Stock market prices

Canada_First · October 15, 2015

Anyone who has to come here to ask about stock prices aren't serious speculators I would offer. Serious people know what's going on since it costs money to be ignorant.

dialamah · October 15, 2015

Stunningly hard to believe, but the oil and gas industry believes energy stocks would go down if companies are not left unfettered to continue business and collect profit, regardless of environmental costs.

Hydraboss · October 15, 2015

Stunningly hard to believe, but the oil and gas industry believes energy stocks would go down...

They're not the only ones. Once it looked like the NDP were about to win in Alberta, I moved everything I had in Alberta-reliant energy out as quick as I could (and I was in a LINE with my personal broker!) Glad I did because they plummeted right after Notley got in.

I'm now in the process of pulling everything out of Canadian-based energy because I've already been advised they're likely to do the same. Off to the US my money goes.........and I'm sure I'm not alone.

msj · October 16, 2015

They're not the only ones. Once it looked like the NDP were about to win in Alberta, I moved everything I had in Alberta-reliant energy out as quick as I could (and I was in a LINE with my personal broker!) Glad I did because they plummeted right after Notley got in.

Umm, notice the correlation between XEG and XLE and US oil?

https://ca.finance.yahoo.com/q/bc?t=1y&s=XEG.TO&l=on&z=l&q=l&c=XLE%2CUSO%2C+&ql=1

Consider the price of oil.

Then consider the price of Western Select oil.

This has little to do with the NDP and everything to do with world oil prices.

I'm now in the process of pulling everything out of Canadian-based energy because I've already been advised they're likely to do the same. Off to the US my money goes.........and I'm sure I'm not alone.

Bit late to the party. The dollar came down long ago due to commodity prices.

No government in Canada has control over commodity prices.

Edited October 16, 2015 by msj

Hydraboss · October 16, 2015

This has little to do with the NDP and everything to do with world oil prices.

Incorrect. The price of oil has a lot to do with share prices in O&G, but the market likes stability regardless of cost. The Alberta NDP introduced unknowns (read: instability).

Bit late to the party. The dollar came down long ago due to commodity prices.

No government in Canada has control over commodity prices.

It doesn't matter whether the government has control...if there is perceived stability, shares react positively for the most part.

There will be a time to put money back in the market up here, regardless of where oil prices sit. The trick is not to get caught in the downturn of shares - you get in when the market is trending up or even once it's stabilized (for more moderate returns).

msj · October 16, 2015

Incorrect. The price of oil has a lot to do with share prices in O&G, but the market likes stability regardless of cost. The Alberta NDP introduced unknowns (read: instability).

Nice talking point but no basis in reality. If oil were at $100 there would be investment.

But since it's not and a new government is in let's blame them for everything rather than the most obvious and important factor.

the instability is in the price of oil. Some think it will go to $20, others think it will tread water around $45-$50, and others hope it will go back to $150.

Given the futures markets recently $50 looks reasonable for a little while.

Hydraboss · October 16, 2015

Yes, and the day it stays at 50+ for more than a couple of days, investors will crowd back in hoping to ride the increase to 60, thus the O&G stocks will rise. O&G tends to be a self fulfilling prophesy of sorts. When bad news pervades the news, stocks fall. The opposite is also true. I've been playing in this enough years to have first hand knowledge of this basis. You'll never make millions doing things this way (unless you start with millions) but you can realize substantial gains by playing along.

msj · October 16, 2015

More likely US producers will produce and use their hedges to keep the price range bound.

This will continue to hurt oil sands producers and the NDP will continue to get the blame all because people mix up partisan politics with investing.

The_Squid · October 20, 2015

If the CPC doesn't win in the federal election and say the LPC wins, do you think the stock price for publicly traded corporations will go up or not?

I think if the LPCs win, then stock prices will fall. I'm trying to figure out if I hit sell and then wait for the stocks to adjust. I am significantly vested in the stock market....and i'm now back in the black post the Chinese market problem...

Markets went up today...

Wilber · October 20, 2015

Kind of a nowhere day TSX up, S&P down. Dollar down slightly.

msj · October 20, 2015

Kind of a nowhere day TSX up, S&P down. Dollar down slightly.

Pretty sure Trudeau had no impact on the S&P 500 or any other important market.

As for the CAD and the TSX (by world standards neither are particularly important), I'm sure there are actual real live economic reasons for those to moves that have nothing to do with who inhabits 24 Sussex.

Who is PM and who is in government has little to no impact on the investing world because there is really not that much variation between LPC and CPC.

Smallc · October 20, 2015

Yeah people are acting like a few tax changes and a few more deficits are the end of the world, when they're basically business as usual.

msj · October 20, 2015

Yeah people are acting like a few tax changes and a few more deficits are the end of the world, when they're basically business as usual.

That's the thing - small deficits would be par for the course given our history over the past 15 or so years.

We have had some surpluses and some deficits.

If our economy remains on the weak side then run some small deficits for the fiscal stimulus.

Unless our economy goes down the tubes due to the debt/housing market or some other world event, in which case we would be running deficits anyway due to a reduction of revenue and the automatic increase in spending (i.e. EI payouts), I expect that we will see smaller deficits than those proposed.

I would expect a big one in year one, a smaller one in year two, a smaller one (or small surplus) in year three and then a surplus in year four.

That's how Chretien/Paul Martin managed in the late 90's and early 2000's - project deficits and achieve smaller deficits/surpluses.

It's annoying as hell and reminds me of Scotty from Star Trek (under promise and over deliver) but psychologically we love it.

Edited October 20, 2015 by msj

Wilber · October 21, 2015

Pretty sure Trudeau had no impact on the S&P 500 or any other important market.

As for the CAD and the TSX (by world standards neither are particularly important), I'm sure there are actual real live economic reasons for those to moves that have nothing to do with who inhabits 24 Sussex.

Who is PM and who is in government has little to no impact on the investing world because there is really not that much variation between LPC and CPC.

I agree with most of what you say but what a PM does can have a huge influence on what business does. PET and the NEP for example.

Wilber · October 21, 2015

Yeah people are acting like a few tax changes and a few more deficits are the end of the world, when they're basically business as usual.

That's the problem, borrowing money and not paying back principal has become business as usual. The only difference between this and just paying the minimum payment on your credit card is the interest rate.

Smallc · October 21, 2015

If my income grew basically forever and the principle was going much slower that wouldn't be much of a problem. It's also not clear that we'll never pay the principle.

Wilber · October 21, 2015

If my income grew basically forever and the principle was going much slower that wouldn't be much of a problem. It's also not clear that we'll never pay the principle.

You are then relying on inflation to rise at a greater rate than your debt which is also inflationary. Never is a long time, like forever and our history is doesn't indicate that we will be paying the principle anytime soon, if at all. The only PM since Diefenbaker who had a net decrease in debt during their tenure was Martin, a mere 4.7%.

Smallc · October 21, 2015

You are then relying on inflation to rise at a greater rate than your debt which is also inflationary. Never is a long time, like forever and our history is doesn't indicate that we will be paying the principle anytime soon, if at all. The only PM since Diefenbaker who had a net decrease in debt during their tenure was Martin, a mere 4.7%.

The debt is decreasing in net terms right now and has been since 2010. I think you're confusing total debt with net debt.

Wilber · October 21, 2015

The debt is decreasing in net terms right now and has been since 2010. I think you're confusing total debt with net debt.

Need a reference for that.

Smallc · October 21, 2015

Sorry, I was talking of best to GDP ratio, the most important measure.

angrypenguin · October 21, 2015

Why hasn't any party talked about paying off our debt. Even the CPC didn't say they would.

Wilber · October 21, 2015

Sorry, I was talking of best to GDP ratio, the most important measure.

So we just have to keep building the GDP to infinity so we can keep borrowing more while praying interest rates never go up. No need to reduce or even stabilize the amount mortgaged, we will just leave that to the kids.

I'm told that personal debt is different from sovereign debt. Just wondering how much of their personal debt those folks are planning to pass on to their kids.

Wilber · October 21, 2015

Why hasn't any party talked about paying off our debt. Even the CPC didn't say they would.

Martin did during his short term and so did the CPC until things fell apart in 2008. Fiscally, Martin and Harper were quite similar.

msj · October 21, 2015

Why hasn't any party talked about paying off our debt. Even the CPC didn't say they would.

Because it makes no sense to.

People like the opportunity to buy "risk free" assets which means it makes sense to have some sovereign long term debt issued.

It also makes sense to issue debt to pay for infrastructure and to "pay off" the debt through a growing economy which makes the debt and interest payments irrelevant over time.

This is not 1986 or 1993 so why people are waging this war on the past is beyond me.

angrypenguin · October 21, 2015

Because it makes no sense to.

People like the opportunity to buy "risk free" assets which means it makes sense to have some sovereign long term debt issued.

It also makes sense to issue debt to pay for infrastructure and to "pay off" the debt through a growing economy which makes the debt and interest payments irrelevant over time.

This is not 1986 or 1993 so why people are waging this war on the past is beyond me.

I carry no debt. I have had in the past, and even in low interest rate conditions, I pay it off and I pay it off quickly. It makes no sense to me to be paying for interest.