What We Learned from Canadian Banks Q1 2019 Earnings
March 5, 2019
Canadian banks are important…not just to Goodreid’s clients (although they are very important to us, comprising nearly 20% of our Canadian portfolio), but to the overall direction of the S&P TSX Composite Index which is 23% comprised of banks and more broadly to the overall Canadian economy as conduits for investment and lending and as some of the largest employers in the country.
Investment lore tells us that “there’s gold in them there hills”, when it comes to initial public offerings (IPOs) of stocks. Surely everyone has heard stories of those fortunate enough to “get in on the ground floor” of McDonalds, Microsoft, Tim Hortons, Apple, Dollarama, Amazon, etc. and the countless number of times those stocks have multiplied since then.
On August 4th, the Globe and Mail reported that just 17% of large-capitalization equity fund managers in Canada outperformed their benchmark in the second quarter, which proved to be the worst quarter for active managers in at least 17 years.
Market corrections are uncomfortable. Investors’ emotional responses are rooted in the worry that a catastrophe will occur. Our companies go bankrupt. Stock prices go down and STAY DOWN…or become worthless.
It seems that every time I look at the Business section of a newspaper or tune into a Business channel someone is asking whether we should “take some off the table”. This bugs me on a couple of levels.