Canadian Personal Finance Blog

Archive for the ‘BCE’ Category

Strikes and Their Effects

In Ottawa we are living through a mass transit strike, and the first day’s joy was compounded by having the remnants of a large snowstorm causing driving conditions to be horrendous in the morning. The bright side is that a lot of people decided not to go to work yesterday, however, today may be a different story. 

The disagreement between the City and the Bus Drivers is not my concern right now (although as a personal aside the Union Leader really could use a few Dale Carnegie courses on how to deal with the media, his demeaner is very unsympathetic), my problem is that I must now drive my kids back and forth to school each day, which is an economic headache (luckily with 67 cent a liter gas it is not as much of a hardship). I am assuming the strike shouldn’t be too protracted, although, one never knows in these situations.

My heritage is strongly trade unionist (both sides of my family have roots in the trade union movement), however, when strikes inconvenience me I find myself much less sympathetic to my Union upbringing. 

BCE Sale Still On?

BCE keeps acting like their sale is going to go through. Interesting since no one in the investment community seems to think this, but BCE has put through a bond term assuming that their sale goes through. The price of BCE shares certainly does not reflect a $32 sale price right now, maybe it is a bargain, but if the sale does not happen, maybe it is still too high?

TD Prime Rate drops only 0.5%

I noted today that TD did lower it’s “prime” rate in reaction to the Bank of Canada’s rate cut, but only by 0.5% and not the entire 0.75%, which is what I suspected might happen. It’s good that they did lower their rate, but again, they are attempt to shave a bit more money and make more on loans. Lower rates are good, but getting the entire rate drop would even be better. Please give us our full cut Mr. TD.

Advent Financial Calendar Box Day 12

You open today and you find a bank passbook, but it is for a bank account you don’t remember. Do you have dormant bank accounts or accounts you have forgotten about? Maybe it is time to shut them down (if they haven’t already been shut down) and try to get whatever money is in them back into your own hands.  The banking industry takes that money for their own, by either killing the account with service charges, or simply marking the account as inactive and then taking the assets after a suitable period of time. I had a group of accounts still open, that I have shut down in the past little while. I viewed them as a security risk as well, if someone could get access to them, they could attempt to work from that account’s “good will” and set up credit vehicles (in my name) and then I would be in trouble. 

Shut down those old unused accounts, before the end of the year.

Happy Thanksgiving

To my American readers I wish you a Happy Thanksgiving and wish you all the joy and happiness of this holiday season. It’s odd to read that the Thanksgiving weekend is actually a bigger traveling weekend than the Christmas weekend in the U.S., in Canada Thanksgiving is big, but not that big. Black Friday looms on the consumer horizon, with stores in Canada getting into the act!

BCE Not a Well Company

I should have known better but BCE announced atrocious numbers on Tuesday and the stock went into the tank on Wednesday, which is not a big surprise. The company is in limbo, with it’s “sale” still not confirmed yet they are laying off management like it’s the new national pastime (come to think of it, it just might be for 2008).

I have held the stock for some years as a Dividend asset, but now it doesn’t even seem to pay those any more, thanks to this misguided sale (at least last quarter) and now the company itself seems to be trying to follow in the footsteps of Nortel? (I really hope not, but then again, BCE has managed to make some very odd decisions in the past two years as well, so who knows).

TSX a Winner Otherwise

Other than BCE’s plummet, the TSX seems to be at leveling off, and it is trending neutral to positive, which is a good thing to see as well. A leveling off is a good thing, a positive trend is even better but a leveling off may mean most of the panic selling is over, but we shall see.

RSS Feed Issues

For my readers who read over my RSS feed, there have been issues the past few days, and I am not sure what exactly is causing it, but I ask for your patience and hopefully I can get to the root of this issue.

Buy Low and Sell High is the trite advice that any moron will give you about the stock market or any other major purchase, but the more important question is “What is the Bottom?“.

The better question is, “Is now the bottom?”, and as usual my non-committal answer is, “It depends”.

Is it the bottom for IBM? Most likely it is near the bottom for them, they have announced good numbers, have a sound business model and look like they have a plan for the next five years, and the same can be said for companies like Cisco too, since they have such a large monopoly in their area of high tech.

Is Google at the bottom? I have no idea, since I still have no idea how Google can be worth that much, but that is my opinion as a High Tech Skeptic (maybe an honorary title, but well deserved). I don’t believe there business model and I have no confidence in how they make money, aside from Advertising. 

Is Nortel at the bottom? I asked that same question when the stock was at $90 in 2000, so you can guess what my answer might be today as well (given they are at $0.19 compared to that $90, today). Remember what Garth Turner said in my post “And He’s An Expert?”

Are Canadian Banks at the bottom? Hard to tell, some seem to be, TD Canada Trust and RBC seem to be near bottom, as does BMO, but CIBC’s continued exposure to the mess in the states makes them a little more interesting too. I have invested in banks in the past week, just for disclosure sake as well.

Please do not take these opinions as advice, they are simply me stating my opinion, you should (as always) make your decisions with as much information as you can and should consult reputable sources for this information as well.

Hopefully these depressed stock prices will hang around ’til the new year, that would be a great time to open a TFSA and then take advantage of lots of growth in a sheltered account like that (wouldn’t it?).

Buy Equities, Warren Buffet Says So

Is that reason enough to go out and buy equities? I have no idea, however it is interesting that Warren Buffet is saying in an article in the New York Times “Buy American I am” that he is putting his personal money into U.S. equities now. 

The article does have a Canadian Financial Angle as Mr. Buffet points out here:

Equities will almost certainly outperform cash over the next decade, probably by a substantial degree. Those investors who cling now to cash are betting they can efficiently time their move away from it later. In waiting for the comfort of good news, they are ignoring Wayne Gretzky’s advice: “I skate to where the puck is going to be, not to where it has been.”

Anybody who quotes Wayne Gretzky can’t be wrong, can they?

Then again, some might say “Equity Investment is the Devil’s Work!“, only time will tell who is right.

Those were the happy thoughts told to me one day at Church. The minister giving the sermon, worked with homeless people and such, so his view might be a little stunted, but that was the point of his statement, “We are all three pay cheques away from living on the streets”.

Is this really the case? Well that all depends on the debt burden that you carry.  If you suddenly had no means of income, but you didn’t have any debt to pay off, you’d simply need money to pay your day to day expenses that may be manageable or controllable. If you are carrying a large credit card debt load, and have minimum payments to make, then your issues are far more complicated and you must find ways to pay spiraling debt as well.

Am I three pay cheques from living on the streets? I don’t think so, I have a fair amount in RRSPs and such, and I also have some savings, but I also have a debt load that does worry me, and given the renewed vigour I have been given from reading good books like: Smoke and Mirrors , I think that is my goal is to kill my debt load while I can.

BCE & Nortel Both Cutting

The news is full of job cuts at BCE as they head towards privatization, and there was the renewed cutting announced by Nortel at the start of the year as well, which may mean some dark times ahead in the High Tech World as well. Hope those folks aren’t three pay cheques away from the streets.

Telus and BCE can both enjoy a new class action suit against them as well for their new texting surcharges. That won’t help BCE, that’s for sure.

BCE Sale On The Rails Again?

On Friday the news broke that the purchasers in the BCE deal have finalized things and the sale should be going through, causing the stock to jump $4 per share. As a share holder I was very glad to see that, however, it seems the Dividends that I am owed for the past while, are not going to materialize, as this money is being used as part of the deal, which does not make me as happy.

I bought BCE initially, because I had no idea what to buy and figured, BCE was a good “Blue Chip” stock to buy. I later realized that the Dividends that it pays makes it an attractive stock as well (proof that the Sun shines on even an Ugly Dog’s butt every once in a while).

My guess is the BCE sale should go through, however, I don’t think that this is quite done yet either, in terms of twists and turns in the story either.

More Women in Pensions

Another interesting study from our friends at Stats Canada about Pension Plans in Canada points out that as of January 1, 2007, more of us are in Registered Pension Plans. The interesting point is that the Percentage of employees that were in a Pension plan actually dropped from 2005 to 2006 even though the total number of folks in Pension Plans actually increased.

More interestingly this increase in the raw number was seen mostly from Women joining pension plans. The percentage of women are:

Of the 5.8 million total membership, women accounted for 2.8 million, or 48.5%, while men accounted for 3.0 million, or 51.5%. In 2000, women accounted for 45.1%, and men, 54.9%

Increases for women were shared between the public and private sectors.

The number of Defined Benefit Pensions that are still under-funded is mentioned as well, and it is still a worrisome area for folks who have them (or who have been recently chucked out of them like me), however the number of Pension plans that are underfunded did decrease in 2006 from 2005 from 57% in 2005 to 45% in 2006. This is still not a good thing since 45% of the funds are unable to meet their obligations at this moment.

TD Hurt by “Rogue” Trader

Thanks to former TD employee Simon Richard Brignall, TD stocks are going to take a hit, because the company has to write off $96M in losses thanks to more “creative accounting” being done by some insiders.

During this period, Mr Brignall mismarked positions on his trading book and entered fictitious trades. This conduct, when considered by reference to the FSA’s prescribed regulatory standards for individuals, is such that it appears to the FSA that he is not a fit and proper person to perform any function in relation to any regulated activity carried on by any authorised or exempt person or exempt professional firm.

Sounds like he made a few mistakes, seems the FSA (Financial Services Authority) doesn’t think he should be doing this job, as a TD stock holder, I think I agree. Who hired this guy? Not sure they should be allowed to do that job either (In My Most Humblest of Opinions). Who was supposed to watch and make sure this guy wasn’t doing this? Not sure they should be keeping their job either.

Mr. Brignall does not appear to be the only cause of this loss, but allegedly has a great deal to do with it.