Featured Article

Air Canada (TSX:AC) Stock’s Monster Rally Could Pop Soon

Posted by Andrew Button

on Wednesday, 25 November 2020 7:57

Air Canada (TSX:AC) stock has been on a massive hot streak in recent weeks. Ever since Pfizer announced its vaccine had a 90% effectiveness rate, the stock has been soaring. Airlines stand to benefit from an end to the pandemic, so the recent price action is likely related to Pfizer’s announcement. The rally may also be related to AC’s third-quarter earnings, which showed a much smaller net loss than prior quarters.

So far, so good. A vaccine is coming, Air Canada is paring its losses, and AC stock is soaring. Sounds like a buy, right?

Maybe. But before you get too excited, it’s time for a reality check. We’re currently in the middle of a second wave of COVID-19 that once again threatens air travel. That includes travel within Canada as well as international travel. Just recently, Newfoundland and PEI announced that they were withdrawing from the “Atlantic travel bubble,” a regional agreement that allowed free travel within the Maritimes without self-isolation. That kind of thing tends to put a dent in airline revenues. And it seems to be accelerating.

A vaccine could take a while

Another factor investors need to be aware of is the fact that recent vaccine trials don’t mean that a vaccine will be widely available soon. A 90-95% effectiveness rate is definitely a good sign, but there are still all the regulatory and logistical issues that come with getting a vaccine to market. Regulators have to approve the vaccine, mass production needs to proceed, local jurisdictions need to procure their supplies. All of these things take time. This is one of the main reasons that public health experts are eying next spring for vaccine deployment, not December or January…CLICK for complete article

Investors Go “All-In” Without A Net

Posted by Lance Roberts

on Tuesday, 24 November 2020 11:24

We have recently written a couple of posts about the “exuberance” that has invaded the market since the election. Such is often seen near short- to intermediate-term peaks in markets as investors go “all-in” without a net.

It was on December 5th, 1996, during a televised speech, that Fed Chairman Alan Greenspan stated:

“Clearly, sustained low inflation implies less uncertainty about the future, and lower risk premiums imply higher prices of stocks and other earning assets. We can see that in the inverse relationship exhibited by price/earnings ratios and the rate of inflation in the past. But how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade?”

It is an interesting point that the U.S. has sustained low rates of inflation combined with monetary and fiscal stimulus, which have lowered risk premiums, leading to an inflation of asset prices.

Big Fat Idea – How Investors Can Qualify for the Lowest Interest Rates

Posted by MoneyTalks Editor

on Monday, 23 November 2020 15:54


Kyle Green, President of the Green Mortgage Team joins Mike to explain that while interest rates are incredibly low, the ability to qualify for them is not – especially if you are buying for investment purposes. Find out how he is managing his client applications for maximum acceptance.

Warren Buffett Sold His Last 3 Canadian Stocks

Posted by Andrew Button

on Monday, 23 November 2020 11:04

In 2020, Warren Buffett has been lying low. Preferring to play his cards close to his chest, he hasn’t revealed much about what he’s been buying and selling. However, once every quarter, he is forced to reveal what he was up to in the quarter before. As it turns out, the “Oracle of Omaha” massively reduced his exposure to Canadian stocks this year.

In the second quarter, Warren Buffett sold out of Restaurant Brands International completely. That move was well publicized, leaving two Canadian stocks in his portfolio. He has trimmed both of those positions throughout the year as well. If this continues, Buffett may be out of Canadian stocks completely by the end of the year. That’s not a great sign for the Canadian economy but — as you’re about to see — there’s a silver lining. CLICK for complete article

Quote of the Week, Shocking Stat & Goofy Award

Posted by MoneyTalks Editor

on Sunday, 22 November 2020 11:28


Quote of the Week 
Question: are things so bad that the head of the central bank feels the need to address bankruptcy concerns? 

Shocking Stat 
Look what a minor change in interest rates does to the cost of servicing the federal debt. 

Goofy 
As protests against Covid related restrictions grow, we should be asking how do we bring more people on board to support the measures to fight COVID-19.