How would you explain the TSX come back lately in the face of plummeting oil prices?
I was speaking with a fund manager last week on current markets.
(of course there's a bit of a sales pitch in the conversation that obviously favours getting people into markets, however....)
He spoke very highly on bank stocks. This being nearly a best bet and easy call to generate a return.
a 5 year GIC is paying 2% (not much more).... why not have a bank stock instead which would generate much better returns through dividend. He had high praise for CIBC and felt the current price being quite good. While these aren't stocks which may grow in huge values overtime, it's all about the dividend.
in 120 years, only one of the major banks and only once - did they lower their dividend.
elsewhere... while it was obvious he read the report Snowman posted on the Canadian Oil Companies and what the impact of $50 or even $40 oil will have..... he sees some pretty big companies who have been dragged down who will obviously make it through. There's buying opportunity.
The banks are starting to sniff around the big players to see if they have any interest on buying (M&A) or buying assets from some of the really small players. There's going to be some action soon.
I asked him where he sees oil landing.... they think it'll eventually settle at $80 but admitted everyone has an opinion and nobody really knows. (or how much lower it'll go before getting stable again)
In general I think each time oil starts moving up, investors are thinking we hit bottom and want to move in on cheap prices..... but we're not at the end, so everytime oil moves back done, others freak out and get out. I think the TSX will ebb and flow like this for a while.
