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A Repeat of Two Weeks Ago

A couple of weeks ago, I wrote a post “It’s Different This Time But it’s Also the Same”. The Canadian market is down 7% and the Dow is down 6% with under 10 minutes left in the trading day. The markets were jittery from the outset as some participants didnt believe the financial bailout would come to fruition.

We can panic and sell as account values shrink with each day. However, looking at individual securities, there are many companies that will carry on who have limited debt, excellent cash flow, but are down tremendously with this month’s losses. 

Canadian Natural Resources is down 16% today. Suncor is down 11%. CIBC is down 7% while some Real Estate Investment Trusts are down 10% in one day. Are these numbers justified? One could argue that it is as oil prices dropped $10 today. However, these oil companies had their estimates based on $90 oil, less than where it is right now.

When this will end, no one knows, but I do know that the valuations get more compelling by the minute. For more information on our company, you can visit us at http://www.rothenberg.ca

Your comments are greatly appreciated.


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