My First Post

This is the first post. My plan is to make this blog a place to muse. About anything really, but mostly business ideas, what I'm doing on the market, and since I'm all over the map, some off tangent type stuff. So here goes!

Sabi Marwah and the importance of mentoring

I read an article in the Globe and Mail last December on Sabi Marwah. Sabi is the 55 year old CFO of the Bank of Nova Scotia. More to the point, he is one of a select few high profile visible minorities (along with TD's Bharat Masrani, RY's Janice Fukakusa, AIC's Michael Lee-Chin and some others who don't get much face time) in Canadian financial services. He's also a great immigrant success story.
His success should prove inspirational to other vm's looking to get ahead at one of Canada's large FI's. Especially to East Indians, whom Marwah goes out of his way to mentor. I wonder if Michael Lee-Chin (he's the only high profile FI black leader I can think of) goes out of his way to do this. Goes to show you the importance of supporting your own as you move up through the rank and file.

Organizations like Junior Achievement are a great way of supporting your community by going out to schools as a positive role model for kids who may lack direction and feel disenchanted about opportunities once they graduate. Making yourself available as a mentor to those moving up through the rank and file is also important. Like Wesley Snipes said in White Men Can't Jump - "If I don't support my brothers (and sisters) who will?".

Bank Earnings - Take 2

So I'm browsing through the cookie aisle at Longo's today, trying to find the crackers (Eventually found out that crackers have their own section, apparently putting them near the frozen food section is a more logical place for them) - when someone comes up to me and asks me if I work there. I was a bit annoyed, because I certainly didn't think I was dressed like a Longo's employee (not to disparage longo's employees, but they don't generally walk around in dress shirts and ties)... I wonder if the same question would have been asked of me had I been white and dressed the same way (the guy that asked me the question was black).

Anyhow - on to other things.
So we're right in the middle of bank earnings season. BMO, NA & RY have reported. RY reported some frigging amazing earnings. But it looks like my earlier comment was right, since even with the stellar earnings, RY tanked. Well... maybe tanked is a bit too strong of a description, but it closed down anyhow. We'll see if the trend remains flat / negative when CM, BNS & TD weigh in. Meanwhile, my interest has been kinda piqued by OSK-N, especially since I decided it was time to get out of ECA after a nice little run up in the price. The price seems reasonable (seems to be some pricing pressure due to the JLG acquisition, as well as some pissed off employee in finance who did bad things). We'll see...

OJ Loses Book Deal

What's the big deal about this book. So what if OJ did it? There is such a sense of injustice and outright anger (in white America, it seems to me) over the fact that one could even consider publishing a book by such a deviant. Black America appears to continue to celebrate the fact that one of their own was acquitted of a crime that a white guy of his status would never have gotten convicted of. Its understandable, I mean, have you seen the incarceration rates for blacks vs whites? I don't like to get caught up in issues of race, as I think its a slippery slope (as Russel Peters says, all races are racist), but stats are stats, and the incarceration rates clearly speak to black America constantly getting the shaft when faced with similar crimes as other races.

And what's up with Kramer's tirade? I don't think I'll ever be able to watch another episode of Seinfeld again.

Finally, a Potty Success!

Yes, that's right. Last night saw my 2.5 year old daughter go potty for the first time! It took me reading 1.5 Dora book's to keep her on the potty long enough to get it done, but it was worth it. Now going potty for the first time may not be a big deal to non-parents, but I think most parents will agree that this is a huge step! It saves you about $50 / month in diapers and wipes (which means more money to invest in an RESP), gets rid of that big diaper bum that makes you have to put clothes 2 sizes too big on your kids, and eventually, gets you out of diaper duty. Made for a happy day (Man! The things I celebrate these days ).

Bank Earnings

Came across a National Post article which discussed investor's expectations of bank Q4 / FY-06 earnings. Apparently expectations are quite high. I'm still licking my wounds from my poorly executed GOOG option play, so I plan to make that up. My belief is that if expectations are that high, then CDN bank stocks are already overpriced, and anything short of spectacular earnings is going to result in profit-taking. Now according to Yahoo Finance, RY has gained 12% since August 15th's closing price, and TD is up 14%. I'm going to watch for the next day or two, but might lock in my profit on RY sometime over the next week.
INVESTORS EXPECTING THE BEST FROM BANKS' EARNINGS SEASON
Annual bank earnings season starts in less than two weeks and anything less than a series of gargantuan profits will be a major disappointment.
"We expect that the banks' string of profitability will remain unbroken in the fourth quarter of 2006, with respectable levels of earnings to be reported by all institutions," said Dundee Securities Corporation analyst Susan Cohen.
But with that performance already built into bank stock prices, how do you pick which one gives the best return?
Ms. Cohen has narrowed down the choice for the year ahead, based on the assumption that earnings growth will slow to less than 10% for all the banks, but to around 5% for some.
"[Previously] we had mentioned that we expect only Toronto-Dominion Bank, National Bank and Royal Bank of Canada to provide investors with double-digit return over the next 12 months," she said in a note.
However, with RBC's stock outperforming most of its major rivals last week, jumping 2%, compared to 0.6% for the sector, the number of banks likely to provide investors with returns of more than 10% in the next year has fallen, said Ms. Cohen.
"The list is getting thinner, with only TD and National Bank filling this criterion," she said.
Meanwhile, notes Ms. Cohen, four banks could hike their dividends this quarter. The government's clampdown on trusts has sent cash scuttling to the banks where steady dividend payouts are perhaps the closest proximity for investors to the trust's distributable income. And some bank dividends are set to become even more attractive.
"We anticipate Canadian Imperial Bank of Commerce, Bank of Montreal, Bank of Nova Scotia and National Bank will announce dividend increases in conjunction with fourth quarter 2006 earnings releases," said Ms. Cohen. Duncan Mavin
dmavin@nationalpost.com

Investing in Bank Stocks

Ok so my GOOG option play did not work out in my favour. I could have made 10%, but held out for a bigger upside and ended up taking a hit. 'll take another crack at it when I'm done licking my wounds.

Now on the registered account side, I read an article in Business Week (11. Why Bankers Keep Seeing Bears; Mara Der Hovanesian, 13 November 2006, BusinessWeek). It basically suggested that banks are overvalued, and a correction is coming as morgage revenue moderates, high concentration of risky commercial loans becomes more of an issue, and consumer credit quality deteriorates. On one hand it sounds a bit like Chicken Little (the sky is falling.... Come, on don't tell me you don't know the story of Chicken Little!). On the other hand, CDN banks have had a great run for the past few years. RY to me seems particularly overvalued. On the other hand, HSBC Canada seems like an interesting play if corrections in bank stocks occur, due to its lower domestic exposure & focus on import / export financing & global cash management.