• What a market we are experiencing right now.  In Canada the Big Banks are releasing their 3rd quarter results and so far both BMO and BNS have missed expectations - never a good thing.  Unfortunately, their stock prices have yet to revisit the lows of July 15th.  

  • Are North American stocks generally dragging along the bottom right now?  How long can it last?  I was out fishing on the weekend and certainly learned that by dragging along the bottom a few hooks are lost along the way. Uncertainty in the market can provide huge opportunities for those with patience and a high vantage point.  
  • Part of my Bear market strategy has been to purchase stocks that fit a few criteria:
  • 1) Too big to blow (this can be up for debate) with top positions (Gold, Silver or Bronze) in the selected Industry.  These are companies that will return to sunnier times but this trip may take years.  I have not been able to decide which of the Canadian Big Banks to buy as all have their own strengths and challenges so my intent is to buy all of them over the next 6 months.
  • 2)  Dividend-paying with a history of solid dividend-growth.  This historic ‘fact’ is not etched in stone as Capital Preservation is much more important in tumultuous times such as we are experiencing. 
  • 3) Optionable.  Check out CBOE,  AMEX and M-X for optionable stocks and lessons.  Using options wisely can supplement overall returns and even replace dividend growth in sideways markets.  The best part of options is that various strategies can be used in all types of markets to earn income.  Learning to trade options successfully is clearly not a skill acquired overnight but I think now is a great time to buy stocks that can be used in upcoming months (?years) to add to one’s returns.  Nothing like cold winter months to sit at home and learn a new skill!
  • I am looking primarily at Financial/Insurance stocks.  If banks and insurance companies cannot make money over the next 5-7 years we are all in trouble but while they are sorting themselves out I plan to use them to my advantage.  They exist to make money and, one way or another, have a firm hold on most of the money in North America.
  • This strategy is part of my long-term plan and is fairly conservative in my books. 

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