Wednesday, January 28, 2009 4 comments ++[ CLICK TO COMMENT ]++

Miscellaneous articles for this snowy day... at least in Toronto

Some articles...

  • Bond yield spreads high but not raw bond yields (Accrued Interest): This is a point I have made in the past and is worth keeping in mind if you are looking at bonds. Many analysts claim that corporate bond yields are trading more attractively than during the Great Depression. This is only true if you look at spreads. In contrast, if you look at raw yields, they are not necessarily that high. I think the junk bonds are worth considering but the rest of the corporate bonds do not look attractive.
  • ConocoPhilips posts massive $31.8 billion non-cash loss (The Globe & Mail): This was supposedly announced before and most of it arises from writing down goodwill related to its Burlington Resources acquisition a few years ago. Talk about a terrible deal for shareholders (unless oil&gas prices rally or something.) Book value was around $93 billion (tangible was $63 billion) and it is going to get cut in third.
  • Rio Tinto considering big stock sale to pay down debt (MarketWatch): They say that bubbles are often marked by huge takeovers near the top (incidentally profitting investment bankers and short-term traders, including arbitrageurs, while potentially hurting everyone else, including long-term shareholders, employees, and creditors.) Well, a good sign of the commodities bubble was the takeover of Canadian giant Alcan by the commodities giant Rio Tinto. Rio Tinto is now considering issues shares to pay off the debt. Needless to say, as is almost always the case when management makes mistakes, the shares will be issued at multi-year low prices.
  • Marc Faber actually recommends some technology stocks (Seeking Alpha): I mentioned a few weeks ago how Marc Faber actually recommended some technology stocks--possibly the first time in many years. In the Barron's 2009 roundtable, he maintains his view and recommends some large-cap tech stocks. This is quite an interesting bet and one that I'm leaning towards. Tech has been out of favour for almost 8 years--ignoring some high flyers like Apple or Google--and is a good contrarian area to look... As for Marc Faber's main strategy, it seems that he favours betting on the re-flation trade. He is going heavily into all sorts of cyclicals. Faber's view is essentially the consensus view, with even the FedRes expecting growth in the later part of the year (although the FedRes is not predicting asset prices ;) ). I don't share the same view and would avoid them. But do keep in mind that some of Faber's investing is short-term trading based on technical analysis. In contrast, I do not use technical analysis at all and am more longer-term oriented (except special situations and the like.)

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4 Response to Miscellaneous articles for this snowy day... at least in Toronto

January 28, 2009 at 6:01 PM


Thanks for the article recommendations. I really love your blog. You do a great job of balancing opinion with facts and new content. I try to link to it daily from

If you haven't seen my bog yet I would really appreciate your opinion. Thanks.

-Miguel Barbosa

January 28, 2009 at 6:23 PM

RBC Bank President Gordon Nixon - Salary $11.73 Million


I'm a commercial fisherman fighting the Royal Bank of Canada (RBC Bank) over a $100,000 loan mistake. I lost my home, fishing vessel and equipment. Help me fight this corporate bully by closing your RBC Bank account.

There was no monthly interest payment date or amount of interest payable per month on my loan agreement. Date of first installment payment (Principal + interest) is approximately 1 year from the signing of my contract.
Demand loan agreements signed by other fishermen around the same time disclosed monthly interest payment dates and interest amounts payable per month.The lending policy for fishermen did change at RBC from one payment (principal + interest) per year for fishing loans to principal paid yearly with interest paid monthly. This lending practice was in place when I approached RBC.
Only problem is the loans officer was a replacement who wasn't familiar with these type of loans. She never informed me verbally or in writing about this new criteria.

Phone or e-mail:
RBC President, Gordon Nixon, Toronto (416)974-6415
RBC Vice President, Sales, Anne Lockie, Toronto (416)974-6821
RBC President, Atlantic Provinces, Greg Grice (902)421-8112 mail
RBC Manager, Cape Breton/Eastern Nova Scotia, Jerry Rankin (902)567-8600
RBC Vice President, Atlantic Provinces, Brian Conway (902)491-4302 mail
RBC Vice President, Halifax Region, Tammy Holland (902)421-8112 mail
RBC Senior Manager, Media & Public Relations, Beja Rodeck (416)974-5506 mail
RBC Ombudsman, Wendy Knight, Toronto, Ontario 1-800-769-2542 mail
Ombudsman for Banking Services & Investments, JoAnne Olafson, Toronto, 1-888-451-4519 mail

"Fighting the Royal Bank of Canada (RBC Bank) one customer at a time"

January 28, 2009 at 9:41 PM

Hi Miguel,

I can get opinionated at times :) But thanks for the compliment.

I am familiar with your blog. I actually like it a lot. There is a ton of information and you cover many topics. I'm sure you put a lot of effort into it (given how you pick up so many links, stories, etc) and it shows.

Your blog is also kind of unique in that it covers the psychological aspects of investing.

If I have any suggestions, perhaps it is for you to have a weekly round-up (maybe for the weekend) of key articles, stories, events, etc. Since you publish so much information it's easy to miss out on them. I don't know if such a thing will detract from your main posts but it's an idea.

Keep up the good work. I actually think you are one of the top regular reads.

January 28, 2009 at 9:47 PM

Corporate Bully,

Sorry to hear about your loss but it's not clear who is at fault or how to solve this problem. Perhaps the best thing is to hire a cheap lawyer who may be able to represent you for free in return for a portion of any claims. I don't know if such a lawyer exists or if you will end up with much even if you win, but that's an idea. Other than that, I can't help you and I'm not willing to close my bank account without stronger proof. I say that you keep contacting the bank, including the main branch in Toronto and see if they can help.



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