Good day, everybody. I hope you are doing well!
This virus fear have crashed the markets to the levels we haven’t seen in decades. There are many blue-chip bargains out there at the moment.
If you’re trying to time the market, then the best time to buy stocks is when it’s the end-of-the-world type situation. I think we reached the tipping point of anxiety and uncertainty. We are surrounded by so much negativity coming out from every news channel. This disease is certainly very contagious and dangerous, but I think we will overcome it.
People need to follow the guidelines and stay calm. I think the stress, the fear, and the anxiety is a lot more dangerous than the virus itself. Personal hygiene and social distancing will protect you from any viral outbreak. This is something we need to keep in mind moving forward. We will have more outbreaks in the future.
Alright, enough of this virus discussion, let’s see the stocks I bought today.
TD Bank (TFSA Account)
I added 20 shares of TD bank to my existing position. My purchase price was $52.31 per share, which is very cheap for such quality stock. Just a month ago TD was trading at around $75 with 4% dividend yield. Since then TD shares dropped to ~$50 level and the new yield is now 6%. OK, all banks will have an impact caused by this event. Two days ago, the banks announced that they will defer mortgage payments to those directly affected by the virus. I’m not sure if they will defer the complete amount of the mortgage or the principal only. Because banks need to collect interest. They may also work with clients to reduce the amount by extending the mortgage terms. In any case, I doubt that banks will have great impact long-term. They might have a bad quarter or two. That’s my rational about all banks for the time being.
Magna (Regular Account)
I started a new position in Magna after a volatile drop from $80 to $36. My purchase price was $36.42 per share and I will be getting a 5.91% dividend yield in return, can’t complain. I used to own Magna shares in the past, but sold them a few years ago when shares reached all-time high and I thought that valuations were too high. Now, it’s the perfect price to get back in. I haven’t seen Magna so cheap before. Magna is one of the biggest car parts supplier in the world. I understand that their next quarter earnings will be impacted because of the virus. A lot of car manufactures shutting down to respect the health guidelines to stop the spread of the virus. But, it’s a temporary measure that will probably last one month. After that everything will go back to normal. Personal cars remain the safest way of transportation to keep away from the virus. Keep that in mind. It’s not the bus, not the subway, not the train and not the plane. It’s a personal car. It’s very hard to catch a virus in your own car. People will keep that in mind. The car industry is perfectly safe. It’s the airline industry that is screwed at the moment.
Suncor (Regular Account)
This is a contrarian buy. Suncor was not only hit by the virus fear, it was also hit because of the low oil price. However, I believe that Suncor is the best energy company in Canada. They have diversified operations and can survive even in low oil price environment. Suncor has oil sands operations, refineries, gas stations, and green energy operations. I started a new position in Suncor by purchasing 60 shares for $15.60 per share. It’s so cheap, I couldn’t not resist. The yield is a mind-blowing 12.90%, but they may have to cut that. When the stock was at $45 the yield was around 4%.
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So these were my 3 stock purchases for today. The TD stock was bought in my TFSA account. I reinvested around $1000 from dividend accumulation over the past three months. The other 2 stocks, Magna and Suncor, were purchased in a regular cash account. My TFSA is maxed out so I had to start buying in a regular account. The bargains are too good to leave them on a table. I will monitor market volatility and will buy more stocks as they get cheaper. Take care, guys!
If you’re trying to time the market, then the best time to buy stocks is when it’s the end-of-the-world type situation. I think we reached the tipping point of anxiety and uncertainty. We are surrounded by so much negativity coming out from every news channel. This disease is certainly very contagious and dangerous, but I think we will overcome it.
People need to follow the guidelines and stay calm. I think the stress, the fear, and the anxiety is a lot more dangerous than the virus itself. Personal hygiene and social distancing will protect you from any viral outbreak. This is something we need to keep in mind moving forward. We will have more outbreaks in the future.
Alright, enough of this virus discussion, let’s see the stocks I bought today.
TD Bank (TFSA Account)
I added 20 shares of TD bank to my existing position. My purchase price was $52.31 per share, which is very cheap for such quality stock. Just a month ago TD was trading at around $75 with 4% dividend yield. Since then TD shares dropped to ~$50 level and the new yield is now 6%. OK, all banks will have an impact caused by this event. Two days ago, the banks announced that they will defer mortgage payments to those directly affected by the virus. I’m not sure if they will defer the complete amount of the mortgage or the principal only. Because banks need to collect interest. They may also work with clients to reduce the amount by extending the mortgage terms. In any case, I doubt that banks will have great impact long-term. They might have a bad quarter or two. That’s my rational about all banks for the time being. Magna (Regular Account)
I started a new position in Magna after a volatile drop from $80 to $36. My purchase price was $36.42 per share and I will be getting a 5.91% dividend yield in return, can’t complain. I used to own Magna shares in the past, but sold them a few years ago when shares reached all-time high and I thought that valuations were too high. Now, it’s the perfect price to get back in. I haven’t seen Magna so cheap before. Magna is one of the biggest car parts supplier in the world. I understand that their next quarter earnings will be impacted because of the virus. A lot of car manufactures shutting down to respect the health guidelines to stop the spread of the virus. But, it’s a temporary measure that will probably last one month. After that everything will go back to normal. Personal cars remain the safest way of transportation to keep away from the virus. Keep that in mind. It’s not the bus, not the subway, not the train and not the plane. It’s a personal car. It’s very hard to catch a virus in your own car. People will keep that in mind. The car industry is perfectly safe. It’s the airline industry that is screwed at the moment. Suncor (Regular Account)
This is a contrarian buy. Suncor was not only hit by the virus fear, it was also hit because of the low oil price. However, I believe that Suncor is the best energy company in Canada. They have diversified operations and can survive even in low oil price environment. Suncor has oil sands operations, refineries, gas stations, and green energy operations. I started a new position in Suncor by purchasing 60 shares for $15.60 per share. It’s so cheap, I couldn’t not resist. The yield is a mind-blowing 12.90%, but they may have to cut that. When the stock was at $45 the yield was around 4%. ----
So these were my 3 stock purchases for today. The TD stock was bought in my TFSA account. I reinvested around $1000 from dividend accumulation over the past three months. The other 2 stocks, Magna and Suncor, were purchased in a regular cash account. My TFSA is maxed out so I had to start buying in a regular account. The bargains are too good to leave them on a table. I will monitor market volatility and will buy more stocks as they get cheaper. Take care, guys!
Love it German
ReplyDelete3 solid stocks. I'm a fan of suncor but I dunno how they will do at less than 10$ usd a barrel...
This whole thing may make me rethink my oil exposure moving forward. They are the only ones I'm worried about the dividend.
Magna is a deal at these levels. So many deals at the moment.
keep it up German, all the best
cheers
Hey Rob, I think oil prices will comes back to normal levels. The Russians and Saudis are playing the game. None of these counties can sustain such low oil price to balance their books. Saudi make money from oil and tourism. Oil is down, tourism is gone. Huge losses. I think oil will change it course very soon. At the moment, it's a commodity we cannot live without. It also got me thinking about the whole electric car industry. If gas prices stay where they are through the summer, who's gonna buy premium electric cars when you can buy a regular car half the price and enjoy cheap gas? Anyway time will tell.
DeleteGreat buys German! I own Suncor and am tempted to buy more shares at these prices. I don't own TD or Magna, I have been looking at TD. I didn't realize the price of Magna dropped to that level I might have to have a look at that as well.
ReplyDeleteCongrats on the buys you'll have lots of dividend income rolling into your accounts now.
Hey Matt, yes, Suncor got really punished, so are the pipeline stocks. I'm looking into some pipeline names to add as well.
DeleteHello German, I just found your website and read your page on the 25 year plan. You got a lot of pushback about how unrealistic it was. I would like to send you some real data how it worked out for me. We made our plan and projections in 2009 and retired in 2018 with a much larger dividend income then projected. You can also find me at dividend-café.com, or divcafe@eastlink.ca
ReplyDeleteHolding all three of them and also added TD and SU these days. DRIPing Magna so I did not want to increase our holding. Yeah, challenging times but I believe this crisis will pass like many others and we should not pass on the opportunities Mr. Market is creating right now. German, stay safe and healthy!
ReplyDeleteIt's definitely a year of buying opportunities. I hope this ordeal end by summer and market stabilize by winter. Until then, we have many months to buy stocks at discount :)
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