Month: February 2016

CIX, CI Financial Corp. update.

Hamilton

The then, Sept. 8, 2013 and now charts, as usual;

cix sept 2013cix feb 13 2016

So we had a sell at the end of 2013 at about $33. As you can see, no two charts are the same depending on the level of resolution (every minute, hour, or day) and the hi-lo kind of stuff. On the Bigchart a triangle seems to fit, whereas on the Globe&Mail one a running flat seems more appropriate. The actual high was around $37 some 5 months or so later. Anyway we are already at $27 so all is well that ends well.

This mutual fund company is, I believe, 39% owned by Bank of Nova Scotia, so it does not have to go as low as, for instance, AGF (it is in this blog). Nevertheless their world has shrunk. It used to be that the client makes, say, 7.5% and the company 2.5% and everybody is happy. Now that is more 2.5% for you and 2.5% for us and nobody is happy. The business is more difficult due to all sorts of regulations and on top of that the trust is very low. We have a higher regard for the guy at Home Depot selling vinyl siding than we do for these guys and gals, perhaps for good reason.

Look for about $15 at the very least and then just under $10, the 4th wave of previous degree. Mutual funds may become just as popular as the Polaroid camera by the time this bear is done.

We add two funds chosen randomly and invite you to the website if you wish to test the 50/50 proposition. We have a bond and equity fund, the latter is guaranteed which means it is life insured at a certain age, which ties you to it. Would you care to own them?

CiInvestmentsEN1CiInvestmentsfund 2

If you look at the one on the left with a MER of >5% it is probable 3% plus 2% for the guarantee. Looking at the chart on the right, –click on it to enlarge- it looks very much identical to the TSE which makes me wonder if this is just another “closet-indexer” that does not deserve such a high management fee. We do not need any help to shrink our portfolio!        Your investment advisor receives about 1/2 maximum of the MER, which is why he, not you, has the yacht.

MRK

Hamilton

mrk feb 13 2016

We use a semi-log scale. This makes the rise from the early eighties look like a perfectly straight channel. We are not entirely sure of the early part of the EW count, but we are pretty sure that the 4th wave is where we think it is. Also the orthodox top might be to the left of what is shown but this does not materially affect the analysis.

First note that this stock never fell back to the 4th wave of previous degree, this simple means that it may still do that! The mess up there over the last 15 years is simple a series of a-b-c’s as far as we can tell, that is corrective and not impulsive so there is little reason to believe that we are in a new bull market. Taking all that into account a target of $15 emerges.

HPQ may have a similar structure.

CF Industries, on NY …………….and CF, Canaccord Fin.

Hamilton

cf feb 13 2016 bcf feb 13 2016 s

For the record we did think the stock was peaking in 2012 at $225, or $45 on an after split basis. Do not confuse this stock with CF on the TSX, Canaccord Financial. The charts look equally miserable but it is in an entirely different business.

CF stock is trend persistent. A term usually reserved to describe the performance of a commodity. That is what CF does, it makes the commodity ammonia NH3 , the stuff that gives livestock farms that very distinct smell. They do that, I believe, by squeezing the N out of Natgas and converting it to a liquid or a solid. It is used almost exclusively as a fertilizer and consequently they are competitors of the potash miners.

Something went horrible wrong mid 2015. They decided the stock should be split 5 to 1 effective June 18,2015 not realizing that the market was about to do that for them. This creates a loss illusion for those that cannot read their statements, which is probable at least half of them. When the stock drops from $350 to $70 the trend persistency is broken and there is a feeling that the 5-fold increase in the number of shares does not fully compensate. If you think this is nonsense, go to England.  There used to be 12 pence to the shilling and then they went metric sometime around 1971. From that point there were only 10 p to the shilling and 10 shilling to the pound. A good part of the English population still believes this was a conspiracy by the then government to rob them of 20% of their wealth. That sentiment still persists.

The stock looks to be doing a standard a-b-c correction. It got to about $26 which is close to 61.8%. Add to that that the c is about equal to the a, and you have a good case for assuming that the drop is complete. Forbes and Credit Suisse, both well known for their insights in manure, have the stock as the TOP PICK! We would hold off just a little. There aren’t 5 waves in the c, there must be one more down wave, perhaps to $20. The yield then at over 4.5% would indeed make it an attractive dividend stock.

For the sake of completeness we add the chart of the other CF, both then, Dec. 2011, and now;

cf dec 2011cf on TSE feb 13 2016

As usual it took longer than expected, but we will get there, that is below $3. The wave count is now purely academic. The question is will it survive?

X, TMX Group

Hamilton

x feb 12 2016

This is the TMX Group, and yes we would have sold it earlier at $45 four years ago. But that was then and now is today. Briefly we were at least 40% below the peak, but typically when you have a big B-wave (see also FFH) the C should take the stock down as far as the A leg,$25 and most often to below the A’s low, $20. It should do so in a clean 5-wave sequence.

So how does one know that it is a B-wave in a large A_B_C flat? Symmetry. B-waves are 3-wave structures. If you can find perfect symmetry you can bet your bottom dollar that that is what it is. Here you have that. If you were to put a mirror where the blue line is, both sides would be perfect and opposite reflections of each other.

TMX is an exchange, they make money selling information, charging for trades and listings etc., the more business the more income. They did not make any in the last quarter. Not good so early in the game!