Because I had bought some TD stock in 2009 and have made a lot of money on it, I sold some and bought some Home Capital Group on 6 March 2017 at $25.96 per share. The company had wobbled a bit when the company announced in February 2017 that it received an enforcement notice from staff of the Ontario Securities Commission.
It basically fell off a cliff in mid-March after the company reported several of its current and former executives have been served with enforcement notices from the Ontario Securities Commission over the company’s disclosure of its investigation into fraudulent mortgage documents. It hit a low of $5.85 in May 2017. This notice basically set up a run on this bank. On its way down I bought some more shares at $6.85 each and that would give me an ACB of $22.14.
The stock hit a high of $19 when Warren Buffet rode to its rescue in June 2017. It headed south again after the announcement and now resides at $14.00 plus.
At its lowest point I would have lost some 73.6% of my investment. At $19.00, my loss would have been around 14%. With today’s prices I am down some 36%. Currently analysts’ 12 month stock price ranges from $23.00 (gain of 3.9%) or a low of $12.13 (a loss of 45%) to an average of $17.69 (a loss of 20%).
I need to decide what to do with this. I will take my time and think about it. If I had panicked in May, I would have loss considerable more than I will currently lose. The thing with financials is that you can earn a lot of money investing in them but they are subject to runs. People can panic and pull out money. Banks and Financials are really confidence plays.
On my other blog I wrote yesterday about Lassonde Industries Inc. (TSX-LAS.A, OTC-LSDAF)... learn more. Tomorrow, I will write about Obsidian Energy Ltd TSX-OBE, NYSE-OBE)... learn more on Wednesday, July 26, 2017 around 5 pm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
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