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Trident Investment Management

OPPORTUNITIES

As with any stock market correction, some very good opportunities do arise.    One such opportunity, is the ability to buy the Canadian banks cheap.   In particular, I would like to focus on the Bank of Montreal.  

BMO-   Bank of Montreal is down 42% from its peak in April 2007 ($72.75). As of writing, these shares are trading at $42.10 and offer the investor an incredible yield of 6.65%   (and that’s before the dividend tax credit).   Assuming you invest in a non-registered account, the before tax yield would be approximately 8.50%   !

Unfortunately, our solid Canadian banks are being compared to our beaten up US counterparts.    This, however, couldn’t be further from reality.   Our Canadian banks, with the exception of CIBC, have had minimal exposure to the US subprime credit disaster.   Our Canadian real estate and mortgage businesses are doing quite well, and thus, will not suffer the safe default losses like they are experiencing in the USA.  

Take advantage of the weakness in shares prices in our Canadian Banks, and in particular, BMO.     Over 5 years of market cap has been erased from the BMO, making it a rare opportunity to buy this fine company at a relatively cheap valuation.  

Best regards,

Mike McGann

Director

Wealth  Advisor

(613) 271-6609