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The TSX Composite Index Fell Almost 5%: Is the Stock Market Crash 2.0 Here? – The Motley Fool Canada

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4 years ago

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For a long time, billionaire investors like George Soros and Warren Buffett have been saying that a second stock market crash is in the making. The TSX Composite Index surged 30% between April 1 and September 1 after falling 34% in March. The market crashed when the COVID-19 pandemic struck, and the market rallied on the back of the government stimulus package.

There were fears that the second wave of pandemic after the reopening of the economy would repeat the March sell-off. These fears are materializing. The increasing COVID-19 cases in the U.S., Canada, and Europe are recreating conditions of a lockdown. But this time, there won’t be a complete nationwide lockdown but tighter travel restrictions. Governments are better prepared to handle a coronavirus outbreak than they were in March.

Is the stock market crash 2.0 here? 

George Soros stated that the free money coming from the fiscal stimulus package created a liquidity bubble, which drove stock valuations to new highs. When the valuations are high, there is more downside than upside.

The stock market was already bearish when the Canada Revenue Agency (CRA) delayed Canada Recovery Benefit (CRB) payments because of a technical glitch. The liquidity coming from the stimulus package was drying up. The COVID-19 resurgence accelerated the bearish tone. The TSX Composite Index has fallen 4.7% in the last three trading days and 6.2% in 13 trading days. In the March-sell off, the Index fell 11.8% in three trading days and 18.7% in 13 trading days.

The potential of another wave of pandemic hurt Air Canada (TSX:AC) and Suncor Energy (TSX:SU)(NYSE:SU) the most. Their stock prices fell 11.6% and 10.2%, respectively, to their March lows. Even virus stocks like Shopify, Lightspeed POS, and Kinaxis dipped single digits this week.

Companies are releasing their third-quarter earnings. The TSX Composite Index decline was partially offset by earnings surprises. For instance, better-than-expected third-quarter earnings sent RioCan REIT stock up 2.46%.

Stocks in the red

AC and Suncor are already struggling with sluggish air travel and oil demand. Another wave of tighter restrictions dampened any hopes of a recovery this year. The stock price momentum of AC and Suncor was range-bound since the pandemic. The recent dip pushed their stock prices to the lower end of their price range. AC stock has found support at $15. But Suncor stock lost its support and fell below $15. Warren Buffett exited airline stocks but retained his investment in Suncor in April.

A prolonged sector weakness leads to consolidation. The oil and gas industry has been in crisis for six years, and the pandemic has made things worse. Moreover, interest rates are near zero, creating an opportunity to acquire companies with strong assets at an attractive price.

The Canadian oil and gas industry saw its first mega-merger; Cenovus Energy agreed to acquire Husky Energy for $3.8 billion. Analysts believe that this could be the beginning of a mergers and acquisition supercycle. Suncor is in a far better position than most oil and gas companies because of its integrated business model. Its third-quarter earnings gave a snapshot of its liquidity, which will help it withstand crisis and operating efficiency that will help it return to profit when the oil price recovers to US$45/barrel.

The airline industry is already consolidated. It might undergo further consolidation, or some airlines might declare bankruptcy. For instance, AC slashed the Transat A.T. bid price by more than 70% to $190 million. But this deal could fall in jeopardy if AC faces the risk of bankruptcy.

What should you do in this stock market pullback? 

The recent dip in the stock market has created an opportunity to buy post-pandemic stocks at discount. Suncor has growth potential, but its growth comes with risks. There are better stocks like Enbridge and RioCan, which have dividend yields of over 8.86% and 9.97%, respectively. These stocks are also reporting profits and positive cash flows. The stock market pullback has created an opportunity to lock such high-dividend yields for a lifetime.

Here are some more quality stocks to buy in the recent stock market pullback.

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Fool contributor Puja Tayal has no position in any of the stocks mentioned. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of and recommends Enbridge, Shopify, and Shopify. The Motley Fool owns shares of Lightspeed POS Inc. The Motley Fool recommends KINAXIS INC.

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What Difference Will You Make to an Employer?

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13 hours ago

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October 21, 2024

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Ex-Employer (Job)

It’s common knowledge that companies don’t hire the most qualified candidates. Employers hire the person they believe will deliver the best value in exchange for their payroll cost.

Since most job seekers know the above, I’m surprised that so few mention their Employee Value Proposition (EVP). Most job seekers list their education, skills, and experience without substantiating them and expect employers to determine whether they can benefit their company; hence, most resumes and LinkedIn profiles are just a list of opinions—borderline platitudes—that are meaningless and, therefore, have no value. Job seekers need to better explain, along with providing evidence, how they’ll contribute to an employer’s success.

Employers don’t hire opinions (read: talk is cheap); they hire results.

You’re not offering anything tangible when you claim:

 

  • I’m a great communicator.
  • I’m detail oriented.
  • I’m a team player.

 

Tangible:

 

  • “At Global Dynamics, I held quarterly town hall meetings with my 22 sales reps, highlighting our accomplishments, identifying opportunity areas, and recognizing outstanding performers.”
  • “For eight years, I managed Vandelay Industries IT department, overseeing a staff of 18 and a 12-million-dollar budget while coordinating cross-specialty projects. My strong attention to detail is why I never exceeded budget.”
  • “While working at Cyberdyne Systems, I was part of the customer service team, consisting of nine of us, striving to improve our response time. Through collaboration and sharing of best practices, we reduced our average response time from 48 to 12 business hours, resulting in a 35% improvement in customer feedback ratings.”

 

These examples of tangible answers provide employers with what they most want to hear from candidates but rarely do; what value the candidate will bring to the company. Typically, job seekers present their skills, experience, and unsubstantiated opinions and expect recruiters and employers to figure out their value, which is a lazy practice.

Getting hired isn’t based on “I have an MBA in Marketing and Sales,” “I’ve been a web designer for over 15 years,” “I’m young, beautiful and energetic,” blah, blah, blah. Likewise, being rejected isn’t based on “I’m overqualified,” “I’m too old,” “I don’t have enough education,” blah, blah, blah. Getting hired depends entirely on showing employers that you can add value and substance to their company; that you’ll serve a purpose.

When you articulate a solid value offer, the “blah, blah, blah” doesn’t matter. Job seekers focus too much on the “blah, blah, blah,” and when not hired, they say, “It’s not me, it’s…” The biggest mistake I see job seekers make is focusing on the “blah, blah, blah”—their experience and education—believing this is what interests employers. Hiring managers are more interested in whether you can solve the problems the position exists to solve than in your education and experience.

 

Not impressive: Education

Impressive: A track record of achieving tangible results.

 

You aren’t who you say you are; you are what you do.

 

If you want to be somebody who works hard, you have to actually work hard. If you want to be somebody who goes to the gym, you actually have to go to the gym. If you want to be a good friend, spouse, or colleague, you have to actually be a good friend, spouse, or colleague. Actions build reputations, not words.

The biggest challenge job seekers face today is differentiating themselves. To stand out and be memorable, don’t be like most job seekers, someone who’s all talk and no action. Any recruiter or hiring manager will tell you that the job market is heavily populated with job seekers who talk themselves up, talk a “good game” about everything they can “supposedly” do, drop names, etc., but have nothing to show for it.

More than ever, employers want to hear candidates offer a value proposition summarizing what value they bring. If you’re looking for a low-hanging fruit method to differentiate yourself, do what job seekers hardly ever do and make a hard-to-ignore value proposition.

  1. Increase sales: “Based on my experience managing Regina and Saskatoon for PharmaKorp, I’m confident that I can increase BioGen’s sales by no less than 25% in Winnipeg and the surrounding area by the end of 2025.”
  2. Reduce cost: “During my 12 years as Taco Town’s head of purchasing, I renegotiated contracts with key suppliers, resulting in 15% cost savings, saving the company over $450,000 annually. I know I can do the same for The Pasta House.”
  3. Increase customer satisfaction:“During my time at Globex Corporation, I established a systematic feedback mechanism that enabled customers to share their experiences. This led to targeted improvements, increasing our Net Promoter Score by 15 points. I can increase Dunder Mifflin’s net promoter score.”
  4. Save time: “As Zap Delivery’s dispatcher, I implemented advanced routing software that analyzed traffic patterns, reducing average delivery times by 20%. My implementation of this software at Froggy’s Delivery can reduce your delivery times by at least 20%, if not more.”

 

If you want to achieve job search success as soon as possible, structure your job search with a single thread that’s evident and consistent throughout your résumé, LinkedIn profile, cover letters and especially during interviews; clearly convey what difference you’ll make to the employer.

_____________________________________________________________________

 

Nick Kossovan, a well-seasoned veteran of the corporate landscape, offers “unsweetened” job search advice. You can send Nick your questions to artoffindingwork@gmail.com.

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Netflix’s subscriber growth slows as gains from password-sharing crackdown subside

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4 days ago

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October 17, 2024

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Netflix on Thursday reported that its subscriber growth slowed dramatically during the summer, a sign the huge gains from the video-streaming service’s crackdown on freeloading viewers is tapering off.

The 5.1 million subscribers that Netflix added during the July-September period represented a 42% decline from the total gained during the same time last year. Even so, the company’s revenue and profit rose at a faster pace than analysts had projected, according to FactSet Research.

Netflix ended September with 282.7 million worldwide subscribers — far more than any other streaming service.

The Los Gatos, California, company earned $2.36 billion, or $5.40 per share, a 41% increase from the same time last year. Revenue climbed 15% from a year ago to $9.82 billion. Netflix management predicted the company’s revenue will rise at the same 15% year-over-year pace during the October-December period, slightly than better than analysts have been expecting.

The strong financial performance in the past quarter coupled with the upbeat forecast eclipsed any worries about slowing subscriber growth. Netflix’s stock price surged nearly 4% in extended trading after the numbers came out, building upon a more than 40% increase in the company’s shares so far this year.

The past quarter’s subscriber gains were the lowest posted in any three-month period since the beginning of last year. That drop-off indicates Netflix is shifting to a new phase after reaping the benefits from a ban on the once-rampant practice of sharing account passwords that enabled an estimated 100 million people watch its popular service without paying for it.

The crackdown, triggered by a rare loss of subscribers coming out of the pandemic in 2022, helped Netflix add 57 million subscribers from June 2022 through this June — an average of more than 7 million per quarter, while many of its industry rivals have been struggling as households curbed their discretionary spending.

Netflix’s gains also were propelled by a low-priced version of its service that included commercials for the first time in its history. The company still is only getting a small fraction of its revenue from the 2-year-old advertising push, but Netflix is intensifying its focus on that segment of its business to help boost its profits.

In a letter to shareholder, Netflix reiterated previous cautionary notes about its expansion into advertising, though the low-priced option including commercials has become its fastest growing segment.

“We have much more work to do improving our offering for advertisers, which will be a priority over the next few years,” Netflix management wrote in the letter.

As part of its evolution, Netflix has been increasingly supplementing its lineup of scripted TV series and movies with live programming, such as a Labor Day spectacle featuring renowned glutton Joey Chestnut setting a world record for gorging on hot dogs in a showdown with his longtime nemesis Takeru Kobayashi.

Netflix will be trying to attract more viewer during the current quarter with a Nov. 15 fight pitting former heavyweight champion Mike Tyson against Jake Paul, a YouTube sensation turned boxer, and two National Football League games on Christmas Day.

The Canadian Press. All rights reserved.

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All Magic Spells (TM) : Top Converting Magic Spell eCommerce Store

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4 days ago

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October 17, 2024

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