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Warren Buffett: A Canadian Market Crash Is Coming

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Whether in the country or across the border, the stock market seems primed for another crash. If the market was overpriced before the pandemic and is nearing the same level in just about five months, it means another correction might be right around the corner. There are other indicators, too, like the warning that Buffett Indicator flashed when the global economy to gross domestic product ratio surpassed the level previously seen before the 2000 tech bubble burst.

For the TSX, one specific indicator of an upcoming market crash might be Warren Buffett getting rid of Restaurants Brands International (TSX:QSR)(NYSE:QSR). Buffett’s Berkshire Hathaway partly funded the merger that created RBI in the first place.

A suffering business

Along with hospitality and travel, another industry that has suffered quite a lot during this pandemic is the food industry. Public places have been suffering for quite a while, mostly due to COVID-19 restrictions. During the times when restaurants were forced to close operations completely (no takeout or deliveries), people cooked at home.

No foot traffic means the majority of the business is slashed away. All the expensive investments such businesses made in aesthetics of their dining rooms all seem like a waste now. Renting or maintaining expensive premises is simply a drain on the resources. This has resulted in RBI, one of the five largest fast-food chains in the world, to close off hundreds of underperforming locations.

While one of the subsidiaries, Popeyes, saw the sales soar, Tim Hortons is suffering. The Canadian giant was already facing backlash and loyal customers turning away from the brand (partly because of the merger), and now the pandemic has made the situation even worse. RBI’s net earnings declined by 36% compared to the same quarter last year.

Should you get rid of RBI as well?

Not just yet. While there isn’t a lot of hope now, Buffett might come around and reconsider RBI, just like he did with Suncor. Even if he doesn’t change its mind, getting rid of RBI right now might not be a brilliant move for investors like us.

The bitter truth is that compared to the larger food chains, RBI is performing relatively poorly. McDonald’s has already recovered its pre-pandemic value, whereas Starbucks is 11.7% low from its pre-pandemic high and Yum! Brands are just 9.6% down. Compared to these fast-food chains, RBI’s valuation (20% lower than its pre-pandemic high) seems very weak.

According to the second-quarter results, two out of three brands have underperformed. But selling at its current valuation might not be prudent. Its dividends might be reason enough to keep the company in your portfolio for now. And if you still wish to get rid of it, wait for the stock to rise again. It will probably pick up pace as lockdown restrictions ease up.

Takeaway

If Buffett’s move indicates that TSX is about to see another crash, now would be an excellent time to identify which stocks you are going to buy. Look at the previous recovery of any of the stocks you are considering and figure out how low the stocks would have to fall to reach your desired valuation range.

Another crash might be a perfect opportunity to balance any losses you incurred in the first crash.

Source:- The Motley Fool Canada

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Three Shoppers Drug Mart workers test positive for virus in Belleville stores – Belleville Intelligencer

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Medical officer of health Dr. Piotr Oglaza stands outside Hastings Prince Edward Public Health.
FILE


Luke Hendry / Luke Hendry

Three employees at a trio of Shoppers Drug Mart store locations in Belleville “have tested positive on a presumptive test for COVID-19”and are in isolation away from work, said parent firm Loblaw Companies Limited.

Word of the three cases follows public notification by Hastings-Prince Edward Public Health of two positive cases of COVID-19, one recorded Tuesday and another reported Thursday in the region.

The transmission origin of Tuesday’s case is listed as pending while Thursday’s case was attributed to close-contact transmission.

Loblaw Companies said on its website that given “the important role we play in our communities, we are prepared for all possible situations, including a positive test for COVID-19 in our stores.”

All public safety measures are taken by Shoppers Drug Mart to clean and sanitize stores following a positive test of an employee, the firm said.

“In these cases, we work closely with public health and follow their guidance to ensure proper notification of close contacts and required cleaning and sanitization in our stores.”

The company said for “transparency, we regularly update the sections … with all positive COVID-19 cases in our stores by province in the last 15 days. For privacy, we will not release any personal information about our colleagues and employees.”

One infected employee working at Shoppers’ 150 Sidney Street location worked their last day Sept. 23, said the company, while another infected employee at Shoppers’ 405 Dundas Street location worked their last day Sept. 20, the company confirmed.

The employee at Quinte Mall’s Shoppers Drug Mart location at the Quinte Mall’s 390 North Front Street location worked their last day at the store Sept. 22, said the firm.

Quinte Mall property management did not return a phone call by The Intelligencer placed Monday for comment on any possible actions, if any, were needed to protect mall visitors.

Dr. Piotr Oglaza, medical officer of health for Hastings-Prince Edward Public Health, declined comment Monday on the Shoppers’ employee testing positive on a presumptive test at Quinte Mall and whether there was a safety concern for a privately-owned mall that sees high footfall daily on its premises.

Oglaza told The Intelligencer in an interview the health unit is bound by provincial health privacy provisions not to release information that could lead to the identification of an individual.

However, speaking in general terms, Oglaza said identifying an individual case and issuing a public COVID-19 advisory can be warranted if the health unit deems a public health safety risk to the public when proper contract tracing cannot locate all people who have been exposed to an infected person.

In the case of a COVID-19 outbreak earlier this year at a Kingston beauty services salon, for example, health unit officials there made the name of the spa public to trace all customers who may have visited the spa in order to conduct further contact tracing to find, isolate and stem any further spread of the virus.

Oglaza said contact tracing in all 54 local cases so far listed by HPE Public Health up until Tuesday’s latest additional case confirmation has been successful to the point that there has been no need to make any public appeals in the health unit’s catchment area.

Contact tracing is key to countering more anticipated cases in a second wave, Oglaza said, because health officials can rapidly identify, trace and isolate new infections to avoid community spread throughout Hastings and Prince Edward catchment area.

“There is a role, time and place for public announcements. That’s when we are unable to trace contact if the nature of the setting is challenging, impossible, and if there is a risk if we don’t get to the public,” Oglaza said.

“In cases of COVID-19, our work is really focusing on as quickly as possible connecting with the person who has been confirmed and getting from them a detailed history of who they’ve been in contact with over a certain amount of time we deemed they were infectious and then getting that list of individuals and connecting with them directly.”

“In that situation, once these contacts are basically identified,” Oglaza said, “connected with all the measures that are in place, there really is no need for anything more for the public to know other than there is a case and it’s being handled by us because any more information provided by a case could potentially lead to identify who that individual is and we’re not a position to do that.”

“This is personal health information,” Oglaza said.

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Disney to lay off 28000 at its parks in California, Florida – CP24 Toronto's Breaking News

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Mike Schneider, The Associated Press


Published Tuesday, September 29, 2020 5:06PM EDT


Last Updated Tuesday, September 29, 2020 8:39PM EDT

ORLANDO, Fla. – Squeezed by limits on attendance at its theme parks and other restrictions due to the pandemic, The Walt Disney Co. said Tuesday it planned to lay off 28,000 workers in its parks division in California and Florida.

Two-thirds of the planned layoffs involve part-time workers but they ranged from salaried employees to hourly workers, Disney officials said.

Disney’s parks closed last spring as the pandemic started spreading in the U.S. The Florida parks reopened this summer, but the California parks have yet to reopen as the company awaits guidance from the state of California.

In a letter to employees, Josh D’Amaro, chairman of Disney Parks, Experience and Product, said California’s “unwillingness to lift restrictions that would allow Disneyland to reopen” exacerbated the situation for the company.

D’Amaro said his management team had worked hard to try to avoid layoffs. They had cut expenses, suspended projects and modified operations but it wasn’t enough given limits on the number of people allowed into the park because of social distancing restrictions and other pandemic-related measures, he said.

“As heartbreaking as it is to take this action, this is the only feasible option we have in light of the prolonged impact of COVID-19 on our business, including limited capacity due to physical distancing requirements and the continued uncertainty regarding the duration of the pandemic,” he said.

California’s health secretary on Tuesday said the state was close to working out a way to have the theme parks reopen in a responsible way.

“We know that a number of Californians are eager and wondering when that is coming, and we’re working with those industries to put out something that’s thoughtful, allows us to maintain the rest of our framework in a strong way, and really following those principles of slow and stringent to ensure those large activities are done responsibly,” said Dr. Mark Ghaly, secretary of California Health and Human Services.

Disney officials said the company would provide severance packages for the employees, where appropriate, and also offer other services to help workers with job placement.

Officials with the union that represents the actors who play Disney characters at the theme parks said they were having conversations with Disney officials about how they would be impacted, according to Actors’ Equity Association.

Officials with the Service Trades Council Union, which represents 43,000 workers at Disney World in Florida, said they were having similar conversations.

“We were disappointed to learn that the Covid-19 crisis has led Disney to make the decision to layoff Cast Members,” the coalition of six unions said in a statement.

About 950 workers from Unite Here Local 11 in California will be laid off starting Nov. 1, union leaders said.

Disney officials didn’t offer a breakdown of the layoffs between the Florida and California operations. Walt Disney World in Florida has around 77,000 employees, while the Disneyland Resort in California has more than 30,000 workers.

With its parks closed due to the pandemic in April, Disney furloughed up to 43,000 workers while still paying for their health insurance at its Florida resort. It brought many of them back after it reopened in July. Furloughed workers in California also received health benefits.

In a statement, U.S. Rep. Val Demings, a Democrat from Orlando, said the layoffs showed the need for more coronavirus-related relief from Congress.

“These layoffs show yet again how desperately that assistance is needed by American households and businesses,” Demings said.

Associated Press writers Adam Beam in Sacramento, California, and Amy Taxin in Orange County, California, contributed to this report.

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Disney to lay off 28000 at its parks in California, Florida – CTV News

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ORLANDO, FLA. —
Squeezed by limits on attendance at its theme parks and other restrictions due to the pandemic, The Walt Disney Co. said Tuesday it planned to lay off 28,000 workers in its parks division in California and Florida.

Two-thirds of the planned layoffs involve part-time workers but they ranged from salaried employees to hourly workers, Disney officials said.

Disney’s parks closed last spring as the pandemic started spreading in the U.S. The Florida parks reopened this summer, but the California parks have yet to reopen as the company awaits guidance from the state of California.

In a letter to employees, Josh DAmaro, chairman of Disney Parks, Experience and Product, said California’s “unwillingness to lift restrictions that would allow Disneyland to reopen” exacerbated the situation for the company.

DAmaro said his management team had worked hard to try to avoid layoffs. They had cut expenses, suspended projects and modified operations but it wasn’t enough given limits on the number of people allowed into the park because of social distancing restrictions and other pandemic-related measures, he said.

“As heartbreaking as it is to take this action, this is the only feasible option we have in light of the prolonged impact of COVID-19 on our business, including limited capacity due to physical distancing requirements and the continued uncertainty regarding the duration of the pandemic,” he said.

California’s health secretary on Tuesday said the state was close to working out a way to have the theme parks reopen in a responsible way.

“We know that a number of Californians are eager and wondering when that is coming, and we’re working with those industries to put out something that’s thoughtful, allows us to maintain the rest of our framework in a strong way, and really following those principles of slow and stringent to ensure those large activities are done responsibly,” said Dr. Mark Ghaly, secretary of California Health and Human Services.

Disney officials said the company would provide severance packages for the employees, where appropriate, and also offer other services to help workers with job placement.

Officials with the union that represents the actors who play Disney characters at the theme parks said they were having conversations with Disney officials about how they would be impacted, according to Actors’ Equity Association.

Officials with the Service Trades Council Union, which represents 43,000 workers at Disney World in Florida, said they were having similar conversations.

“We were disappointed to learn that the Covid-19 crisis has led Disney to make the decision to layoff Cast Members,” the coalition of six unions said in a statement.

About 950 workers from Unite Here Local 11 in California will be laid off starting Nov. 1, union leaders said.

Disney officials didn’t offer a breakdown of the layoffs between the Florida and California operations. Walt Disney World in Florida has around 77,000 employees, while the Disneyland Resort in California has more than 30,000 workers.

With its parks closed due to the pandemic in April, Disney furloughed up to 43,000 workers while still paying for their health insurance at its Florida resort. It brought many of them back after it reopened in July. Furloughed workers in California also received health benefits.

In a statement, U.S. Rep. Val Demings, a Democrat from Orlando, said the layoffs showed the need for more coronavirus-related relief from Congress.

“These layoffs show yet again how desperately that assistance is needed by American households and businesses,” Demings said.

Associated Press writers Adam Beam in Sacramento, California, and Amy Taxin in Orange County, California, contributed to this report.

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