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another massive assistance will be provided :)
If a bank has problems, yes it will get massive assistance, but that does not necessarily preserve the equity. Citigroup and Bank of America had huge assistance from the US govt and their equity has been destroyed.

But many investors in Canadian banks seem to think that (inevitable) government bailouts will preserve their equity value. I think this is a big mistake in reasoning.
 

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I have a lot less concern about our banks now that they have to have higher Tier 1 capital ratios and their debt including potential conversion of prefs into useless common equity, has to be NVCC compliant. It means their shateholder and debt holder capital structure would be destroyed before a taxpayer bailout happens. That would be a Joan of Arc moment for the executives.
 

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I have a lot less concern about our banks now that they have to have higher Tier 1 capital ratios and their debt including potential conversion of prefs into useless common equity, has to be NVCC compliant. It means their shareholder ... would be destroyed before a taxpayer bailout happens
I'm not concerned about the banks either. The banks will be ok; it's the shareholders that will be destroyed once their equity is diluted into oblivion. This could have happened in 2008 but shareholders of Canadian banks got lucky.
 

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James is the epitome of the cognitive bias known as loss aversion, but I do think AT&T is not so hot as a dividend stock.

I inherited some AT&T stock but am looking for some strength in the stock price to make an exit. I am not interested in their new media businesses (Warner) which is probably end in tears and I already have Canadian telecom exposure.

Total returns on T have been well below that of the SP500 over the past 5 years. It's been setting lower lows for a couple years now.
 

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James is the epitome of the cognitive bias known as loss aversion, but I do think AT&T is not so hot as a dividend stock.

I inherited some AT&T stock but am looking for some strength in the stock price to make an exit. I am not interested in their new media businesses (Warner) which is probably end in tears and I already have Canadian telecom exposure.

Total returns on T have been well below that of the SP500 over the past 5 years. It's been setting lower lows for a couple years now.
agree, telecom sits with media, energy and pipelines as sectors i am very leery about and try to avoid (we don't have to own anything) due to politics and plain old technological disruption (i only own tech companies in etf's)

i looked at att but decided to pass and stick with telus as my one telco, i can follow them better
 

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James is the epitome of the cognitive bias known as loss aversion, but I do think AT&T is not so hot as a dividend stock.
I just understand the risks of these things. There's no problem investing in AT&T, or banks, or anything as long as one has a realistic idea of both upside & downside.

Beware aware of both upside & downside is not loss aversion bias. In fact it's a vital part of any kind of risk taking, and that includes thinking through the worst case scenarios.
 

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T's yield is now 7.2%. I just wanted to point out something about "dividend investing". I think AT&T is a good example of how focusing too much on yield can create a misleading picture and harm your capital.

At first glance, T seems like it's been an OK investment. The 5 year cumulative total return (including dividends, not annualizing) is +16% so you might say, great, it's making money. And it's paying a big dividend.

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But is that really OK? Here's what the broader S&P 500 has done in the same 5 years. It's up 84%.

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So while the investor didn't lose in AT&T in absolute terms, they certainly did much worse than the broader index. It's a significant underperformance, and in my view, that's harmful since most of us want our capital to last as long as possible into the future.
 

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I wanted to give this thread a bit of a bump. We are looking at a low interest rate environment for the near term if not longer. I have a tiny position in this US telco and hold BCE and Telus as well. I noticed that the EPS does not meet the current payout and the stock has cut its dividend in the past. The stock is inching closer to the march lows and gave me reason to revisit. I briefly considered placing an order this evening. I think Verizon is probably a better company in this space but perhaps there is a bit more value with AT&T. I don't believe there are many members that stock pick US equities but would welcome any analysis. I am wanting to keep my powder dry for other purchases as we move closer to the US election so will hurry up and wait on this one. Whether or not we see another drop in the next month or so I plan to allocate some cash to equities.
 

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Dead money. Going nowhere.....
I see that AT&T now has a 7.5% dividend yield, which itself should be a warning sign. But the total return is far more important. Here are AT&T trailing returns.

5 years: 2.4% CAGR ... vs ... 14.0% for US mkt
10 years: 5.0% CAGR ... vs ... 13.8% for US mkt
15 years: 6.1% CAGR ... vs ... 9.9% for US mkt

Nothing to write home about. What does this stock offer you that the dumb old index does not? I don't pick individual US stocks, but if I did, I would be looking for companies which have a history of outperforming the index.

In comparison, BCE and T have performed on par with, or better, than the Canadian index.
 

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Thanks for the feedback James and Alta. Another example of how chasing yield can result in underperformance. Canadian telcos definitely are more appealing (better balance sheets, moats and opportunity). I am at full allocation for Canadian telcos and happy with their return.
 

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Picking US stocks is pretty difficult. I am a fan of the US index. Also this industry in particular seems to be very cutthroat in the US. Canadian telcos definitely leverage their monopolistic position and lack of foreign competition barriers to keep their margins healthy.
 
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