Incubator Hedge Fund

Incubator Hedge Fund Using the Strategies of Endowment Investing such as those of Harvard, Yale, and Stanford to achieve consistently superior results with reduce risk.

Using the Strategies of Endowment Investing such as those of Harvard, Yale, and Stanford to achieve consistently superior results with reduce risk by investing in classes that provide true diversification to provide absolute returns. Utilise specialised trading strategies in order to capture investment opportunities available in specific market sectors or asset classes that provide diversification

across lowly correlated investments to reduce portfolio volatility without negatively impacting the expected return, thereby improving the return/risk profile of a portfolio.

My question to Enbridge's CEO in order to unlock value in the stock
08/04/2018

My question to Enbridge's CEO in order to unlock value in the stock

The U.S. economy is so big that all of the individual states are comparable to entire countries.
03/08/2017

The U.S. economy is so big that all of the individual states are comparable to entire countries.

02/10/2016

My February 2016 Blog

Canadian Bank CEO Conference

Last month I attended a Canadian Bank CEO Conference. At this Conference, the biggest concerned was about higher loan losses stemming from the oil and gas sector. On the day of the conference a year ago, the price of WTI was $56 per barrel - as of the writing of this blog it is even lower at approximately $28 per barrel.

Low oil and gas prices remain a challenge for Canadian banks and some banks have shown early signs of credit weakness related to the low commodity price environment. Canadian banks have begun to show some signs of weakening oil and gas credit quality . Certain banks suggested they are also seeing some early signs of weakness on the retail credit side in the Canadian oil-regions. NA has the highest exposure to oil and gas loans (measured as a percentage of CET1 capital), but the lowest exposure to Western Canada in terms of overall loan book composition.

Prior credit cycles and rising loan losses have had a negative impact on Canadian bank valuations but the overall relative performance of Canadian bank stocks seems to “work” even
during a rise in loan loss rates.The Canadian banks have also underperformed the TSX in some instances of rising losses in the early 1990s and late-2000s; however, since 1990, the Canadian
banks have still outperformed the broader TSX index in approximately 80% of the years on a total return basis.

The Canadian banks also look “inexpensive” relative to U.S. banks and Canadian lifecos based on historical average levels, while the Canadian bank dividend yields are also “above average” versus other Canadian yield sectors.

09/23/2013

Key differences with Canadian banks & US banks

Canadian banks are very diversified by product, business line, client type, and geography. Most banks in the US market have not historically been as diversified by product line.

Canadian banks’ ROE has been materially higher than US banks’ ROE in recent years because they benefited from their expansion into wealth management, they were not as affected by the capital markets dislocation and credit losses in the US during 2007–2009, and they have suffered less pressure on their fees. Furthermore, larger US banks had generally been more acquisitive than Canadian banks, to the detriment of their ROE. In Canada, ROE
had been in the 21–23% range from mid-2006 to late 2007, then declined to a median of 13% in 2009, and then recovered 17-18%. In the US, ROE had been in the 15–17% range from mid-2006 to late 2007, was negative for much of 2008 and 2009, and is now about 12%

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