Comments on Triaging My Way To Financial Success: Competition for Capital:

Anon - The average yield for BMO common over the p...

2009-01-04T21:26:00.000-05:00

Anon - The average yield for BMO common over the past 20 years has been 4.13% which is well below that of their preferred issues over the same time period.

Preferreds have very little upside potential with respect to capital gains if bought at issue and therefore offer a higher yield as an incentive for investors to commit equity to a company over a period of time. The point I am making is that the common equity issued by BMO is very expensive in relation to an industry leader and that the behaviour of the commons indicate suspicious activity.

The recent share offering was for common equity. Y...

2009-01-04T20:44:00.000-05:00

The recent share offering was for common equity. You should check the share price and yield history of BMO common versus preferred shares. Preferred shares yield less but of course have relatively greater security.

Preferred shares are in the hierarchy of equity an...

2009-01-03T10:13:00.000-05:00

Preferred shares are in the hierarchy of equity and stand above common shares with respect to dividends and stake in the business. It's kind of like Bonds being King, Pref's being Queen & Commons being the Jester.

Yields on pref's should routinely be higher than commons because of this priority. Dividends must be paid out to pref shares before common shares.

When you have a negative yield (common yield higher than pref yield) its akin to the Jester sitting in the Queen's throne telling her what she should do.

Sorry for the ignorant question, but can you expla...

2009-01-03T02:35:00.000-05:00

Sorry for the ignorant question, but can you explain your comments on the negative spread between common and preferred yields? What is the significance of this?

Thanks for the comment T.

I currently hold ...

2008-12-23T20:43:00.000-05:00

Thanks for the comment T.

I currently hold RY as one of my core CDN banking stocks (RY, TD & BNS) but I will be looking to add to my position in the future when I have the resources to do so.

I have expected BNS to raise equity to boost their tier 1 ratio, but their style is more conservative so if they feel an equity issue would be too expensive in this current market environment they may look to sit tight for the time being as I do consider them a more conservative bank with their diversification of operations.

Safe to say, your next acquisition will be RY?
...

2008-12-22T20:34:00.000-05:00

Safe to say, your next acquisition will be RY?

What are your thoughts on BNS' prospects as it looks very well that it'll follow the same path as RY in diluting equity to shore up their reserves.