Bank of Montreal (BMO.TO)

The only bank that disappointed in earnings. Also, disappointed on their domestic lending platform. Not her favourite bank but the macro backdrop is very positive for the Canadian banking system. This will be okay and you will probably make more than the coupon but she feels you will make more in the other banks and lifecos.

Switch from this to Toronto Dominion (TD-T)? This would involve some taxable gains. TD is getting a new CEO in the next little while. Not sure if this would be worth a switch at this time.

He is underweight Canadian Banks and only owns BNS. Growth in loans in Canada will be muted here. BMO is doing fine in the US.

99 year bond 10.22%. Callable in 2018, so this is slowly amortizing towards par value. One of the higher-yielding bonds out there because of its structure and because it is a Junior debt, so it is good value this way. If it was in an RRSP or a non-taxable account, he would hang onto it. If it’s in a taxable account, he would take his gain now and buy something else.

Her concern with this bank is more related to the fact that they are smaller in the Canadian retail side, and so in terms of the slowing loan growth environment and some of the challenges to the Canadian retail landscape, they have less of an ability to generate operating leverage. You are not going to get hurt badly in any of the Canadian banks.

(Market Call Minute) Take profits next year to defer taxes.

Has always had an attractive dividend yield. All of the banks have been on a good trajectory lately. He wouldn’t be adding to any banks at current levels at this time. He still prefers the Royal (RY-T), Commerce (CM-T) and Bank of Nova Scotia (BNS-T).

Not excited about new money going into financials. This one is at an all time high. Would be looking to take money off the table, but momentum is strong right now.

6 year high. Dividends have come in year after year and started to grow as of late. 4% yield is attractive. No risk to dividends over next little while.

Broken out to new highs. Very overbought at this point. Look at 50 day moving average as an entry point, a couple of dollars down. Prefers CM, RY and another, see Top Picks. Likes US banks a bit more.

(Top Pick Oct 5/12, Up 23.82%) Model price $76,82, 10% differential. Sees it going to $75.16. Good dividend. He would still hold it.

Banks, whether looking in the US or Canada, have been beneficiaries of government stimulus, especially Canadian banks. Chart indicates that we might be a little bit overbought in the short term, but looking at support, it comes in at around $62.

Do you think we have reached the bottom in terms of the Bonds? He is an equity guy more than a bond guy but thinks that we are not at the end with regards to bonds. Tapering talk is not going away. We have already seen some backup in rates and we are going to see more. Feels that bonds are going to trade sideways to down. The longer duration you have the more vulnerable you are. This name though is a high quality bank and Canadian banks are very well capitalized so there is no issue there. With bonds, he thinks you are swimming against the tide right now.

It’s a bull market and the banks lead. When they are making 52 week highs you have to go with it. Prefers ZEB-T because you get the basket. It is pausing right now.

If you buy this on the US side the dividend is no different but you don’t get the dividend tax credit, it is treated as interest.