Bank of Nova Scotia (BNS.TO)

(A Top Pick July 23/13. Up 29.72%.) Had a theory that all you had to do was buy the worst-performing bank in the big 5, and the next year it will either be the best or the 2nd-best. That works 18 out of 20 times.

(A Top Pick July 15/13. Up 31.68%.) Likes this primarily for its international exposure. Very big Latin America exposure, Southeast Asian exposure and not much US exposure. In markets that have tremendous upside with growing middle classes.

Do you see this stock splitting in the near future? The history of Cdn banks is that they like to get towards the $100 mark. This one will probably split.

What does diversity contribute to its attractiveness as an investment? When you look at the banks, each one brings a different element to your portfolio. BNS-T gives you more diversification outside of North America. They are doing well in South America. A solidly run bank.

If you are a Canadian investor and have a portfolio, you have to have some bank stocks. Financials take up about 30% of the TSX, so you could have up to 30% of your portfolio in financials. Probably right now you want to be a little bit underweight. This one has reached a new high, so probably works higher.

(A Top Pick June 11/13. Up 29.34%.) Selling off most of its big stake in CI meaning the uncertainty is over. There is now another uncertainty in that they have the capital position where they could buy something else, or put the money back into wealth management. Still thinks it could go higher.

International exposure. Capital ratio is strong at just under 10%. Just sold CI stake. If loan growth rate slows then all banks have to look for growth elsewhere. They have excess capital to go shopping.

One of his core holdings. Likes their exposure in the Caribbean and South and Central Americas, which is paying off in an excellent way. They are into markets and economies that are growing at 5%-6%, versus 2%-2.5% in Canada. The Caribbean has been soft, but this bank has been smart enough to expand out of their area. Thinks this will continue.

$66 Puts for October? Insurance is cheap right now because implied volatility on most of the banks is very cheap and they have actually had a very good run. The price today was $68, so you are $2 out of the money. 6 months out is typically what he would use, so October is fine. When you are trading stocks that have high dividends, you are going to pay more for the Put then you are for the Call options. Aside from that, there is nothing wrong with this strategy.

CIBC (CM-T) was hit with a surprise charge on the Caribbean. This was isolated and doesn’t think it will hit this bank at all.

(A Top Pick April 26/13. Up 22.09%.) Of all of the banks, this one has traditionally always had the best credit discipline. A very smart bank. Their international diversification will pay off in the long run. Good management.

Stock vs. Stock: TD or BNS. Less volatility and more international exposure. Recommends you buy both.

(Top Pick Jan 14/13, Up 21.48%) The banks have outperformed the markets. Good cost controls and expansion into wealth management has worked out well for them and the international business is high margin retail.

(A Top Pick June 11/13. Up 22.34%.) Market had worried about China and because this was an international bank, it was taken down to a discount. There ING (Tangerine) acquisition is working well. Doesn’t expect he will get 22% again in the next 12 months, but would get about half, 11%.

They lagged more recently. With new management and some of their changes, they are moving more to a retail operation here. He has not bought back in yet, but it is at the top of his list right now.