Trusha Desai Innovation Management Inc.

Trusha Desai, Founder and CEO

Vancouver, BC Canada

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email: ceo@TrushaDesai.com

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Freefall

March 10, 2016

 Chart courtesy ca.finance.yahoo.com

 

On a day when $TRP has fallen by 4.13% and trade was halted for sixty minutes, we might do a reality check and see how the stock has performed over the past year vis-à-vis the S & P TSX. Transcanada Corporation’s stock price increased by 22.85% while the $TSX fell by 6.54%. We must remember that the $TSX is a basket of 239 stocks, weighted in financials (37%), energy (18%) and materials (11%). As the constituent stocks perform, so does the $TSX. As the constituent stocks (only one of which is $TRP) express their volatility and emotional hysterical responses of shareholders, so does it.

 

Why was trade halted? In the good old golden days of stock trading when the bourse had stockbrokers getting apoplectic fits when stocks became volatile, trade was not halted. This permitted a freefall at the whim of an investor’s chilblains. Not anymore. As we have more sophisticated(?) tools that permit us to place trailing stop orders, at the discretion of the stockholder, trade is certain to be halted when there is investor emotion involved or global economic doom predicted.

 

Perhaps I am of the ilk where I place more stress on investor psychology. Perhaps that is because whether we deny it or not, our inherent fight-and-flight response sets in. Despite eons of being agriculturalists, our hunting instinct strikes and we go in for the kill or flee.

 

We may only anticipate that trade will not be halted without a moment’s notice when investors depend not only on sophisticated tools but focus on their long-term investment goals which would include dividend growth.

 

Please contact your investment adviser for recommendations. We are available to provide a second opinion and do investment analysis. We prepare extensive Capital Gain schedules (Schedule 3, T5018) for Canadian personal taxes. #TrushaDesai.com

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