Name: There's risk of production shut-ins in Canada amid oil price crash
Uploaded: 2020-03-12T23:24:20.000Z
Duration: 6 min 47 s
Description: Thousands of YouTube videos with English-Chinese subtitles! Now you can learn to understand native speakers, expand your vocabulary, and improve your pronunciation...

So we've seen a sell off in the markets for about two weeks now.

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I want to say about 9% or 7% rather the S and P TSX around 9%.

How long can we expect this downward trend to continue?

This has been a very, very fast correction.

It's the first week was the fastest we've seen, and again, this week has been very, very fast.

So the danger is that the correction becomes a bear market.

So in terms of bear markets, typically about 20% drop from peak to trough and we're about 16.

So there is a danger that that typically bear market signals a recession.

So that's the danger right now we're getting a big supply shock with this Corona virus.

So what I mean by that is do people not go out to eat?

Do they were already seeing some curtailing of activities?

Certainly in the leisure sector, nobody wants to go on a cruise if your people in a fly a lot of conferences were canceled, so we're definitely going to see that.

So the question is, do Pete people spend less money?

The good news is with technology, you never have to leave your house.

You can order groceries in food, in toilet paper, water, whatever you want.

Because what we're seeing right now is that the cure might be worse than the actual disease.

Uh, that's definitely not good for the economy.

So that's what we're watching very carefully now.

He acted quickly and China activity was bad butts trying to bounce back.

We're also seeing the number of cases come down.

There's no doubt it will spread, and it's said that a lot of people will die.

But as I said, the danger is that we go into a recession.

But the good news is we're seeing governments around the world putting stimulus packages in place.

We're seeing central banks lower interest rates.

So they're getting ahead of that curve to make sure that we don't have a contagion.

Have you, in your experience, seen anything like this?

I've lived through 0809 with the financial crisis.

That the financial crisis Fundamentally, there were issues.

The banks were taking on too much, risking too much debt.

Thean economies are certainly more fragile since we've had a big economic expansion for so long.

But we don't think that we're going to go into full on recession.

We're certainly going to see a supply responses.

Supply chains are gonna have some problems and then once the supply issues they're taking care of and there's all this liquidy that goes through the system, we do believe the system will recover.

I want to say that's about a 19% drop, the single biggest drop since 1991 W.

S, of course, trading at a discounted about $28.

They're waas I guess, uh, shakiness when it came to foreign investment with respect to Canada's energy sector.

I mean, the confidence was shaken before all of this.

I think that it just gets worse and we're at risk of actually shutting in some of our oil or gas.

I don't believe the oil sands, especially the big oil sands minds, because they have to keep those trucks going.

Otherwise they literally sink into the whole sense.

But what we have seen in the past, some of those in situ saggy projects they don't produce is much.

And we can certainly see some, you know, oil and gas being shut in over these low prices.

Can I ask whether there is opportunity for investors in these sell off moments?

Well, certainly when we have some of these stocks down, cut in half.

But one thing you do have to remember is their balance sheets are getting more and more impaired.

They're not making money at this price that free cash flow negative.

So things we're going to get worse before they get better.

Are there any specific stocks that you would be looking at now in the energy sector.

So if you want to be safe, the safest ones tend to be the pipelines.

If you really what you know, willing to take on risk, I would suggest the larger names like Pickney Natural, our son corps, who are more buffered with much more diverse operations.

We're talking about the impacts of Corona virus opportunities there for investors, so short terms on the opportunities are things like canned goods we own the Campbell Soup and Campbell's soup has done very well with people stockpiling.

We've also seen, you know, select companies in the healthcare space.

Some companies that are trying to develop vaccines such as your Sanofi, your Johnson and Johnson, But it's really small in the context of their big empires and does take a long time 3 11 years to develop a vaccine.

Another one would be stairs, which actually sterilizes tools for hospitals, so that has also held up better.

I want to go back to something that you mentioned in the beginning of this conversation and you said bear market, in your experience, is this the beginning of the end of the bull market.

I think that everybody's been waiting so long there, you know, 12 years expansion can't go on.

We just have that bear market cause we're almost there.

And then, uh, once we're satisfied, I think a lot of people start coming in and buying, realizing we had her bear market.

 This is our chance divide because buy on dips has worked in in general for this bull market, and I think that if stocks do dip over 20% the definition of a bear market, it will be a buying opportunity. 

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There's risk of production shut-ins in Canada amid oil price crash

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