Buying in Dec vs JanSo here's an anti-pump: I am expecting the overall S&P500 to go lower in January. Two key reasons.
First, banks in the US need to become very honest about their balance sheet valuations in order to get their auditor to give them a clean opinion on their financial statements. This is what started AIG's downfall two years ago. Auditors refused to sign their statements. I think we are going to see some unexpected bank write-downs in the US. That will bring the Canadian banks lower, since they just follow the S&P500. The rest of the Canadian market will also sag.
Second, US taxpayers must wait 12 months to sell in order to claim the low 15% capital gains tax rate. So if they bought after the initial Nov/2008 crash, after waiting 30 days, their purchases occured in January 2009. They are sitting on a nice gain in 2009, even if they rode through the March 2009 low and back up. The "tax selling" this year will be in Jan-2010 instead of Dec-2009 because they need to mostly defer paying tax instead of crystalizing losses. But they are nervous about valuations, so I think we'll see some selling in January to take profits.
What will NHC do if the overall market goes down? In the Nov 2008 crash, it did not move much. It didn't sink until January 2009 when they announced the dividend cut. However, recently I have noticed selling pressure in NHC on days when the S&P500 sinks 1-2% as the fast money crowd exits NHC temporarily.
I am holding some cash on the sidelines for January in case I see 85 cents again. If it goes up before January then I will celebrate and ignore the opportunity cost of holding the cash.