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Prima Noce

October 25, 2012

Prima Noce or the “droit de seigneur” is an ancient practice that seems to have no purpose but to assert power or sovereignty and perhaps create royal bastards with leadership or warrior pretensions. Policy makers and the government were last in the bedrooms of the nation in the 1980’s and gave us a number of ill-fated enterprises such as the National Energy Program (NEP) and the glorious but ultimately failed Petro-Canada (now owned 100% by Suncor) not to mention some recent (1999) tinkering with the Bank Act which released the flood gates to “financial weapons of wealth destruction”.

Fortunately, as investors, we know how to deal with it and have described our helpful and appropriate responses to investment issues in a number of our recent Posts. Please see, for example, The New Mercantilism and The All Canadian Four Play, both in October 2012, as well as the many references to the companies currently affected.

Exhibit 1: (B)(N) SU Suncor Energy Incorporated – Price Chart

Suncor Energy Inc produces a number of refinery feedstock, diesel fuel and by-products by developing its resource leases in the Athabasca oil sands in northeastern Alberta and upgrading the bitumen extracted at its plant near Fort McMurray, Alberta.

(Please Click on the Chart to make it larger if required.)

Suncor currently has a market value of $50 billion and pays dividends of $800 million per year on 1.5 billion shares ($0.50 per share). From the Chart, of course, we can see that we have not owned it since between $25 and $32 in 2009 (with some hope in 2011 that didn’t last very long) and the stock price is about the same now as it was in January ($35).

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Investing in the bond and stock markets has become a highly regulated and litigious industry but despite that, there remains only one effective rule and that is caveat emptor or “buyer beware”.

Nothing that we say should be construed by any person as advice or a recommendation to buy, sell, hold or avoid the common stock or bonds of any public company at any time for any purpose. That is the law and we fully support and respect that law and regulation in every jurisdiction without exception and without qualification to the best of our knowledge and ability.

We can only tell you what we do and why we do it or have done it and we know nothing at all about the future or the future of stock prices of any company nor why they are what they are, now.

The author retains all copyrights to his works in this blog and on this website. The Perpetual Bond®™ is a registered trademark and patented technology of The RiskWerk Company and RiskWerk Limited (“Company”) . The Canada Pension Bond®™ and The Medina Bond®™ are registered trademarks or trademarks of the Company as are the words and phrases “Alpha-smart”, “100% Capital Safety”, “100% Liquidity”,  ”price of risk”, “risk price”, and the symbols “(B)”, “(N)” and N*.

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