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(B)(N) BBD.B Bombardier Incorporated

May 14, 2015
The Bull Run and Bear Embrace

The Bull Run and the Bear Embrace

Drama. The “price of risk” is not set by us but by the market itself because the price of risk is the “least stock price at which a company is likeable” (Goetze 2006) and “likeability” for an investment is not about charm or heroism but about whether we can reasonably expect to get our money back and a hopeful but not necessarily guaranteed return above the rate of inflation; that is, we hope for a non-negative real return and there are some things that we can do that might help us to get that.

Miraculously, the Theory of the Firm (Goetze 2006) tells us what it must be in order to resolve a competitive Nash Equilibrium between “risk seeking” and “risk averse” investors in that market and the solution depends on the investors, their demonstrated needs or necessity for liquidity, and how much money they have to invest, all of which facts are a matter of demonstration and we can rely on the investors to be more unchangeable in their attitudes towards investing and how much money they have than the stock prices which vary every minute because there are usually lots of investors with lots of money who have a different idea than mere capital safety, liquidity, and a hopeful return above the rate of inflation – such as speculative and unearned capital gains.

When “volatility” = “investment risk” as in the Capital Assets Pricing Model (CAPM) then it is this latter group of investors – the buccaneers – who define the market and what it’s worth and so forth and it’s pointless for us to argue with them any more than we might advise an habitual “gambler” with a Business Degree to repent and get a job if we own the casino – the market will eventually take care of that.

But it’s this latter group of investors – the gamblers and buccaneers – who are keeping the stock price for the non-voting Bombardier Class B stock as anything other than zero (Reuters, May 14, 2015, Bombardier to cut 1,750 jobs, 15 pct, in business-jet unit); please see Exhibit 1 below.

Exhibit 1: (B)(N) BBD.B Bombardier Incorporated Class B – Risk Price Chart

Figure 1.1: (B)(N) BBD.B Bombardier Incorporated Class B - Risk Price Chart

Figure 1.1: (B)(N) BBD.B Bombardier Incorporated Class B – Risk Price Chart

For more information on the Free Market Yield and the terms that we have used above, please see our Posts “(P&I) The Dismal Equation (Ecclesiastes 9:1)” and “(B)(N) S&P 100 Volatility Risk and The Full Moon” and “(B)(N) NASDAQ 100 Volatility and The Stone Bunnies“ and for an introduction to The Barometer “(B)(N) What’s A Girl To Do” or “(P&I) The Swiss Franc Debacle“.

And for more information on real “risk management” in modern times and additional references to the theory and how to read the charts and tables, please see our Post, The RiskWerk Company Glossary and “(P&I) Dividend Risk and Dividend Yield“, and our recent Posts “(P&I) The Profit Box” and “(P&I) The Process – In The Beginning“; and we’ve also profiled hundreds of companies in these Posts and the Search Box (upper right) might help you to find what you’re looking for, such as “(B)(N) TLM Talisman Energy Incorporated” or “(B)(N) ATHN AthenaHealth Incorporated” or “(B)(N) PETM PetSmart Incorporated“, to name just a few.

And for more applications of these concepts please see our Posts which rely on the Theory of the Firm developed by the author (Goetze 2006) which calibrates The Process to the units of the balance sheet and demonstrates the price of risk as the solution to a Nash Equilibrium between “risk-seeking” and “risk-averse” investors within the demonstrated societal norms of risk aversion and bargaining practice. And for more on The Process, please see our Posts The Food Chain and The Process End-Of-Process.

And for more on what risk averse investing has done for us this year, please see our recent Posts on “(P&I) The Easy (EC) Theory of the Capital Markets” or “(B)(N) The Easy (EC) Theory of the S&P 500“, and the past, The S&P TSX “Hangdog” Market or The Wall Street Put or specialty markets such as The Dow Transports & Utilities or (B)(N) The Woods Are Burning, or for the real class actionLa Dolce Vita – Let’s Do Prada! and It’s For You, Dear on the smartphone business.

And for more stocks at high prices, The World’s Most Talked About Stocks or Earnings Don’t Matter – NASDAQ 100. And for more on what’s Working in AmericaBig OilShopping in America or Banking in America, to name just a few.


We are The RiskWerk Company and care not a jot for mutual funds, hedge funds, “alternative investments”, the “risk/reward equation” and every other unprovable artifact of investment lore. We have just one product

The Perpetual Bond
Alpha-smart with 100% Capital Safety and 100% Liquidity
With No Fees and No Loads on Capital

For more information on RiskWerk, please follow the Tags or Categories attached to this Letter or simply enter Search for additional references to any term that we have used. Related data may be obtained from us for free in a machine readable format by request to


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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