Q: I read your comments on Canadian telcoms with your suggestion to go to the US to get exposure in this sector (TMUS). But could part of the weakness in Canadian telcos be due to tax loss selling? Or are there too many long time share holders whose adjusted cost basis is so low that even this year's telcom pull back is not enough to trigger a capital loss? Just a thought, s for me I will keep my telus but I am not adding any more.
5i Research Answer:
Certainly tax loss selling could be a possible reason for some of the pressure on prices. Yes, some long term holders will still have nice gains. But T, as an example, is still down $4 from its high, and BCE nearly $18. Because these stock tend to not have big moves (generally) many investors in a loss position are likely selling with a view to buyback after 30 days or more.