Should you own legacy media stocks?

August 13, 20236 Comments

Today, I am going to look at the charts of the “legacy”(aka: the old guard) media companies with publicly traded stocks. Be warned, this is a two-pronged blog. In addition to the stock charts,  I’ll be ranting by addressing a disturbing reality in the legacy media bias. If you wish to skip the rant, do so, and just read the “Contrarian investing” headlined section below, and the bottom section “Lets look at stocks”.

Contrarian investing

As investors, I have often shown you (through this blog) how online and legacy media tends to deliver a popular message regarding the markets or individual stocks. Typically, the headlines are delivered with poor timing. You know how it works. The media starts talking about the cannabis industry, or bitcoin, or AI, or oil, or whatever. That stock or sector has been moving, and we are told it is going to a) go up a whole lot more …or b) go down a whole lot more. Typically – right before the opposite happens. In fact, I’ve pointed out some tools – such as the Google Trends tool, to quantitatively track this tendency.

Yes, folks. There is bias, and crowd behavior in the news. So I start off with skepticism when it comes to what the media reports. Recall how legacy media delivered the “governments transient inflation” argument back in 2021. Recall the media’s message of the bull markets return only half way through last years bull market?

Adding to my skepticism regarding ANY media reporting has been Canada’s government funding of heritage media outlets. That, and recent Bills for controls of media content ranking (heritage media and internet) and access. While this control doesn’t always affect stock market news (although it can, via inflationary or economic policy reporting bias), it certainly affects issues surrounding freedom of speech, choice, and access to unbiased information. So, you will have to endure a rant today (most of y’all tell me you love my rants anyway) before we get to the charts. OR … just skip this next part. Your call.

BTW –fun fact—my marketing data company shows me that I get more hits when I rant, so I ain’t stopping.  Sorry to individuals who wish to keep their heads in the sand on the policies of Canada’s most hated PM in history. As an aside – way back on December 23, 2015, I wrote my very first political rant–warning readers of what was to come with a high level of accuracy (contrarian call against his massive popularity at the time).  I got a lot of pushback. My how things change – he isn’t so popular any more. I have always felt it a duty to say something, even if its contrarian at the time, and it is gratifying to see others starting to see the light.

“The antithesis of courage is not fear. It is compliance”– Clyde D0-Something

The rant part

One of the key strategies by communist, fascist, dictatorship or elitist governments is control of the media. For those interested in the subject, you may want to read the classic “Rise & Fall of the Third Reich” to witness the steps towards fascism in Germany during the late 1930’s. While we are a far, far distance away from becoming the next Nazi state, there are similarities of strategies happening here in Canada you may be shocked by after reading the book.

For starters: Fascist governments dominate the media landscape through the national television networks, radio and print outlets – either directly or through state-owned enterprises or friendly/ funded business magnates.  Stop me if this sounds familiar, fellow Canadians.

These days, media is largely on the internet. Witness higher levels of internet censorship in countries with high levels of media state ownership such as Russia, Singapore, Belarus, Myanmar, Ethiopia, China, Iran, Syria, Turkmenistan and Uzbekistan.

Off topic, but Trudeau’s government are also notorious for appointing acknowledged Liberal supporting judges and “special rapporteur’s” – another comparative taken out of Hitler’s rise to power (who appointed sympathetic judges early in his political career). That’s a fact.

Anyhow…

Canada’s Bill C-11, Bill C-18 echo anything, fellow Canadians? As a refresher:

C-11: Trudeau’s Heritage Minister Pablo Rodriguez believes that unregulated speech “erodes the foundations of democracy.”

Unregulated speech erodes democracy??? Actually, this bill empowers government regulators to censor user-generated content. It curtails what and how you see and say things. Recall the blocking of anyone posting online questioning COVID shots, lockdowns, masks in 2020-21 by some social media platforms. Opposing views on these platforms were incentivized to censor  by government. Eg- The US Biden administration has recently been challenged in court successfully by doctors who have been critical of state and federal pandemic-era restrictions, and others who were censored for online criticisms of Covid health measures.

Using C-11 in Canada, The CRTC is to set content promotion and demotion rules (key words!). These rules  effectively push search engines towards government initiatives (ESG). It requires more emphasis on Canadian content (even if that is not what you are looking for) and requires platforms to make financial contributions towards Canadian content.

C-18: This bill is attempting to force social media platforms to pay legacy media for content. Free content has been used as a marketing driver to generate ad revenue (click bait) or paid subscriptions in the past. Just like this blog, where I offer free content in the hope that I gain market awareness and in the hope that some people may want to do business with ValueTrend. This is modern era marketing.

The problem with C-18 is that it gives the government the power to regulate who gets to post their articles – aka, which expression is worthy of payment. Will the Free Press with non-party views be “allowed” to post & pay? In doing so, it creates a threat to freedom of expression for all Canadians.

Beautifully ironic: Apparently, Trudeau’s Bill C-18 has been backfiring as Meta has refused to pay his “Qualified Journalism Organizations” for their content. I am hearing that Meta has only been posting content by the Free Press – who typically do not promote the party line!

“Two things are infinite: the universe and human stupidity; and I’m not sure about the universe.”– Albert Einstein

Coming soon to a Canadian theatre near you…

 

There are three levels of media influence by government in Canada.

Government owned

The elephant in the room is obviously the state owned CBC, costing taxpayers well in excess of $1 billion. Opposition leaders have vowed to defund the CBC. Think of the CBC executives and staff…Pretty hard to be politically unbiased – what with an opposing government who will pull the funding.

Don’t ya’ think?

Government funded

By handing nearly $600 million directly to “select media outlets that obtain the federal government’s approval”, the Liberal government has been building support through “friendly” media magnates. Tell me, what are the odds that these “Select Media Outlets that meet Federal Approval” will  continue supporting the regime giving them this money?

I’d guess the odds are about 600,000,000 – to 1.

Government supported

“Andrew Coyne and Paul Wells argue that if the government starts to pay our bills, we will inevitably start to suck up to governments, or at least to government,” said Maher. “I’m not so sure…An awful lot of our media is already subsidized, either directly by government, like news magazines, or through CRTC-mandated cable fees and industry funds, like TV news.”

Western Standard notes: “Even those not directly hired with a large grant in the print business will owe a large portion of their take-home pay to the federal government. The Journalism Labor Credit allows the Orwellianly-named “Qualified Canadian Journalism Organizations” to apply for a 25 per cent refundable tax credit, with a cap of $13,750 per employee. This puts even credible and reputable reporters, columnists, editors, and publishers in a massive conflict of interest.”

Question: If you were a journalist in one of the Liberals’ “Qualified Journalism Organizations”, are you going to write with a positive bias of the current government? Or will you write unfavorable stories, risk it’s re-election chances, and watch those juicy tax credits disappear?

Just askin’.

Free press

This sector is growing, as the growing frustration and awareness of an agenda-biased heritage media by Canadians has expanded. The chart below was put together by Western Standard in 2020, with new names like True North and many online free press agencies missing. No government funding here, and no love lost by the Trudeau administration, who prefer to squash those who might dissent.

 

Rant over- lets look at the stocks

I wanted to see how the government funded legacy media companies with public stock listings have fared. The bailouts and incentives were announced in the 2019 budget. Beyond the far more important implications of free speech, and handing YOUR tax dollars to losing business models — do shareholders benefit by these handouts? Since early 2019 when the incentives were launched, the TSX was at about 16,000 (keeping it simple). Now its about 20,000. Thats about 25% gain. So that’s our comparable for these bail-out babies for returns. Was it a good investment of your tax dollars? Can we make money going forward in them? Lets take a look at how the 4 publicly listed companies receiving our money have fared, and whether we should consider investing in them now.

Torstar (TS.B-T), Owner of Toronto Star 

Torstar stock was delisted in 2020, having plummeted since its heydays of the early 2000’s. The unabashedly Liberal biased supporting paper fell into the penny stock range by 2020. The company got their bailout money, and then went private. Needless to say, our money didn’t seem to make a difference to their viability, or to shareholders profits.

Bell (BCE-T), Owner of CTV

BCE did move up nicely after the 2019 announcement. But its been stuck in a very defined trading range since 2021. ValueTrend has traded the stock a couple of times in that range, which seems to lie between $56 support, and $63 resistance. We are back into the stock, now that its near the bottom of that range. I even made it one of my BNN (owned by Bell!) Top Picks on a recent show.

Note that this is a trade for me, not an investment. The company is struggling, and now its asking for even more of your hard earned tax dollars to support the failing business model! FYI: Just because I’m on the show, doesn’t mean I like sending them my tax dollars. But I’ll trade it. If they get Bailout 2.0, we might see a pop back to resistance. I’ll sell if $56 cracks by too much – that’s my stop point. I’ll sell anywhere in the low $60’s if it get there.

Chorus Entertainment (CJR.B-T), Owner of Global News

Do I need to tell you this has been, and remains, a lousy chart? Boy, those bailouts really helped, didn’t they? Especially in a market that rose 25%! Great investment in another failed business model. Happy my money went to such a worthy cause. How about you?

Rogers (RCI.B-T), Owner of Rogers TV & Omni Television

This chart follows the a large swing pattern. No return against a 25% rise on the TSX.  Sideways, go-nowhere action. But…Good trading vehicle so far. Buy near $53 with a tight stop, sell near $63. As far as the bailouts, another lousy investment of our tax dollars since 2019.

Updates

  • We’ve recently updated our BNN video clip history on the ValueTrend Website. You can click here to view the videos, which now have images of the videos to make accessing them a bit easier.
  • Some of you have noticed that my books SmartBounce and Sideways are no longer available (except as after-market sales at ridiculous prices) on Amazon. Unfortunately my prior publisher has retired and let the renewal with Amazon slip.
  • The good news is that I will be passing the Sideways rights over to the publisher I used for my latest book Smart Money, Dumb Money. In fact, I will be going a step further by editing to update that book, which has been a bestseller and my most popular book of the three.  So you can expect the “Sideways, revised & updated” edition in a couple of months to appear on Amazon.
  • Meanwhile, I will NOT be renewing the Amazon listing for SmartBounce. I will have copies of the three books for sale at a super discount price at my  Moneyshow talk on September 9th at 3:00pm. Here is the link to register for my presentation: Richards, Keith (moneyshow.com)

6 Comments

  • Hello Richard,

    It’s been awhile since I posted anything on here. Just wanted to say I love your ‘rants’ because they need to be said…keep up the good work.

    Cheers,

    Reply
    • Thanks Gavin. Its funny, because its easier now to do them, given that a larger portion of Canadians see him for who he is. I began writing these rants back in late 2015. I knew I was right, my first blog addressed the elitism – aka, favoring family and friends –I referred to Orwell’s book Animal Farm in that blog “Some animals are more equal than others”. Funny how WE scandal, AJA Khan scandal, SNC scandal, corporate favors to supporting firms, and all the special Ministerial appointments for his college buddies etc came AFTER I pointed out in that first blog that this is how socialist governments work! I did subsequent blogs on the debt, the ethics situations, inflation, freedom reductions, on and on. Everything I said turned out to be true. But I sure did get a lot of flack from his fans. Now, not so many fans left. Happy to see the change in attitude, but really wish more Canadians saw the same writing on the wall that I did back then and NOT voted him in the second time. Would have saved a lot of hardship on our people. But this is where the media did their thing. That election was immediately after the SNC scandal, yet he got in because the media painted a glossy picture of him while spreading BS about the opposition. Having said that–people voting for him that second time with the scandal in plain site were to blame. Anyhow, change is in the air at last.

      Reply
  • I bet a media personality, such as Shark Tank’s Kevin O’Leary or an economist that is well respected, namely Mark Joseph Carney, at one point of the Bank of England, would be more socially acceptable, trusted or popular than merely Me Pierre Poilievre, no matter how rabidly Stephen Harper is pounding the table in his favor, praying on his altar. That’s just my opinion. The GTA population needs more than lip service from a candidate, to find him trust worthy or worth voting for.

    Reply
    • Having said that, its obvious that the current PM is absolutely positively NOT trustworthy and NOT worth voting for. He has proven this on every level. So – I’ll take ANYONE else over a known bad apple. Even if its green party!

      Reply
  • I love your rants! Mainly because I agree with you. Since you brought up 2015, I’m reminded when some of my younger acquaintances wished to get a selfie with JT and I asked them if they heard that he admired a certain (foreign regime) way of government. They just scoffed..
    I wonder if they follow your blog-I emailed it to them.

    Reply
    • Mario–I wish people read history. My dad was an historian. The book “Socialism – The Failed Idea” would be a good start. Or the book Rise & Fall, per the blog. Actually–the best of them all, in one very easy read- is Animal Farm by George Orwell. If people would read that book, and look around! They would see the path that JT has taken, but they would also instantly recognize the WEF. Also –Orwell’s 1984.
      I wrote a blog in 2015–as I heard his tax & spend concepts – and his insults to the “old guard Canadians” – and then watched the personal trips and home renovations like no other PM in history (Harper caught hell for flying to a baseball game once!!!) – the selfies, the costumes, the drama (tears), tearing his shirt off at any excuse (like StarTrek Jim Kirk!), his background in groping women and blackface racist acts, while ironically calling himself a feminist and calling others racists -I knew we had the making of a narcistic totalitarianism. Some animals are more equal to others.

      Reply

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