August 3, 2016

On Wednesday, the S&P 500 rose 0.3% and Toronto rose 0.2%.

Oil was up about 3%.

Most of the stocks on our list were up modestly. AutoCanada, which will report earnings tomorrow (Thursday) was down 1.6%.

With the recent weakness in oil prices and with house prices apparently starting to decline and with the impact of the 15% foreign buyer tax in Vancouver it is certainly possible that Canadian Western Bank will come under downward pressure. The same is true of Melcor. Although these companies seem like very good value that does not mean they can’t drop in price.

My own portfolio is highly concentrated and contains very little cash.

As I thought about all of this today I decided that I should sell some of my very large position in Boston Pizza. In a taxable account I had a gain of just over 15% on Boston Pizza. I had bought most of those shares at prices around $19 and some at lower prices. I had used some borrowed money to buy these. I generally don’t really like using borrowed money but this seemed like a safe investment. But these shares had fallen under $16 in January and then had climbed back to about $18.50 and bounced around that level for over three months before rather quickly jumping to the $21 about a month ago. I still like this investment but I decided it was prudent to reduce my BP position. So today I sold the shares in the taxable account where I held about 24% of my BP shares. This was a good investment with a good return. I may sell some in other accounts especially if the price rises. However, I plan to retain perhaps 5% or more of my portfolio in this name.