April 10, 2012 Comments

Liquor Stores N.A. Ltd (formerly Liquor Stores Income Fund) is added to the list above as a Buy at $17.01. Perhaps this can help quench the thirst for dividends with its 6.3% yield. I would not necessarily count on much growth here although we could get some.

Something to think about with EVERY investment is that even though it may be a Buy that does not necessarily means we should buy it. Ideally we place our money in the best investment we can find while maintaining some level of diversification. I am not sure if I will buy this one or not.

A couple of interesting things I learned. It’s bottom line profit as percent of sales is 3.8%, perhaps about what one might expect. But its gross margin is 25% implying a mark-up on the product that averages 33% and which is higher than I would have expected. For some reason I had the impression liquor had small mark ups at the retail level. But this makes sense. The fact is they need the 33% mark-up in order to arrive at a about 4% on the bottom line.

My pre-existing order to buy some Constellation software got filled today as the market dipped. I also picked up some Toll Brothers given the lower price. This rather rapidly uses up much of the cash I have in my accounts and perhaps I should have retained more cash in case we are unfortunate enough to get some real bargains. If that happens, which is always a possibility, I will scramble to find money to buy on dips as I am wont to do and have pretty much always done.

It will not likely be news to anyone that the U.S. markets were down about 1.7% today and Toronto was down 0.7%. Retail stocks did okay today with Canadian Tire and Couche-Tard up with Wal-Mart down only slightly. Also Canadian investors are helped on our U.S. investments by the decline in the Canadian dollar over the past few days. Unfortunately, the opposite is true for Americans who hold Canadian stocks (and that is the case even if the Cnadian stocks trade in New York). When it comes to currency impacts what matters (setting aside hedging) is the currency sales and costs are in. The reporting currency or the currency it trades in are not important with regard to currency movements.