April 7, 2014 Comments

On Monday, the S&P 500 was down 1.1%and Toronto was down 0.9%

Not surprisingly, most of our stock picks were down as well. In particular American Express was down 2.9%. I don’t know any particular reason for this stock going down 2.9% while the market was only down 1.1%. The reality is that many times there is basically no real reason as to why stocks wiggle around in price on a particular day. Some price movements are essentially random.

Liquor Stores N.A. managed a small gain today. On the weekend there were more news stories about liquor sales in grocery stores coming to Ontario (which has a particularly backward liquor distributions system in my experience). Also we know it is coming in B.C. and there was speculation about Alberta. I rather doubt much will change in Alberta. We have about 1200 private stores and I can’t see the government cutting all these stores out of their livelihood when the licenses were purchased from the Alberta Government. Also we already have liquor stores located next to grocery stores in terms of Superstore (separate buildings) Sobeys (separate buildings and not very many locations) and Costco (same building, separate entrance. I continue to view Liquor Stores N.A. as a more speculative stock and I not sure how well managed it is. I hope that its founder, who is still on the Board will take action if needed. As the report indicates, I do not consider this to be a great company, I am attracted by the seemingly low price of the shares in relation to earnings and in relation to the dividend (though I am not convinced that the dividend can be sustained). For more thoughts see the report.

This weekend I sent out the latest edition of the free newsletter. You likely received it but note that the list for the free newsletter is separate from the list of paid customers. If you did not receive an email with the free newsletter, you can add your name to that list.

The theme of my newsletter was about the need for people to invest money and grow capital over the decades. Coincidently there as a bit of a book review in the Globe and Mail this morning regarding a brand new book that suggests that those who invest will be the rich and that the gap between rich and poor will increase in a slow growth world. In effect 7 or 8% from the market today, with low inflation, may be a far superior return to say 12% in the early 80’s accompanied by high inflation.


The author of the book thinks its a problem that owners of capital will get richer. Perhaps it is a problem. It’s also an opportunity