January 10, 2013 Comments

It was another strong day for stocks…

Melcor continues to bounce around.

Yesterday I mentioned that having seen Tuesday’s closing price of over $20 most of us would be reluctant now to sell much below that. Of course another option is just to keep the shares indefinitely. After all at $20 the shares would certainly not seem over valued. The company is well managed and even by the is REIT action demonstrates an interest in making sure the share price does not languish below a reasonable value if they can help it. Sure, there is always a risk that Melcor shares will dip with a slow-down in housing construction in Alberta if that occurs  and may dip if the REIT plans fall through. But long-term there is no reason at all to think that this will not continue to be a good buy and hold company.

Speaking of buy and hold, in a 2009 newsletter I explained why any suggestion that “buy and hold is dead” is a mathematically challenged view. i.e it’s demonstrably and mathematically wrong.

I read today that Warren Buffett had explained how U.S. banks wee now in better shape financially than they had been in years. That is in contrast to thousands upon thousands of articles and comments on the internet about how the banks are technically insolvent. So who are you going to believe? Those comments usually based on old articles from 2009 and parroted by financially illiterate doomers or will you believe Warren Buffett?

Of course the doomers and doubters then say that Warren is talking up his own book since he owns banks shares, oh and he is also a tax evader, they gripe. It it all so tiring to read such drivel. Any fair minded person who has actually studied what Buffett has said and done over his 60 year investing career has to conclude he is a man of the highest intelligence and integrity. But you know each to his own. Frankly if it were not for mis-informed people using poor strategies to invest and using twisted thinking there might be no one for us to “beat” in the stock market. Those who still believe that most U.S. banks are near insolvency are easy prey for more intelligent or more informed investors.

I understand that Wells Fargo will report earnings on Friday morning.

Canadian Tire confirmed to me today that they are buying some shares based on the price. They did so in December. I don’t see any buys yet in December (correction, January) however which is disappointing.


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