July 10, 2012 Comments

Walmart went over $72 today and so my order to sell 300 shares went through at $72. It got as high as $72.58 but closed at $72.11.

Most of our stocks picks were down along with the market but Boston Pizza was up 1.4%. The Canadian dollar was down a third of a cent which amounts to a gain on Canadian’s U.S. investments.

My order to trim 1000 of my 8200 Melcor shares at $15.90 almost got hit today, but not quite. That order as well as a further order to trim an additional 1000 at $16.90 expires today but I will likely renew those orders. The other order I have in (besides the Berkshire mentioned yesterday) is an order to sell some of my Boston Pizza at $18.10.

Today there was news of a small futures broker having scammed some $200 million from customers.

A few thoughts on this.

Firstly there is no reason for a rational INVESTOR to be involved with speculating on futures. First, it’s a pure zero sume game. You can only win what another trader loses. (In stocks all owners can win from profits serving customers of the companies owned). Second, probably 95% of the population would not be able to do the math to think about how to speculate on futures. Thirdly, of the few people who could do the math almost none of them would have any rational reason to think that they are able to predict the direction of futures. Currency futures in particular seem like a total speculation. It MIGHT be possible to predict that corn prices will go up due to a draught. But currencies fluctuate for many reasons and I just don’t think anyone can consistently predict those (and certainly not over periods of less than about a year). To my mind, one does not invest in futures markets. One hedges or one speculates. But investing is not involved.

Also I don’t understand why any investor would want to place their funds with some small brokerage. It seems far preferable to stick with the biggest names in the business. Canadian might not like their big banks. But they do trust big banks not to literally steal their money. The big Canadian banks can easily handle almost any size investment portfolio. I just see no reason at all to start writing cheques to small companies. It’s a risk that is easily avoided.