July 3, 2012 Comments

Okay, so the Dow was up another 0.6% today. Toronto was up 2.2%. Oil was up… The Canadian dollar was up.

Walmart powered ahead by another 2.0% today to $70.75. No one seems to have noticed that it has passed its lifetime high from way back in 1999. That is really of no relevance but I find it interesting. Canadian Tire was up 1.7%. Shaw Communications (which has been weak) was up 2.4%

Here are my thoughts on some of this…

Personally I am up close to 17% this year to date. That kind of gain is not sustainable. Basically my stocks are doing better than the underlying companies. That is mathematically something that can’t continue for too long.

I have a very heavy exposure to equities somewhere around 95%.

But the stocks I own don’t seem over-valued. I am loathe to sell.

But from a portfolio management perspective (as opposed to from the perspective of individual stocks) it would seem prudent pare back my equity exposure. After all we all know that markets can go down quickly at any time.

I had entered some orders to reduce a few positions a few weeks ago and those never got hit. (Walmart, Melcor, Wells Fargo, Boston Pizza and Berkshire Hathaway. Those orders are still in place. But as reported below I did go in and trim some Walmart and Canadian Tire and Wells Fargo and Toll Brothers.

Even if I sell down a bit I am still going to have a very heavy exposure to equities. I almost always do. I accept the risk of it. It has worked out well over the years. But not without some heart-stopping declines from time to time.

July 4th, Wednesday should be quite given the U.S. holiday, but then again one never knows what news will arise out of Europe.