May 6, 2013 Comments

Our stocks picks did better than the market today.

Bank of America was up 5.2% after it settled a dispute with a major credit card company.

However Canadian Tire was down 1.8%. Apparently this was due to an analyst downgrade predicting that the Q1 report will be weak. Perhaps it will be weak. We had a later Spring in most of Canada and perhaps Spring sales in march were weak. And certainly in Western Canada April was still winter and so the early sales in Q2 may have started out weak. If the recent to sell is merely due to Q1 earnings, that does not seem a great reason to sell. The stock appears cheap based on trailing earnings. Possibly its earnings are going to decline material but I’m don’t see the basis to assume that is so.

Warren Buffett was on Squawk Box this morning for three hours. This followed his huge annual meeting weekend that just took place. Some of his comments illustrate how incredibly hard he works and how passionate he is about business. He reported that sales at his Nebraska Furniture Mart will likely come in at around $40 million for the weekend up from $36 million last year. And he reported that the carpet and flooring department was up 36% and drove the sales increase. It is incredible to me that as busy as he was this weekend he took time to review and memorize these figures. He will know as well the sales that took place on the meeting convention floor and at his Borcheim’s jewelry. He reported (from memory) on the number of carloads that Burlington Northern is carting today and what it carried at the peal in 2006 and how far it dropped at the bottom in 2008. The point is he is still an incredibly hard working individual who has a photographic memory and still has incredible passion to see all of his businesses succeed. I would bet that the average small business owner hardly knows his sales from last week and somehow Warren Buffett tracks such numbers for numerous businesses.

 

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