September 30, 2014 Comments

On Tuesday the S&P 500 was down 0.3% and Toronto was down 0.1%.

The Canadian dollar is worth 89.15 U.S. cents in the U.S. It remains, as always, worth precisely $1.00 in Canada. A lower dollar benefits Canadian exporters and makes imported things more expensive. It makes travel to the U.S. more expensive. It also hurts the Canadian NHL hockey teams who generally pay salaries in U.S. dollars but collect most of their revenue in Canadian dollars. (So sad for them) For investors if you have U.S. investments that you will eventually spend in the U.S. the exchange rate change is of no real meaning. But it does increase the value of those investments as measured in Canadian dollars.

eBay rose 7.5% today after announcing they will split off PayPal into a separate company. They were under pressure to do so but had resisted the idea. There were some good synergies between the two and it probably is a dumb idea to break it up but activist investors are only interested in short-term gains.

Today marks the end of Q3 and within a week or or so the Q3 earnings reports will start to come in although most will arrive in three to five weeks.

Melcor declined 2.6%. As a thinly traded stock it can be volatile. There may be some fear that the Alberta economy will soften. But overall Melcor appears to offer good value. Melcor will likely report good Q3 numbers. Toll Brothers declined 1.5% and I took the opportunity to add to my position.