December 18, 2017

Today, one week before Christmas, the S&P 500 was up 0.5% and Toronto was up 0.6%

The U.S. markets rose yet again on optimism that the income tax reduction Bill will be passed.

The top gainer on our list was Linamar, up 2.6%.

It should continue to be an interesting week in the markets. The Senate could pass the income tax bill tomorrow in a close vote (possibly requiring the Vice President to cast a favorable tie-breaking vote). Trump’s lawyers meet with the Special Prosecutor on Wednesday and Trump is apparently now confident of exoneration.

Regarding Melcor Developments: I happen to live very close to one of their largest Subdivisions, Jensen Lakes in St. Albert. This is a 50% joint venture with another property developer. There is certainly a lot of activity. It appears that many home lots have been sold. This large community will be under development for years to come. It includes an adjacent commercial development where building is well underway and a new theater complex will open in the Spring. It appears that two schools are under construction. Overall, while I don’t know the number of lots being sold this quarter or next year, the whole development certainly appears to be thriving.

With Melcor trading at half of book value I wondered if at some point we will be able to look back and see that as a very clear buying opportunity indeed.