December 27, 2017

On Wednesday, the S&P 500 rose 0.1% and Toronto rose 0.2%.

Canadian Western Bank was up 1.4% to $38.97

RioCan was up 1.7% to $25.41. Despite fears about the retail sector, this REIT seems likely to continue to pay its distributions and generally be an acceptable but unspectacular investment over the years.


I bought some shares in the Melcor REIT today. It has a cash yield of almost 8% and it trades with a price to book ratio of about 0.75. While it could decline if the Alberta economy declines, the opposite seems to be happening. I expect this REIT to continue to pay its distribution and there is a reasonably good chance of a modest capital gain as well. Checking insider trading, I note that one insider bought 3000 units at $8.50 in the very recent subscription receipt offering. I believe that offering sold out quickly and currently the shares trade at about $8.50 meaning we can buy in at the same price as the recent offering.

The Canadian dollar is at about 79.13 U.S. cents having risen somewhat in the past week or so. It seems to me that most analysts were predicting a decline. The exchange rate is always hard to predict especially in the short term. As I am holding a fair amount of U.S. cash I was hoping for a decline to transfer some cash back to the Canadian side.

A lower Canadian dollar also boosts the value of U.S. investments as calculated in Canadian dollars. But an argument can be made that perhaps we should simply calculate the U.S. investments in U.S. dollars since most investors will ultimately spend some of their investments in the U.S.