February 27, 2018

On Tuesday, the S&P 500 was down 1.3% and Toronto was down 0.3%.

Toll Brothers was down 5.1% to $45.10 even though it reported strong Q1 fiscal 2018 earnings. Apparently the market was disappointed with the full year outlook. I believe it is a good investment at this price.

The Federal budget came out today. I don’t think there was anything in it that would affect stock market returns.

In my own trading, I am somewhat inclined to do some selling to raise cash. However, none of my bigger holdings look over-priced to me and so it is difficult to pull the trigger on any sales. Meanwhile, with the Melcor REIT trading as lkow as $8.00 today I decided to place an order for a small amount. The order did not get filled.

On the one hand I like the idea of owning a part of the various buildings that the REIT owns. On the other hand the units could decline with vacancies and higher interest rates. But I think the risk I am taking, with a small position in the Melcor REIT, is TINY compared to all those younger people who buy houses at today’s prices using 90% (or more) borrowed money and where the value of the house is multiples of their net worth. Stocks are generally perceived as risky and leveraged investments in houses as safe. Reality and perception are not necessarily aligned in this case.