February 28, 2018

On Wednesday, the S&P 500 was down 1.1% and Toronto was down 1.5%. I don’t know if there was any special reason. U.S. markets remain relatively close to record highs and seem somewhat jittery regarding higher interest rates. Lately a 1.1% move in the S&P 500 is simply nothing unusual.

Melcor closed down 4.7% at $14.90. The volume was 24,000 shares which for most companies is tiny but Melcor is very thinly traded and the average volume in the last three months is apparently only 5,000 shares per day. Today, most of the trading was near the end of the day and the price drop may reflect what happens when someone tries to sell 20,000 shares in a market that averages 5,000 shares. Had I noticed it going under $14 I likely would have picked up a few more shares. Melcor reports Q4 earnings on March 7

Meanwhile the Melcor REIT closed down 2.5% at $7.88 and my order for 1000 shares at $8.00 got filled. It will report earnings tomorrow, probably after the close.

Toll Brothers was down another 2.8% at $43.83.

Canadian Western Bank was down 2.0% to $37.93 and will report earnings tomorrow. I believe that will be before the open. I expect continued good results.

BHP Billiton plc (The American Depository Receipt BBL)  was down 3.6% to $40.82. The supposedly economically equivalent American Depository Receipt for BHP Billiton Limited trading as BHP in New York was down 2.7% to $46.50. The discount for BBL versus BHP is 12.2%. The reasons for the discount are not clear. I hold the discounted BBL shares. This is a more speculative investment since it is so dependent on commodity prices.

It’s always more enjoyable to see the prices of stocks that we own rise rather than fall. But these dips can provide buying opportunities.

Today I sold 300 shares of TFI International at $33.01. I had bought these 300 shares at $29.12 on a very recent dip and only bought because of the dip. Therefore I decided to sell given the shares had rebounded. I only have TFI rated (lower) Buy at $32.86.  Given that I am looking to raise some cash I placed an order to sell more shares if it hits $34.50.

The Canadian dollar has been dropping and is at 77.8 U.S. cents. I have been waiting for a drop to about this range or a bit below in order to transfer some U.S. cash to Canadian dollars using DLR and the Norbert Gambit which I described in detail on December 9th and 10th. Around December 10 the dollar was also at 77.8 cents and there seemed to be a lot of predictions it would decline. Instead, it promptly rose.

Transferring Funds to Australia

Speaking of transferring currency. This week, I was dealing with the issue of how a Canadian student living in Australia can transfer money from a Canadian bank account to a local Australian bank account.

Consideration was given to using HSBC which has branches both in Canada and in Australia. It was found that the HSBC in Australia was apparently not interested in students and in any case the Canadian HSBC is quite separate from the Australian operation. HSBC advertises itself as an international bank. I am not convinced.

Apparently, writing a cheque on a Canadian account and depositing into an Australian account could take weeks or a month to clear. We will test that.

A wire transfer did not seem feasible since a student in Australia can’t go into a the branch in Canada to sign for such a thing as required.

TD offers a service called Visa Direct. The Australian account came with a debit card that had the VISA symbol on it. Using that Australia Visa number it was possible to transfer money from a Canadian TD account directly to an Australian account. This turned out to be very easy to do online. TD charges a fee of $12.95 to transfer up to $2500 and then scoops an additional 2.5% or so exchange fee (over and above the wholesale rate) which presumably gets shared between TD and VISA and perhaps the receiving bank. It’s annoying to be charged 2.5% over and above the wholesale exchange rate but this was the most convenient method. I have, in the past, used the wire transfer and gone through a Foreign Exchange firm to get a better rate for larger amounts.

It seems to me that a number of banking procedures are relics of the past including wire transfers that require a branch visit. Hopefully some of the FinTech products will disrupt some of this including the fees.