January 16, 2018

I didn’t intend to take yesterday off from posting (It was Martin Luther King Day and U.S. markets were closed) but due to some other distractions that is how it turned out.

On Tuesday, U.S. markets first posted new within-day highs as the DOW burst through the 26,000 level. But U.S. markets then reversed with the S&P 500 down 0.35% at the close. Toronto was down 0.45%.

Most stocks were down but Canadian Western Bank, Stantec and Couche-Tard were each up 1.0%.

Constellation Software was up an impressive 6.9% to $787.87 after it announced its latest acquisition.  I have sung the praises of the management of this company ever since it was added to this site on February 5, 2011 rated (lower) Strong Buy at $40.87. Subsequently, the stock has often looked expensive and on two occasions I sold my own shares to raise cash. I did buy back in but sadly, only a small amount. I don’t think I ever rated it a Sell. Warren Buffett has always advised against selling the strongest companies even when their shares look somewhat over-valued. When we find a company that not only has great economics but has great management we should probably grab onto the coattails of such management and simply hang on for the ride.

I am currently working on updates for three Alberta-based companies: Canadian Western Bank, Melcor and AutoCanada. The Alberta economy has made a significant but not a full recovery from its recession that bottomed around October of 2016. CWB’s share price has responded and rebounded significantly from its lows. But AutoCanada and Melcor remain low for various reasons. As long as Alberta continues to recover, which I expect it will, I think these last two could and should rebound nicely in 2018.