March 9, 2016

On Wednesday, the S&P 500 rose 0.5% and Toronto rose 0.6%.

Canadian Tire rose an impressive 2.9%.

Liquor Stores N.A. released Q4 earnings this evening. Overall the results were awful although there was a marginal increase in same-store sales. And revenue did increase 8.9% partly due to currency impacts. This company has finally accepted the reality that its dividend was too high and so the dividend has been cut from $1.08 per year to $0.36 cents. There is a big goodwill impairment charges. Administrative staff are being reduced. Unfortunately the management team that kept the dividend too high for too long and that added expensive staff to management will still be in charge.

I will re-evaluate our rating on this stock after the price settles out on this news. But in general I have found that investing in poorly managed businesses even at lower prices has not worked out well (Bombardier being a classic example).