May 10, 2017

Wednesday’s market saw the S&P 500 up 0.1% and Toronto up 0.4%.

I added to my position in Canadian Western Bank taking advantage of the recent slide. I have done quite well over the years by adding to positions in companies that I had confidence in as they fell. Sometimes my buying on the way down has been done out of stubbornness but it has worked out (but it has been stressfull at times)


The Bombardier preferred shares (these are perpetuals) on our list were down 1.3% to $17.61 to yield around 9%. Despite the woes of the company I like these shares for a portion of my portfolio. I have owned these for quite a few years, some bought too high but some bought at lower prices. The volatility has been scary at times but the dividend has flowed in on schedule. It is possible, but it does not seem like Bombardier will be “allowed” to go bust. We have already seen the recent government support. The C Series project was crippling and would likely have bankrupted them without support. But by all accounts it is a great plane and presumably they can soon (well it may be another two years or so) start selling these for at least a cash profit and longer term the operating profit on that plane should rise.

There were no large moves in the stocks on our list. AutoCanada was down 1.4% to $21.40. I continue to think that owning auto dealers will be rewarding over the years as it has been for about the last century. Buying AutoCanada at the current price means that we get to buy in at about a 35% premium to what the company itself has invested in the dealers. And it has owned these dealers for a number of years. Buying AutoCanada at $21.40 is far different than buying at over $80 (where it once was) would have been. The stock may or may not rise anytime soon, but I do think it will rise over the years.