November 9, 2015

Monday saw a negative start to the level of stock prices in north America, on average. The S&P 500 was down 1.0% and Toronto was down 0.5%.

Liquor Stores N.A. was down 11% to $9.65. We had rated this a strong Sell on March 13 at $15.26. We had lost confidence in management some time ago.

Canadian Tire was down 3.3% to $111.25. This has been a great company and appears to be very well-managed. However, our concern for a least the last year has been about the impact of the sharply lower Canadian dollar. Its REIT subsidiary of which it owns over 80% reported after the close what it claimed was a strong third quarter and increased its distribution by a modest 2.6%. Canadian tire reports earnings on Thursday morning.

Stocks that rose on Monday included AutoCanda up 3.4%.

With rate reset preferred shares having risen a lot in the past five weeks but still being mostly well below issue price the thought arises as to whether one should trim positions here. Logically it may make sense especially if there are better uses for the cash. But it’s always emotionally difficult to sell below issue price. With that in mind I have not sold any of the pref shares that I bought at $25. But I did today sell at $21.54 a third of my Canadian Western Bank preferred shares that I had bought early last month at $16.80. These rate rest shares should continue to rise if Canadian interest rates rise due to the FED possibly finally rising its rate in December.

The Melcor REIT which is about 55% owned by Melcor Developments reported what appeared to be good results this morning. The REIT rose 3.2% while Melcor ended the day down slightly. Melcor will report tomorrow, likely after the close.