October 27, 2015

On Tuesday, the S&P 500 was down 0.3% and Toronto was down 0.7%.

TransForce was down 7.0% for probably no good reason. I initiated a small position in this stock today (I bought when it was down more like 4%) and have an order in that will fill if the stock drops just a bit further.

Many other of our stocks declined today including AutoCanada down 4.2%, Element Financial down 5.2%, and the Bombardier pref share down 5.9%. Such is life in the stock market.

CN Rail was down 3.8% and then after the close posted a better-than-expected 18% increase in earnings per share. Look at the earnings per share graph for CN rail, it is a thing of beauty. Earnings were boosted by currency which we had expected. I first added CN to this site in the earliest days of this web site in 1999. It’s up 10 fold since then. CN provides a vital transportation service and is well managed and does not really face intense competition. It seems fair to predict that it will continue to grow its earnings over the years though it may face occasional earnings declines. As to the stock price, that will be left to the sometimes madness of the market. Stock prices can certainly be far more volatile than earnings. But looking back, CN’s stock price has been relatively well behaved.

The Alberta budget released today, with its stimulous spending could be a positive catalyst for some Alberta stocks on Wednesday. I am thinking of Stantec and maybe also Melcor and Canadian Western Bank. It certainly should not be a negative factor.

The U.S. market may breath a sigh of upward relief if the FED keeps interest rates unchanged tomorrow (Wednesday) and especially if it signals that “lift off” may be delayed into 2016.