October 27, 2017

On Friday, the S&P 500 rose another 0.8% and Toronto was up 0.4% finally reaching a new record high close.

In the U.S. in particular it starts to seem like stocks only ever go up. Obviously, this is wrong but with gains almost every day for the last year investors are mostly feeling good and most may be complacent about risks.

Amazon was up 13.2% to $1100 dollars after it handily beat earnings estimates by posting earnings of 52 cents per share. The math indicates that the stock is trading at 280 times trailing earnings and 144 times forecast earnings (the trailing earnings may not yet reflect the latest quarter but that won’t make much difference and no doubt analysts will boost forecast earnings).

I spend little or no time being concerned about stocks that I missed out on. In the case of Amazon I have looked at the numbers closely several times starting in July 2015 and it was far too richly valued for my blood. I have no regret about not owning it since it simply does not fit my value investing approach.

Another stock that is up hugely is Apple. I have some regret about that because I really should have looked at it a few years ago when it was trading at an attractive P/E level. But overall, I have done well in the markets and there is no sense lamenting what I did not buy.

Back to other stocks today:

Constellation Software was down 2.3% after posting earnings that were, it seems, a bit disappointing. I would not particularly mind a bigger pullback in order to buy. I own a few shares and will not be selling.

TFI Industries was down 1.5% after being down 6% earlier in the day. It is a well managed company and one I intend to keep for a long time.