On Tuesday the S&P 500 was about unchanged while Toronto was down 0.7%
Potash corporation fell 16% on news that a huge Russian Potash producer, the world’s largest would exit a pricing cartel. I don’t own any potash stocks (or any commodities for that matter save some oils sands ETF units). My sympathies for those that own it. But as for the company itself I am not too sympathetic at all. Potash Corporation had long belonged to a price cartel called Canpotex. I can’t have much sympathy for that kind of price fixing. Especially when Canpotex probably artificially (and significantly) raised the price of fertilizer which is a nasty thing to do in a world where millions go hungry when farmers in Africa can’t afford fertilizer.
I have no idea what Potash Corporation is worth. This development also illustrates the fact that sometimes things can come out of the blue very unexpectedly.
Other news today indicated that TD Bank announced a significant insurance loss due to flooding in Alberta and Ontario. (That should hardly have been considered a surprise however) I alluded to the same happening for Canadian Western Bank in my July 23 comment. I thought I had probably mentioned it earlier but I don’t see it.
Canadian Western Bank has a home and auto insurance business and will surely have suffered significant losses due to the Alberta floods. I don’t think that is any concern at all in the long-term but it could certainly push the price down temporarily.
I was very tempted today to sell some of my Canadian Western Bank shares. It might even be wise to sell them all and hope to buy back at a lower price when it announces its insurance losses.
Meanwhile we had Canadian Tire up 1.6%. And FirstService was up over 6%. I have long liked FirstService but it did not look like a buy at all in the last update.