As most you will have noticed, the DOW was down 1.8% today, Toronto was down 1.4% and the S&P 500 was down 1.4%.
These kind of days are not unusual and simply reflect the realities of stock investing. And I am afraid I can offer no comfort that the market will not continue on down. But I am not suggesting I particularly think it will go down. I have never claimed to be able predict the market especially in the short term.
I don’t believe that the stocks I own are over valued and I believe that our stock picks will continue to be good investments over time. As for the stock picks in the table, the ratings are as of the date and price indicated and as it states above subscribers would have to make a judgment call as to whether the rating might still apply given how old it is and how much the price has moved (or not) and what other events have taken place. I simply can’t sort of reaffirm each rating without doing the updated analysis.
There will updates coming before too long and there will be definitely a flurry in December as I always try to get everything as up to data as possible for the start of the new year. There is nothing special about a new year but I do measure performance from each January 1 and it is best to measure the performance of a Buy or Sell rating from a fresh update.
Canadian Tire was down a little today to $70.08. Yahoo indicates that is a P/E of 11.3. My analysis agrees with that. I can’t make any guarantees but I note that Walmart was trading around $50 to $55 for much of 2010 and 2011 and I believe the P/E was around 11 at times. It took a while but now Walmart is at $75, not because its earnings soared but because the P/E rose to 15.8. Buying good companies at 11 times earnings (an earnings ratio of almost 9%) will likely work out well over time in a world where the 10-year bond yield is under 2%. I considered adding to my already hefty Canadian Tire position today but I probably have enough already.