Toronto was up 0.9% while the Dow was up 0.2%. Constellation Software was up another 1.8% to $116.20. We had last rated it (lower) Strong Buy on April 1 at $89.35. They will release earnings after the close on Wednesday next week and I plan to update the report with a few days after that.
Shaw Communications was up 1.8% after releasing earnings this morning that were about equal to the prior year on an adjusted basis. Apparently, this was better than expected. I plan to update that analysis before Monday.
Yesterday I provided a link to a lengthy transcript of an interview of Warren Buffett. It is astounding how good his memory is for figures. When the host made a disparaging remark about Dairy Queen, (Berkshire Hathaway owns 100% of International Dairy Queen), Buffett bragged that its same store sales were up 5.8% in September. Berkshire owns about 79 businesses and yet Buffett happens to know this figure from memory. He also is able to condense various economic events into a few crisp sentences that explain a lot and to do that on the fly/ It’s truly remarkable. I have already said I expect Berkshire to report good earnings for Q3. I suspect it will report a week from tomorrow.
I was just noticing one thing, Berkshire owns virtually no rental type real estate, no REITs, no office towers, no shopping malls, no commercial space, no farm lands and no forest lands. Even its own operations including head office are often in rented space. I don’t think he would view real estate as a bad investment. But he has found better investments and apparently does not choose to tie up Berkshire’s capital in real estate.
It is often claimed that “most of the great fortunes of the world were made in real estate”. Andrew Carnegie said: “Ninety percent of all millionaires became so through real estate.” I don’t know if that was a true fact when the quote was stated. I do know that this quote is around 100 years old or more! (Carnegie died in 1919) Every real estate promoter since has quoted it. It’s categorically false today. The great fortunes of the world are made in many ways. Most billionaires today certainly did not make their fortune in real estate. By the way it may be debatable whether 50 is the new 40, but there is no doubt that billionaire is the new millionaire, given inflation since Andrew Carnegies’ time.
Buffett does however think that individuals in the U.S. who have stable jobs and who do not own a house would be making a terrible mistake not to buy one now, at today’s low prices, and lock in a 30 year mortgage.