On Wednesday, the S&P 500 fell 1.5% and Toronto was down 1.0%.
One of the few stocks going the other way was Dollarama, up 2.7%. While Dollarama had a great Q4, it also reported that the sharply lower Canadian dollar is hurting its profits in Q1. Nevertheless it also intends to continue to expand aggressively.
Warren Buffett has teamed up with 3G Capital once again, this time to buy Kraft. According to Yahoo Finance the P/E on Kraft (after today’s increase) is 48 which seems extremely expensive. However the forward P/E based on forecast earnings is much more reasonable (but still not cheap) at 24. Buffett is once again showing his confidence in the American economy. He is very much looking at the long term. It seems likely also that he is counting on 3G to achieve synergies and cost-cutting. Buffett wants to make sure that Berkshire has plenty of subsidiaries and investments that will gush cash long after he is gone from the scene.