September 3, 2017

On Friday, the S&P 500 was up 0.2% while Toronto was down 0.1%

Canadian Western Bank was up 3.4% to $29.99 in further reaction to its strong earnings report. It appears to me that this bank will continue to recover and remains good value at this price. It’s my second largest position representing a heft 13.5% of my portfolio as of August 28. I have no plans to trim it although having added a lot of shares when it swooned to the $26 and $25 level last Spring, it might be prudent to trim it somewhat. I own it partly in RRSP accounts where I don’t have to worry about triggering taxable capital gains.

Home Capital was up 3.2% to $13.97. I mentioned I grabbed a few shares about a week or so ago. The vote to approve Buffett/Berkshires added investment at $10.30 takes place September 12. Some investors oppose the discounted price. I think it deserves to go ahead since it will totally shore up the balance sheet. But some investors believe Buffett’s original investment has already done that sufficiently. Buffett will retain his original 20% stake no matter what. But I suspect he will feel insulted if the vote is negative. How smart is it for Home Capital owners to insult Buffett? Not very, I would say, but as a huge Buffetf fan I am biased.

Statistics Canada reports that

“Capital expenditures for the oil and gas extraction industries rose 14.9% from the second quarter of 2016 to $9.8 billion in the second quarter. This increase followed a 2.2% year-over-year gain in the first quarter of 2017.”

This is more proof of the partial recovery that has occurred in that industry.

I am on a road trip this week heading west from Cape Breton. Edmonston, New Brunswick on Monday night. Ottawa on Tuesday night. Next stop to be determined. Sault St. Marie or probably somewhat past that.