August 30, 2023

Wednesday was another day when simply holding a diversified portfolio and doing nothing at all resulted in a capital gain. Most days are like that although of course a minority of days deliver a capital loss in the portfolio value. On top of the capital gains, every single day brings an accrual of interest and dividend income. So, life’s not so bad for those that have accumulated a decent sized balanced investment portfolio.

Today the S&P 500 edged up 0.4% and Toronto managed 0.2%.

Toll Brothers was up 3.4%. They’ve been announcing quite a few new communities and multi-family projects opening up for sale. 

VISA Inc. was up just 0.4% but hit a new all-time high of $248 earlier today. It had actually hit very close to that level two years ago but then dropped as low as $175 one year ago – which was a great buying opportunity. I did manage to mention buying VISA last on September 22 and also August 22.  Today it was in the news that VISA and Mastercard might raise their fees to retailers. I find that hard to believe given the push-back such a move would get. But it goes to show that they are more than holding their own against new payment options.

After the close, Costco reported same-store sales growth that seems a bit weak. After adjusting for volatile fuel and foreign exchange the latest month same same-store sales growth of 4.1%. And over the past 52 weeks the average same-store sales growth has been 5.2%. This growth is below the rate of inflation and may indicated a modest decrease in volume. Canada however has been running stronger and did 7.5% in August and 8.0% over the past 52 weeks. 

Canadian retailers are benefiting form our rapid population growth. Canadian Tire is not adding many new stores at all and so the population growth is helping their same-store sales figures. I visited my local Canadian Tire store today and noticed it seems to be very well stocked up. Canadian Tire had a weak Q2 but perhaps Q3 will be looking stronger.

Canadian Western Bank will release results on Friday morning. I’m hopeful that their loan loss provisions will be modest since they mostly lend to commercial customers. They have no personal credit card exposure. But they do have some exposure to residential mortgages and that could be problematic. They also have faced far higher deposit costs. They had also ramped up expenses but had lately indicated that they would try to cut back on expenses if needed to protect profits.


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