Stocks were mostly lower on Monday as the S&P 500 declined 0.2% and Toronto was down 1.15%.
But Apple was up 3.4% as it began trading on a four for one stock split basis. And Shopify was up 2.3%.
AutoCanada closed down 2.85%.
RioCan was down 1.7%. In related news the Canadian government is extending the small business rent relief program another month. While that program requires participating landlords to “eat” 25% of the rent, my understanding is the REITs generally view that as a favorable program. They are basically okay with eating 25% of the rent for some of their struggling small business tenants if the program (which pays 75% of the rent for the small business) helps keep those tenants in business. With RioCan down over 2% earlier today I added a little to my position.
Statistics Canada reported building permit data for July. In Alberta the decline was 9% versus July of 2019. That seems like a modest decline in the face of the oil price drop and the virus situation. For Canada overall the decline was similar to Alberta at 10%.
Berkshire Hathaway News:
This morning there was news that Berkshire had invested $6 billion dollars into “five of the leading Japanese trading companies”. $6 billion a large investment but it is not really all that material to Berkshire which has over $800 billion in assets including about $140 billion in cash. So not a big deal at all as far as Berkshire’s future prospects.
What caught my interest was this term “trading companies”. What did that mean? Were they stock and bond trading companies akin to Goldman Saks? Or were they merchandise traders of some kind? None of the headlines I saw explained this point and neither did the short press release from Berkshire. In fact it appears that what was meant is simply that these were five of the largest publicly traded companies in Japan. An interview on BNN described the companies as “trading houses”. That appears to me to be wrong.The BNN interview also called them conglomerates and that looks closer to the reality.
An interesting point about Berkshire’s press release was that it was released in Tokyo Japan. It was required to be released by Japanese regulators. Perhaps that means nothing. The press release was likely written in Omaha and simply released in Tokyo.
Another very interesting aspect of the Berkshire press release is that it gave an email contact for Berkshire’s investor relations contact. That interests me because Berkshire has famously NEVER had an investor relations department. They don’t do analyst conference calls. They don’t respond to analyst questions. All investors were always free to read their financial statements and attend the famous annual meetings. Analysts never got ANY preferential access. The contact on the press releases has always been the phone number for the Chief Financial officer. And I suspect no ordinary investor (or maybe even any large investor) and no analyst was ever going to get through by calling that number. The inclusion of a Berkshire investor relations email may signal some kind of change at Berkshire. Head office is famously extremely lean consisting off about 25 employees. I am surprised that they are now apparently going to be responding to emails which will no doubt flood in. (Is the head office employee count about to “balloon” to 30 or something?)