On Friday, markets were strong with the S&P 500 up 0.5% although Toronto was up only 0.1%.
Berkshire Hathaway released its Q2 numbers on Saturday morning. They were strong. Of interest they reported no share buybacks have taken place. In isolation that could push the share price down but perhaps the strong earnings will prevent that. Buffett is extremely patient. He may wait and see if there is a better opportunity to buy back Berkshire shares. Although he has also said that if Berkshire’s shares were ever plunging he would let the plunge happen and not try to reverse it with buy backs.
I mentioned that Melcor Developments sold 147 single family building lots at an average $163k in Q2 versus 104 at $174k in 2017. In both cases some of these lots were part of a 50% joint venture so the net lot sales for Melcor’s owners was lower. Historically, I believe there were very few joint venture lots but now a substantial number of lots (I don’t know how substantial) are joint venture. In any case the sales in Q2 2018 look fairly good. Other more volatile aspects of Melcor’s business come into play, but these single family lot sales are an important indicator. Here are the historic number of lots and prices for Q2:
2018 147 @ $163k average
2017 104 at $174
2016 92 @ $179
2015 201 @$153
2014 244 @$182
2013 197 @153
2012 149 @ $142
2011 80@ $143
What really matters is the how many they will sell in future and at what price and especially in Q4 which is seasonally the biggest quarter.
I mentioned my regret at substantially reducing my position in TFI International. Some I sold at about $32.50 (oops) But most I sold at $41.50. In both cases I had fairly large gains (very roughly about 50 and 100%). And these were sold in non-taxable accounts. So, in may ways I have little to complain about. But with the price now at $45.78 and the company optimistic it would be better if I had not sold. I think my regret comes partly because it was my own decision to sell. So a committed error. Meanwhile, I have little regret about not selling Melcor at higher prices since I still think it should recover given it is trading at half of book value and where book value represents very real assets with presumably very real market values that are at or above book value.