April 29, 2014 Comments

Tuesday was a strong day in the markets with the S&P 500 up 0.5% and Toronto up 0.4%.

Looking at my favorite stocks, returns seemed to be bustin’ out all over.

Melcor was up 1.2%. (It’s thinly traded and so it’s gains must be taken with a grain of salt but at least the still tiny volume was a bit more than it is most days). Wells Fargo was up 1.1%. The oil sands ETF, CLO which we don’t have a rating on but which has been in my own portfolio for about a year (as disclosed on this site) was up 1.9%. FirstService was up 2.8%.

Bank of America, as I had expected, recovered some ground today and was up 1.9%.

My Wells Fargo preferred share was up 0.9% today to $22.40 and also rose yesterday and as a result my order to reduce that position at $22.25 was filled. I believe this is the first time in a while that it has been this high (The less than fabulous Yahoo Finance only shows me five days on the stock for some reason). I have entered an order to trim some more at $22.50. The yield on these is perhaps still quite good at 5.7% and maybe I should keep them but I don’t really like perpetual shares in an environment where interest rates could rise.

Yesterday the Canadian government apparently sold $1.5 billion of 50 years bonds at just a hair under 3.0%. I fail to see the logic in that for pension plans, life insurance or anyone else. Years ago Buffett wrote about people buying non-taxable bonds int eh 1940’s at around 1% which he said was clearly an abominable return. I think 3% is quite abominable too especially where the investor is taxable. It’s a P/E ratio of 33 if you want to look at it that way. And while the E, the earnings will be paid in cash (unlike the case for most of the earnings of stocks), it will also (unlike the earnings of most stocks) not grow at all over the 50 years. Well, to each his own.

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