As mentioned yesterday I wanted to raise some cash today. sitting at home after my trip I took the opportunity to so some selling this morning. I sold half my Walmart. I then sold my Shaw Communications which has risen about 18% since my last rating which was Buy at $21.06. It may have risen on faint hopes of a Rogers take-over. Certainly I may regret selling this, but I needed to sell something to raise some cash as it seems prudent to have some cash around in case better bargains emerge. I also sold the rest of my Boston Pizza. It will continue to do well as an entity and the cash flows I think are secure and will grow although only quite slowly. But it would fall if interest rates rise and I just was not sure it should be this high ($22.25) my last rating was (lower) Buy at $19.96. Also some of its price rise seems a bit financially engineered when they borrow money to buy back shares. We could all borrow at low rates and buy this stock and make money on the dividend but it is risky. Having the company do it is convenient as we don’t have to make the payments. Still it somehow smacks of risk and a bit of a free lunch. The strategy made a LOT of sense when the units were clearly under-valued but I am not sure it makes sense now. I then bough a bit more Toll Brothers as it was down 2.25%, perhaps I am being stubborn there as it is not clearly a bargain but I do think the U.S. housing recovery will continue.
I saw some figures yesterday that indicate that loan delinquencies in the U.S. are WAY down from what they were a couple of years ago – with one important exception. Mortgage delinquencies are still VERY high (30 day delinquent around 10%). But I wonder now it that is an artifact of the past. These loans may have been delinquent for a very long time and we are looking at the same loans. Banks are allowing the delinquencies under various government programs and also due to the very slow foreclosure process. I think the current mortgage delinquencies may far overstate the situation on a go forward basis.