Today the S&P 500 was down 0.2% and Toronto was down 0.1%.
Toll Brothers was up 2.1%. Canadian Tire was down 0.4% despite news that Canadian Retail sales were unexpectedly strong in May. CN fell 3.1% on concern about increased regulations. It’s a great company but still seems expensive. My “stink bid” is set at $90 – probably unrealistically low but you never know what strange things can happen in the markets.
Canadian Western Bank fell 3.6% and the chart shows that almost all of the decline came at the very end of the day on high volume. Possibly some news has leaked about insurance losses in Alberta due to the floods. Or maybe some large institution just needed to sell a lot of shares. This drop does not bother me at all. Canadian Western Bank appears to be a well run and reliable operation. It will almost certainly continue to grow over the years. If, in the meantime the market would like to offer up its shares at lower prices, I am fine with that.
I sold what amounted to 60% of my Berkshire Hathaway shares today and now hold 200 shares.
I was reading in this morning’s newspaper that the price for Alberta heavy oil (from oil sands) is about $90 per barrel and that this price had been as low as $50 in January. I can’t pretend to be able to predict oil prices and have not looked at the oils sands companies. Still it seems to me that the oil sands ETF symbol CLO at just under $13 has not moved much on the recent positive news. And it is well below its historical peak and the P/E ratio at 17 is not that high assuming that profits could improve quite a lot with this $90 price. (However, I am not aware what this price was as a year ago. I recollect from news stories that it was considered quite low last Fall but I am not sure about last July). I understand that certain bottlenecks in Cushing Okalahoma had caused the price differential or spread for heavy crude to be especially large. I understand that the bottleneck situation is much improved due to the reversal of flow of an Enbridge pipeline and also due to more oil being shipped by rail. The same situation was causing West Texas crude to trade far lower than Brent crude. If the spread is now much reduced then if Brent crude stays high (and I have no prediction on that) then the western Canada heavy crude price should stay high and I would thing the CLO units would then do well. The bottom line is that I certainly don’t have all the information or all that much to go on, but with the big recovery in that heavy oil price I feel good about owning this oil sands ETF and may add more to my position.