On Tuesday, the S&P 500 was up 0.2% and Toronto was up 0.1%
Those who don’t own it may tire of hearing about Melcor but it managed another 1.2 % today. Volume was 25,000 shares. At that level it would trade 6.25 million shares a year. It has 33 million shares. But over half are with the founding family and lots more are probably held by those who will never trade. So 25,000 shares per day may be at the high end of the trading we will ever expect to see here. (So, again it’s surprising that RBC would mention it to their vast client base.) In theory trading adds nothing to the true value of a company, especially one that is not looking to sell additional shares. In practice it often adds to the share price. A decent volume of trading can facilitate making a quick capital gain and then selling. And it facilitates selling out at any time. Most retail investors do not need to see a lot of volume since we tend to have 1000 shares or (much) less very often. But for those who get into owning say $50 or $100k or more in any one company a lack of trading liquidity can be a concern.
With a company like this, a good strategy might be to have a core or minimum holding intended to hold indefinitely. On top of that when it is cheap one could own another layer with the intention to sell if it no longer looks cheap. Or a layer of stock that is used to buy low and sell high and perhaps repeat that if the stock is volatile. I have tried to do that with stocks like Wells Fargo, Toll Brothers, Canadian Tire and some other over the years. Sometimes it has worked out. I have not however had firm rules so it has been ad-hoc.
Wells Fargo also did well today, up 1.2%. Bank of America was up 2.0%. I read mixed mixed messages about the U.S. economy and about home building. In general, I believe a slow recovery continues and that the big banks and Toll Brothers will do okay.