On Thursday, the S&P 500 was up 0.6% and Toronto was up 0.5%
The Boston Pizza units were up 6.7% to $10.82 after it announced the 20 cent special distribution. The 20 cents really just results from the six months of zero distributions as cash built up even with the reduced operations. Hopefully the 20 cents also signals that they think they can at least sustain 6.5 cent monthly distribution. If only a few of their locations end up closing permanently then perhaps these units can continue to do well. Overall, I am surprised how well the units have recovered.
lululemon was up 6.6%.
I notice today that Bank of America is redeeming a 6.2% preferred share. This would be a perpetual preferred share. This could be because with todays low interest rates they could reissue at a lower rate. Or it may be that as bank capital rules change these particular preferred shares were no longer what they need on the balance sheet. Its too bad those 6.2% shares were redeemable. They would be a good investment in a very lower interest rate environment. If not redeemable they would likely be worth perhaps several dollars more than $25.
BitCoin has been in the news reaching record highs. It’s not the sort of thing I can analyse. Apparently many are investing in BitCoin and see a bright future for it as a way to protect against possible inflation due to central bank money printing. That may be valid but it is at odds with the fact that a 30 year U.S. government bond pays under 2% (1.7%). Presumably the investors buying these bonds are expecting quite low inflation. It may be that pension funds, insurance companies and certain other investors buy long-term government bonds with virtually no regard to the interest rate. They may be effectively required to buy them due to regulations and due to accepted notions of proper diversification. In any case buying BitCoin to protect against big inflation is at odds with the bond investors accepting such a low rate. We can check back in 30 years and see who was right. I also heard one BitCoin fund manager describe BitCoin as a “hard asset”. Perhaps I am slow to understand. BitCoin has a scarcity value but I am pretty sure it is the complete opposite of a hard asset.
Another thing I will put on the record about BitCoin is that while it scarce (there will only ever be 21 million created) it seems to me that if it became more generally used as money then a bank could be set up to lend BitCoin and take BitCoin deposits on a fractional reserve basis. It seems to me that this could create a lot more BitCoin, just the way that commercial banks create money by lending. And such a BitCoin bank might be able to pay and charge interest in either dollars or in a percentage BitCoin itself. (You borrow 10 BitCoin and pay back 11 sort of thing). I have thought this is possible for a long time but not sure I ever mentioned it on this site. I have never heard the possibility of lending creating more BitCoin (and diminishing the scarcity value) . But a google search reveals there is some borrowing and lending going on. But I am not sure if the lending of BitCoin that is already occurring amounts to fractional reserve type banking or not.