On Thursday, the S&P 500 was down 0.2% while Toronto was up 0.2%.
Bombardier was up 3.4%
Statistics Canada reported that that the Consumer Price Index was up just 1.2% year over year in November. Core inflation was apparently somewhere between 1.3% and 1.9% because Statistics Canada is now publishing three different measures of core inflation. While the range is sort of annoying, it probably a lot more realistic. The fact is that measuring inflation is always done on an estimated basis relying on certain baskets of goods that are supposed to be representative. Reporting it as one number like 1.2% gives a false sense of accuracy and precision.
Retail sales were reported and were up modestly although down 0.7% in Alberta year over year. (Which does not seem too bad given the downturn in teh energy sector).
Restaurant sales for October were reported and wee up substantially on a year over year basis although down slightly from September. Overall this report looks like good news for the likes of Boston pizza.
Berkshire Hathaway is up about 25% this year. I believe Berkshire will have a very good Q4 in terms of growth of book value per share (which is how Buffett has tracked progress since 1965). Book value per share will grow due to gains in the investment portfolio. Wells Fargo alone will be up some $5 billion pre-tax (barring a noticeable decline in the next few days). In addition I believe there will be an unusual gain as its Dow Chemical preferred shares were converted to common shares (I am not sure if most of this gain had already been booked on a mark to market basis or not) Also the put options on stock market indexes which are counted as a liability on the books will gain as that liability will shrink by, I would guess a billion dollars or so, with the higher markets and with the reduced amount of time to the settlement date of those puts. Oh, and there was a HUGE gain in the value of its 700 million options on Bank of America (about $4.2 billion pre-tax). Berkshire’s price is up 15% since I recently rated it a Strong Buy but it can probably still be considered a Buy. However, even with a very strong Q4, Berkshire’s gain in book value per share for the year will not likely be higher than 10% or so. That gain stood at only 5.3% as of Q3 which was $13.7 billion. So even with a blow-out Q4, it will be tough to get to the 10% range. It’s just not that easy to grow 10% on a book value of $256 billion. In that regard small investors have a BIG advantage over Buffett.