December 4, 2017

On Monday, U.S. markets opened sharply higher reflecting the Senate approval of the income tax reduction plan over the weekend. The excitement died down by the end of the day and the S&P 500 was down 0.1% while Toronto was down 0.4%.

I reviewed my own cash position on the weekend and found I was at 23% cash. I’d like that to be a bit higher but it is always hard to decide what to sell. This morning Berkshire was up sharply and so I decided to sell half of my remaining small position. And Canadian Western Bank was up and I have heavy allocation to it and decided to sell a small portion of that. Most or all of my selling in the past few months was likely a case of selling too early as stocks have mostly continued to move higher. Nevertheless, I think the trimming was prudent. I am often adding to positions when stocks fall and it makes sense to do the opposite as those same stocks rise.

In today’s trading: FedEx was up 3.6%. Costco was up 2.4%, Bank of America was up 3.4%.

Visa was down 3.3%.

Berkshire’s A shares got as high as $299,000 per share today. These are the self-same shares that were trading under $20 as Warren Buffett took control of the company in 1965. His average cost was $14.86 per share. The earliest price shown on Yahoo Finance for these shares is $380 in March 1980.

The U.S. markets seem to be pricing in a lot of optimism. Stocks can likely stay high and go higher as long as basically all the big news breaks to the positive. That is the income tax reduction gets passed into law, the spending bill gets passed to prevent the government shutdown, Trump does not get charged or impeached anytime soon and there is no other major bad news.

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