December 8, 2016

Thursday was yet another positive day on the markets.

The S&P 500 was up 0.2% and Toronto was up 0.4%.

AutoCanada surged 11.3%. I do not see any news to explain that. Possible some analyst “upgraded” it.

Canadian Western Bank was up an additional 2.2%. I further reduced my position today but still have a large exposure to it.

Costco was up 2.4% after releasing earnings

Constellation Software was down 4.1%.

The recent stock markets gains have certainly been a surprise. So, far trimming positions has seemed counterproductive as the market kept rising. Still, it is prudent to trim larger positions and to have some cash available. Markets do not and will not continue to rise in a straight line for any extended period of time. By no means am I suggesting that investors should sell massively at this time to build huge cash positions. But if a 10% position has become 13%, it seems prudent to trim certainly.

It is staggering to look at the gains in many stocks compared to their lows last January/February. Many stocks on our list (and these are by no means volatile penny stocks) have risen in the order of 50% from their 2016 lows. I was doing some modest buying back then. It certainly would have been nice to have had a more reasonable allocation to cash at that time to facilitate buying. There will be dips in the market in future as well and I hope to have a more substantial cash allocation next time.

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