February 18, 2021

Thursday was a moderately negative day in the markets as the S&P 500 was down 0.4% and Toronto was down 0.55%.

West Fraser Timber was down 3.0%. That’s despite lumber prices being at record highs. Well, this is always going to be a more speculative investment. I have only a small position and am tempted to add to it but will proceed slowly and cautiously on this and any other purchases becasue I want to maintain a strong cash position.

The Canadian Western Bank rate reset preferred share CWB.PR.B was up another 1.8% to $21.30. Rate resets in general have had a good recovery, but this one seems to have risen more than most others. I don’t know why it has risen quite this much. I already sold what I had in this and would likely be inclined to sell now if I held it. 

Linamar was down 3.5%.

AutoCanada was down 3.0%. They will release results on March 2, after the close of trading.

I saw some figures today indicating that Calgary home sale market was very hot with big sales gains and a prices up 8% year-over-year. Apparently the Edmonton market has also strengthened. That could bode well for Melcor Developments which owns large amounts of residential development land and trades at about one third of book value. That seems like it should work out well. Of course Melcor faces other risks such as possible value declines on its commercial rental buildings. And it takes a very long time for Melcor to go though the full cycle from buying raw land to selling all the residential building lots it develops on that land. The length of time that this process ties up money has been problematic in reducing annual returns. We shall se what Melcor’s Q4 results bring when they are released in March.

 

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