With markets up this morning, my fear that the trend was still negative is suspect at this time. But there are many days ahead before the virus situation is even remotely resolved.
I understand there is agreement on the U.S. $2 trillion stimulus deal which is massive. The deal is supposed to pass the Senate late today then presumably the House after that (tomorrow?). It will take time for the market to fully digest the bill but so far the market is happy with it.
I did buy some Melcor REIT units today at prices from $2.85 to $2.92.
I also looking at the Melcor REITs two subordinated convertible debentures. MR.DB.A and MR.DB.B The conversion prices are now way higher than the unit price but these are of interest becasue they have traded as low as 60 cents and 51 cents on the dollar. But that was at very low volumes and it might not be realistic to be able to buy at less than about the current bids of 67.5 and 65 respectively. Be careful buying these as they are very il-liquid and the buy is based on face value rather a number of shares. It can be confusing. I believe these would be safer than the units in the event the REIT gets into real trouble. But they are not as safe as regular bonds as they are a subordinated debt. Also the REIT could redeem these in units rather than cash at maturity. They also have less upside than the units if things get back to a more normal situation in the Alberta economy. But I wanted to mention them since I was looking at the REIT and I did put in a small order for these debentures (which may not get filled).
I think VISA is worth considering at its current price of $160 (down from pre-virus highs of $214). It will surely be a survivor of all this mess. It would of course be even more interesting if the market declines and brings it lower. I have the P/E at 31 based on earnings as my last update which was for Q3. Still expensive but of course it has an extremely dominant and favorable position in the market.
Costco at $283 is down from highs of $324. It will no doubt post huge same-store gains for March as everyone stocked up. It’s hard to know if that will lead to a reduction later as buying was brought forward. It always looked expensive to me (the P/E is around 35) but it may stay expensive in relation to earnings given its great market position and given its revenues are growing at a time when so many businesses are suffering. I would not rush to buy too much of it but it is worth considering.