May 13, 2021

On Thursday, markets rebounded somewhat from the recent losses with the S&P 500 up 1.2% while Toronto was up 0.15%.

Going the other way, Shopify was down 3.3% to U.S. $1048. It’s made many investors a huge amount of money. But that’s a nasty dip from its peak of $1500 earlier this year. I am not one to pay attention to important  “phycological levels” and such but still I wonder if it falls below $1000 will that shake confidence? At some point it will turn around again but it still looks expensive to me.

Canadian Tire was a huge winner today gaining 10.6% to close at $212.84 after releasing what was apparently blow-out earnings this morning. Given the gain, let me indulge in a bit of history.

Canadian Tire has been firing on all cylinders for over a decade now. And looking back even further, I first added it to this site on February 4, 2000 rated Strong Buy at $22.90. That’s a gain of 779% in the 21 years since then. Or 11.2% compounded annual and that’s not counting dividends. Over the years since 2000 it has mostly been rated Buy or (higher) Buy  and was Strong Buy at several occasions around 2010 to 2012. It was however rated Weak Sell / Hold at the end of 2002 at $32.45. It has not all been smooth sailing. The stock has had major dips at times. It fell with the market in the financial crisis and then took a long time to recover partly because Target was was supposed to take away some its business when they came into Canada. And of course it fell hard with the market last Spring. 

The point is, we have all heard many times (more often when markets are down) that “buy-and-hold-is dead”. But the fact is that buying and holding good companies has often been a great strategy. Even better with Canadian Tire would have been “buy-and-hold-and-buy-more-on-dips”.  In theory, the best strategy would have been to Sell ahead of the major dips and buy back at lower prices. I wonder how many managed that?

I have made very good gains on Canadian Tire but the fact is I sold it at times including selling most of what I had recently to build my cash position. It turns out I would have been best served to have never sold. 

Scroll to Top