May 2, 2017

On Tuesday, the S&P 500 rose 0.1% and Toronto rose 0.3%.

TransForce was down 2.3% to $28.70 and is worth considering at that price.

Constellation Software was up 2.5% to about $666. It’s a wonderful company. It always seems expensive however. I have only a small position and have not intention to sell.

Home Capital is delaying releasing Q1 earnings. This is understandable since they will be under fire if everything is not disclosed up to the minute. A tough task. They are in a hard position. If they sound too pessimistic it will be a self-fulfilling prophesy. It they paint too rosy a picture they could be in trouble for that. Given the loss of confidence by depositors and potential GIC buyers, they may be forced to sell the company at what would likely be a fire sale price.

With Canadian Western Bank down to $26.50 I grabbed more shares today.

In Alberta last week a large land / house development company is seeking creditor protection. This is a private company (does not trade on the exchange). But it appears it does raise money from investors in other ways.

With hundreds of subsidies and partnerships they sound a bit untrustworthy to me. Blame is being placed on the Alberta economy. Maybe, but I suspect over-leverage and mismanagement played some role here. I am not sure if this has any real implications for the likes of Melcor but obviously it is a sign that things are tough in the land development business. Melcor has always been conservatively financed in order to weather the bad times. And it has substantial rental income revenues so that it can hold onto land in bad times without difficulty.

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