May 21, 2020

On Thursday, the S&P 500 and Toronto were each down 0.8%.

Melcor Developments was up 6.5% after releasing its Q1 report.

The report on Shopify is updated and is rated Sell or reduce at Canandian $1121. I try to fathom how its price of 53 times sales can be justified. It is a tremendously successful company. Ultimately it should make a high profit on sales. But it seems to be pricing in tremendous growth in revenues as well as the achievement of high profit margins. It is true that a 40% growth rate can justify a lofty valuation – but the valuation here seems very hard to justify.

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