May 3, 2017

On Wednesday, the S&P 500 was down O.1% and Toronto was down 0.5%.

AutoCanada was down 3.5%.

As stocks decline I will look to add to positions. But I don’t want to get in a hurry doing that.

Regarding mortgage arrears the latest figures are for February and show no sign of deterioration. Somehow, some way mortgages get paid. In an environment of robust house prices few people default. They are better off selling and paying the loan. This is one of the dad parts of the Home Capital situation. Some of their mortgages were shaky. But in almost all cases even the shaky people are paying the monthly mortgages on time. \But what happens if home prices fall? Hard to say since we have not experienced that in Canada to any material extent in a couple decades. And we have never experienced in in an environment where mortgages were were obtained so easily and of such gargantuan size.

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