October 21, 2020

On Wednesday, the S&P 500 was down 0.2% and Toronto was down 0.3%.

Toll Brothers was down 4.3%. 

CN Rail was down 6.1% after reporting Q3 earnings. This gives back a little of its recent strong gains. I plan to update the report on this company and to post that tomorrow. I suspect it will look somewhat expensive. But it has certainly been a fantastic long term investment.

AutoCanada bounced up 5.0%.

Statistics Canada reported today that:

“Prices of new homes surged across the nation in September, the largest jump in 14 years. Nationally, prices were up 1.2% in September following a 0.5% increase in August. New home prices increased in 24 of the 27 census metropolitan areas (CMAs) surveyed. Builders across the nation primarily linked the gain to higher construction costs, mainly driven by the impact of the pandemic on the demand and supply of labour and materials. The shift in buyer preference for larger homes also contributed to the rise in new housing prices.” 

Despite that Melcor Developments continues to really languish. I am optimistic that they will have had a reasonably strong Q3, at least in comparison to what must be low expectations. Home builders may be reluctant though to buy very many lots in the face of all the uncertainty. But if there is demand for new houses, even in Alberta, then builders will respond to some extent and Melcor will be selling them building lots.

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