OPTIMISM #2 - March 31, 2020

Hello Clients and Friends,

I hope this finds you and your families safe and healthy.

I thought this was brilliant.  From George Athanassakos, a York University professor of Value investing, in the Globe and Mail last weekend:

A quote from Seth Klarman is in order here: “When prices are high the perceived risk is low but the actual risk is high and when prices are low the perceived risk is high, but the actual risk is low.”

Although one would never know it from watching the news, we seem to be seeing the beginnings of a wonderful recovery.  Suncor and CNQ are up 50% from their bottoms a week or so ago.  TD bank was 49$, now $59 (up 20+%)

TD’s dividend is 3.16 a share, or 5.4% yield at the current price.  The ten-year average is 3.3%.  An amazing opportunity.  The list goes on.

On our banks, utilities, pipelines and railroads, dividend income continues to be paid and increased at a rate of about 8+% per year.  The income doubles about every ten years.

Still a great time to buy, not sure how long it will last.  We will talk about this sale for decades.

Stay positive.  I’m always here to chat if you like.

Derek Moran R.F.P.