Looks like we will have another leg lower on this correction. Nothing to be overly concerned about at this point. Basically, it is not common to go up for 1.5 years without a correction, then complete the correction within one week.
Recall in 2015 – we failed in August 10% down, doubled dipped in October and then had yet another fall of 10% in January – taking 6 months to complete.
We are likely going to have a bit of a struggle in markets for a few months, it must digest these returns earned over the last year and change before we complete another leg higher. This is completely healthy, and better than going higher to have a brutal turn down. We will not do any additional selling at this point, more likely we will buy a dip on the same parameters of safety and company strength.
When you look at the DOW, it rallied to resistance -to fail lower, it will test that low and potentially double bottom short term, but we will likely not be blasting to new highs day in day out for the next six months.
We continue to hold structural cash. I made on purchase on Tuesday to buy us a bit of Alphabet (aka Google).
Google has 100bl in net cash, and grows its cash by over 5bl per quarter. It will go down like any other stock, but we are confident in the long-term safety.
Furthermore, I’d like to pass on something that makes us extremely happy. I am now able to control more aspects of the portfolio trading between now and our previous employer – I purchased this Google and the FX rate I received for us is absolutely incredible!
We managed to get a cost rate on the FX of roughly 25-30bps on these bulk trades that I execute on our behalf. This savings is so meaningful and goes directly into your pockets. I’m extremely happy with this result and proud to pass this on. I would estimate our FX savings to be between 70-90%, if we model 10-20 USD purchases per annum, this will add up in your accounts. Every little bit helps
The spot level on the CADUSD at time of purchase was 1.2520 and we received an FX rate of 1.2545.
Big win longer term for all of us.
Call to discuss.
Chris, Steve, Rick