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About the only 100% certain thing that can be said about equity markets is that they will fluctuate. Although their purpose is to provide an outlet to buy and sell shares of businesses that you either desire to be a shareholder of or no longer wish to be a shareholder of, the day to day market prices change more frequently and sometimes randomly compared to the underlying value of the business and its potential. Therefore, in times when markets appear to be valuing things more randomly than rationally, investors are sometimes provided with opportunities to invest in good businesses at prices that could provide above-average rewards when prices once again align with values and become more rational. We are in one of these more random periods and I have used that period to add three new holdings to many clients’ portfolios. The companies that we have invested in are all US...

One of the keys to long term successful investing is to have a diversified portfolio among many stocks and sectors because not all portfolio holdings can be contributors to positive performance day in and day out. This month, that diversification has helped the Padlock portfolios to stay ahead of the market while two of our bell-weather holdings have had a difficult couple of weeks. Apple and Google, which have been very strong contributors to the positive performance this year, have both declined recently but those declines, rather than being a cause for concern, have created the opportunity for them to once again lead the portfolios for the balance of the year. Starting Thursday, October 18th, Google shocked investors by having their earnings released four hours ahead of schedule and having them widely miss expectations. Apple then released their earnings the following Thursday and also disappointed investors by falling slightly short of the...

When I appeared on Headline with Howard Green on September 12th and was asked if it was time to take profits in Apple, I jokingly responded that “it is never the time to take profits in Apple”.  There will obviously be a time to take profits in Apple and at some point to sell the entire position BUT that time is NOT NOW. From its intraday high of $705.07 on September 21st, the stock has fallen 9.5% to close yesterday at $638.17.  Reasons for the decline range from the disappointment of selling “only” 5.0 million iPhone 5’s the first weekend to the premise that stock prices cannot grow to the trees and Apple is already the most valuable stock in the world.  Yes, there was an issue with the new Maps application on the iPhone and also reports of labour unrest in China but to extrapolate that Apple’s best days are...

Just a brief note today with a couple of housekeeping details. First of all, tomorrow (October 3rd), I will be appearing on Market Call at 1:30pm. This half hour show is hosted by Michael Hainsworth and is re-broadcast at 8:00pm. The video will be posted in the Library section of this website. The performance charts to the end of the third quarter for the three Padlock Composite Portfolios - Balanced, Growth and Small Cap Growth - have been posted in the Performance section of this website. With the standard caveat that past performance is not indicative of future performance, I have been very pleased with the results this year, particularly when according to a recent JP Morgan report that only 10% of US equity mutual fund managers had exceeded the S&P 500 Index (their benchmark) by 2.5% or more. If you have any questions about the charts, give me a call. I...

Last week, I attended the Peters & Co. Fall 2012 Oil & Gas Conference in Toronto at the Toronto Ritz Hotel. It was an interesting setting since that week the hotel was also serving as the official hotel of the Toronto International Film Festival (TIFF). With a throng of paparazzi lining up outside the hotel, the only star sightings for me were not the Hollywood stars at TIFF but rather a few oil & gas stars from Calgary. There were several themes that were in evidence throughout the conference. The key themes were, as detailed in the Peters & Co. research summary: 1) North American Natural Gas Outlook - All the Right Things are Finally Occurring; Will Supply Ever Respond 2) Canadian Oil Differentials will Remain Volatile Throughout 2013 3) Maintenance Capital Requirements in the Oil Sands have been Vastly Underestimated 4) Propane Prices Crash - Does Liquids Rich Drilling Still Make Sense 5) With More...

Late last week, I was interviewed by Proactiveinvestors. Proactiveinvestors is a leading multi-media news organisation, investor portal and events management business with offices in New York, Sydney, Toronto, Frankfurt and London. They provide content to many of the world’s largest news amalgamators, financial websites, and news tracking services, and also provide commentary to dozens of other leading specialist investor focused websites. Here is the link to the article that was posted on their website this morning. If you have any trouble opening the link, let me know and I can send you the article in a different format. Talk to you soon. To receive The Lato Letter by email from now on, please click here....

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