YCG Investments
“If you buy above average businesses at below average prices, on average, we believe you should come out ahead.” — Brian Yacktman

Reality Check

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Yesterday, the National Association of Realtors said existing home sales fell 27% in July month over month to a seasonally adjusted annual rate of 3.83 million – the lowest level in at least 11 years. Granted, much of this can be attributed to sales being pushed from July into June because homebuyers were scurrying to take advantage of the $8,000 homebuyer tax credits that were going to expire (they ended up being extended to Sept. 30th). But still, this statistic should raise some eyebrows.

Seems anytime there is a deteriorating economic indicator or some sort of disappointing news, investors have a tendency to shrug off the bad news and look for any reason to take a chance because they are so eager to speculate in the market. We think it’s a great time for a reality check.

Disclaimer: The specific securities identified and discussed should not be considered a recommendation to purchase or sell any particular security. Rather, this commentary is presented solely for the purpose of illustrating YCG’s investment approach. These commentaries contain our views and opinions at the time such commentaries were written and are subject to change thereafter. The securities discussed do not represent an account’s entire portfolio and in the aggregate may represent only a small percentage of an account’s portfolio holdings. These commentaries may include “forward looking statements” which may or may not be accurate in the long-term. It should not be assumed that any of the securities transactions or holdings discussed were or will prove to be profitable. Past performance is no guarantee of future results.

Posted by: Brian Yacktman | August 25, 2010 | Permalink

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