Monthly Message

The Wutherich & Co. Composite was up 9.6% in December. This compares with the S&P/TSX up 1.2% and the BMO Small Cap Index up 3.6%.

Well, better late than never. Our 9.6% result in December marked one of our largest monthly gains ever (November 2004 was our largest at 10.6%), dragging us into positive territory for 2017. Over half of the gain came from a single stock, Pure Technologies, which, in the four years that we have owned it, has been a story of two steps forward, two steps back. Each large gain in the stock price was matched by an equal and opposite large loss. Luckily, Xylem Inc., a US-based water technology provider, decided the company was worth about twice what it was trading for in early December. We agree. This allowed us to double our money in this position overnight. This story is like many that we have in the portfolio: good companies that are being largely ignored by the broader market because they don’t fit some index or some macro-economic theme. Hopefully, more of our companies will be revalued in 2018, providing us with other “Pure-like” returns.

Jean-Francis and I hope that everyone had as wonderful a Christmas as we did and we wish all of you many Happy Returns in 2018.

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