Monthly Message

The Wutherich & Co. Composite was up 9.3% in January. This compares with the S&P/TSX up 8.7% and the BMO Small Cap Index up 8.6%.

The Wutherich & Co. Portfolio has gained 18% from its low on Dec. 24, 2018. Just since the end of September we have experienced one of our worst months in October at -11.2% (only September and October of 2008 were worse) and one of our best months in January at 9.3% (only November and December of 2001 were better). All this while very little has changed amongst our names in the portfolio with one exception. On January 20th, ZCL Composites announced that it would be bought by Shawcor Ltd. for $10 per share. We had owned ZCL successfully from December 2013 to January 2018. The stock declined significantly from January to November of 2018 when it looked cheap again by our metrics. We repurchased ZCL in November for $6 per share. The $10 take out provided us with a 66% gain in just over two months.

All this to say that it is best to ignore market volatility and just focus on the prospects of the individual names that you own. Their value will out over time either through stock price increases or acquisitions by other firms.

Also, a big shout-out to those clients that heeded our call to put in more money. The 18% recovery from December 24th sure feels good in their wallets right about now. Regardless of this move, the portfolio still offers good value and should support future returns. It is RRSP season and so it is an excellent time to look at adding some of your annual contribution to your accounts with us.

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