Monthly update: October 2013


Selling continues.

I continued to study on WTW and decided that the risks are too many to justify the price I paid. The company faces business model risk from apps. Even though I think that apps will not win in the long term i.e., there has to be social component to any weight loss strategy, I am still inclined to believe that they will continue to be a threat to WTW. The company reported a sucky quarter and cut its dividend. The stock was pummelled to $32. But reading the conference call, it seems that the management is very forthright about the problems they are facing. They laboriously went over what is wrong with the business and explained their strategy. This is more than I can say for many managements who try to put positive spin on everything. A good management does not help a bad business though. The question one has to ask here is clearly the competitive advantage of WTW and sustainability of its business model.

I sold a bit of Orange, all of my positions in Alcoa, and all of Munich Re.

I bought two new Canadian positions. These are small companies with great managements. The first is Fortress Paper helmed by Chad Wassilenkoff and the second is Altius Minerals headed by Brian Dalton. Fortress paper is in a commodity industry and is facing margin squeeze because of falling DP prices. I am not going to increase this position beyond 2% of my portfolio. Altius Minerals is another story. This is one stock I will likely buy hand over fist if the prices go down. At the moment I only have 200 shares.



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