Educational Segment | StockChase
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Compiling comments that experts make about stocks while on public TV.

Educational Segment

Date Expert Opinion Subject
2017-01-09 Larry Berman CFA, CMT, CTA

Educational Segment.  How to play the market if you are risk adverse in 2017.  Are Trump policies coming in or not?  Over the last 10 years the marginal tax rate for corporations has come down from 50% in 1955 to 35% recently.  Analysts expect 22% earnings growth from the S&P.  The PE of the S&P is 21 times.  It is a 23% world GDP economy.  The banks have been the big leader since the election.  It’s going to take a lot of interest rate hike to get the banks back to where they should be with interest rate spreads.  There is a new president, first term, new party.  The average pattern has half a percent gain.  We have already exceeded that.  The inauguration is pretty much the high point for the year.  Get into options late in the market cycle. 

NORTH AMERICAN - LARGE & ETFs
2016-12-19 Don Vialoux

Educational Segment.  When Stocks are Overbought or Oversold.  Look at the percentage of stocks above and below their 50 day moving average.  Below 20% (30% in Canada) is a buying opportunity and above 80% is a selling opportunity.  These give you signs of the market preparing to sell off or to go up after buying.  He suggests you hold off until inauguration day and then you have a good opportunity to take money off the table.

TECHNICAL ANALYSIS & SEASONAL INVESTING
2016-12-12 Hap (Robert) Sneddon FCSI

Educational Segment.  How to Use Stop Losses.  It is part of risk management.  Look at your position sizing.  Do you have too much in one stock because it has done so well.  Knowing when to sell is a hard thing.  Look at the beta of your portfolio.  To exit, you could use a volatility stop (VSTOP – Google it).  ‘VSTOP’ is a calculated stop loss point that incorporates the volatility in the stock.  Look at moving averages.  You might sell if it breaks the 10 day.

TECHNICAL ANALYSIS
2016-12-05 Don Vialoux

Educational Segment.  Why the TSX outperforms in the early part of the year.  The Canadian market outperforms the US from December to the end of February.  It has to do with commodity prices, which move higher.  Crude oil is at the end of its seasonal weakness after which it moves higher.  Silver moves higher from December into March.  Copper moves higher from now until April.  Gasoline goes up from now until the beginning of March. 

TECHNICAL ANALYSIS & SEASONAL INVESTING
2016-11-21 Larry Berman CFA, CMT, CTA

Educational Segment.  Momentum and value in smart beta ETFs.  Vanguard has a couple of smart strategies.  They think smart indexing is an active strategy.  They debate Larry in disagreeing it is active in that it is a set of rules.  The Momentum strategy is benefiting from a behavioral bias in the market place where investors are slow to react.  The Liquidity strategy focuses on companies that are smaller and don’t trade as much, aren’t in the news as much and so may be undervalued.  Investors overpay for liquidity in the market place.  Less liquid names, also have more risk.  A quarter of Vanguards assets under management are actively managed.

NORTH AMERICAN - LARGE & ETFs
2016-11-14 Larry Berman CFA, CMT, CTA

Educational Segment.  Smart Beta ETFs.  First asset’s approach is to work with morning start.  They have been working on quantitative modeling with dates going back to the 1980s.  They created a screen.  They look for companies that are trading below net asset value and have growth potential.  They screen for companies with price momentum as well as earnings momentum while having value.  These two strategies since inception have extracted some of the better companies.  Over 2 years the two strategies together outperform 90% of the time and 100% of the time over 4 years.  VRX-T was in the momentum portion and was rebalanced on a quarterly basis and got trimmed back.  You could equal weight the strategies.

NORTH AMERICAN - LARGE & ETFs
2016-11-07 Larry Berman CFA, CMT, CTA

Educational Segment.  Smart ETFs - Multi-factor products.  iShares has a forecast on where things are going.  They see $1 Trillion US$ by 2020 and 2.5 by 2025 in these products.   There are two factors suggesting these forecasts:  They has the potential to disrupt active management; and the have the potential to address the challenges investors are facing in today’s market.  What is new about mult- factor investing is the technology. It is based on long term proven drivers of return.  Their approach of combining factors means you don’t have to forecast which is the winning factor of the future.  Value, size, quality and momentum are the four factors they combine into one investment solution.  If you look at F-class (compensation component of cost is removed) mutual funds they have a cost of just below 1%.  iShares multi-factor ETFs are 45 basis points.  It is more affordable.

NORTH AMERICAN - LARGE & ETFs
2016-10-31 Larry Berman CFA, CMT, CTA

Educational Segment.  Fundamental Indexing.  Market Cap indexes are the traditional way to do indexes and fundamental indexing looks at cash flow, profitability, dividend sustainability and so on.  It is a rules based approach that focuses on the strength of the underlying companies.  Market weight is a popularity contest.  E.g. Nortel.  It went from 3% to 30% of the TSX index.  It represents a key flaw of market weight investing.  You would have ridden it all the way back down.  VRX-T did something similar being 9% of the TSX 60 at its height.  Returns are better in fundamental indexing rather than market cap indexing.  It will not win over every part of the cycle but long term it wins.  Larry’s guest runs his screen once per year.  Running it more often incurs trading costs and so on.  Research shows you only run it once a year.  These funds have a few basis points more MER and are worth it.

NORTH AMERICAN - LARGE & ETFs
2016-10-24 Larry Berman CFA, CMT, CTA

Educational Segment.  Smart Beta ETFs.  They are smart indexing products.  Low beta or volatility strategies address investor outcomes using Beta.  They look for low beta.  If you weight beta and ensure diversification across the market place, you get less risk.  Low beta is not expensive but in line with the market place.   There is also a ‘quality’ based set of ETFs.  They look at debt to equity to reduce volatility.  These ETFs are managed by computer and not actively managed by a portfolio manager.  You pay a bit more than a non-smart ETF.  The low volatility and higher quality strategies have historically done better through history.

NORTH AMERICAN - LARGE & ETFs
2016-10-17 Larry Berman CFA, CMT, CTA

Educational Segment.  ‘Smart’ ETFs.  A Beta of 1 means ‘market’. They researched factors back to the 1950s and if you screen for these factors you can do better than market weighted portfolios.  You can pay a bit more, but you get a slightly better return.  Smart ETFs are rule based rather than actively managed.  This is the fastest growing area in ETFs.

NORTH AMERICAN - LARGE & ETFs
2016-10-03 Larry Berman CFA, CMT, CTA

Educational Segment.  Today's educational segment was pre-empted by an announcement by the federal government on housing.

NORTH AMERICAN - LARGE & ETFs
2016-09-26 Larry Berman CFA, CMT, CTA

Educational Segment.  Currency effects on your portfolio.  Over the next decade, average returns are going to be lower.  When you invest globally, currency is the most important consideration.  When the CAD$ is getting weaker, you are making money. However, when it gets weaker, it reduces profits.  With ETFs you can control the currency.  Currency explains about 70% of the difference in returns when investing globally. 

NORTH AMERICAN - LARGE & ETFs
2016-09-19 Larry Berman CFA, CMT, CTA

Educational Segment.  The market thinks the likelihood is 18% for a rate hike.  He thinks they will go for it this week, however.  They have not unexpectedly raised rates since 1994.  ’94 was the worse bond market we had for a generation.  This will not be similar.  It is all about the psychology of how they do it.  We will almost certainly get another recession in the next couple of years and Canada and the US will have to go to negative interest rates.  Economic numbers are getting worse, but the market has not reacted. 

NORTH AMERICAN - LARGE & ETFs
2016-09-12 Larry Berman CFA, CMT, CTA

Educational Segment.  Increased Volatility Coming to the Markets.  There are lots of ways to measure it.  One way is to use the Bollinger bands.  It uses 20 days, or about a month.  The spread got down to below 2% for the longest period in decades recently.  We had ultra low volatility.  In history all the times it has fallen below 2%, we are in for a period of a market correction.  It does not help us to know how long the correction will be.  He believes it will be at least a couple of months.

NORTH AMERICAN - LARGE & ETFs
2016-08-29 Larry Berman CFA, CMT, CTA

Educational Segment.  The US$.  The market changed dramatically after the Fed said the rates were to go up September and December both.  The Euro is 57.6% of the US dollar index, so it matters what Europe does.  The notion that currency doesn’t matter is wrong.  It is the most important factor when investing.  A rate hike will put downward pressure on commodities and upward pressure on the US$.  He thinks we re-test the Brexit lows over the next couple of months.

NORTH AMERICAN - LARGE & ETFs
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