A Comment -- General Comments From an Expert (A Commentary)
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S&P over 5 years: ’03 to ’08 you see a very strong bull market. We had a ‘V’ bottom followed by a strong up trend from ’09. We are now in a bull market. We broke a trend line from Jan ’09 to Apr’10. He thinks this will prove to be another correction from which we continue up.
Derek Webb, CFAUnknown
COMMENT
Nat Gas: Is the most volatile commodity there is. It’s a function of the way it trades. It has really been in a bear market. Doesn’t believe in trying to catch the bottom. One way to play it is to sell options. Take an ETF and sell a put option to make 5-10%. It is probably not going too much lower.
Derek Webb, CFAUnknown
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The word is volatility. Now we are in a range called 11,000 to 12,500. He is defensive in portfolios. If earnings don’t come through then watch out because the market will be over valued. This could be into next year, depending on the economy. Defensive stocks are the backbone of the economy. Principals are capital preservation and dividend growing stocks.
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6.1% GDP growth in the quarter and they hiked the rate a quarter point. Doesn’t know if they will accelerate the raising of the rate much this year. He got cautious in the funds because the market seemed over bought in April. Now he is back into the market buying some of what he sold. We continue to expand due to the stimulus plans but not at the same rate. This market was looking for a triggering event to go lower. The Europe situation is contained. He is looking at this as a buying opportunity. Maybe we will double bottom, but he didn’t want to sit on a whack of cash.
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Bank of Canada will raise rates (70-80% likely) according to the market. It is the right thing to do for Canada. There is some adversity because of Europe. Inflation is running at the high end of several bankers’ estimates. Real Estate values are increasing due to low rates and raising rates may be to head off a bubble. He is cautious for the last few weeks. Thinking about when to toe into the water. He will be slow to deploy.
PAST TOP PICK
(A Top Pick May 4/09. N/A.) Long term real estate bonds: E.g. Riocan, First Capital. Really cheap last year but not so cheap now.
Paul Gardner, CFAOwned
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Markets. We are in a cyclical recovery in a secular downtrend and this will cause a lot of volatility. Great environment for those who sell options. He is an earnings investor. He looks for stocks where the earnings are accelerating.