A Comment -- General Comments From an Expert (A Commentary)

It very well could happen. Right now, though, the focus is so much on those stocks. Everybody's aware that they're overbought, yet everyone's still buying them partially because of FOMO. When that changes, the other stocks will catch up, which is why he's in non-tech stocks. The change will happen eventually, so it's safer to be there now, even if he suffers a few months of underperformance.

No. Draw it so that it touches the troughs. It's sort of a median line. If the stock hits that, it's probably a buying opportunity.

Seasonally, not great over the summer. Coming into an election, incumbent will try to keep prices low, so that inflation and gas prices don't look so bad, and electorate will like them. They've done it before. He's lightened up, but still holding, expects these stocks to tread water for a while.

See his (really good;) blog on oils, being published tomorrow.

Absolutely. But remember that it's just like any government, where there are people behind the leaders that do all the thinking. The leader at the top is really just the talking head. 

Yes. Volume counts, but especially on up days. One of his favourite indicators is money flow. It compares positive volume days with negative volume days, and assigns a significance to the bigger volume in that move. The MFI is a momentum indicator, so you can see if there's money building in a stock.

As far as timeframes, use the weekly charts. His typical holding time is 3-6 months. Use weeklies to pick possible resistance and support points. When looking at long-term support levels, the older the support the less it matters.

As far as indicators go, there's no magic answer. He has his favourites. Any indicator on a daily chart is more of a short-term indicator. Stochastics is a really good one for short-term stuff. Otherwise, find the ones that work for you.

He, and a lot of other people, use stockcharts.com. But if you're a young investor with $20-30K, you're probably not going to take out a subscription to that. But once you get around $100K or so, it's worth spending $200 or so for the base subscription. You get all the indicators, you can store your charts, lots of wonderful stuff.

If you're going to get serious about investing on your own, and not use a money manager, you need to step up your game.

We've seen economic data really start to slow down. The government's being a bit slow on rate cuts, and that could be an increased risk to investors, but probably not for another year or so. As some of these numbers come down, it means a higher likelihood of rate cuts, which the market's pricing in right now.

We're in one of those weird markets where poor economic data is probably good for investors; it means rate cuts are probably coming, and stocks should move up if that's the case.

That conundrum does make it difficult for the Fed to deliver on rate cuts. Some inflation has proven to be a lot stickier than traditionally expected. The hope is that data on the price side gets revised down as has a lot of other data. Something to monitor over the next few months. 

He expects that inflation and pricing points will start to fall, opening up the avenue to rate cuts.

Without a doubt, it hasn't been a broad-based rally. Mega-cap companies and those in AI are the leaders, and he expects this to continue. Later in the year, perhaps in the last quarter, we'll see a bit of evening out. So maybe some of the small caps and underperformers will catch a bid and move up.

Realistically, the top-performing companies continue to do so. It makes it easier from an investment perspective, because you don't necessarily have to go chasing too far to get returns. You can own the S&P 500 or some of the mega-cap ETFs and, assuming you get in when they're not too elevated, you should be able to make profits through the rest of the year.

While history doesn't repeat itself, it often rhymes. Normally, when markets are as strong as they have been in the US for the first half of the year, that should continue over the last half. Possibility for positive returns from now until the end of the year is quite high. His target for the S&P 500 would be somewhere between 5800-6000, which means 8% or so in upside gains.

It will still come from the leaders that have been paving the way so far. Traditionally in a bull market, you can just keep buying the winners because they continue to perform the best. So he'd be looking at mega-caps, chips, and AI. Some financials are starting to show a few interesting characteristics.

Don't overthink it. Look at what's been working, and you can follow that template for the next 6-12 months.

In lower interest rate environment, growth will generally outperform value. Might get periods of sector rotation, but growth will probably outperform in next 6-12 months.

What to do with winners in a short timeframe?

Have to be prudent. Take stock of the risks you're holding within a portfolio. At the end of June, he did some rebalancing where a lot of targets had been achieved. You don't want to get too greedy. Sometimes it does hurt as you watch a stock continue to go up.

For the tax implications, talk to a qualified tax advisor. Unique to each individual. Not a lot of upside for Canadian banks, though they are nice for an income stream. Look elsewhere for growth, such as in the US, despite debt and economic headwinds.

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ATD is a global leader in the convenience store sector. It operates under different brands including Couche-Tard, Circle K, and Ingo. It provides food and non-food items, as well as fuels. It has a large network of convenience stores through company-operated stores and franchise stores. We consider it to be one of the highest-quality businesses that trades on the Canadian markets, and it has the ability to grow predictably over a multi-year period. 

In terms of its financials, it reported recent results which were weaker than expected, but fuel was the main factor, which is a volatile component of earnings. Inflation may put some pressure on consumers at the lower end, but the long-term prospects for ATD have not changed. It recently signed a deal with Too Good To Go to increase foot traffic. It pays a small yield of 0.9%, it has a history of margin expansion, and it trades at an attractive forward P/E of 18.5X.

We believe that ATD can continue to grow its free cash flow, acquire and integrate more convenience stores, and integrate them effectively while expanding its profit margins. We can see that its profit levels have largely grown over the years and its stock price performance has been excellent, proving itself to be a quality compounder. 
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