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

Mid-cap energy stocks have been strong, even with reduced fund flows from pension and ESG funds. WCP and ARX will continue to do well.

Never sell just for tax reasons. Whenever he's done this, it's been a mistake. Instead, ask yourself if your thesis still holds for owning the stock? If yes, hold on. If not, let it go.

Yes, very well. But there's a lot going on with so many new products and services coming out, especially out of the AI revolution. New products on the hardware side with chips and data going into the data centres. Now the applications are going to come into play, with processing and interpretation and so on. 

Vendors are making a heck of a lot of money, centering around generative AI. But you'll see, this year, the end users are going to make some hay out of this too. It's going to make corporations faster and more efficient. 

Training in the new ways of AI is taking some time. Productivity does take a while to emerge, but you can see from the vendor side, especially from the chips, that they're just making a lot of money. Not only are they selling a lot, but the margins are enormous.

Take, for example, NVDA. Gross margin on the superchips is 75%. 

The new thing is packaging the GPUs together with the CPUs. That allows the data processing to move faster, and the interpretation to be delivered very, very quickly.

Graphics processing unit. With NVDA 8 years ago, GPUs were huge in the gaming industry. With a lot of the crackdown, especially in China, they took a back seat. But then cryptocurrencies came along, and they had to use the GPUs. Now it's given new life to generative AI, because it requires GPUs.

The likes of NVDA, INTC, and AMD have come out with packaging combining CPUs with GPUs, making the processing and the interpretation a lot quicker.

Extreme volatility. So you have to be patient. You will get a chance to get into the high-flyers on your wishlist.

The NASDAQ's gone up about 7% in only the last couple of weeks. So it's tough.

Here we are in earnings season. Though only a handful have presented earnings so far, he thinks everyone's paused and not changing price targets, waiting for each company to independently report. Then we'll get to mid-February, and everyone will start changing their price targets. 

Even with a lot of these that have run up, he's holding on with rolling stops below. 

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Within 3% of price target, take off 1/3. At price target, take off another 1/3. 

For maximum percentage holding, he rarely goes over 7%. His contracts state that he can't hold anything at more than 10% of a portfolio.

Enbridge (ENB) vs. TC Energy Corporation (TRP):

Both ENB and TRP are top players amongst Canadian oil and gas companies and present solid opportunities for investors, particularly due to the high yield both offer. TRP presents an interesting alternative to ENB but at a smaller size it inherently takes on more risks. On a growth basis, both companies are quite in similar terms of outlook with marginal growth in revenues and drawdowns in EPS expected in 2024, but ENB does have a slight edge. ENB is also stronger in other financial areas while also giving investors a better yield.

The decision between ENB and TRP can be summarized by whether an investor places more importance on stability versus value. TRP is cheaper compared to ENB, but for justifiable reasons such as a weaker growth outlook, lower historical return and lower dividend yield. Growth for both companies will be tied to demand from the oil and gas industry, but ENB has the edge as things stands due to its size and shareholder returns.
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Bitcoin, but it's going lower and in a bad place now. If it rises past $40,000 consider it a gift. Sell it.

He thinks that central banks have contributed to inflation with rising shelter costs. They're pivoting now as inflation comes down naturally. The rate hikes are down, and rates will decline perhaps gradually to the 2% target. Small-caps have been neglected by the markets, but are cheap. Bonds are also a bargain as are dividend payers like telcos, utilities and pipelines (e.g. Enbridge, Boralex) and enjoy growth tailwinds.

Believes consumers have exhausted stockpiles of cash built up during the Covid-19 pandemic. Inflation eating into the consumer in a meaningful way. Expecting upcoming S&P 500 earnings to grow. China softness and quarter earnings will be felt in the markets, and will be interesting to watch. If interest rates have peaked, and start to fall - will drive further economic gains. 

Believes Chinese economy will not continue to grow due to slowing population growth. Cheap markets in China are not expected to grow - does not see growth catalyst. Expected stimulus from Chinese government not materializing. Upcoming US inflation reads will be indicative of trends. Trend appears to be downwards for US inflation, however time will tell. Slower inflation will be good for markets - could be catalyst for economic growth. 

Believes S&P 500 record high a result of recovery in tech names. A.I. theme very powerful in bringing up strength in markets. Falling interest rates good for prospects of tech companies. Waiting to see if strength in markets is sustainable. Would advise investors to be cautious.