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

No. The investor doesn't get a good deal while the underwriting collects a profit. Find one yourself, a 1-year maturity that pays a better yield. Better to buy-short liquid notes with your US cash.

He definitely prefers dividends, the bigger the better.

Each are A-rated bonds. Very flexible.

Govt of Canada 0.5% bond, December 12030. 

It's in the sweet spot of the curve and offers a good 4.3% yield, relatively. Only 3 years to maturity, good risk/reward.

Don't buy preferred shares without resets.

TPO PICK: LYZ801F: It holds corporate-value funds. A good performer with a track record.

PIC3501: It's a long short fund. No MER. The manager shorts credits when he thinks they're expensive. Has done well over time.

It's classifying retail investors and their money flow. Not that retail investors are dumb, but that they're traditionally less sophisticated than, say, Warren Buffett. 

We can track money flow by following ETF and mutual fund flows, small lot trades. He pitches that against people like Warren Buffet, Teachers' Pension Plans, and commercial hedgers. Those would be the smart money. When the two are at opposite ends of the confidence levels of who's selling and who's buying, he has leading signals that say perhaps we need to be cautious or we need to be aggressive. If dumb money's selling and smart money's buying, maybe he needs to go in, or vice versa.

There's evidence to show that retail investors get it wrong more often than the pros. He's even written a book on it. There are lots of indicators to look at, like the put/call ratio and the VIX. So when retail investors are bullish, that's a bad thing; and when they're bearish, it's good.

Again, these are leading indicators. When big money is selling and getting out, you want to follow the smart guys. There's a point when they're going to start buying again. When retail people are bidding up, it's not a bad thing since it pushes the market up. But at some point, you hit the point of Greenspan's "irrational exuberance". 

Yes, their confidence levels are lower. It's a leading indicator. Doesn't mean that tomorrow the market's going to fall. But it does mean that the market's setting up for a correction, whether it's next week or 3 weeks from now. He's put some charts on his blog, valuetrend.ca. 

Things get overbought and they either fall, consolidate for a while like a yo-yo up and down, or go up again. Trends have to take pauses to be healthy. So the story might not be very exciting for a while.

He's always looking at peaks and troughs. Don't get too complicated with your analysis.

A series of peaks and troughs getting lower and lower is a bad thing. But if you have a series of lower peaks, but the troughs are more or less flat, that's another way of saying that's a consolidation. You're looking for that sine wave, up and down, type of consolidation. But it doesn't have to be a nice, even pattern. Just has to be a discontinuation of the pattern of lower highs and lower lows. Once it breaks out, it's really good news.

Investor interest in A.I., and tech currently propelling markets ahead right now. Not all A.I. companies earning profits, so will take time to see the winners. Expecting competitors to enter the chip space which will create competition for NVIDIA. Suspects a lot of the strength in companies like NVIDIA is due to investors FOMO in rising share prices. Preferred US Fed (personal consumption expenditure report) inflation index due at the end of February - and will be indicative of economy. If inflation is higher than expected - suspects market is due for a slight correction (3-4%). Demand side for bonds currently softer than past few months - indicating higher interest rates going forward. 

Narrative around "Magnificent 7" - and importance in the markets is turning out to be the "Mag 4", since Apple, Tesla and Google are down in 2024. Small cap stocks are not performing nearly as well as the "Mag 7" - this suggests economy is not as strong as people think. Narrow growth in the market could be indicative of problems in the economy. Believes current "Mag 7" bull market is not sustainable, and investors should be cautious. 

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