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

CN Rail vs. Canadian Pacific/Kansas City.
Generally speaking - weather negatively affecting railroad industry in Canada.
Freight continues to remain strong.
CP trading at higher valuation. 
Long term - is a stable business.
Has been stated that double digit growth is expected.
 

Canadian Banks earnings not growing. 
Waiting for growth to resume before investing.
Higher interest rates putting pressure on business performance.
Waiting for environment to change before investing. 
Will be a good long term (10-20 years) investment. 

U.S. Federal Reserve meeting at Jackson Hole will be important to watch this week.
Interest rates will be major point of discussion.
Long bonds selling off, with "higher for longer" interest rates expected.
Tech earnings remain strong against narrative of high interest rate pressure. 
A.I. boom is reminiscent of 1999 dot com boom.
Unsure on whether tech valuations (Nvidia etc.) justified. 
Re-financing of Canadian mortgages will be interesting to watch as old rates re-set. 

If history is a guide - tech stocks like Nvidia are overvalued and hard to justify. 
1999 offers lessons on investing when valuation are too high (pain ahead for investors).
If markets crash, will take a long time to earn investment back.
Investors should be careful when there are periods of 200x earnings etc. 

Basic Investment Terms: Return on Equity (ROE).

Some investors believe this is the single most important financial ratio, and some hedge funds are run entirely on that principal. We do see it as very important, but we don’t think any ratio should be looked at in isolation. ROE, essentially, tells investors what the company’s return has been on the total amount of capital invested or retained within the company.

A figure above 20 per cent is generally considered very good. Companies such as Constellation Software screen well on this metric. High ROE typically — but not always — results in strong stock returns.
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Rising bond yields (10-year) a concern for investors.
Believes investors entering a tougher economic environment.
Rates expected to be higher due to inflation concerns. 
Productive assets will be more valuable vs. long dated tech investments. 
Even a portion of capital flowing out of big tech will benefit traditional asset-backed companies.
Likes prospects of traditional companies paying dividends. 

Keyera vs. Emera Inc.
Keyera a smaller player in Western Canadian midstream sector. 
Prospects for both business' good.
Buy shares in the fall when economy falters.
Solid dividend yields ~6%. 
Good long term investments. 

The market slump is down to August seasonality, that's all. September and October can be tough too. He targets 4,550 for the S&P, but earnings could push his target higher. He expects a strong rebound in Q4.

She doesn't expects the S&P to fall to 4,200. Rather, investors who missed buying tech will nibble at these same names during this downturn. We're seeing stocks settling and investors buying. Earnings were decent, better than feared. Consumers are spending. All in, she expects market buying into 2024. PEs of the biggest markets are coming down.

The current slump is down to normal August seasonality, not a fear of rising rates. In fact, it's a 90% of no hike, and 10% of a 25-point hike, and that isn't a big deal. GDP forecasts point to another quarter of strong growth, so why wouldn't we see more hikes? Maybe 7.25% is too high for 30-year mortgages

Basic Real Estate Terms: House Price to Income Ratio.

While real estate prices are interesting on their own, having more context for them is far more helpful. As a crude example - if a house costs a million dollars but the average income in a country is two million, affordability is not an issue. If the average income is $50,000, the situation is far different. Countries with the lower housing prices should have a longer-term tailwind in terms of an economic driver as home ownership and prices rise, lifting the broader economy.
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We've had a couple of different types of market. Until mid-year, we had a market dominated by very few stocks, mostly in tech and telecom. Since the beginning of Q3 at the start of July, we've seen a rotation and a broadening out. Small cap stocks are doing a bit better. Industries and sectors that didn't participate in the first half of the year, like healthcare and industrials, have come on a little bit, and that's very healthy for the market.

Likes it for the long term. Just look at the demographics to understand why. Most analysts think that growth in healthcare will be double GDP over the next 10 years. So we can take advantage of that by owning some of the best stocks in that sector.

He participates in pharma through MRK, and he owns AMGN in the biotech sector. He has exposure to broad, diversified companies like CVS, which is quite vertically integrated from insurance right through drugstore operations. There's good opportunity there. See his Top Picks.

He also owns ELV, a pure play in health insurance.

He likes the sector, but you have to be pickier. Some of the companies tend to be low growth and high multiple, which could spell trouble down the road. There are opportunities in the area that he's taken advantage of.