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

He just got a bubble signal for the NASDAQ. As long as the bubble lasts, he'd keep holding stocks like AAPL. When the bubble bursts, and it will, just remember the bubble of June 2020 and the tumble of AMZN and the like. Expect it to happen again, but not now.

For people who don't want to take risk, it' not a bad time to sit on the sidelines. Intrinsic value of US growth stocks is relatively poor. Intrinsic value of Canadian stocks is pretty good, because our index is heavily weighted to oil/gas and banks.

At this juncture, you're doing a bit of gambling if you're in the stock market. There's a bubble building in the AI stocks. We've seen this before. You can have a lot of fun, but when they come down, remember Nortel. Go for value, but this is a gambler's market.

Lots going on in the generative AI space. It involves the cloud and SaaS, and it's a multi-billion-dollar marketplace. The uses can go on forever, from healthcare to manufacturing to the consumer.

But it's still very young, picks and shovels right now. But for those companies that can harness it, it's going to be very powerful.

Quite a bit of volatility. But if you look at the charts over the last 5 trading days, it's flatlined a bit except for the beginning. Spikes up, comes back, spikes up, comes back. Going back to 1983, the S&P 500 has an average gain of only 0.15% in June. If you go back only 10 years, it's around 0.2%, but with a lot of volatility. 

What you're seeing is a lot of rotation. On Monday, the market cap of AAPL equalled that of the entire Russell 2000. It indicated to the market that something was out of whack, and that's perhaps why we saw the surge in the Russell 2000. AAPL's revenue warrants high confidence, but still, something's out of whack.

Financials lack a catalyst now, so he's not excited about them. Generally, he likes Mastercard, Arch Capital Group (performing very well for him), AmEx and JPMorgan, but unhappy with MS and BAC.

Very bullish, so he just raised his price target on the S&P by 250 points to 4,550. Market price momentum will persist. He hasn't been overweight tech since 2019. He isn't late on tech, but rather tech is just beginning. The market bottomed last October and there's 6% upside ahead. He's excited.

Previous Investment Bubbles: Electric Vehicles (EVs). 

Tesla Inc. started this bubble off. That tends to happen when a stock soars to US$410 per share from US$1.05 in less than 10 years. The interesting thing with the EV Bubble is that it spawned other bubbles. EV manufacturers soared in value, and so did battery, lithium and copper companies and anything else that went into the manufacture of EVs. Some of these bubbles are still ongoing.

There have been big successes and big failures in the sector, but the growth potential is intact. The market share of EVs is still low, but is expected to grow for the next 20 years at least. Governments are mandating EVs, and price points are coming down. This bubble may turn out to have some legs.

As with any investment, investors need to be careful with valuations and watch cash flows. Growing companies tend to burn through cash. Not all will survive. With mining companies, be careful not to buy tiny, promoted companies with little possibility of actually building a mine. Bigger companies are probably the better play if you want to participate in this sector.
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Market does not believe Saudi Arabia/OPEC oil cuts will be effective.
Investors worried that OPEC cuts will be undermined by Russia production etc.
Long term energy shortage & under investment a good trend, but worried about China slowdown. 
US jobs data last week indicating a divergence between US Fed policy & employment.
Best measure of economy is IRS tax collections. 
Not expecting a another US Fed rate hike (believes enough monetary constraint in markets).

Not aware of any Canadian ETF's that are pure A.I. vehicles. 
Would wait until product is launched instead of hedging with semi-A.I. ETFs.

Recent increase of S&P 500 hard to explain for Larry Berman (unsure why he has been wrong on bearish forecasts). 
Believes average stock isn't doing as well as major tech leaders (rising S&P 500 average).
Expecting markets to fall given underlying fundamentals in economy.
Companies will report lower earnings later this year, which will be reflected in stock market.
"Nifty 50" a good analogy to false sense of optimism in the markets today.

Previous Investment Bubbles: Dot-Com Stocks. In 1999 you could own a dopey gold company worth $20 million called Look for Gold Inc., change its name to Look for Gold.com and suddenly your company was worth $300 million. It was insane. The internet was going to change the world (I guess it did) and companies were hopping on the bandwagon. Investors got greedy, which is a necessity for any bubble.

Dot-com IPOs could soar 400 per cent on the day of their listing. No one cared about profits, only growth. If your company didn’t have dot.com after its name, it was going to be a dinosaur. It was, truly, a stupid time in the market. Fortunes were made by investors and companies that had no idea what they were doing. And then, as usual, the party just ended.

Profitability became important again, and the money pipeline investors were pumping to startups closed. Some stocks lost 90 per cent of their value in a matter of months, if they even survived at all. Amazon.com Inc. traded for less than 30 cents a share, though it was one of the survivors.
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It's been a bull market, but we're in for a tougher run. Stock prices have been bobbing up and down. The chart suggests a pullback in mid-June, followed by a July decline. He suspects the Fed will hold rates in mid-June, but that will put pressure on every data point--every strong economic number will pressure the market. Good news was that last week saw the rally broaden from tech into cyclicals and some financials. That said, he advises taking some profits, so you're ready to buy more later.

Seasonality is a big factor, in particular for trading portfolios where trimming is often done, but not as much in long term portfolios. The technology sector is week in June, maybe a flurry of activity at the beginning of the month and then some softness. Tech stocks are very affected by rate increases. He is not sure when the market will pull out of the inflation problem. It is looking for rate cutting but it's not happening yet. Only 5% of stocks on the NASDAQ are making new highs and this does not indicate the start of a new bull market. We may be getting close to a market low but we're not there yet.

The question was on the NASDAQ. Look at around the range 12 500 to 12 700 for the best spot to enter. 13 000 would also be an OK level to increase holdings and individual stocks. There might be a downturn of the NASDAQ after the Apple event which is happening today.