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

Major tech earnings are coming this week, so markets are tentative today. Will numbers be positive? Layoffs? Full-year-forecasts up or down? Q1 and Q2 earnings on the S&P have been negative, but Q3 has been positive, so the end of the year looks positive. But if earnings will be lower for the year, then earnings now are too high and need to come down. There's complacency in the market, given the VIX at 16, so volatility could happen in the next several months. Also, the market expects the US Fed to raise rates 25 points next week--the issue is inflation. Unlike the market, he expects rates to stay higher for longer later this year.

It's better to invest in car parts than car stocks. Inflation costs have already been passed onto buyers, so don't expect much in the future. EV's are a tailwind for the parts companies. Are trading at decent PE's. Again, the car business is tougher and he avoids that.

Believes corporate earnings (big tech) will be main focus of the market this week.
Is expecting earnings to be lower than previous highs.
Big tech will focus on "cloud" & "A.I." potential.
Thinks A.I. will take years to prove itself as a legitimate business.
Productivity will be positively affected by A.I., but could see social issues. 

Chicago Board Options board recently launched 1 day volatility option.
Creates very volatile market.
Indicates speculate opinions of investors.
Very complex product, should only be used be expert traders. 
Average investors should beware.

Worry about the macro, focus on the micro. Amid market dislocation due to inflationary pressures, a banking crisis, interest rate hikes causing a prolonged recession, and other factors, more than ever, investors are concerned about where to put money to work in the most efficient way. However, we think the best approach for long-term investors amid uncertainties is “worry about the macro, focus on the micro”. As there is a small sub-segment of the market that regardless of what happens with the macro picture, the business will continue to do well (or are only mildly affected), due to such a strong secular tailwind in the business models. Some of the prominent transitions include brick-and-mortar retail to e-commerce, software licensing to software subscriptions (SaaS), programmatic TV to streaming and cash to electronic as a payment method, etc. As long-term investors, these are the opportune times to establish or add to positions that not only persist through the downturn but also come out much stronger when the economy recovers. Therefore, we think the current drawdown could offer opportunities for attractive entry points into these names.  
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Avoiding Home Bias in Your Portfolio: One of the most common problems we see in Canadian investment portfolios is a large bias toward Canadian domiciled and traded stocks. Often times a portfolio can be weighted in excess of 60% to Canada when it makes up less than 5% of the world economy. Many investors might not even realize this could be a problem for a portfolio but the risks here are easy to highlight at a high level:

1. The TSX has underperformed the S&P 500 over 1, 2, 5- and 10-year periods (in some periods, vastly underperformed)
2. The TSX is largely a ‘bet’ on the financials and energy sectors which is actually a concentration risk

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US Federal Reserve "pause" on rate hikes not a guarantee that market is in good shape. 
Believes Teck Resources ownership is better suited for Canadians (as opposed to foreigners).
Economy not out of the woods yet with regards to recession.
Concentrating capital into large (money center) banks due to liquidity concerns.
Tighter lending will help US Federal Reserve calm the economy. 
Aggressive actions by J.Powell have created a stock pickers market (mis-priced opportunities). 

Two big indicators of economic growth. One is interest rates, and the full effects haven't been felt yet. The second is recent turmoil in US banking markets, because any lending they pull back on will have profound ripple effects going forward. These will take time to play out, and we could have a recession over the short term.

Volatility within the banks is across the whole sector. US banking crisis in Q1. Valuations have come down, so the sector is very attractive and offers lots of value. See his Top Picks.

Because governments in NA and Europe have such aggressive EV goals and timelines. If you flip it and look at EV commodity prices and shortages, at some point things aren't going to line up well. Either the EV car prices will be so high that people won't buy them, or they're going to have to stretch those goals out because it's not economically feasible. That's what worries him about the auto space in general.

The first thing you want to look at is business economics, which includes profit margins and free cashflow. Other things to look at are the balance sheet, management team, growth platform, and valuation. Ticking all 5 boxes gives you a candidate for your portfolio.

Textbook good governance principles say that multi-vote shares are not good. Which isn't to say that there aren't some great companies that have adopted these structures. The founders get the upside of the public markets, but still retain control. In Canada, they were more prevalent, but this was due to regulatory artifact. 

No. The big 3 in the US are RCL, CCL, and NCLH. Terrible charts, with NCLH and CCL almost back to Covid lows. Highly leveraged balance sheets, 10s of billions of dollars in debt. Betas of 1.6-1.7. Spending is highly discretionary, and the economy is slowing. Pent-up post-Covid travel demand has been satisfied.

Valuation is never really a good timing tool. Sometimes things trade higher because they're becoming better businesses.