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

Method for picking stocks. His firm has a disciplined, rigorous, and consistent approach to investing. Bottom-up investors. Start with the 4,000 investible companies that trade on the TSX. Look for market cap greater than $200M, actively traded and liquid, track record of over 5 years so they can see how companies do over the course of a business cycle. This leads to "research candidates" of 400 companies. Quality filter is applied, which further reduces the field to 120 companies, the "working list". All on the working list have strong balance sheets, good profitability, high return on equity and invested capital, impressive operating margins. When it's time to buy, they apply a valuation filter to the working list. Companies are ranked by quality and valuation. The winner is researched, with results distributed to the investment and management committees. If everyone is happy, the name is added to the portfolio. As long as a company is profitable, they're agnostic as to what industry it's in.

REITs for the next year. REITs don't really match with how his firm looks at the world, so he wouldn't be putting money into them. They're looking for companies with not a lot of debt, yet able to get high profitability with high ROEs and ROCs. REITs in Canada tend to generate ROEs considerably below stock market average, yet their amount of debt is quite high. They own a limited portfolio of 20-25 names, and they don't need to be in REITs.

Metrics for evaluating banks. Fundamentals such as strong balance sheet, tier 1 and core capital ratios compared to the industry and peers, ROE, various profitability metrics. Ability to pay the dividend consistently and to increase the dividend and return capital to shareholders.

Gold. Price of gold is caught in the middle but, overall, he'd be slightly bearish. Not working as well as an inflationary hedge as it has in the past, partly because the Fed's aggressiveness is really increasing the USD, so people are moving towards it instead of gold.

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Investor Mistakes: Too Much Emphasis on Stories. In the past two years, there’s been tons of media exposure on a few companies and sectors, such as GameStop Corp., AMC Entertainment Holdings Inc., the electric-vehicle industry, the cryptocurrency sector and special purpose acquisition companies (SPACs). The media loves these sectors, they generate investor interest and trading, and result in a lot of FOMO amongst investors. But, really, are they that important? GameStop is a US$10-billion company in a declining industry. AMC is US$8 billion. They hardly matter at all in the big picture of the investment world. But together they account for more news stories than most large companies can ever hope to achieve. We ran GameStop through Google and got 143 million hits. We also ran AbbVie Inc., a US$270-billion company (27 times as large as GameStop) and got only 32 million hits. Investors need to put far more emphasis on the larger, important companies rather than the tiny companies that generate exciting headlines.

A Canadian real estate fund has just halted payments Starlight had been growing a mismatch

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Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Too Much Focus on The Short Term. All investment eyes were on exactly one data point last week: the consumer price index (inflation) number in the United States. Next, everyone will shift to corporate earnings reports. Sure, these are important when looking at the market, but one economic number — or one quarter of earnings — should not form the basis of your entire investment portfolio.  We know many investors who will sell a company after one bad quarter. But the best companies play the long game: focusing on long-term gains, even spending more money in the short term to get there. If you own a stock, you should strive for at least a five-year holding period: you want that compounding to work for you. Looking so closely and reacting to a 90-day period out of 1,825 days (not counting leap years) is likely doing your portfolio a huge disservice.

Markets know that China will eventually have to turn around and accept a certain level of Covid. It will not destroy itself economically. There have been some good things happening in the market lately but we're not out of the woods yet. After 10 months into a bad market there are some good valuations in different sectors including some oversold tech companies. Also fixed income is an incredible place to be now. Portfolios now can even be less than 50% equities with GIC's at over 5%. Dividend stocks are a good place to be too. Generally stocks have more upside over the next five years than downside. Regarding Crypto it is hard to know where it is going. It is way too risky so if you want to get into this area do so with only very small amounts of money.

Question was about bonds and fixed income. If you have large gains from selling before or at the beginning of the market downturn, you can offset this with selling some trusts and bonds. There are good opportunities and he thinks the Feds will begin to taper rate increases.

Question was on the falling Canadian dollar and how it might impact investors buying U.S. stocks. If you wanted to buy JP Morgan for example you would just buy it in U.S. dollars if you thought the Canadian dollar was going to fall. If you thought the Canadian dollar was going up you could buy the CDR hedged version of JPM on the TSX. If you own U.S.dollars in your portfolio you could buy inter-listed stocks like BMO and own them on the U.S. exchange.

The question was on Canadian banks, whether to buy now or after the earnings come out which is soon. He doesn't really know but probably wait.. The banks' fee incomes are under pressure and loan growth is slowing. The U.S. banks are cheaper and there is more growth.

The question was on preferred shares. Don't buy the perpetuals since there is a poor risk/reward on them. Rate resets are good to buy and for suggestions you can follow their daily lists. For the fixed income part of your portfolio, own quality real fixed income, not preferred shares.