A Comment -- General Comments From an Expert (A Commentary)
COMMENT
There are signs that inflation may be leveling off and that there's a peaking of interest rates. Every region in every country should be looked at differently. Smaller and developing nations have debt problems but larger countries not as much. Their markets are more diversified. The U.S dollar is seen as a faculty for emerging markets. Some companies are doing well because of the strong U.S. dollar.
COMMENT
The question was on the Mexican Stock Exchange - is it likely to be more like other North American exchanges or Latin American exchanges which have more volatility. The Mexican economy has been growing quickly but there is a concern that there is not much growth left. Oil exports are in a perennial decline and there are structural issues such as no water in the northern part for industry. Also it can't compete with areas like China. She owns one company in Mexico so buyer beware.
COMMENT
The question was on the effect of the severe lockdowns in China which has a zero Covid policy. This has affected growth and the GDP forecast of 5.6% is in question. There are stoppages in factories, etc. However the re-opening of the manufacturing processes in various industries starts up again quickly. Inflation has not been much of an issue but may return quickly. She also mentioned that the Chinese Covid vaccine does not work very well. Overall China continues to grow in services, consumption and technology and there are strong pockets of opportunity.
COMMENT
The question was on getting involved in the Indian stock market. You can go to a broker, buy ETF's or buy Mutual Funds. Registration takes a long time. India has lots of entrepreneurship and good businesses. You can target many industries including the smaller pharmaceutical companies which have more growth opportunities than the bigger ones elsewhere. Private banks like ICICI will do better than government owned banks. They have to tackle inflation which is a problem because of infrastructure. She has a positive outlook.
COMMENT
Believes world is in a multi-year bull market for energy.
Concerns for demand destruction during weak economy unfounded.
Historically, demand growth for energy (even during a recession) has been steady.
Oil inventories continue to fall even with US SPR releases (largest ever) and China under lockdown.
COMMENT
Still sees meaningful upside for Canadian energy stocks in the form of share buybacks and dividends. Recent USA SPR release to reduce gasoline prices is unsustainable. Financial demand for oil has fallen, even when physical demand has remained strong. Believes OPEC is looking to establish a floor price even with US SPR releases.
COMMENT
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Oil prices have been showing weakness which initially eased investors' concerns, but the services sector continues to underpin the elevated inflation numbers. Bond yields are rising and the consensus is for the Federal Reserve to hike rates by 75 bps at its meeting next week. Still, markets have not made new lows and headline inflation is not accelerating, so we feel it is necessary to assess how the contracting economy interplays with the financial markets. Unlock Premium - Try 5i Free
;fill-opacity:1;'/%3e%3cpath%20d='M31%2018.6001V30H8V18.6001L14.1334%2022.4334L19.4999%2014L24.8669%2022.4334L31%2018.6001Z'%20fill='%23EE5432'%20style='fill:%23EE5432;fill:color(display-p3%200.9340%200.3310%200.1956);fill-opacity:1;'/%3e%3c/svg%3e){kind=small}
Premium contentCOMMENT
COMMENT
Markets. Constructive. If you look backward, there have been dozens of bottoms since he started in the business, and there's a great rhyme to these things. June lows were probably the bottom, though we may test them again. Great opportunity to start putting some money to work that you've had on the sidelines. He has about 20% in cash, and he's been trickling it in as the market gives him opportunities to do so.
COMMENT
Sectors. Old economy vs. new economy. For growth, you want to be in the new economy. Old economy is going to be a tougher slog, because the growth isn't there. Though you can have some investments in the old economy, the growth orientation has to shift to new economy names and away from the names that have been used for the last 20-30 years.
COMMENT
Renewable energy. It's a part of his portfolios, but not a big part. Real test this winter in Europe, as they spent billions on infrastructure in renewables. Hopefully, it will pay off. The worst scenario for them is cold and calm, vs. chilly and windy. Chilly means they won't have to use all the power they've stockpiled. Windy means they can take advantage of all their wind farms. It's certainly the future, and will grow as we move forward, but it's not the only game in town.
COMMENT
Royalty streams vs. gold miners. The miners are very cheap. The question is what's going to happen to the commodity, because you have to make your call on it before you look at the businesses. If the price of gold goes sideways, those companies won't do much. Right now, he likes stocks better than royalties. Royalty companies are better to have once things get going. Stocks like AEM, NGT and ABX are really down, and that's a better way to play now.
COMMENT
Fintech and growth. When to buy? If you're not sure, put in a partial position now and wait and see what happens. If the market goes up, you're averaging your costs higher and that's a good thing. He owns some of the fintechs, new economy stocks. Focus on where's the growth going to be in the future. We're going to need the growth, especially if inflation hangs around for a while. Returns get eaten up by inflation. How much growth can I get, how much safety can I get, and am I in the right sectors?
COMMENT
Timing a buy on utilities. Key to any utility and high-yielding stocks is you have to factor the inflation rate into your return. If inflation gets sticky, around 5-6%, you'll have a negative rate of return. You need to get this on sale, especially important if you hold it in a taxable account. If inflation goes back to 3-4%, it's not that big an issue.
'%20fill='%23ffffff'%3e%3cg%20id='Pager'%20transform='translate(423.000000,%201755.000000)'%3e%3cpath%20d='M243.295367,17.286474%20C243.68919,16.9045087%20244.327703,16.9045087%20244.721525,17.286474%20L249,21.4361302%20L253.278475,17.286474%20C253.672297,16.9045087%20254.31081,16.9045087%20254.704633,17.286474%20C255.098456,17.6684393%20255.098456,18.2877274%20254.704633,18.6696927%20L249.35654,23.856763%20C249.159628,24.0477457%20248.840372,24.0477457%20248.64346,23.856763%20L243.295367,18.6696927%20C242.901544,18.2877274%20242.901544,17.6684393%20243.295367,17.286474%20Z'%20id='Path'%20transform='translate(249.000000,%2020.500000)%20scale(-1,%201)%20rotate(-90.000000)%20translate(-249.000000,%20-20.500000)%20'%3e%3c/path%3e%3c/g%3e%3c/g%3e%3c/g%3e%3c/svg%3e)
'%20fill='%23ffffff'%3e%3cg%20id='Pager'%20transform='translate(423.000000,%201755.000000)'%3e%3cpath%20d='M243.295367,17.286474%20C243.68919,16.9045087%20244.327703,16.9045087%20244.721525,17.286474%20L249,21.4361302%20L253.278475,17.286474%20C253.672297,16.9045087%20254.31081,16.9045087%20254.704633,17.286474%20C255.098456,17.6684393%20255.098456,18.2877274%20254.704633,18.6696927%20L249.35654,23.856763%20C249.159628,24.0477457%20248.840372,24.0477457%20248.64346,23.856763%20L243.295367,18.6696927%20C242.901544,18.2877274%20242.901544,17.6684393%20243.295367,17.286474%20Z'%20id='Path'%20transform='translate(249.000000,%2020.500000)%20rotate(-90.000000)%20translate(-249.000000,%20-20.500000)%20'%3e%3c/path%3e%3c/g%3e%3c/g%3e%3c/g%3e%3c/svg%3e)
