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

Bitcoin has plunged to $23,000. Blockchain technology will eventually work, but that doesn't mean Bitcoin will reach $100,000, though $40,000 is reasonble. The two don't correlate.

Friday's inflation figures are on everybody's mind. Also saw worst University of Michigan consumer sentiment reading ever. Markets are very concerned. We got a little bit overstretched in valuations over the years and what the Feds say this week will be critical to see where this correction stops.

The NASDAQ should continue to fall in stages by 80% from its peak. Another 25% drop isn't going to be enough. An overall bear market has recently been confirmed in the U.S. A bear market is a time for re-evaluation of stock values. There are risks and opportunities.

Today's hot CPI data Today's CPI doesn't jive with other data, like industrial production numbers - car-making numbers are up - but are not driving priecs lower. Food is increasing more than 10% YOY, the highest since 1981, which strongly impacts all consumers and is troubling. If you are a long-term investor, this is the time to pick up companies with strong fundamentals; you will ultimately be rewarded.

Hot inflation data is triggering today's slide People focusing on earnings are missing the point. Earnings estimates are not falling because everything costs more. Consumers are not stupid; they're pissed off. Consumers have no choice but to spend more! This feels like a recession to them, even though they can find jobs. Consumer confidence, says a new survey, hasn't been this low since the mid-1970s. That said, don't sell stocks. Use stop losses, though. To long-term investors, remember that there are periods where the market doesn't reward fundamentals. And be diversified.

Hot inflation data is triggering a steep sell-off today Despite today's sell-off, he remains bullish for 2023. Yes, the market is lousy now and will likely go lower but not much, but don't sell. There's a lot of recession talk now, but show me an economic decline--people are finding jobs and retail sales are still growing. The economy remains strong. He still targets the S&P at 4,896 by year's end. How? We'll get all this bad news out in this and the next quarter. He doesn't see earnings estimates coming down.

Is positive on North American stocks, despite market challenges (rising inflation & rate increases). Adjustment to higher interest rates being priced into the market the past few months. Unsure whether economic downturn will cure high inflation rates (should be clearer within next month or two). Upcoming (Q2) earnings will provide clarity on economy. Looking for buying opportunities given current price of stocks.

Infrastructure: essential daily services delivered to a majority of the population in a "supply-constrained manner". For example, look at Pearson International Airport in Toronto. You can't have two large international airports in one city, so we're seeing bottlenecks at the one infrastructure asset. Likes infrastructure assets that can capture the value of increased foot traffic and not have to engage in price wars.

Airlines. The airlines are having a tough time. They had to downsize during Covid, and then bounce back. The processes are not easy to turn off and on. Most airports are now operating quite efficiently, though there is a range. He doesn't own any. Too much volatility and price competition. He wants to focus on companies that benefit from volumes and don't take price risk.

Stocks for retirement. You want low volatility, dividends, and dividend growth. That's where utilities shine. But as interest rates rise, you'll see multiple compression. Best approach is to own a basket of utilities and industrial assets. With an infrastructure ETF, such as his firm's SCGI, you get diversity, a monthly distribution, and some capital appreciation. If you want to pick stocks, look at names like FTS, EMA, H, and NEE.

What's attracting your attention? Inflation and what the Fed is doing and saying. We're in a US mid-term election year. His research going back to the 1950s shows that markets tend to trade off badly early in the year, but every time they rally sharply off those lows a year later. See the "Goodreid Guage" under "Insights" on his website, goodreid.com. During times of Fed rate hikes, markets actually go up. Sentiment is so overwhelmingly negative right now. You need to step back and clear your mind. Not a Pollyanna approach, but know that there are many possible outcomes from the current environment, and the mainstream ones are not always the ones that come to pass.

Recession? Recessions happen. They come in different shapes and sizes. There have been about a dozen since the end of WW2. They're not terminal. They're actually the beginning of something. TGT and WMT clearing inventory is deflationary, not inflationary. A recession creates many great opportunities, and he's seeing these.

Investing when stocks are falling. There's no doubt we're in a downturn. Question is how deep does it go? Investors have to be careful about valuations. A low PE might have the E at risk. Do I have a quality company that can sustain itself through an attack on revenues and earnings? How does it come out on the other end? Are there secular forces that will allow it to do much better? This homework will tell you whether a stock is yea or nay for your portfolio. Investing is done in years and cycles, not days/weeks/months.

The economy was too hot and is now cooling off. He doesn't believe we'll fall into stagflation. Today though the bears had the upper hand.