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

The VXN, the Nasdaq volatility, peaked today (over the past year). A few spots, like Walmart and CAT, are doing okay amid this sell-off. Today felt like a liquidation as stocks cascaded across many sectors. ETFs declining will add to the sell-off.

Bitcoin You need puts to the downside in something like QQQ.

Everybody is so negative. He hasn't seen this in a long time. Investors should take a deep breath and stop looking at the stock market day to day. A bear market story is in every single stock and the market will go lower. Ignore this if you don't need the money in the mid-term since the time horizon is important. He quoted Warren Buffet as saying you need the right temperament and most investors are not wired properly for investing in the stock market. If selling you need to have sold months ago, not now. Be the first to sell and not the last. Most stocks he is looking at are cheap across the board. He is interested only in the stocks he owns today that are free cash flow positive, high quality, profitable businesses.

The question was on U.S. banks. They have sold off more than the Canadian banks. His clients own JP Morgan, a good company. It is hard to know how U.S. bank earnings will do. Wait for cooler heads to prevail with markets.

The question was on major gold and silver producers. He avoids commodity producers because there is no control over commodity prices and they can't be predicted. Higher inflation is not necessarily good for commodities.. Focus instead on companies with higher cash flows and recurring revenues.

He expects banks to go even lower as the Fed hikes rates. It's a macro call.

Today's rout The selling since last week's Fed announcement makes sense, including today's rout. He sees the next level being 3,750 on the S&P. ETFs selling off is a good sign; the excess is being cleared out, though we haven't capitulated yet.

Opinion on GICs Yield linked to interest rates. Expects the Fed and Canadian Central Bank rates to stay very close over time. GIC rates could go up to 2.5% but not much higher than that. Sees longer-term inflation in 4-5% range. GICs will not yield enough to safeguard against inflation.

Educational Segment. What will be the catalyst to turn the market? Stimulus coming from China often plays that role. Currently China is having issues with Covid but hight pressure on the government to be stimulative. China's credit impulse should be coming in next 6-12 months. US 10-year yield is currently at 3.2%. If it breaks past 4% it could be really tough on equity markets. There will possibly be a tradable rally soon but a rally that will fail. Almost certainly a down year for US equity.

Hold cash He doesn't see a turnaround, but we are due for a short-term rally. Sentiment is bearish. He expects inflation to stay stubbornly high, given the war in Ukraine and supply chain issues. Today's jobs report with wages rising 5% was amazing, but inflation is 8%. You can sell the market on pops. Until the market rolls over, he isn't buying.

He has sold most of his stocks to take option positions, totalling $2.5 million. between now and June. He has only 1.5 months to participate in the market. Do I go back into those names as stocks or not? Energy, he expects to go much higher when China returns online. The VIX is hitting highs today, so there could be a bottom soon. After breaking 4,100 on the S&P today, could 3,800 be the next level?

He's buying a lot in this bear market, including Chevron, Dupont, Apple, JNJ, Pfizer, BABA, Moderna, Home Depot and Meta. All these companies do no require financing; they have strong cash flows and balance sheets. They pay shareholders. Their PEs have been crushed. He can either go to cash--but would lost 7.5% in the face of 8% inflation--buy the 10-year bond at 3% (not, not until it pays 5%), or buy stocks with pricing power. They won't go out of business regardless of Powell, Ukraine or anything.

Believes widespread negativity in the market will improve. Situation in Ukraine not going away soon, but thinks other concerns (US monetary policy & China worries) will subside. Market already pricing in hawkish US Federal Reserve actions.