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

Impact of traditional energy getting into renewables? It is having an impact. It's the right decision. They're allocating a lot of capital to areas that will have a lot of growth and it's a key area of focus for investors. But he'd rather own companies that are 100% focused on those areas, rather than 10% as ENB and TRP are. Names like PIF, NPI, and BLX are pure plays in the renewable energy space. There's a lot of opportunity out there, especially with valuations of renewables that have sold off.

The Fed's Powell told Congress today that he wants to raise interest rates by 0.25% this month and that inflation has been higher than expected. She feels inflation will be lower in time, though well above 2%. Today Powell bought a little time, and him hiking rates by 0.25% was enough to maintain his credibility.

Energy is the only bright spot in the market among a wall of worry. Results in earnings have been quite good, so investors should take advantage of low stock prices. There are opportunities if you know what you want. Concentrate your portfolio. In 2021, indices were strong across the board, but in 2022 you must be selected. He doesn't spend a ton of time focusing on the macro--there are so many factors at play. For instance, in 2020 with Covid who would have foreseen a fantastic two-year run in stocks?

Educational Segment. Learning how to use the VIX index can help. When looking at volatility expectations, when current volatility is higher than expected volatility in 4 months, if the former is higher then there is much bad news priced in. VVIX is the volatility of volatility. VVIX has remained high. The VVIX is now anticipating high volatility, and is a leading indicator. We are close to a bottom according to this. However, we are close but not there yet.

Rising interest rates will be more of a challenge for high multiple, high growth stocks. Have been seeing this with SHOP for example. This becomes a buy but we are just starting the rate hike cycle. Wednesday is a big day, as we will hear from Central banks.

Markets will move on the headlines and he is not sure if there will be a deal between Russia and Ukraine. Thinks things will get worse before getting better probably. There are other elements like Bank of Canada raising interest rates. Rates are stimulative and there are inflation pressures down the road. The supply chain, cyber security, etc. worse and more difficult. Cutting interest rates or doing QE will not solve anything.

Gold does well when there are concerns about the maintenance of purchasing power of more conventional assets including bonds. For example ten year bonds are guaranteed 2% but purchasing power is down 6% so the interest rate is negative. The Russia/Ukraine conflict may be negative for gold in the near term since Russia may need to sell gold reserves to turn into cash due to banking restrictions and sanctions. However we are looking at a new era for gold since inflation causes money to lose its value. In the U.S. 35% of the dollars were put into circulation within a relatively short time. Deficits are here to stay.

Comment on Lithium. He prefers the larger producers. There is lots of lithium but there is a shortage of production capacity.

Technical analyst specializing in volatilty, Mark Sebastian, predicting the market future based on the VIX YTD the S&P has declined while the VIX has risen, touching a ceiling (like today) of 30. VIX vs. oil YTD: both have been moving in tandem, rising. Oil's spike is a major reason why the VIX has been climbing. Based on the VIX futures, Sebastian feels that volatility is now "swelling" and in "backwardation." The latter means the current VIX is above the next month's VIX futures, which signals the market is getting irrational--and nearing a bottom or another market breakdown. In other words, the market is stressed. Case study of the 1990 run-up to the 1991 Gulf War: the VIX topped out early on--August 23, 1990--but the S&P continued to fall until it bottomed on April 11, 1991--four months before the war ended. The VIX also spiked in late December 1990. On the eve of Desert Storm (by the US), the S&P started to take off while the VIX sank. Meaning: escalation between the West and Russia will see volatility and market weakness. In the Guld War, the market bottomed when we knew how the war would end (Desert Storm), and the same will happen with the Russian invasion. When the VIX and S&P diverge, that's the time to jump into the market. We're not there yet. There's more pain ahead.

Ukraine, rising interest rates and pandemic creating volatile markets. Best plan for investors is to focus on individual companies with good long term prospects. Double check your portfolio to ensure not exposed to problems in Ukraine.

Opportunities in small/mid-sized companies that have been overlooked the past few years. New asset classes such as Bitcoin with no tangible assets/earnings will be risky. Air being let out of market as low interest rates(free money) begins to reduce. Focus on value investments that operate in non-cyclical industries. Lots of speculative assets such as real estate positioned for a correction.