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

Doesn't see Omicron variant as damaging as Covid-19. Omicron selloff briefer and shallower than Covid-19. World better prepared for spread of variants(wearing masks etc.).

Today, we saw red-hot inflation numbers which means the Fed can't keep interest rates this low. Today, the S&P made an all-time high, but maybe the reaction is too bullish considering what will come. On Wednesday, Jay Powell delivers his next Fed remarks. Cramer thinks he will move up the timetable of rate hikes, which means the stock market will get hammered. Inflation is rampant, so the Fed has no choice. Don't sell everything, but certain sectors will fall out of fashion, and others fall in.

Reality check: Not all, but certain sectors will decline when the Fed raises interest rates (which will scary). Don't be scared. From 2015-18, rates rose 9 times, but the Dow jumped 50.2% with the S&P and Nasdaq (61%) moving even higher. Take 2015. Anticipation of a rate hike kept market gains limited; the market was doing fine to start 2015 until it got by an nasty correction caused by a crash in the Chinese stock market that spread globally. Consumer staples, tech and discretionary did the best that time while energy, materials and financial fared the worst.

Tempted to go to cash? That's always a temptation, but it's a mug's game trying to second guess the market. All you can do is buy the best stocks you can at reasonable prices. Even if they do get thrown out with the high flyers from time to time, they tend to recover. Financial strength, safety of dividends, and stay the course. In a market like this, what tends to happen is you tend to be a net seller rather than a net buyer. You're probably a bit heavier in cash today than you were a year ago.

US tech stocks. Have been a wonderful gift. As a value investor, there's very little he'd play in that field. Multiples are beyond his reach. He wants tried and true, long-term companies. Most of his investors are looking for capital preservation, not the big swings that you can get with some of the tech stocks these days.

Oil and gas. Yes, he's in. Never totally abandoned them. Energy will be a necessary part of powering the world for the foreseeable future. Yes, lots of divestment. Weaker companies have fallen away, providing opportunities for the larger players to pick up production growth reasonably. Huge swings in oil prices this last year. As long as we can remain in the range we are, companies that are left tend to be huge free cashflow generators. We're already seeing dividend improvement. It's still an area of good value that people can exploit.

Canadian banks. Overall, banks are good to be in right now, given world uncertainties. Rules being relaxed means share buybacks and dividend increases. Earnings potential over the next year will stall out, until the economy gets more settled. Prime area to hold for safety.

Buy an oil/gas stock with no dividend? He'd buy, but dividend payers will always have a bit of an edge. When it comes to resource companies, he looks at total return. Lots of clients want income, and dividend stocks are the main vehicle for this. Resource stocks are so cyclical, he'd like them to pay big dividends in good times, and smaller dividends when times are not so good. When times are bad, it's a more efficient use of an investor's capital to put it elsewhere than a resource company.

Ignore the negative headlines. Focus on the long term. Headlines are all doom and gloom, not productive for most investors. Investors who were speculating in the markets earlier this year are losing enthusiasm. Very tough to trade these markets, can't do it profitably. More valuable to avoid capital gains and commissions and trying to guess the next squiggle upward in the line. The companies he invests in don't care about the Fed this next quarter or next. They're still making business plans, manufacturing things, and customers are still buying. All negative news does is make investors worry and make poor decisions.

Omicron variant. For 18 months people have been talking about how bad Covid is, but markets have been moving higher. Businesses like McDonalds and Disney are very adaptable. Shipping lines have eased and still delivering goods in time for the holidays. AMZN has been quite capable of keeping shelves stocked and shipped out. Headline news has already been discounted to a large extent.

Recent selloff. He's been a buyer 100%. DIS, for example, has enormous opportunities in virtual reality. Imagine the unique experiences possible from the comfort of your own home, without having to travel. People aren't necessarily focusing on the longer-term optionality that a company like DIS has.

High dividend yield for a company like ENB. ENB thinks dividend will sustainably increase by 3% per annum. Investors cottoned on to ENB increasing dividends at a high rate, but then having to issue equity to pay for them. Portfolio managers were unwilling to keep it in their portfolios. ENB doesn't fit into the new ESG model. It's really a problem. So ENB has had to adjust its dividend growth model to a much lower number. Lots of debt. If interest rates rise, ENB would find it difficult to raise prices to consumers to service that debt.

Payment system players. Look at GOOG, AAPL, AMZN, or V which is on sale. The system is really changing very much, so you want strong, big players diversified across the globe.