Market Commentary — Page 402

Market Commentary

COMMENT

Semiconductor sector. TSM has geopolitical risk, but he likes to think cooler heads will prevail. Hasn't participated in the recent rally as much, but it's only a matter of time. A great company, and one of his favourite ways to play the space for foundries. He likes AMD for CPUs, NVDA for GPUs, ASML and AMAT for semi manufacturing equipment.

COMMENT

Access to global stocks. This is what asset managers do. It is tricky to access them through the pink sheets or through ADRs. You have to make sure there's liquidity, look at foreign exchange, etc. In most cases, the simplest way to do it is through a fund.

COMMENT

WEIGHT OF THE CRYPTOCURRENCY ECOSYSTEM

In the last article, we saw that the market cap of crypto-currencies was around $3 trillion. The question of a speculative bubble or a real paradigm shift is on everyone's lips.

While it is always important to handle them with care, statistics can always give us clues that we need to dig deeper.

There is over $1 quadrillion in the world. The global equities market represents about $90 trillion, the precious metals market such as gold and silver represents $12 trillion. The world's total M2 money supply (physical money, deposits, etc...) is $40 trillion and global real estate accounts for $30 trillion. Including other forms of investment, global debt, and the derivatives market, we get a total of $1 quadrillion, or $1,000,000,000,000,000.

A quick calculation immediately reveals that the crypto-currency market represents 0.3% of all wealth in existence. It is also 4 times smaller than the precious metals market, and 30 times smaller than the global equities market.

We can therefore think that, even if there is a bubble (a lot of behavior leads us to think that there is an abusive speculation on the part of many investors), there is also, on the long term, a place to take for crypto-currencies which are increasingly adopted, have already proven themselves and are increasingly valued by people to fight inflation and have easy access to means of payment thanks to the DeFi.

COMMENT

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Rates may go up soon. For the time being, investors could reduce very expensive growth stock exposure, and reduce high income dividends that have no growth. Short duration bonds should be the only type kept and be cautious of commodity exposure. Unlock Premium - Try 5i Free

COMMENT

5 year outlook. The market is very expensive right now. Beaten up stocks have come back. Some of it's justified, and some sectors like travel and leisure will take longer. EV has a lot of froth from low interest rates and a lot of momentum. There will be money lost 5 years from now. He prefers value investing, rather than chasing momentum with complete disregard for valuation, as this never ends well.

COMMENT

Internet giants. Some are looking frothy, though not necessarily MSFT or AMZN. NVDA and AMD have gone straight up, and they'll go down at some point. Small group of stocks that everyone's chasing, disregarding valuation, which is almost a guaranteed way of losing money. More a game of musical chairs than investing. Great opportunities to buy when everyone is panicking and selling.

COMMENT

Big 6 Canadian banks raising dividends. That's the 6M dollar question. Every bank should raise, but at different rates as some have lower payout ratios. BMO could raise the most. Question is whether they'll do it in one fell swoop, or over quarters. Owning any of them now is good. Stock prices have had quite a run, so the prices already reflect raised dividend potential.

N/A

Market. Tech names have PE ratios in the hundreds. Other stocks are in the teens. There is a big disparity. The FANG stocks' multiples have come down. They are priced to perfection. It's going to be hard for the FANG stocks to grow at 20-30% over the next few years. You hit saturation. This is where you risk PE ratio compression, which can be detrimental to price.

COMMENT

Educational Segment. The focus is on disruptive technology and innovative themes. This reminds him of the tech bubble in the 2000s. Some of these companies don't exist anymore. You run into market cycles where a lot of good news is priced in. The best stock in the past decade in the big cap space is Amazon. Intel has not come above the peak in the 2000s. Same with Cisco from the 90s. What stocks today are the Amazons and which one is a Cisco? We don't know.

COMMENT

The reconciliation bill is coming up. The budget ceiling and everything else was kicked down the road but it is coming up. It will go down to the wire. He does not think the US will default. The markets will be watching this. There is also China that cracked down on education firms but now they are allowing it now. There is a lot of noice. Feds also started tapering. 2022-2023 is about Fed tapering and less liquidity in the financial markets. Analyst targets for next year aren't much higher than today since the market has been pushed up by easy money policy.

COMMENT

Looking at the historical pattern of bond yields as QE is eased, the yield curve flattens. This flattens because they are worried about an economic slowdown. It is not bullish. Inflation pressure is new this time.

COMMENT

A key inflection point will be the mid-term elections. Based on last week's elections, the GOP will retain control of the senate and the lower house. This will mean lower spending and a fiscal cliff. Coupled with feds pulling liquidity, this will be a challenge. We could go higher in the next 3-4 months, but in a year, he expects it to be flat.

COMMENT

Gold. Gold has risen over 1800. He is scratching his head. At the end of the day, it should be working but it is not. Gold stocks vs gold bullions have never been cheaper in the modern day market. There is an asset where there is a lot of value but it has not been working.

COMMENT

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. With the infrastructure bill coming up, it is probably a better idea to buy the sector. It’s hard to say which company will be the biggest beneficiary so remain diversified. The tech sector is also of interest now although it carries more risk. Unlock Premium - Try 5i Free

COMMENT

In the short term, it is hard to call. OPEC has stated they cannot fix the oil problem. It is a healthy area for crude oil. There will be $100 oil by next year probably. Energy stocks are still trading at low multiples, at average 23% free cashflow yield. All energy stocks are committing to returning capital. There is 10-15% returns going back to investors. Generalists are coming back to the sector. Energy stocks are about to be rerated.

Showing 6,016 to 6,030 of 21,759 entries

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We paraphrase the experts by hand, we watch the shows and write down what we understood from the experts’ comments. We are human and can make mistakes, help us fix any errors. If you see something that you know is not right or if there is a problem with the site, feel free to email us at : [email protected].

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

Semiconductor sector.(A Commentary)

Access to global stocks.(A Commentary)

WEIGHT OF THE CRYPTOCURRENCY ECOSYSTEM(A Commentary)

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research.(A Commentary)

5 year outlook.(A Commentary)

Internet giants.(A Commentary)

Big 6 Canadian banks raising dividends.(A Commentary)

Market. (A Commentary)

Educational Segment. (A Commentary)

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

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

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

Gold.(A Commentary)

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. (A Commentary)

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

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