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

Potential taxation on Canadian banks. They're looking for revenue. This is one way to start. There's a view they could be put on the naughty list. The banks always have some headwinds. Dividends are fabulous. Valuations are still below the norm, though a bit higher than they've been. There are catalysts for them. It's good that there's some antagonism toward the sector. It might come down a bit, but the banks are still long-term wealth builders.

Energy stocks. Not overweighting them. It will take 30-40 years to wind down. Manipulated globally with Saudis and Russia. The supply/demand picture looks good right now for nat gas. He favours companies that tilt toward nat gas and they're still very cheap, underappreciated, and underowned. Some of the oil companies fit that description too, though he's a little less certain about the price of crude. Oil seems to have found its footing around $60-80, and there are some good names in oil land as well.

How do companies such as banks get employee talent to move to big cities? We're in a changing world. Employers are embracing that people can work from anywhere. Working in person is important, as are having connection points. The virtual world is getting better and better.

Favourite REITs. CRR.UN sets up beautifully from a growth to valuation perspective. BAM looks really good, though it's not a real estate play per se. AP.UN is pricey, but the growth is really there. SRU.UN has a nice distribution and looks good from a price to growth level.

Oil stocks. IMO is not one he follows too closely. If you're comfortable with the commodity of oil, try SU or CNQ. Both have nice dividends and are really cheap compared to their history.

China's president and Jay Powell made announcements today that they knew would lift markets today (by 1%). The Fed won't raise rates yet until more people, especially the poor, find jobs. He likes this. Critics though think Powell is blind to rising inflation. Cramer doesn't care about the critics, but Fed has the power, that Powell doesn't have to listen to this critics. President Xi of China is cracking down on sectors like real estate (Evergrande) in order to reduce the gulf between China's rich and poor. Last night, Xi agreed to bail out these businesses instead of letting them die, this halting the spread of economic contagion.

Educational Segment. The more the election outcome is tilted to Liberal Minority with big support from the NDP, which tilts policies to the left, this will lead to more wealth taxes. There are many seats in GTA that are too close to call so it is still a toss up. Projections remain for a Liberal minority. He wouldn't change portfolio strategy based on this. If the NDP wins a good amount of seats, then there could be more selling in stocks due to upcoming taxes. There will also be increasing corporate tax rates if the NDP has more power.

There were a couple Fed presidents that were short term trading based on policy moves. The Feds are a moral hazard. They cause tremendous amounts of distortion including run ups in debt and credit markets. The spreads should not be this tight either. Not a big fan of what central banks have done in markets. Will probably continue to see the same. The alternative is to not step up, kind of like China with its real estate market and Evergrand right now.

If you look at the banking index, it is in a trading range and the Chinese real estate risk is not a broader risk to the market. It is starting to get priced in to this. There has been extreme central bank intervention since decades.

Market. After the election he thinks it will be business as usual. Investors should remain cautious and conservative in their investing strategy. He has shied away from the re-opening trade. Those sectors are already correcting. He prefers renewable energy and telecom, consumer staples and energy infrastructure stocks. He tends to outperform during a downturn.

Stocks plunged today, lower than in many weeks. But this isn't enough of a reason to buy...yet. Stocks can still decline more. He needs another reason to buy. Reasons not to buy yet: Evergrande's implosion needs to play itself out more, Washington is facing a debt ceiling yet again, but will find a solution, uncertainty of the US infrastructure bill, ongoing Covid crisis, taper tantrum talk, there's likely more seasonal weakness to come, an endless supply of new stocks that he mostly doesn't want, and the rookie investor's overconfident buy mindset.

The collapse of China's #2 real estate developer, Evergrande, will harm American companies with substantial business in China, like Starbucks, but he predicts it won't effect the American economy. The crisis is giving investors an excuse to sell. He advises to it it out for a couple weeks before buying stocks in this market.

The Liberals won another minority government. It's going to take a lot of work to climb out of the financial hole that Ottawa dug to cope with Covid, starting with balancing the national budget. The Liberals will raise taxes on the wealthy, but this will discourage investment--we don't need this. The election was unecessary and costly. A pity. Let's hope we can get things going again and pray we don't see a fourth wave. Let's hope businesses continue to open up as consumer spend and travel again. We will get through this, but it will take time. In the past 18 months, he's been selling and holds a lot of cash now. He's waiting for a bigger sell-off than yesterday. He's looking for high dividend payers that don't stretch valuations. Be defensive in staples, financials and utilities.