A Comment -- General Comments From an Expert (A Commentary)
COMMENT
Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. With investors thinking of Feds talking about tapering, higher rates would see weakness in utilities, real estate, communications and tech. Dividend stocks could also decline with more alternatives. Unlock Premium - Try 5i Free
Stockchase InsightsUnknown
COMMENT
Market outlook. Markets haven't had a correction in a while and seasonality suggests weaker performance. Markets are getting close to targets and risk-reward, there is some upward movement but at some point, there will be a correction. It probably will not be a major correction, around 5-6%. A good time to make sure positions are appropriate and have some cash ready to be deployed.
Cole KachurUnknown
COMMENT
Right now, markets are moving between growth and value depending on inflation. Must be more nimble on individual names or using ETFs. These are strategies that work and you must be ready to pivot. Policy mistakes could have consequences in the market too.
Cole KachurUnknown
COMMENT
The USD is at 9-month highs and there are fears of a housing bubble in China. The news in China is a big deal; she's been short China where the GDP has been decelerating and is effecting the US dollar, which in turn effects China's deflation. Material prices have come off hard this week, because of China's deceleration. Until China accelerates growth, EM won't pop up. Rather, she's a big buyer of Europe, though.
COMMENT
Is the USD still a safe haven? It's trading because of China's deflation. The USD could continue to strengthen; it's at the top of her trading range. There could be a bounce and you could short the dollar. Go long India, short China and short a broad EM index, because China is a large part of those indices, yet avoids the risks of China like headline risk.
COMMENT
The USD is at 9-month highs and there are fears of a housing bubble in China. If the USD keeps getting stronger for 3 weeks-3 months, it won't be good for the world economy or emerging markets. The USD is the new VIX. Don't buy foreign stocks at all. He's surprised that risk assets aren't pricing in the popping of China's housing bubble--and they should.
COMMENT
Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. It is tough to protect from a deflationary environment. Cash would be the best option there. For an inflationary downturn, consumer staples would be a good sector. Tech companies could due well over time from higher margins and lower cost outside of labour. Unlock Premium - Try 5i Free
Stockchase InsightsUnknown
COMMENT
Markets. Reflationary environment since last October/November. There will be fits and starts, but we'll work our way through. Financials, industrials, and basic materials are still underowned, especially in the US. Ultimately, good opportunities there. The tech-driven spaces are very expensive and seen as a source of cash for people to redeploy as we go through the reopening.
COMMENT
Commodities hit today. Fairly bullish still. Saw good consolidation from May-July, and we're retesting areas of support right now. Pretty underowned. Copper is pulling back, as well as zinc. Agricultural commodities are strong, and the main agriculture ETF made a new high. Aluminum and nickel have been strong. Basic materials, including chemicals, is an area you want to watch through this pullback and maybe accumulate.
COMMENT
Dividends and share buybacks. Generational low in interest rates. We're going the other way, though it takes time to put in a bottom. One of the most important areas is dividend growth. During falling rates, you want a stable dividend, such as utilities. But if we end up in a reflationary period, dividend growth is more important than a high dividend. So financials, industrials, and basic materials have lots of scope to raise dividends and return capital to shareholders. This will be a very important theme, much like the 1960s and 70s with the Nifty 50 and dividend growth.
COMMENT
Semiconductors. TSM started to consolidate after a tremendous run. Leader is AMD. He owns NVDA and SITM. TSM is a dynamite company, but technically has been in a range for 4 months. Key support is around $107. Buy it today with that stop, as a great long-term hold. Semis are today's copper, and this a great way to play. TSM has geopolitical risk, as may see a challenge to its independence from China over the next few months.
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COMMENT
Profits are what matters. Exactly. There's always something happening in the world: the Fed, Afghanistan, the Delta variant. Ultimately, if a business increases its earnings and cashflow, it's going to be worth more. If you distill it to that level, eliminates the noise that can throw you off track. Buy good companies that have a better advantage against their own history, their peer group, and the market in general, and you'll do well over time.
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