A Comment -- General Comments From an Expert (A Commentary)
COMMENT
Employment. It will take some time to get the workforce fully back. Many people have also taken early retirement. New month means new report on employment. We expect economic data to be all over the map for the near future. Canada expects to have lost jobs in May.
Larry Berman CFA, CMT, CTAUnknown
COMMENT
Inflation. There needs to be a will to spend, but also an ability to do so. In the bottom half of the population, they are still struggling. Incomes have not risen in a material way. Prices of technology continues to fall and this is a deflationary force. There are supply shortages that are pushing prices up. This is not real demand but a supply shortage. We will see policies to fix inequalities. Inflation will come back to the system.
Larry Berman CFA, CMT, CTAUnknown
COMMENT
Gold. Gold prices are now breaking out. However, gold stocks have not responded as expected. The case for gold and negative real yields is still with us. There is so much debt in the world, governments will need to monetize it. In the long run, this is positive for gold.
Larry Berman CFA, CMT, CTAUnknown
COMMENT
Educational Segment. In 2011, the first part of the baby boom hit 65 and now the middle part of that generation is retiring. This poses challenges for natural rate of growth. China over the weekend is now allowing people to have up to 3 children outside of cities because of their demographic challenges. Sub-saharan Africa is the only place with a strong natural rate of growth. If we are not getting demographic growth, productivity must grow. Tech is the only sector that has increased productivity in a large way. Buy the dips.
Larry Berman CFA, CMT, CTAUnknown
COMMENT
Educational Segment. In 2011, the first part of the baby boom hit 65 and now the middle part of that generation is retiring. This poses challenges for natural rate of growth. China over the weekend is now allowing people to have up to 3 children outside of cities because of their demographic challenges. Sub-saharan Africa is the only place with a strong natural rate of growth. If we are not getting demographic growth, productivity must grow. Tech is the only sector that has increased productivity in a large way. Buy the dips.
Larry Berman CFA, CMT, CTAUnknown
N/A
Market. Inflation will play out differently for different real estate sectors. Real estate is a great hedge for inflation. Rents go up as inflation goes up. You have to be careful, asset class by asset class. When you have record office space vacancy, you cannot capture inflation to the same extent as with industrial, which has record low vacancies. Single family rental homes in the US are a good choice, as are malls. REITs don't pay tax at the corporate level, so they are agnostic to a change in corporate tax rates. REITs should be better off than corporate right now.
Andrew MoffsUnknown
COMMENT
Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. 5i considers that the crash occurred last year. Growth stocks have already corrected twice this year. Although the current rally is hated by most investors, earnings and interest rates are the things that count. Both remain favourable for equities. Unlock Premium - Try 5i Free
Stockchase InsightsUnknown
COMMENT
Market outlook. Retail interest is strong in energy. Generalists have not come to energy yet. There is still noise that is holding them back. We saw the Dutch court order against Shell. Exxon also has had activist investors coming onto the board. Supply will still be strained and there is be triple dollar oil. Demand needs to fall with limited supply.
Eric NuttallUnknown
COMMENT
Oil outlook. There has been cost cutting so break even costs have gone down. Margins are higher now. For generalists to come back, there are two forces: performance pressure and return on equity. Energy companies are coming back from the damage due to covid and are now buying back shares and increasing dividends. Small caps give you the biggest opportunity.
Eric NuttallUnknown
COMMENT
Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Investors need to accept that they cannot time things perfectly. When a stock moves up 10%, it should not make a huge difference since it can indicate the end of drawdown. Averaging up at higher prices is preferable to continually adding to a position that just goes down. Unlock Premium - Try 5i Free
Stockchase InsightsUnknown
COMMENT
The booming U.S. cannabis space He's an expert in the cannabis space, running an ETF and sitting on company boards. The macro trade reflects the legislation from state to state of cannabis--the market keeps growing--and will attract institutional money. Once they do, it will lift all boats. This is a hyper-growth industry at 50-60% annualized. Not profitable before, these companies are profitable now. Risks are company by company, not macro. You got to find the right company based on fine managers.
COMMENT
Cryptos He worries about the leverage in the system in the crypto trade. The volatility is not surprising; a lot has to do with uncertainty over regulation. The volatility is scary, especially going into a weekend; in recent weekends the trade has been wild. Among the cryptos, he'd choose Bitcoin, which has proven to be counter-cyclical many times and marched to its own beat.
COMMENT
He just started offering cryptos to his own clients, because there was so much interest in them. You'll see wide swings in cryptos, a new asset. Institutions are still entering this space as the ESG discussion over cryptos will continue. Long-term holders must look 15 years down the road. Some will trade it and some will hold after they look at the fundamentals. Time will tell in this very new space.
COMMENT
Inflation is good for the stock market. His research concludes that, despite volatility during inflationary times, any increase in input costs gets passed on to the consumer. Earnings go up, companies raise dividends, and stocks have beaten inflation by a healthy margin. Real estate and stocks hold up very well during times of inflation, whereas long-term government bonds get hurt.
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