A Comment -- General Comments From an Expert (A Commentary)
COMMENT
Afghanistan. This will be a political problem for Biden. It makes it harder for him to get other agendas to move forward with spending. It may be one of the reasons why the Feds have been cautious about unwinding and tapering.
Larry Berman CFA, CMT, CTAUnknown
COMMENT
Hurricane Ida and oil. Bullish on energy from a trading position. Disruption of supply is a positive factor for prices. OPEC reaffirms there is more supply coming. There has been underinvestment and the market may be surprised as to how high oil prices can remain.
Larry Berman CFA, CMT, CTAUnknown
COMMENT
US Job Report. It will be another couple reports before the jobs lost will be recovered. There is a labour shortage and investment in technology will be part and parcel of the transformation for those low end unskilled jobs.
Larry Berman CFA, CMT, CTAUnknown
COMMENT
Educational Segment. A central bank is behind the curve when it does not raise interest rates to keep up with inflation. If we look at the market based expectations of inflation and transitory inflation, the expectations for long-run inflation has not moved. The market still believes in transitory inflation. The treasury cannot issue more bonds and the debt ceiling has been hit. QE and debt monetization will be part of the future and there will be inflation pressure. Financial markets will come under stress in the next few months because of it.
Larry Berman CFA, CMT, CTAUnknown
N/A
Market He is seeing opportunity in the market. The COVID opportunity still has legs The delta wave has created a second down wave and there are opportunities for recovery stocks like AC-T. He believes the industrial sector, that is suffering from chip problems, that as it works through the system over 1-2 years there will be significant upside in some companies. The traditional growth stocks may under-perform in the next year but after that you should stay with them.
Bruce MurrayUnknown
COMMENT
Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Stock buybacks helps tighten the shareholder base and makes takeover harder. It also helps keep prices higher. Buybacks do not guarantee a premium pricing of a companies shares. Unlock Premium - Try 5i Free
Stockchase InsightsUnknown
COMMENT
Prices may stay higher but if the economy does not recover, you can't buy anything. Wages will probably not go up but with inflation, people will just buy less. If we stay in this low interest rate environment for a while, stocks will remain at higher valuations. Markets are extremely expensive, but there is value in industrials and energy.
Bill Harris, CFAUnknown
COMMENT
Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Although seasonality points to weakness in September, it is hard to perfectly time the market. Rather than timing the market, keeping weighting at levels that you're comfortable through the cycle is recommended. Unlock Premium - Try 5i Free
Stockchase InsightsUnknown
COMMENT
Markets. Things will cool down in the fall. He has a feeling that we've come a long way, and the recovery has been adequately discounted by markets. Policy set to tighten, fiscal or monetary. Plus, this is usually a tough period for equities. He's raised some cash and is hoping for better prices to reinvest capital.
COMMENT
Canadian stocks. Canada's in a good position. Our market is relatively discounted compared to the S&P. Energy is set up quite well. Continued strong demand on the back of a bumpy, but steady, reopening process, with relatively limited supply. No incentive for shale to increase market share. This favours the Canadian market. If we get a bit of market rotation, investors will come back to infrastructure and dividend players, rather than the risk-taking of the last few months.
COMMENT
Interest rates and pipelines. More noise in 2021, than in his entire career, about interest rates and inflation rising. 5-5% Y/Y inflation numbers were expected. Now that's starting to level out. US and Canada treasury rates have fallen back. He doesn't believe inflation will drive rates back to normal. We'll have low rates for a very long time. Even if there is inflation, pipeline companies just charge customers more via contract clauses. Not a concern long term. Comes down to fundamentals of the company such as is oil in demand, and are the pipelines full. For example, ENB has had its fundamental value driven for 70+ years by dividends and share price. Don't give up on critical infrastructure just because of a 3-5 year relatively temporary rise in interest rates.
COMMENT
Wisdom of a dividend portfolio in midst of higher inflation. In a high inflation world, you have to protect your capital. Money is just a utility. It allows you to buy something or do something in the future. Trying to keep your purchasing power level with inflation. To the extent that you outpace inflation, it increases your standard of living. He doesn't think we're in a 10-15% inflationary world. We're seeing tremendous deflation based on technology. With inflation, all the companies that provide the things we need will see profits go up, and dividends won't be as modest. Invest conservatively in things we absolutely need. Technology may outpace inflation when times are good, but it won't when there's a downturn. The middle road is the answer. Infrastructure equities with solid dividends that pass through inflation, and try to find some secular growers within that space.
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