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

Market outlook. Before dot com ended in tears, there were lots of run up. There is a compelling case how bitcoins can work. It is a very binary thesis. It could worth zero if it is not widely adopted. There are pockets of froth and it is a crowded market. People are universally bullish, which is concerning. The better view is that the markets will grind higher in the next year.

Recovery. Economic recovery is going well. Data is showing positive moves, savings rates are super good and interest rates are retracing. The crisis has led to lots of innovation and productivity gains. 2023 estimates before the crisis were actually worse than 2023 estimates following the crisis due to productivity gains and lower interest rates.

Cryptocurrency. It's getting a lot of attention, especially as prices go up. Coinbase is a bit different, as there's more of a business model behind it. She's just watching to see how the space evolves. A difficult investment to make to generate long-term, sustainable returns. Volatile. More attention will also garner more regulatory scrutiny.

Economic recovery. Yes, predicated on 2 things. Extraordinary stimulus (as in the US) plus an effective vaccine rollout (as in the UK). In those countries, economic growth momentum will pick up sooner. In Canada, logistical issues will eventually get resolved. Our recovery will be somewhat uneven, but the trend is upward.

Gold. Stock price moves as the underlying commodity moves. Gold has pulled back, and the USD should start strengthening, which also works against gold prices. She has no money in the sector right now. She prefers producers with very little political risk.

Bitcoin. Even if it doesn't end well, is there an opportunity in the short to medium term? As central banks move ahead with digital currencies, they will look at existing cryptocurrencies with a great deal of suspicion and regulations will be implemented. A preferable way to be involved is through semiconductors, the picks and shovels of cypto mining. Digital currency will empower payment networks and banks that are most ahead in digital, and the long-term winners will be the existing businesses that are most adapted to the digital world. Both JPM and First Republic have significant investments in digital banking, and these will pay off.

Let winners run? He lets winners run. Warren Buffett says that selling your winners to buy more of your losers is like cutting your flowers to water your weeds. But there's a limit to how far you let your winners run. Can't let them run beyond control. Remember the lesson of Valeant; it was punishing when it pulled back. He has about 25 positions. He trims winners. There are risks associated with a winner becoming too big a position. A financial advisor can help navigate this.

Messianic thinking: Some believe it's a sin to sell any stock, because they feel buying stocks is a crusade. He's talking especially about cryptos, GameStop and the Reddit trade. Beware of putting your faith and money in just on sector of the market. And take profits where needed. Really, we're worshipping greed here. He would sell Bitcoin now.

Certain parts of the market are showing signs of a bubble. The causes are ease of access for the investing public and cheaper trading costs, which are both good and bad. He wants democratization of the market, but it's hard to succeed in the market and those entering the market with little or no knowledge could suffer losses. We're in a classic situation where the general public believes we're still in a recession when we exited that many months ago. This happened in 2009, too. Rather, markets are looking ahead with the U.S. going full bore as businesses expand. Earnings will hit new highs later this year. We'll likely grow 30% in earnings in 2021, while coming years look promising.

Big banks are starting to report this week. Earnings will probably be positive. Geopolitical risk seems to be ramping up in Iran, Ukraine and Taiwan. In regards to the Fed's, the growth is being induced by the fiscal support. The question is over the next few years, will it be enough to kick start the economy?

Gold. Gold has a flight to safety type movement. However, we are seeing money flowing into digital assets. Gold, traditionally chosen for safety, is being replaced by bitcoin and other cryptos.

Educational Segment. There are signs for a melt-up bubble. The BoA has released a report saying that there are more funds flowing into the equity markets than in the last 12 years. It is phenomenal. Looking at two indicators today, the first is bull-bear ratio. The S&P 500 sentiment is becoming extreme. At these times, we see corrections of 5%-10%. We are not seeing the same degree of speculation, however. Looking at the Opportunity vs Caution indicator, it is reaching a high caution level. There is froth. Once earnings get priced in, there will be a sell in May. Need to be more defensive in portfolios in the next months. We are seeing traditional late cycle behaviour but the bubble can get bigger and bigger since the Feds will not be cooling the markets.

Euphoria? There are two camps: a short-term pullback is coming, or we're entering an exponential upsweep. There's lots of opportunities in stocks as there's little upside in bonds.