A Comment -- General Comments From an Expert (A Commentary)
COMMENT
Canadian or US banks, lifecos, car makers, or FANGs? Thinks of best business first, and then country second. His clients own National Bank, TD, RY, and JPM. Best banks with the best management teams. Jaime Dimon at JPM is the very best. In Canada, his favourite is always National, with smart acquisitions and growing in wealth management. All Canadian banks are under-levered. You have to be there.
COMMENT
Canadian housing market. Strong housing market is related to low interest rates. Hard to imagine it getting weaker. Rates will remain historically quite low, but at some point, the BoC rate decision will be reversed. If you can afford it, go ahead. If you can't and you're speculating, good luck to you.
COMMENT
What's your approach for tech these days? A wrestling match between the markets and interest rates. Everyone is expecting inflation and rates to go higher, which has impacted tech stocks and the darlings in the reopening stocks. He's sticking to his knitting. Invest in the leaders in long-run, lucrative technology runways. At this stage, the runways are a lot longer than he's seen in a while. At least half of the stocks he owns or are on his radar have 20-30-35% upside from current prices. The pullback has provided opportunity.
COMMENT
Any bargains in tech? Yes. There's been a pullback in the IGB, a barometer of SaaS, of almost 40% in some stocks. But it's up almost 2.5% today. Eventually, people will come back. Thankfully, semis and cloud providers have just been treading water. In the 2nd quarter, perhaps we'll see some tech leadership coming from software, semis, and cloud providers.
COMMENT
Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Valuations are contributing to the correction in tech stocks. Tech stocks can do well in a higher rate environment but it must be accompanied by good economic growth. The market rotation could last for another 3-6 months. It is recommended to include some income stocks and to not have all tech stocks. Unlock Premium - Try 5i Free
Stockchase InsightsUnknown
COMMENT
When rates rise higher because of inflation, that's good for real estate. We're seeing pent-up demand, which bodes well for real estate long term. true, borrowing costs would rise, but in real estate everything is priced off a spread and interest rates are still at generational lows. Also, the yield on publicly available real estate investments remains attractive compared to corporate bond yields. Finally, the US sunbelt still looks good enjoying strong demand (i.e. Tennessee, Florida) based on Americans migrating to cheaper housing prices.
COMMENT
Market oulook. Expects strong economic rebound. The stimulus will generate economic growth. The numbers will get better for a couple months with earnings upgrades. This should buoy the markets. The Feds have promised support for years to come.
Larry Berman CFA, CMT, CTAUnknown
COMMENT
Bond yields. In the short run, the bond seasonal are good. We have to pay for the stimulus, and the bond supply will dwarf the amount by the Feds through QE. Next quarter is good, the quarter after could be a challenge for fixed income investments. The natural rate of economic growth is anemic. We will not be able to create a type of economic growth without stimulus.
Larry Berman CFA, CMT, CTAUnknown
COMMENT
Monetizing debt. It means quantitative easing, where the interest payments just goes back to the government. It is the same as printing currency.
Larry Berman CFA, CMT, CTAUnknown
COMMENT
Educational Segment. Focusing on the ETF KWEB, Chinese tech stocks. The volatility in Chinese tech stocks has occurred since the ANT group IPO was cancelled following the Jack Ma comments. There has since been some sanctions and fines levied against big name tech companies in China. We are seeing a divergence in BABA stocks since then with it losing a third of its value. Amazon has been sideways. The anti-trust saga is much broader. Would not touch KWEB until it is 10-15% lower. Long term, you do have to like these companies but there will be more shakeout.
Larry Berman CFA, CMT, CTAUnknown
COMMENT
Gold. US dollars has been strong and real returns are a big part of it. Feds need negative real yields for years. Gold will have its day again but the last 6 months have not been great. Was bullish around $1,200 so still likes it.
Larry Berman CFA, CMT, CTAUnknown
N/A
Market. Risk is high across the market and it is up. There is the hedge fund story today. People are taking advantage of the volatility and low interest rates. There is speculator froth in the markets. You have to try not to play the market. It is all about risk management. Equities will see growth over the years but you have to have fixed income in the portfolio to offset inflation if we see it come. With the right strategy you can have a little bit of everything and protect yourself. We are in uncharted territory in with the amount of stimulus now being injected. You have to be diversified.
Brett Girard, CPA, CA, CFAUnknown
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