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

He specializes in cannabis, small and mid-cap stocks. Of the latter, they've gone sideways or corrected a bit in the last 3 months, so he's excited about the future. He sees opportunity in growth and value as investor flip-flop on any given week. Whenever the U.S. Fed is accommodative, they lower rates and drop bank reserves. As the economy picks up, they adjust, but that hasn't happened yet. Rates remain low and the taps are still on for liquidity.

How do you know that the dividends of a pipeline stock will be safe? It's a more volatile industry than others, but he looks at free cash flow, the catalysts in the business and the individual company.

Rising case counts. Britain is seeing more cases with the delta variant. There is also good news that the mRNA vaccine's efficacy is still high. The bulk of those who were going to get the vaccine has gotten one. It will be an overhang for a while and it will have influence on markets and policy.

Federal reserve. They have been walking back talks of removing stimulus. It's clear that when the market is upset about something, the moves get walked back.

Gold. Still bullish on gold, but has modified upside expectations. Was looking at 2300-2500 for spot gold over the next couple years. Less confident on the call now with the negative rate policy is in the market. However, gold has not moved. Debt monetization will continue.

Bonds. The whole category of fixed income is now broken. Interest rates need to stay low because of debt. The safety and balance aspect is broken now. Must look at alternatives now. This will be a theme for the next 10 or 20 years.

Educational Segment. Michael Burry said that the hype and speculation around crypto and such is sucking in retail investors. When it falls, there are billions that get wiped out. We are seeing a divergence where markets are moving higher but a lot of stocks are under their 50-day moving average. The last time we saw these divergences, it was in 2007. We are in a high risk market with dislocation of what's happening. This is a cautionary sign.

Market. The market as a whole is not a cheap place. It is getting tougher to find value. Holding on to things that did well in the past is probably not the way to go. He is seeing value in Europe, parts of Japan and some in the US as well. Some opportunities exist in Financials, industrials, service companies that suffered during COVID and some others. He has never heard Crypto currencies explained in such a way as to make sense. It looks very speculative.

Marijuana Stocks. He does not own any. There are not yet any great marijuana brands. He expects some companies not to make it in the sector. Some offer great valuations. It is a speculative sector.

Las Vegas Casino Stocks – Which is Better? The whole gaming sector has had a massive run since the low over a year ago. The sector is more of a hotel and entertainment sector than a gaming sector. He only has exposure in his high yield bond fund. He avoids stocks with companies that have a fair bit of debt. MGM has the best franchises, but it is a hard sector to invest in.

Tech rallied today, but the price of oil fell $1. Causes: Boeing received a negative FAA announcement and the company has received no fresh orders from China, fears over the new Covid variants and a vague doubts over the new infrastructure bill.

Market outlook. Looking back 6-9 months ago and where markets were then, there was market discounting. Confidence returned to the broader market in November with vaccine trial announcements. We can see the results of vaccination campaigns in economic recovery and case counts. Looking forward, there needs to be caution as much of the recovery expectations are priced in.

Good news can be bad news since 2008. There is outside stimulus from the central banks and government that is propping up markets. When there is good news and the stimulus is reduced, there could be a market pause. Hopefully vaccines remain effective and this will lead to more spending on services and less on durable goods.

Energy sector. Many one car families became two car families. There is also a desire for travel. This will be positive for oil demand. Demand for power with heat waves is also another factor pulling natural gas demands forward. There will also be continued development of renewables.