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

There are some brain-dead sellers out there, sellers of AMC, etc, stocks too expensive in valuation to the Reddit short-sellers. Who will return to theatres? If you want to see the next James Bond, you new Amazon Prime. These are sellers who don't care about metrics or balance sheets. If you short AMC, you're an idiot. Look at what happened last winter. AMC was up today 19% in the latest short squeeze. As for GameStop, well it could turn itself around (or not).

It's trickier to find US stocks at decent valuations. There will be winners and losers. Momentum stocks have had some success coming off the pandemic, but they're not getting stretched. Meanwhile, commodities, cyclicals, social-driven tech like Facebook, and banks are gaining. The falling US dollar: sometimes currency moves are your friend or foe. The riding CAD is good for Canada, though weakens his U.S. stocks. Then again, his cyclicals which operate in the U.S. are doing fine.

Lumber prices These prices are volatile. He expects lumber prices to fall back to $300-500 from the recent peak of $1,600 after this supply chain disruption. It doesn't take long to have another mill operate at double or triple shifts to process lumber. Lumber is a renewable resource.

Today, where did the sellers go as the markets rallied. What drove today's move was the lack of sellers (supply vs. demand). Breaking down this lack into these factors: the absence of IPOs, he demise of once-hot SPACs, the surge in pandemic savings, more share buybacks, money flowing into index funds, cryptocurrency turmoil pausing and worries over higher capital gains taxes subsiding.

By the fall, the US markets will enjoy a soft landing. No, inflation fears are overblown and foolish. No, this is not the historic Weimar Republic. The state of the consumer is healthy. Workers are making more money and no, this won't create runaway inflation. The extra unemployment insurance will end in September and more folks will return to work, which will benefit unemployment numbers. As for the semi shortage, there are signs from companies like Cisco that production is rising, and this shortage will end sooner than later.

Market outlook. Not a strategy that he follows, but this May it may be a strategy to follow. They have been pressing equities a lot. Still very bullish and markets are getting cheaper since earnings have gotten up. That being said, we are seeing some technical resistance, higher tax propositions and all that together makes market more tough. If you have indices that are near highs, he would peel back from them and look at specific equity allocations.

Reopening. The reopening stories was a question of balance sheet drip. With the vaccines and reopening happens concretely, you have to own them. You just have to buy them at the proper technical levels. These will probably more active positions, but when the tape is weak, he is buying them.

Commodities. The commodities rally probably has more legs. People are misjudging pent-up demand and the impact of stimulus. The key player in commodities is China. Copper has been trading sloppy since the Chinese policy makers pronounced on the issue. You have to buy and sell at the right time. This will change if China decides to dig its heels in.

It would be amazing if we could talk about stocks and not cryptos all the time, but it won't happen. We're seeing a slow-motion crypto collapse. The easy money in crypto has been made as Bitcoin has plunged. However, nothing is stopping anyone from creating a new crypto.

Easy to find growth stocks at a decent price? He has a portfolio full of growth stocks that are still priced well enough to go forward with. A bit of both tech and cyclicals. The large social media type tech stocks are still very reasonably priced with 20% growth going forward. The general economy is opening up, and there are opportunities almost everywhere. Be careful of valuations, as well as short-term concerns over inflation. Once the building boom is over and commodity prices catch up, these concerns should settle down.

Too early for airlines and hotels? No, he owns both. He just chose not to recommend them for today's top picks, as they're not at the core of what he does.

$75K to put into a TFSA. He'd put it in 7 stocks to diversify. AMZN, MSFT, 1-2 of the Canadian banks, 1 of the railroads (or AC if you're more aggressive), a class oil company like CNQ or TOU, and a world-class global healthcare company that's into robotic surgery or PFE that will raise its dividend nicely. That presents a nice mix.

Markets. All-time highs earlier this month, and now we've pulled back by 4-5%. Totally normal, happens around 3x a year. Consensus global GDP of 6% for 2021 provides a good backdrop for stocks. That would be the strongest annual economic expansion since 1980. In 2022, expecting 4% growth. Vaccination numbers are growing around the world. Declining number of cases will provide a good backdrop. Volatility is due to inflation concerns and digesting gains so far this year.

Today's market weakness. Inflation concerns started last week with the surge in the US CPI. This is transitory. An economic restart is not the same as a normal business cycle recovery. Supply bottlenecks plus pent-up demand are combining to push prices materially higher. Inflation won't go back to zero, but spike in inflation is temporary. Usually, we see demand slowly capture supply, but they're neck and neck right now.