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

Monetizing debt. It means quantitative easing, where the interest payments just goes back to the government. It is the same as printing currency.

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.

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.

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.

Movie Theater Stocks. It will probably be longer in Canada before we get back into the theatres. He would recommend streaming media stocks. He also would recommend DIS-N. LOGI (Logitech) would leverage on work-at-home.

Invest now in Industrials? If inflation is going to be persistent as we proceed to a reopening then he expects industrials to be a good investment. You might take advantage of the stronger loonie and convert into USD. The US industrial offerings are much more diverse. He would recommend using an ETF.

A large hedge fund, Archegos, was forced to sell $20 billion of stocks which pressured some sectors of the U.S. market today. This and a stern CDC warning about Covid cases and for Americans to keep their guard up. The reopening trade took a breather today. He thinks Archegos will have limited impact. The fear of new Covid restrains is appropriate and some states have jumped the gun, even though there is progress on vaccinations. That said, he thinks it's unlikely the US will regress to a lockdown and recession like Germany.

We have a stock glut and not enough buyers. IPOs, SPACs, secondary offering and insider selling are the causes. The glut is dangerous, because ir can push down stock prices. This was the biggest IPO quarter ever. Some of these deals have started to fizzle, breaking below their IPO prices. DOCN, for example. Others: DSEY, ZH, ALHC. We're also seeing lots of substandard Chinese IPOs, which he has been avoiding for a long time. COIN, a crypto exchange IPO, is another to avoid. There've been over 300 IPOs YTD, which is more than all of 2020. There are too many SPACs and those prices are sagging, some below $10/share which is an ominous sign. Secondary offerings: ViacomCBS was a big, recent example. Insider selling refers to the end of lock-up periods of IPOs, which adds even more stocks in the market. Be careful this spring.

Oil. Year to date, oil had a big move. There is a lot of noise right now, like the ship stuck in the Suez. Normalization of oil inventories, post-US shale world, OPEC spare capacity, and chronic under investment are the key 4 elements for oil prices. Oil stocks are still extremely undervalued.

Virus resurgence. We have seen global air travel recover, which is now down 30% instead of 99% like during the first wave. Road transportation is also recovering. Economies that are not under lockdown like China and India, demand in regions are higher than before covid. We are entering into a supply crisis and that is what counts.

An accelerated vaccine schedule (Moderna will pump millions of shots into the system next week), will raise all boats in the economy from drug stocks to housing. After days of selling, today saw a ton of buying across the board. It's all about vaccines to drive the reopening.

Inflation He fears that inflation down the road will spike, a real doozy, and that US Fed Powell may have to raise interest rates sooner than later. He points to the sharp demand in steel and, hence, rise in steel prices. Lumber is also surging. Until the US strikes a deal with Canada, tariffs will make it expensive to build houses in the U.S. The shortage in semiconductors is putting the kiebosh on the hot car market. In turn, used car prices are shooting up. Oil is also up which means plastic products which will jump in price and ripple through the economy. Some of these shortage may be temporary, but we have limited time and Powell may be forced to raise rates.

Markets. Very extended heading into March. Now seeing rotation. Pullback off the highs, especially in the US with the Russell and NASDAQ. TSX, heavily financial weighted, has done quite well. Financials and energy have started to accelerate. He's closely watching moves in utilities and staples, which are signs of defensiveness.