A Comment -- General Comments From an Expert (A Commentary)
COMMENT
Stimulus. We probably won't get a massive spending bill like what the Democrats were hoping for. Democrats are really hoping to swing the senate in Georgia in January which could help them get more stimulus. Very much a political hot potato. How the Feds and Central Bank will monetize the debt is also a key point to watch.
Larry Berman CFA, CMT, CTAUnknown
COMMENT
Leverage. He would not be using leverage to play equity markets. Things have reflated to valuations so you want to be defensive. Banks are okay but we are in a low rate interest rate environment. There will be little growth.
Larry Berman CFA, CMT, CTAUnknown
COMMENT
Educational Segment. When investors are bullish in markets, they are buying calls to participate in the upside. When there is an expectation of down-side, they buy puts. Looking at the markets, there is more buying of calls near highs and puts near lows. We are now seeing in the put-to-call ratio, we are at the 90th percentile. We are at an extreme point here. This tends to mean a 5-10% correction soon.
Larry Berman CFA, CMT, CTAUnknown
N/A
Market. November was a strong month. We are finally seeing a much broader strength in the market. It looks positive going into 2021. We are stretched a little at these levels short term, however. Any pullbacks will be pretty good buying opportunities during December. He thinks we will see a weaker US dollar going into 2021. Global growth looks positive as we go into a post-COVID world.
Bryden TeichUnknown
BUY
Telehealth Stocks. He is more familiar with Cloud MD. The adoption was always something you could see but the pandemic has brought that forward. It is definitely an area of healthcare that is interesting. There is definitely upside to the sector as a whole. It is hard to know which company is going to do the best so own small positions in two or three of them.
N/A
How to Buy Volatility. Over the last ten years the VIX has moved higher at the same time as the market sells off. It still has not been below 20 since March and we saw a significant run in stocks. Volatility is up at the same time as markets and this does not happen often. The traditional correlation is breaking down. It feels like we are in the beginning of the market top blowing off. Prepare to be in an environment where we still have an elevated VIX.
Bryden TeichUnknown
COMMENT
The return of retail investors has changed the face of investing. Conventional wisdom has been turned on its head during Covid, driven by young retail investors: forget ETFs and bonds, they pick individual stocks. And they don't care about PE and other metrics, though they will research on the internet themselves. They're picking stocks well and don't care what Wall Street says. The internet has freed these investors from the dominance of Wall Street money pros. Also, the young are strong believers of ESG investing.
COMMENT
Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. If inflation coincides with a strong economy, industrial and tech stocks have good pricing power. Gold and other metals are also a good option as a hedge against inflation. Unlock Premium - Try 5i Free
Stockchase InsightsUnknown
COMMENT
We see a rotation into value oriented stocks. He thinks it might be too much too quickly though. We saw the economy shut down and he does not think it will restart on an even keel. There is still the logistics of rolling out the vaccine. The shutdown induced economic problems will persist for a while.
Michael SprungUnknown
COMMENT
Investors will have a chance to truly invest and look at companies with good management and strong balance sheets. Multiples are extreme for some tech companies and the markets have been led by a narrow set of names. The markets will be better for longer term investors in the times ahead.
Michael SprungUnknown
COMMENT
Energy. If there is any value to be found, it is in the strongly managed energy companies. They will participate in any economic recovery rally. The surviving strong companies have taken advantage of the weaker companies that have gone by the wayside.
Michael SprungUnknown
COMMENT
Banks. A lot of investors have been using banks stocks as a means of gaining some yield in a low interest rate environment. Those dividends are still well covered by earnings. Assuming economic pick-up, the banks will benefit from that. Net interest margins are pretty low but with economic improvement, we could see changes in interest rates.
Michael SprungUnknown
COMMENT
Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Higher current valuations in the stock market may lead to a more muted 2021. However, it is not impossible to see a strong year, especially with earnings expected to grow, an effective vaccine and overall recovery in economic activities. Unlock Premium - Try 5i Free
Stockchase InsightsUnknown
'%20fill='%23ffffff'%3e%3cg%20id='Pager'%20transform='translate(423.000000,%201755.000000)'%3e%3cpath%20d='M243.295367,17.286474%20C243.68919,16.9045087%20244.327703,16.9045087%20244.721525,17.286474%20L249,21.4361302%20L253.278475,17.286474%20C253.672297,16.9045087%20254.31081,16.9045087%20254.704633,17.286474%20C255.098456,17.6684393%20255.098456,18.2877274%20254.704633,18.6696927%20L249.35654,23.856763%20C249.159628,24.0477457%20248.840372,24.0477457%20248.64346,23.856763%20L243.295367,18.6696927%20C242.901544,18.2877274%20242.901544,17.6684393%20243.295367,17.286474%20Z'%20id='Path'%20transform='translate(249.000000,%2020.500000)%20scale(-1,%201)%20rotate(-90.000000)%20translate(-249.000000,%20-20.500000)%20'%3e%3c/path%3e%3c/g%3e%3c/g%3e%3c/g%3e%3c/svg%3e)
'%20fill='%23ffffff'%3e%3cg%20id='Pager'%20transform='translate(423.000000,%201755.000000)'%3e%3cpath%20d='M243.295367,17.286474%20C243.68919,16.9045087%20244.327703,16.9045087%20244.721525,17.286474%20L249,21.4361302%20L253.278475,17.286474%20C253.672297,16.9045087%20254.31081,16.9045087%20254.704633,17.286474%20C255.098456,17.6684393%20255.098456,18.2877274%20254.704633,18.6696927%20L249.35654,23.856763%20C249.159628,24.0477457%20248.840372,24.0477457%20248.64346,23.856763%20L243.295367,18.6696927%20C242.901544,18.2877274%20242.901544,17.6684393%20243.295367,17.286474%20Z'%20id='Path'%20transform='translate(249.000000,%2020.500000)%20rotate(-90.000000)%20translate(-249.000000,%20-20.500000)%20'%3e%3c/path%3e%3c/g%3e%3c/g%3e%3c/g%3e%3c/svg%3e)
