Market Commentary — Page 492

Market Commentary

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January selling? Will re-balancing portfolios cause a selling off of some FANG stocks? He does not think there will be a lot of tax loss selling and January selling he does not think will move share prices.

COMMENT

The new strain from the UK underscores the hope that the markets have formed under the presumption of the vaccine and government aid. There are real growth challenges and it is not a surprise to see set backs. The markets are really over valued, but he is unsure if we will get to fair market value without a major policy mistake. Central Banks must continue stimulus.

COMMENT

There are still 20M people receiving benefits in the US. There is more stimulus coming but it will not pass until the new congress, probably in February.

BUY

Gold. Very bullish on gold. Central banks want to anchor interest rates at 0 and there are inflationary pressures.

COMMENT

Educational Segment. The expectations for the S&P 500 varies in range from the low end of 3800 and the high end of 4400. Consensus for earnings is $172 with a multiple around 23 or 24. You get an average target of 4085. There may be as much as 10% upside. Every metric for valuing the market is in the 100 percentile. The US market has never been more expensive. EV to EBITDA is at the most expensive it has every been.

COMMENT

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Online retail will probably not suffer much post-covid. A recovery trade would be in the industrials and consumer cyclical sectors. Unlock Premium - Try 5i Free

COMMENT

This has been a crazy year. The extent to which the market recovered was a surprise. The amount of savings and liquidity is staggering. Coupled with a recovery in 2021 from the vaccine and pent up demand, it will be a good year for equity investors until we have to deal with the debt.

COMMENT

There has been a huge rotation into value. The incongruence between value and growth has been around for so long. Value is still very cheap. There are easier ways to make money. When you have days were the rally fades, there are mini-rotations into growth names. The easy money according to the recovery script is the value names.

COMMENT

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. 5i expects the odds of a rotation from growth to value and cyclical stocks at 40%. It is best to approach this rotation with balance. There is no reason for tech companies to not continue to perform well. Unlock Premium - Try 5i Free

COMMENT

Investors are holding cash--$5 trillion on the sidelines waiting for a selloff to buy cheaply. That's one reason stocks were battered today. We may have a couple more down says as Washington wrestles with the stimulus bill, but he expects markets to bounce back. The big box retailers will do very well if stimulus comes.

COMMENT

What's the big driver in the market now? Rally based on vaccine optimism. Stimulus is back on the table. Not exciting that governments are spending money they don't have. Low interest rates, fiscal deficits blowing out. Risk assets seems to be responding to this. No idea how long this will go on. Bitcoin is top of mind these days, going vertical here.

COMMENT

Explain the biggest shift in momentum that we've ever seen. He does fundamental plus technical analysis. S&P 500 and TSX are very bullish charts. Looks like a teacup and handle, and these can be very bullish. His sneaking suspicion is that this is a very bullish setup and he wouldn't be shocked to see stocks rally quite hard from here. In the past, January and February have been strong for equities. If you forced him to make a prediction for 6-8 weeks from now, stocks will be materially higher.

COMMENT

Gold. If central banks continue to print money, bodes well for hard assets. Gold is trending higher again, a hedge against inflation. Jury is still out, as we don't have runaway inflation. He isn't saying there will be, but there is a risk. Fed is willing to let inflation run hot. Don't have all your money in gold, but a percentage in gold or the precious metals (miners) does make sense. Doesn't know Barrick well. It's the biggest. Lowest risk way to express this trade in the market. He owns Kirkland Lake and Pan American Silver. These two are the top miners based on his metrics. He also owns PHYS. Make sure any ETF you own is backed by hard gold, not paper gold.

DON'T BUY

Canadian banks. Banks are good companies, but they're not great. He wants above 20% return on invested capital. Oligopolies. Source of their moat is regulatory, and he'd rather they stand on their own two feet. Banks haven't invested enough in tech. He expects tech to come in and give them a good run for their money. Good core holding for income-type investors, but not for him.

COMMENT

What to look for when investing? He looks for proven business models, high returns on invested capital, low debt, capable management, asset light, and increasing shareholder wealth.

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

January selling? Will re-balancing portfolios cause a selling off of some FANG stocks? (A Commentary)

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

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

Gold.(A Commentary)

Educational Segment. (A Commentary)

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research.(A Commentary)

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

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

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. (A Commentary)

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

What's the big driver in the market now?(A Commentary)

Explain the biggest shift in momentum that we've ever seen.(A Commentary)

Gold.(A Commentary)

Canadian banks.(A Commentary)

What to look for when investing?(A Commentary)

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