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

Tech earning results. FANG companies announced record revenues. In a bear market, good news is bad news and investors sell the news. That being said, it could be that the high multiples for tech are now moving away to re-opening stocks like leisure and travel, especially taking into account eventual stimulus. Growth outperforms value from a tactical standpoint.

Natural gas. The energy story, if he were to run everything, he would invest in nuclear and natural gas as a step. Natural gas relative to crude oil and coal is a win. However, the industry overall will loose so you want to have tradable rallies. It is not investable. Buy for a trade.

Educational Segment. When outcomes are uncertain, you want optionality. Ratio-put spread is when you buy a put to play the downside risk, and to pay for this put, you sell 2 puts at a lower price. This is a strategy that helps buy a dip. You make money on the way down. If you get an upside move, like we might see if there is a massive blue wave. You can write a put at, for example, the 200-day moving average. Then you can buy a call for the upside. You get a lot of optionality then. Either you buy a dip at a good level, or participate in the upside.

The U.S. vote on Nov. 3 The US vote result this week could be traumatic or calming. Beyond that, he looks at the monetary debt that must be discussed down the road; that's the bigger picture. If Biden wins, it'll be a global coordination to deal with this debt. If Trump wins, it will be like Hoover in the 1930s when American retrenches and becomes more isolationist. Either way, gold wins; gold is the only constant during a debt reset. The debt is the real issue, and the election is a lot of noise. We'll see. He's hedging for greater volatility. By fiscal reset look at 1933; governments re-value their currency on which their debt is issued. Problem is, if you hold that debt, then that value will plunge. Also, many foreign currencies are tied to the USD. If Trump wins and devalues the dollar, there will be problems. This happened in 1971 with Nixon.

Today saw value stocks win over growth. Tech has had a growth run, but now selling off to give way to growth stocks. Investors are sick of the election and want to make money regardless of who wins. Tech money moved into oil as the price of oil rebounded, but then tech mounted a comeback late today. But such mass rotations from growth to value make him suspicious. Oil, for example, remains terrible to invest in (oil popped today). Rotations ignore the work studying individual stocks. He advises selling (tech) into strength. Choose value stocks wisely or you'll get trapped.

He is not overly concerned over the recent price action. It is probably pre-election jitters and worries over tech due to the NASDAQ peaking early September. The correction is healthy. It does not change the long-term perspective and his optimism for equities.

It's difficult to say whether the global economy will be back to normal in the next 2 years. There were secular trends that were accelerated by covid, that has helped the market. There is an element of safety there, despite these companies being growthy companies. E-commerce, and other trends will not slow down.

Theme parks and cinemas, looking at the data from China, has not come back to normal. If people feel safe to go back, it could go back to how it was before, but people have now developed habits they may keep even when this is all done.

Markets were so bad today that they ignored great earnings from Facebook, Apple and other tech giants. Why didn't numbers matter? The answer: the pending election. Of that, he expects massive confusion, unless results are a blow-out. We may not know the winner for days, given the mail-in ballots. However, he expects a stimulus package after the vote from either side. Buy some shares of stocks on Monday when the market revisits today's lows, wait on Tuesday's election day, buy more if Biden wins and Trump doesn't concede (this will be ugly), then wait till Friday's unemployment numbers to be a third tranche.

Why are stocks recovering a bit? Got overcooked to the downside yesterday, volatility spiked to 40. Not sure the bumpiness is done; it should be concentrated this week and into early next, but then markets should resolve higher. His models show that the market's in a fairly resilient spot. The last week of October is seasonally very difficult. We're facing a long list of uncertainties, lead by the US election result and rising Europe Covid cases. Yet the market's only 7% off the highs.

A report that BMO is weighing options for its wealth management unit. An existential question for many of the banks. The push into ETFs hasn't brought in a lot in fees. It's a good business, but challenged from a fee perspective.

Market Call cut short. Today's October 29 Market Call with David Burrows was severely abbreviated due to technical difficulties. No past picks or top picks.

Your take on the selloff today? Pre-election and pickup in Covid cases. No structural changes to the market. Not too concerned yet. Almost business as usual, but we'll have to see if it continues.