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

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.

Your asset allocation? He looks at all the companies in the world and positions towards those that will do well irrespective of who wins elections in the near future. He's looking to add companies that have overreacted to the downside, and is looking to reduce those companies that have less upside.

Risk of total lockdown again. You have to take the worst case scenario and see which ones will be profitable. Some businesses are benefiting from Covid, so you must figure out whether they will continue to be good investments even when Covid cases drop. He sees opportunities in both growth and value.

Are pipeline dividends in Canada vulnerable in the same way as in the US? The economics for the Canadian ones are much more sustainable. But you have to look at it case by case. Canada has limited capacity with long-term contracts in place.

Best way to invest in gold now? A safe haven. Uptick in gold prices earlier this year. Not a viable long-term investment. For the conservative investor, better to invest in companies that are cashflow positive and are growing nicely. Hard to predict price of gold. For gold, invest in ETFs, not individual companies. ETFs can be in bullion or miners, but bullion is safer.

Invest in NYSE or TSX? Keep in mind that performance of the overall markets doesn't reflect the performance of the individual companies. NYSE is heavily weighted to large cap tech. As well, you have the exchange rate. In Canada, we're influenced by financial services and the resource sector. A better way to think about it, is to look at individual companies and assess how they might perform under different market conditions. Opportunities in both Canada and US, though US has more choice. Don't buy the overall market; buy individual companies if you can.