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A Comment -- General Comments From an Expert (A Commentary)
COMMENT
What's the catalyst for the selloff today? This market is so extended to the upside, you can't point to anything in particular. Sometimes these markets sag under their own weight. He's been getting more defensive. It's a tough market, as there are tailwinds, but it's so extended. Sees some risk in the growth stocks.
COMMENT
Are people losing faith in the work-from-home revolution? Reminds him of the crash of 20 years ago, when a lot of the tech stocks didn't achieve their highs again for another 15 years. The stocks were so ahead of their valuation. Zoom, Tesla, and Shopify are in the same situation. You're paying a lot today for future growth.
COMMENT
Could the selloff be just seasonal jitters? Valuation will matter. You can have a great growth period, but how much are you paying ahead for it? Interest rates are the biggest risk, with debt where it is and the amount of expansion. Any increase in interest rates will knock down multiples pretty substantially, and the growth stocks will suffer the quickest and the hardest. You'll be facing Wile E. Coyote-type air underneath.
COMMENT
Reaction to Altice USA offer to buy Cogeco? Offer seems relatively fair. Shares are relatively undervalued in the market, so the premium was offered as enticement. A long way from being a done deal. Telecom returns haven't been that robust over the last little while, so it represented a good chance to take some profits.
COMMENT
ETF management expenses. The ETF industry has changed. They used to track just the S&P 500, the TSX 60, etc., and the MER was very low. Now, there are more actively managed ETFs, and the MERs will be more expensive. Best place to find the actual MER is in the prospectus of the investment, found on the website or wherever you're buying it from.
COMMENT
Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. The stock market has seen a surprising rally, welcoming stronger than expected Q2 earnings. However, a correction of around 10% is possible. Investors should still be comfortable investing now for a medium term timeframe of 3-5 years. Low interest rates and good earnings growth expectations for 2021 has investors willing to pay more for stocks. Unlock Premium - Try 5i Free
Stockchase InsightsUnknown
COMMENT
Big tech stocks are overbought, but other sectors have started to rise, sectors that have been dormant, so this is a good sign. This buying is driven by FOMO, though the economic realities don't line up stock prices. Stimulus has also encouraged buying, but economic data looks encouraging. He's looking for companies that can grow earnings in a period like this. Home improvement and recreation (i.e. skidoos) have been higher than in years.
COMMENT
He doesn't believe much change in society, but accelerated existing trends like poor demand at shopping malls and more buying online, as well as video--conferencing impacted travel and the office market. There's already diversification of production away from China, like in Vietnam and Mexico, the latter seeing a shift of production to the western hemisphere. China is also less competitive in terms of quality, not just costs.
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Hello, my name is Billy Kawasaki -- Stockchase Insights editor. Today we’re launching a new partnership where we will be publishing insights and top picks from the 5i Research Community forums. 5i Research is a subscription based service founded by stock experts Ryan Modesto and Peter Hodson where you can get answers to your own investing questions. Use our special offer coupon code “Stockchase” to redeem your free 1 month trial. We will publish Stockchase Insights every Monday, Wednesday and Friday on Canadian stock ideas from the 5i Research Community forums. Today’s ideas focus on the trends in defensive stocks, e-commerce and industry. Stockchase Insights is available for free for a limited time and might become Premium-Only in the next few weeks.
Stockchase InsightsUnknown
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Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. We are seeing developments in prevention and treatment for the coronavirus that adds positivity to outlook. Lower interest rates have pushed demand higher for housing and lumber. Although there is risk for a recession, government stimulus is working and people are saving more which increases willingness to spend. Unlock Premium - Try 5i Free
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The economy has dug itself in a hole and we then filled it with too much money. Now there is nowhere for the money to go. Interest rates are so low, do you use the bond market? The scale of the money looking for somewhere to go is driving the market.
Bill Harris, CFAUnknown
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Apple. They sold Apple last week. Over the last 6 months, nothing has changed internally. However, the multiple has expanded sharply. It's close to 40 times current earnings now.
Bill Harris, CFAUnknown
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Going back to 2012, the Fed has always been concerned with their inflation target. In the 60s, there was runaway inflation that they have worked to stabilize. Now that it is stable, they want inflation higher to inflate away the debt issue. The US government will owe 30 trillion next year. Because of low interest rates, it is manageable. However, if inflation goes up, they will need to buy more bonds.
Larry Berman CFA, CMT, CTAUnknown
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US Elections The RNC did a good job to present Trump as a worthy candidate. We will probably see the polls close in in the next couple of weeks. The swing states are the only ones to watch closely. The markets will be paying more and more attention to this in the coming weeks.
Larry Berman CFA, CMT, CTAUnknown
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