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A Comment -- General Comments From an Expert (A Commentary)
BUY
American Equities. Currency concerns are short term and he looks long term. He is looking to own the best quality companies that have strong balance sheets; capital-light business models; huge re-investment opportunities; and run by smart management. He will buy them in whatever country he is comfortable to own them in. The majority of these business models are found in the US. He does not see the CAD$ jumping in the short term. He is a long term investor.
HOLD
Canadian Banks including TD-T and RY-T. He wishes we had earnings out of the banks because we are flying blind. It is hard to see anything positive out of then. The stocks have fallen a lot. His preferred is NA-T. It is hard to be materially bullish on the Banks unless you are a long term investor. He would not add more to positions, just hold.
Barry SchwartzOwned
COMMENT
Market Outlook He is skeptical about the monthly rally -- since March 23 the TSX is up 32% off the lows. The economic data continues to worsen, as he has expected. Corporate earnings are confirming weak results and he expects them to worsen in Q2. He does not think we are out the woods yet. Bear markets are more often a process, so he thinks we could retest the March 23 lows or go lower yet. A retracement seems more likely now. Oil stock holdings have been high-graded in his portfolio -- lightening up on any higher cost producers. Look for companies that have a competitive advantage and are surviving in this virus related market. Shell's decision to cut its dividend should be a signal that a lot of other companies will consider doing the same -- now is the time. You should be evaluating the likelihood of dividend cuts in all the holdings you have -- look at payout ratios, whether they have in the past, their leverage, etc.
Brian MaddenUnknown
N/A
Market. We have seen tremendous volatility. Real Estate was not left behind. When we came out of March we saw 40% discounts in net asset value, but private markets have not traded back that much. He thinks stocks have priced in too much discount. We have seen unprecedented stimulus by global governments and interest rates should remain low.
Andrew MoffsUnknown
COMMENT
Market Outlook This is a difficult time in the market with all this uncertainty. Economies around the world are beginning to reopen and he wonders if that will be successful. People are hopeful the virus may be behind us, but we have to be on watch for wave two. When the lows of March in the market were made the fast plunge likely means we won't make new lows on a pullback. There has been so much done by Central Banks to keep if from happening again. Markets could trend lower, however. When the 2008 financial crisis occurred, it was a crisis of the banking system. Today, the banks are much stronger.
Chris BlumasUnknown
COMMENT
The current rally in the early phase was down to short covering, but also the market looks ahead of the news; eventually, economies will reopen. Investors are slowly piling back in, but they should be cautious. We don't know how long this will last. Some businesses will not recover at the same rate. This is a stock-picker's market, better than buying the index. Keep some powder dry. There could be a second wave later this year. We're in unknown territory. No, we're not in a depression, because of all the efforts of central banks and government stimulus. The recovery will be slow. This is not a normal recession. Recession-proof businesses like movie theatres were shuttered overnight and will take a long time to recover. Also, human behaviour has changed and will last a long time (the lockdown). Some industries will snap back, others may never return to past strength (airlines, hotels, cruiselines).
N/A
Market. The volatility has been extreme, both to the downside and the upside. Investors need to know what they own and how well they are doing. You needed a risk control strategy on the downside in the beginning but now you need it on both the downside AND the upside. You can't tell if we are going to get back to the March lows. Perhaps we won't see a retest, but looking at past history of epidemics then you have to be prepared for the market to react negatively.
Bruce Campbell (2)Unknown
COMMENT
Market Outlook He was disappointed with a negative outcome for a vaccine being worked on in China. There are over 1000 companies working on the solution. There appears to be a turnaround for gold and he has started buying into some producers due to all the government buying of debt. COVID-19 impacts are still uncertain, with some analysts calling this a buy of a lifetime. A technical analyst he follows sees this as a 1987 event that has not impacted the underlying fundamentals of the economy. Negative interest yields could continue, which would be great support for gold. He sees the government buying of assets, adding liquidity to avoid a credit crisis like in 2008. Be selective, look for companies with rising cash flows. Some companies are awash in new business. He remains very optimistic.
Robert McWhirterUnknown
N/A
Market. This is a tough market to call. He forecast that the S&P low would be 2175 last month. It was two times book value and it was where the market bottomed in 2002 and in fact the market bottomed there this time. Value is running into stimulus. Most market commentaries are in two camps. The fundamentalists are saying we've had it because there is not much left and the technicians are saying the sky's the limit and there are no ceilings. His productivity-of-debt graph shows that if you load more and more debt on top of an economy there is a point at which it becomes so heavy that it starts to push the economy's growth to zero and then if it falls through there it has a difficult time recovering. It is going to be increasingly difficult for the economy to recover strongly because of the pure weight of the debt sitting on it.
Ross HealyUnknown
COMMENT
Market Outlook The two things they have been focusing on most is making sure the businesses they invest in will be solvent during the duration of the shutdowns and what companies will succeed and thrive going forward. They need to have certain essentials needed by the market and have a good cash reserve. The month of March showed the correlation among all sectors and assets went to 1. Now, we are starting to see some separation. Certain sectors are starting to shake out giving investors a better idea what businesses will do well going forward. Utilities and pipelines offer good yields (3-6%) and act as core holdings for them on a diversified basis.
Bryden TeichUnknown
COMMENT
REITs have been reporting that 60-80% of renters with small businesses did not require rent assistance last month. That worries him as we are really only one month into the lock downs. Absent any further government relief the real estate asset classes he prefers holding are apartment buildings and US industrial warehousing.
Bryden TeichUnknown
COMMENT
Big 6 Canadian Banks? Their view has been for the past few years that the environment for banks was becoming challenged as interest rates moved towards zero. The upcoming recession will make things worse. He has holdings still with TD and RY. In Japan, where interest rates have been at zero for a long time, bank stocks there have not done well. He sees the same issue for banks in the US, but feels the Canadian banks will do a little better, but like sprinting the wind. Be cautious about being too overly exposed to any one bank.
Bryden TeichUnknown
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