Market Commentary — Page 538

Market Commentary

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Currency Risk. You have to be cognoscente of currency around the world. He buys only the best companies around the world. It does not look like the Canadian dollar is coming down as much as the US$ so as you see huge losses on US markets, after currency conversion your investment has not come down quite as much. Coming out of the financial crisis the US markets were the ones to own. Currencies tend to even off after 10 years.

COMMENT

Markets. Don't do binary things. It's not all in or all out. Review your financial plan. This is not 2008, as that was a crippling banking crisis. Three things are happening. First, COVID-19 is destroying supply and demand and slowing the economy. It's clear that we're going into a recession because of it. Second, while central banks are doing all the right things, they can't stop the volatility. Third, the price war in oil is gumming up the debt market, especially high yield debt. This will have a real effect on the real economy. What we need is for the US government to do something similar to what the Canadian government did. If it does, you're likely to see a better outcome. Difficult in a democracy to do what China did. This will happen again, so we need to learn how to make the healthcare system better.

COMMENT

Average down on oil stocks? Problem is you need to be in the larger cap names, rather than mid cap names. Some may have to cut their dividends. Saudis tried in 2014 to increase production to drop price of shale. Except shale had access to capital back then, but it doesn't now. So oil could go even lower.

COMMENT

Buy on margin? You have to be very clear that you can withstand the payments. Margin isn't particularly a good thing to do, but there's a right time to do it. In 2009, it was a good thing to do. If you think markets are going up, margin is smart. Great companies that generate a lot of free cash flow are safe longer term. But a lot of leverage can be painful.

COMMENT

Chance of yields being cut in Canadian pipelines? Yields will be cut in mid caps oil and gas. ENB can make it through. But others will be asking if it's prudent to keep paying the dividend yield. The world has changed. Admires Cenovus, which cut capex. Most pipelines will be fine for a little while, but if this continues it will be difficult.

COMMENT

Can't the market just shut down for a couple of days to give us some respite? The US stop is 15 minutes for a 7% drop, 15 minutes for 13%, and 20% stops it for the day. The stops make people think about things. In 9/11, it was shut for a couple of days. But this is not that type of event.

COMMENT

Market Outlook He thinks the market is still digesting the chance of a global recession. On a PE multiple, you have to look at forward earnings and those seem to falling going forward, this should result in prices falling. Analysts now think we should expect a decline in earnings and the multiple is also coming down. Slower global growth, thanks in part to Coronavirus, is driving forecasts of lower demand around the world. Add to this OPEC and Russia fighting over prices and market share in the oil market. This will impact employment in a lot of industries in North America.

COMMENT

Energy stocks? Right now stick to the large, liquid energy stocks. There is growing concern of counter-party credit exposure within the mid-stream and pipeline space. He recommends ENB-T and TRP-T for pipelines and SU-T and CNQ-T for producers, if you want to own any energy stocks. SU-T yield is 7.2%, while CNQ-T is 8.4%. CNQ-T is probably still showing positive cash flow, even at these oil price levels. You may still lose money, but it will be much less than a smaller player.

COMMENT

After Coronavirus? Once we know we are all clear with the virus, one could look at more cyclical names including financials, energy and industrials. In the meantime look to REIT's, healthcare with dividends, utilities, certain consume staples and some high-quality tech companies.

COMMENT

Gold? He likes gold as a safe haven. He thinks it could head to $2000 per oz, especially if interest rates continue to fall. He prefers owning the GLD ETF -- why take unforseen operational risk? He also holds Kirkland Lake.

COMMENT

How are you doing in these markets? Tough time for investors. We've seen this before. It's different, because of different underlying factors. But the technicals are the same because people are running scared and they don't know where the bottom is.

COMMENT

Are we in for more selloffs tomorrow? Markets are rationing out the chance of a recession. The odds of that are about 60%. The market is priced for reduced earnings, but too soon to tell if it's pricing in negative earnings. The market will overshoot because of the uncertainty. Goldman has a positive outlook. Rates are low, and there's a lot of cash in the system, so we'll probably go a lot higher by the end of the year.

COMMENT

Chance of a recession? Three types of recession: structural, cyclical, event-driven. This one is probably event-driven. They're typically down 29%, and we're down 20%, so we have another 9 to go. Today we were down 6%, so this could be over by Monday or Tuesday.

COMMENT

Strangely, the 10-year yield today moved higher with the selloff, so is this hinting that pain could be short-lived? The bond market is always ahead of the game. It's a bigger market and smarter. That yields rose today is an encouraging sign, but don't read too much into one day. As low as all the rates are, the curve is not flat. Probably not over yet. If you're waiting for the bottom, you'll probably miss it.

COMMENT

Three things to do in a bear market. One, identify it early and sell well. Hold well, stomach it and collect your dividends. Buy well. If you have a war chest, you can get to work. A lot of the smart money sold at the right time.

Showing 8,056 to 8,070 of 21,878 entries

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

Currency Risk. (A Commentary)

Markets.(A Commentary)

Average down on oil stocks?(A Commentary)

Buy on margin?(A Commentary)

Chance of yields being cut in Canadian pipelines?(A Commentary)

Can't the market just shut down for a couple of days to give us some respite?(A Commentary)

Market Outlook(A Commentary)

Energy stocks?(A Commentary)

After Coronavirus?(A Commentary)

Gold?(A Commentary)

How are you doing in these markets?(A Commentary)

Are we in for more selloffs tomorrow?(A Commentary)

Chance of a recession?(A Commentary)

Strangely, the 10-year yield today moved higher with the selloff, so is this hinting that pain could be short-lived?(A Commentary)

Three things to do in a bear market.(A Commentary)

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