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

Gold and precious metals is a good place to be in this uncertainty. The safety trade makes a lot of sense. He bearish on the economy but it is nice to see gold rising higher. Gold is the ultimate safe haven for him.

He's lost trust in the fed since 2008. At some point, you have to stop printing more money. Ultimate utility of debt will run out and you will have to dip into reserve. He's bullish on gold. He has positions in place and now he is looking at other areas like blockchain that is fascinating. We just crossed the billion threshold for Ethereum based apps.

The value of the blockchain will grow with the coin. It is a ledger. Blockchain is the solution. Gold and blockchain can coexist together. There's a lack of understanding of what money and currency is and its differences.

Market. The market is a little bit frothy right now so you expect a little bit of a pause. Then the Corona virus is taking a bit back. We are responding to the FED and the Corona virus. If the economy falters a little bit, the FED will come into the market and try to support it. Morgan Stanley is taking over E-Trade in a multibillion dollar deal in an all stock deal. This is not an opportunity to get in. Is there really going to be that much synergy? And we are at a market top. They are paying a lot for it. The fund he works with is fully invested. We are a couple of months away from where the market seasonally moves into a more unfavourable period. He thinks you need to be a little more defensive now. L-T is perhaps a little too defensive. It is too early for that one. Gold is just finishing its seasonal period of strength. The Corona virus is an unknown. There is a lot of optimism about its being contained at present. There is a greater risk that this is different than SARS.

Impact of coronavirus? Pickup in the economy in the second half of the year will probably be delayed.

How long can the Fed fix every single problem? Market is complacent, and the Fed is accommodative. Not a lot of liquidity out there, and the easy place to be is the market.

Both stocks and gold are hitting all-time highs. Which is right? There are still value stocks out there trading at 10-18x earnings, with good businesses, good earnings growth, and increasing dividends.

Are people looking for yield in dividend plays? Yes, but there are lots of good companies with lower yields, but increasing them at more than 10%. Tries to mix his portfolio of stocks yielding 3-4-5%, with companies that are growing their dividends faster.

What are you expecting from the banks? It'll be slow, with an increase in credit loss provisions. Reasonable quarter, with stock prices down. He has a fairly significant position in both Canadian and US banks.

Market Outlook Markets seem like we are in a bubble. There are major problems ahead with corporate, personal and government debts. Interest rates at record lows are not helping. He thinks its a mistake to try to keep real estate markets inflated and does not believe a 2% stress test is enough. He thinks there should be more emphasis on creating jobs, but with unemployment rates so low it could lead to inflation. The CN Rail layoffs are a signal of the spill off effects and could lead to more unemployment ahead for the economy. He does not think the rail blockades should continue.

Canadian Energy? Oil and Gas is well out of favour, so he is interested. He worries about companies with high debt loads, but he is watching the sector closely.

Gold & Silver? Gold prices are now over $1600 per ounce. He thinks it should go up further. He holds two gold plays in his portfolio, one in Turkey and another gold company that holds no debt. Gold could do well this year and so could silver. He wished he owned more gold companies.

These record levels are acting as if we have contained this virus, but we haven't....A lot of sectors have piled into telcos for yield, some late and are suffering FOMO. (Telus announced an equity issue of $1.3 billion after hours.) This market is getting ahead of itself. The market doesn't recognize a negative headline anymore; it feels immune because interest rates will stay low. He doesn't think the US Fed wants to continue propping up the market, but investors don't believe rates will rise. There's a little more time left in this rally. The Fed will be on hold until the late-summer before the election gets near. Volatility will return in the summer, especially if Trump is shaky in the polls and the Democrats/Bernie Sanders are gaining.

Why do companies buyback shares when they reach all-time highs? Should I avoid them? It depends on the company and their situation. Are they buying the stock too cheaply or overpriced? What will they do with their cash on hand? Investing it back in the business? Reward shareholders with a special dividend? Buy shares? You can't make a blanket statement. Buybacks are not necessarily a bad thing.

Apple guides down on the quarter due to the virus is expected. Will this be a one-quarter blip or drag on? He thinks it will be a blip and the virus contained, based on past viruses. The market resiliency is incredible during this crisis, because there's amply liquidity in the market. He isn't adding to his portfolio during days of weakness, but he's aware of market volatility. Oil: he's taken a step back and not bought oil. Funds are flowing into renewable energy, not fossil fuels, especially by younger investors. This is a permanent change.