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

Market. Cool heads have prevailed regarding the middle east incident. It would not be a good thing to proceed into war. The Chinese have to translate the trade deal. Some words in it are hard to translate. The market is assuming things will go well. He is watching ETFs. ETFs in the US are heavily weighted in the biggest stocks. All the same names are owned and for every dollar that flows in, they buy in the relative weight. It has nothing to do with the earning. When they sell they all sell at the same time. There is a business case for diversifying away from highly concentrated ETF owned positions. It is different when a dollar or a sell comes into a mutual fund.

Chinese ETFs. Many large Chinese companies were on sale recently and we have seen some recovery. He thinks there will be upside here. If you can't buy them directly then by all means buy them through an ETF.

Packaging Sector. The whole sector was beaten up last year. He would suggest Amcor. It is a well managed company. It is a sector that might be due for a rebound. He would also look at CCL.A-T.

We had a fantastic 2019, but he's concerned that markets have become irrational as the chug along. He's waiting for any shoe to drop. Drill down and you don't find much depth. Apple and Microsoft are among the very few couple of names that move the needle; this is a crowded trade. What about the rest of the stocks? Something big will happen that causes the market to re-adjust. 2019 went from 14x PE to 19x. We are very expensive, historically. At some point, we'll hit a recession, and that's when you need cash to invest....Among banks, he likes TD which boasts 40% of its business from the U.S. America banks, starting with JP Morgan, start reporting tomorrow...Today, Visa announced the acquisition of Plaid to branch into the tech space (https://www.marketwatch.com/story/visa-to-buy-fintech-company-plaid-for-53-billion-2020-01-13). He owns Visa and likes the stock and this deal.

Oil outlook He doesn't own commodities, including Canadian energy. He needs to see in a stock consistent growth and cash flow. Oil is at the whim of global prices. Too volatile and inconsistent. He owns oil indirectly, like through CNR which ships oil.

Market Outlook He thinks we are in a "Booming Depression" in the market. The market no longer trades on fundamentals -- it trades on liquidity. And it looks like the central banks are already talking about more QE coming up. A year end rally into January is happening right now. Fair value on the S&P, he believes, is around 3720 -- compared to today's 3275 level. His quant model has been pointing to this value for some time now and with liquidity still coming in, thanks to QE, there is a real potential for a market "melt up".

CAD$ He sees nothing positive in the Canadian market presently. Real estate in the Toronto market is ridiculous. It would be interesting if the CAD$ dropped to the mid-$0.60s. Watch your exposure in Canada, he warns.

Your funds under performing? He is a value trader. Value beats growth 7 out of 10 years, but this has reversed in the past three years. The liquidity coming from Central Banks is reversing this right now. When Value stocks return, there will be massive swings in this trend back to normal.

2020 outlook: more gains to come. Markets can trend for a long time, and the cycle isn't ending anytime soon. Trump trade issues look they're fading and Brexit problems may soon fade. The outlook is good for stocks. True, anything can happen in world news. Iran stood down in the war threat this past week with America. Today's jobs numbers were good enough, not great, but good enough. Manufacturing is weak in America and the world. Boeing has continued woes. Earnings season is coming and will telegraph the future.

Better to sell a stock, pays the capital gains, then buyback at least 25% lower, or use new money to buy it (in an unregistered account)? If you're very bullish--confident that a high-flying stock will fall, then you can do sell-and-buyback later 34-50% lower. But you can't know that for sure. This is a tactical swing, based on a longer-term plan and a firm asset allocation (say, 60/40 stocks/bonds). It will work if you guess it for sure.

Difference between cash flow and EPS? In oil, you talk cash flow per share growth; EPS with banks. Payout ratios apply to both metrics, and be very different sometimes. Say a power stock has a payout ratio of earnings at 200%, but 42% free cash flow--vastly different. Hard to summarize the difference. Instead, you must know the company and balance sheet.

Market. December of last year was very bad and then we had a fantastic year and then news came out and who know what will happen. She is a bottom up stock picker. The strategy is to look for good management teams. Investors should expect more volatility. The political events seem to be digested very quickly even if creating a lot of noise in the market. It's going to continue to be a tale of winners and losers.

People are worried about where things are going from here. The most important thing is knowing when you need the cash. You should not be forced to sell into a depressed market. Also you need to stay balanced.

A good year for 2019? 2019 turned out be the best year of the decade for the TSX, up 95% in total returns when you include dividends. Dividends are often neglected when investors tally up their total returns.