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

Gold price It's creeping up, but should be much higher than now. Look closely at what happens in December as there'll be a lot of rollover on the repos (repurchase agreements).

Market. The markets are finally doing well. CM-T is a day late and a dollar short. If you compare to the others it is truly underperforming. Most every bank follows the same strategy. But CM-T has never put the puck in the net. It may be now the one to buy as management has spoken about getting their act together. He loves the banks. He thinks banks in Canada are underpriced. They can go a lot higher. His favourite bank is NA-T. The markets are discounting a lot of the negative stuff we are worried about. For markets to go higher you need an accommodative fed (check), you need profits to go higher and he thinks we are seeing turnarounds in PMI and industrial data (check), and finally you need China and the US to at least have lunch together. We may get half of phase one.

He's bullish the TSX with the financials leading. This will go much higher. Oil is stable now. Buy Home Depot after today's sharp sell-off; he likes this overreaction. As long as interest rates stay low, the markets will remain the place to be; buy on weakness, he stresses. Buy hiccups.

Market. The bigger story is why Saudis are selling their oil now. Share buybacks are what is boosting earnings for S&P companies. This is not a time to get bullish on the stock market. One way or the other 50-100 years from now the vast majority of the world will be on alternatives to carbon. The Saudis are converting a 10-30 year life-span asset and converting it to cash. This is the biggest insider sale in history. BRK-N has massive cash on the sidelines right now compared to past years.

The Inevitable Debt Meltdown. You can look at debt levels as a percent of GDP. There cannot be a forgiveness of debt. The debt is owned by pension plans. He thinks countries will monetize the debt by printing money and inflating the currencies. He does not see a way out. It is an argument for 5-10 years for interest rates to stay low.

Where is money coming out of equities going to go – bonds? He prefers to play it through TLT-N. ZTL-T plays it in CAD$.

Market. Last year we had a big sell off and people are going into the end of this year nervous. We are now waiting on some resolution of the trade deal. A lot of it is priced in. He thinks it sets up for a material correction in 2020. The economic data is looking better to stable, so we may be troughing on that front. For the market in general, it does not like election years in the US. The parties are so polarized now. Wall Street is turning a blind eye to impeachment. You have Brexit, Iran, and protests in Hong Kong. He is continuing to average down in the energy patch. He is trying to find stable management teams with conviction for their dividend.

Gold Miners. The ability to predict costs has been difficult. With positive news on trade, gold has stalled out. He does not own any gold miners right now.

We're running out of steam and will likely see a short-term pullback this or next week for who knows how long. But he sees a four-year cycle coming, bullish into 2021 with double-digit gains in 2020, then down to single-digit in 2021. Wait a week or two for a good entry point. He's bullish. He expects rate hikes starting in summer 2020 and into 2021, which will lead to a correction reminiscent of Q4-2018....Cannabis faces tax-loss selling following a tough year of losses; yes, more downward pressure is coming, but then weed stocks will go sideways that will lead to a breakout. He likes industrials, infotech and insurance.

S&P The chart shows a correction coming soon. It's literally a (Trump) tweet away. Around 2,900 is a buying opportunity.

Market Outlook He thinks we have been in the worst bear market in the energy space ever. He has been accused of being too bullish, but when the Trump Administration lied about putting sanctions on Iran back last October the market changed direction. Next year he sees US shale growth rates decelerating as well results start to plateau and companies turn to lower quality rock. The growth rate has fallen from 1.9 million barrels per day of annual growth falling to only 600,000 barrels per day for US production. Offshore global supply is also peaking, he says. By 2021 the market could be incredibly tight. Energy stocks could go up 100%. He hopes an increase in oil prices would bring back investors. Companies should not be valued at 70% of their reserve values. He thinks companies should become buyers of their stock from free cash flow. Believe in the oil price on the screen today and you will see share prices move up.

He’s reduced his equity exposure and switched to fixed income. The market is depending too much on the tariff war. They haven’t finished phase 1 and he thinks the Chinese will be a tough negotiator. The tariff war is a negative on the world economy.

Last year, the Santa Clause rally turned upside down. He considered last year’s sell-off a phoney since the market was looking for a bottom, and there were shorts that came in. The market recently hasn’t made a lot of progress until the the last couple months.

The oil sector is under pressure, and money managers have decided they don’t want to be in fossil fuel companies. There hasn’t been any rationale in the selling. Once we start to see a pick-up in the junior companies, the sector will pick up.