A Comment -- General Comments From an Expert (A Commentary)
N/A
Market. No one can predict the future but there are going to be lower returns in the future. Valuations are quite high and interest rates are low but that is because growth has been slow. He has over a 10% exposure to real estate, which is higher than the TSX. This has benefitted from low interest rates.
Rob McConnachieUnknown
N/A
Quantitative Stock Picking. You buy a company's future value of its cash flow stream and then discount it back for how much risk you are taking. Fixed income has very low risk. With equities it is hard to figure out how sustainable the cash flow is. Rail companies, for example, are easy to be sure of. Moats can be many, many things. They can be legislated, natural like the rails, or brands. It could be network economics such as with a credit card. This could manifest itself in high returns on capital.
Rob McConnachieUnknown
TOP PICK
The Real Estate Sector. He is well over 10% in real estate. Publicly traded real estate is typically at a discount (20-30%) to private transactions.
Rob McConnachieOwned
TOP PICK
Mortgage Investment Corporations. They are not publicly traded typically. Half the mortgages in Canada are insured by the CMHC so the lenders are making risk-free profits. They go after those clients who do not quite qualify for a mortgage. Typically you go directly to these companies to invest in them.
Rob McConnachieOwned
COMMENT
He's still finding companies with a competitive moat. The TSX broke out a little and the S&P flirted with 3,000. The markets are opening higher, then come down--interesting. Not boring at all. We're in a Twilight Zone where bad news (negative data) leads to good news (the Fed will cut rates). So, poor PMI numbers in Germany and Korea points to recession there. Then if Trumps tweets, markets may jump higher. He follows Nike which reports tomorrow--and this may reflect the US-China trade war. If the Chinese yuan gets weaker it will benefit Nike as well as Dollarama.
COMMENT
Market Outlook The market is a little scary up here. If a new client came today with cash, he would suggest only getting into partial positions and buy on weakness. Although there is some room for the market to go higher into the spring, he would be concerned after the US Presidential election. Then you will need to be more defensive, hold more cash and gold. Energy, banks and financials are all picking up momentum and he thinks these are good areas to find defensive holdings that can pay a good yield as well.
Bruce Campbell (1)Unknown
COMMENT
Dropped from an Index? When a stock is dropped from an Index, there will be temporary forced selling of the stock. When the selling is finished you may see a bump up as the stock then looks undervalued. It also means they are need meeting the requirements to list, so it is a warning sign.
Bruce Campbell (1)Unknown
COMMENT
Markets finished on a negative sentiment. Trade talks with China are stumbling again. The markets need to see a friendlier tone, combined with an aggressive Fed to keep the bulls happy.
Greg NewmanUnknown
COMMENT
On the yield inversion, are we going to see a recession soon, or is it like in 2011/2015 and the Feds will get in front of it and it’s a pause that refreshes it? It all depends on the Federal Reserve and trade.
Greg NewmanUnknown
COMMENT
He thinks the job of the Feds is to be forward looking and react to key economic data. It’s their job to see that it’s coming and stave it off.
Greg NewmanUnknown
COMMENT
The script is that markets rally for the next 14 months anyways, even with a yield curve conversion. He thinks the Fed should fight it, and maintain the expansion as long as they can. It might need fiscal stimulus. He believes that either there’s a deal or the supply chain will move elsewhere and China won’t be as relevant as before.
Greg NewmanUnknown
N/A
Market. The percentage of IPOs for companies with negative earnings has increased and we are back to year 2000 levels. Unlike the 2008 incident that involved a housing problem with half a dozen states instigating a European banking crisis, this fund has a lot of middle eastern and their sovereign investments and so this could be more reaching than we expect. People are chasing these returns and being forced into riskier investments. He is more conservative for his clients. The more you go into the greed momentum, until that trend breaks it does not change and then there is significant change. At least MSFT-Q has a business.
Ryan BushellUnknown
DON'T BUY
Gold. It has put two or three percentage points on the index this year. He has a difficult time with the gold space. The rally leaves him cold. There have not been dividends in the sector and the companies have been terrible allocators of capital in the sector. They are expensive now. He is not about trading them. The investor is in it for the gold trade in most cases. Larger companies have done a better job.
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