Market Commentary — Page 576

Market Commentary

COMMENT

Surprised about the continued fallout in the pot space? Not at all. His firm has said for 2 years that holding weed stocks is a mania. The sky is falling, and it has further to fall.

COMMENT

WeWork is the largest user of Manhattan office space. If that IPO is unsuccessful it could have a major impact on the real estate market there. Who would back-fill the commitments to the space. It is not so much of an impact in Canada however. The multiples applied to WeWork are high.

COMMENT

Embassy Office REIT is India's first REIT IPO, backed by BlackStone. His company was asked to help anchor this high quality holding of assets and it is up 40% since the IPO in March. It trades on the Mumbai exchange -- difficult for Canadian investors to access.

COMMENT

A new GTA REIT Continuum REIT is his single largest holding in their Real Estate fund -- a private fund that just launched its prospectus last week. It holds apartments in the GTA area of Ontario. They are exploring an IPO -- a pure play exposure in this very hot market. Rent controls in the market actually caused other rents to spike as people held onto their apartments. This REIT will take advantage of the opportunity to raise rents on the units available. This shows rent controls are not the answer to keeping rent affordable. You need to increase the supply.

COMMENT

Markets are swayed by sentiment, optimistic today going into tomorrow's trade negotiations. She doesn't think it will be an all-encompassing deal, perhaps at least a stop in tariffs which would be positive. The trade war is impacting the world with two quarters of US contraction in manufacturing as well as in Europe. Overall numbers are starting to soften. Some progress in trade is needed. FedEx is a proxy to the trade war, but they bought they bought a European transport company, but need to invest more money and take more time to integrate them; also European economic softness doesn't help. Meanwhile, online commerce means more business-to-commerce, so FedEx and UPS need to invest more there. The US consumer remains very strong, and wage growth is rising. Consumers have some money in their pockets, so Costco is benefitting.

COMMENT

He's not investing in resources now, doesn't see the upside. There's been a pullback in tech names like Uber, Lyft and Shopify, which is the first crack in these names. Maybe this is temporary or long-term. He still likes tech. He believes that Trump wants a deal ahead of the next election which will benefit his campaign, but China isn't playing along. This makes it tough to invest in tech hardware which is seeing volatility. Trump has until Q1 2020 to sign the deal or else he loses business confidence. This is the most-anticipated recession; the market has been talking about one for 18 months. But investors are well-positioned with REITs, staples and utilities are hitting new highs.

COMMENT

He's not overly concerned with the current sell-off. Sit back and relax a bit. Markets have been sideways for 18 months, actually. It's still a bull market. Underneath this mess, we've had three mini-recessions in the past decade. Unemployment remains at all-time lines and productivity is still good. Investors are scared, not putting money to work. The markets are 2-3% below all-time highs. People are overreacting. He's holding more cash than usual at 15%. He won't turn bearish until American and Chinese consumer numbers turn negative. The big money now is to sit on your hands--be patient, not bearish.

COMMENT

Where the Dow is going Boeing has issues. Apple is doing well. And so on. There are undercurrents in the big 30 names, price-weighted, held within the Dow. The Dow isn't perfectly constructed, but oddly enough the S&P is very correlated to the Dow. But he'd prefer to look at the S&P which holds a wider breadth of stocks so he sees what is going on in the markets.

N/A

Market. There are clearly risks as we go into the fourth quarter. There is a lot of political risk. The US China trade talks this weekend are important. China is playing off Trump's weaknesses. We are looking at a year when there are technically no earnings growth. He thinks the US don’t want Trump to have an election win. Congress will not pass an infrastructure spending bill. The unfunded pension liability globally is estimated to be $200-300 Trillion over the next 30-50 years. Low interest rates are a key reason for this. This problem will not be solved with interest rates going to zero again.

N/A

If you can buy puts in your portfolio you should consider covered call put protection. It is challenged, though. His funds work in this way.

BUY

Defined outcome ETFs from Innovator. They create a structure with options in the ETF to make potentially 10% upside. It has strategies that protect you for from downside. He loves these strategies.

WEAK BUY

He likes the residential real estate space but does not know of anything that is cheap in space. He likes the sector and thinks it will be an out-performer in the REIT space.

N/A

Educational Segment. Eventshares created an ETF that deals with government policy. He does not see Trump winning the election last year. PLCY-N is overweight energy and industrials but it is a bet on LNG, refining, utilities and infrastructure. Also it is into military and defense. This allows you to participate in some of the dramatic changes.

N/A

Market. Keep some extra cash right now. Investors are being lulled by some false things going on like in the US they keep saying the market hit a new high. Over the last year it has not gone anywhere. With all the uncertainty going on, and earnings not being that great, it is a good time to have some extra cash. He is willing to give up some near term gains in order to hold cash.

BUY

Gold. He bought in the last few months. (FNV-T)

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

Surprised about the continued fallout in the pot space?(A Commentary)

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

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

A new GTA REIT(A Commentary)

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

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

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Where the Dow is going(A Commentary)

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

Defined outcome ETFs from Innovator.(A Commentary)

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