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

Market Outlook He considers trade talk issues the "cow bell" that is leading the market in and out of favour. He held a lot of cash in the summer and then on Oct 31 he increased his beta as he saw a buy signal. He now thinks the market is overbought as his "bearometer" is showing big money holding more cash, while retail investors are already all in. He expects near term volatility, but he does not expect any crash over the next few weeks. Market breadth is good so there is lots of reasons to be bullish. As soon as he sees the market making lower highs and lower lows he will be out.

Oil Stocks If we get a break above consolation, he will get back into oil stocks in general. He sees an ascending triangle right now with higher lows for oil prices currently -- good, but he will keep watching. He would need to see a break above $60, holding for few days, before he will get excited.

The market is a little expensive overall but he doesn’t pay attention to the wider market. Things are going pretty well. Industrial and healthcare stocks are struggling so you could find some good value there. You could find some good valuations right now if you look.

You could see a 10-12% correction, but he thinks there are good values now. There are also lots of areas that are fairly priced that you don’t have to worry about.

The principals are, you have to buy when people are nervous. Healthcare is extremely ingrained in this society, and you can’t change the whole system. There are opportunities in health insurance and on the administration side. It’s one area that he is looking into closely.

He doesn’t trade volatility but he trades facts. Don’t trade based on headlines and chose businesses that you want to be invested in the long term.

Market. The premier of Alberta is looking forward to working with Christa Freeland to come to some accommodation with the federal liberals to move forward on energy. They want to get moving forward on the TMX line. Takeaway capacity is an issue. LNG is moving forward. There is a delegation moving forward in China regarding facilities on the coast of BC. He thinks in 2020 we will be looking at higher commodity prices. Tax loss selling, however, could be nasty this year.

Is the lower market downturn today concerning? Slowdown today after several weeks of nice moves and new highs. Not surprising to see the pause. The S&P is at the higher range of a 10-year valuation. Not surprising that trade issues have caused a bit of a slide in markets.

Retail sector results are mixed. Some doing well, and others like Home Depot are not. You have to be selective in the space. Be careful. Be more defensive like dollar stores, or off-retail, Costco. Avoid luxury brands.

Comfortable getting back into equities? Rotation back into cyclicals coincides with yield curve being steeper. So investors feel recession is not in the next 12 months. He feels that rotation into cyclicals is a bit of a trade. Be well diversified. Have some value, don't be all in growth. Growth has higher beta and is more volatile. He errs on the side of non-cyclical. Watch valuations, as the defensives are expensive.

Has your view on the energy patch changed with the new federal Liberal cabinet? Liberal government needs to be more sympathetic to the west. But at this point in the cycle, energy tends to underperform, so he doesn't have any exposure.

Market Outlook When he was on in January, the end of 2018 was very weak. He thought then it was a correction in a bull market. Now, we have taken out 2018 highs, economically sensitive sectors like finance and tech have made new highs. This is not the sign of the end of the bull market. He thinks we have another 24-30 months of upside. Investors are not positioned for this as they have worried about Trump, trade wars, etc. Money has moved into highly defensive sectors instead like telcos and REITs. We are set up for a good run ahead of us.

Gold: producers are outperforming as he predicted. That said, have a diversified portfolio, but high net worth investors. We're facing a market rally because of cheap money and low interest rates--but also volatility. Physical gold is at an all-time high. Going forward, the producers--as seen in the GDX--are doing well. Smart money is coming into these producers. The breakout we've had this year is holding, which is good. He predicts markets AND gold will rise in tandem.

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.