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

Silver. Not as excited about silver right now, although there are some that say that the silver-gold ratio is growing.

Market. We are in uncharted territory and no one knows where it is going. The 5 most dangers words are 'this time it is different'. Investors are starting to get used to zero interest rates. The global economy has peaked and is slowing. Everything is based on valuation. There will be a recession sometime but he cannot tell you when. When stocks in a sector look weak, you want to lighten up on them. Focus on a long term time horizon. Go for quality and attractive valuation.

Oil. He is not a fan of the Canadian energy sector as they are terrible allocators of capital. They invest all of their cash flow and borrow money at the worst possible time. He has a zero weighting.

US T-Bills. They trade like stocks every day. If you hold it to maturity you get the rated interest. If you sell in the middle you get a gain or a loss. He does not recommend buying them to trade them. If you buy a 1% note then it is less than the inflation rate. You can get 6% in a bond fund in the US (high yield / currency hedged).

Oil. A lot of investors don't want to invest in oil for environmental reasons. It might make sense for private equity funds to buy mature producing companies but they would have to borrow money and might not get a good rate. That makes more sense than a private investor investing in the oil patch.

Healthcare Recommendation. Medical device stocks are trading at very high valuations. You really pay up for them. Pharma stocks have not had the gains. He sees better value and lower risk in lower PE / higher dividend stocks.

People are spooked. You should have a portion of your portfolio in cash. He has 30%. BRK-N is also sitting in a record amount of cash. There may be opportunities to spend this money at opportune moments. Real return bonds are too unknown as to how they react in a recession.

Times of volatility? Volatility can be your friend, as it may afford the opportunity to buy a great company that you like. As long as you have a long term view, you'll be fine.

Chase to jump into a crowded trade like bonds. Bond yields have come down a bit. Bonds offset equity risk and diversify your portfolio. Lots of ETFs out there that give you access to bonds, give you protection and some gains, without having to buy a particular bond. If you need money to live on, you need between 5-7 years of fixed income in your portfolio. It's like a bucket with a hole in it that just keeps dripping cash. Then when equity markets come back, you still have your bucket.

Rate reset preferreds. When these reset at the 5-year Canada rate, some of the resets don't happen for 3 years. But the market's trading as though they got reset today. And that's the opportunity. So they may get reset higher, plus they'll trade closer to par. Downside is they're not as liquid. Good thing is they're taxed as dividends, not as income. Please remember they're not bonds; they're stocks, and they can be more volatile.

What FANGs to buy into? Feels as though there's going to be more volatility. He owns Google. Wouldn't own Netflix, as it will have big competition from Disney. Facebook and Amazon are great cash-generating businesses. Tech regulations are coming, but will take a long time.

Market Outlook The Ethics Commissioner found the PM wrong in the handling of the SNC Lavalin case. The Canadian dollar has been impacted as well. He feels this goes beyond just a political misstep. The Dow is down 600 points today and it confirms in his mind the best strategy is to be finding things to sell rather than buy. It is time to be defensive. Gold is up $15 per ounce and that makes him feel more comfortable getting back into this space. He especially likes holding a gold royalty like Franco-Nevada to avoid any specific mine risk.

Oil by rail vs pipe? You simply can't build pipelines in Canada anymore, so rail companies are benefiting to the detriment of pipelines. The rail companies assume that pipe will eventually be built, so they are careful to not overbuild infrastructure.

Retail stocks down 10% today. Tariff wars are very bad for consumer spending as tariffs lead to higher prices. President Trump must understand that tariffs only punish your own consumers. He can't understand why Larry Kudlow, whom he used to respect, is supporting the President's direction.

Today was a very tough day, though markets are still near the highs. Know where your asset allocation is. Yes, we can go into a recession given the inverted yield curve today and there are dangerous things happening, like Trump's trade war and declining interest rates. The global economy was doing well until Trump took on China and now the U.S. is a corner. Trump is bungling. It's an inter-connected mess that involves the world, including Germany which is heading to recession. It isn't too late yet to fix things, but what is the catalyst to turn things around. Yes, you can pick away at stocks now, but remember that markets are still near their highs. That said, recession risk is higher....Canopy Growth is a good company but expectations are too high for a company with a super-high PE ratio and little room for error on the balance sheet.