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

Back to highs again with the expectations that the US and China will get some things done. The NSADAQ was up around 2%, with a smaller inverted yield curve. Technology, industrials and everything with China was up. Consumer stocks fell. China has only said that they would buy soy beans again. Patents and safety are another thing, and this is where they need to agree.

Normally you see sell-offs in September and October. It's a good time to watch when the sell-off is done and it's a buying opportunity. Things tend to be better in Q4 than in Q1.

Market. He forecasts an inventory build on oil and then due to Saudi attacks, a risk premium comes in. He thinks we will break $50 in the next month or so. Tax loss selling should be very severe this year. Investors should look to be buyers on tax loss selling this year.

Natural Gas. He thinks natural gas will do well this winter. Cold weather in Alberta has put the price above $2. Tax loss selling could be severe this year.

Electric cars: We will not use them for long distance. There are about 100 million electric vehicles sold a year. Reserves are shrinking and we are running out of reserves to service the remaining gas vehicles.

Optimistic about trade talks? No. Tomorrow's the deadline, and doesn't imagine major ground will be broken. Some feel Trump needs a symbolic win. This is much ado about nothing. Investors can put too much emphasis on political drama, and not enough on economic fundamentals. These are pretty good in the US, but there is general macro economic uncertainty.

Canadian jobs data. Don't lose any sleep over the numbers. Jobs do matter more than anything else in economic data, but they're unpredictable to predict. It's give and take from month to month. Canadian data is not as market moving as US data, but it's like throwing darts trying to forecast.

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.

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.

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.

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.

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.

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.

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.