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A Comment -- General Comments From an Expert (A Commentary)
COMMENT
What’s the lowest risk for a retiree? GICs. Ladder them. Takes the risk off the table. They don’t carry the same emotion as stocks. After that, he would buy the Canadian banks.
Richard CroftUnknown
N/A
Market. Today's event is BBD.B-T. The biggest story is that they are a money pit, taking tax dollars over the long term. Governments just keep throwing money at it over and over. With all the money put into it, where did all the money go and what did tax payers get for it. Their turbo prop is being sold. You have business jets, part of the 'C' series and the transportation business. Every business they are in is political and they just keep bringing the revenue in. This is a trading stock and not an investing stock. The street opinion on this stock is to outperform/buy and nobody ever changes their opinion.
Norman LevineUnknown
COMMENT
Market Outlook From a macro market perspective the US election has been a blessing. Under the Trump Administration being a global investor has been tough. Lots of arbitrary policies. Gridlock is good for the markets. In December the Fed is going to increase the rate, based on the metrics they are seeing. But the rate increases has to be moderate because if the US starts to suck up too much global liquidity from the markets, countries start to defend their currencies. Some countries are down 50%. Thailand looks very interesting. He would stay away from Brazil and Turkey. There are opportunities in EM but maybe it is a little too early.
Darren SissonsUnknown
BUY ON WEAKNESS
Is it a good idea to get tech companies from Canada and between Open Text (OTEX-T) vs CGI Group Inc. (GIB.A-T), which one you prefer? if you long term track record of Open Text is a great story. CGI is also a great story. He prefers open Text for the dividend.
Darren SissonsOwned
COMMENT
The U.S. Midterms last night were as expected. With uncertainty removed--and historic seasonality--the markets took off today. Also, the third year of a U.S. presidency also sees the strongest returns, averaging 14% (6% in the 4th year). True, US-China trade tensions, rising rates and peak earnings remain concerns, but he's bullish. Investors have something to look forward to.
COMMENT
Are you concerned about China with its volatility, and emerging markets? He actually likes some of the Asia EM markets. He won't buy big now, but he has some limited holdings there. China is trading at forward earnings less than 10x. Sentiment is still negative. Wait until that sentiment turns. He doesn't see a major shift in U.S. policy towards China after the Midterms. It's more like how long can China hold out on these tariffs. A trade war benefits no one. It's a matter of coming to an agreement.
COMMENT
The U.S. Midterms today: Whatever happens today, the markets will be happy because there will be certainty. If the sentiment swung dramatically to the Democrats, then there might be a market hiccup. The October sell-off has taken a lot of risk out of the market. The S&P has a great chance of hitting 3,000 again; it may not happen overnight, but it likely will. Seasonally, the next 4-5 months is the time when money strongly flows into the market (i.e. pension plans get a lot of money this time of year). We've already had the kind of move in interest rates, like 1982-87 (in 1987 the market crashed), where rates have risen from very low to higher. Now, we're having a correction (like the 1987 crash). However, the scenario now is much better than 1982-7.
COMMENT
When will we get back into the interest-rate sensitive stocks? We're in a bear market for interest rates for long time. Not just a year or two. Inside those cycles are smaller cycles--maybe you can step into them. Utilities are full of debt, and interest rates will rise for the next decade or two, even. These stocks will face headwinds for a long time.
COMMENT
Is it a good time to invest in cannabis stocks? It's a trade, not long-term investments. It's like the tech bubble of the late-90s: no sales, no revenues, balance sheets were cash until they were all spent. Sure, there will be winners that'll survive, but others that'll go to zero (i.e. Nortel). The valuations are NOT cheap. Trade, trade, trade. Not an investment. He's not in this space at all.
COMMENT
The US Midterms--happening today--are usually bad for the incumbents. Tomorrow, we could have a rally because there's so much liquidity given the U.S. tax cut, artificially low interest rates. If the Democrats control both houses, liquidity would diminish and be bad for markets though. Also, there could be gridlock ahead in Washington but good for markets, because there'd be no interference from either party. Commodities should rise on a valuation basis. The commodities complex id priced near/at the price of production. Also, commodities are also economically sensitive--we are in the 9th year of an economic recovery and he can't see this lasting. Also, Americans and Canadians make the mistake from looking at the world economy through an American lens. We should consider MANY parts of the world instead.
COMMENT
How do you reconcile the difference between the spot price of gold and gold share prices? In the last bull market for gold from 2000-2010, the gold price rose $250 to $1,900/ounce, but earnings declined. Until management teams can effectively turn the gold price into cash flow, you'll see the gold share prices languish vs. gold prices. The companies that have the best leverage to gold are the inefficient producers (high costs). We need gold companies to show the same financial acumen as companies in other industries.
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