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

Market. It's been hard to find bargains this season. His stockwatch list is the smallest that it’s been in at least a decade. He did very little buying in his buying season. The VP Portfolio doubled down on one stock. He picked three, doubling down on one. Few value plays and contrarian plays. The prudent thing to do is to be patient rather than buying. He does not venture on the Venture exchange. He buys stocks on the TSX, NYSE, NASDAQ and sometimes AMEX. He does not go beyond these to find new opportunities because he has refined a process by learning from his mistakes. Too many people feel an urgent need to be active. This often ends up costing them money. At this point, he wants to sell a few stocks. He is happy to sell his winning stocks: “Stocks don’t love you so why should you love them back?”. But he often times his sales if there is a seasonal trend or event trend that is likely to take the stock a little higher in the near future. Many people follow sell rules like selling a loser when it returns to the price they paid, or when it doubles. These have no basis in the underlying value of the company and so they make no sense, but they are very popular. Several of the companies he invests in are taken over. He recommends not buying when there is a strong rumour that the company will be taken over because the price rises so much on the rumour. Wait until noise settles down, the price comes down, and then buy.

Gold price seasonality. He prefers to buy gold stocks in November and December. Gold prices often move up in November and December, especially because of buying in China and India. This has changed a bit because of new regulations in India. Stocks also rise just before PDAC and then have a tendency to come down.

Tonight’s show was a special on the 2018 Federal Budget. No opinions were recorded.

Market. For broader markets the Fed is the biggest influence. NAFTA is also a factor. The Fed may be guiding toward higher inflation. With respect to Canada’s budget, it may be a much to do about nothing. They are waiting until next year, election year, to do a lot of spending. We need to wait for the details to come out but it may not be that interesting from a market point of view.

Market. It is getting more difficult to find attractive opportunities. The stock market has run up a lot faster than earnings (about double) over the last few years. That is in the US. The TSX has not gone anywhere. The problem is the valuations across the board. You have high valuations across all sectors. You need to be selective. He has stayed on the sidelines with Bitcoin and Block chain. He sees it as a way of facilitating transactions but not being a currency. He thinks there will be too much supply in the cannabis industry.

NAFTA and Canada / Mexico Pullout. It is highly unlikely that Mexico could pull out of it. Canada also is highly unlikely to pull out of it. The uncertainty of how NAFTA plays out is a negative on the markets.

What charts and moving averages does Larry look at. You tend to want to look at a timeframe one greater than the timeframe you are going to invest or trade in. If you are going to trade once a month, then you need to look at the annual chart. If it is daily trades then look at weekly charts. He likes a 21 day average (a month), a 63 day average (a quarter), and a 200 day average (a year). He likes to look at quarterly trends vs. annual trends.

Gold and Silver. The Euro has gotten stronger but will not get much stronger now. Gold came up to key resistance levels. We have not broken through them. He has material positions in gold equities and thinks we will get a break out in 6 months to a year. He has not given up.

Trading from a moral standpoint, rather than a capitalist standpoint. There are ETFs in the US that address such things as females in the C-Suite (SHE-N), or child labour. He is not sure if they outperform the market index.

Educational Segment. Economic scenarios most likely in the coming year. Interest rates will most likely rise. Earnings may go up or may not. The recession probability forecast from the Fed is not high at the moment. So don’t price in a recession. Inflation concerns are building. Hourly wages have ticked up to the highest point since 2009. The Fed may be increasing their tolerance for inflation. You need increasing yields and price protection. Horizons have a bunch of ETFs to address this. Floating rate ETFs hold bonds that give a higher payout as interest rates move up. They are good to have. Floating rate notes give you a stable return. You want to be more conservative on the fixed income side.

Market. U.S. equities will under-perform, though he likes sectors like banks. Post-2009 crisis, performance of these equities has been astronomical beating most other indices around the world. Today, American markets and currency are very expensive with a change in U.S. fed policy. We're in an emerging market cycle that will last for several years after bottoming in 2016. Recommends in U.S. equities, he is negative the oil space, but likes healthcare, though it's expensive now. There's better value in EM than the U.S. We're at the end of the 36-year bond bull market. Central banks are committed to gradual interest rate rises around the world. And inflation is finally here.

What ETF to buy for the S&P? If you're a very long term, buy-and-hold, investor, ZEUS is good to track the earnings potential of U.S. corporations. But he prefers to be overweight in certain sectors he picks.

What is a good ETF for Europe? Europe has been very demoralizing to investors for a long time, dogged by EU break-up threats, deflation and the Euro decline, for instance. He likes Europe. VEU:AMEX (Vanguard FTSE All-World ex-US ETF) is a core, affordable building block, but prefers a past pick, EUFN-Q (iShares MSCI Europe Financial), because as Europe recovers and earnings come back, you want to hold European banks.

What will happen to the CAD? He looks at currency like a stock--it can get overvalued or undervalued, though currencies behave differently from other assets. During the 2008 crisis, assets classes suffered, but only currencies were actually stable. Fair value for the CAD is 85 cents, though oil could pressure that. He's VERY bullish on EM currencies and neutral USD, both via-a-vis CAD.

Buy mutual funds or ETFs? Disclosure: he runs both an ETF and mutual funds. He doesn't like the active vs. passive distinction. There are active (and passive) ETFs as well as mutual funds. The big benefit of ETFs is that they've made accessible obscure asset classes, such as Chinese bonds, that weren't available before. Both vehicles are useful tools, though ETFs have built upon mutual funds.