A Comment -- General Comments From an Expert

A Commentary

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Analysis and Opinions about A Commentary

Signal
Opinion
Expert
COMMENT
COMMENT
January 22, 2020
ETF flows 2019 was a record year of inflows to ETFs -- over $28 billion in Canada and now over $200 billion in total. The US has hundreds of billions of dollars each year. ETF inflows now exceed mutual fund inflows. A movement back into bonds by investors signals a risk adverse behavior following the trade related uncertainty. This caused a lot of inflows into low volatility ETFs. As 2019 came to a close higher market returns moved flows back into risk on investments. 2019 was a "Goldilocks" years as virtually all markets were up globally last year.
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General Market Comment
January 22, 2020
ETF flows 2019 was a record year of inflows to ETFs -- over $28 billion in Canada and now over $200 billion in total. The US has hundreds of billions of dollars each year. ETF inflows now exceed mutual fund inflows. A movement back into bonds by investors signals a risk adverse behavior following the trade related uncertainty. This caused a lot of inflows into low volatility ETFs. As 2019 came to a close higher market returns moved flows back into risk on investments. 2019 was a "Goldilocks" years as virtually all markets were up globally last year.
COMMENT
COMMENT
January 22, 2020
S&P Inverse ETF? Anything that is inverse or leveraged requires caution and he advises only highly sophisticated traders use these. HIU-T is an inverse S&P ETF in Canada. Volatility makes them erode over time, so be careful.
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General Market Comment
January 22, 2020
S&P Inverse ETF? Anything that is inverse or leveraged requires caution and he advises only highly sophisticated traders use these. HIU-T is an inverse S&P ETF in Canada. Volatility makes them erode over time, so be careful.
COMMENT
COMMENT
January 22, 2020
High-growth Tesla hit a $100 billion market cap today. Tesla laid the groundwork, such as developing powerful batteries, for its success....It's been a remarkable year for stocks this year so far, continuing the trend of last year with low interest rates despite sub-par growth. Pensions and others have little choice but to invest in stocks, given rock-bottom rates. Fixed income yields too little...The Bank of Canada today held interest rates at 1.75%. He doesn't see the Canadian economy weakening later this year and expects rates to stay put or drift lower. That could mean big gains to the TSX, certainly for utilities and REITs (defensive sectors) that will trade higher.
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General Market Comment
January 22, 2020
High-growth Tesla hit a $100 billion market cap today. Tesla laid the groundwork, such as developing powerful batteries, for its success....It's been a remarkable year for stocks this year so far, continuing the trend of last year with low interest rates despite sub-par growth. Pensions and others have little choice but to invest in stocks, given rock-bottom rates. Fixed income yields too little...The Bank of Canada today held interest rates at 1.75%. He doesn't see the Canadian economy weakening later this year and expects rates to stay put or drift lower. That could mean big gains to the TSX, certainly for utilities and REITs (defensive sectors) that will trade higher.
COMMENT
COMMENT
January 21, 2020
The US Fed has been cutting rates to buffer any negative impact of Trump's aggressive trade moves. It's not surprising that in real terms, U.S. interest rates are negative. Trump's hostile moves have driven global investors to American stocks and ETFs, which are viewed as safe. He specializes in Canadian mid-caps. Canada is two-tiered: one, the household names which are a crowded trade, and two, the midcaps which are great but not big enough to be included in the mutual funds of the big banks. Therefore the midcaps enjoy a discount.
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General Market Comment
January 21, 2020
The US Fed has been cutting rates to buffer any negative impact of Trump's aggressive trade moves. It's not surprising that in real terms, U.S. interest rates are negative. Trump's hostile moves have driven global investors to American stocks and ETFs, which are viewed as safe. He specializes in Canadian mid-caps. Canada is two-tiered: one, the household names which are a crowded trade, and two, the midcaps which are great but not big enough to be included in the mutual funds of the big banks. Therefore the midcaps enjoy a discount.
COMMENT
COMMENT
January 21, 2020
What should my allocation be among Canadian, American, EM stocks and cash? An important question, so ask your advisor. Some points: EM account for 33% of global GDP, but 44% of world trade--dependent on trade. In this environment, therefore, EM, are disadvantaged. The US is a far bigger, diversified market, whereas Canada lacks diversity in tech and healthcare. He prefers US stocks.
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General Market Comment
January 21, 2020
What should my allocation be among Canadian, American, EM stocks and cash? An important question, so ask your advisor. Some points: EM account for 33% of global GDP, but 44% of world trade--dependent on trade. In this environment, therefore, EM, are disadvantaged. The US is a far bigger, diversified market, whereas Canada lacks diversity in tech and healthcare. He prefers US stocks.
COMMENT
COMMENT
January 21, 2020
Markets fell today due to fears of the coronavirus. Stocks got hit including gambling ones. Maybe this will have a big impact or it could be a yawner. Too soon to tell and we need more information about this virus.... Netflix reported after-hours. They face a lot of competition, but it's still doing well and he still likes it. Cable TV should be worried, though.... 2020 outlook: the sky's the limit for U.S. stocks as gains continue.
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General Market Comment
January 21, 2020
Markets fell today due to fears of the coronavirus. Stocks got hit including gambling ones. Maybe this will have a big impact or it could be a yawner. Too soon to tell and we need more information about this virus.... Netflix reported after-hours. They face a lot of competition, but it's still doing well and he still likes it. Cable TV should be worried, though.... 2020 outlook: the sky's the limit for U.S. stocks as gains continue.
COMMENT
COMMENT
January 21, 2020
The Shiller S&P closed today at 31.75, indicating an overbought market. Is a near-term correction coming? He's never seen the markets move this far up for so long. What will derail it? The coronavirus? Something strong will. There's no stopping it in a low-rate environment. Doesn't see a correction.
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General Market Comment
January 21, 2020
The Shiller S&P closed today at 31.75, indicating an overbought market. Is a near-term correction coming? He's never seen the markets move this far up for so long. What will derail it? The coronavirus? Something strong will. There's no stopping it in a low-rate environment. Doesn't see a correction.
N/A
N/A
January 20, 2020
Market. The impeachment trial starts this week and he thinks the markets are too heavily discounting a negative outcome. They are trying to paint Trump's issues here as not violating the constitution. The surprise here is that Trump gets impeached. He is expecting volatility because the market is expecting this to be a non-issue. From a simplistic perspective there are a couple of ways we can predict things going from here. The trend line started up at the beginning of 2019 and now is at the top of the channel. We don't know what's coming but when it comes, be prepared for a melt up. After about another month it could be another period of extreme volatility.
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General Market Comment
January 20, 2020
Market. The impeachment trial starts this week and he thinks the markets are too heavily discounting a negative outcome. They are trying to paint Trump's issues here as not violating the constitution. The surprise here is that Trump gets impeached. He is expecting volatility because the market is expecting this to be a non-issue. From a simplistic perspective there are a couple of ways we can predict things going from here. The trend line started up at the beginning of 2019 and now is at the top of the channel. We don't know what's coming but when it comes, be prepared for a melt up. After about another month it could be another period of extreme volatility.
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N/A
January 20, 2020
Dollar cost averaging. Buy the total world through ETFs. If you want a higher yield and better capital preservation, you might go with Balanced ETFs. There are lots of low cost versions but there really are none protection from low interest rates. There is no one-stop solution so look at an active ETF that focuses on capital preservation. There is not one ETF that ticks all the boxes.
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General Market Comment
January 20, 2020
Dollar cost averaging. Buy the total world through ETFs. If you want a higher yield and better capital preservation, you might go with Balanced ETFs. There are lots of low cost versions but there really are none protection from low interest rates. There is no one-stop solution so look at an active ETF that focuses on capital preservation. There is not one ETF that ticks all the boxes.
DON'T BUY
DON'T BUY
January 20, 2020
Copper. He is much more for diversification. COPX-T is all the copper miners. It is one of the primary things. Looking back 10 years he wonders why you would own this. He does not think this is a now an early play but it does have cyclicality. He would not like this sector long term. You might be able to trade this short term.
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General Market Comment
January 20, 2020
Copper. He is much more for diversification. COPX-T is all the copper miners. It is one of the primary things. Looking back 10 years he wonders why you would own this. He does not think this is a now an early play but it does have cyclicality. He would not like this sector long term. You might be able to trade this short term.
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N/A
January 20, 2020
The CAD$ is closer to the upper end of the range. He is about a market weight position for US$ (about 53% exposure). The CAD$ could drift a little higher here and then he would want to add to exposure.
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General Market Comment
January 20, 2020
The CAD$ is closer to the upper end of the range. He is about a market weight position for US$ (about 53% exposure). The CAD$ could drift a little higher here and then he would want to add to exposure.
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N/A
January 20, 2020
Educational Segment. Natural Gas. With nothing trading on the cheap he is always looking for relative value. He has seen the gas sector show up. The carbon footprint of natural gas is half that of coal. There is an opportunity for us to replace a lot of coal with natural gas. LNG will let us transport it around the world. UNG-T trades the commodity and the problem is the forward contracts and volatility. From 2000 to now it has declined from $2000 to $20. It is the front month futures contract. He would look for natural gas over the traditional energy guys.
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General Market Comment
January 20, 2020
Educational Segment. Natural Gas. With nothing trading on the cheap he is always looking for relative value. He has seen the gas sector show up. The carbon footprint of natural gas is half that of coal. There is an opportunity for us to replace a lot of coal with natural gas. LNG will let us transport it around the world. UNG-T trades the commodity and the problem is the forward contracts and volatility. From 2000 to now it has declined from $2000 to $20. It is the front month futures contract. He would look for natural gas over the traditional energy guys.
N/A
N/A
January 20, 2020
Market. He has been looking for a potential recession for a year. He de-risked his portfolios a year ago. The inevitable correction will be that much stronger. He has some growth bets and will not ever, not have positions in the kinds of companies he looks for. He also likes long dated US treasuries. Nobody knows what will happen in the future but he is prudent this late in the cycle to have positions that will do well if the equity markets falter.
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General Market Comment
January 20, 2020
Market. He has been looking for a potential recession for a year. He de-risked his portfolios a year ago. The inevitable correction will be that much stronger. He has some growth bets and will not ever, not have positions in the kinds of companies he looks for. He also likes long dated US treasuries. Nobody knows what will happen in the future but he is prudent this late in the cycle to have positions that will do well if the equity markets falter.
COMMENT
COMMENT
January 20, 2020
The market is fast approaching year-end targets (already), continuing last year's rally. But more people are questioning how long this rally can sustain. That said, it's expected that interest rates will stay low and earnings growth will rise by high-single digits. Also, trade tensions seem to have moderated, though how much did the US-China trade deal actually solve? The markets are relieved that tensions have diminished, however....Boeing: there are discussion about a financing package. Nobody knows when the 737 Max will return to service, but the company needs capital now. Boeing just can't sell the 737 now, a big problem and a severe, long-term blow to Boeing's credibility as well as profitability.
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General Market Comment
January 20, 2020
The market is fast approaching year-end targets (already), continuing last year's rally. But more people are questioning how long this rally can sustain. That said, it's expected that interest rates will stay low and earnings growth will rise by high-single digits. Also, trade tensions seem to have moderated, though how much did the US-China trade deal actually solve? The markets are relieved that tensions have diminished, however....Boeing: there are discussion about a financing package. Nobody knows when the 737 Max will return to service, but the company needs capital now. Boeing just can't sell the 737 now, a big problem and a severe, long-term blow to Boeing's credibility as well as profitability.
COMMENT
COMMENT
January 20, 2020
The S&P is 15% of its 200-day moving average, and there could be a correction. If so, how much cash should I hold now (and how much to sell now)? He doesn't know when the correction will happen, but risk is increasing. The higher the market rises, the more he will prune positions. He carries 12% cash, which is high for a money manager. That level has been a little higher; he's bought a few position recently. That said, look at individual stocks, including those trading above their 200-day averages. Catalysts? Could be a geopolitical event or a sudden change in investor sentiment.
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General Market Comment
January 20, 2020
The S&P is 15% of its 200-day moving average, and there could be a correction. If so, how much cash should I hold now (and how much to sell now)? He doesn't know when the correction will happen, but risk is increasing. The higher the market rises, the more he will prune positions. He carries 12% cash, which is high for a money manager. That level has been a little higher; he's bought a few position recently. That said, look at individual stocks, including those trading above their 200-day averages. Catalysts? Could be a geopolitical event or a sudden change in investor sentiment.
COMMENT
COMMENT
January 17, 2020
Market Outlook He feels the market is back to dot.com type valuations -- 14 times EBITDA and all time highs for marketcap to GDP. Historically at these valuations you could see zero to negative returns on average for the next 10 years. At the trough of the 2008-09 market collapse, valuations plunged to 8 times EBITDA. Not every part of the market is necessarily over valued, but defensive areas like utilities and value stocks are very expensive. Investors could look to energy, but they are in a perennial down trend. Financial, industrial and consumer staples are middle ground areas that are still affordable.
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General Market Comment
January 17, 2020
Market Outlook He feels the market is back to dot.com type valuations -- 14 times EBITDA and all time highs for marketcap to GDP. Historically at these valuations you could see zero to negative returns on average for the next 10 years. At the trough of the 2008-09 market collapse, valuations plunged to 8 times EBITDA. Not every part of the market is necessarily over valued, but defensive areas like utilities and value stocks are very expensive. Investors could look to energy, but they are in a perennial down trend. Financial, industrial and consumer staples are middle ground areas that are still affordable.
COMMENT
COMMENT
January 17, 2020
Healthcare has permanent and non-cyclical drivers like no other sectors. Looking at developing markets, a lot of their GDP gets spent on healthcare. There is also technological innovation, happening in medical, biotech and pharma industry which is strong.
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General Market Comment
January 17, 2020
Healthcare has permanent and non-cyclical drivers like no other sectors. Looking at developing markets, a lot of their GDP gets spent on healthcare. There is also technological innovation, happening in medical, biotech and pharma industry which is strong.
COMMENT
COMMENT
January 17, 2020
China is a great example of healthcare spending expansion. In 2002, spending was around $250USD per capita. Now it's around $850. The expansion just has to continue at the pace right now.
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General Market Comment
January 17, 2020
China is a great example of healthcare spending expansion. In 2002, spending was around $250USD per capita. Now it's around $850. The expansion just has to continue at the pace right now.
COMMENT
COMMENT
January 17, 2020
The healthcare sector has been the whipping child of the election campaign. However, the macro environment is important. Last year, healthcare was under a lot of pressure but this was sentiment driven from macro politics. There was a shift in sentiment in Q3 earnings where any misses were bought, and beats were rewarded. Sentiment is now positive.
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General Market Comment
January 17, 2020
The healthcare sector has been the whipping child of the election campaign. However, the macro environment is important. Last year, healthcare was under a lot of pressure but this was sentiment driven from macro politics. There was a shift in sentiment in Q3 earnings where any misses were bought, and beats were rewarded. Sentiment is now positive.
N/A
N/A
January 16, 2020
Market. Getting out of Bombardier: He has been one of the major sellers. He uses stops on every position. If it doesn’t work out then he is gone. This is a position he cut back some time ago. It was a big position for him. In the end he looked deeply at fundaments and price was not doing what he thought it should do and it was ultimately the stop loss that took him out. If a stock gets hurt in a bull market then there are other things to do. Don't try to pick bottoms. There are an army of unhappy shareholders that just want to get their money back out of the stock. Many markets, unlike the S&P are only just breaking out of multi-year sideways choppy markets. France Switzerland, Taiwan, Japan, for example. More and more markets are joining the rally. He would fully expect a 2-5% correction over the next few weeks. The risk/reward is in equities.
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General Market Comment
January 16, 2020
Market. Getting out of Bombardier: He has been one of the major sellers. He uses stops on every position. If it doesn’t work out then he is gone. This is a position he cut back some time ago. It was a big position for him. In the end he looked deeply at fundaments and price was not doing what he thought it should do and it was ultimately the stop loss that took him out. If a stock gets hurt in a bull market then there are other things to do. Don't try to pick bottoms. There are an army of unhappy shareholders that just want to get their money back out of the stock. Many markets, unlike the S&P are only just breaking out of multi-year sideways choppy markets. France Switzerland, Taiwan, Japan, for example. More and more markets are joining the rally. He would fully expect a 2-5% correction over the next few weeks. The risk/reward is in equities.
BUY
BUY
January 16, 2020
He likes software. Technology as a sector is a theme he will continue to like. IGV is an ETF you can buy to get a basket. He would like LRCX-N this time of year. These are more economically sensitive than others.
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General Market Comment
January 16, 2020
He likes software. Technology as a sector is a theme he will continue to like. IGV is an ETF you can buy to get a basket. He would like LRCX-N this time of year. These are more economically sensitive than others.
N/A
N/A
January 16, 2020
Stop Losses on Banks. He uses a point a figure chart. It takes a long time to learn how to read them. For a longer term investor, use a 150 day moving average. If you are trading above this line then it is your friend.
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General Market Comment
January 16, 2020
Stop Losses on Banks. He uses a point a figure chart. It takes a long time to learn how to read them. For a longer term investor, use a 150 day moving average. If you are trading above this line then it is your friend.
N/A
N/A
January 16, 2020
Banks. He thinks that this year financial services will do well but he prefers US banks. The multiples are less than Canadian and they are global behemoths. He does own two Canadian banks, however: BMO-T and NA-T. He would prefer BAC.N or JPM-N.
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General Market Comment
January 16, 2020
Banks. He thinks that this year financial services will do well but he prefers US banks. The multiples are less than Canadian and they are global behemoths. He does own two Canadian banks, however: BMO-T and NA-T. He would prefer BAC.N or JPM-N.
COMMENT
COMMENT
January 16, 2020
Where do we go from here? He's a technical guy, so the trend is his friend. Can't argue with this trend. A bit overbought right now, so we could see a minor pullback in the next few weeks, which he'll treat as a buying opportunity.
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General Market Comment
January 16, 2020
Where do we go from here? He's a technical guy, so the trend is his friend. Can't argue with this trend. A bit overbought right now, so we could see a minor pullback in the next few weeks, which he'll treat as a buying opportunity.
COMMENT
COMMENT
January 16, 2020
S&P 500 chart. A bit like 2017, where there was very little volatility. This ended up with lots of volatility in 2018. Looks like this again, but this time the Fed is keeping monetary policy stimulative. Unless the Fed makes a change, there's no technical sign that things are coming to an end. He's keeping a little bit of cash to buy the dip.
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General Market Comment
January 16, 2020
S&P 500 chart. A bit like 2017, where there was very little volatility. This ended up with lots of volatility in 2018. Looks like this again, but this time the Fed is keeping monetary policy stimulative. Unless the Fed makes a change, there's no technical sign that things are coming to an end. He's keeping a little bit of cash to buy the dip.
COMMENT
COMMENT
January 16, 2020
How do technicians deal with macro events? The trend trumps all, along with breadth. The other side is sentiment, and flows of money. He's starting to follow Twitter feeds. Short-term movements can definitely be influenced by Twitter feeds. There's no absolute answer. His view is stay with the market right now, though there may be a short-term correction.
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General Market Comment
January 16, 2020
How do technicians deal with macro events? The trend trumps all, along with breadth. The other side is sentiment, and flows of money. He's starting to follow Twitter feeds. Short-term movements can definitely be influenced by Twitter feeds. There's no absolute answer. His view is stay with the market right now, though there may be a short-term correction.
COMMENT
COMMENT
January 16, 2020
Measurable sign for a correction. He created a rule of thumb that if a stock, market, or sector gets more than 10% above its 200-day simple moving average, it's not a sell signal, but it's another sign that things are getting extended. Reversion to the mean. Keep an eye on it, and expect a correction.
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General Market Comment
January 16, 2020
Measurable sign for a correction. He created a rule of thumb that if a stock, market, or sector gets more than 10% above its 200-day simple moving average, it's not a sell signal, but it's another sign that things are getting extended. Reversion to the mean. Keep an eye on it, and expect a correction.
COMMENT
COMMENT
January 16, 2020
Cup and handle explanation. Everything is either trending or consolidating. Often the handle brings us back near the old resistance point. Cup and handle is just a consolidation. As soon as it stops retracing, you have to buy. You can see the formation in any timeframe, whether day-trading or over a few months.
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General Market Comment
January 16, 2020
Cup and handle explanation. Everything is either trending or consolidating. Often the handle brings us back near the old resistance point. Cup and handle is just a consolidation. As soon as it stops retracing, you have to buy. You can see the formation in any timeframe, whether day-trading or over a few months.
COMMENT
COMMENT
January 15, 2020

US/China Trade Agreement It looks like we have two armies who have sent down their white flags for the first battle. This is setting the stage for an upcoming phase of negotiations that will go on for a very long time. This is not over -- this may be the beginning of the end for all he knows. This is good, but now we go into phases 2, 3 or 4 of negotiations.

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General Market Comment
January 15, 2020

US/China Trade Agreement It looks like we have two armies who have sent down their white flags for the first battle. This is setting the stage for an upcoming phase of negotiations that will go on for a very long time. This is not over -- this may be the beginning of the end for all he knows. This is good, but now we go into phases 2, 3 or 4 of negotiations.

COMMENT
COMMENT
January 15, 2020
Market Outlook He thinks the 1982-2000 rally of the Dow from 200 to 1400 points is looking much like what the market is poised to do again. You should participate, don't go fully into cash ever, as this market could march higher for years to come.
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General Market Comment
January 15, 2020
Market Outlook He thinks the 1982-2000 rally of the Dow from 200 to 1400 points is looking much like what the market is poised to do again. You should participate, don't go fully into cash ever, as this market could march higher for years to come.
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