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.
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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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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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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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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.
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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.
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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.
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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.
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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.
COMMENT
COMMENT
January 15, 2020
He's constructive about real estate, seeing supply-demand balance in most geographies, and things are better than a year ago with more stability in the trade environment. There's less market risk and the real estate market is solid. REITs were strong in 2019, solid; he had a 20% return. He likes the US sunbelt, apartments, and e-commerce-related real estate. There are land constraints in Vancouver and Toronto, so no surprise that single-family homes are going up. Affordability is an issue here and in condos. Also factor the strong influx of 350,000 immigrants yearly, plus students, plus overall high population growth across Canada. That's why he likes apartments.
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General Market Comment
January 15, 2020
He's constructive about real estate, seeing supply-demand balance in most geographies, and things are better than a year ago with more stability in the trade environment. There's less market risk and the real estate market is solid. REITs were strong in 2019, solid; he had a 20% return. He likes the US sunbelt, apartments, and e-commerce-related real estate. There are land constraints in Vancouver and Toronto, so no surprise that single-family homes are going up. Affordability is an issue here and in condos. Also factor the strong influx of 350,000 immigrants yearly, plus students, plus overall high population growth across Canada. That's why he likes apartments.
COMMENT
COMMENT
January 15, 2020
Which percentage of REITs should I hold in a balanced portfolio? 20% is decent. Retail investors are increasing their real estate holdings. There are many advantages to owning real estate on the stock market than directly, including liquidity, diversifying holdings easily (around the world) and not fixing plumbing late at night. Also, you can buy real estate cheaper in the stock market than in the property market.
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General Market Comment
January 15, 2020
Which percentage of REITs should I hold in a balanced portfolio? 20% is decent. Retail investors are increasing their real estate holdings. There are many advantages to owning real estate on the stock market than directly, including liquidity, diversifying holdings easily (around the world) and not fixing plumbing late at night. Also, you can buy real estate cheaper in the stock market than in the property market.
COMMENT
COMMENT
January 14, 2020
U.S. manufacturing is still weak with numbers showing contraction for five straight months. She wants to see growth. Consumer spending and unemployment numbers are strong and are keeping the US economy going. US markets are also strong because the Fed's Powell cut interest rates, so she wants to see the follow-through in profits in the upcoming earnings season. Earnings multiples on stocks have risen. She also wants to see corporate spending, which was held back in 2019 because of the US-China trade. Now, we have clarity; both countries are signing phase one of the trade deal tomorrow.
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General Market Comment
January 14, 2020
U.S. manufacturing is still weak with numbers showing contraction for five straight months. She wants to see growth. Consumer spending and unemployment numbers are strong and are keeping the US economy going. US markets are also strong because the Fed's Powell cut interest rates, so she wants to see the follow-through in profits in the upcoming earnings season. Earnings multiples on stocks have risen. She also wants to see corporate spending, which was held back in 2019 because of the US-China trade. Now, we have clarity; both countries are signing phase one of the trade deal tomorrow.
COMMENT
COMMENT
January 14, 2020
Markets were crazy today. A headline said that the American tariffs on China won't be removed until after the November vote. Tomorrow, the signing of the phase one trade deal is good. The details of the deal don't matter, but rather it will tone down the rhetoric. Maybe global growth will rebound, or that is already priced into markets. His 2020 outlook comes down to earnings and interest rates. All else is news and noise that doesn't matter to your portfolio long-term. He sees a strong rebound in earnings and rates to stay low or rise very modestly. Energy prices will boost prices. Facebook, Google, Apple and Amazon will also rebound in earnings. A lot of sectors can rebound, since trade worries will be off the table.
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General Market Comment
January 14, 2020
Markets were crazy today. A headline said that the American tariffs on China won't be removed until after the November vote. Tomorrow, the signing of the phase one trade deal is good. The details of the deal don't matter, but rather it will tone down the rhetoric. Maybe global growth will rebound, or that is already priced into markets. His 2020 outlook comes down to earnings and interest rates. All else is news and noise that doesn't matter to your portfolio long-term. He sees a strong rebound in earnings and rates to stay low or rise very modestly. Energy prices will boost prices. Facebook, Google, Apple and Amazon will also rebound in earnings. A lot of sectors can rebound, since trade worries will be off the table.
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January 13, 2020
Market. He is saying 'Show me the money!' We have now gone a year without any real earnings growth and there is now expectation for earnings to grow high single digits. When you have a year with absolutely no earnings growth and the markets are up 30% you have to ask how much earnings growth the markets have already priced in. You want to see earnings growth that is unaffected by share buy backs and so on, but he does not think we will see that. You want to watch out for investors fearing missing out and then chasing the market here. There is anticipation of the signing of a US/China trade deal and he thinks it will be pomp and circumstance without out a lot of substance. There were not the escalation of tariffs in December but there was not the roll back. The tariff rate is 16% and that is not a good thing. He thinks there is no phase II coming. The trade balance is the only thing that matters.
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General Market Comment
January 13, 2020
Market. He is saying 'Show me the money!' We have now gone a year without any real earnings growth and there is now expectation for earnings to grow high single digits. When you have a year with absolutely no earnings growth and the markets are up 30% you have to ask how much earnings growth the markets have already priced in. You want to see earnings growth that is unaffected by share buy backs and so on, but he does not think we will see that. You want to watch out for investors fearing missing out and then chasing the market here. There is anticipation of the signing of a US/China trade deal and he thinks it will be pomp and circumstance without out a lot of substance. There were not the escalation of tariffs in December but there was not the roll back. The tariff rate is 16% and that is not a good thing. He thinks there is no phase II coming. The trade balance is the only thing that matters.
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N/A
January 13, 2020
Educational Segment. The markets are expensive by many metrics but cheap by some others. He presented a table of current vs. historical valuation models of some indicators. He looked at price to sales. The last peak was in the late '90s and we are back there. He looked at Enterprise value to EBITDA and we are also at a peak just above the late 90's peak. We are creating a massive bubble and this is not the time to get excited about stocks. Be conservative. The market may not top for another two years.
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General Market Comment
January 13, 2020
Educational Segment. The markets are expensive by many metrics but cheap by some others. He presented a table of current vs. historical valuation models of some indicators. He looked at price to sales. The last peak was in the late '90s and we are back there. He looked at Enterprise value to EBITDA and we are also at a peak just above the late 90's peak. We are creating a massive bubble and this is not the time to get excited about stocks. Be conservative. The market may not top for another two years.
N/A
N/A
January 13, 2020
Market. Cool heads have prevailed regarding the middle east incident. It would not be a good thing to proceed into war. The Chinese have to translate the trade deal. Some words in it are hard to translate. The market is assuming things will go well. He is watching ETFs. ETFs in the US are heavily weighted in the biggest stocks. All the same names are owned and for every dollar that flows in, they buy in the relative weight. It has nothing to do with the earning. When they sell they all sell at the same time. There is a business case for diversifying away from highly concentrated ETF owned positions. It is different when a dollar or a sell comes into a mutual fund.
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General Market Comment
January 13, 2020
Market. Cool heads have prevailed regarding the middle east incident. It would not be a good thing to proceed into war. The Chinese have to translate the trade deal. Some words in it are hard to translate. The market is assuming things will go well. He is watching ETFs. ETFs in the US are heavily weighted in the biggest stocks. All the same names are owned and for every dollar that flows in, they buy in the relative weight. It has nothing to do with the earning. When they sell they all sell at the same time. There is a business case for diversifying away from highly concentrated ETF owned positions. It is different when a dollar or a sell comes into a mutual fund.
BUY
BUY
January 13, 2020
Chinese ETFs. Many large Chinese companies were on sale recently and we have seen some recovery. He thinks there will be upside here. If you can't buy them directly then by all means buy them through an ETF.
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General Market Comment
January 13, 2020
Chinese ETFs. Many large Chinese companies were on sale recently and we have seen some recovery. He thinks there will be upside here. If you can't buy them directly then by all means buy them through an ETF.
BUY
BUY
January 13, 2020
Packaging Sector. The whole sector was beaten up last year. He would suggest Amcor. It is a well managed company. It is a sector that might be due for a rebound. He would also look at CCL.A-T.
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General Market Comment
January 13, 2020
Packaging Sector. The whole sector was beaten up last year. He would suggest Amcor. It is a well managed company. It is a sector that might be due for a rebound. He would also look at CCL.A-T.
COMMENT
COMMENT
January 13, 2020
We had a fantastic 2019, but he's concerned that markets have become irrational as the chug along. He's waiting for any shoe to drop. Drill down and you don't find much depth. Apple and Microsoft are among the very few couple of names that move the needle; this is a crowded trade. What about the rest of the stocks? Something big will happen that causes the market to re-adjust. 2019 went from 14x PE to 19x. We are very expensive, historically. At some point, we'll hit a recession, and that's when you need cash to invest....Among banks, he likes TD which boasts 40% of its business from the U.S. America banks, starting with JP Morgan, start reporting tomorrow...Today, Visa announced the acquisition of Plaid to branch into the tech space (https://www.marketwatch.com/story/visa-to-buy-fintech-company-plaid-for-53-billion-2020-01-13). He owns Visa and likes the stock and this deal.
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General Market Comment
January 13, 2020
We had a fantastic 2019, but he's concerned that markets have become irrational as the chug along. He's waiting for any shoe to drop. Drill down and you don't find much depth. Apple and Microsoft are among the very few couple of names that move the needle; this is a crowded trade. What about the rest of the stocks? Something big will happen that causes the market to re-adjust. 2019 went from 14x PE to 19x. We are very expensive, historically. At some point, we'll hit a recession, and that's when you need cash to invest....Among banks, he likes TD which boasts 40% of its business from the U.S. America banks, starting with JP Morgan, start reporting tomorrow...Today, Visa announced the acquisition of Plaid to branch into the tech space (https://www.marketwatch.com/story/visa-to-buy-fintech-company-plaid-for-53-billion-2020-01-13). He owns Visa and likes the stock and this deal.
COMMENT
COMMENT
January 13, 2020
Oil outlook He doesn't own commodities, including Canadian energy. He needs to see in a stock consistent growth and cash flow. Oil is at the whim of global prices. Too volatile and inconsistent. He owns oil indirectly, like through CNR which ships oil.
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General Market Comment
January 13, 2020
Oil outlook He doesn't own commodities, including Canadian energy. He needs to see in a stock consistent growth and cash flow. Oil is at the whim of global prices. Too volatile and inconsistent. He owns oil indirectly, like through CNR which ships oil.
COMMENT
COMMENT
January 10, 2020
Market Outlook He thinks we are in a "Booming Depression" in the market. The market no longer trades on fundamentals -- it trades on liquidity. And it looks like the central banks are already talking about more QE coming up. A year end rally into January is happening right now. Fair value on the S&P, he believes, is around 3720 -- compared to today's 3275 level. His quant model has been pointing to this value for some time now and with liquidity still coming in, thanks to QE, there is a real potential for a market "melt up".
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General Market Comment
January 10, 2020
Market Outlook He thinks we are in a "Booming Depression" in the market. The market no longer trades on fundamentals -- it trades on liquidity. And it looks like the central banks are already talking about more QE coming up. A year end rally into January is happening right now. Fair value on the S&P, he believes, is around 3720 -- compared to today's 3275 level. His quant model has been pointing to this value for some time now and with liquidity still coming in, thanks to QE, there is a real potential for a market "melt up".
COMMENT
COMMENT
January 10, 2020

Canadian Banks? He is very pessimistic on Canada in general. We are the whipping horse of the world right now. He is not a fan of this sector. News of high loan loss provisions is making him nervous and he sees global shorting going on. He favours US banks instead. If he were to look at one Canadian bank, it might be BNS. A yield over 5% and share price upside to $85.36.

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General Market Comment
January 10, 2020

Canadian Banks? He is very pessimistic on Canada in general. We are the whipping horse of the world right now. He is not a fan of this sector. News of high loan loss provisions is making him nervous and he sees global shorting going on. He favours US banks instead. If he were to look at one Canadian bank, it might be BNS. A yield over 5% and share price upside to $85.36.

COMMENT
COMMENT
January 10, 2020
CAD$ He sees nothing positive in the Canadian market presently. Real estate in the Toronto market is ridiculous. It would be interesting if the CAD$ dropped to the mid-$0.60s. Watch your exposure in Canada, he warns.
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General Market Comment
January 10, 2020
CAD$ He sees nothing positive in the Canadian market presently. Real estate in the Toronto market is ridiculous. It would be interesting if the CAD$ dropped to the mid-$0.60s. Watch your exposure in Canada, he warns.
COMMENT
COMMENT
January 10, 2020
Your funds under performing? He is a value trader. Value beats growth 7 out of 10 years, but this has reversed in the past three years. The liquidity coming from Central Banks is reversing this right now. When Value stocks return, there will be massive swings in this trend back to normal.
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General Market Comment
January 10, 2020