A Comment -- General Comments From an Expert

A Commentary

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Analysis and Opinions about A Commentary

Signal
Opinion
Expert
COMMENT
COMMENT
July 9, 2020
What kind of stocks are you buying? Still likes growth over value, as it's performed well over the last decade and should continue with low interest rates. Quality is important, as is high ROE, low leverage. Likes dividend appreciation over high yield. Largest weightings are healthcare, tech, communications, and some consumer. Key secular themes exacerbated by the pandemic are work from home, e-commerce, cloud infrastructure, and healthcare innovation.
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What kind of stocks are you buying? Still likes growth over value, as it's performed well over the last decade and should continue with low interest rates. Quality is important, as is high ROE, low leverage. Likes dividend appreciation over high yield. Largest weightings are healthcare, tech, communications, and some consumer. Key secular themes exacerbated by the pandemic are work from home, e-commerce, cloud infrastructure, and healthcare innovation.
COMMENT
COMMENT
July 9, 2020
Hedged vs. non-hedged ETFs? Long term, US dollar has been moving sideways. CAD will stay in the 70-80 cent range. In general, prefers the US dollar ETFs. But right now, prefers ETFs not hedged to the CAD. It's a little less expensive.
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Hedged vs. non-hedged ETFs? Long term, US dollar has been moving sideways. CAD will stay in the 70-80 cent range. In general, prefers the US dollar ETFs. But right now, prefers ETFs not hedged to the CAD. It's a little less expensive.
COMMENT
COMMENT
July 8, 2020
Market Outlook The pending federal deficit is not far from analyst expectations. The deficit is likely only going to go higher. The government is trying to re-balance, but they are trying to support as much as possible so the economy is not permanently impaired. Eventually government spending will have to decline and taxes will have to go up -- likely through the GST. The crisis has caused companies that were already growing well and have done well through this time have seen their multiples expand -- with PEs exceeding 30. The prime beneficiaries have been the fintech companies so far.
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Market Outlook The pending federal deficit is not far from analyst expectations. The deficit is likely only going to go higher. The government is trying to re-balance, but they are trying to support as much as possible so the economy is not permanently impaired. Eventually government spending will have to decline and taxes will have to go up -- likely through the GST. The crisis has caused companies that were already growing well and have done well through this time have seen their multiples expand -- with PEs exceeding 30. The prime beneficiaries have been the fintech companies so far.
COMMENT
COMMENT
July 8, 2020

Sell Banks for Pipelines? He likes this strategy. Balance the weight between both he suggests. Pipelines are economically sensitive these days, due to their weightings in the energy ETFs. ENB, TRP and PPL have been particularly sensitive. He thinks the valuations warrant investment here.

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Sell Banks for Pipelines? He likes this strategy. Balance the weight between both he suggests. Pipelines are economically sensitive these days, due to their weightings in the energy ETFs. ENB, TRP and PPL have been particularly sensitive. He thinks the valuations warrant investment here.

COMMENT
COMMENT
July 8, 2020
Hyperinflation worries? Companies that are not price takers are the best in a hyperinflation situation, where prices rise sharply. Technology companies can -- like MSFT.
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Hyperinflation worries? Companies that are not price takers are the best in a hyperinflation situation, where prices rise sharply. Technology companies can -- like MSFT.
COMMENT
COMMENT
July 7, 2020
The virus surge in the US and elsewhere reflects complacency, since past outbreaks have had second waves. It's tragic. Expects these flare-ups in coming months. Investors have to be positioned for this and as citizens expect draconian lockdowns. Don't time the markets. The market now has high expectations and has been complacent about a second wave. He seeks defensive names, but also stocks exposed to a cyclical recovery happening now--a barbell approach. Caveat: he seeks companies with strong balance sheets to survive a sustained recession. Hot potato stocks like cruiselines have seen wild swings, partially because of novice traders.
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The virus surge in the US and elsewhere reflects complacency, since past outbreaks have had second waves. It's tragic. Expects these flare-ups in coming months. Investors have to be positioned for this and as citizens expect draconian lockdowns. Don't time the markets. The market now has high expectations and has been complacent about a second wave. He seeks defensive names, but also stocks exposed to a cyclical recovery happening now--a barbell approach. Caveat: he seeks companies with strong balance sheets to survive a sustained recession. Hot potato stocks like cruiselines have seen wild swings, partially because of novice traders.
N/A
N/A
July 6, 2020
Market. The big tug of war is when inflation is going to push interest rates up. He thinks we are in a deflationary period. At what point do we get serious inflation and what does it look like. We have to position portfolios for it. He looks at the velocity of money. Really, printed money is finding its way onto banks' balance sheets and it is their job to find a way for that money to get out in to the economy. There are greater deflationary pressures than inflationary pressures but you have to keep an eye on it. Inflation is unlikely but you should see how much money they are printing in Japan. When Japan started doing this there were fears of runaway inflation but it did not happen. Gold could challenge 2011 highs. There will be a period of consolidation and then it should move higher.
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Market. The big tug of war is when inflation is going to push interest rates up. He thinks we are in a deflationary period. At what point do we get serious inflation and what does it look like. We have to position portfolios for it. He looks at the velocity of money. Really, printed money is finding its way onto banks' balance sheets and it is their job to find a way for that money to get out in to the economy. There are greater deflationary pressures than inflationary pressures but you have to keep an eye on it. Inflation is unlikely but you should see how much money they are printing in Japan. When Japan started doing this there were fears of runaway inflation but it did not happen. Gold could challenge 2011 highs. There will be a period of consolidation and then it should move higher.
DON'T BUY
DON'T BUY
July 6, 2020
Canadian Banks. There is not a lot of innovation going in so it is how they operate and what is the environment that matters. The banks don't meet his criteria on return on invested capital. There is always the threat of being disrupted. If he did buy one, it would be TD-T or RY-T.
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Canadian Banks. There is not a lot of innovation going in so it is how they operate and what is the environment that matters. The banks don't meet his criteria on return on invested capital. There is always the threat of being disrupted. If he did buy one, it would be TD-T or RY-T.
COMMENT
COMMENT
July 3, 2020
Market Outlook 2020 has been marked by the COVID-19 crisis, both by the plunge and V-shaped recovery and now the rise in cases. We also have a major US election this fall and escalating China trade concerns. Resilient business models, recurring cash flows and manageable debt levels -- exactly where infrastructure stocks fit. They have previously trimmed airport and energy exposures as the dividends are at risk. They are focusing on renewable energy and technology infrastructure, which has resulted in 15 dividend increases this year averaging 7% growth. Cloud computing and remote work location communication are all part of the technology push.
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Market Outlook 2020 has been marked by the COVID-19 crisis, both by the plunge and V-shaped recovery and now the rise in cases. We also have a major US election this fall and escalating China trade concerns. Resilient business models, recurring cash flows and manageable debt levels -- exactly where infrastructure stocks fit. They have previously trimmed airport and energy exposures as the dividends are at risk. They are focusing on renewable energy and technology infrastructure, which has resulted in 15 dividend increases this year averaging 7% growth. Cloud computing and remote work location communication are all part of the technology push.
COMMENT
COMMENT
July 3, 2020
Pipelines? As an investor you should never put a lot of value into something that is a binary (go/no-go) decision. If the project does not go, you may have taken on too much risk. Given it is so hard to get a new pipeline built, the value of the existing pipelines is actually a lot more than the market gives it credit for. He thinks there will be room for two major pipeline projects and no more going forward out of Canada.
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Pipelines? As an investor you should never put a lot of value into something that is a binary (go/no-go) decision. If the project does not go, you may have taken on too much risk. Given it is so hard to get a new pipeline built, the value of the existing pipelines is actually a lot more than the market gives it credit for. He thinks there will be room for two major pipeline projects and no more going forward out of Canada.
COMMENT
COMMENT
July 3, 2020
5G infrastructure? 4G tops out at 100 mbps, while 5G is supposed to be 100 times faster. It will allow streaming and open up new opportunities like autonomous driving and fast, real-time processing. He likes the cellular towers infrastructure plays. Wireless carriers, like Telus, Bell and Rogers, face far too high competition to be attractive.
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5G infrastructure? 4G tops out at 100 mbps, while 5G is supposed to be 100 times faster. It will allow streaming and open up new opportunities like autonomous driving and fast, real-time processing. He likes the cellular towers infrastructure plays. Wireless carriers, like Telus, Bell and Rogers, face far too high competition to be attractive.
COMMENT
COMMENT
July 3, 2020
Airports? There are not many Canadian airports that are listed. He thinks there is still a long way to go to get back to previous air travel levels. International business travel will need to get back up and that is no where near getting back to where it needs to be. He expects to see more weakness in the space over the next few months.
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Airports? There are not many Canadian airports that are listed. He thinks there is still a long way to go to get back to previous air travel levels. International business travel will need to get back up and that is no where near getting back to where it needs to be. He expects to see more weakness in the space over the next few months.
COMMENT
COMMENT
July 3, 2020
Electrical storage companies? This is a space that is still in its infancy as battery storage is still being developed. His preferred way is to look at renewable energy companies. As users of batteries on site, they can provide energy 24 hours per day. These companies will be beneficiaries of this new technology, but they won't have to take on the risk of developing this new technology.
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Electrical storage companies? This is a space that is still in its infancy as battery storage is still being developed. His preferred way is to look at renewable energy companies. As users of batteries on site, they can provide energy 24 hours per day. These companies will be beneficiaries of this new technology, but they won't have to take on the risk of developing this new technology.
N/A
N/A
July 3, 2020
Market. There is going to be a moment where the markets realize there is not going to be a 'V' and we are still in wave one and there is going to be a wave two. Right now it is all about the Fed and all the money they are throwing at it. He is bullish technology, however.
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Market. There is going to be a moment where the markets realize there is not going to be a 'V' and we are still in wave one and there is going to be a wave two. Right now it is all about the Fed and all the money they are throwing at it. He is bullish technology, however.
COMMENT
COMMENT
July 3, 2020
Percentage of Canadian Banks in your portfolio. 25% of the TSX is banks. In a taxable account you want the benefit of the dividend tax credit. In a registered acount, you don't need to focus on Canada. 25% of your Canadian exposure should be banks. This is if we DON'T go to negative interest rates.
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Percentage of Canadian Banks in your portfolio. 25% of the TSX is banks. In a taxable account you want the benefit of the dividend tax credit. In a registered acount, you don't need to focus on Canada. 25% of your Canadian exposure should be banks. This is if we DON'T go to negative interest rates.
BUY WEAKNESS
BUY WEAKNESS
July 3, 2020
ETF Recommendation for Growth and Income for a 70 year old. He pointed out that this is part of financial planning where one figures out how much capital gain and how much dividend you need to live on, as well as to determine how much risk you are comfortable with. It is not as simple as recommending an ETF. Cyber security is an area he really likes. CYBR-T is an ETF that covers this. This sector has tripled in a year and a half. One would have to be able to handle the ride in this stock. You would have to buy the dips. This will not be a good dividend payer, however.
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ETF Recommendation for Growth and Income for a 70 year old. He pointed out that this is part of financial planning where one figures out how much capital gain and how much dividend you need to live on, as well as to determine how much risk you are comfortable with. It is not as simple as recommending an ETF. Cyber security is an area he really likes. CYBR-T is an ETF that covers this. This sector has tripled in a year and a half. One would have to be able to handle the ride in this stock. You would have to buy the dips. This will not be a good dividend payer, however.
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N/A
July 3, 2020
Educational Segment. On-line Brokerages. A 20 year old guy was trading spreads and miss-read his on-line statement and felt he had made a colossal mistake and he committed suicide. Larry looked at rates of opening new accounts with on-line brokerages in the US, which have spiked during the COVID shut-in. He is worried about people doing crazy things – it's like a drug. People should need to take a course before being allowed to open a discount brokerage account. He would encourage viewers to take a look at his YouTube Channel.
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Educational Segment. On-line Brokerages. A 20 year old guy was trading spreads and miss-read his on-line statement and felt he had made a colossal mistake and he committed suicide. Larry looked at rates of opening new accounts with on-line brokerages in the US, which have spiked during the COVID shut-in. He is worried about people doing crazy things – it's like a drug. People should need to take a course before being allowed to open a discount brokerage account. He would encourage viewers to take a look at his YouTube Channel.
COMMENT
COMMENT
July 2, 2020
Market. The market is looking at the rate of the change of the economic data. As long as it continues to improve and we don’t see a second wave, then the market will chug along. We will need some follow through with third quarter earnings. We will have to see what happens with analysts expectations. Everyone is watching US hospital capacity and to look to a second lock-down if they exceed it. The market would take a leg down in that case. Technicals show an improvement in the last couple of months. Monday is coming into the markets in a wholesale fashion.
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Market. The market is looking at the rate of the change of the economic data. As long as it continues to improve and we don’t see a second wave, then the market will chug along. We will need some follow through with third quarter earnings. We will have to see what happens with analysts expectations. Everyone is watching US hospital capacity and to look to a second lock-down if they exceed it. The market would take a leg down in that case. Technicals show an improvement in the last couple of months. Monday is coming into the markets in a wholesale fashion.
COMMENT
COMMENT
June 30, 2020
The future of gold: he's been keen on gold for two months. Gold has broken $1,750 and on track to have its highest quarterly rise. He sees further upside in gold as well as copper. Often, both are mined and found at the same time. Teranga and Centerra will be huge cash flow generators in 2021. The small-cap gold stocks will also do well but are more leveraged than the large-caps who should do better. (Check his top picks today.) The long-term bull market is intact, but he feels we're now in a 5-7% pullback in the next 4-6 weeks, because North American stocks are overbought. But gold will continue to be strong. Long-term, the bull market still has 18 months to go.
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The future of gold: he's been keen on gold for two months. Gold has broken $1,750 and on track to have its highest quarterly rise. He sees further upside in gold as well as copper. Often, both are mined and found at the same time. Teranga and Centerra will be huge cash flow generators in 2021. The small-cap gold stocks will also do well but are more leveraged than the large-caps who should do better. (Check his top picks today.) The long-term bull market is intact, but he feels we're now in a 5-7% pullback in the next 4-6 weeks, because North American stocks are overbought. But gold will continue to be strong. Long-term, the bull market still has 18 months to go.
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June 29, 2020
Market. People need to look toward some kind of strength of track record of management and strength of balance sheet. Retail, hotel and airline industries are going to be very tough industries. The recovery is going to be a very rocky road and we are going to see a lot of bankruptcies along the way. It is going to be a touch environment for the next few years at least. The market is very short term in its orientation. FB-Q and GOOG-Q are facing regulatory headwinds at present. The carnage to the economy has yet to be tallied. The banks will survive.
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Market. People need to look toward some kind of strength of track record of management and strength of balance sheet. Retail, hotel and airline industries are going to be very tough industries. The recovery is going to be a very rocky road and we are going to see a lot of bankruptcies along the way. It is going to be a touch environment for the next few years at least. The market is very short term in its orientation. FB-Q and GOOG-Q are facing regulatory headwinds at present. The carnage to the economy has yet to be tallied. The banks will survive.
BUY
BUY
June 29, 2020
Which company in the oils sands would he like to buy? All energy companies are going to have a poor year, this year. As the recovery takes hold, demand for energy should increase. SU-T would be one of the better places to be. It is well financed and has a good balance sheet. It is also quite diverse, covering up stream to down stream operations. It has the capability to pay a dividend throughout this crisis.
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Which company in the oils sands would he like to buy? All energy companies are going to have a poor year, this year. As the recovery takes hold, demand for energy should increase. SU-T would be one of the better places to be. It is well financed and has a good balance sheet. It is also quite diverse, covering up stream to down stream operations. It has the capability to pay a dividend throughout this crisis.
COMMENT
COMMENT
June 26, 2020
Market Outlook If you have held good companies they are probably still doing well during the pandemic. You need to see companies that beat their cost of capital consistently, have a good balance sheet and can take on debt safely to build their business with good cash flow generation. COVID-19 has changed the way we look at businesses, with a move to more mobile strategies. The PE ratio of the market is in the top 10% of history, while the economy is in the bottom 10%. This is not like 2008. There will be unanticipated events in the world, so therefore most people should be cautious and patient rather than making big decisions in their portfolio right now. He thinks retail companies will suffer post-pandemic, especially smaller retailers. Oil and gas will also continue to suffer due to a slower growth in the economy. E-commerce companies will benefit.
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Market Outlook If you have held good companies they are probably still doing well during the pandemic. You need to see companies that beat their cost of capital consistently, have a good balance sheet and can take on debt safely to build their business with good cash flow generation. COVID-19 has changed the way we look at businesses, with a move to more mobile strategies. The PE ratio of the market is in the top 10% of history, while the economy is in the bottom 10%. This is not like 2008. There will be unanticipated events in the world, so therefore most people should be cautious and patient rather than making big decisions in their portfolio right now. He thinks retail companies will suffer post-pandemic, especially smaller retailers. Oil and gas will also continue to suffer due to a slower growth in the economy. E-commerce companies will benefit.
COMMENT
COMMENT
June 26, 2020
US Bank stress testing? US banks may have a couple of difficult quarters. They are not expensive, trading at 10 times earnings and trading close to book value. They are well capitalized, and will not be allowed to increase their dividends. The big banks will get stronger as they can spend money on technology to make them more competitive and reduce their cost structure. The pandemic is pushing this move sooner. From a regulatory point of the view, the US Fed has done the right thing.
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US Bank stress testing? US banks may have a couple of difficult quarters. They are not expensive, trading at 10 times earnings and trading close to book value. They are well capitalized, and will not be allowed to increase their dividends. The big banks will get stronger as they can spend money on technology to make them more competitive and reduce their cost structure. The pandemic is pushing this move sooner. From a regulatory point of the view, the US Fed has done the right thing.
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June 26, 2020
Market. They've made COVID-19 a real political hot potato. The market has not priced in Trump NOT being the president after the election. You should take a more cautious approach in managing your investment portfolio. Be cautious when things are a little illogical.
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Market. They've made COVID-19 a real political hot potato. The market has not priced in Trump NOT being the president after the election. You should take a more cautious approach in managing your investment portfolio. Be cautious when things are a little illogical.
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June 26, 2020
Negative interest rates. He does not think we will get to negative interest rates. That would be catastrophic. The Fed does not want to see negative interest rates. Interest rates will, however, be glued to zero for some time. In the next couple of years, longer term rates will tend toward zero.
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Negative interest rates. He does not think we will get to negative interest rates. That would be catastrophic. The Fed does not want to see negative interest rates. Interest rates will, however, be glued to zero for some time. In the next couple of years, longer term rates will tend toward zero.
DON'T BUY
DON'T BUY
June 26, 2020
Canadian Oil Outlook for Mid-Cap Sector. There is massive political risk because the current government does not support pipelines. Because of climate change, the world is moving more and more away from oil. The next decades will see less and less demand relative to supply. The sector is not investible but probably tradable.
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Canadian Oil Outlook for Mid-Cap Sector. There is massive political risk because the current government does not support pipelines. Because of climate change, the world is moving more and more away from oil. The next decades will see less and less demand relative to supply. The sector is not investible but probably tradable.
BUY
BUY
June 26, 2020
ETF covering FANG stocks Exclusively? The big six names in tech are 30% of the index. You might go to the stocks directly. You may want to avoid FB-Q for now, for example. Cloud Computing ETFs might be a way to go.
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ETF covering FANG stocks Exclusively? The big six names in tech are 30% of the index. You might go to the stocks directly. You may want to avoid FB-Q for now, for example. Cloud Computing ETFs might be a way to go.
N/A
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June 26, 2020
Quantitative Easing vs. Debt Monetization. The difference is time frame. QE is temporary. However he thinks the Fed will never be able to unwind the balance sheet. Debt Monetization is permanent. Essentially they have to print money.
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Quantitative Easing vs. Debt Monetization. The difference is time frame. QE is temporary. However he thinks the Fed will never be able to unwind the balance sheet. Debt Monetization is permanent. Essentially they have to print money.
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June 26, 2020
Educational Segment. The Fed's Stress Test. We are in a bear market – we are not in a 'V'. They don't want to tell us what's wrong. He compared the expansion of the Fed balance sheet vs. the SPY-N ETF on a chart. The two run closely and peaked about two weeks ago.
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Educational Segment. The Fed's Stress Test. We are in a bear market – we are not in a 'V'. They don't want to tell us what's wrong. He compared the expansion of the Fed balance sheet vs. the SPY-N ETF on a chart. The two run closely and peaked about two weeks ago.
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June 25, 2020
Market. Markets sold off indiscriminately in March and as markets rebounded, not all real estate entities are the same. Are the prices of buildings off 30%? What geographies should one be focused on: Residential rental, industrial warehouse space, and different classes within residential. He focuses on cash flows and their dependabilities. Yields have gone higher, making them more attractive, but he looks at cash flow because they can cut dividends. It has been a desired asset class for 15-20 years by pensions and institutions globally. We are in for lower for longer interest rates. Those real estate classes will capture inflation when it goes higher. There is a lot of capital sitting on the side lines waiting to get into real estate.
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Market. Markets sold off indiscriminately in March and as markets rebounded, not all real estate entities are the same. Are the prices of buildings off 30%? What geographies should one be focused on: Residential rental, industrial warehouse space, and different classes within residential. He focuses on cash flows and their dependabilities. Yields have gone higher, making them more attractive, but he looks at cash flow because they can cut dividends. It has been a desired asset class for 15-20 years by pensions and institutions globally. We are in for lower for longer interest rates. Those real estate classes will capture inflation when it goes higher. There is a lot of capital sitting on the side lines waiting to get into real estate.
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