Larry Berman CFA, CMT, CTA
Chief Investment Officer, Partner at ETF Capital Management Inc.
Member since: Jul '02 · 5265 Opinions
Rating Card
Premium content| All | 
Rating
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Big Win
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Win
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Neutral
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Loss
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Big Loss
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|---|---|---|---|---|---|---|---|
| 0 | 31 77.50% | 8 20.00% | 1 2.50% | 0 0.00% | 0 0.00% | ||
| 1 Month | 0 | 3 37.50% | 5 62.50% | 0 0.00% | 0 0.00% | 0 0.00% | |
| 6 Months | 0 | 7 87.50% | 1 12.50% | 0 0.00% | 0 0.00% | 0 0.00% | |
| 12 Months | 0 | 7 87.50% | 1 12.50% | 0 0.00% | 0 0.00% | 0 0.00% | |
| 2 Years | 0 | 6 75.00% | 1 12.50% | 1 12.50% | 0 0.00% | 0 0.00% | |
| 5 Years | 0 | 8 100.00% | 0 0.00% | 0 0.00% | 0 0.00% | 0 0.00% |
Stock Opinions by Larry Berman CFA, CMT, CTA
It's always about what the market is going to deliver relative to expectations. The bar isn't particularly high this quarter. We normally get about 70% of stocks beating earnings.
The story is going to be what they say about tariffs and margin compression. Not sure enough companies know yet what that's going to look like. If you look at the 6.5% earnings growth estimated over the next year, it doesn't seem a stretch at this point. If we get nominal GDP growth of 5-5.5%, those numbers are achievable. But that nominal GDP growth number assumes no margin pressure from tariffs and a pretty decent economic outcome.
In the "big, beautiful bill" we get some current stimulus and tailwinds over the next year, though they're not what we saw in terms of tax cuts in the TCJA passed during the first Trump administration. But there's also massive bond supply being a headwind to future growth.
It's not going away anytime soon. If the tax revenues through tariffs are elevated enough to mitigate some of the need for bonds, that would be a good story from a debt finance perspective but a bad story related to margins. Either we're going to get inflation, or margin pressures, or bond yields are going to have to back up a little bit more. It's one one of those three things or some combination of all of them. To him, the market is priced for a more Goldilocks-type of outcome.
We've been in a situation like this before, where equity markets surprise to the upside. So we can't be too confused by that. See today's Educational Segment for some ideas to deal with that uncertainty and where to put your money if you're worried about growth.
In general, international dividends pay a higher yield than you get in the US. This one is international developed markets, largely Europe and Japan. You don't get the benefit of the dividend tax credit. This investment should be in a registered account, not in a taxable account, if you're looking to maximize your after-tax return. He has no problem with it from that perspective.
But if you're really looking for enhanced yield out of Europe, he really likes ZWP or ZWE.
If you're really looking for enhanced yield out of Europe, he really likes ZWP (high dividend payers, covered call, currency exposure) or ZWE (high dividend payers, covered call, currency hedged). The charts don't show a lot of gains, but that's because they pay out a pretty significant dividend (much bigger than ZDI, which is just dividends without the covered calls).
If you're conservative and you want more tax-efficient income in a taxable account, he likes these ETFs with the covered calls a lot better than ZDI.
If you're really looking for enhanced yield out of Europe, he really likes ZWP (high dividend payers, covered call, currency exposure) or ZWE (high dividend payers, covered call, currency hedged). The charts don't show a lot of gains, but that's because they pay out a pretty significant dividend (much bigger than ZDI, which is just dividends without the covered calls).
If you're conservative and you want more tax-efficient income in a taxable account, he likes these ETFs with the covered calls a lot better than ZDI.
Puts on a covered call options strategy to extract some extra income out of TSLA. He has some general thoughts on this and similar products. Why are you investing in TSLA? You're investing in it for growth. If you really believe in TSLA, why do you want to give up that growth by putting a covered call on it? Go to the stock itself to play it for maximum growth.
But at this moment, he hates the value of TSLA, grossly overvalued. Probably worth half or less than what it trades at today. He wouldn't touch it with anybody's money.
There is. Speaks to the whole universe of Canadian Depositary Receipts that have come up. You can buy fractional shares with an embedded currency hedge in a lot of the big names in the US. If you feel the CAD is very low here, and you want that US exposure, you're probably better off buying it with a CDR that has currency hedge embedded as opposed to buying the stock on the US exchange.
If you like the stock and think the CAD is expensive and likely to get cheaper, then you want to own the US dollar version of that and keep your exposure to the USD.
Larry thinks the CAD is somewhat undervalued right now in the context of the next 5 years. Fair value for the CAD is probably somewhere between 75 and 80 cents. When it's below 75 or 70, you want something that's hedged. When it's above 80-85, you want the US dollar exposure. If it's somewhere in the middle, you're a bit indifferent to the currency risk.
You can buy an ETF that's listed in Toronto that has the euro exposure. For example, ZWP gives you exposure to the euro via a Canadian holding.
This question is probably prompted by the whole narrative around a weaker US dollar and the euro getting stronger. That's very much a USD-Euro story, than a CAD-Euro story. So you might need to look more for a US holding than something in Canada.
FLUR gives you international exposure. XEU gives you broad exposure to MSCI Europe.
You can buy an ETF that's listed in Toronto that has the euro exposure. For example, ZWP gives you exposure to the euro via a Canadian holding.
This question is probably prompted by the whole narrative around a weaker US dollar and the euro getting stronger. That's very much a USD-Euro story, than a CAD-Euro story. So you might need to look more for a US holding than something in Canada.
FLUR gives you international exposure. XEU gives you broad exposure to MSCI Europe.
You can buy an ETF that's listed in Toronto that has the euro exposure. For example, ZWP gives you exposure to the euro via a Canadian holding.
This question is probably prompted by the whole narrative around a weaker US dollar and the euro getting stronger. That's very much a USD-Euro story, than a CAD-Euro story. So you might need to look more for a US holding than something in Canada.
FLUR gives you international exposure. XEU gives you broad exposure to MSCI Europe.
Not sure it's going to rally the way AT&T did. Very different sectors. In his modelling, he's been in accumulation mode. Likes it at these levels on a risk/return basis, screens well for value. High yield is probably a risk factor at this point. Not a lot of upside potential to analysts' price target.
(Analysts’ price target is $32.00)Provincial bonds will give you an incremental pickup over the federal bonds (ZFL). But you're taking on a massive amount of interest risk. Yes, it's good monthly income instead of federal government bonds. If long bond yields are going to be volatile and inflation's going to be a challenge for the next few years, then he doesn't love ZFL or ZPL or any kind of passive income, low-risk generator. The yield is safe so you don't have to worry about that, but there is a lot of price volatility in the next couple of years.
Likes it from a trading perspective. But buy-and-hold, long-term bonds are a challenge right now because of the interest rate risk embedded in them.
