Larry Berman CFA, CMT, CTA
Chief Investment Officer, Partner at ETF Capital Management Inc.
Member since: Jul '02 · 5245 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
Last week, we saw the ADP (US payroll) come out. ADP cuts paycheques, so is accurate, and ADP claims net job losses in June. Trump can yell at Powell all he likes, but it will do nothing. Interest rates won't move until there is economic clarity. Not today, but markets are growing desensitized to trade news. Today, President TACO is pounding his fist on the bigger numbers. The Big Beautiful Bill was signed into law, and Big Beautiful Deficits are coming, and he's got to pay for them. Deficits are a headwind to long-term growth. Trump needs revenues, so he's pushing tariffs hard. Uncertainty is very high, while markets are priced to perfection at all-time highs. He was supposed to sign 90 trade deals by now, but there are two frameworks for trade deals, instead (UK and Vietnam). Headwinds are building. The BB Bill offers very little net-new stimulus in tax cuts. The bill just continues what he started in his first term. Rather, there's a lot of spending.
Likes it, but the question is, Do you want to be in US banks? If you expect us to go into a hard landing, US banks won't do well. Also, is this ETF taxable or not? Makes sense in a registered account. But after this recent rally be more defensive. Don't add money to banks now. It comes down to timing.
It's about timing. About 18 months ago, he didn't like the valuation in the public markets and so was investing his assets into private equity. Then, he switched back to public markets right before Trump flipped the tariff switch in April. He caught the market bounce of April 8. He likes the lower volatility of private equity, but you give up liquidity.
The U.S. dollar volatility: There's been lots of talk about it. Year to date, the USD is -11%, but in the big picture, this is noise. The USD is basically where it was in the early 1970s. Historically, the USD spiked in the mid-1980s which led to the Plaza Accord to strengthen other currencies which lowered the too-high USD, and in 1999 when the Euro was created. That said, the USD now does matter. The USD's depreciation, plus the inflationary impact of tariffs that's coming will negatively impact inflation. The Fed pausing rates makes complete sense. The positive side: a weakening USD is positive for earnings, particularly for these sectors (many revenues from abroad): tech, materials, communication services and consumer staples. Look for what companies say about inflation and tariffs during earnings season.
The US employment numbers at the end of the week are far more important than the digital services tax, which was nevertheless a big issue for many Canadians. It was also important for Trump, as he cancelled all negotiations on Friday, but today it's all good again.
We're going to see a lot of volatility around trade discussions in the coming weeks. Companies still don't have a better handle on the uncertainty ahead. We just heard that the EU is going to accept the tariff rates. We'll have to see how it all plays out. Those tariff policies are still inflationary.
We are seeing a decay in the employment situation for both economies. Demand for labour is softening, as well as the supply of labour. Starting to see an increase in how long it takes Americans to find jobs. That will matter far more to the Fed cutting rates than what President Trump says.
The Fed has a dual mandate -- inflation and full employment. It's balanced 50/50, though at times it skews. If we were already starting to see job losses, it would be far more weighted to the employment situation than to the inflation fight. If job losses are here and now, then inflation's going to come down because demand will fall dramatically.
Right now we're around 50/50, but there's concern that the inflationary policies of tariffs are going to be a factor. Things change by the hour these days, and we have no visibility. President Trump's policies put the Fed on the sidelines, it's just that simple.
Over the last couple months of uncertainty, we saw forward expectations on earnings flatten out for the US. They didn't come down in a big way, but they became flattened to slightly down. Recently, now that markets are at all-time highs, we're starting to see an uptick again.
He doesn't follow the Canadian marketplace for earnings as much. Canada is 3% of the world economy, whereas the US is 65%. We have a structurally weaker economy, and so our earnings will be structurally weaker in general. But our market multiple isn't expensive to the same degree that the US market is. There's still better value in Canada.
Investor is holding HDIV, ZWC, SMAX, and ZEB. By holding all of these, it looks as though you're diversified but you're just duplicating a lot of the strategies.
Likes HDIV a lot for yield-seeking investors. A nice strategy, and you probably don't need a whole lot beyond that. The dividend and covered-call strategies are nice defensive ways to stay invested.
If an investor did want to branch out, they should be looking for growth. But he wouldn't add growth-focused now, because we're at all-time highs and he's not sure the multiple is sustainable.
Investor is holding HDIV, ZWC, SMAX, and ZEB. By holding all of these, it looks as though you're diversified but you're just duplicating a lot of the strategies.
Likes HDIV a lot for yield-seeking investors. A nice strategy, and you probably don't need a whole lot beyond that.
