Larry Berman CFA, CMT, CTA
Chief Investment Officer, Partner at ETF Capital Management Inc.
Member since: Jul '02 · 4004 Opinions
Rating Card
| All | 
Rating
| 
Big Win
| 
Win
| 
Neutral
| 
Loss
| 
Big Loss
|  |
|---|---|---|---|---|---|---|---|
| 0 | 17 70.83% | 7 29.17% | 0 0.00% | 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% |
Stock Opinions by Larry Berman CFA, CMT, CTA
COMMENT
Equity sell-off. The pull back is from a variety of factors. There is the start of earnings, Powell last week tried to convince the market of transitory inflation, tapering aid, geo political tensions and lots of bond supply coming to market. There is a perfect storm starting to brew.
Unknown
$0.000
Unknown
COMMENT
China-US tension. The modern day Cold War with China's tech right now. China wants to become the largest economy and global influence. The Cold War is being debated and fought in large cap tech. Right now it is the secondary companies that are being affected.
Unknown
COMMENT
Earnings. Earnings expectations year to date have ramped up tremendously. At the start of the year, $163 on the S&P for this year was expected. However, now it's up to $191. We have never seen earnings ramp up so much, but also we have never seen this much government spending.
Unknown
COMMENT
Market drivers. It's always earnings that drives the market. The valuation is on the high side right now. You get some risk off and this is what we are seeing right now.
Unknown
BUY on WEAKNESS
Hydrogen has been spoken of as an alternative for many years. It hasn't panned out yet after decades. How far along is hydrogen? It will definitely be part of the future. It makes a lot of sense. However, in a risk off market, companies without earnings and good cashflows, these stocks get hurt most.
E.T.F.'s
COMMENT
Crypto and gold. It is a digital asset that can be traded. The fundamental value is probably closer to zero and thinks it will collapse under its own weight in a bubble. The real interest rate is negative. Gold has seen a dislocation from this.
Unknown
WEAK BUY
Over the long run, these will lose you money. As markets go up, these things go down considerably. It is not for the faint of heart. In a risk off market, these can run 10-15%. You must be able to time markets perfectly.
E.T.F.'s
COMMENT
Educational Segment. Any good educated market technicians, the number of stocks participating in performance is important. Some analysts are saying breadth is still doing okay. He does not agree. In March and April, the S&P was making new highs. However, the average stock was turning down. Last week, most stocks were down but the index was only slightly down. This was last seen 25 years ago. Market breadth is wonky. This divergence often leads to a 5-10% correction. This should be looked at as an opportunity. We have not seen markets come down to trend. There are indicators that are showing cautionary levels. Risk-return is telling us to be cautious here.
Unknown
COMMENT
Educational Segment. U.S. second quarter earnings season is starting. Expectations are very high going forward. Looking at the chart comparing 2017 market expectations to EPS, the market was up 20%+ with dividends even though earnings did no go up much. However, this can be accounted for by the anticipated tax-cuts from Trump. In early 2018, the market was down with lots of volatility since it was priced in. Earnings expectations fell dramatically in 2019 but the S&P500 had a great year. Every year is different but this year, we have super high valuations and high expectations for earnings. 2022 earnings are now at $213 and 2023 at $235. These are crazy high in terms of growth. Taking a 20x multiple, we have 4700 on the S&P500. Very close to where we are now. This means that we cannot expect double digit growth for the next few years since it has already been priced in.
Unknown
COMMENT
One of his favourite ETFs. Was involved in creating this structure. They write puts on large cap US companies. Once they own them, they write calls on them. Trying to generate yield from the option premium and dividends. Buy low and sell high, 6% yield target. Focused on yield return with modest growth. In a robust economy, this will underperform but will provide yield. Will do well in most markets. A more defensive play.
E.T.F.'s
BUY on WEAKNESS
Saw a parabolic rise in the beginning of the year. Now it has reversed to 52-week lows. A value play now with lots of discounting factors. A lot of bad news priced in. Doesn't mean it can't fall further, but it could be a buying opportunity to ease in. Wouldn't worry about short term volatility.
E.T.F.'s
COMMENT
Thinks there is a play in steel, although this is no longer early. Would play the steel play through ZMT. Stelco is a good name here although it has already had a good run. 10% range correction is possible. Use the past corrections as a guideline for entry.
COMMENT
Thinks there is a play in steel, although this is no longer early. Would play the steel play through ZMT. Stelco is a good name here although it has already had a good run. 10% range correction is possible. Use the past corrections as a guideline for entry.
COMMENT
Long term bearish on energy. However in the next 2-3 years, there has been underinvestment and this has lead to prices squeeze higher. Bullish for a trade. Buy dips and sell into strength. $100 barrel would be the upper limit for consumer demand. Could see some more upside before price becomes a problem.
oil / gas
COMMENT
There is dividend from the underlying companies and there is also yield from covered calls. The stock price adjusts on the ex-dividend experience.
E.T.F.'s
BUY on WEAKNESS
The growth of the pipeline industry will be strained. Natural growth is challenging. For a trade, it is positive due to short term considerations. Big picture, you can buy into weakness and you can earn a decent yield. Don't chase strength.
oil pipelines
COMMENT
Real return bonds with rising inflation expectations will protect you. They have a small coupon and you get a top up that is the actual inflation rate. Tricky and on average do not recommend to average investors. If you believe there is sustained inflation, you could buy it. This is a vehicle that needs to be traded.
0
COMMENT
China saw their growth metrics turn down a couple months back. There will be a perennial discount for the Chinese companies but they offer good value. China will be the biggest economy in the planet and you cannot ignore this. Last couple weeks have seen some interference by the Chinese government in capital markets. There is opportunities in pull-backs but there is risk of government influence.
Unknown
COMMENT
Earnings week. Must draw trend lines and differentiate between pre-covid, during covid and post-covid. $163 was the initial expected earnings for the S&P. Now it is $191. This speaks to the strength in capital markets. Selling the news may be a good strategy.
Unknown
COMMENT
Feds. The liquidity support that is driving multiple expansion is now being talked about to start unwinding. What are they going to say about housing? It is quickly becoming unaffordable for average people. Why are feds supporting mortgage markets when there is strength there.
Unknown
COMMENT
Delta variant. A noise factor. We have seen the positive impact of vaccinations and health measures. It is not eliminating transmissions but it is impacting hospitalizations. Markets respond with memory of what happened last time cases went up. However, the impact is reduced.
Unknown
COMMENT
Didi IPO. Have looked at KWEB a few months ago, which tracks Chinese tech. He saw that there was a risk of a pull-back. The valuation of Chinese tech companies relative to the US, there is a significant discount in terms of multiples. Any weakness caused by something like the Didi Chinese regulator issue would be an opportunity for investors.
BUY on WEAKNESS
Resistance has turned to support around $65. Around this level, the risk-reward is pretty good. It is an opportunity when it falls to these levels. Equivalent companies to Amazon in China is quite cheap.
COMMENT
Alternatives to fixed income. This asset class is broken and it may be on a permanent basis. The yield you get from your core fixed income is lower than what it used to be, which causes the challenge. You don't get the interest protection and after inflation, it is negative. The debt in the world means interest rates must stay low. The private credit area is booming, where they lend in areas banks can't or won't. The yields are around 6-10% but without volatility. Private real-estate lending is quite interesting. There are alternatives but they are hard to get into with minimum balances. There will be more in the next years that will come to market.
Unknown
COMMENT
It is triple leveraged so it provides triple the exposure of the index. It rebalances constantly and you are buying high and selling low. The more volatile the asset is, the worse the rebalancing impact is. Over time, it will erode the net asset value. Not good for long term buy and hold. Trading only.
E.T.F.'s
COMMENT
This is not a pure blockchain play. It holds Bidu for example. They do hold some like HIVE Blockchain. Look elsewhere if you want a pure play on blockchain.
COMMENT
Utilities to combat inflation. They have a lot of capital and if the cost of capital goes up, then their margins go down. The energy sector for now is very positive. If you think inflation pressures will build and you want fixed income type exposure, then you can look at gold and inflation-linked bonds. Utilities in general will not be a good hedge against inflation.
Unknown
BUY on WEAKNESS
Has been a long term bull on gold for the last few years. Below 1200 is a great risk-reward trade. Gold in the next few years should get into the 2300-2500 range. Thinks that there is a dynamic where there is so much debt in the world and central banks willing to accept inflation. Real rates will be negative and this will be bullish for gold. However, there are cryptos that are pulling money from gold, which is a dynamic that has not existed before. Trimmed a little into the strength. Trading it now.
E.T.F.'s
COMMENT
Educational Segment. The world is going green and there is a tremendous down trend in investment in the energy sector. There is ESG, US shale dropping off and Canadian production being stymied that are affecting oil right now. The futures markets are at $65-$75 for the next year or so. If you extend this out to a decade from now, prices are anchored in the $50s. Prices were depressed in 2020 and forward prices are still depressed. There is short-run supply and demand. It is bullish for oil as a trade. The prices could go up to $100 range. However, it is not investable. Only for trade.
Unknown
COMMENT
Rising case counts. Britain is seeing more cases with the delta variant. There is also good news that the mRNA vaccine's efficacy is still high. The bulk of those who were going to get the vaccine has gotten one. It will be an overhang for a while and it will have influence on markets and policy.
Unknown
COMMENT
Federal reserve. They have been walking back talks of removing stimulus. It's clear that when the market is upset about something, the moves get walked back.
Unknown
COMMENT
Gold. Still bullish on gold, but has modified upside expectations. Was looking at 2300-2500 for spot gold over the next couple years. Less confident on the call now with the negative rate policy is in the market. However, gold has not moved. Debt monetization will continue.
Unknown
COMMENT
Bonds. The whole category of fixed income is now broken. Interest rates need to stay low because of debt. The safety and balance aspect is broken now. Must look at alternatives now. This will be a theme for the next 10 or 20 years.
Unknown
HOLD
There is still a strong case for equal weight to outperform. This is a call on big tech being very highly valued right now. It depends on inflation or deflation however. Still thinks the average stock will out perform market cap weighted.
E.T.F.'s
BUY on WEAKNESS
Has been nibbling away at the underperformance of China. With the pullback, you can start adding on these names. Likes China. Overweight strategically.
E.T.F.'s
BUY
Both are good. If you want to extract yield form Europe, it is the better way to invest. Still owns them in his portfolios and strategies. One is currency hedged while the other is not.
E.T.F.'s
BUY
Both are good. If you want to extract yield form Europe, it is the better way to invest. Still owns them in his portfolios and strategies. One is currency hedged while the other is not.
E.T.F.'s
BUY on WEAKNESS
There is tremendous speculation in the airline names in general. It is part of the noise factor. Will continue to see lots of it. If you think the airlines are going to normalize, buy the dips around the lows of the previous months.
Transportation
BUY on WEAKNESS
A great way to play innovation. You must have exposure to disruptors. Innovation and new technology will be part of the growth. Some names are very expensive. You want to own it and buy dips. Don't chase higher.
E.T.F.'s
COMMENT
Educational Segment. Michael Burry said that the hype and speculation around crypto and such is sucking in retail investors. When it falls, there are billions that get wiped out. We are seeing a divergence where markets are moving higher but a lot of stocks are under their 50-day moving average. The last time we saw these divergences, it was in 2007. We are in a high risk market with dislocation of what's happening. This is a cautionary sign.
Unknown
COMMENT
Commodities volatility. Copper and lumber has seen some volatility in the past few weeks. Feds walked back on comments made last week that may not have been interpreted correctly by investors. The focus on Fed and reducing accommodation will be there for the next 6-12 months. The markets are trying to correct.
Unknown
COMMENT
Iranian oil. There is a new leader coming into power in 6 weeks. Israel also has a new leader. This will make the deal with Iran a lot harder to execute. If the deal does not go through, oil prices could rise.
Unknown
COMMENT
Feds. The whole idea of QE and support against the deficits we will see will be meaningful. A weaker USD to global currencies will need to be on the front burner.
Unknown
COMMENT
Copper. We have not seen a fundamental rise in the demand for copper yet. A lot of the move up in copper is speculative activity. The long term trend is to a higher plateau for copper. The next year will be to establish a new range.
Unknown
COMMENT
Canadian banks. A big factor is the steepening yield curve. If Feds start unwinding QE and raises rates, they will not go very high. The yield curve has probably gotten as steep as it will get. There could be some more upside, but best move may have already been seen. There may be a risk off event in the fourth quarter.
Unknown
COMMENT
We saw a sharp weakness in the CAD so the dip was a currency based weakness. There is no longer term net exposure. There are more puts relative to covered calls right now. The under performance this year is the currency impact.
E.T.F.'s
COMMENT
Gold. Has been a big head scratcher. Gold should be significantly higher than it is. Why with negative real rates, gold is not doing better. Should be higher but it does not seem to budge higher. Has trimmed some exposure into the strength.
Unknown
COMMENT
Has not looked into the deal and how it would affect the company stock. The chart is not telling him anything material.
oil pipelines
COMMENT
Silver. A leverage to gold. If you are bullish on gold, should have some silver exposure. Silver will have an industrial demand as we electrify the world in the decades to come. Supply-demand longer term favours silver. Buy dips. Inflation issue will be with us for years.
Unknown
COMMENT
Focuses on lithium producers, miners and battery makers. Lithium is a big part of the battery world but there are other tech coming online. Hard to say if this will be the tech of tomorrow, kind of like the hype around hydrogen.
E.T.F.'s
COMMENT
Educational Segment. Powell stated on Friday that it was the start of discussing tapering accommodations. Looking at 2013, which was the last taper tantrum, Feds started only raising rates in 2016. Equity markets started to have problems in 2014 when Feds started to shrink the balance sheet. We are probably okay and corrections will be relatively modest right now. In 2022, 16.5x multiple is expected. Low end of a pull back would be 3,500 on the S&P500. This would be a 15% correction, maximum. Any big correction will happen when the Feds balance sheet starts to shrink, which would be around 2023-2024.
Unknown
