Market Outlook - He is still risk averse. Holding 20% times the equity allocation for accounts in cash. Even if there is no economic recession, there is some signs of an earnings recession. Corporations made a lot of acquisitions and carry a lot of debt. He sees the S&P 500 crossing 2,900 and then you will have momentum probably pushing it another 10%. His top is 3,700. There he would rise cash as we would be at the 2000 or 1929 highs on a relative valuation. Yesterday the 10-year yield came low enough to match the 2-year yield. That happens usually in Canada. We are there already in Canada. If a recession comes it usually lasts 18-24 months and the market could fall 20 to 40%. The banks were rising on the expectation that rates would continue to go higher. Banks are not the best place to be for now.

They completed their $30 billion divestment program that allowed them to pay down debt. They are moving towards LNG. They haven't been rising dividend lately. Caution on this. The yield is attractive but if not growing is a red flag.

He likes it a lot. They are into water purification and air purification in NA and India and China. They are not making money in China but not losing.

Bunch of engineers in Chicago that make fuses. Great opportunity ahead of them. He bought in 2013. The power side of their business has been growing. Dividend have been growing at roughly 14% clip.

A conglomerate through South East Asia. They have been around for 250 years. They are selling their insurance business. Good Management team that would take advantage of opportunities.

They just bought GE Pharma for $20 billion that supposedly is going to be an earnings accretive acquisition. The stock went up in price $6 the day it was announced. The market basically saying "you did good". Now they sit back and pay down the debt in 5 years. There is going to be a bump in earnings. Still buying but it is getting toppish.

Straggling now with growth. The dividend is not growing. Yield is attractive but not able to grow earnings. Free cash flow has to go up.

(A Top Pick Jan 29/18, Down 9%) They were early on this pick. One of the leaders in architecture in water systems. The dividend is growing. Still buying more. Trading at 12 or 13 times 2021 earnings.

(A Top Pick Jan 29/18, Down 3%) Still buying more. The second best performance among all Euro banks. European Banking sector is terrible now. Yields being so low. They are AA credit.

(A Top Pick Jan 29/18, Up 7.5%) For people that have FI in their portfolios he has 5% in inflation protected bonds.

Historically it has been the best performing. They will have issues going forward in auto loans. Not a lot exposed to investment banking.

They are AA. The best underwriters in the business. Insurance companies are out of favor in the investment community because of global warming and other catastrophes. They pass off a lot of that risk and exposed only to 5% of the risk they cover. Not exposed to the stock market as they invest exclusively in bonds.

In a registered account is fine. In a taxable account you are having a combination of interest and ROC and dividends.

Question on analyzing debt on a balance sheet - The first thing to look at is debt to cash flow. If you have 2 times debt to cash flow you are fine. At 4, 5 things get difficult. The other things is how it is spread out over time. The credit rating is important as well.

He likes asset light. Basically a logistic firm. They suffer when gas prices are rising. There is a dearth in trucks drivers now. They are hurting in their fresh business now. They are making good margins on everything else. They have price power. As well as the economy is doing well they do well.