Bill Harris, CFA

Sky-high US inflation and volatility. Extremely important. When rates are this high, and valuations get this high, markets will swing a lot more than normal and more quickly. Seems that supply disruptions will be around longer than anticipated. We'll have this kind of inflation number for another year or so. The markets are figuring out quite quickly where things are at.

Decelerating liquidity. A general definition of liquidity is how fast can you turn an asset into cash? During the pandemic, a fantastic amount of cash was put into the system. The extreme valuations we've seen are a result of that. This year, we have less quantitative easing, interest rates are going up, and no more cheques from the government. So the bubble that was in place last year, is not here this year. The most important thing to understand is how does decelerating liquidity affect the valuation of stocks and asset prices?

Businesses/sectors to focus on. Watch out for high valuation stocks, but at lot of these have already come down in the last 2 months. Think of money moving the way water sloshes around in a bathtub. The money that was all in tech and high valuation stocks is now moving to the other side of the stock market. And that's what he's looking for: consistent businesses with consistent rates of return. You could use the term "value", but these are high quality, established companies. We're not seeing a market meltdown, but rather a movement of money into these more traditional companies.

All real estate is impacted by interest rates. Really got hit, as it owns all the things that were shut down. Company is a bit directionless. He owns AP.UN instead, as it has a clean structure, clear what management is trying to accomplish.

Clean structure, and clear what management is trying to accomplish.

Gold market has languished the last year and a half. Cost are going up by 20-30% at this part of the cycle, and he doesn't know how markets are going to react to that. He's looking at royalty companies or specific targets, rather than a generalized big gold company.

Overshot on valuation. Sold recently. Uranium price went up, but the next move needs demand in the market to move the price higher. Commodity prices will stall for the time being. If the valuation and commodity price were favourable, he'd revisit.

Great Canadian business. ROC over time is not as great as others. But now in the sweet spot, as it can raise prices and capture this inflationary environment. Going to benefit from higher prices. Great team. Strength of commodity cycle will dwarf CEO issues.

Second-tier. Benefitting from commodity cycle. Great recovery so far, but these stocks are still relatively inexpensive. He owns ARX, but WCP could easily have been a comparable. Enthusiasm for energy is just starting. Anticipates an easy 50% out of these Canadian mid-cap producers.

Benefitting from commodity cycle. Great recovery so far, but these stocks are still relatively inexpensive. He owns ARX, but WCP could easily have been a comparable. Enthusiasm for energy is just starting. Anticipates an easy 50% out of these Canadian mid-cap producers.

Instead, he owns BIP.UN and BBU.UN. Heavy asset base that might have a high valuation. News today is they're looking at taking the business apart to release value. The asset manager is the piece the stock market would want to value. Wait and see how it plays out.

He likes the repeatability of the business. Pretty good model of what its rate of return will be. Accounting is new and will take a couple of years to sort out. The pandemic didn't help its revenue. He's looking for stable cashflow in the underlying business.

(A Top Pick Dec 15/20, Up 35%) Pandemic pulled a lot of demand forward. There might be a kind of weird recession after all this spending. After staying at home, people are probably anxious to do activities away from home. He's now sitting back to see how this all shakes out.

(A Top Pick Dec 15/20, Up 61%) Stock got way ahead of the commodity price, and the commodity price might stall out. It could be really volatile. Hopefully, the supply and demand will line up at a point in the future.

(A Top Pick Dec 15/20, Up 12%) Taken over. He got out when the deal was announced, as the acquirer wasn't somewhere he wanted to put his money.