Gordon Reid

We've had a couple of different types of market. Until mid-year, we had a market dominated by very few stocks, mostly in tech and telecom. Since the beginning of Q3 at the start of July, we've seen a rotation and a broadening out. Small cap stocks are doing a bit better. Industries and sectors that didn't participate in the first half of the year, like healthcare and industrials, have come on a little bit, and that's very healthy for the market.

Likes it for the long term. Just look at the demographics to understand why. Most analysts think that growth in healthcare will be double GDP over the next 10 years. So we can take advantage of that by owning some of the best stocks in that sector.

He participates in pharma through MRK, and he owns AMGN in the biotech sector. He has exposure to broad, diversified companies like CVS, which is quite vertically integrated from insurance right through drugstore operations. There's good opportunity there. See his Top Picks.

He also owns ELV, a pure play in health insurance.

He likes the sector, but you have to be pickier. Some of the companies tend to be low growth and high multiple, which could spell trouble down the road. There are opportunities in the area that he's taken advantage of.

He owns EME instead. On a 5-year chart, PWR has outperformed. But on a 1-year chart, EME is ahead. At 28x earnings, the multiple on PWR is about 50% higher than its normalized range, so it's not as good a value today. He'd switch into EME. EME has better profitability metrics, EPS revisions are better, PE is 20x earnings. 

He owns EME instead of Quanta Services. On a 5-year chart, PWR has outperformed. But on a 1-year chart, EME is ahead. At 28x earnings, the multiple on PWR is about 50% higher than its normalized range, so it's not as good a value today. He'd switch into EME. EME has better profitability metrics, EPS revisions are better, PE is 20x earnings. 

It's harder to decide when to sell than when to buy. Before you buy, you have all the time in the world and there are no emotional tugs.

Once you own a company, the emotional side kicks in. If you look just at the profit you've made, you're only looking at one side of the equation of value. I've made x%, so should I sell because I've been rewarded? This is a flaw in investment thinking. Instead look at fundamentals, growth of earnings and cashflow, revenue growth. If it's a better value today than when you bought, keep it. This way you give some stocks in your portfolio the chance to double and more.

Take the price and look at what you're pricing, rather then looking at your own experience.

A dividend story of about 8.7%. Shouldn't expect a lot of capital growth. 53 years of dividend growth averaging 6.9% growth per year, so sustainability is high. As a Canadian, you're giving up the dividend tax credit. Look for something in Canada.

Not good news, can't sugar-coat it. Often there's an overreaction to these situations. He's waiting for follow-up comments. Market's waiting to see how it deals with all the disruption. Trash-bin multiple of 7x. Expects over $8 EPS this year, more than in 2015 when stock hit highs.

AI is unlikely to be winner take all. AWS is a wonderful franchise, the leader in cloud, backed by an enormous company. Much of stock's move from $80s to $130 based on expectation that its cloud and AI will be a winner.

Getting good reviews. He's done some research into it. It's screening quite well, there's some opportunity here. A good healthcare offering.

Doing well because of its weight-loss drug and the prospective Alzheimer's drug. Valuation of 50x earnings is too high for him. Lots of froth. The market has a way of luring us in, and then the trap springs shut. Better value opportunities out there.

Great company. Fabulous CEO. Always trades at a premium, and that's kept him away. He only has space for 20 stocks, and he sees better opportunities in AMZN, AAPL, and GOOG.

Banks have had troubles. Trading below book value, at 8x earnings. Early cycle vehicles, and we'll get there fairly soon. We'll either go through a recession, or have one declared null and void. Has $100B of underwater bonds, and the market's nervous. It's only a problem if they're forced to sell, as they'll earn less. Don't write it off just yet.

He sold in January on valuation. Great company. One to own when the price is right. 21st century leader in industrial technology.

Tier 1 producer of seats and electronic equipment for the auto sector. Volume will come back. Margins are much higher with electrification programs, which will drive EPS. Not an expensive stock.