Stan Wong

We have to take some cues from history. When you look at the 2018 trade war between the US and China, the S&P 500 did drop nearly 20% in Q4. But it rebounded with a 31.5% return in 2019. The other thing is that when he looks at the last 6 corrections of 10% or more (which is what we're facing now with the S&P 500), going back to 2009, the 1-year return was 40%. 

That's the past; doesn't mean history will repeat, buy it often rhymes. The fundamentals are still solid in the US. GDP was fairly solid in the last quarter. Inflation ticked down. Consumer remains pretty solid. Unemployment is hovering near multi-decade lows at 4.1%.

He wonders how much is posturing and how much is negotiation. Premature to say we're looking at a recession down the road. 

In 2018-19, inflation was around 1.9-2%. So even with tariffs coming on a much bigger economy (China is 20% of world GDP), markets still came out OK.

Choppiness will continue as long as this rhetoric is there. But we also need to look at some of the political considerations coming up. US mid-term elections are next year. Will the US administration stem some of ?the talk and put policies in place that will help the economy, such as deregulation and tax cuts? Such moves would help the economy and the stock market.

This is an opportunity for investors to take advantage of some of the names that are down 15-20% or more. He's using cash to add to high-quality names he likes for the next 3-5 years.

Concerns about economy, sentiment around energy stocks is lower, oil prices are weak as well. He sold. Long-term, makes sense to own oil and energy. 200-day MA is flat, trending slightly down. Price now below 200-day. Down 26-27% from recent highs. Technicals don't look great. Yield is ~5.65%.

SU is the only true energy name in his portfolio.

He likes this ETF for US exposure. He likes names with rising dividends over time. Very reasonable 5 bps MER. Top names include: AVGO, JPM, AAPL, MSFT, V. Typically, high quality. Very strong performance, up ~16% annualized over last 5 years. Down 1.87% YTD, not too bad.

On currency, with the interest rate differential between Canada and the US, he has to wonder when we see this big rebound in the CAD. It might be some time. You want to diversify your currencies as well. Having USD exposure has worked out very well for Canadian investors over the last few years.

Down 27% from recent highs just last month. An opportunity to buy, though there might be more choppiness ahead. Right at 200-day MA, could be a support level. High growth with 12-15% earnings growth. Bit pricey at 35x forward PE, but it has a near-monopoly on tickets and concert space. 

Decline due to lots of growth stocks falling, plus concerns about consumer.

Volatility in last month has been great for all the utilities. Not a lot of growth, only ~7%. He looks for a bit more growth. Great place to shelter for defensive positioning, plus 4.9% yield.

He likes growth, and utilities don't usually provide that. Stock's down to just below 200-day MA, so watch that. Defensive, given what's happening around the world. Only 5-6% earnings growth beyond 2025. May make sense for income investor looking for yield. Yield is 5.5%.

Leader in the space. Trades at 16x forward PE, 11% growth. Last 5 years, earnings have growth 12% a year. 200-day MA trending higher, but price is a bit below that, so technical signals are neutral. Integrated model strong. Pricing power. Down 24% from recent highs on regulatory concerns, overdone.

Looking 6-12 months out, and assuming we don't fall into recession, look at financials (soft landing, relatively low inflation and unemployment, increasing business activity). Financials will be big beneficiaries of deregulation and tax cuts from Trump administration.

Industrial sector should also do well. He's focusing on the US, though it can tie into the Canadian sectors as well. In the US, there will be more of a focus on domestic manufacturing. Names like CAT and OTIS.

Selectively, be in the tech and communications sector. Mag 7's are back to 2017-18 levels on valuation. Growth rates of 15% or more are still there.

Yield is 7.1%, fairly tax efficient from distributions and ROC. Great for investors that want that yield. However, more often than not, the underlying securities will perform better on a total return basis. With the covered call, you get struck out as prices go higher over time. See ZEB.

Basket of Canadian banks, no covered call. Past year's total return is nearly 14%. As well, better return over 3 years than ZWB.

Over the past year, total return for ZWB was ~9.5%.

Still adding for new clients. Key has been that it has very little competition, unlike US counterparts. You pay up for that position, at 35x forward PE, but you get 15% earnings growth going forward. 

Beneficiary of cumulative effects of inflation and uncertainty in Canadian economy. Recession-resilient business model. Outpaced the TSX since its IPO in 2009.

Sentiment's pretty rough on this name. Fairly cheap at 22x forward PE, 18% earnings growth. Regulatory scrutiny. Lost a bit of market share to LLY (which he still holds). Below 200-day MA, which is moving down. Growth of GLP-1 drugs is there, so he's keeping an eye on it for future.

He sold and put profits into CRWD (and then took profits on that, too). Like FTNT, still great names to own long term, as cybersecurity threats are only going to get bigger. Secular demand for software and services will continue. PANW is 53x forward PE, for 15% earnings growth, so he needs a lower PE to be interested. Capex slowdown from businesses in this area.