Lorne Steinberg

US inflation. Sees inflation either peaking now or close to the peak. As inflation cools, he has confidence that the Fed will be able to take its foot off the gas a bit, which will be accommodative to markets. Important to understand that bond yields are way below what they've been for the last 15 years or so. Healthy to have a normal yield curve, so that when there is the next recession, the Fed has room to cut rates. Bulk of the bond market increase has already happened. It may go to 4-4.5% at the outside. Consumers are in excellent shape, wages are rising, there's a lot of money on the sidelines to spend, and he's still bullish on corporate earnings. Remember that, 12 months from now, the war in Ukraine will be resolved somehow, China's shutdown will be resolved somehow, and we'll be talking about something else.

Turnaround coming for tech? You have world-class companies like AMZN that make money, have a great market share, and are dominant. Then you have companies that are losing money or trading at sky-high multiples, which remind him of the NASDAQ in the late 90s. AMZN has retraced back to where it was before the pandemic, so he sees value. For a stock like SHOP, AMZN is stepping up competition, and it's still not cheap despite the decline.

Areas of opportunity? Financial services, banks in particular, have been hammered globally. Canadian banks have outperformed, and have fallen 10-15% from where they were a few months ago. Global banks in the US offer great opportunity with cheap multiples, earnings multiples, and healthy dividends. Credit and consumers are in great shape. If we don't see a steep decline in the housing market, the loan books will remain in very good shape.

Has fallen 30-35% in line with the tech market and a slowing economy. Cheap price to earnings at 10x earnings, so it's something to look at. A question mark is CEO retiring, but naming his son to one of the largest divisions.

BMO vs. CM BMO completing 16B acquisition in the US. BMO has a much larger presence in the US, whereas CM has the larger presence in Canada. CM has been the faster grower, and he favours it. Execution risk with BMO, especially in a tough market. CM has the better opportunity, but he doesn't knock BMO.

CM vs. BMO BMO completing 16B acquisition in the US. BMO has a much larger presence in the US, whereas CM has the larger presence in Canada. CM has been the faster grower, and he favours it. Execution risk with BMO, especially in a tough market. CM has the better opportunity, but he doesn't knock BMO.

Somewhat cyclical. Growth has been lagging, and doesn't see it accelerating soon. In a competitive space. Solid business, not cheap. High quality. Slowly getting more shareholder friendly. Better places to look.

Best in class. Not cheap for a value investor. Would be on his radar screen if it came down another 10-15%. Brilliant management, great company.

Medical technology. Fantastic job repositioning away from consumer products. Likes the company. Under pressure due to CPAP recall. An opportunity.

Underperformer. Profitable, free cashflow positive. Out of favour. Profits from sale of biosimilar business will be used to buy back shares, which he approves of. Compellingly cheap at 3x earnings. Paying down debt.

Incredibly cyclical. Benefits from high commodity and food prices. Not a forever hold. Take some chips off the table.

Global business. A laggard, but that's the opportunity. Earnings disappointment due to input costs. Fantastic acquirer and integrator. A very comfortable holding.

No real clarity yet on the takeover. Frustrating. Rock solid. Free cashflow generator, solid dividend. Long term, it would be harder for them to carry on as a standalone company.

(A Top Pick May 27/21, Up 22%) BAM is about to put together a bid for the company, deadline next week. Stock popped overnight.

(A Top Pick May 27/21, Down 2%) Long-term core holding. Buys back shares, raises dividend. Premier P&C insurer in NA. Great business at a cheap price.