Market. Bad news is good news and good news is bad news as the market is loving that consumer spending is weak. That kind of thing is going on quote a lot in the world right now. The market is discounting lower interest rates as well as quantitative easing a year away. The IMF is pretty clear that they see global growth slowing. News of China and India are pretty weak as well as North America. It is pretty clear that the economy is slowing and the question is if we get a recession how deep and how long. Have some cash on the sides at least. The market is not going to continue to go up.

He just trimmed his holdings. One has to look at the quality of what one is buying. This is a quality company. They are driven by the cloud business. He looks forward and sees so much cash being generated that it deserves to get a premium. They are a massive cash machine. They keep buying back stock and sit in an immaculate financial shape. It's not cheap, however.

They became one of the largest wealth managers in the US. It is a very steady cash flow business. It sets them apart and is a more consistent part of the business. The stock is cheap. Global banks have all suffered with flattening yield curves.

A lot of investors don’t want to own oil stocks. He is not a huge fan. A lot of these companies don't see the value of sitting on cash when commodity prices are high.

Other companies have gotten into trouble bidding on these large contracts. They got rid of part of the 407, which was their cash cow because they needed cash. They still have a stake, however. This whole global engineering space is hard to predict. It is so hard to know if these large companies underbid on these large contracts then 3 years later find they lost money on them.

Japanese Tobacco. You are not going to find another Japanese company like this with that kind of dividend yield. If you own tobacco then you find yourself in a very mature market. The Japanese market remains on sale. Hold on if you want that kind of yield. There is nothing wrong with the company.

Cash. He is not a believer in being all in cash or none. If you own great companies and have a long term time horizon then you will do okay. Don't go 100% cash.

Three principal variables when buying a high yield bond. When you buy one, you are lending money to a company like a lender. If there is not adequate capital, then it is probably too risky an investment if the company fails. Ask what is the cash flow to pay back the interest on the bond. A number of high yield bonds yield 15% but don’t pass the above tests. You'll be in the 6% range. Buy a diversified portfolio. [No third principle given.]

(A Top Pick Oct 02/18, Up 20%) And it still looks cheap. It is so well positioned globally. Earnings are rising double digits. The dividend is growing and he thinks this will continue. They have been able to handle the low interest rate environment so well and continue to generate earnings growth.

(A Top Pick Oct 02/18, Down 7%) It has been weak like the global banking sector. Most other banks have gotten out of derivatives trading, that most people don’t understand. By staying in that business they will derive fantastic profits in that area. They are a cash machine and are buying back stock over time.

(A Top Pick Oct 02/18, Down 7%) Japanese small caps have been very poor performers although this one does not reflect that bad a performance. It is incredibly cheap. It sells manufacturing processes to car manufacturing.

It is probably the best run bank in the US. It is trading at a premium valuation. The sector is reasonably valued. But this is such a well managed company.

It is a world class spectacular company but the problem is valuation on slow growth mature companies. Even with share buybacks over the next few years that will not have that big an impact. You need to buy at prices that give you more upside.