Market. The market was already poised to head higher before Trump was elected. The trends were already in place. What is interesting is that the Trump bump everyone was looking for i.e. get Long banks and get Short bonds, etc. had a really nice run up until the middle part of the new year, and has subsequently given everything back. People are now very much in a “wait and see” hold pattern with respect to the whole reflation trade. Several sectors are really propelling the S&P 500 narrow rally, the consumer discretionary and technology. The backdrop for technology is really conducive. We are in a period right now where you have inflation falling, real GDP growth accelerating, and that backdrop is about as good as you can get for the technology sector. Inflation is still benign. Technology has now moved up to about 25% of the S&P, which is really, really substantial. People should be rebalancing portfolios now. At some point there is going to be a real reversion trade. He has Short positions now on the broad indexes of Canada and Australia.

The classic category killer. In his funds, he is Long this company and Short the things that Amazon is killing, certain retailers, etc. Not a cheap stock at 28X enterprise value to EBITDA. It certainly has a lot of runway in front of it. They are getting involved in every vertical with respect to retailing. He is nervous.

Like a lot of Canadian banks, it has US operations, which would probably be the one area he would be most excited about, in part because the US banks find themselves in a better environment than they do in Canada. Thinks there will be legislation changes in the US, which favours bank shares in general. The flipside is the constant buzz on the Canadian real estate market. This bank operates in the prime mortgage market. Doesn’t think you’re going to make a lot of money in any of the Canadian banks right now. He would much rather focus on banks internationally rather than domestically.

Has been very favourably disposed to this area. The stocks in this area are all very expensive. If you look at the geopolitical environment we are in now, the US doesn’t want to be the policeman or watchdog of the world. Feels the wind is at your back in the sector. You want to go with the major players, including Lockheed, Northrop Grumman (NOC-N), Raytheon (RTN-N).

Has owned this for a long, long time. It is basically in the crosshairs of Amazon (AMZN-Q), but it is a retailer he would prefer over all others. They focus on the lower end of the market, which he feels still has decent growth ahead of it. The company is putting in the effort to fight back on the online side. Their e-commerce sales are doing very, very well. Not a super cheap company. They buy back oodles of stock every year.

The market cap is around $12 billion. In the grand scheme of things, everyone knows that Amazon (AMZN-Q) is eventually going to buy these guys out. The growth of this thing internationally is fabulous. He would scale into this and not buy into it all at once.

Lloyds (LYG-N) or ING (ING-N)? He would favour ING, the Dutch insurer, over Lloyds. In the UK, Lloyds has had a big restructuring coming out of the financial crisis, and clearly that is now behind it. The problem is the political and economic uncertainty background in the UK.

Lloyds (LYG-N) or ING (ING-N)? He would favour this over Lloyds. In the UK, Lloyds has had a big restructuring coming out of the financial crisis, and clearly that is now behind it. The problem is the political and economic uncertainty background in the UK. ING is a terrific business and is a very, very inexpensive stock. Thinks interest rates in Europe are set to go up, which should put the wind at the back of this bank.

(A Top Pick Oct 3/16. Up 35%.) This is firing on all cylinders. The lithium market is a market that is underappreciated, both from the constraint/supply side and the expectations on the demand side. Lithium is very much an Asian story, and probably is why this company has been undervalued for quite some time. Still a Buy.

(A Top Pick Oct 3/16. Up 14%.) *Short* At the end of the day, all retailers are going to suffer the same fate from the Amazon (AMZN-Q) affect. A cheap stock, but a bit of a value trap. He covered his Short on the earnings disappointment, but would look to re-Short if it bounced materially from here.

(A Top Pick Oct 3/16. Down 3%.) You have to own gold all the time. It’s a form of currency and a proxy to the US$, which he thinks is bottoming out. Has reduced his gold exposure materially, but always has some on.

Investing in Ireland? This is an iShares ETF for Ireland, which will give you a diversified basket of stocks. The Irish economy is a little like the Canadian economy, a small market, basically financial, building, construction and agriculture. He wouldn’t make this a cornerstone of a portfolio.

US banks versus Canadian and European banks? US banks in general are cheaper, comparing some of the money centred banks like Wells Fargo (WFC-N) and Citi (C-N). On the general outlook, there are some real positive tailwinds, whereas in Canada there are a few headwinds. Also, he would be playing more of the bigger cap money centred type banks, as opposed to regionals. The European side does look good, and there is an ETF iShares MSCI Europe Financial (EUFN-Q) which is a broad composite of European banks. These are banks that have not moved that much. There is a big opportunity in European banks. He would choose banks in the order of 1) European, 2) US and 3) Canada.

One of the finest alternative asset management teams globally. By buying the top company, you are getting investment stakes in all the different subsidiaries. Good management.

The biggest bank in Germany, so there is no way this would ever be put into receivership. The government would step in. Despite that, it is a very risky bank. They have multiples and multiples of their BV in all kinds of strange things. It’s like J.P. Morgan (JPM-N) on steroids. They are a massive player in the capital markets and the banking markets globally. He would prefer using a broader basket of banks through an ETF like iShares MSCI Europe Financial (EUFN-Q).

A Great Britain ETF? He is not wild about Britain right now, only because the uncertainty is very difficult. Remember you are taking exposure to the British pound indirectly, which bounces around like a ping-pong ball.

Kinder Morgan (KMI-N) or Kinder Morgan Canada (KML-T)? In the short term, he would choose neither. If certain things happen, he would look at the Kinder Morgan Canada position. The Canadian subsidiary, without the pipeline expansion, is worth $15. That is just on the assets and the quality of the assets. Since you can get the shares close to $15, you are getting all the optionality. He is waiting for an opportunity to get this under $16. In the US, it is an MLP, and he is not positive on the MLP market. *Correction by BNN on June 6/17 that they are no longer an MLP, they are a common stock company. (Bill) There is just so much debt associated in that area.

The insurance company he would be a buyer of today. The nice thing is the global diversification. You are getting the US business, the asset manager and the underwriting life insurance business, but more importantly you are getting the Asian exposure, in particular China. If you just tuck this away, as rates creep higher globally and the insurance markets heal, it’s a company you need to own.

Kinder Morgan (KMI-N) or Kinder Morgan Canada (KML-T)? In the short term, he would choose neither. If certain things happen, he would look at the Kinder Morgan Canada position. The Canadian subsidiary, without the pipeline expansion, is worth $15. That is just on the assets and the quality of the assets. Since you can get the shares close to $15, you are getting all the optionality. He is waiting for an opportunity to get this under $16. In the US, it is an MLP, and he is not positive on the MLP market. There is just so much debt associated in that area.

A really interesting business. They straddle 2 businesses. There is an active money manager business and then there is a path of ETF’s. Power Shares is the 4^th largest ETF platform in the world. They have a very strong and growing organic active business, and a terrific growing ETF business. Dividend yield of 3.5%. Thinks the stock should trade upwards of $40. (Analysts’ price target is $36.)

EUR/USD *Short*. The euro today is around 1.1257, and has had a really strong move up from 1.05 earlier in the year. This is predicated on the fact that people think Draghi is going to curtail corporate bond buying. Thinks that is going to change. Real economic growth in the US is accelerating, and in Europe he thinks it is topping out. Another wildcard is the Italian election which is coming up, which will cause some consternation in the market.

*Short*. The Company derives a good chunk of its revenue through its credit card business of about 40%, and its auto financing business, another 20%. Of that business, approximately one 3^rd is subprime. One weak link in the US market is the subprime market where delinquencies and some of the charges are going to increase. Dividend yield of 2.1%. Thinks the stock can trade down to $59. (Analysts’ price target is $98.)

Market. Equity values are at stretched valuations, so if there are disappointments on the policy front, we could be in for some trouble. His strategy is being long financials, industrials and energy. There is still a lot of risk out there. The principal risk is in valuations. The US has really been a magnet for a lot of the world’s investable capital, and as a result we are getting a pretty bifurcated market right now. He is bullish on Japanese shares, but his caveat is to be hedged, and he is Short the Long Japanese shares, a play that has got a lot of folks interested again, partly because the Japanese monetary authorities have changed their policies more towards targeting yields. As a result, you typically get currency going down and the stock market going up. France is also very interesting. On the debt side, he is starting to see the spread starting to move out quite a bit from where the German Bund would be on the curve, as well as some skittishness in the equity market. He hopes to take advantage of volatility that will come out of the election. He’s been Short the Cdn$ for quite a while, but has it on a fairly short lease because it has been probing the $.70 level on a couple of occasions, and has been bouncing in a range of $.75-$.77. The issue here is partially a hedge against growth continuing to slow. If the Trump bump doesn’t manifest itself the way the market thinks, or doesn’t have the repercussions globally, he expects the Cdn$ and Australian $ will both be under pressure.

The proverbial story of valuation versus fundamentals. This is really a killer in its categories of online retailing and Cloud services. However, it is not cheap. You are looking at 25 to 28 times cash flow. They have a fair bit of growth to achieve in the next little while to come into that valuation. He would prefer looking at this in 2 parts, online retailing and Cloud services, so would suggest maybe looking at Microsoft, which has been growing its share in Cloud services. A cheaper stock and pays a dividend.

He would prefer ING Groep NV (ING-N), which is very cheap and trading at around Book right now. Expects rates in Europe will start to rise, and he would focus on the highest quality names.

Had a near-death experience because of debt, and it took a change in commodity prices for it turn. If bullish on industrial commodities, this is one you could continue to own. Has a lot of hidden assets.

One of the premier media companies globally. The management team is critical on this name. There is speculation that Bob Iger is going to be staying on past 2018. The real challenge has been ESPN. Thinks the worst days are now behind it, and you can trade it up into the $120-$130 level.

He likes this. Over the last 4-5 months, iPhone 7 was not as bad as he had expected, and also the services side of the business is growing faster than he had thought it would. Also, that is in the context of a not very robust economy. Looking at the product cycle coming, some of the big improvements they’ve made in their laptop and the Mac business and its low valuation, he covered his Short position and is now Long.

Just released really, really strong results. Terrific operators and have great properties. He is a little concerned with the natural gas price not going up dramatically from here. Also, you should be a little cautious about the border adjustment tax Trump is floating and its impact on Canadian E & P companies.

(A Top Pick June 28/16. Up 20.83%.) Lithium. Last quarter they completed the transaction of one of their processing plant businesses in China, so they have a little bit of a war chest now, and he expects them to go out and buy a lithium producers, possibly in Australia. He still likes this and feels the price of lithium will continue to go up as the demand for electrification continues. Still a Buy.