Market. Do not take on risks that you do not understand. Index funds get into industries and markets that may be winning or losing. There is nothing safe about being in something you don’t like. Cannabis has no barriers to entry because anyone can growth some of it. If there is a material adverse change or management lies to him, he sells. Cyclicals can be bought when out of favour but when they are in favour, he reminds himself that it is cyclical and prepares to sell.

Fine company and well known. It is a source of funds when the economy is improving. It is a cyclical market so it is not timely. It is a defensive company but this is not the time to be defensive.

The companion animal market has grown very strongly in the developed world. This company has less exposure to livestock. They provide testing services to vets. He likes the company. He likes the long term prospects of the company but banks will do better if interest rates keep going up.

He tries to stay away from conglomerates because they trade at a big discount to net asset value. He is concerned about it being a self help story. The catalysts will be unfolding slowly.

They have one of the largest fleets of alternative energy out there. Regulators are encouraging utilities to install more sun and wind. They have a nice growth trajectory. Because it is a utility, they are very sensitive to rising interest rates. You need to be concerned that money will shift over to banking in an improving economy.

He owned it for many years until interest rates started to rise. The whole group has done poorly over the last 60 days. More natural catastrophes mean insurance companies have a 'hard market' and can increase fees over that of claims.

(A Top Pick Dec 27/18, Up 34%) They are the largest producer of Humus.

(A Top Pick Dec 27/18, Up 23%) He has been sitting out for 6-9 months. He is watching it carefully now because we have had a turn in the manufacturing economy.

(A Top Pick Dec 27/18, Up 74%) Electronic test equipment. 1/3rd is in defense and military. They have high operational leverage. They moved to being relatively unknown to known over the last year. It attracted a broader audience. All their businesses are doing fairly well.

Gold. He is not bullish on gold right now. For it to do well, the US dollar has to go down, and then global central balance sheets need to grow more than they are now, and there have to be negative real interest rates. Gold has not been a hedge since 2012. It is not timely right now.

He has avoided it because insulin and products to replace it have had a lot of price increases and he fears they will be looked at by politicians. It is a very defensive issue and should do better when the economy slows.

It is a defensive issue with defensive growth. He exited over the last quarter as he thought people would use this as a source of cash. It is one of the best run consumer good companies in the world.

UTS is splitting into pieces and one is coming into Raytheon. He likes the defensive as well as the commercial spaces they are in.