Danesh Rohinton

Capping off a pretty good quarter, which caps off a pretty good year so far. As we're entering the back half of 2024, we're talking about China reflation, inflation coming down, and Fed rate cuts. Generally speaking a constructive market as a whole, and for equities as well.

Tremendously so, and across a lot of yield-oriented sectors. More importantly, it's been global as well. Other global markets have been catching up to the US. Mean reversion in all the positive ways.

20+% in one week. The single biggest positioning squeeze we've seen in many years. And it all started with what are still, largely, not deeply tangible stimulus measures. But everyone believes now that the promise is real, because the rollover in the economic data was happening across services and goods PMIs. The government is reacting to the softness in China with stimulus measures that everyone believes will have a future impact, even if they don't work currently.

That's why the positioning rally has been so extreme, 23% on the week he believes. He partially believes this will work. See his Top Picks.

Largely a reflection on uranium sentiment. If you're bullish on uranium, this is one of the most liquid ways to express that view. Despite spot prices coming in weaker, inevitable that nuclear will have a critical role to play in AI long term. Rallied, but could be volatile.

Great run. If you believe that e-commerce retail has a lot of legs (which he does), there are other ways to express that view. SHOP is stuck in the middle. Doubled off bottom, but faces structural issues of having to go up-market to enterprise customers, and AMZN is already there.

Moving up from micro-merchant is easier said than done. Being the UI layer and the feature layer is the most vulnerable part of the value chain that is global e-commerce. Tactically, he'd own AMZN.

Goes through cyclical episodes of 4-5 years where it's dead money. A more mature company, not the rip-roaring growth of years past. Tighter range of expectations, but that's not a bad thing.

Constructive, a buy today. Long-term investment. More durable and higher growth than COST and WMT. Best of the big 3 retailers. E-commerce retail has a lot of legs. In a great position to fight off competition in so many ways from the likes of, say, SHOP.

All about GLP-1's, obesity drugs taking the world by storm. Population adoption still has a long way to go. Selling off because easy money's been made. But still upside if you have a long-term view. Not a rich valuation for growth profile. Durable lead. If you already hold, go long; if not, don't pile in now.

Big fan. Now less of a pipeline, and more of a midstream and regulated utility. Unlikely to build out large-scale, risky capex projects as before. Makes sense here. As rates get cut, more demand for yield and defensive. Relatively good value compared to some of the regulated utilities.

Economically sensitive, rate sensitive. If you have a 5-10 year horizon, US housing is still underbuilt. Still more valuation upside. Since 2008, all in the space have become higher quality and more of a manufacturing business.

Two dynamics. Existing home sales were down when supply disappeared because the next person to buy had to spend 7-9% for their mortgage. Very different from where we are today. 

Homebuilders went even further by offering a 3-2-1 buydown mortgage if you bought a new home. So new home supply has taken a lot more market share from existing home supply.

Jury' still out, but he expects inventory to unlock as rates come down. On an absolute basis, rates are still 200-300 bps higher than in pre-Covid era. Needs to be a big step down in the yield curve, especially on the 30-year end, to make this conversation more live than it is today.

Short term, he's constructive, likely more upside, a yield beneficiary. Medium term, might be one of the largest REITs in Canada, but one one of the smaller investors compared to pension plans, for example. Buying and developing assets is complex, expensive, and fraught with uncertainty. Fragile profile, despite good yield and recent rally.

Keep a position in it, but remember its risk profile. Not expensive valuation, but fundamental revenue growth and margin expectation will be under scrutiny as they move from Hopper to Blackwell. Are revenues durable? Expect 20-30% volatility in share price.

In different areas of the market. Healthcare tends to be a more regulated industry, so he doesn't have a strong opinion. Scale has a role to play. Its businesses don't have the makings of huge homeruns. Neutral.

Spectacular 1-week rally in the midst of a hope rally. Tactically, over weeks and months, sees more upside. But medium- to long-term, more pessimistic. Reason: tons of competition in China. There are 2 or 3 others that do what it does. Don't fall for "it's the AMZN of China at half the price"; far more nuanced than that.

(Note the short timeframe.) Still likes it. Multi-year compounder going forward.