Chief Investment Officer at Middlefield Capital
Member since: Mar '24 · 25 Opinions
The American economy is on a path to a soft landing which basically means no major recession and no spectacular growth. There have been little recessions over the last two years in different sectors, eg, the tech sector. He thinks Powell doesn't want a recession and that the market thinks there is now room to push rates lower, anticipating maybe three cuts. Market leadership is broadening out which is a good sign. He could see a 4% to 5% correction which would be healthy for the market and a buying opportunity.
The price of natural gas has been low because of a warm winter. Tourmaline has a very good balance sheet and is a low cost producer. It has exposure to oil and liquids pricing, and he sees it as 1/2 gas and 1/2 oil. If you are looking for just oil stocks, stick with the big ones paying dividends. It could have been his top pick.
The question was on his opinion of Telcos. They have been under pressure and performing poorly. They are still spending on Capex but their pricing powers are being lost. There is a real price war on cell phone packages now. Rate cuts in Canada will help dividend payers like BCE to rally. He is definitely not overweight in Telcos.
It has quality drugs including a weight loss drug and pays a dividend. There are two main risks, one being that insurance companies may not be able to pay for the weight loss drug until the pricing comes down. Also we don't really know what the side effects are and may not know for another five years. You can buy on weakness for exposure to the sector.