Chris Thom - CIM, DMS, FCSI

Definitely uncertainty out there, which is surprising when you see that markets are at all-time highs in both Canada and the US. 

But he looks at the market long distance from an options perspective. So he likes the uncertainty, as it keeps both options prices and implied volatility higher.

He couldn't tell you. His firm has maintained pretty cautious optimism. Businesses have to adapt to whatever the market throws at them. Investors have been more optimistic than he would have thought.

He's out there still trying to find value and maintain the positions that haven't gotten too extended.

Seems to have grown to a bigger piece of the portfolio than the investor is comfortable with. Doesn't have too strong an opinion on this particular stock. If you want to trim, a great way is to sell a covered call -- you sell somebody the right to buy the stock from you at a higher price. 

With shares right now around $194, you can sell a September $200 call for about $4.50. If the stock doesn't go up, then you end up just hanging on to your stock.

If you own this name and you're comfortable selling it at this level, as you think it's not going to go up from here and may even go down, then this seems like an OK strategy. 

For him, he typically likes to leave a bit of upside between where the stock's trading and where he sells the call. 

If you look at the Canadian banks, they're pretty stable businesses. Volatility's not as high, so neither are the options premiums. Selling something closer to the money, or even in the money, can make sense. You're really riding a fine line that what you expect is going to happen actually does over a short period. That's pretty hard to predict, so he'd leave a little bit offside.

He wants companies that are trading at attractive valuations. PE is not the be all and end all, but it's definitely where he starts his analysis. Both META and MSFT had pretty good numbers this quarter and the stocks are doing well today. If you plan to own all of them and want to buy more, then buy the ones trading at cheaper valuations. 

Great business. Has AWS, which is a huge piece of the business. Also direct-to-consumer, so that part continues to grow in this time of inflation. Valuation is not stretched, so he'd be looking at this one among the Mag 7.

He fully understands the plan, which is to sell covered calls and then get called away as part of a tax-loss strategy. He's not an accountant, so can't give tax advice. 

Some people sell a stock, and then sell an in-the-money put or a cash-covered put to maintain some exposure to that stock. Just make sure you're not re-acquiring the stock within 30 days (or the tax loss won't count).

Should always be treated as capital gains if you're selling options, whether in Canada or the US. There will just be some difference in the currency when calculating what those gains and losses are.

There are some strategies you can use, though it might be a longer conversation. His team has recorded some webinars on this topic, which can be found on their website.

If you own a stock and it goes up, you're making money at 1x (if it goes up $1, you make $1). There's something called a 1x2 call spread. With this strategy, you buy a call option as well, and then sell 2 calls at a higher strike. What you can do is pay for the call by selling the other 2, so your net cash outlay can be zero. Between the window of the call that you bought and the 2 that you sold, you actually make money at 2:1. Above that level, you stop making money. This method could, potentially, get you back to break-even more quickly.

It maintains the same downside. If the stock keeps going down, you didn't pay any money to put the trade on, so you're at 1:1 on the downside.

Long term, definitely a good investment. Good company, has continued to grow, adapted through all markets. Trades ~41x PE, expensive. If you've owned for a while and done well, you may want to diversify away from it; but over the last 30 years, this has been a bad idea.

Not as though they make buggy whips. Lots of different products in everyday activities, such as the PDF option if ChatGPT fails to work. This presence is likely to continue. 

If you own it and it's been painful, you could try the 1x2 call spread discussed earlier in today's show. Or you could look to generate some call premiums by selling some upside calls. On a stock that's been beaten up like this, the option prices are typically high. So if you want to start extracting some premium from that, there's definitely an opportunity to do that.

We'll have to see what the merged company looks like on the other side. No strong opinion on it. Looking at it from an options perspective, companies going into deals like this can see their option premium disappear.

If you don't own it, you can look to buy it ~$10 out to October, and sell that $10 put cash-covered (so 54 cents below where it's trading now). This lets you collect about 20 cents. You'll generate 2% over 2 months if the stock stays here or goes higher, and if the stock goes down you'll be buying it.

Likes it. Smartest people in the room, as they were raising cash before the markets went down earlier this year. Buffett's leaving, but has built a pretty deep bench. If it never did another deal, its many legacy brands are really great producers. Doesn't pay a distribution, but owns a bunch of really-high-cashflowing businesses.

He learned very early on to not fight the Fed, and it's along the same lines as don't fight the president. He's taken direct aim at the whole sector, and he's probably not wrong that Americans are paying too much for medications. That'll make it hard for these businesses.

He doesn't get involved much with ETFs, often because he doesn't want to own the whole sector. Here, he'd take a look at individual pharma companies and find the ones you think will do well in the current environment.