John Zechner

Value stocks going forward. He switches between growth and value, depending on where the most upside is. Since vaccines were announced, value has been running the show. That's slipped in the last month with a lot of the cyclicals being hit hard. Tech has come back, but the recovery trade is still in place. They have better valuations and better earnings growth. Tailwinds of monetary stimulus, massive fiscal stimulus, reopening, capital spending. Stock market's come a long way in 15 months and valuations are extended, so a correction is not surprising.

Is current market action just the pendulum swinging the other way? With the reopening trade, that side of the boat got a bit crowded. Some of the growth data started rolling over. China is slowing down the economy to quell inflation, and the Fed might move earlier than expected to slow down rates. What happens when the fiscal benefits run out? The past 2 quarters have been quite a bounce, but we can't expect this to continue, so this took some froth off the cyclical trade.

The question is whether it's the pause that refreshes, or is it the end of the bigger run? It's a pause, with the caveat that it's an extended market. He's worried that there's not as much cash on the sidelines, bullish sentiment is high, and valuations are stretched. A lot of fast, hot money moved in and you have to shake the tree a little bit and see where the stronger holds are. He has cash and is getting ready to redeploy it in cyclicals like financials and industrials.

They've been awfully impressive this last year. They have limited growth, being stuck in Canada. Good dividend. If he owned it, he'd hold. Other areas of the market have more upside. One you don't lose sleep over. They have capital to make some kind of acquisition.

Last quarter was disappointing. Great expansion into Asia. Recent drop in yields has hurt all the financials. Dividend yield, growth, safety. Not everything in your portfolio fires at the same time. Some things you just tuck away and wait. Good company, growing. Yield is 4-5%, better than cash or bonds.

US bond market. The advice to sell all equities at 1% would still have a ways to go. Bond market is signalling slower growth ahead, earnings won't be growing as fast as expected. Growth expectations got a bit ahead of themselves. The Fed and money centre banks are still out there buying bonds, so that puts pressure on the yield. Rebalancing at quarter's end also. He's not concerned about the checkback, doesn't think it will last.

Survives quite well in a lower interest rate environment, with its strong organic growth. Doesn't think the drawdown in yields will last. In general, tech will struggle if rates go higher. Cash generation remains dominant. Hold it, don't sell.

Management's restructured for better earnings control. Engineering service as a fee. Global infrastructure spending will help a lot of the engineering firms.

Global infrastructure spending will help a lot of the engineering firms. This is another good engineering play, mainly out west.

(A Top Pick Sep 03/20, Up 23%) He's adding to it. Auto parts producers under pressure, mainly because of the chip shortage. Lightweighting of vehicles by using aluminum. Significant insider buying. Into EV batteries. Well positioned going forward.

(A Top Pick Sep 03/20, Up 109%) Sometimes it's better to be lucky than smart. He sold in February, as the valuations weren't sustainable. No one got broke taking a profit. If it went under $9-10 US, he'd look at it again.

He can't bring himself around to the valuation for a conservative portfolio. But they've delivered growth, expanded the platform, and made a superior company. A good company vs. a good stock. They have to deliver so much future growth to justify the valuation.

Underperformed. A lot of people owned it for the yield, paying more than they should. Once they cut the dividend, many people exited. Might be an opportunity as an international play. Leveraged to oil price.