David Burrows

Oil. We went through a commodity trough last year, and we're coming out the other side. Supply/demand issues. Everybody is looking for ways to recoup what they missed along the way, and OPEC is no exception. We're going to be in a tight oil supply situation for some time. The liquidity that's been pushed into the system is only just starting to hit. On one side we have producers who've been exercising control in capex spending, and on the other side a ramp up in demand. It's going to be an interesting winter.

Markets and inflation. Wonderful lift in the reflationary sectors from October till April of last year, and then they went into hibernation and consolidated. We correct markets in price or in time, but not much price correction even in September/October. Russell 2000 just broke out in the past week after 6 months of consolidation. We've just started the second leg of this bull market. Likely to be a good winter into spring.

Risks. Breadth is expanding solidly across the board. A concern if rates were to spike more quickly than the market is expecting. Bond market isn't hurting anyone too badly, but it's something to keep an eye on. If earnings estimates started to roll over, that would be a worry. The sectors that had relative improving price strength through the correction were the economically sensitive groups, and that's where he's focused. That's telling you that the market is looking through the problems to things improving on the other side.

AMAT vs. LRCX Semis are in a structural, secular bull market. Most economically sensitive part of tech. Both are attractive. He owns LRCX, but he could own either. LRCX has pulled back 10% off the highs but is making a turn. Expects demand to continue to be pretty robust, especially as the size is moving down and we need more capacity.

LRCX vs. AMAT Semis are in a structural, secular bull market. Most economically sensitive part of tech. Both are attractive. He owns LRCX, but he could own either. LRCX has pulled back 10% off the highs but is making a turn. Expects demand to continue to be pretty robust, especially as the size is moving down and we need more capacity.

China has its foot on the brakes to control inflation. We'll see if this comes off over the next few weeks. Tech industry has been under scrutiny. He'd like to see the technical picture start to improve before putting money to work.

Very steady performer. Earnings will probably grow next year about 10%. Not impossible it could underperform the financials group. Best place to be is more direct exposure to capital markets and asset managers. Quite attractive as a steady growth stock. It's pulled back off the highs. Great long-term hold.

We've entered a structural bull market for commodities, but they don't go straight higher. China has tried to keep its thumb on commodity prices. Global steel production will continue to expand. Should find a footing around these levels. US infrastructure bill will help. Good entry point for the next 2-3 years, and you should get a solid dividend and total return.

IPAY, an ETF holding digital payments solutions, has also underperformed. He suspects these companies are being used as a source of cash for things that are more leveraged to the business cycle. Move on to something that will get a little more help from the reflationary cycle. Significant profits from cross-border transactions, and this type of travel hasn't regained its footing yet.

Economically sensitive companies. If you were to look at all the companies that really benefited during the pandemic (for example online retail, digital payments, fitness), most got quite expensive and are now a source of cash for companies that are more sensitive to a reopening.

Buy on significant pullback today, or wait? When something breaks down in a strong market, and it breaks technical support, you have to let the traffic clear. He'd wait for it to rebuild some technical footing. Technical support around $50-55, which is a long way from where it is today.

Buying on a pullback. There are 1000's of companies to choose from, but you only need 15-20 companies to build a portfolio. You don't want to buy the one that has a current question mark. If we're in for 6 months of a great market, which he thinks we are, there are better ways to use your money.

SHOP vs. AMZN Hanging in remarkably well. Has gained relative performance compared to AMZN, which has consolidated for a year and looks like it's trying to make a turn. He'd prefer SHOP, but the whole online retail group continues to struggle a bit. IBUY, as a proxy for the entire group, has also underperformed for several months.

AMZN vs. SHOP SHOP is hanging in remarkably well. Has gained relative performance compared to AMZN, which has consolidated for a year and looks like it's trying to make a turn. He'd prefer SHOP, but the whole online retail group continues to struggle a bit. IBUY, as a proxy for the entire group, has also underperformed for several months.

Online retail. The whole online retail group continues to struggle a bit. IBUY, as a proxy for the entire group, has underperformed for several months.