David Burrows

We had 40 years of declining interest rates to 2020, and there are industries and assets that do well when money gets cheaper. So the power was in the hands of the borrower.

Today, power's in the hands of the lender. Long-term interest rates are going higher. If you're a company that generates tons of excess cash, it doesn't matter -- you can take that capital and return it to shareholders or make investments. 

There's a different genre of business you want to own now. Energy producers, base metals miners, some agricultural companies, and the financials.

Between 2012 and 2021-22, the US was the only game in town. At the same time, the USD was appreciating. A lot of international investors bought US dollars to get that appreciation as well as US growth stocks.

For international markets outside the US, financials make up the biggest sector and materials are significant. Energy and industrials are important sectors. These sectors are all benefiting in this world.

Now that the USD has been backing off against virtually major currency, and international markets are outperforming, it's only natural that some of those countries say maybe we take some back to our local market. The flows favour international stocks, which are a lot less expensive than US equities. 

Most people are long the US to begin with. So perhaps the opportunity is to focus on those less expensive markets.

At his firm, they have about 28% in financial services (by far, the biggest weight). Generating a lot of free cashflow. Capital reserves are very strong. Continue to beat estimates in different ways.

Great run over last 2 years. Around the world, banks have been strong everywhere. Long-term rates moving higher, and short-term rates relatively low, the spread they can make on their loans is pretty darn good. When markets continue to be decent, then capital markets are strong and so is wealth management. He doesn't see any major change to that.

Can companies pull back 10% at any given time? Absolutely. And they have pulled back over the last 6 weeks or so, but that's fairly typical in a longer-term bull market. He'd be a buyer at these levels. Structural backdrop is supportive.

Pharma and biotech are seeing better leadership in the market. Partly because these sectors are going to be big implementers of AI, and the sector was out of favour for quite some time. They tend to be pretty big cash generators.

Problem is very low growth. Estimates have not been going higher. Stock's rallying on the back of the sector getting better. But he's a big fan of focusing on the leaders in a sector. You won't get hurt with PFE, but he'd definitely lean toward LLY, which he owns. Yield is 6%.

Pharma and biotech are seeing better leadership in the market. Partly because these sectors are going to be big implementers of AI, and the sector was out of favour for quite some time. They tend to be pretty big cash generators.

He's a big fan of focusing on the leaders in a sector -- easier time hiring best employees and raising capital. He'd much prefer this over PFE. Lots of revenue upside. GLP-1 market will continue to grow, as these drugs help with all kinds of issues.

His team is more focused on oil than natural gas. Nat gas is more of a show-me story. This name is a serial disappointment. Lots of opportunity, with ~2400 drilling locations in the Montney. Technical picture is languishing. 

A strong performer in the group. His team is more focused on oil than natural gas. Nat gas is more of a show-me story.

Copper is one of the most powerful themes in this market. Copper producers broke out, with consolidation over last several months.

Massive mine in Indonesia has been prolific. He'd be a buyer right here. Generates enormous cashflow. Estimates are going higher. Just broke out technically.

Proven pricing power. ROE has been solid. Earnings should be up this year ~40%. Now above 200-day MA; the rising 200-day should provide good support. RSI starting to improve. Use the 200-day as your stop. Investor made a good buy.

His nemesis. Many see it as a potential beneficiary of the AI boom and quantum computing. For a company with a $200B market cap, he doesn't have the stomach for it's being so volatile. Attempts at making a new high have all failed, made 3 lower lows. 

Restaurant and consumer staples sectors have been under pressure, partly due to "Ozempic effect". Also, low-end consumer feeling pinched by inflation.

Limited success with value meals. That end of the economy is under pressure, unlikely to change in near future. Fuel prices are high, and likely going higher over the winter. It's actually a REIT, and they have a hard time when interest rates rise. Technically, trading below long-term MA.

The brokers stand up well, especially technically. All benefiting from better net interest margins. Doing well with fee revenues. Equity market is healthy; despite the typical seasonally weak period, breadth has been expanding. As long as long-term rates steepen, will benefit. Fits the world we're living in. 

He owns MS.

Thinks we're in the second leg of the gold bull market. Printing money. Second leg might even be bigger than the first. Consistently delivers, diversified assets, more upside.

His opinion is that we're in a structural bull market for materials, and that's when picks and shovels tend to do well. This name is dominant. Generator business has been selling into data centres. Pulled back on concerns about data centres. Lots of cash, production growth. A buying opportunity.