TOP PICK
S&P Financials ETF. This is a contrarian play. He is switching from gold ETF's (XGD-T), which has had a nice run, to this one for a 4th quarter rally. Looking for it to go to $24-$25 and the XGD to settle back down to $23ish.
TOP PICK
(A Top Pick May 11/10. Down 3.1%.) S&P 500 (Cdn$-Hedged) ETF. Expecting the Cdn$ to go to PAR and once we are there we can go back to buying US ETF’s. Expecting the US market to do well with the S&P 500 up 50%.
BUY
High Yield Bond ETF. Likes this one. Owns it in taxable accounts because it’s tax advantaged.
TOP PICK
(A Top Pick May 11/10. Down 6.3%.) Financial ETF. He loves the US financials because 1) earnings are quite strong underneath because of reduced loan losses, 2) US is moving more towards a Canadian model and 3) everybody hates them. For trader types, you can go from $14.50 to $17, which is not a bad flip. He could see it reaching $30.
PAST TOP PICK
(A Top Pick May 11/10. Up 7.52%.) Broad Emerging Market ETF.
BUY
REIT’s. Has done incredibly well this year and may go sideways but he doesn't see it going down. This is a core position for him. Gives 1) great current yield, 2) exposure to real estate across a number of real estate categories and 3) has a lot of liquidity. Can see it in the upper teens eventually.
DON'T BUY
An actively traded Exchange Traded Fund. It manages to bring together the 2 worst parts of mutual funds and ETF’s, i.e. it is expensive and is ineffective. He is dead set against buying actively managed ETF’s.
COMMENT
S&P/TSX Income Trust ETF. A pretty good security this year but they changed the mandate so that it became an income bearing ETF and he sold his holdings.
BUY
BRIC ETF. Emerging markets is what is going to drive the bus. Things are happening in Asia and China is the #2 economy in the world. Expect we will continue to be surprised on the upside.
COMMENT
Inverse ETF’s. Basically allow you to go Short the market. He questions why you wouldn't just short it yourself rather than paying fees for an ETF. A painless way of shorting but dangerous because if you don't have the courage to Short yourself, you really shouldn't be buying these.
TOP PICK
Dreamliner is the airplane of the future. New technology will make it economical and save airlines a lot of money. Will be making 10 a month well into the future and will be very profitable. Also producing about 35 737s a month. Should fit very well with the economic lay of the land. A lot of global demand. Looking for a yearly 15%-20% advance in earnings and share price.
TOP PICK
Do a lot of the avionics such as cockpit devices, sensors, etc. for Boeing (BA-N). Revising earnings upwards and thinks this will be a continuing pattern for them
TOP PICK
Oil/gas services. This business bottomed with the 08-09 economic malaise. Now earning about $2.10 a share. Should do well with the energy cycle.
DON'T BUY
Money flow had gone to these areas because it was a place to hide. He is staying away from defensive areas. Too expensive at 16X earnings. Struggling for revenue and earnings growth.
BUY
Verizon (VZ-N) and AT&T (T-N) are major telecoms. Yield in excess of 6%, which is attractive in an environment where a 10-year bond is 2.75%. Could be a trap where you go for yield but capital depreciates. Doesn't think this is the case. Great cash flow, which they pay in dividends but also build out networks. The drag is their wire line business.