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COMMENT
Markets – Markets are running because there’s so much liquidity. Quantitative Easing 2 is pumping all kinds of money into the stock market. What the staying power is remains to be seen. Is enjoying it, but nervously. Sectors that he has had the most fun with, and the most unexpected, have been Canadian pipelines, telecoms and utilities. (His clients are more conservative so tends to have a lot of this.) It is really a search for dividends. Some are starting to get a little high and he is starting to pare back a little.
DON'T BUY
Hasn’t liked for a long time. Doesn’t like their business model. Yesterday’s technology. Trying to move the consumer from the book to the internet but it’s not working out as well as it should have. When they converted from an income trust, the cost was 20X the average and they gave no disclosure.
communications
media
DON'T BUY
This is not one of the Canadian banks that he favours. Doesn’t like the US exposure which is becoming a big part of the bank and which they virtually earn no money but actually lose money. Would prefer National (NA-T) or Bank of Nova Scotia (BNS-T). If you want one with US exposure, Toronto Dominion (TD-T) would be a better one to own.
banks
COMMENT
He is a value investor and it is hard to view this one as a value stock. His question is, what is Apple without Steve Jobs. Is it still a great company because it has great products and great people or is Steve Jobs the genius behind this? If he is no longer there permanently, does it rest on its laurels for a while and then start to fade away? Great unknown. Too much uncertainty.
electrical
electronic
COMMENT
Sold half his position when it was higher. Really 2 companies. Biggest part is generics. They are the biggest manufacturer globally. A lot of patented drugs will become invalid and they will grow because of it. They are also a pharmaceutical because they have a few drugs. One of them is an MS drug and a large part of their profits. It too is possibly coming up for generic competition, which has held the stock back but this is an opportunity. Probably won’t go any where for a little while. (See Top Picks.)
biotechnology
pharmaceutical
BUY
Recently gold prices have outperformed stocks. This company’s energy, labour and material costs have been going up, which has hurt profitability. Also they made an acquisition late last year, which diluted short term and brought the stock down. Views this as an opportunity and likes the long-term outlook. All their properties are in politically safe areas.
precious metals
TOP PICK
Gaining Market share. Well run. Just announced their first dividend, which is a positive sign. Spending in their area is holding the whole industry back. Consumer spending will come back later in the year, especially in the home improvement area where people can’t put things off forever. Not expensive.
specialty stores
