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BUY
This is economically sensitive, but is a large holding for him. Iron Ore prices have held globally. If production costs go up it doesn’t hurt them. Pays a nice yield. If you believe that it is possible that growth can stay somewhat positive, this should continue to do quite well. Price is moving around because there is concern about the global economy.
Financial Services
WAIT
Likes the auto industry, specifically while there are concerns around the economy. As a result of 2008 there are fewer cars coming off lease so a used car is relatively expensive. If you look at Japan’s spring, there is a shortage of parts. There are now fewer parts suppliers and they are more powerful there. He owns two auto part US companies. Auto should perform better of economy gets a little bit better. Business is currently strong in North America. Wait until the market behaves a bit better before getting into it.
Automotive
DON'T BUY
Well run company, diversified. The problem is that it is the wrong kinds of business for the current economic environment. These types of companies can really get clobbered. If you think this is a mid-cycle slowdown, then it could do well in a mid-cycle slowdown. It will have a difficult time if the economy is slowing.
integrated mines
COMMENT
Silver: He is not a gold bug but gold and silver are the largest weighting. Silver had been lagging gold. Likes silver. There is limited growth in production and a big appetite. He uses the physical silver ETF and Silver Wheaton. Also Allied Nevada. Cannot see fundamental reasons driving the market changing in the near term.
BUY
TOP PICK
Today they announced Brookfield Asset Management would combine its renewable power assets with those of BRC to form a larger entity going forward. He is a big proponent of yield investing. He wants yield with inflation protection. Was already an interesting business.1600 Megawatts of production across a broad variety of holdings. After the merger there will 5000 megawatts of operating capacity across 180 different facilities across Canada, US and Brazil. Yield will rise to $1.35 from $1.30. Will grow distributable cash 10% per year and distribution 3-4% per year. Contracts for an average of 24 years.
Utilities
