Today, Larry Berman CFA, CMT, CTA and David Cockfield commented about whether PWF-T, CPG-T, CNR-T, S-T, ABX-T, TA-T, ECA-T, SU-T, MFC-T, EMA-T, ARX-T, TD-T, BTE-T, BCE-T, BA-T, DOL-T, POW-T, T-T, SLF-T, MBT-T, TS.B-T, BB-T, IPL-T, ZRE-T, CASH, TECK.B-T, K-T, CVE-T, BKNG-Q, BA-T are stocks to buy or sell.
Educational Segment. Sleep at Night Portfolio. He under weights the US. The markets have rallied now. There are three potential changes we can make now. SDIV had a good move but has high beta so look to trade it out. Replace with ZWA-N, a covered call strategy, reducing beta. ZHY-T was hedged into the equivalent US holding, JNK-N. He took exposure out of mid-term corporate bonds and got SCPB-N. If the CDN$ goes back to $0.95, which he thinks it will then he makes a couple of percent. He has less than half the volatility of the broader markets with his portfolio.
There has been a letter of intent from Fairfax Financial (FFH-T) to acquire this company. It is a nonbinding kind of a deal. He wonders if there is a strategy here to try to pull some interests from other sources, but he feels they are willing to go through with the whole transaction. Not sure what it will mean for the company itself. The price they have offered is probably good for the buyer, and perhaps any bid is better than no bid.
Markets. Expects this will be a reasonable quarter. We just broke through one of the previous highs of around $12000 and got closer to $13000. Today was a good example when New York backed off, but Toronto was able to eke out a small gain. Feels we are at a resistance level for the TSX right now and will have a hard time breaking through $13,000. If it does, the market could run a bit further. Not sure what will happen in October.
A good section of his portfolios are in telcos. This hurt when Verizon (VZ-N) rumours came but he added to some of his positions at that time. He is quite happy with the dividends. This one has a good business. Took a big jump up when they sold the fibre-optic side. Took some profits at that time. Excellent yield and dividends are safe.
What factors should we focus on in comparing this with the other lifecos? Also, what should we focus on when comparing with other financial stocks? Lifecos are quite different than other financials. Also, in the insurance industry, it is important to know if a company is in the life side or the casualty side. He stays clear of the casualty side. This is an area that can get squeezed on margins, particularly when bond market yields are so low. Lifecos are legislated to put a portion of their investment portfolios into fixed incomes, and when these are running 2%-3%, it’s a pretty tough market to maintain margins. He owns Great West Life (GWO-T) through Power Financial (PWF-T). Not that enthused about Sun Life.
Tradable. For now Copper and coal combination is not attractive, however.