Advertising
N/A

Market. Sometimes you have to listen to what the market is trying to tell you. Since early February, the US market has been moving up, despite 1st quarter earnings of about -6%, and the 1st quarter GDP also being pretty lousy. Thinks the market is looking forward to some earnings advance. We need earnings to grow in order for stocks to grow. For earnings to grow we need the economy to move forward. Consumers are in pretty good shape. They don’t have too much debt. Also, feels the US$ is going to go down which will help consumers outside of the US. Also, many emerging markets finance their dollar denominated debt, so when the dollar goes up, they have higher payments to make which is tough for emerging-market governments. Also, many commodities such as oil and natural gas are priced in US$s, and when the dollar goes up it makes those commodities more expensive than what they are in the US.

Unknown
WAIT

This has been a well-managed company for some time. What you are buying into is a very high beta of 1.45, meaning it is 45% riskier than the market. He would avoid the stock because there is too much volatility. Also, one of their major inputs is fuel, and feels the price of oil is not done going up. There will be a better chance to get this in the near future.

household goods
DON'T BUY

There are 2 cautionary notes on this. 1.) They have offered a partnership. Canadian investors who buy US partnerships are subject to a 35% tax on the dividend. However, they now offer a share class that is not a partnership. 2.) Richard Kinder is the CEO. He was the president of Enron. Has grand ambitions, and is more interested in making the company big rather than making shareholders rich.

pipelines
N/A

Pipelines. These are going down because of the fear that their customers are going to go bankrupt, and some of them are. If they go bankrupt, the contracts are potentially not going to be valid. Even if they have fixed-price contracts, they won’t be any good if the customer is bankrupt.

Unknown
COMMENT

He would rather own advertising companies in the consumer discretionary sector. You get a better dividend and a smoother ride.

specialty stores
COMMENT

Wouldn’t own this stock. He has clients that own it, and they are going to start selling it. The signs are in that the company has finally hit the end of the road. Their problem is that their products are very expensive relative to their competitors, so profit margins are very high. The P/E ratio is not very high. The only way the stock is going to continue to go up is 1) to convince you to buy a new iPhone every 2 years or 2) invent a new device. Early signs are that the Apple watch is not moving the needle.

electrical / electronic
DON'T BUY

Healthcare is a great sector, but the worst performing one year-to-date. Politicians are talking about capping prices for healthcare manufacturers, which doesn’t help. More importantly, Medicare and Medicaid US administrations are trying to cap prices and this one is being hit particularly hard. There are better names in this space.

biotechnology / pharmaceutical