Latest Stock Buy or Sell? Make More Informed Decisions!

Markets. Brexit news is coming tomorrow from Britain. Brexit is part of the shift to the right and it shows that people don’t want globalization any longer. You have to understand what it means for growth and volatility. It is a headwind. It will be good for British exports, but if you invest in the UK, you better buy the hedged version of the ETF. Trump is protectionist. We are just beginning to see what this means on a trade basis. He thinks it will allow not more than 2% growth in the US GDP. The banks have had a big run up and he sees a sell-the-news happening soon. There have been some misses and we have to watch for those. Inauguration of Trump happens this week and you have to look at seasonally patters for the last 60 years, post inauguration day. You don’t have much growth on average for the rest of the year. A lot of news is priced into the market. You have to play defense. A post inauguration correction is expected.

It has a covered call overlay. A lot of good news is priced into the banks so he would not be chasing this one, but be a dup-buyer in the Canadian banks.

They had a disappointing forecast. In the past year it sold off every time it got above $45. At best it is a hold.

Leveraged ETFs are toxic for long term holding. The more volatile the underlying asset its, the more toxic it is. It is great for short term trading. You don’t go out and sit on this because the price of Nat Gas will eventually go up. ZJN-T is a good one to sit on for Nat Gas exposure. You can play it for a long period of time.

Silver Technicals: It is a speculation on money, inflation and so on. Gold broke $1200 support recently, so we will see some resistance at $1250 soon. He is out of all his gold shares. He is inclined to sell into this pop a little bit. He would then buy the dips after that.

DOW mature blue chip companies with a covered call overlay. ZPW-T or a hedged version, which is even better, would be better going forward.

Educational Segment. Smart Beta ETFs. Sustainable yield. High dividend stocks can’t usually sustain the high dividends. Sphere’s strategy aims to offer sustainable dividends. You have to eliminate stocks from an ETF that can’t sustain high dividends. They have a screen for these companies. You lose a little yield, but greatly reduce volatility. SHC-T is a Canadian sustainable high yield ETF. They have US, Europe, Asian etc as well. It is not always about the MERs.

A put write strategy on a 100 of the best US companies across all economic sectors. They have a pretty sustainable payout, but it is paid in US$. It is not hedged. They have filed a prospective on a hedged ETF that is similar.

Markets. He is not sure he knows a whole lot about a Donald Trump presidency. You cannot make an investment decision based on tweets. The trends in place prior to the election – reflation, cyclical doing well, and interest sensitives acting poorly, will extend into this year. He is a magna investor and did nothing. You do not know where the rhetoric will turn into policy. You have to stick to trends and themes that have been developing. Stay away from high multiple growth stocks. Stocks hit by a Trump tweet have recovered, but it is not how this guest manages money.

It has a good yield of 6’ish percent. Valuations in these types of companies have been rather high as defensives, low interest sensitive, and low volatility did well. There were rumours they would buy WIG and the stock could be under pressure if the deal was consummated. For him it is too highly valued for the growth profile. You own it for the yield.

He likes it and holds it here. Since June this cyclical wave came in and cheaper stocks benefited from a growth economy and did well. You want to focus on cheaper stocks that are more industrial and this stock looks good. They are poised to benefit from the ‘Buy America’ trend Trump is trying to instigate.

He has been short for about 18 months until the last few days. He does not like to be short stocks that have fallen a lot over a short period of time. There is no question you should hold this stock for yield. They have negative free cash flow, however. They could always sell their real estate, but they warned for the second time. Some major stock holder has exited their position. They have some very valuable assets: Saks, the building, for example. He is waiting to see if they do anything because of their low stock price.

He does not trade these stocks because they are volatile and don’t have traditional earnings. He thinks of them as defensives. They peaked in the summer. He would argue that they are tied to the path of interest rates in the future. You don’t need to own gold as much right now. They don’t have operating risk so have high PE. It is not attractive to him.

He was short until November when it started to turn the corner. It has taken off since then. The valuation is a bit of a challenge for him. The commodity is changing very quickly. Uranium has come off its bottom. On a price/momentum basis you could own it, but there has been a big move without knowing that cash flows will show up in the share price. Wait until earnings materialize.

It was a favourite short by hedge funds over the last couple of years. It has all changed now. It has broken out of the $2 cap. To him the valuation is just not there yet and is moving ahead on optimism. There is a risk of an equity issue to shore up the balance sheet.