N/A

Markets. The Chinese growth story is over. Chinese debt (gov’t, corporate, personal) from the Lehman moment was about 165% and now is pushing 265% debt to GDP. The Chinese economy that was growing at 6-7% was 100% fueled by debt. The economy is still growing, but just because they are slapping on the debt. The demographics in the world are a big problem. With protectionist policies under Trump, Chinese growth will have trouble keeping going. Canada is only growing this year because of debt.

BUY

Treasuries Outlook: The longer the maturity, the more negatively correlated it is, compared to equities. The long bond is the best hedge. The longer bonds are starting to find support whereas short term are starting to back up because of the fed rate hike scenario over this year. We are getting a flattening of the yield curve, forecasting economic slowing. If the market was forecasting inflation then the long bond would be selling off more.

COMMENT

Covered Call Protection against a recession? ZWU-T is the safest one. It yields about 7%. In a recession that will give you the best protection. ZWB-T would sell off more. ZWC-T looks at the best dividend paying companies with covered calls.

BUY ON WEAKNESS

The US infrastructure spend is over the 8 years of the administration. It will not move the needle all that much, but this company is one of the top ones to benefit from it. We are back up at the levels when SNC-T had the problems mid-2014. He would buy on dips, but does not see a big upside breakout here.

N/A

Oil bulls think we will rebalance and energy will go back up. He is a realist. He just bought a plug-in hybrid car. The first 30 km of the day it runs on electricity. All the cars are going this way. Demand for oil is going to come down in the developed world. The TSX energy sector is priced at $60 oil. He is very underweight.

COMMENT

The best 100 companies with write-options 15% or so below market. If markets decline rapidly, you don’t get a lot of support from it. But if a decline is over 6 months you won’t see a lot of downside.

N/A

Educational Segment. Long Term Investor Psychology. Per unit of gain in a portfolio, the psychological value diminishes as you get more. The more money you start to lose, the more you increase your unhappiness per unit of loss. When we get complacent after a period of gains, this is our biggest point of risk.

COMMENT

They just put a mine into production. The good news is they have produced more karats than expected, but the bad news is what has happened in India. He hopes it stabilizes and goes away.

WATCH

They are going to mine both gold and antimony on a decommissioned site, but it only works at $1600 gold. They are raising money, permitting and drilling, but will anything get permitted in Idaho with Trump’s anti-globalization policies. Antimony mostly comes from China.

BUY

In February they finally got approval. Brazil has been hard to get permits in because of the bureaucracy. We are waiting for cash flow to start and for gold to go up.

BUY

One of his favourites that turned into a train wreck. It had to be reorganized. They are still doing gold-in-groundwater activity. They are using a technology that no one else has ever done for gold.

DON'T BUY

Quebec area. They have new management. New geophysics has been done. They realize there is a lot more going on in this area. He prefers other operating in the same area. He thinks there is nothing going on on the property MKR-X operates in.

SELL

They have been fighting being stopped in the permitting cycle. The short sellers say this thing is not economic, but others point to Trump’s changes to the EPA and how it will speed up permitting. He thinks it will still take years. He thinks the rally is over.

COMMENT

The Congo is a very interesting place. There is civil unrest. The place is turning into a potential timber box. Cobalt prices are going up because it is a key ingredient in Lithium Ion batteries. A civil war would disrupt operations in this country.

DON'T BUY

They made a chromium discovery, but first nations’ opposition to development forced them to give up. The nickel price is still kind of weak and they are still trying to overcome the opposition. The warm winter this year has made exploration difficult in this area. Longer term, a chromium mine here would serve all of North America.