Today, Larry Berman CFA, CMT, CTA and John Kaiser commented about whether IZN-X, PRB-X, SCY-T, CCE-X, MTO-X, DGC-T, CGLD-X, PGD-T, AZ-T, SCY-T, GQC-X, LIO-X, NOT-X, KAT-T, NDM-T, MKR-X, NGE-X, BSX-T, MAX-T, SWY-T, ZPW-T, ATRL-T are stocks to buy or sell.
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.
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.
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.
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.
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.
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.