Latest Stock Buy or Sell? Make More Informed Decisions!
Today, Larry Berman CFA, CMT, CTA and Norman Levine commented about whether FTS-T, TECK.B-T, HCG-T, C-N, MFC-T, KO-N, PKI-T, BNS-T, TD-T, EQB-T, CPG-T, SNY-N, MET-N, STN-T, GM-N, VSN-T, VRX-T, KNIN-VX, RECP-T, PWF-T, ABX-T, HCG-T, CVE-T, ZQQ-T are stocks to buy or sell.
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ETF with Monthly Income. There are suites of them. He likes XTR-T and FIE-T because they give you diversification. FIE-T pays out a fixed kind of return, but there is nothing in there that pay outs that much so you are getting some of your capital back. Both products are fine. FIE-T has a big concentration in Canadian financials, so there is some concentration risk. There is no international exposure. He uses ZWE-T and ZWH-T and ZPW-T to compliment Canadian holdings in registered accounts.
It is now back almost at the lows of early 2016. The oil and gas sectors are getting cheap again and he is starting to buy, but we could see further weakness. We could see oil prices cooling off and heading back to $40. Use caution. He is nibbling and accumulating. The M&A activity with CVE-T is interesting. He is not worried about it, but the market thinks it is an issue.
Educational Segment. The Fed in their meeting will debate this week how to reduce the debt. He thinks we are in a liquidity trap. He does not think we can get back to 3% growth and they can’t raise interest rates much. Looking at quarterly GDP going back 20 years, the chart has been falling constantly for decades. The 34 quarters since the Lehman moment have seen us running at 1.5%. Interest rates first fell dramatically in 2000. The fed is thinking 3% is what we can get back to. He does not think so. The US yield curve 10 years compared to 2 years. The curve is not saying there will be a recession. Since they started raising rates the curve has been flattening, so the economy is not handling it. Look at the fed balance sheet. It has been flat since QE3 ended in 2014. The annual GDP was last growing without deficits in 2000. So the economy is very, very weak.
Markets. This is the time for active management. In a fast rising market, active managers will always underperform. It is a momentum driven market. In a gently rising or down market, active managers will outperform. Active managers can hold cash. So many managers hug the index. You have to know what your fees are. You want something with a relatively low fee. Right now the broker only has to tell you what fee they are getting out of the investment.
Markets. There is not a lot of money in the US budget for a wall – it is a dumb idea. It is a metaphoric example. Congress is not willing to work with Trump on a bipartisan basis on anything he wants to do. When he wants to launch his budget it will be either the fourth quarter this year or Q1 next year, but the market is excited about it. Going into the summer months there is high risks in the markets as it is priced for perfection. We are basically at full employment in the US. He is fully hedged all his portfolios. 73 cents is the low end of the range for him and we hit that last week, although that is not to say it could not go down a little further.