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Markets. An Italian bank is purchasing for one Euro two Italian regional lenders that were being bailed out, and are now being wound up. This is the continuation of ‘too big to fail’. The government is not doing a good enough job of regulating the banks there. This is going to be troubling for decades to come. If interest rates go up marginally, you see purchasing coming down. At the end of the day, fixed income is a safe place to put your money. There are doubts that Trump can ever cut corporate tax rates all the way to 15%. This will affect small cap US stocks, which would have benefited tremendously from a big tax cut. That makes the Russell 2000 index the most expensive in the world, so he is short that index.

ZEF-T vs. ZHY-T. The question is credit risk. You have emerging market risk with ZEF-T and so you get extra yield. When you do the correlation of the higher yield, they trade more like an equity than a bond. ZEF-T is an equity type risk, where as ZHY-T is more like fixed income. He does not think it is the time to step into either of these.

ZEF-T vs. ZHY-T. The question is credit risk. You have emerging market risk with ZEF-T and so you get extra yield. When you do the correlation of the higher yield, they trade more like an equity than a bond. ZEF-T is an equity type risk, where as ZHY-T is more like fixed income. He does not think it is the time to step into either of these.

Energy is his biggest weight in his portfolios and has been for a couple of weeks. We are at the lower end of the oil price range. CNQ-T has held up well over the last 5 years. He does not see the tail risk currently. You want to buy a quarter or a third into a position and do so on weakness.

The Canadian market has come off about 5% from the highs. This is why the banks are off from earlier in the year. There is definitely risk around real estate and the Canadian economy. Banks are much more attractive at the level they were at about the time of the Trump election and there is a risk they will go there again.

80% Canada / 20% US. It is not a fixed income replacement. He is not adding to his holding right now. He loves it as a yield play and would add more if we sold off more aggressively. He has half a position.

It is specialty financing so they get caught up in the whole HCG-T space. CBL-T is in a corporate mess. You have to wait for the dust to settle. When there is something this acute, the chart and technical analysis are not useful.

Canadian dividend index. You have big exposure to banks and insurance. It is a fine, diversified mix, and fine as long as we don’t get a pull back in any of the names. He would have preferred a covered call overlay (e.g. ZWC-T).

Steel stocks have been beaten up and he plays it through an ETF. You have Met. coal in TECK.B-T and so he thinks there is downside potential. He would sell into rallies.

Educational Segment. Robots. A lot of boring jobs were replaced by computers and so a lot of jobs have gone away. Amazon is breaking every space. They could have cost a million jobs by now. They are only going to get bigger and bigger in this space. He feels there will be social problems coming. From the mid-70s to today, the bottom 50% of people have seen no real growth in their incomes. The next 40% have seen only a marginal growth. The top 10% are all doing well. BOTZ-Q and ROBO-Q are ETFs for robots and they have outperformed the world. He will love them once we get a market correction.

Markets. Stocks aren’t cheap, but where else are investors going to invest. It is more and more of a stock picker’s market. It will be tough for Trump to accelerate US growth to 4%. Canada is doing far better. Stimulus spending and tax cuts are temporary. We are probably in low inflation for the rest of our lives. There is a lot of government debt. There is too much stuff in the world and not enough people to buy it all. He feels tech specialty companies are the way to go. We are running out of tech names in Canada, however.

He follows it closely for the children’s content space. They did a great job of monetizing content. They have been on an acquisition binge and have to keep acquiring content to keep the ball rolling. They have quite a bit of debt and have to pay that down quickly. The stock has come down a lot and it is coming close to a buy.

They are coming out with results today or tomorrow. He feels the next couple of quarters will show some growth, in which case it is very undervalued. The advertising revenue should start to go up. The high yield is sustainable and is not a warning sign. There should be some really good upside here.

They had very good results last quarter, but it is still a ‘show me’ story to a lot of people. There are big investors accumulating in the name. If management delivers on promises the stock price should go a lot higher.

VSN-T was a natural one to get acquired. He is going to hang on to the stock he gets in the deal.