COMMENT
Are algorithms controlling volatility? He's suspicious. The last few declines including the brief one in January was an algorithm-driven trade. At 10:30 or 2:30 every day is how the market will close. It's like the retail investors trade until 10:30, then the big institutions come in 10:30-2:30--there are many theories about that. That January day felt really well-organized, enough to trigger his suspicions. Regardless of the cause, you're losing money. Use stops. Alogorithms will rule this volatile period until at least February 2019. He also suspects alogos in Twitter feeds which are activated whenever Trump tweets (but he has no evidence of this).
BUY
2019 outlook? The US healthcare sector has been very defensive in this market; they're not as off other sectors. The sector went sideways during the 2016 US election campaign. PFE has announced the price of 40-50 of their drugs will be raised. Plenty of runway in this company. But in 2019, if there's a market recovery, money will flow out of healthcare and back into tech. But you're good to own this.
WATCH
He owned it for 5 years and got out in the summer because of negative connotations about China and its tech association. He'd like to get back into it in 2019 though because it's a fast-growing name. They're generating strong cash flow. Good balance sheet. But there's a lot of negativity overall about China. Be patient.
BUY
A long-term defensive stock vs. its peers? He's owned it in the past. He got stopped out of VOD in the summer. He also likes Verizon. As for AT&T, they carry too much debt and have a poor balance sheet.
PAST TOP PICK
(A Top Pick Jan 26/18, Down 57%) He thought he was clever buying this after major bad news came out. He exited and will stay away from it. Their debt has been seriously downgraded. Then, there's tax-loss selling now.
PAST TOP PICK
(A Top Pick Jan 26/18, Down 67%) He got stopped out after bottom-fishing this. He lost a little. SLCA has a lot of business but are you getting the oil/gas one for free? No, not yet. but it's approaching the point of being a good buy down there.
PAST TOP PICK
(A Top Pick Jan 26/18, Down 10%) He owned it for a long time, then got stopped out. Inflation costs in resin, a big part of their label business, are a pressure. Their Innovia is $40 billon in the hole. It'll be a great entry in 6-12 months though. He still likes it.
BUY
Emerging markets worth buying now more than Europe? He likes it because it's an active ETF in EM, and is not your typical static market weighting across various countries and regions. He'd rather pay a higher MER for an active ETF. The broad EM have been outperforming the rest of the world in the last six weeks.
BUY
All Canadian banks had good earnings, with TD among the best in various areas (profit, dividend growth, overall performance). He also owns RY and BNS. Definitely buy TD. But American banks are not doing well and he has sold several of them this year. The banks need to lead the recovery in the next three months (or else the market is in trouble).
HOLD
It's unfortunate that it didn't gain from the USMCA deal. He exited a while ago to avoid dealing with that noise. It's trading at 9x and growing earnings at double digits. Very profitable and re-tooling on the driverless car front. All positive, but it's been tough. If you hold, sit tight. Don't enter it.
DON'T BUY
Owned it in the past. The fundmentals are being ignored in this market. US financials have done nothing all year. In the summer, he greatly reduced exposure in this sector. He needs to see a definite price move to get interested in this stock and sector. As for Powell rising rates, either he gives markets a rate hike that the market doesn't need, or investors panic because he didn't raise rates (because he feels the economy is weak).
DON'T BUY
He used to follow this. It's taken a beating because of protectionism and budgets to buy buses have been slashed. The 4% dividend is interesting, but he'll stay away for now. Maybe later.
DON'T BUY
It became stock associated with Tesla (and lithium). Hasn't been following it. He won't look at this until global conditions improve.
TOP PICK
Price action in a negative market is attraction. Cheap price earnings. Catalysts include picking up business from Huawei, but that could face backlash, since 16% of their business is derived from China. He still believes in the big 5G roll-out. They're managing their cloud solutions well. A real turnaround and great name. (Analysts’ price target is $51.21)
TOP PICK
It's #5 in revenue of all US companies. They'll do $250 billion in revenue in 2019. It's down only 7-8% during this market carngage, so it's held its own. The CEO belives they just started a growth boom. Has a good runway ahead, working closely with government agencies and in South America. Good defensive stock. (Analysts’ price target is $304.74)