TOP PICK
Buying beta. Can drop with the market but high quality market exposure. Tends to have high cash flow, large cap, robust companies, well diversified. Yield 1.6%.
TOP PICK
Cautious about energy. Constrained capacity, demand is holding up globally, OPEC making the right noises in Saudi. Definitively a more conservative play. Stock price has gone down with the market. Market performer with a great yield at 8.3%. Fundamentals really are well supported here.
TOP PICK
New leader in Brazil. Minister of the economy is a well educated economist and widely seen has being more free trade and open market policy friendly. You really want to see the meaningful reforms start to kick in. Oil is working, weaker U.S. dollar, all supports Brazil and EM. Yield 2.7%.
COMMENT
Market. It's a tough market. Economic data points in Europe, and Germany specifically, are getting worst. PMIs are on a downtrend and cruising to contraction territory. Weakening in China. It's a been a long great run but the economics underpinnings are weakening. Historically when looking at the yield curve spread and recessions, when the yield curve inverses that means you are on average about 18 months from recession. The 1-2 year spread has inverted, the 2-5 year spread is just on 0 bip today and is inverting. The yield curve is flat or inverted. We are on borrowed time. You can still find spots to invest in, but we haven't seen any reversal yet. Sometimes sitting on your hands is the hardest thing to do, but sometimes it's the right thing to do if you don't want to lose your capital.
COMMENT
The Q4 sell-off caught many by surprise, and a lot of it was due to politics. The US Fed was tightening too quickly. Now, we have an opportunity where companies are much cheaper. We could see a little more downside but he's more optimistic now than in the past few years. The U.S. markets are acting like the U.S. economy is an island, untouched by the rest of the world. That was so in the 1940's, but not now. If China goes into recession, the impact will be huge for America (farmers, tech companies like, say, IBM). If Europe slows, it'll hurt the U.S. too. He needs to see one more interest rate hike in the U.S. to buy into emerging markets (telcos look attractive now). He's pivoting from growth to defensives. Samsung posted numbers today and slipped a bit. It's still too expensive for him. Semi-conductors are part of the phone business, which if it slows down, will directly impact semis. Apple is seeing peak-phone sales. But he's still watching Samsung.
BUY
We had oil oversupply which pushed down prices. At these levels BP has an attractive yield. Good reserves and balance sheet. He's happy with their current levels.
COMMENT
WCS differential shrinking & outlook Alberta limiting supply is only a temporary measure. Much better is building a pipeline, but that requires a lot of political will and cooperation.
BUY ON WEAKNESS
Trump has slowed down growth of China's semi-conductor industry. He'd buy below $31. Good balance sheet and track record. The semi industry is increasing, but we'll still see more of a pullback. Watch for now.
DON'T BUY
Blockchain is interesting and has many applications such as insurance. But currency has to be controlled, like a central bank. Yes, you can transfer wealth using Bitcoin, but what's to stop someone from hacking this. Control? This doesn't make a profit. He doesn't see this becoming a mainstream currency until a central bank controls it. Otherwise it remains a pseudo-currency.
BUY ON WEAKNESS
It held up very well during European economic crises, but the issue is they are waiting for higher interest rates in Europe. After this sell-off, he'd buy it. It's Latin-focussed, so if you believe in those territories, it's a good buy.
DON'T BUY
He's not sure if there'll be growth. They've had so many reports misses. The matrix around advertising needs to change, though Twitter is here to stay. He thinks ultimately Twitter will become part of something else.
PARTIAL BUY
Remember the high population density in China, so moving goods is difficult and takes time--and this issue doesn't go away. The pricing of this stock got very high and needed re-tracement. But if it continues to grow at this fast rate, it may get busted up/split (like U.S. telecoms in the late-1980s). This is a good company. It's partially on sale now, not totally oversold. If you have a half a position now, see how it goes.
PAST TOP PICK
(A Top Pick Dec 20/17, Up 1%) Good balance sheet and fundamentals. Buy during dips to average down. A world-class company.
PAST TOP PICK
(A Top Pick Dec 20/17, Up 0.3%) Strong balance sheet and has almost no debt. It's leveraged to oil and nuclear power industries. So when industrial production slow, this stock sells off. But it's been a strong performer for a long time and raises its dividend regularly.
PAST TOP PICK
(A Top Pick Dec 20/17, Up 3%) He's long owned this. The Fox acquisition will be a big deal as Disney tilts towards broadcasting, and there'll be big movie releases coming. He wish he had bought this 10 years ago. They regularly raise their dividend.