- Page 1/4
- Next Page
COMMENT
Market Outlook If you look at the index levels, things look like they are improving. Under the surface, however, there has been an extreme "rotation" -- a five standard deviation move between momentum into value stocks. Unloved stocks are getting bought up, while strong steady performers are being sold. Monday was the highlight, but it may become a trend going forward. He thinks hedge funds are reducing exposures, so this means covering short hedges. Share buybacks are happening in the market as well. There are three weeks of really solid buying he thinks. Then the markets will return to being influenced by trade talks and politics.
DON'T BUY
Within the payment card space, AXP-N has a closed loop network -- they can gather their own customer data on spending and credit use. This allows them to do better target marketing. Someone will probably come in to buy that network in the future he thinks. About 20% of their revenue comes from credit card balances making them susceptible to credit downgrades. He would not step into them now.
investment companies
funds
WAIT
An interesting turnaround story. It will never have the Herculean run they had in the past. An interesting candidate for a covered call option write strategy. At the end of the day he wants to see how the market goes -- if the market falls this will fall faster (high beta). Trade resolution will cause the stock to continue higher, but otherwise it may stutter. He would wait for a while.
food services
DON'T BUY
This really reacts to daily user usage metrics. He has been hesitant to enter into fad investing. He thinks it may get picked up by another company and bolted on their social media strategy. The multiple is volatile due to the swings from negative to positive earnings. They are up against a giant, so he would stay away for now.
PAST TOP PICK
(A Top Pick Sep 12/18, Up 20%) He still likes being in this. A real steady grower. If you think 10 year rates stay around 2% this will be good to hold. If interest rates go up, this will be a tough hold. He thinks slow growth or a modest recession is likely, so holding this is good. If economic growth accelerates, selling of real estate will accelerate too and he would be forced to sell out.
0
DON'T BUY
At 60-70 times earnings, this is not a great investment. He would step away. He likes the company, but now is not the time to buy. Stay away look at Visa or Mastercard.
Technology
COMMENT
High income ETFs? If you are looking for income, be careful. There are a lot of components in the basket that you might not want to own. You are better to look at the sectors and themes you like and look for high yields there. XLRE-N is a high yield ETF in the real estate sector (3.5% yield), for example. The quality of the holding is more important as you want to preserve your capital.
DON'T BUY
HOLD
Down 30% last month! It should be a steady-Eddy story, but the change in interest rates has been negative on this. He likes XLRE-N as it holds 40% in data centres and towers. At the end of the day, apps files and photos all require more data-bytes which will be going through 5G towers. If strong economic rates resume, this will likely get beaten up. He will likely be stopped out of his position.
Telecommunications
