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COMMENT
What's the catalyst for the selloff today? This market is so extended to the upside, you can't point to anything in particular. Sometimes these markets sag under their own weight. He's been getting more defensive. It's a tough market, as there are tailwinds, but it's so extended. Sees some risk in the growth stocks.
COMMENT
Are people losing faith in the work-from-home revolution? Reminds him of the crash of 20 years ago, when a lot of the tech stocks didn't achieve their highs again for another 15 years. The stocks were so ahead of their valuation. Zoom, Tesla, and Shopify are in the same situation. You're paying a lot today for future growth.
COMMENT
Could the selloff be just seasonal jitters? Valuation will matter. You can have a great growth period, but how much are you paying ahead for it? Interest rates are the biggest risk, with debt where it is and the amount of expansion. Any increase in interest rates will knock down multiples pretty substantially, and the growth stocks will suffer the quickest and the hardest. You'll be facing Wile E. Coyote-type air underneath.
PAST TOP PICK
(A Top Pick Oct 18/19, Down 11%) Disappointing short-term. Growth, reasonable valuation, free cash, dividend. Still a decent growth story. Great assets, especially if the Cogeco deal goes through.
Cable
DON'T BUY
More inclined to play the semiconductor group as a whole, through the SMH, which gives you broader diversification. A more broad-based name would be Texas Instruments. In this environment, take some money off the table and move to the telecom names that have lagged a little bit, like Verizon, BCE or Rogers.
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