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COMMENT
Inflation. There are several risks to the market. Valuations in some places are dangerously high. The data is mixed on inflation. We have clearly seen inflation rates kick up. We must be prepared for persistent inflation. Must position portfolios so they work for both environments. There are also taxes being hiked that are changing portfolio allocations.
BUY ON WEAKNESS
COMMENT
Cryptocurrency. There has been a past for them. Right now, it is a lot of speculation. There is little fundamental value, yet we are seeing them used. There is enthusiasm for them. The concern is that there is nothing anchoring their valuation. It is a pure momentum play. Likely to see central banks issue cryptocurrencies which could take the wind out of these private cryptocurrencies.
COMMENT
High Yield Bonds. It is a tricky place to be. The credit spreads are pretty low, which means the prices are high. Going through hundreds of bonds to balance risk with returns. Does not look at junk since risks are too high. 4-6% is possible, but you must do deep research in order to find good high yield bonds.
BUY ON WEAKNESS
The results were a little disappointing but not too surprising. They had to pay a big fine to regulatory bodies in China and adjust their business practices to allow further competition. Likes BABA and recently added to the growth strategy. There is good value and opportunity for the company to grow. They also lost a big cloud customer which was a one off that slowed growth. However, there are other customers in the pipeline and they continue to grow. Likes it.
0
BUY
Likes it a lot. Customers are very loyal and continue to re-purchase these items. The service side, which is high margins, is growing as well. It is well run and very responsible to their shareholders. Dividend should go up over time. Don't worry about timing the market. Trading at 23x next years earnings, which is a reasonable price.
electrical
electronic
COMMENT
Active versus ETFs. When you own ETFs or index funds, your money is concentrated in high multiple plays. For example, investing in the S&P500, the top 5-6 stocks accounts for 25% of the market. Risks of higher inflation and interest rates means you have to be concerned about high multiple stocks. Companies that rely on higher future earnings will be worth less due to discounting the future more.
COMMENT
Portfolio in retirement. The intermediate solution is to create portfolios that have different target yields on the equity side. You give up a bit of appreciation but you can sleep better knowing you get the dividends. On the other hand, putting together investment grade and barely high interest bonds to get 3-4% yield on the fixed side. Banks are great places to put money in since they pay a dividend, tend to do better in higher interest environments, and it's a reopening play. Energy and industrials are similar.
COMMENT
Currencies. The exchange rate of USD and other currencies are hard to predict. Right now, the dollar is unusually strong due to the stimulus we have seen in the US economy and reopening sooner than other countries. CAD can continue to strengthen relative to the USD but wouldn't make a bet on it. International diversification is important since there will be a global recovery and you can diversify currency risk.
COMMENT
A turnaround play. The big catalyst that is coming up is the restrictions put on the company. It should come off later in the year. CitiGroup is also another good choice. They can increase their dividends and start buybacks once rules change.
banks
COMMENT
A turnaround play. The big catalyst that is coming up is the restrictions put on the company. It should come off later in the year. CitiGroup is also another good choice. They can increase their dividends and start buybacks once rules change.
banks
