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COMMENT
Market outlook. Important to be optimistic about the economy. We are out of the shortest recession ever. Economic cycles tend to run for several years. It makes sense to be involved primarily in cyclical businesses. What makes sense last year and now is not the same. They are shifting towards higher quality companies. Want to avoid the strong performers that came back from near death.
COMMENT
Financials and interest rates. The really hard work of interest rates rising from near zero to more normal levels may be largely over. Rates might go higher but the curve tends to flatten when Feds start to taper. Financials have the ability to grow. we have most likely seen the maximum steepness of the curve.
PAST TOP PICK
(A Top Pick Aug 31/20, Up 18%) Has an opportunity to improve their margins. Have some concerns about outperforming the market. There is a lot of demand for housing builds but there is a shortage of housing trades and materials. Will require some time for them to increase thrust. A hold right now.
misc industrial products
PAST TOP PICK
BUY
Optimistic about the company. Makes sense given the new product launches and the increasing penetration of services within their business. It hit a peak last August. Then, it consolidated while continuing to grow earnings. Bought in during this consolidation. Expects it will do well. Should be a core holding.
electrical
electronic
DON'T BUY
Made a decision to move to the sideline a couple months due to concern about reaching the peak of 5G adoption and there will be 6G. If we start to see a moderation in the growth of 5G installations, it might be time to look into other ideas. 5G requires a significant demand in semiconductors. Prefers companies that are more unavoidable in semiconductor manufacturing.
PARTIAL BUY
Likes the company. It lets you participant in indexes but also in ESG business. There are many that cover it. It is a fine company but it is not his favourite. Prefers S&P. Has many of the same drivers but they also have a merger through a competitor takeover with synergy. MSCI may not have as much of a catalyst.
Financial Services
DON'T BUY
Would stay away from traditional telecom companies. This industry was the worst performing sector of all time. There has been a tremendous destruction of profitability in this industry. Terrestrial communication through cable is easier than satellite. Mobile is more part of what people want to do. A completely commoditized product so people are not loyal to companies. Need differentiation. Not high quality companies.
telephone utilities
DON'T BUY
DON'T BUY
Peaked in their relative performance with peers in 2000. Before, they were collecting a tax on computers. Ultimately, over the last 30 years, there has been a reduction in instruction set computing. Intel missed the boat on low power and mobile where the growth has been. Trying to make themselves more relevant without much success right now. Everyone is ahead of Intel in terms of nodes.
computer parts mnfctr
TOP PICK
The price target is in Japanese yen. Expertise is in glass. There is pent-up demand in eye glasses. They are number 2 in the world. They are also a producer of a substrate for hard disk platters. They also dominate the photo lithography for semiconductors. A play on the extreme ultraviolet lithography. (Analysts’ price target is $16600.00)
Healthcare
