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COMMENT
Markets. He tends to be a cautious investor, not to say that he's negative. Stocks do well in expansions, but there are always corrections. Stocks aren't cheap, but interest rates are low and unlikely to soar. Wage inflation is low. Wage inflation is good for consumer spending. Growth has peaked, but it's still a tailwind. Global lockdowns are easing, so this should lead to an end of supply chain issues and to a moderating of inflationary expectations. Most of the inflation we're seeing is in durable goods, which will ease when lockdowns ease. There's lots of household liquidity, supporting demand for goods and services. An expanding economy is good for stocks.
COMMENT
Investor timeframes. He's a long-term investor, doesn't get too worried about headline news. There's a lot of fast money moving around. Concerns about China, inflation, and debt ceilings can all cause volatility. Stocks did well coming out the pandemic, but people are getting more selective. Now that we're mid-cycle, investors need to be mindful of quality instead of quantity. Make sure you have your risk parameters in place. Don't get over your skis, overly aggressive, investing in companies like cryptocurrencies that don't make any money. Mid-cycle currents can cause ripple effects, so make sure you stick to good quality businesses.
COMMENT
Good quality businesses. Those that touch people's lives on a daily business. Banking, info tech, delightful products and services that people use over and over again. Such as DIS, MCD, online shopping, or a desire to get access to information quickly. You're not going to innovate away these cornerstones.
DON'T BUY
Backdrop for energy remains positive over the long term, as alternative energy sources aren't always that efficient. Increasing investment in ESG is a headwind. His concern is that management owns only a small piece. Might continue to issue too much paper to pay for acquisitions. He owns KEL instead.
oil
gas
DON'T BUY
Well run. Food and beverage has historically been a great area to invest in. He worries about margin compression. Brands are getting into more specialized niches, such as local craft breweries, which the big companies have to then buy and carry increased debt. In brands, you always want to go upmarket, rather than go with the mass players.
Consumer Products
WAIT
They always seem to have unexpected gains or losses. Often controversial. New leadership, tremendous staff turnover. A black box as to what it actually owns. Trying to diversify revenue streams. Reasonable PE multiple. Its performance will track closely the movement of the capital markets. Invest on bad news, not during good news.
investment companies
funds
BUY
We may be at the beginning of a fairly meaningful commodity cycle. If you want international exposure, this is the right kind of name. He doesn't invest in deep cyclical plays. Setup globally is for continued economic growth. Financial wherewithal to extract resources. Attractive free cashflow generators.
other mines
