Market Outlook A big lesson for 2021 through the pandemic was that for as fast as things fell, we as human beings adapt quickly to a new normal. We can thank science and technology. His portfolio is expecting somewhat higher interest rates, which would be healthy. Corporate profits should be very good for companies and higher bond yields will be bullish. Many company's balance sheets are in great position, so even higher interest rates won't impact these companies. High yield bonds tend to do well during periods of rising interest rates. From a credit perspective, issuers are in great shape, balance sheet wise, which makes him think this category will again dramatically better low yield bonds next year. He thinks energy stocks are too volatile and are highly correlated to commodity prices. He thinks oil prices above $75 will not likely be sustainable.
A Montreal based tech company with an $8 billion marketcap in the payment processing space. The stock has been under pressure lately because of tech in general and because there is a short seller. It falls into the speculative category when it trades 20x revenue. It is impossible to put a valuation on.
With the yield get back to 4%? He would remain being a seller based on the nefarious things they did a few years ago. There is much better value in its competitors.
Hold as a bond proxy? He does not think investors should buy stocks as bond proxies. A high dividend yield is one thing, but bonds will not have the volatility that stocks will. You buy bonds for stability of income. High yield stocks will often cut dividends, resulting in loss of income and equity value.
other mines
It remains the standard product and people simply have to buy their product. The entire tech sector has taken a step back. He is not ready to step in just yet as higher interest rates are going to impact higher PE stocks like this one. Be patient.
computer software / processing
It holds a wide variety of bonds with different maturities. In a period of rising interest rates, he does not expect this asset class to perform well. The only place for fixed income will be high yield bonds, albeit with more volatility.
When was the last best buy opportunity? COVID was an excellent time and they told investors to get in. The other time was when he bought his house after 911, when it was worth 25% less than before. The world will never come to an end and we as humans will adapt. Always buy book quality companies.