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COMMENT
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.
RISKY
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.
Technology
COMMENT
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
COMMENT
DON'T BUY
He has never owned a gold stock in his life. ABX is probably valued at the same stock price as it was 35 years ago. Gold has not done well even with the threat of inflation. There seems to be an inverse relationship between interest rates and gold prices, so if the Fed does raise rates, it is hard to see gold do anything. You are better to find companies that have more consistent earnings and pay dividends out of regular cash flow.
precious metals
PAST TOP PICK
(A Top Pick Dec 22/20, Down 19%) Part of metals sector worldwide, including catalytic converters. He sold it a couple of months ago after a division that made electric batteries was sold. The money required to be spent in a competitive space resulted in the company's decision, so they sold out.
chemicals
PAST TOP PICK
(A Top Pick Dec 22/20, Down 24%) By far the cheapest cost (and highest value) stock in their portfolio. A fist banging buy. They have drugs like the EpiPen and others for asthma. They pay a reasonable dividend and it trades at 4x earnings. Even at 8x, it would be very cheap. He is not concerned about legal issues surrounding the EpiPen - you simply need their product.
Pharma & Healthcare
