COMMENT
Tech sector. There have been some powerful changes in the market, especially in the NASDAQ 100. It reached the same valuation peak from October to early January that it did in the year 2000, and has now stepped back. This is the first leg down of that index. Some stocks like PTON have been massacred, as they don't have much earnings support. These stocks are still not cheap, and have miles to go before they're finished. SHOP and some of the FANGs are also on their way lower. Modestly decent fundamentals have held up so far. If all this reminds you of the height of the dot-com boom, it should.
COMMENT
Portfolio positioning. As in 2000, value stocks and gold have held their ground. Economy didn't implode then, and it doesn't appear to be imploding now. He has no overall sell signal for the general market, and he's in no panic to become defensive unless you still hold the NASDAQ stocks. If you do, switch to any areas of value. End of pandemic should open the NA economies to a great degree and encourage the overall market to stay the course, at least for now. TSX is far, far better value than the S&P or NASDAQ, and he'd focus his portfolio there.
COMMENT
Differences from year 2000? If you can find differences, good on you. Only the names have been changed to protect the guilty. Same excessive valuations have begun to correct. Switch from those high valuation, no sales, no earnings stocks and into value. Value held quite nicely for all of the 2000s. We can see a crash again on the NASDAQ stocks. The lion's share of those are still excessively valued. For the NASDAQ to just get back to FMV (not even cheap), it would have to fall almost 40%.
DON'T BUY
As brilliant as management of BRK has been, they've not been without their mistakes. Getting into China early may well be one of them. We don't know what the new rules will be. Jack Ma has not been seen, not sure what this tells you. Be very cautious. When the stock broke the strong support level of $200, it signalled the end of the growth of BABA.
COMMENT
Investing in China. Not only would he avoid BABA, but China in general. This view is seconded by David Rosenberg. BRK may favour China right now, but they've not been without mistakes, and some have been lulus. Beware of the politics of that market.
DON'T BUY
Very profitable. ROE is around 30%, and has been high for a long time. Company has never used its potential to expand the business faster. Great value, but buying back stock at a high valuation. Go elsewhere.
DON'T BUY
Got expensive, 20x book value. FMV is 51% lower than current price. Eventually, FMV is a very powerful attractor to the stock price. Not good value. Company won't disappear, but overpriced. Sees it going as low as $268.
COMMENT
Let stocks run or trim? When a stock goes and goes, periodically, usually quarterly, trim back to 3-5%, depending on the climb. Means that you're taking profits but staying exposed to a good growth company. Go with the percentage you're comfortable with, whether it's 3 or 5 or 7.5%.
WAIT
Despite new orders, analysts' earnings forecasts have checked back. Stock remains on the expensive side, and the price is pulling down. A really good company, so he hopes it turns around. Be cautious about getting too frisky with this stock right now.
COMMENT
ENB vs. TRP Nice yield, but it's paying out too much. Balance sheet is slipping. Still waiting for US acquisition to produce solid earnings. Shares running up against strong technical resistance of $37. FMV is only 15% higher. Do you hang on and wait, or sell at technical resistance? Flip a coin and choose. As for TRP, it's almost right at 2x book, which is significant technical support/resistance. Which means potential for $86 on the upside, $60 on the downside. Take that coin and flip it again. He's not trying to be cute. Sometimes share direction is in the lap of the gods. If you simply hang on, you'll be all right as you earn a dividend while you wait. Depends on your time horizon and short-term risk tolerance. If you have a long horizon, sit back and enjoy the income, and don't look at the share price every week.
COMMENT
TRP vs. ENB ENB has a nice yield, but it's paying out too much. Balance sheet is slipping. Still waiting for US acquisition to produce solid earnings. Shares running up against strong technical resistance of $37. FMV is only 15% higher. Do you hang on and wait, or sell at technical resistance? Flip a coin and choose. As for TRP, it's almost right at 2x book, which is significant technical support/resistance. Which means potential for $86 on the upside, $60 on the downside. Take that coin and flip it again. He's not trying to be cute. Sometimes share direction is in the lap of the gods. If you simply hang on, you'll be all right as you earn a dividend while you wait. Depends on your time horizon and short-term risk tolerance. If you have a long horizon, sit back and enjoy the income, and don't look at the share price every week.
PAST TOP PICK
(A Top Pick Jan 11/21, Up 20%) Likes it still, especially with rising interest rates. Lifecos will earn more on their spreads. Still on the cheap side.
PAST TOP PICK
(A Top Pick Jan 11/21, Down 56%) Market did not like their acquisition in Africa because of political risk. He's very bullish on the outlook for gold and silver, which should do much better. Add more at these levels.
PAST TOP PICK
(A Top Pick Jan 11/21, Up 7%) Never bet on the government. Infrastructure bill has sputtered. Stock's on the cheap side, so he's not worried about it.
HOLD
Nice dividend around 4-4.5%, well covered. Balance sheet is fine. We're getting to the end of Omicron, and as things open up this summer we're going to see a lot more travel. OPEC is capped. Despite the green revolution, demand for oil has never gone away. He's optimistic on the price for oil. Reasonably valued, despite the run off the bottom. Hold on. His modelling suggests $52-55, and if oil goes to $125-150 as some suggest, you could see some real fireworks in this stock.