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COMMENT
Volatility and markets short term. Increased volatility. Two narratives. 1) If you live in Europe, will the conflict in Ukraine expand? 2) Outside Europe, it's higher rates, which will also have some impact on slowing demand. As we transition to higher rates, it causes a rotation. The impact on high-growth, non-profitable tech has been a selloff. Now we're starting to see buying into value and GARP names. Options and futures markets are moving around like yo-yos. If you look at a longer term 3-5 year horizon, there are fabulous opportunities right now for those with capital to put to work.
COMMENT
Price of energy going forward. Tied to Ukraine. Supply in Europe has to come from somewhere else, and this is good news for Canada. The price ultimately reaches a point where it becomes a tax on the global consumer. Some countries are backtracking on taxes on oil. He sees it spiking up into the $130 range, which is reminiscent of the 1970 oil crisis. Investors need to think through these dynamics.
COMMENT
Advice to investors. Prudent to have a cash buffer right now. This cash can be used to buy high quality stocks when they've sold off. Some good quality European companies have sold off, even when they have no debt, so it's worthwhile to take a look at those. Some of the global opportunities are looking very good, especially those based in Europe. Those that have European HQs, but global pressures. Lower and rebalance your tech exposure, in the face of higher rates.
DON'T BUY
In rising interest rate environment, a bond portfolio is going to be somewhat troubled. You have to actively trade it. You need to ask yourself how much fixed income exposure do you want and is it priced right? If rates go incredibly high, that's going to be detrimental to this type of holding. If you want bonds, you should be looking at 1-2 year vehicles. Look at some fixed income proxies that can participate in rising rates.
E.T.F.'s
BUY ON WEAKNESS
Very good longer term. Reasonable balance sheet. Shareholder support is quite good. Reasonable returns. Beneficiary of semiconductor business. With volatility, stock probably moves further south, so chance to pick it up lower. Be aware that Japan's central bank is playing in the currency market to support the yen.
Healthcare
BUY
Seldom goes on sale. Shareholder returns increase annually, plus share buybacks, and he likes those types of companies. The underlying theme of digitization isn't going way. At these levels, you may have to hold your nose and buy. May sell off after next Fed rate decision. If you see it going south, pick some up. He'd buy today for new clients.
Darren SissonsOwned
other services
BUY
With the New Zealand reopening, operating leverage is going to be huge. Great long-term businesses. There's a tax on everything there from coffee to parking. He likes businesses that just clip coupons as customers go through. Long-term, more upside.
Darren SissonsOwned
Transportation
PAST TOP PICK
(A Top Pick Apr 23/21, Up 20%) National champion. Great shareholder reward story. Tax on the NA economy. Continues to like it. Benefited significantly from Covid logistics story. You could add here or wait a bit, and if you have a longer term time frame, you'll be well rewarded.
Darren SissonsOwned
Transportation
PAST TOP PICK
(A Top Pick Apr 23/21, Up 52%) Still likes the name, as the transition to renewables story is not fully fleshed out. It's had such a huge run, at these levels he'd be wary of having it overweight. He'd trim a bit. Dividend is safe and will grow. Oil will be around for a long time. For new clients, he might buy a half position.
Darren SissonsOwned
0
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