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COMMENT
Anticipated market reaction to Fed rate decision? Fait accompli that we're going to get a 50 bps hike. Probably a case of investors selling on the rumour, and perhaps there will be a bit of a relief rally on the news of the actual hike, especially if Powell dials back on the hawkishness we've heard to date. There will be a lot of eyeballs on this one, for sure.
COMMENT
A return to the days when Canadian markets outperformed US? The good ol' days are back. From 1999 to 2010, Canada outperformed the US in 10/12 years. Then the reverse from 2011 to the present, where Canada lagged the US in 10/11 years. Things are off to a relatively good start for Canadian stocks YTD, with the TSX Composite outperforming the S&P 500 by around 800 basis points in the first quarter, which is the widest outperformance in a long time. Sustained trend, because of rising interest rates and higher value vs. growth orientation in Canada. As well, commodity boom in resource companies in the energy and materials sector benefits Canadian stocks over US. These 2 sectors have just eclipsed the financial sectors for the first time in quite some time.
COMMENT
Portfolio construction now. Canada has the home ice advantage right now. He's been shifting meaningful portfolio weightings from the US to Canada. From longer duration, secular growth stocks into value, cyclical, resource trades. All the while being mindful of the risk of the economic cycle being truncated by the expected rate hikes.
BUY
Blockbuster results. Fertilizer price cycle should extend. Potash, nitrogen and phosphate are at nosebleed levels, but supply is constrained from Russia and Belarus. Guidance increased by 58% in next year. $18.50 EPS forecast. Farmers are still buying fertilizer. Blue sky scenario: eclipses RY as largest TSX company, as it did briefly in 2008, and more than doubles.
agriculture
COMMENT
Gold. Agrees that gold is going higher. He has good gold exposure across his 3 portfolios from momentum to growth to dividend growth. He owns a royalty play and a big miner. See his Top Picks. If you believe gold is going higher, do you want the high torque name, or the big diversified large cap? The answer depends on your conviction in the direction of gold. Gold's behaviour is enigmatic. Trend is favourable for long positions.
WEAK BUY
ABX vs. AGI Agrees that gold is going higher. Doesn't own ABX or AGI. If you believe gold is going higher, do you want the high torque name, or the big diversified large cap? The answer depends on your conviction in the direction of gold. His firm is conservative, so they'd pick ABX. ABX has a better management team and asset base and is more diversified. AGI is more concentrated in 3-4 mines, so the risk is higher.
precious metals
DON'T BUY
AGI vs. ABX Agrees that gold is going higher. Doesn't own ABX or AGI. If you believe gold is going higher, do you want the high torque name, or the big diversified large cap? The answer depends on your conviction in the direction of gold. His firm is conservative, so they'd pick ABX. ABX has a better management team and asset base and is more diversified. AGI is more concentrated in 3-4 mines, so the risk is higher.
precious metals
STRONG BUY
A long-term grower and compounder. More upside. Exposure is timely. Pretty defensive if economic slowdown. Great operators. Scale applies procurement clout to drive margin advantages. Getting better at merchandising. Navigating inflation well. Underleverged. Great consolidators. Very much a buy.
food stores
