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PARTIAL BUY
He's underweight tech now, but long-term likes GOOG because they dominate digital ads, and there will be more ads moving from traditional to digital. A forward PE of 19x, which is decent given a 20-25% growth rate. The price to sale is 5.5x, which is a caveat. You can start to nibble away but watch your weighting.
Technology
COMMENT
An alternative to this that won't involve a tax hit Holds 100 US high-dividend names like Merck, Verizon, Pepsi, and pays a 3.9% dividend. He prefers the Canadian version, XHU or XHD (Cdn-dollar hedged). Speak to an investment professional to understand US estate tax, if that is a consideration.
E.T.F.'s
DON'T BUY
Their parks, streaming and merchandise amount to a great franchise, but the streaming business is very competitive. Disney+ has done very well, but investors want more. Also, how well will their theme parks do during high inflation. Also, China's lockdowns are effecting those theme parks. Consumer discretionary is one of the worst performers now, though long-term Disney is good.
entertainment services
PAST TOP PICK
(A Top Pick Jun 24/21, Down 13%) Down 26% since February due to recession fears. It holds large-cap financials like Berkshire Hathaway, Royal Bank and Morgan Stanley; half of this is American. 52% are banks and 29% insurance. Trades at 1.13x price-to-book. Financials are great long-term. Pays a 2.5% dividend that will increase. Still buys it.
E.T.F.'s
TOP PICK
Has picked it before. They boast $225 billion revenues are expected in the US this year; they continue to build that revenue, despite the pandemic. They enjoy strong loyalty; 92% membership renewal rate. Efficient, clean stores encourage high store traffic. They sell a concentrated number of items vs. other retailers. Customers are higher-income. This offers growth and defence. (Analysts’ price target is $557.81)
department stores
