DON'T BUY
Hard to own insurance, as there are so many moving parts. Insurance arm in Asia starting to slow down. Cheap valuation. Unclear what motivation is to move higher. Not a fan, or of any insurance. Benefit of rising rates offset by poor equity markets.
insurance
DON'T BUY
He's lightened up on financials. Valuations are compelling, but margin and loan growth will be stagnant. Banks don't do well in recessions. Large loan book in Canada, without access to the US. It's fine, but his preference is TD or RY.
banks
COMMENT
Banks. He's lightened up on financials. Valuations are compelling, but margin and loan growth will be stagnant. Banks don't do well in recessions. No tailwinds right now. The only thing that saves them is that Canadian banks are trading 1.5x book, PEs are 8x. Cheap. Cousins in US are even cheaper, but they're struggling too. TD has expanded its NIM in the US, so last quarter they benefited the most out of all the banks. His preference is TD and RY, as they're best in class.
Unknown
PAST TOP PICK
(A Top Pick Jan 12/21, Down 15%) Pandemic pushed valuation up, it got too expensive, he sold. Didn't like share buybacks at high levels.
specialty stores
PAST TOP PICK
(A Top Pick Jan 12/21, Up 40%) Bought in depths of pandemic, sold as it became fully valued. Better apartment REIT opportunities elsewhere. Loves management, they're long-term value creators.
property mngmnt / investment
PAST TOP PICK
(A Top Pick Jan 12/21, Up 48%) Great-managed REIT. Taken out.
0
DON'T BUY
Its assets are a fantastic way to earn on real estate. Geographically diversified with multiple management teams and dynamics, so it's hard to wrap your head around. Outperformed relative to the sector. He prefers a simpler theme.
REAL ESTATE