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The 800-pound gorilla. No question that they have a wave of demand. 

Big question that some investors have is just how much investment is going to be required to build out all these data centres? In many cases, the companies building them have been capital-light. Sums to be invested are massive. Can these companies get a return on the investment they're making? That's creating a bit of a wobble in the market.

Over the past year he's steadily taken down his tech exposure, now only about an 8% weighting. He does own NVDA and GOOG. 

There are parts of the market that have really started to perform, giving him an opportunity to diversify. And not just in the US. In fact, his firm's US weighting is probably as low as it's been in 5 years. His international exposure is now much higher.

Over the last couple of months the market has been narrowing in the US, meaning that fewer and fewer stocks are participating. That's not generally a super-healthy thing.

Sector weights in international markets are quite different than the S&P. For example, 31% of the MSCI All-World Ex-US Index is in financials. Large banks are doing well everywhere in the world. We have low short-term rates and sticky, high long-term rates. The opportunity to make a margin is pretty darn good.

Banks are pretty inexpensive, such as SAN. It trades at 9x PE compared to MS at 16x. SAN has a great balance sheet and good growth rate.

There's been an opportunity to buy some lower-valuation companies in sectors that aren't as over-owned. He's in Japan, Latin America, and the EU. About 20% of an average portfolio at his shop is international (ex-US). This has resulted in outperforming the US stock market for the last 18 months.

Doesn't own this one, but 6-7 weeks ago he reduced his gold exposure after this wonderful rally. Thinks we're in for a period of some consolidation. We're in the very early stages of a long-term bull market, it's just taking a breath. Past gold markets have tended to move in 3 legs. The intermediate and small companies will have lots of opportunities in the next leg higher.

He has some Kinross and some AEM. He likes their jurisdictions, where he's comfortable with the risks.

Start your analysis with the market -- NASDAQ had 87% of companies in an uptrend in July, now that's only 36%. Breadth has been narrowing.

Then look at the sector. Software sector has been relatively underperforming for a couple of months, trading below key support levels. Remember that 70% of your return is being in the right neighbourhood, and this sector's trading below the 200-day MA.

Down at the company level, this name has some challenges. His firm uses Adobe a lot less now that they can use generative AI. Don't buy one of the weakest stocks in a weak sector. Instead, he looks for the strongest sectors on a relative basis and buys the leading stocks within the group.

Start your analysis with the market. For example, NASDAQ had 87% of companies in an uptrend in July, now that's only 36%. Breadth has been narrowing. That's why he's been reducing exposure for some time now.

Then look at the sector. The software sector has been relatively underperforming for a couple of months, trading below key support levels. Remember that 70% of your return is being in the right neighbourhood, and this sector's trading below the 200-day MA.

Now you're down at the company level. Don't buy one of the weakest stocks in a weak sector. Instead, look for the strongest sectors on a relative basis and buy the leading stocks within the group. Stocks in a sector tend to move together like a school of fish, but there will be stronger ones and weaker ones. Start with the strongest company you can find because you have to assume that conditions may get more difficult. You want the companies with the best balance sheets, income statements, growth opportunities, and long-life reserves.

Great company, well managed. Nat gas stocks have been consolidating for months. If they break out at some point, he'll start adding. Doesn't hold this one, but still has a pretty significant energy weighting (predominantly in oil). See his Top Picks.

International investors are recognizing that Canada may be getting a little more friendly towards investing in energy. Shale companies in the US are having difficulty with decline rates. Canadian long-life assets are starting to trade at a premium, as they have predictable long-term production. These companies offer great opportunities for dividend growth as they pay down debt and have excess cashflow.

Interesting that these long-life producers are behaving as well as they are with oil behaving as poorly as it is. That's generally a pretty good tell. In commodities, you want to look for areas where the stocks are behaving well but the commodity is a little less positive. It tells you what might be coming. 

He takes his cue from the market. When the market's doing something other than what you might be expecting, you need to pay attention.

He has a pretty significant energy weighting, predominantly in oil. See his Top Picks.

Outlook for uranium is really strong, as is the outlook for nuclear power. Assuming we're going to get the buildout of data centres, the biggest concern will be power production. The granddaddy. Trading around, or just below, 50-day MA. Long-term MA's are sloped higher. Estimates for earnings are going up, not down.

Traded better than ~80% of companies in S&P over the last 52 weeks. Relatively early stages of a commodity bull market.

Used to own this name, but came out earlier this year. Leaking like a balloon, trading below all the moving averages. Don't put any $$ to work here until consumer sector starts performing better.

Look at the sector. He has virtually 0% weighting in the consumer. From homebuilders to retailers to restaurants to leisure travel to airlines, all are performing poorly. WMT has been the standout in the group, but COST is not.