Gold companies. There are 2 kinds of gold companies. Operating companies, the ones that build and operate mines, and royalty companies. He owns Goldcorp (G-T) and Agnico-Eagle (AEM-T). Agnico has been an outstanding operating company, and if you have to buy an operator, you won’t go wrong owning this. If you want an operator and get some leverage to the upside, buy when sentiment is negative, and Goldcorp is clearly the name. If you just want a safe, stable name on the price of gold, then Franco Nevada (FNV-T) is the right way to deal.

Market. Investors seem to be wisely ignoring the melodrama of the Trump presidency. Clearly, the US has any number of plans for taking action against North Korea. There is one big issue for China, a huge refugee problem of 25-30 million refugees. It will also make the Japanese very nervous. One way or another the US is going to have to put a line in the sand, and it is probably not too far off. This would be a major, military mover of the market. He is normally and has been for the last 8 years, overweight the US. Probably 35% of his total portfolios is US equities, and about 20% Canadian. He is starting to take a look at the Canadian market, which is more undervalued.

How far out do you go when writing Calls on bank stocks?Normally when he does this, he is buying the stock in order to write the Calls. If he has stocks that he has held for a long time that has big capital gains, he is not going to write options, because he doesn’t want to get caught with capital gains for the sake of a couple of dollars of option premium. There is no point gaining 5% if you’re losing 25%. He tends to write stocks at the money, or as close as he can, and 6 months out. This is because it has cheaper trading costs, and his clients can understand it better if they see just one move instead of selling it out every 2 months, etc. You have to be careful when trading options to never let things expire on the expiry date. He buys them back.