A Comment -- General Comments From an Expert (A Commentary)

Investing 2022 vs. 2021. In the US, handful of big, very expensive tech stocks drove the market up. Since mid-last year, more than 50% of those stocks were down quite significantly. In Canada, oil & gas and banks were responsible for 18% of the 24% return on the TSX, extremely concentrated. Most stocks had muted returns, even worse in small-mid caps. You have to pick your spots, be company-specific. Lots of sector rotation, computer-driven momentum trading based on algorithms. If your stock goes down, it's a buying opportunity, as sometime it will come back into favour. If it gets overvalued, think about trimming. Be in it for the long run, and stomach the volatility whether it's justified or not.

Market glutted with tech IPOs? No question. Huge indigestion last year on the IPO front. There's always the good (overvalued), the bad (shouldn't have gone public in the first place), and the ugly. Not necessarily easy to pick out the diamonds in the rough.

Right time of the cycle for industrials? Industrials is a broad category. Momentum investing and sector rotation often cause the industrials to get tossed around together even though they're in very different businesses. It's his biggest segment. Never a bad time, just because they happen to be industrials, to get into good companies.

Precious metals. Reality is inflation is not transitory, it continues to grow. Once out of the basket, very hard to control. We're at 7% already, and inflation is much higher than this, as we use different calculations than in the 80s. Copper is signaling that, but gold and silver have not caught up. Once they do, they'll become inflationary hedges and ring the true alarm for what inflation is at. Gold is the ultimate hedge for inflation. Central banks and Asia continue to acquire physical gold, but the price is not reflecting this. To protect against inflation, he recommends holding physical gold, producers, and royalty companies.

4 criteria for metal producers and the sector. Geography. Reserves on the ground. Management. Low cost of production.

Holding cash vs. buying into dividends. He wants to hold higher levels of cash right now, as he's concerned about markets. He still owns good yielders for the cashflow, but he'd wait to buy more.

Asset allocation model. To be disciplined, if you have a position at 5%, which declines by half, buy into it to bring the position back to 5%. This discipline of holding something that hasn't really changed but the price, and selling into something that's done well, is 80% of a portfolio's return. If nothing fundamental has changed, he'll continue to hold a company.

Platinum. He owns platinum through the BMG ETF, as they have silver, gold, and platinum. Better value is in a silver or gold ETF. So he has a lot of cash in the Sprott physical gold and silver ETFs, and they have more upside than platinum or PALL. For silver, he buys the coin.

Commodity ETF considerations. For any commodity ETF, ask yourself if it's pay-per-contract, or are they taking the physical commodity aside and putting it in a vault. Is it a closed-end fund of the commodity? A very important distinction. If anything happens to the derivatives market, the future contracts that back that product might not be there.

Price of gold. Has to go higher. Disconnect between the demand for physical gold around the world and a price that continues to go down. At some point, the price has to reverse. Central banks continue to buy it, and they know that inflation is a problem.

Multiples for blockchain companies. Hard to assess. Just maintain a disciplined asset allocation model. Financial industry is coming on board. The technology is here to stay.

Canadian mid-cap energy producers. Great that they're upping dividends and buying back shares. He tries to pick stocks for older clients within an income portfolio. Problem with mid-caps is the threat of a clean energy mandate. Canada is a geopolitical risk. In Canada, he'd be parking money in pipelines, as we're not building any more, and so the cashflow strengthens. Energy environment still challenging in Canada. He'd rather go with an international play.

After another hideous decline today: Who can triumph over the broken supply chain and survive higher interest rates? Don't focus on rate hikes, which won't kill the stock market. Rather, pick stocks of great franchises.