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

Cannabis. Rough year in both Canada and the US. Not a lot of catalysts or uptrends. Canada supply/demand issue, with too much supply and not enough demand. In US, delay in legalization, so there was a selloff. Tax-loss selling has taken the sector down.

Lessons learned in 2021. Searching for quality and understanding your investment process. Easy for investors to get whipsawed out of positions, but at the same time markets were hitting new highs.

Year of the chip. Yes, and the other side of the coin saw SaaS really getting hurt. Quite the roller coaster. SaaS includes TWLO or MNDY, "smaller" cap, but their valuations got very stretched at the beginning of the year, and then pulled back as interest rates started to go up. Rising interest rates will contract the valuations for the smaller- to mid-cap companies. On the growth side, they're extremely strong. There's just a rationalization in the market, and it's not letting up.

Global payments sector. Global payments segment got caught up in supply chain issues as government fiscal stimulus started to roll off. PYPL is a gem, as is SQ, that has come off but is very profitable.

Outlook for 2022. There are some opportunities going into 2022. S&P is up 26-27% on the year. Epitome of growth, ARKK Innovation, is down 22%. Going into 2022, market volatility won't let up. 5-week streak of +/- 2% moves. That's amazing. The last time this happened was October 2011 and March 2009. It's nothing like those times, or even the dot.com bubble. But it's certainly volatile, and we're bound to have more going into 2022.

Project management software names. Go with ASAN, it's the cutting edge company out there for collaboration and work management. You could also look at SMAR or TEAM. These days, go with the larger companies. ASAN's market cap is only 13B, but it has heavy hitters at the top, and he has a 12-month price target of $103.40.

Lithium and EVs. Interesting space, almost an ecosystem. You have miners all the way through to the battery side. He likes BYD on NASDAQ, holding it in individual accounts. Look at PLUG. For OEMs, look at Ford and GM.

The effect of rising bond yields and effect on certain stocks Certainly next year. All are surprised that yields have stayed low. Next year, this could all change. Last October, the Fed was buying $80 billion in treasuries. By March 2022, the Fed will cease buying. There will be volatility.

A CNBC survey says that financials are the top sector to buy now. S&P's performance will depend on the 7-8 megacap tech names. GDP will slow. A more hawish Fed, higher inflation and rising interest rates will challenge tech stocks. She doesn't own healthcare, but has financials and industrials as well as small-caps. The small-caps in the last two sectors will do better than the large-caps.

Bond yield is spiking today Rising yields are the big story now. He expects the 10-year yield to move 10-15 basis points higher in coming weeks, which will rattle stocks in biotechs, Cathy Wood tech stocks and hypergrowth stocks until earnings season.

55% surveyed predict less than 10% gains on the S&P for 2022 Going into 2022, there's a ton of pressure on coorporations and consumers to keep contributing to the economy. Corporate profit margins are at all0time highs, and consumers don't yet seem worried about inflation. He's holding low expectations for 2022. Headwinds will be a little stronger in 2022 when volatility will rise. The market is moving towards defensives (in consumer staples and healthcare). He won't offer an end-2022 target, but he will say that 2022 will be a much harder market 2021. Consumers will have to endure inflation and corporations will pass through inflation and labour costs. If so, then the bull market will continue, but he won't place a target.

Stocks are taking a pause today, and we've seen this many years after violent moves up (or down). In the first week of December, we averaged 50 million derivative contracts, but only 37 million/daily since then. Yesterday was the lowest day of the year. Investors want to sit back and pause now. Sudden news about Omicron and will definitely effect markets though. January will see more normalcy with earnings season.

55% surveyed predict less than 10% gains on the S&P for 2022 In the first half of 2022, we'll see volatility, but fade in the second half. He predicts a double-digit rise in the S&P. Supply constraints will loosen by the summer and the markets will kick in. Latter-2022 will look like 2021's healthy rotation. Energy will continue to rally. From the time Biden took office, energy has soared. The financials will be interesting, could explode up, depending on the Fed.

2022 outlook He's holding more cash heading into year-end. Investors are in wait-and-see mode. Like the Fed, he is data-dependent. He barbells cyclicals and value stocks with quality tech. Probably in 2022, growth stocks will surprise upwards beccause of labour shortages while incomes will jump. Will income growth overpower inflation? The consensus says it will, and he agrees. Expect volatility in Q1-2022. Inflation will remain on the back-burner. If the Fed tights more than expected, all bets may be off about income vs. inflation. For 2022, he's focused on the consumer who is in great shape now with $2.6 trillion in excess savings on the sidelines while earning more money. So, he likes consumer stocks and energy, specifically those with more beta. He's abandoning high price tech vs. value tech. Also likes healthcare where he's starting positions internationally. He expects the markets to rise single digits in 2022, but active managers will do better. Own stocks with huge pricing power and cash flows and reasonably PE's.