A Comment -- General Comments From an Expert (A Commentary)
COMMENT
Educational Segment. The NFTs and Ethereum is brining forward a whole new way of valuing art works. There are two digital pet rocks that traded over $100K each. The amount of liquidity in the system is mind numbing. This makes him think about inflation. What if it is not transient. Right now, cash is trash.
COMMENT
A viewer asked about BMO ETFs lowering dividends. The dividends are affected by the underlying stocks. At the height of the pandemic, the stocks were priced lower so dividend yield was higher. These are also all option based strategies. The option premium from call options are now lower with less volatility.
COMMENT
Market outlook. We are 90% through earnings. Focus is back on geopolitics and sentiment. Elections are also coming up. There is lots of uncertainty coming up. Consumer confidence is less than in March-May last year. An unusual set of economic numbers with stimulus driving markets and now tapering talks.
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Market. It has been an excellent environment since the lows of last year. He is still finding outstanding opportunities that can be bought on attractive valuations. He focuses on the higher quality names in the small- and mid-cap space. His firm avoids resource and mining stocks, not to say they are not also doing well. He looks for companies that are retaining as much capital as possible so they can get those high growth rates.
COMMENT
Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. The preferred hedge against a downturn is more cash. It costs nothing and will not incur a cost like other strategies. VIX or other volatility indexes are okay if you can perfectly time a market crash, which is quite difficult. Unlock Premium - Try 5i Free
COMMENT
Enough talk about the Fed taper tantruming. People talk and trade, because they're afraid of missing out (FOMO) which is fuelling this year's stock rotations. The stalk is not stupid, but reveal lazy thinking. It's the perfect parlour game, just chatter, like the Clue board game. Much more important things to consider include the state of the American consumer, the impact of the Taliban taking control of Aghanistan, the Delta variant, lower interest rates, and low price-to-earnings multiples. Instead, buy into weakness of targeted stocks.
COMMENT
The S&P and Nasdaq have been real leaders in the last decade. There is a bit of catchup being made in Europe. It has been underperforming since the financial crisis. Things are starting to turn around. Export is the driver behind Europe. Valuation in NA has gotten so far from Europe so there is a natural catchup happening.
COMMENT
Although the EU moves directionally together, there is some divergence, especially looking at Nordic vs Mediterranean markets. Investors must understand the macro country level market, but also the EU market as a whole. Developed EU is one block and the UK is a close trading partner. Holds most European stocks in Nordic countries.
COMMENT
Has always stayed away from direct Chinese listings. Can't get comfortable with the rule of law in place in China. Asian investments have been made in Singapore and India. Chinese exposure is based in companies with activities in China, such as Unilever, that operates in China. Risk for owning direct Chinese listings is too high.
COMMENT
Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Tapering will lead to interest rates rising, most likely. Higher rates have put pressure on commodity prices in the past. This will lead to commodity linked stocks seeing pressure. Inflation and industrial demands are other factors that could support commodities and partially offset the effect. Unlock Premium - Try 5i Free
COMMENT
The S&P has been on a juggernaut rally, hitting 48 record highs this year so far and has doubled from the pandemic low of March 23, 2020. Are nervous this could end? Nervous about this market? A trader always is. But with any pandemic pullbacks we saw, the market then moves higher. A big reason is that Jay Powell is in the market's corner by keeping interest rates very low. The market may pull back 5-10% in the future, but it will quickly bounce back because those rates are low. This makes risk-on trading nowadays either value, growth or both.
COMMENT
The S&P has been on a juggernaut rally, hitting 48 record highs this year so far and has doubled from the pandemic low of March 23, 2020. Worried about complacency? No, because the cost of protecting his portfolio is cheap (using overlays across his portfolio). Yes, shares have doubled from the pandemic low, so now take some profits. No, he would not sell stocks to buy protection like options.
COMMENT
The U.S. 10-year yield Has been discussed ad naseum and oversimplified. He'd rather look at credit spreads, boiling down to the Fed striking a balance between their tapering asset purchases and setting their target interst rates. When the high-yield credit market is spreading, it trickles down and correlates well with small businesses that haven't enjoyed the same access to credit like the big players.
COMMENT
The S&P has been on a juggernaut rally, hitting 48 record highs this year so far and has doubled from the pandemic low of March 23, 2020. How to invest in this market now?
Market strength comes from low interest rates and that people still have cash in their pockets to spend. There's lots of dry powder to support risky asset prices. True, there are many record days now, but below the surface not every stock is rallying. There's volatility for individual stocks that far more than an overall index. You have to be choose certain sectors and geographies to trade. The tide is not lifting all boats.
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