A Comment -- General Comments From an Expert (A Commentary)
N/A
Market. The market as a whole is not a cheap place. It is getting tougher to find value. Holding on to things that did well in the past is probably not the way to go. He is seeing value in Europe, parts of Japan and some in the US as well. Some opportunities exist in Financials, industrials, service companies that suffered during COVID and some others. He has never heard Crypto currencies explained in such a way as to make sense. It looks very speculative.
DON'T BUY
Las Vegas Casino Stocks – Which is Better? The whole gaming sector has had a massive run since the low over a year ago. The sector is more of a hotel and entertainment sector than a gaming sector. He only has exposure in his high yield bond fund. He avoids stocks with companies that have a fair bit of debt. MGM has the best franchises, but it is a hard sector to invest in.
COMMENT
Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Generally the energy sector continues to have decent runway. Crude oil prices and general economic recovery are tailwinds. Financials, with excess capital and dividend increases likely this year, should do well as well. Unlock Premium - Try 5i Free
COMMENT
Market outlook. Looking back 6-9 months ago and where markets were then, there was market discounting. Confidence returned to the broader market in November with vaccine trial announcements. We can see the results of vaccination campaigns in economic recovery and case counts. Looking forward, there needs to be caution as much of the recovery expectations are priced in.
COMMENT
Good news can be bad news since 2008. There is outside stimulus from the central banks and government that is propping up markets. When there is good news and the stimulus is reduced, there could be a market pause. Hopefully vaccines remain effective and this will lead to more spending on services and less on durable goods.
COMMENT
Gold. An interesting set up for gold. The price has not performed as well as those who believe in inflation and gold bugs have thought. The sector has been so decimated that producers that remain are seeing great cashflow yield. Could see a more positive environment for gold. The producers at current prices are making good margins so there could be steady dividend growth out of these.
COMMENT
Is the economy overheated or fine? Do we need a trillion-dollar infrastructure bill when there's a labour shortage (i.e. FedEx)? A week from now, we'll get the non-farm employment numbers to answer this question. He expects continued generous unemployment benefits. Money managers aren't really worried about inflation, but rather they're under-invested and need the Fed to bail them out. Powell won't raise rates until there's less unemployment.
COMMENT
Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. There is an equities premium in returns due to risk. Those who predict doom will be right from time to time. However, the main drivers of stock prices are earnings and interest rates. Nothing new to worry about right now. Unlock Premium - Try 5i Free
COMMENT
Markets. If recent economic forecasts are realized, we're headed toward the strongest global expansion since 1980. The estimates are for 6-6.5% GDP growth globally this year, followed by estimates of around 4.5% for next year. This is not priced into the markets. Earnings and estimates are being lifted. Vaccinations are accelerating, though the Delta variant is a risk. He's constructive on equities, though the summer season is somewhat weaker. Though the cyclicals in economically sensitive areas have backed down a bit, that's the area you want to be in going forward.
COMMENT
Cyclicals and value over growth. He really likes financials, industrials, and materials. It's about vaccinations moving so quickly, with case counts going down. Where he expects the economy to be in 6, 12, 18 months is very supportive for equities. Stick with the cyclicals and economically sensitive stocks. Growth stocks have come back up a little bit, which could be a reflex bounce. It's not that he doesn't want any growth stocks, but he's sticking more to the value areas.
COMMENT
Geography. You won't get the depth and breadth of stocks anywhere but in the US, which he's always favoured. Seeing good value in Europe, especially financials, and in Asia-Pacific. Resource and financial names in Canada are starting to look strong. A broad approach makes sense. Right now, he's broadening out of North America and into some of the international markets.
'%20fill='%23ffffff'%3e%3cg%20id='Pager'%20transform='translate(423.000000,%201755.000000)'%3e%3cpath%20d='M243.295367,17.286474%20C243.68919,16.9045087%20244.327703,16.9045087%20244.721525,17.286474%20L249,21.4361302%20L253.278475,17.286474%20C253.672297,16.9045087%20254.31081,16.9045087%20254.704633,17.286474%20C255.098456,17.6684393%20255.098456,18.2877274%20254.704633,18.6696927%20L249.35654,23.856763%20C249.159628,24.0477457%20248.840372,24.0477457%20248.64346,23.856763%20L243.295367,18.6696927%20C242.901544,18.2877274%20242.901544,17.6684393%20243.295367,17.286474%20Z'%20id='Path'%20transform='translate(249.000000,%2020.500000)%20scale(-1,%201)%20rotate(-90.000000)%20translate(-249.000000,%20-20.500000)%20'%3e%3c/path%3e%3c/g%3e%3c/g%3e%3c/g%3e%3c/svg%3e)
'%20fill='%23ffffff'%3e%3cg%20id='Pager'%20transform='translate(423.000000,%201755.000000)'%3e%3cpath%20d='M243.295367,17.286474%20C243.68919,16.9045087%20244.327703,16.9045087%20244.721525,17.286474%20L249,21.4361302%20L253.278475,17.286474%20C253.672297,16.9045087%20254.31081,16.9045087%20254.704633,17.286474%20C255.098456,17.6684393%20255.098456,18.2877274%20254.704633,18.6696927%20L249.35654,23.856763%20C249.159628,24.0477457%20248.840372,24.0477457%20248.64346,23.856763%20L243.295367,18.6696927%20C242.901544,18.2877274%20242.901544,17.6684393%20243.295367,17.286474%20Z'%20id='Path'%20transform='translate(249.000000,%2020.500000)%20rotate(-90.000000)%20translate(-249.000000,%20-20.500000)%20'%3e%3c/path%3e%3c/g%3e%3c/g%3e%3c/g%3e%3c/svg%3e)
