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

How are you positioning tech holdings now? 94-95% fully invested, with a bit of cash. 63% hedge overlay on top of that. He still sees value, but the hedge tells you that there are warning signals. Valuations are high. Pay attention to monetary stimulus. Another $3T is expected to reach the US markets in 2021. Once vaccines create herd immunity and economies open up, market fundamentals and technicals should be important again. Forward-looking nature of the market means selling the news will happen well in advance of global economies opening up. Going into 2021, he likes GARPy large-cap names such as Ericsson, MSFT, Alibaba and Nvidia. Likes semiconductors. E-commerce plays like Shopify and PayPal. Also likes themes of electrification and 5G.

Strategy for buying puts on the QQQ. He'd recommend laddering some puts. Laddering lowers your risk. Set a strike price one month out around $310, and then do it about $10 down going out each month. Hardest part of doing puts is there are so many moving pieces: strike price, expiration date, volatility. He uses the NASDAQ 100 instead of the PowerShares QQQ.

Market Call pre-empted by inauguration of US President Joe Biden.

Biden's inauguration and 2021 investing themes The Trump era is over, so how to prepare for the Biden era? The markets roared today, partially because nothing crazy (violent) happened at the inauguration. Biden should do a better job than Trump in rolling out the vaccines and this alone will be crucial. The biggest investing theme for 2021 is e-commerce. Many are nervous that e-commerce will fade with the end of the pandemic, but he thinks this is only the start. For example, Choptle is using an app to boost its revenues. Then, there's Amazon, Apple and other big tech names which led today's markets. Salesforce and Adobe, too. Then, there are cybersecurity plays like Crowdstrike. He likes them all. Add to this the 5G roll-out stocks, like Taiwan Semi and Qualcomm. Biden's stimulus plans will benefit Dollar General, Walmart and other retailers. Biden, he expects, will build warmer relations with China, which businesses want; Apple, Boeing and Starbucks will benefit. Work from home will continue this year, so Wayfair, Zoom Video and Amazon are picks here. Biden will encourage the EV trend (Ford is a pick here). For all of them: buy on pullbacks when others are scared.

Does incoming Biden presidency change your investing strategy? Partially. It's a piece of the puzzle, but there are a lot of moving pieces. The Democrat Blue Wave is just part of it. Obama had a clean sweep, but there were splinter groups there that turned out more conservative and held up the agenda. We'll certainly see more fiscal money and infrastructure investment, though. Bond yields could rise and pressure dividend stocks, possibly. This includes consumer staples. We're moving into value and cyclicals and, at long last, move away from pure growth/momentum stocks. Value is now in cyclicals--banks, industrials, metals/minerals. Passive investing will take a back seat to stock-picking, which reverses the last 10 years. In fact, passive investing is a danger trade with too much money concentrated in a few areas.

Intraday reversals (like today) happen all the time, so avoid buying when the futures are up and selling when they go down. The stock market is not a casino....FAANG stocks don't thrive only during lockdowns and are not meant to be sold in signs of recovery....Treasury secretary Janet Yellen in testimony today embraced globalism which will help stocks like Apple.

Market. For 2021 the most important question is with the resurgence of the virus, will the economy open up and recover in the back half of the year, or will the economy weaken and go into a double dip recession. She thinks not. Interest rates will be near zero for a couple of years. The stock market is not the economy and it has chosen to look through the economic weakness because the governments have stepped in and provided financial assistance to the people who need it. It is important to chase returns. You have to be very aware of price valuations before you get it to a stock.

The S&P is not the economy nor the political situation. With democrats now controlling what they do, we expect higher stimulus, which the markets will like. It had a good year last year and this year it will go higher even if not so much. Interest rates will stay near zero.

Option expiry day for JPM was on Friday and we saw reaction following bank earnings. We may see Feds talk about raising rates. We will see a flattening yield curve and reactions to bank stocks that are close to ATH. We have had a massive move since November with the vaccine news. There will be a correction.

It's not necessarily a big week for earnings. The big tech names won't report until next week. It will give us an idea of earnings and growth. There will be a risk to not see the same performance as last year in big tech. There may be some market disappointment.

Keystone XL. They are in risk mitigation mode. Canada needs more capacity to distribute the product to Asia, not necessarily to the US. Does not know how this will play out. The news is still meaningful for Canada and the relationship with the Biden administration.

Educational Segment. Today's topic is on equity risk premium, or the multiple the market is willing to accept. Analysis on liquidity has been about the central bank and Fed put. How much debt do they have to use to fund the programs. In 2021, we will be short 4 trillion to fund all the spending this year. This will come from sucking liquidity out of the market. When there is more supply than demand, equity risk premium go down and yields go up. A challenge for financial markets.

A lot of people are still working from home. Without the fiscal stimulus the market would not be hitting all time highs. There is a disconnect between the economy and the stock market. For the time being it is still positive but you have to watch for hazards. A hazard is the extremely low interest rates. Markets have clearly outperformed because of the push for equities.