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

Canadian banks. The banks have recovered well. September wasn't great across the board, but they have outperformed US counterparts. There were good results out of banks last quarters. Banks have proven they are very resilient even in recessions.

Federal Infrastructure Bank. This was well expected. It further increases fiscal spending that will help lift us from the downturn. It's a good thing and will probably push the economy out of the pandemic. Renewable energy and rural broadband has been a focus for a while. The rural broadband may continue to support exodus towards rural areas.

Recovery is expected to be uneven. We have seen a nice recovery up from the bottom, but going forward, continued lumpiness and volatility is expected. A bumpier ride for investors going forward.

Gold and silver. The commodity side of gold and silver are seen as a hedge for inflation and volatility. However, he does not see gold to be seen positively with inflation since he doesn't think we will see too much of inflation. It could be a hedge for volatility. He prefers to focus on companies than commodities.

Will tech resume its upward march after some of the speculative air has been let out of the sector? It's possible. Unike 20 years ago, there are viable businesses behind these prices. The run expanded the multiples as the prices were rising faster than the fundamental growth. He's taken a barbell approach, holding some tech as well as some value like banks and industrials.

Rotation back into high dividend, low multiple value stocks? At some point, but getting the timing right is a mug's game. He will continue to participate in good quality businesses. When valuations get stretched, they sell a portion of a dominant position, for example Apple. When a stock is at the upper end of its historical valuation range is always a good time to take money off the table.

Last night's 1st US presidential debate The two presidential candidates in last night's first debate did NOT bash the healthcare companies. That's good. Health stocks, even CVS, rallied today. The moderator pointed out that Trump failed to replace Obamacare, so Obamacare is there to stay. Another tailwind for health. Also, Biden didn't bash the big banks. Good for banks. The debate made him optimistic that we will find a Covid vaccine soon. Third, there was little bashing of China, which is good for big tech stocks which detests a US-China trade war.

Near-zero interest rates are definitely boosting real estate sales in apartments and houses. Borrowing is so cheap. A private buyer now would be making a bet in certain stable sectors during this pandemic: industrial warehouses, apartments in affordable parts of North America, and single-family rental homes (people can work anymore now). These are all stable and strong. However, retail, office and student houses have questionable stability and are at risk in this Covid environment.

Washington's delay in passing the next stimulus package will doom thousands of small businesses. Viewers want him to avoid talking politics, but good luck. That's impossible.... Big chains in industries like hotels have deep pockets and will survive, but small indies will perish. He's not being political, but stating the facts. Let small businesses die? They employ thousands and thousands, so think again.

Market. During the worst pandemic in 100 years, we have interest rates that will have a profound effect on the economy as well as the social structure, for 50 years to come. The low interest rates are causing the inflation of assets, rather than goods and services. Bond prices are at world record highs. Obscure art and wine prices are soaring. People are looking for places to put money. All this money that is being printed is going into 'stuff'. Investments are being made into assets that people really need to own for life. People buying real estate for investment reasons are crowding out those who want a place to raise a family and so on.

Banks involved in Money Laundering. Technically there is a trend of replacing what is involved in the processing of payments and that is block-chain technology. It defines the reputational hit banks take from the issue. None of the Canadian banks have bounced back since the start of COVID. He is not saying Canadian banks are involved in money laundering but there is something happening that will impact their revenues 5 years from now.

There is a feeling that reliable dividend payers are just like bonds. You need to buy companies that have a capacity to grow their dividends and this is more important than their current level. You also don’t want to risk that the dividend is cut. Dividends should be paid out of earnings.