A Comment -- General Comments From an Expert (A Commentary)
DON'T BUY
N/A
US$ - when to convert to CAD$? Currencies are difficult to forecast. A lot of traders view the CAD$ as commodity driven. The CAD$ is not viewed as a safe haven currency. Based on the cost of a basket of groceries, the Canadian dollar is worth $0.82 US, vs. the exchange rate of $0.68, so you should convert them now.
COMMENT
Market Outlook He is not looking to buy back in all the way yet. The speed of the draw down is impacting other markets like commodities (oil down another 10%). There is no where to hide, except in cash. They are watching how different countries are reacting to COVID-19. South Korea took the course to do as much testing as possible, finding people who could have spread the virus, but were able to be contained. Very challenging times.
HOLD
Big 6 banks in Canada? Yielding 5.8% collectively. The Canadian banks weathered the last crisis better than their US counterparts. He thinks the Canadian banks will survive this. They are not impervious to COVID-19 and the interest rate curve is not helping either. He does not call for negative rates in North America, but where the curve ha fallen, it is impacting profitably. Your are safe holding in the long run.
COMMENT
Gold levered ETFs? The US dollar has been on fire lately, crushing all other currencies. This is generally not good for gold. He likes gold as he thinks interest rates will stay low for a long time to come as the opportunity cost to hold gold is dropping. He was surprised to see how much gold has fallen lately. If you don't understand how futures curves and swaps work you should avoid buying levered products due to the inherent decay in them.
COMMENT
Gold levered ETFs? The US dollar has been on fire lately, crushing all other currencies. This is generally not good for gold. He likes gold as he thinks interest rates will stay low for a long time to come as the opportunity cost to hold gold is dropping. He was surprised to see how much gold has fallen lately. If you don't understand how futures curves and swaps work you should avoid buying levered products due to the inherent decay in them.
COMMENT
USD? He is not a currrency specialist. Exposure to the US and Europe and Canada, creates a natural hedge for them. He has heard chatter for a potential accord to weaken the US dollar and the US government would not be adverse to it. You can choose to hedge your exposure through various Canadian offerings.
N/A
Market. He showed a chart that was pre-empted on Monday's educational segment of Berman's Call. Vix readings are same as the extremes in 2008 following the Leman bankruptcy. The Vix stayed elevated for months and months until March of 2009. He would encourage people to understand the VIX and north of 40 is indicates too much volatility to catch falling knives. He then outlined money falling into money market funds. At some point we are going to get a phenomenal rally. People ask where the bottom is but we need to see the VIX below 40. It is 75-80 recently. He was aggressively buying with the S&P at these levels at Christmas of 2018 but now he is not.
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