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

Gold miners? You only want to own commodities when their price is doing well. Gold prices are doing well. The problem with miners is that share prices get separated from the commodity prices at times. There are always operational issues. He prefers holding Franco-Nevada as it is a royalty structure and not dependent on a single mine. He thinks gold prices are in a corrective phase, but poised to go higher.

Record highs in the S&P500. TSX is also very close to hitting all time highs. People are buying because markets are going up. There are some concerns that the markets are going to fall down again. However, the breakout we’ve seen this month is distinctive as we are breaking above new levels.

Half of the gain this year is a recovery from last year. We’re up 2-4% annualized, depending on which market you look at, so there is still lots of volatility.

Right now, compared to 2 years ago, it’s been steady so you definitely have to trade to get good performance.

Moving averages are good to find an exit point. Looking for crossover of several moving averages could indicate its momentum.

Market. It seems like every week or month there is another notch taken off the recession argument and thesis. The quarterly results are not shooting the lights out but they are encouraging. You would have seen some kind of reduction in job numbers before a recession. Recession fears are being calmed. What if markets didn’t go down that much during a recession. Are you positioned for that? Tech and consumables are the most interesting in Canada.

Volume in the markets today on trade optimism. Any positive news is positive for the markets.

Different strategy to get through the end of the year vs. kickstarting 2020? Great year so far. Underlying fundamentals look pretty good. Little bumpy till the end of the year. Next year should be positive.

Will liquidity work its way through the system from January 2020 onwards? The 3 Fed rate cuts will start to move liquidity through and help companies. Any incremental positive on the trade side will be a huge positive. Hopefully momentum will carry through into 2020.

How are the earnings so far? Estimates are too high compared to actual economic growth. Disney, however, seems to be firing on all cylinders.

Market Outlook The market is telling you the summer was full of political bad news. The last six months the market is not down, where is all the gloom. The market is behaving as it should. Rates are as low as they can get, you are not seeing it help the economy. The psychology is positive right now. The Dow is following the previous bull market that ran 1982-2000 -- it has about 10 years to go. He doesn't expect a 20-30% plunge is coming.

Why are REITs selling off? REITs are falling off on the threat of bond yields rising again. If bonds go up, it will create competition and money will move to safer yields.

Canadian Economy The Canadian economy is disappointing because a large portion of the driving force is being held back from contributing fully (interviewer, "You mean oil and gas"). Hopefully now a minority government and the two main partners agree on energy to allow the correct legislation to allow the energy space to grow again. China has hurt us as well.

Too much of the market is liquidity driven and this worries him. But he doesn't follow the broad markets that closely. He's started to take interest in Alberta oil, which hasn't been this bad since 1989-90--he likes the Canadian oil space now when NOBODY does. Even a dead-cat bounce is overdue. Encouraging news is two First Nations bands have backed out opposing the TransMountain and possible moves for a First Nations band to own the TM. Canadian drillers have curbed drilling and turned into free cash machines. Also, there are too many competent people in oil for this sector to be still for much longer. About Encana: when a Canadian-named oil company has to move to the US, that says something. Overall, Canadian oil/gas companies are too competent and too unloved for too long that contrarian investors should start looking at these stocks. The industry is quite solvent. Also, the mid-eastern and American shale plays will be in 5 years long in the tooth.

Gold mining stocks On a 40-year gold chart, we are closer to the bottom than the top. Gold mining stocks are cheap, and when they recover, they REALLY recover. Don't take too many risks nor invest too much. Returns could take 12-18 months, so wait. Gold trades inversely to confidence in the USD. US debt is too high and current levels can't sustain. Gold stocks won't beat the USD but will do less badly in a downturn.