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

If bearish on a company, buy the puts back, short the stock, or wait? Once you’ve sold the put with the obligation to buy, you have to assume you want the stock. But if you’ve changed your mind, just buy it back at a loss, and call it a day. Don’t try to short it. Distance yourself from emotions.

Is the recent volatility due to algorithms or trade fears? October 10 dip was algorithms. The corrections that used to take weeks, now take hours, and there’s nothing you can do. You just have to be able to weather those movements. The main job of a financial adviser is managing the emotions of investing.

Do you look at the technicals in an options trade? It’s hard to trade options technically. But he’d use Bollinger bands, to give him support in his strategy of where he’s going to trade in a range.

Add to or sell preferred shares now that rates are normalizing? Go with floating rate preferred. CPD is an iShares ETF that covers this. Floating rates will bump up with interest rates.

Can you recommend a bond ETF? XBD from iShares, which tracks the Canadian corporate and government bond universe. Duration is about 14.5, so be aware that with a 1% rise in rates it may take a 14% hit.

What’s the lowest risk for a retiree? GICs. Ladder them. Takes the risk off the table. They don’t carry the same emotion as stocks. After that, he would buy the Canadian banks.

Market. Today's event is BBD.B-T. The biggest story is that they are a money pit, taking tax dollars over the long term. Governments just keep throwing money at it over and over. With all the money put into it, where did all the money go and what did tax payers get for it. Their turbo prop is being sold. You have business jets, part of the 'C' series and the transportation business. Every business they are in is political and they just keep bringing the revenue in. This is a trading stock and not an investing stock. The street opinion on this stock is to outperform/buy and nobody ever changes their opinion.

Is it a good idea to get tech companies from Canada and between Open Text (OTEX-T) vs CGI Group Inc. (GIB.A-T), which one you prefer? if you long term track record of Open Text is a great story. CGI is also a great story. He prefers open Text for the dividend.

The U.S. Midterms last night were as expected. With uncertainty removed--and historic seasonality--the markets took off today. Also, the third year of a U.S. presidency also sees the strongest returns, averaging 14% (6% in the 4th year). True, US-China trade tensions, rising rates and peak earnings remain concerns, but he's bullish. Investors have something to look forward to.

Are you concerned about China with its volatility, and emerging markets? He actually likes some of the Asia EM markets. He won't buy big now, but he has some limited holdings there. China is trading at forward earnings less than 10x. Sentiment is still negative. Wait until that sentiment turns. He doesn't see a major shift in U.S. policy towards China after the Midterms. It's more like how long can China hold out on these tariffs. A trade war benefits no one. It's a matter of coming to an agreement.

The U.S. Midterms today: Whatever happens today, the markets will be happy because there will be certainty. If the sentiment swung dramatically to the Democrats, then there might be a market hiccup. The October sell-off has taken a lot of risk out of the market. The S&P has a great chance of hitting 3,000 again; it may not happen overnight, but it likely will. Seasonally, the next 4-5 months is the time when money strongly flows into the market (i.e. pension plans get a lot of money this time of year). We've already had the kind of move in interest rates, like 1982-87 (in 1987 the market crashed), where rates have risen from very low to higher. Now, we're having a correction (like the 1987 crash). However, the scenario now is much better than 1982-7.

When will we get back into the interest-rate sensitive stocks? We're in a bear market for interest rates for long time. Not just a year or two. Inside those cycles are smaller cycles--maybe you can step into them. Utilities are full of debt, and interest rates will rise for the next decade or two, even. These stocks will face headwinds for a long time.

Is it a good time to invest in cannabis stocks? It's a trade, not long-term investments. It's like the tech bubble of the late-90s: no sales, no revenues, balance sheets were cash until they were all spent. Sure, there will be winners that'll survive, but others that'll go to zero (i.e. Nortel). The valuations are NOT cheap. Trade, trade, trade. Not an investment. He's not in this space at all.