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

Market. His company is a portfolio hedge manager in the global technology market. Black Swan Dexteritas came from BSD, which in Israel translates to “great prosperity”. They watch over 700 technology companies and sees technology being the combination of intelligence, data, and merging the virtual and real worlds. He sees the 5G market growing to $1.23 trillion by 2026, with today over 6.5 billion wireless devises growing to over 20.8 billion by 2020.

Digital Twins. His research has lead him to think that a physical object could be digitized and put on screen, creating a virtual representation of that object. From there, you can gather data and hypothetically test it to see if you can run it more efficiently. It could be a machine, factory floor or even city. Singapore brought in a company to build an avatar of their city with sensors and cameras to gather data to change things like traffic flows or even sewer flows for maintenance. Hardware, software and end-users will all play a role for future investments.

He sees value in Canadian stocks with the pick-up in oil. He likes companies with low debt and lots of free cash flow. He wishes he had bought Magna a couple of years ago. Similarly, helikes Martinrea. It's amazing how these stocks have run up in light of NAFTA and trade issues. Glad that Trudeau dropped the gloves yesterday to stand up to U.S. tariffs--which are ridiculous. A trade war would hurt both countries. The U.S. economy is doing well, and Canada is faring OK. The market was a little surprised that the Bank of Canada was more hawkish than expected this week. He thinks the BoC will raise rates once this year. Overall, the trade issue is the elephant in the room.

Market. He likes the fact there are new highs being made on the short term charts. Not a lot of enthusiasm, but good signs. Over the past year the S&P500 has retraced to the 50% mark between the high in January and low in February. All the recent lows are trending higher, which is cautiously supportive. He is holding more cash than normal.

Market. Who knows what comes out of the US administration. Changes from one day to another. All countries are responding responsible to the belligerent trade practices of the US administration. There is good synchronized global growth at the moment and this guy is risking all that. Good for the Government of Canada for standing up to the US threats. Most countries are figuring out how to negotiate. For businesses to make plans you can’t review plans every 5 years.

Trans Mountain Pipeline. He thinks the Trans Mountain pipeline nationalization was caused because of the Federal government forcing themselves into approving only one pipeline. He does not want to see another National Energy Program. He is hoping the move will convince investors to come back to Canada. The challenge will be finding a buyer once the pipeline is completed. Hopefully this is a good thing for Canada and Alberta.

Market. Value is coming back into equity markets, albeit with higher volatility than last year. Economic growth has been tepid for the past 10 years, but at least it is still growing. He feels we are in a much more positive environment than before. This is a good time to be choosy when buying stocks – look for good management and balance sheets.

Bombardier Common versus Preferred Shares. Preferred shares will be much more sensitive to interest rate hikes. They have announced diversification of their aircraft fleet, but they still remain with a stressed balance sheet. He would not own either one.

There's a great wall of worry over markets, like Trump tariffs, Italy this week and tariffs, but GDP growth is strong and so is the US economy as well as global productivity. We're seeing more automation in factories. Yes, we're late in the cycle, but he still sees good several years ahead. He's more skeptical about Canada, due to political squabbling over oil. Ontario is heavily indebted though booming currently. The Bank of Canada didn't change rates today, but signalled a July hike--it's going to happen. Our economy needs a lower dollar. The BoC will be cautious. He's selective Canadian stocks. Canadian banks can continue to rise even if the economy and housing slow, especially those like TD with American exposure. In contrast, Scotiabank has suffered due to its heavy exposure to Canada.

What three companies to invest in for a first-time investor for a year? Don't put money in the market for a year. That's gambling. You need a 3-5, preferably 8-10 years. Buy solid, long-term growth companies like Facebook or a healthcare company or even Amazon. You need more than three names to properly diversify, at least 10.

American healthcare stocks have been struggling, why? The tailwinds are good: we're all getting older so there's demand. The issue is that governments are more involved in healthcare payments, and governments are struggling for money and squeezing costs. We're shifting from chemistry-based to genetic-engineered products. The payment system in the U.S. is convulated--we had Obamacare and now they're repealing it. U.S. health care costs are 15% of GDP much higher than other developed countries. All these stocks are cheap at 12-13x earnings. Good profit margins. If you own them broadly, then fine. It's a tough business now.

Trans Mountain Pipeline acquisition by the Federal Government. He is not happy with the oil situation and he thinks this acquisition is a tragedy and didn't have to happen. It is all the fault of the Trudeau government. The government went on and killed Northern Gateway, went a step further and said no tankers would be allowed on BC coast, they made the regulation such that Energy East had to be cancelled. Then they were left with Trans Mountain and it blew up. Trans Mountain could have been cancelled if the other projects had gone ahead. The Kinder Morgan stock is slightly up today, but there isn’t much left in Kinder Morgan to grow, there is some oil storage left, but there is not much left to grow, so it’s only going to go up so much.

Concerns about Italy potentially leaving the Euro. There was some sell off today amid concerns about Italian government could take country out of Euro. That would be very bad for Europe and for markets. They have been expecting the market to sell off and have improved their cash. This could be the catalyst and give an opportunity for people to move into value stocks and small caps and away from the market leaders.

U.S. Banks. He prefers U.S. banks vs Canadian banks. They are more interest rate sensitive. If rates go up, they benefit more, and they don’t have the housing situation that Canadian banks have to face.

When is the right time to buy utilities? The best time to buy them is when interest rate is going down not when interest rate is going up.