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

General Market Comment. He is not deterred by the market move lately. He expects a little ebb and flow, but feels the economy is strong and interest rates will not be going into the stratosphere. Not a banner year, but he is not running for the hills. President Trump’s recent comments on $100 oil being too high is not going to change things, unless he releases from the petroleum reserves. A fair value of crude is $60-$80. Interest rates are not an issue until long term rates get up to 4-5% levels.

Oil prices. We have seen a nice recovery on oil prices. Saudi Aramco going public is likely leading to the bullish comments from them. Fundamentals still suggest a range of $60-$80.

Quantitative Easing and Market Levels. This may have been the catalyst for recovery since the last financial collapse. He thinks valuations are historically at the high end of the range, so he still feels the market is constructive and can sustain these levels. He prefers the Dow over the TSE.

Retired seniors. He has clients that are all equities. It depends on your circumstances. We have finished 35 years when it was always good in fixed income. Interest rates have bottomed. He is more interest in putting more into fixed income when interest rates have gone up.

Market. Tran mountain: What you've got is a premier that is in office with three green MPs that are keeping him in office. He is trying to protect his office. He does into care what is happening to the rest of the country. The head of the green party and his ego is bigger and he talks nonsense half the time. He is not open to anything and just says no. Norman's Levine's opinion is that: 'why not have a vote today and see if he gets re-elected'.

Market. In December we had a great tax cut in the US and everyone thought 2018 would be a great year. Unfortunately this is the worst fiscal and monetary mistake the US Government could make. The dead weight of debt on the economy starts to weigh it down and we have crossed the threshold in the US for it to do that. In the past when there have been tax cuts but no spending cuts, the debt to GDP ratio gets worse each time. The US debt to GDP ratio has flat lined for the last 10 years since the last tax cut. We can't take another tax cut in the US, meaning it was the worst mistake they could make. This does not mean another recession because Japan has been in this situation for 80 quarters.

Is Gold the Answer to his opening remarks? Yes. Unfortunately it probably is. There is not very much else out there if the US economy goes into that situation and the Fed has no option but to print money. Long rates are not going to go up, but short rates are administered by The Fed.

General Market Comment. He says last year was the lowest level of volatility on the VIX, now it has returned to a more normal level. The big change is that the medium and timeliness of “fake news” is now instant. Investors should not react to all the noise. Now if you want to spread a lie, it can be dispersed quickly. He prefers his information in print form.

Marijuana Industry. He sees this and cryptocurrency as being fascinating. The key is to correctly choose the future winners. Second Cup (SCU-T) is hoping to be able to distribute cannabis – he is not sure they will be. There are too many questions about legislation. If you see mining companies announce they are moving into this space, beware.

What sectors to buy if there's a recession in 2019? He doesn't see any sign of a recession in 2019. He doesn't invest that way anyway. In a recession, though, he'd buy the things that act like bonds: telocs, utlities and REITS. Crashes in, say, 1987, were not recessions, but resets.

What's a safe, stable dividend stock, like TD or BCE, for five years? He's cautious on telecoms, including BCE. They still have wireline exposure and would stay away. The only Canadian bank he owns is TD, which he's reduced a little. He prefers a U.S. bank with much higher dividend growth, albeit a lower dividend. BAC, for instance.

Credit card stocks to buy? He likes companies with long runways, and digital transactions are growing by leaps. Buy Visa and Mastercard (the latter he owns).

2016-2017 enjoyed high performing low volatility followed by 2018's volatility, just like post-1984 and the early-1950s. In both cases, the third year was a big up year. It's rare that the first correction (Feb. 2018) breaks the back of a bull market. After the correction, the markets run higher. 6 of the 10 best days in the last 20 years came within 2 weeks of the 10 worst days. So, we had a shake-out rally and held onto the moving averages. The strongest sectors since he pullback are all economically sensitive, not the ones you see heading into a slowdown or recession. The pullback gave buyers an opportunity. We have 4-6 months ahead that'll be constructive. But he's avoided Canada the past two years. In the last few weeks, though, he's seen strength in oil, so there could be a catch-up trade here in energy and Canada. American will outperform Canada.

He's looking for opportune sell-offs. U.S. tax reform and more restrained American household debt are encouraging, but the Fed is raising rates under a new chairman. Other factors: the U.S. yield curve is flattening and global trade tensions. He's optimistic long-term, cautious short-term. American has become an under-the-radar oil superpower through innovative fracking to the point of exporting oil and natural gas. Hold dry powder (cash) for opportunities.

Car industry: An extremely interesting time now, given the transition to self-driving cars, electric ones and ride-sharing. Google's Waymo is offering a self-driving, ride-sharing test program in Arizona. Later, they plan to offer a for-pay service. As the cost of these new forms of transportation decline, more people will use it. Also, self-driving cars will reduce auto deaths which are rising in the age of texting drivers. Adapation will be gradual and likely be introduced from city to city. Factors, including the high cost of the technology inside these cars, will likely increase fleet sales vs. individual car sales.