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

Market. Today’s drop in stock prices, especially American stock prices, seems to come from trade uncertainty. The extent of restrictions on imported steel and aluminum is still uncertain as is the state of NAFTA, and the recent rhetoric is causing volatility. He thinks that Canadian stocks reacted less to this because trade uncertainty has already been baked into most of the stocks in the Canadian markets. He thinks that the auto space and the rails are not yet pricing in the NAFTA risk. We are not yet in an all-out trade war with the United States, but we are in an uncomfortable middle zone.

Market. He expects U.S. shares to end the year higher, based on stronger earnings and the tax package.

Oil Sector. There is a hug discount on Canadian Select oil because of transportation prices. He believes that in the next 6 months to a year, the capacity issues will be improved and the differential will get smaller. He feels that the next year or two will be favorable to commodities and will favor Canadian oil after the capacity problem is resolved.

Market. He thinks economic indicators look strong still. Small cap holdings do tend to sell off harder during downturns. The recent Canadian budget announcement did not have any surprises in their opinion. Going forward, the “Sell in May” trend may have already begun – he expects another 6 weeks of volatility. From there it will depend on economics and earnings.

Market. Investors are worried that the American economy is overheating with inflationary pressure on interest rate hikes, particularly after the U.S. Fed Chair's Jerome Powell's testimony yesterday. Powell is adding to the overall uncertainty: will there be three or four interest rate hikes? Compare him to Janet Yellen who was straightforward with her intentions. Even if NAFTA is resolved tomorrow, Canada's economic prospects aren't as rich as America's which has more visible growth. In fact, Canada is unsure how much Ottawa will spend on infrastructure. Where's the major catalyst, like a pipeline, to encourage our economy to grow? It isn't here.

Canadian Oil. We have $60 oil, but the oil differential with Canadian oil is vast. We don't have enough pipelines, which we desperately need. Crude by rail was supposed to be a solution, but they've gone away. Now, that we want to return to rail, companies like CP Rail want more. We're stuck with oil that we can't move. She's very bearish on oil and so is severely underweight Canadian oil. Skeptical about the ARAMCO deal.

Market. It's been hard to find bargains this season. His stockwatch list is the smallest that it’s been in at least a decade. He did very little buying in his buying season. The VP Portfolio doubled down on one stock. He picked three, doubling down on one. Few value plays and contrarian plays. The prudent thing to do is to be patient rather than buying. He does not venture on the Venture exchange. He buys stocks on the TSX, NYSE, NASDAQ and sometimes AMEX. He does not go beyond these to find new opportunities because he has refined a process by learning from his mistakes. Too many people feel an urgent need to be active. This often ends up costing them money. At this point, he wants to sell a few stocks. He is happy to sell his winning stocks: “Stocks don’t love you so why should you love them back?”. But he often times his sales if there is a seasonal trend or event trend that is likely to take the stock a little higher in the near future. Many people follow sell rules like selling a loser when it returns to the price they paid, or when it doubles. These have no basis in the underlying value of the company and so they make no sense, but they are very popular. Several of the companies he invests in are taken over. He recommends not buying when there is a strong rumour that the company will be taken over because the price rises so much on the rumour. Wait until noise settles down, the price comes down, and then buy.

Gold price seasonality. He prefers to buy gold stocks in November and December. Gold prices often move up in November and December, especially because of buying in China and India. This has changed a bit because of new regulations in India. Stocks also rise just before PDAC and then have a tendency to come down.

Tonight’s show was a special on the 2018 Federal Budget. No opinions were recorded.

Market. For broader markets the Fed is the biggest influence. NAFTA is also a factor. The Fed may be guiding toward higher inflation. With respect to Canada’s budget, it may be a much to do about nothing. They are waiting until next year, election year, to do a lot of spending. We need to wait for the details to come out but it may not be that interesting from a market point of view.

Market. It is getting more difficult to find attractive opportunities. The stock market has run up a lot faster than earnings (about double) over the last few years. That is in the US. The TSX has not gone anywhere. The problem is the valuations across the board. You have high valuations across all sectors. You need to be selective. He has stayed on the sidelines with Bitcoin and Block chain. He sees it as a way of facilitating transactions but not being a currency. He thinks there will be too much supply in the cannabis industry.

NAFTA and Canada / Mexico Pullout. It is highly unlikely that Mexico could pull out of it. Canada also is highly unlikely to pull out of it. The uncertainty of how NAFTA plays out is a negative on the markets.

What charts and moving averages does Larry look at. You tend to want to look at a timeframe one greater than the timeframe you are going to invest or trade in. If you are going to trade once a month, then you need to look at the annual chart. If it is daily trades then look at weekly charts. He likes a 21 day average (a month), a 63 day average (a quarter), and a 200 day average (a year). He likes to look at quarterly trends vs. annual trends.

Gold and Silver. The Euro has gotten stronger but will not get much stronger now. Gold came up to key resistance levels. We have not broken through them. He has material positions in gold equities and thinks we will get a break out in 6 months to a year. He has not given up.

Trading from a moral standpoint, rather than a capitalist standpoint. There are ETFs in the US that address such things as females in the C-Suite (SHE-N), or child labour. He is not sure if they outperform the market index.