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

Educational Segment. Active or Strategic Strategies. There is a Bitcoin ETF coming to the US but probably not this year. There is a BLOK-N ETF that is an actively managed block chain ETF. The top 5 stocks in the S&P 500 account for 12.7% of the entire weight of the S&P, which is the same as the bottom 245 stocks in that index. The top 50 stocks control 50% of the index movement. It is a concentrated index. Increasingly fewer and fewer of the stocks are controlling more and more of the market outlook. SPHD-N is a smart factor index taking the best 75 quality/highest dividend payers and then sub-selecting the lowest 15 volatility stocks within that. It gives you a smoother ride. You get double the yield of the S&P.

Market. Markets are at record highs. This can take ages to resolve itself. Canada is lagging big time. 100 years on the DOW is compounding at 5% and dividends are 3 of those 5 points. You can focus on dividends but you might want to focus on dividend growers. Acquirers may be able to grow dividends by acquisitions. Tax cuts in the US are a bullish argument. They are driving things but not the same for all companies. CSX-N and retail have rebounded substantially. There are pockets of decent value but the market is not cheap.

Canada’s Grocers (Food Retailers). It is a difficult business. They are trying to diversify L-T. They are getting into businesses where there might be a little growth. EMP.A-T has been the best for 5 years but not so recently. You get an okay yield but there are better places to be in the Canadian market.

Market - It's almost like musical chairs. The music is going, you get to parade around, and when the music stops we all want to find a chair. It keeps him up a bit at night in how we will react when the inevitable correction or bear market comes. The market has been in an expansion since 2008-2009, but less then we saw in the 1990s, 1980s and 1970s. The real GDP growth is around the 2%-3% range despite over $5 trillion of money printing, quantitative easing, ultra low interest rates, etc. Yet the New York markets are plumbing new highs on a day-to-day basis. A key thing watches is the yield curve. When that inverts, that is generally a harbinger for a recession 12-18 months down the road. We are not quite there yet, and probably about 2 to 3 rate rises in Canada before the yield curve inverts, and the same or a little more in the US. Should that happen, that would be quite a warning sign for investors.

Market. Repatriation of overseas cash for US companies, is not an accurate way to gauge the value of stocks. It would have been much, much better had the repatriation conditions been specifically contingent upon monies actually being for expansion, etc., not to buy back stocks. The much larger picture of the act is that it does very substantial damage to the solvency condition of the US government. There will be kind of a foot race between the good that the tax act did for corporate earnings, and the damage it is doing to the US government. The US is in the worst fiscal condition it has ever been in, except for the last 8 years when it has just been flat lining. There had better not be a recession, because the US can't withstand one.

Market. The Trump tax cuts got through before the end of the year, and now we are seeing big companies either paying out bonuses or repatriating money from outside the country. From an economic front, this plan seems to be working very well. Because companies have got a big tax cut, doesn't automatically mean that it is going into the US economy. If a small business wants to buy a dozen computers, they are still made in China and Japan. However, it’s still far, far better than it was. When you see some of the big companies offering bonuses, particularly Apple which is bringing back a quarter of $1 billion into the US, that is extraordinary, especially when it is estimated to be around $1.5 trillion US dollars offshore. That could be a huge boost to the US economy. This will benefit stock values because when you get an increase in earnings with an absence of tax, that is tremendous for the market. Also, when a company has to pay the taxes, it is spread out over 5 years. He is now even more bullish on the US. A lot of companies are going to look at Canada from outside and ask if they really need the Canadian restrictions. Also, a lot of Canadian companies could be feeling the same and thinking about moving to the US.

A ticker for a US rate reset? If you are going to use US preferreds, you are not going to be getting the dividend tax credit. He doesn't know that he would be doing that. Any foreign income is treated as fully taxable income.

Market. The Trump trade lives on. It was the hoped for tax changes and deregulation that didn’t happen in 2017. Small caps, industrials, materials have benefited since September. He thinks we are entering the euphoria stage. There are opportunities but it is hard to argue the market is not expensive. Cannabis and Crypto sectors are indicative of the bubble Euphoria condition. Cannabis stocks have run ahead of themselves. The combined market cap compared to forward earnings result in huge multiples. There will be winners almost certainly – but only a handful. We don’t know how this will play out. He has been short energy for two years. Price momentum has been terrible for some time. But it is looking better from a price momentum point of view. This would be the best relative sector right now.

Chinese BAT stocks. They are caught up in a euphoric trade upswing and have over exceeded their valuation metrics. When they start to miss on earnings on the turn of a cycle, say in a year or so, you could really see a move down in these stocks.

Market. The markets are extremely strong. It's a dangerous game, and he is always ready for a correction. US banks ought to be able to stay out of a crisis mode, because they've been there. Commodities are making nice moves. Oil and gas is looking strong. He sees no real problems on the horizon.

Market. Thinks most people expected 2 to 3 hikes in interest rates, and he saw there were too many clouds in the future. That uncertainty is never good for the market. When the central banker doesn't know what the future holds, it causes a little concern. However, the Cdn$ dipped a little, but has now risen. The rate increase was small, so it is going to affect the mortgage holder, but not enough to create real problems. He is still concerned about NAFTA.

Market. Things are very good. The economy is rolling along nicely, which was validated by the government raising interest rates. Also, we have had the best job rate we’ve seen in 15 years. There has been very good retail sales. However, what happens after a long extension is that risk appetite starts running pretty hot, which is happening right now. It's always wise to take the long view and think about where you are in the cycle.

Market. We are at a point where some money might be taken off the table by people who want to put it aside. When he did a look-see at the stocks in New York, NASDAQ, AMEX and Toronto, there were far less things to add to his Stock Watch list. That list is at the lowest level in over 20 years. His "end of the year" buying was less than it has been in a decade. In terms of what he does, there is far less choice at this point in time. He is looking at stocks that are down at least 33% over the past 52 weeks, and then looking at the past 10 years. It is very, very difficult right now to find things worthy of being bought.

Market. The overall volatility has been really, really low. It's been a long time since we've had even a 3% correction in the market. Inter-day we are going to get choppiness, because there is so much quant driven money and computers looking for short-term trends. He tries to take advantage of that. If you focus on the fundamentals of your portfolio and you know that it is cheap, you buy on pullbacks, which is a great opportunity.

Market. He is bullish on natural gas and weary on oil. When we have winter things change very quickly. Mother nature takes down storage so quickly that it changes fundamentals very quickly. The price chart spiked up quickly in the winter of 2014. It is these weeks of 200 BCF draw downs that do it. It is again cool and if we have another cold spurt, every time you have had 4 historically, you have a spike up to $5 for gas. If cold weather persists we will see $3-$3.50 for gas. He is bearish on oil because US production will get back up overly quickly. ECA-T is saying they increased production 30% and will do so another 30% this year. OPEC is cheating. It is a percentage of honesty. They are producing more than quota already. Iraq has to get money in the door to perform repairs to the country. More capacity has to come online.