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

Market. 2017 was the year where almost everything went up. TSX was up about 6% and the S&P 500 was up about 19.6%. It wasn't just 1 or 2 sectors doing well, but it was across all industries and asset classes. Looking forward to 2018, the 4th quarter is going to be looking pretty good because we had a strong consumer going into the holiday season which should help boost a lot of consumer names. When you have strong consumers, other stocks usually do well also. However, he would temper expectations because it is not every year you are going to see all these asset classes go up like they did in 2017.

Hold or take profits on a stock that has gone up 67%? When you see a triple or a double, take out what you have put in. In that way the stock doesn’t owe you anything. If you still like what is happening, then you can let it ride.

Cannabis leader? You need to have 2 hats when entering cannabis stocks. You have to have the speculative hat where everything is going well, momentum is good, and there is a lot of hype behind it. With that, you could definitely make an argument for owning them. It is speculative, high risk, and highly volatile. However, when putting on a fundamental hat, it is very hard to get numbers to where valuations are. Canopy Growth (WEED-T), valuation wise, is trading at about 5X next year's Book and 7X current year's BV, stock is trading at about 23X Sales. Analysts are expecting the company to put up $550 million revenue by 2020. Even if they do, and they issue zero shares, it will be trading at 11X Sales by 2020, which is a pretty high valuation. It’s hard to make an investment case for this. A preferred way is probably to Buy an ETF.

Market. This is a very unique time in the market where the professionals have very little leg up over the average investor right now. The 3 biggest stories will be the crypto currencies, the cannabis space and the market levels, of which the professionals bring very little extra to the table. As the market crosses 7,000, these numbers mean very little. They used to matter and he used to trade on and off some of these restriction ranges, but doesn't anymore. With crypto currencies and the cannabis space, they are in the infancy stage. Everything is new and it is exciting.

Canadian Banks? One of those sectors that, like a lot of sectors, has had an incredible move. Looks positive. If you believe this market is going higher, then you can hang in. He can't see a reason not to be in these.

Market. The TSX has gone through a bit of a hard time this year, but we’ve broken out from the short term downward trend line, and currently are making decent progress. Charts indicate we should be going upwards, so a bullish conclusion is reasonable. The S&P is a very good upward trend without a broken channel this year. We are now in the early stage of a new bull phase, which argues for the TSX to outperform S&P, but there is no sign the S&P is slowing down. Going into 2018, the Canadian economy has its work cut out for it, as well as having to deal with the NAFTA negotiations.

Gold. The price broke through $1300 today. Would this be a real break out, or just some year-end adjustment? Would you use the commodity or a stock ETF to give the maximum torque? A 5-year chart shows a saucer formation. Most importantly 2016 was the year of the strong US$. When the US$ is strong, there should be downward pressure on the price of gold. For gold to be able to do well in that scenario, it means the Bear market is now done, and we are on a gentle rising bull market. However, you need to be patient. The best way to own gold is to own a good, Canadian, gold mining company.

Cd$ VS US$? His forecast for 2018 is that the Cdn$ will be weaker than the US$. In the last few days, the Cdn$ has been rising, but into very thin year end trading. There may be some short-term strength, but the overall big, big picture is still a slower Canadian economy. We have NAFTA negotiations; the US Federal Reserve will raise rates and the Bank of Canada has to give more thought to raising rates.

Market. As we see a better economic recovery globally, the TSX should do better. This is the 1st time we have seen a global recovery, and it may only mean 2%-2.5% growth, but that is very good. The issue facing 2018 globally is what happens to central banks around the world and how they slowly ease themselves out of quantitative easing. The Federal Reserve is well on its way to doing that, and the other banks are thinking about how to best solve that issue. The yield curve in the US is flattening, which tells you there is going to be less growth and less inflation. How do you increase interest rates in a low inflationary environment? That is very difficult.

Market. The TSX hitting a high is a relative thing compared to the rest of the world. Weed stocks are not stocks he has invested in for his clients because it is a business that is in its infancy in Canada. No one knows what it will look like in 2, 5 or 10 years. He does not know who the survivors will be, the winners, etc. Lots of money managers have not invested in these stocks. Most companies are getting in the beginning into the medical marijuana business. It is not based on science like regular drugs. There is not a good substitute to use as a bind placebo. You don’t know how much of the product will come from private grow-ops where it is not taxed.

US Bank Recommendation. He favors US over Canadian banks right now. See his Top Picks today. A second one is BKU-N. It is based in Florida. It is mostly commercial and real estate loans. It is well run and has a great future ahead of it.

Utility Stocks. See his Top Picks today. Every portfolio should have a portion in utilities and regulated companies. You own them for diversification and dividends. They outperform when other stocks don’t do well.

A Japanese stock that can be traded in North America? The one cautionary note about Japan is that the Bank of Japan has been the heaviest buyer of ETF's in Japan for the past year. That would give him cause for concern. They are propping up the market by being the biggest holder of the Japanese ETF's.

Market outlook for 2018? Thinks the tax cuts have already been priced in, so it is time for earnings to start to grow. If earnings can grow beyond the 8%-9% that economists are forecasting, then you'll probably get a positive market in 2018. If the earnings don't grow at that rate, we’ll probably see a correction at some point. This is why he has a cash on the sidelines. To him, it is the best of both worlds because he has been able to outperform, not being fully invested, and if the market falls he doesn't have to sell into a falling market.

(South African investment?) The Rand has rallied back big time in the last 2 weeks because of the recent election results. There are a couple of ways to play south Africa. You can go into the consumer or banking with any of the companies. It is doubtful if you are going to be able to get them on an ADR, so you may want to go into South Africa on an ETF. You may also want to get an interest in the supranational bonds. If you believe the economy is going to turn around and improve, there are bonds with coupons running around 8%.