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

The market reminds him of 2000 with Cisco, Lucent, Microsoft dominating. The S&P is up 9% YTD, but the equal-weighted is actually down slightly. This is slightly worrying, because a healthy bull market enjoys broad gains with depth. He's been taking profits in tech to reduce the bet. Either everything rolls over and tech brings down the wider average (they can't extend their valuations forever) or the rally broadens and sees more participation from other sectors like cyclicals.

Copper prices have come well off since the year started. Copper is important because it's a global economic bellwether--copper is used heavily in construction. Garner feels the same themes that led to copper's boom this year will let it keep running now. A weaker dollar and interest rate price volatility are good for copper. Garner notes that copper has seen an overall uptrend since 2020. There's a floor of support at $3.60. But if copper can't hold its 200-day moving average, copper could fall to $3.30. But that's a buying opportunity. The tumbling RSI indicates that most of the copper selling may be behind us. If copper vaults past $3.80, the upward momentum could overwhelm the bears. Large speculators are net short by a lot, which limits the potential downside and multiplies the upside if the price moves in the right direction. Seasonally, coppers hits lows in late June and rallies in the fall. China's reopening has disappointed (China buys half the world's copper), so copper prices have flagged. Traders got too bullish on China, but their selling of copper is ending. Copper could rally from here.

Gold used to be a hedge against inflation, so people are abandoning gold. He still feels that gold should comprise 10% of a portfolio.

Believes US debt ceiling agreement is good for markets - however - is worried about long term government spending.
Expecting bond market interest rates to increase.
Congressional budget projection (10 years) of debt/spending not very good.
Believes idea of debt ceiling not good (creates artificial stress).
Root of debt ceiling problem is a bi-partisan issue. 
Strength in labor market is not helping US fed fight inflation.
Expecting a hard landing.

 

A.I.(ChatGPT) recommendation on Active vs. Passive investing: it depends on what individual investing goals are.
ChatGPT recommends quarterly re-investment to average out cost basis.
Consult with your investment advisor before relying on any A.I. investment advice. 
No right or wrong answer. 

Keys to Managing Your Portfolio: Keep costs low. This is unlikely to be a surprise to many at this point as it is well discussed and written about. It is worth repeating though, as over the long-term, fees can destroy the value of a portfolio. If you consider fees, taxes and tack on inflation, it can be very hard to just break even. Fees are one of the few items totally in an investor's control, so it is something all investors should keep a tight leash on. No all fees are bad but it is important to understand and be sure you are getting value for the fees paid.
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Editor's Note: The topic also includes wealth protection strategies. There is a lot of pessimism out there but the main source of optimism is the macro environment. Earnings are still quite strong and quarterly reports are still frequently providing positive guidance. There is also a strong jobs market. The U.S. balance sheet at the consumer level is pretty good. A recession is not necessarily needed before the market can move on. At present interest rate levels cash and bonds can be a bigger part of your portfolio. They will pay well in an uncertain economic environment. A whole lot of asset classes are working now.

Editor's Note: The question was on the Canadian banking sector. It is always a good sector but he would wait for a better entry level, although one to buy today is CIBC for the best risk/reward.

The big names like Nvidia won't come down, but the laggards in this space will rally, like NXP, Intel and Qualcomm, if overall economic activity is stronger than expected. This could happen because the labour market remains strong.

Believes current market prices are presenting good buying opportunities for investors.
High quality companies with predictable cash flows are investors best friend.
Finding value in Japan, UK & Middle East.
Concentrated portfolio is best way to generate alpha for investors. 
Dividends are ok for investors - preference is for share buybacks or re-invested capital.

US Dividends For Canadians: Canadian companies may choose to pay US dividends for a few reasons. Although some companies are being traded in Canadian exchanges, their main operations are in the US. As a result, the majority of its profit and cash flow comes from the US dollars. Therefore, it is more efficient to pay shareholders directly in US dollars instead of converting back to Canadian dollars just for the sake of being listed in Canadian exchanges, which will incur additional expenses from currency conversion and hedges. Secondly, Canadian companies may want to attract a group of investors who want to earn income from US dollars without being subject to foreign exchange fees and currency fluctuation risks, allowing them to reinvest and purchase US securities.

In terms of taxes, Canadian investors get favourable treatment from this source of income, as dividends in US dollars paid by Canadian companies are considered similar to Canadian dividends. As a consequence, this would not be subject to the US foreign withholding tax of 15%, and the accountants just simply convert that US income source into Canadian dollars at an appropriate exchange rate to calculate investors’ total dividend income.
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His view on the world of stocks is very simple. They're going either up, down, or sideways. The sideways periods can be either topping or bottoming. Basing is the bottom part of the stock market cycle phase. We're in that phase now. The markets tread water, going up and down, not going anywhere for a while. 

His issue with the markets right now is that it's a concentrated market. For example, it's insane that NVDA is up about 25% today. Six stocks make up 50% of the NASDAQ. Market breadth is terrible. The advance/decline line is declining, which means there are fewer advancers than decliners overall. 

By itself, the NASDAQ looks good driven by those 6 stocks. But the broader picture shows that it can't last like that. We've seen this before, and it's called 2001 and late 2021. It's not a healthy market when most stocks are going down and a few are going up.

He's cautious.

You don't care if you're in that index or you're in those stocks. But let's take the example of TSLA. For a while, it could do no wrong. The PE ratio of 100x didn't bother people, because they said it's going up. But it rounded over and got ugly. These stocks get overvalued, and the crowd moves on.

You can trade the trend, but it's getting peaky. You don't want to be the last person to exit the subway.

Driven a lot by OPEC and politics. Likes it, but he's trading it. He's here for a good time, not a long time. Momentarily oversold. Might still be in a downtrend, but still has potential to bounce. He's regression trading right now. Trade it for a pop.