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

Money inflows start with ETFs, then flow into senior producers like AEM, ABX, and NGT. If enough retail interest, money then flows to intermediates, juniors, and even exploration. As the cycle matures, exploration really starts to outperform, as that's the last flight of capital. 2022 was tough, so there's a bit of overhang. Looking for better things this year. 

$80 is probably a fundamental floor. Lots is predicated on OPEC being willing to create that floor. Question marks about the velocity of China reopening. Recession: when, how deep, how long? 

Companies are probably valued in the $65 range, so there's material upside in the right companies. The key is to stay defensive, own companies with dividends and clean balance sheets that are willing to return capital to shareholders.

They've all focused on cleaning up the balance sheet, and pivoting into return of capital. Crucial to maintain the balance between running a business with moderate growth and returning capital to shareholders so they can see the true value of the business they've created. 

They heard shareholders, after a 5-6 year span of growth at any cost, especially in the US. The new mantra has become the norm, and the stock prices have reacted. Executives used to be compensated on absolute growth, but now it's based on other criteria like return of capital and generating free cashflow.

Defined Benefit Versus Defined Contribution. If you are the owner of a pension asset, particularly a defined income stream, consider yourself lucky! A pension is one of your greatest financial assets. There are two types of company pension plans: Defined Benefit (DB) and Defined Contribution (DC). A DB pension means you receive a specific, known and periodic payout that is guaranteed by your employer regardless of how the pension investment performs. Your defined benefit amount depends on how much is paid into the plan and your years of service with that employer. The employer bears the investment risk and any ‘underfunded’ status. A DC pension is entirely dependent on investment performance. The employee typically directs the asset allocation via investment fund choices. There are no guarantees about what your payout will be when you either retire or leave that employer.
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News is positive, then negative. Nobody knows about this market. We need to see the impact of existing interest rate hikes on the economy. Companies like 3M and Disney are making job cuts, though unemployment remains low. A dichotomy. Those buying a GIC should note that you're locked in for a term, so when that term ends, what will interest rates be? Higher or lower? Instead, you can buy a stock that yields 5% plus share appreciation, rather than a GIC at 5%, that offsets inflation.

The FAANG names report this week, except Apple. Valuations are stretched, up 25% YTD. There is better risk/reward elsewhere.

Major tech earnings are coming this week, so markets are tentative today. Will numbers be positive? Layoffs? Full-year-forecasts up or down? Q1 and Q2 earnings on the S&P have been negative, but Q3 has been positive, so the end of the year looks positive. But if earnings will be lower for the year, then earnings now are too high and need to come down. There's complacency in the market, given the VIX at 16, so volatility could happen in the next several months. Also, the market expects the US Fed to raise rates 25 points next week--the issue is inflation. Unlike the market, he expects rates to stay higher for longer later this year.

It's better to invest in car parts than car stocks. Inflation costs have already been passed onto buyers, so don't expect much in the future. EV's are a tailwind for the parts companies. Are trading at decent PE's. Again, the car business is tougher and he avoids that.

Believes corporate earnings (big tech) will be main focus of the market this week.
Is expecting earnings to be lower than previous highs.
Big tech will focus on "cloud" & "A.I." potential.
Thinks A.I. will take years to prove itself as a legitimate business.
Productivity will be positively affected by A.I., but could see social issues. 

Chicago Board Options board recently launched 1 day volatility option.
Creates very volatile market.
Indicates speculate opinions of investors.
Very complex product, should only be used be expert traders. 
Average investors should beware.

Worry about the macro, focus on the micro. Amid market dislocation due to inflationary pressures, a banking crisis, interest rate hikes causing a prolonged recession, and other factors, more than ever, investors are concerned about where to put money to work in the most efficient way. However, we think the best approach for long-term investors amid uncertainties is “worry about the macro, focus on the micro”. As there is a small sub-segment of the market that regardless of what happens with the macro picture, the business will continue to do well (or are only mildly affected), due to such a strong secular tailwind in the business models. Some of the prominent transitions include brick-and-mortar retail to e-commerce, software licensing to software subscriptions (SaaS), programmatic TV to streaming and cash to electronic as a payment method, etc. As long-term investors, these are the opportune times to establish or add to positions that not only persist through the downturn but also come out much stronger when the economy recovers. Therefore, we think the current drawdown could offer opportunities for attractive entry points into these names.  
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Avoiding Home Bias in Your Portfolio: One of the most common problems we see in Canadian investment portfolios is a large bias toward Canadian domiciled and traded stocks. Often times a portfolio can be weighted in excess of 60% to Canada when it makes up less than 5% of the world economy. Many investors might not even realize this could be a problem for a portfolio but the risks here are easy to highlight at a high level:

1. The TSX has underperformed the S&P 500 over 1, 2, 5- and 10-year periods (in some periods, vastly underperformed)
2. The TSX is largely a ‘bet’ on the financials and energy sectors which is actually a concentration risk

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US Federal Reserve "pause" on rate hikes not a guarantee that market is in good shape. 
Believes Teck Resources ownership is better suited for Canadians (as opposed to foreigners).
Economy not out of the woods yet with regards to recession.
Concentrating capital into large (money center) banks due to liquidity concerns.
Tighter lending will help US Federal Reserve calm the economy. 
Aggressive actions by J.Powell have created a stock pickers market (mis-priced opportunities). 

Two big indicators of economic growth. One is interest rates, and the full effects haven't been felt yet. The second is recent turmoil in US banking markets, because any lending they pull back on will have profound ripple effects going forward. These will take time to play out, and we could have a recession over the short term.