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

One of his favourite themes for this year, along with platinum. Had a good run, but now in seasonal weakness that goes into the summer. Expects choppy consolidation around $1800. A lot of the big miners like AEM and ABX have come back to important technical support near their 200-day moving averages. Doesn't mind nibbling right now. Strong seasonality in June, July, August, and that's when he expects them to take off. That's when stocks in general tend to be weaker. Looking for a retest of the highs. If we can get above $2000, that's a big breakout, next upside potential to around $2700. 

He'd be looking more at exploration areas, such as CS or IVN. Big runup, consolidation through pandemic, and then a big correction through the bulk of 2022. Now starting to re-accelerate. Copper and materials are more early- to middle-cycle plays. Really likes them. Good upside for copper stocks through the bulk of this year and at least halfway into next.

Exactly right that if something is moving, it's likely to keep moving unless there's a big event. If the world is ending, why are there charts making new highs? You always want to be on the right side of the trend. One of the things that trips people up in investing, is that you have to listen to the market. It can't be my way or the highway. If the market's telling you that you're wrong, then you're wrong. It's not the market that's wrong. For some people, ego is more important than money. 

The Fed can't stop what it's doing until it wrestles inflation to the ground. People under the age of 55 don't remember what it was like the last time inflation got out of control, when interest rates went berserk up to 20% both in Canada and the US. You don't know what pain is like until you face a 20% interest rate on your mortgage. He thinks Powell is actually frightened, so get the job done, and then we can open up again. We might have a recession here and things might slow down, but as an equity person, he likes to see cheap valuations. So when markets come down, that's wonderful.

We're kind of in a bear market, but you have to define bear market carefully. It doesn't mean that everything's going down. It means the market's very discriminating and it seeks out poor values and drives them down. It also leaves room for good values to go up. Hopefully, his 3 Top Picks today will do just that.

Absolutely. Here, in Canada, TSX values are pretty good. It's dominated by banks which are relatively cheap, oils which are very cheap, and mines and golds. The heavy weights in our index point that it can go higher. We've been in the shadow of the US since 2009-2010. They had their moment in the sun, but now it's our turn to shine. Over time, the spotlight alternates between Canada and the US.

In Canada, they're all very expensive, trading up near maximums. Good news is that if you're going to hold for 10 years, you're likely going to come out well, stocks will likely double. That's a 7% compound gain, which is no screaming heck. Be patient, let things fall to something that will give you a better rate of return.

Still bullish on oil and gas. Increasing pressure on companies not to expand in the face of rising demand has caused upwards price pressure. China is now coming back onstream, so who knows what their energy demands will look like? US has been running down its strategic reserves to its lowest level in 30 years. If you're an energy company that's getting punished for drilling and expanding, but the money's just gushing in, what do you do with it? Buy back stocks and pay out nice dividends. Just standing there doing nothing means that the companies are getting cheaper and the yields are getting better.

Be defensive, as we're in that kind of a market. Really nice to have some income to see your way through. If nothing else happens, at least you have something coming in. If you get 5-10% capital appreciation on top of a 7+% return, you'll have a heck of a year. He's trying to hedge against downside and maximize yield.

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Nobody should be shocked with Jerome Powell's hawkish comments now about raising rates sooner, if needed, given economic data. There's some talk that the Fed will hike rates next by 75 basis points, not 50, though he disagrees with this. Powell is saying that he will do what it takes to get the job done--tame inflation. The economy is okay now, but we will get a lot more tightening until the early part of 2024 may see an economic crunch. The TSX will re-test its 19,150 level in light of these new rates. Though, the Bank of Canada says it will pause hikes, while the U.S. will raise faster. The reality may fall in the middle.

Rising rates in the US means compressed margins, which is a concern. The big banks can borrow, issue shares and buffer their capital reserves, but the mid-sized ones can't. Better to buy a big bank.

Inflation is dipping lower, but also economic activity. This will lead to negative GDP growth rates by year's end, which could signal the start of a recession.

This decline in natural gas prices (hitting lows today) is good to fight inflation, even short term.

Believes 1) "peak/troughs" & 2) "past 200 days" are simplest way to look at markets.
All major indexes are pointing to upwards trend.
Believes caution warranted in markets as future uncertain.
Need to see break through on indexes before will start investing again.
Is waiting for upcoming actions of US Fed.
Expecting pain for the consumer with rising interest rates.