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

Markets. Everybody loves growth companies, but they are hard to find right now. There is so much change and a lot of moving parts and the market is trying to digest all that right now. There has been a slowdown in growth overseas. The US has been the strongest market for a number of quarters now and continues to be, but even with those pockets of slowness, with the dollar having gotten so strong it is impacting the exporters. A lot of companies in the industrial space are tied to commodities and energy, so there has been a lot of softness impacting results. There are pockets of growth and that is what she is really focused on. Right now the market has come up so much with a lot of risk coming in that the value stocks you are looking for, just on a pure multiple basis, there is a lot of fear which is why they are trading like that. This is a temporary fear so she is looking for stuff that is improving, and in this environment those are hard to find. Global growth is slowing down and she thinks that continues. All of a sudden you have growth as a sort of scarce commodity. Any time you have that, she expects a premium on growth companies to get better.

Markets. He is cautious. Started to tell people to raise cash about a year and a half ago. As a Bull market ages, he recommends having more cash. Markets have sold off a lot and thinks we will get a bounce in September. Recommends staying cautious though. Recommends that you significantly be invested in cash right now.He has 80% cash. Evaluations are high. Interest rates apparently will be increasing in September, although with this China de-evaluation this might change. Believes that we may be near the peak of the bull market. Feels that there is hope for a lot of promising companies that have been down a lot. If they have cash, good management, and good ideas, they will be come back and thrive. Generally, he thinks stocks are in for a rough ride.

Energy. He doesn't think the energy sector will turn around anytime soon. He has heard some promising news that the big majors are determined to selvedge their dividends and are cutting back on exploration. This will lead to less production and will take some supply off stream.

Canadian Banks? He feels that banks are banks and that they will always make money and pay dividends. They have always been good investments. At this stage of the cycle they may not be attractive buys right now. It might be better to buy next year if the housing market rolls over as some people think. If you are looking for a dividend buy them now, but if you are looking for capital gains you might get a better chance in the near future.

Markets. There are two ways commodities can recover from a bear market: Demand Creation, when prices become lower or the economic recovery spurs demand for them. The other is that you have demand destruction where you shut in mines and wells. The first is a shallower bear market compared to the second. He thinks demand destruction is the way we are going. We are seeing investor capitulation, but not amongst the juniors.

Gold. The first interest rate hike is baked into the cake. The question if they can make it stick and is another in the cards. That would create strength in the US dollar.

Markets. We are in a bull market, but it is resting. In the market we go from a depression period to a euphoria period. During March 2009 we were feeling a depression period , but feels we haven't hit the euphoria period yet. You need to have a plan as to how the market is moving then you can make some decisions. Since Oct. 2014, we have been in a horizontal trading range. He feels we still have one more uptrend to go,. The next uptrend could go to the middle of 2016. Feels that there is room to run, the market has been long, but you have to understand that when you have a huge secular bear market, you are going to get a huge secular bull market.

Gold recently broke the technical lines? Do you still use this line in how to trade? He believes that you should never disregard anything. Sometimes you have a one day reversal and you want to look at it to see how people have reacted to it. Gold had a upper rising, 40 week average. Somewhere it changed and it started to come down and even today we are falling below the 200 moving day average. The trend line is broke and it is trading down. It is possible that gold is having a selling climax. Make sure that gold has found a bottom. He recommends getting into gold stocks once gold has definitely found its bottom.

Canadian Dollar. Where does he see it bottoming out? He doesn't have any idea. The chart has been falling and it is in a downtrend and as long as it is a downtrend the trend continues. The only way the trend is going to change is, if it changes. You have to wait until it finally finds a support. The Canadian dollar is weak and it will continue for a while.

Price of Oil? We had a major, major down trend line. We have a potential for a double bottom. It is looking better than before.

Markets. China’s devaluing of their currency caught everyone by surprise. China is maybe not growing as strongly as the government’s target. Trade data coming out showed exports were down. Commodities now become more expensive for them to buy as they are priced in US dollars. For the markets it could mean weaker demand from China. The US is not as affected in terms of trade flow as they are more of a consumer driven economy. She is constructive on markets. She believes the US economy continues to grow and the Canadian economy starts to pick up. It will be actual fundamentals that will drive these markets.

Markets. The markets are extended and driven too high on the zero interest rate trend. He does not think we are headed for a recession, however. People don’t realize how much ‘air’ there can be in the markets after all this time. 6 stocks are responsible for more than 100% of the gains in the market – the breadth of the market is narrow. The risk/reward in stocks is much higher than sitting on the sidelines right now. You could see this market down 10-15% on a heartbeat. We are more than due for a correction of 10-15% as we haven’t had one since 2011.

You never go broke taking a profit. You could scale back your equity exposure to 50% right now. Cash is not always the worst alternative. He would not hide out in gold stocks right here.

Markets. The Canadian dollar moved lower in the last two weeks than in ‘08/’09. The technical traders should pile onto it. He thinks it will go from $0.76 to 0.80 before it goes anywhere else. It is oversold. The strength of the US dollar is a problem for China. We should get more volatility and uncertainty over China. We should watch this during September and October. Earnings growth in the US has been zero in the last year or so. If you back out Energy it is about 4%. He thinks the markets will get stressed with the expectation being 11-12%.

US Investments. The world is 55% US stocks, Canada makes up 4%. The Canadian dollar will stay around $0.80 for the next year or two. Then it could go up and that is the currency risk. ZWA-T, for example, is the Dow with a covered call overlay to enhance yield and hedge currency risk. He recommends hedged versions of ETFs without a doubt.