Shy. Reserved. Polite. Those are three cliches about Canadians. You can add to that list pessimistic, gloomy, and anhedonic (an inability to feel pleasure). That’s the Wikipedia description of Eeyore, the fictional character from the Winnie the Pooh books and that’s how Brian Belski describes Canadian investors. He doesn’t mean it literally or maliciously. But after more than 20 years visiting Canada from his native Minnesota, and meeting with various investors, the Chief Investment Strategist at BMO Capital Markets, definitely sees a difference in the mentality of Canadian investors versus those in the U.S.
Last December, we repurposed a blog by Jesse Felder of The Felder Report entitled The Courage to Act on Major Commodities Bull Market. At the time, Felder had been arguing for several months that commodities were climbing out of a 10-year consolidation and investors should be putting some money to work in the sector. A key commodity index has since doubled. Felder is back with a followup to his original piece with a blog entitled A Generational Opportunity in Commodities, Part Deux. Here’s his take on supply and demand dynamics and why commodities are on the verge of a clear breakout.
When you’re right, you’re right. And Brian Belski has been correct now for about 13 years. It was 2009 when the Chief Investment Strategist at BMO Capital Markets and his team started calling for an extended bull market for equities. The following year, Belski went further out on the limb saying conditions were in place for a 20-25 year bull market, which could run to at least 2030. There, of course, have been corrections and crashes along the way such as 2020’s record-setting steep decline, something Belski called a reset. He also called the market bottom nearly to the day. Belski has maintained this unalloyed bullishness despite some other strategists and academics repeatedly predicting a gloomy end for stocks. In this conversation, Belski details the factors that continue to give him faith the bull market will continue to run.
Keith McCullough doesn’t care what you think of him. He gets that attitude in large part from his father, a firefighter, and one of his grandfathers, who was one of 19 children from Quebec, and became a successful, serial entrepreneur despite a limited education and often being told he wouldn’t succeed. McCullough loves to hear he’s not good enough. He heard it growing up in Thunder Bay playing hockey, which culminated in him captaining the Yale hockey team to a championship. And McCullough still hears it as the founder and CEO of Hedgeye Risk Management, a firm he launched in 2008 as a disruptive competitor to the “Old Wall” Street ways of doing business. It’s why the guy they call the “Mucker” is driven…Click the link or image above to keep reading and watch the video…
If you wanted to take investment advice after the financial crash in 2008 and beyond, you could have done a lot worse than listening to Brian Belski. The Chief Investment Strategist of BMO Capital Markets, and his team, started calling for a 20-25-year bull market in 2009. And during the 2010s while many macro strategists and academics were pointing out everything that could trip up the market, stocks generally chugged higher. And after the pandemic-led crash last year, Belski called the bottom nearly to the day. He said the market had reset and the bull market still had at least another 10 years to run. We’ll post a fascinating interview with Belski next week. For now, here are three innovative, leading companies that can thrive for at least the next decade.
There really isn’t a lot to say about what’s going on in the stock market that you likely haven’t recently heard. Not much has changed, with investors at somewhat of a standoff. Given the positive tilt to attitudes as expressed by mostly fulsome valuations, the betting is mostly of the bullish view. So, we won’t waste space here. We naturally all prefer this positive vibe, but it does little to provide any assurance of how we will collectively feel one or two years out. Read more…
Investors are pouring more and more money into exchange-traded funds. More than $6 trillion globally as of 2019, more than double the inflows for the hedge fund industry. These investors are choosing to access the indices, stocks, sectors, and alternative strategies ETFs offer. And they like the ease of use and generally low fees. But if you’re looking to add some ETFs to your portfolio or thinking of buying some for the first time, there are a few key principles you should consider before pulling the trigger. Greg Taylor is back with some ETF talk. The CIO of Purpose Investments knows exactly what to look for and what to shun when investing in exchange traded funds.
No quibbles in this corner about the long-term stock performance of Netflix. The stock is up about 465% per cent in the last five years. But is the big spending, online video streaming leader a buy now after a tepid earnings report. And with increasing competition from the likes of fast-growing Disney+, are the days of heady growth for Netflix over? Hedgeye analyst Andrew Freedman explains why, for now at least, Netflix shares are in purgatory and likely to fall.
What’s the difference between successful investors and those who flail around year after year? In a general sense, it comes down to a plan. Successful investors have systems, rules and discipline. When they buy a stock they know why. They know what they’re going to do if it does well, and what they’ll do if the investment goes sour. If that investor also has more than 30 years experience in the investment business, and has developed very specific methods around fundamental and technical analysis, and other at the ready investment principles, the probability is their returns and ability to protect capital will be solid.
Getting spooked by the recent changes and volatility in the stock market? Let’s back away from the screen, take a deep breath, and turn to the Global Equity Strategy team at J.P. Morgan, for some perspective. After all, as we’ve noted before, they’ve been very accurate in reading the economy and market expectations since the pandemic began. Here’s why concerns about peak growth and peak earnings are overdone and why these research pros are upping their year-end target for the S&P 500.
Exchange Traded Funds? Uncommon Sense Investor never talks about ETFs. You’re right. We generally prefer to present videos, research and articles about stock picking. But we also can’t ignore this sector that has grown about 10-fold the last decade, and by 35 per cent year-over-year in Canada in the first six months of 2021. Greg Taylor knows his way around ETFs as the Chief Investment Officer of Purpose Investments. In this conversation, he presents some thoughtful advice on how to construct a winning ETF portfolio using growth, income and alternative and hedge fund-style ETFs. He also explains what to look for when doing research and what to avoid.
Doug Kass isn’t ordering a Code Red like Jack Nicholson’s character in A Few Good Men but he’s called one on the stock market. The Founder & President of Seabreeze Partners Management is widely followed for his market commentary. He knows from experience that bull markets are hard to kill and acknowledges stocks can go higher still so he’s not aggressively shorting the market. But in these excerpts from a recent piece Kass details a litany of warning signs, as he sees them, that will eventually lead to an ugly end.
Investors often get bogged down in following too many data points in trying to assess the future direction of stocks. While looking at global macro factors right down to the minutest of details about a company’s products or services are important, one simple way to determine whether a stock is going to go up or down is to track the direction of a company’s earnings. That’s because share prices track the direction of earnings 93 per cent of the time, in the case of the S&P 500, anyway. Here’s some brief commentary from Canaccord Genuity’s Chief Market Strategist, Tony Dwyer, on the “summer of indigestion”, “peak everything”, and what’s important to remember.
We’re of the opinion that, barring an exogenous shock of some sort or Black Swan event, stocks should continue to do well. Yes, there’ll be pullbacks and corrections along the way, but as the following opinion piece details, there are just too many unusually bullish factors in play for stocks to fall off a cliff, as some have been predicting for months. Here are six reasons why equities are the place to be long-term, three investment themes, and three stock ideas.
We’re trying to not get dragged into too many stories comparing the current stock market environment to the tech boom of the late 1990s and 2000, but they keep pullin’ us back in. This time it’s because technology stocks and bond yields, which usually, happily, chug along mostly in unison, are now seeing the largest divergence in years. Why? And what does that mean? Here’s commentary from Lisa Shalet, Chief Investment Officer of Morgan Stanley Wealth Management .
Mad as hell and not going to take it anymore may be an exaggeration. But John O’Connell certainly feels like venting like the Howard Beale character in the 1975 movie Network. This after a hellish customer service experience with Rogers Communications in the wake of major account and double billing errors by the company. Those mistakes caused the Chairman & CEO of Davis Rea Ltd. to spend a combined 12-14 hours on the phone trying to get things fixed. It got O’Connell thinking, not for the first time, that Canadians shouldn’t have to endure the country’s oligopolistic telecom system, its high rates, and often times, poor service. Here’s O’Connell’s challenge to Rogers’ CEO Joe Natale.
Invest don’t trade. Minimize your tax exposure. Pay little heed to the growth versus value debate, meme stocks and other market noise. That is some of the market wisdom conveyed in this third quarter outlook video with John O’Connell, who explains that investing doesn’t have to be complicated. Here’s what to ignore and how to build a heavyweight portfolio to power through any kind of market.
There is a convincing counterargument to the line of thinking the U.S. will experience runaway economic growth and corresponding inflation and higher interest rates. Instead, it may be highly likely that, like Japan and the Eurozone before it, and after pandemic stimulus wanes, the U.S. may be stuck in a low growth, near zero interest rate policy (ZIRP) for an extended period. That excess savings, an ageing population and other factors are conspiring to leave the Federal Reserve resigned to ZIRP. Here are a few excerpts and charts from an excellent report by Alpine Macro.
Prior to the financial crisis in 2008, there were a few voices in the wilderness calling for a stock market crash. The likes of Nouriel Roubini and Peter Schiff burnished their reputations by being right – eventually. The same drumbeat is going on now with several investment luminaries forecasting that this never-ending, mania-prone bull market will end badly. They may be right – eventually. But when? Here is a collection of some of the commentary from these market heavyweights.
BCA Research is out with its third quarter strategy outlook. Chief Global Strategist Peter Berezin and his team have delivered yet another high-quality report with an expansive look at the macroeconomic picture, asset allocation recommendations, equities, fixed income, currencies and commodities. Here are the hi-lights and one key chart.
Acclaimed author Nassim Nicholas Taleb recently said Bitcoin is worth zero. That’s clearly not the case as the original cryptocurrency is trading around $33,000, as of this writing. The larger debate is whether governments will continue to allow digital currencies, and we use that word loosely, to flourish and compete with traditional central bank-led monetary systems? Or, as is increasingly the case, will they develop their own so-called stablecoins, and clamp down on cryptocurrencies to maintain the financial systems that have existed for hundreds of years. The type of centralized structure which allowed for a global rescue of economies during the pandemic. Here’s a well-reasoned argument that a digital, decentralized system would have been incapable of stepping in during the depths of the downturn and would have resulted in chaos.
That was an eventful and interesting first half of the year in financial markets. Now on to the second half of 2021. Which regions and asset classes will perform the best, and how does the global recovery play out amid increasing concerns about the Delta variant of COVID 19? For insight, we turn to the Mid-Year Outlook from J.P. Morgan’s Global Research team. They’ve been very accurate in their views during the pandemic so there’s no reason to stop listening now. Here are some excerpts from their report on why investors should stay long certain types of stocks.
Oh, the handwringing. The endless questions and coverage of every piece of minutiae about the U.S. Federal Reserve. When will it raise interest rates? What did that Governor mean by that comment? Why did Fed Chair Powell omit that particular word this time? What about the changes in the dot plot? And on and on and on. We’re not saying the U.S. central bank is not important, what with trillions of dollars at stake, and an unprecedented stimulus/backstop to extricate itself from. But for investors, agonizing over every detail about the Fed is a waste of time. Here’s what matters.