Independent Insight

11 Reasons to Get More Bullish on Equities

11 Reasons to Get More Bullish on Equities

Let’s first consider: Does a mild and brief landing lie ahead? Have interest rates peaked? Will lower rates lead to a rally in large-cap growth stocks and for the market as a whole? I am growing increasingly, and incrementally, more bullish on equities, in part based on my expectations of a mild and brief recession and a possible rapid deceleration in the rate of inflation, causing a less hawkish Fed. Keep reading…

Hedgeye’s McCullough Nails Another “Quad 4” Bear Market Crash

Hedgeye’s McCullough Nails Another “Quad 4” Bear Market Crash

The record of Keith McCullough is intact. The voluble founder and CEO of Hedgeye Risk Management has not failed to anticipate a bear market crash since 2008. That prescience over the years has saved him and his subscribers and large institutional clients untold billions of dollars. The crash of 2008 was the year after McCullough was fired as a hedge fund manager by Carlyle Group for being “too bearish.” He, of course, turned out to be correct about what we now call the Great Financial Crisis. McCullough, who hails from Thunder Bay, Ontario, founded Hedgeye in 2008 with a goal of bringing hedge fund-quality research to the masses through trust, transparency, and accountability. Since then, he’s been refining his data-driven process to the point that he’s been right in calling every bear market – commonly accepted as a major stock index dropping 20 per cent or more from its recent peak.

Four Leading Stocks You’ll Be Happy to Own a Year From Now

Four Leading Stocks You’ll Be Happy to Own a Year From Now

We’re near the midway point of 2022, and this year is shaping up to be a lot different than most investors had expected. And that means, as investors look to retool their portfolios with the best stocks for the rest of 2022, they’ll have to take a somewhat different tack than they did at the start of the year. The optimism following strong returns in 2020 and 2021 has given way to bear market angst. All major U.S. indices crossed into official bear market territory in the first half of 2022. As for the reasons? Keep reading…

These Two Stocks May Be the Best Inflation Hedges Out There

These Two Stocks May Be the Best Inflation Hedges Out There

The bear market crash for stocks accelerated this week with the S&P 500 joining the Nasdaq Composite and Russell 2000 in falling more than 20 per cent from its peak. This as the U.S. Federal Reserve scrambles to get the inflation genie under control, let alone back in the bottle, after the Fed let it loose by keeping monetary policy way too easy for way too long. Long-term investors are being told to not fret and that everything will be just fine over time. But short-term, where’s an investor to turn? In this conversation with John O’Connell, we isolate two companies that millions of people use every day. One is like a toll booth and somewhat inflation resistant. The other has pricing power in this inflationary environment. 

“Buy the Dip, Sell the Rip.” Here’s Why.

“Buy the Dip, Sell the Rip.” Here’s Why.

The stock market and economy have whipped up a lot more questions than answers these days. Is the market rally sustainable or is this a classic bear market trap? Will so-called animal sprits continue or do we need to see a couple of ugly capitulation days? The economy and corporate profits are slowing but by how much? How much will inflation curtail economic growth? What does all this talk about an inverted yield curve really mean? Can the U.S. Federal Reserve fulfill market expectations and raise interest rates eight times this year or will the stock market revolt? Those are a few of the questions we posed to John O’Connell in the latest of our on-going series of conversations. As always, 37 years managing other people’s money and seeing every market condition imaginable gives the head of Davis Rea Investment Counsel insights and context many others don’t have. So, take advantage of some thoughtful opinions and advice, to enhance your investment knowledge and skills.

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European Vacation: Boots on the Ground View of EU Economies & Multi-National Companies

European Vacation: Boots on the Ground View of EU Economies & Multi-National Companies

John O’Connell recently took a European vacation. The Chair, CEO & CIO of Davis Rea Investment Counsel spent time in Germany, Italy, France, and Monaco, and drove through Switzerland. Naturally, he was enjoying the sights. But also, naturally, he had a keen eye out in order to glean empirical and anecdotal evidence of what’s happening economically in those regions of Europe. Are the shops and restaurants busy? Is there steady foot traffic at McDonald’s? Did that consumer just use a Visa card? How many FedEx trucks and Amazon deliveries has he counted in this residential neighbourhood? How many iPhones can he count on this crowded street? Get O’Connell’s impressions of his European (working) vacation, and hear his answers to those questions about the health of multi-national companies, and what his on-the-ground research may mean for your investments.

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Inflation & The $64,000 Question for Stocks

Inflation & The $64,000 Question for Stocks

The weakness in the stock market so far this year has many pundits and investors alike wondering if we might be closer to the end of the drawdown than the beginning. From the indicators I watch, it is fairly obvious that we are still in the very early days of the process. Either way, ‘how much further can stocks fall?’ is now the $64,000 question (or, given the inflation rate since that game show last aired, I should probably say $640,000 question).

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Six Reasons for Optimism About the Economy & Stocks

Six Reasons for Optimism About the Economy & Stocks

Our most recent video conversation focused on what needs to happen to rid investors of all of their pessimism. This video examines six reasons the economy and corporate prospects aren’t nearly as dire as many believe. John O’Connell looks at housing, consumer spending, lumber and auto prices, inflation, and what the U.S. central bank might do. The Chair, CEO & CIO of Davis Rea Investment Counsel concludes that investors are safe to calm down, not get blown off their investment goal path, and enjoy the summer. Here’s why.

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Why Stocks Need Time to Resolve Rampant Pessimism

Why Stocks Need Time to Resolve Rampant Pessimism

JPMorgan’s CEO, Jamie Dimon, is warning about an economic “hurricane.” Elon Musk has a “super bad feeling” about the economy and is cutting 10 per cent of Tesla’s workforce. Blackrock’s CEO, Larry Fink, believes inflation will remain elevated for years to come. And Microsoft reduced its earnings forecast slightly due to a stronger U.S. dollar. Or is that the software company’s code for something else management sees coming? There’s no shortage of pessimism out there. But is this pessimism warranted? The truth about the economy and the direction for stocks must lie somewhere in a grey, middle area. In our latest conversation with John O’Connell, we examine rampant investor and consumer pessimism, and why stocks need time and space for this sour sentiment to resolve itself. 

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“Recession Resistant Leading Value Retailer” with Double Digit Upside

“Recession Resistant Leading Value Retailer” with Double Digit Upside

JPMorgan Chase CEO Jamie Dimon says investors should brace themselves for an “economic hurricane.” If that’s the case, which are the stocks that can anchor your portfolio and withstand a storm? One analyst says this company, whose shares are higher by more than 2,100 per cent since 2009, should be a core position in Canadian portfolios for a myriad of reasons including its low risk profile, growth prospects, and “recession resistant characteristics.” 

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Surprising Insights & Robust Stats on the Retail Renaissance

Surprising Insights & Robust Stats on the Retail Renaissance

Sponsor Content. The accelerated rate of e-commerce adoption triggered by the pandemic raised questions about the future of brick-and-mortar. This BNN Bloomberg Brand studio video, featuring Colliers Canada experts Madeleine Nicholls and Jane Domenico in conversation with Mark Bunting, delves into the post-pandemic shift of retailers not choosing between a physical store or an online storefront, but recognizing the need for both and changing how they use their square footage. You’ll also hear about some surprisingly robust statistics for the Canadian retail sector.

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Rare Opportunity in Five Large Cap Growth Stocks

Rare Opportunity in Five Large Cap Growth Stocks

In this market volatility, it can definitely be difficult to determine the best places to put our capital. Yet as I’ve written before, these kinds of pullbacks can be an excellent opportunity to buy over-punished stocks. Fears about interest rates and inflation have dragged down the markets. And many stocks have been sunk to irrationally low levels.

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Bull Market Rhymes: Hi-lights from Howard Marks’ Latest Memo

Bull Market Rhymes: Hi-lights from Howard Marks’ Latest Memo

Legendary investor Howard Marks has been writing indispensable memos about investing for decades. He makes them available for free on the Oaktree Capital website. His latest examines the investor psychology behind bull and bear markets and how the names, faces, and stocks change over the years, but human nature does not. That’s why bull market history doesn’t repeat, but often rhymes. 

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Making the Great Return to Office, Work

Making the Great Return to Office, Work

Sponsor Content. What needs to be done to make the return to the office worthwhile and safe? This video explores the intersection between the workplace and the workspace, discussing initiatives and innovations employers and building owners can implement to make the office a place of work and an experience.

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Amerigo Resources in the “Sweet Spot” of Copper’s Supply Deficit

Amerigo Resources in the “Sweet Spot” of Copper’s Supply Deficit

Sponsor Content. How many corporate CEOs can say the stock of their company is higher by more than 30 per cent since last November. Aurora Davidson, can. She’s the CEO of Amerigo Resources (TSX:ARG). That’s despite the recent damage in the stock market and a copper price that has been more volatile than usual. In this conversation with Green Shoe Radio, Davidson updates investors on Amerigo’s unique relationship with Codelco, the largest copper producer in the world, Amerigo’s dividend policy and the possibility of a “top-up” dividend for shareholders, what is estimated to be an annual copper supply deficit by 2030 of nearly five million tonnes, and how Amerigo is sitting in the “sweet spot” of the copper market. 

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Five Reasons Home Depot is Not Like the Others

Five Reasons Home Depot is Not Like the Others

Recently people have been worried about a recession and how high mortgage rates and inflation may kill consumer spending and this will hurt Home Depot which boomed during COVID-19. The concerns about the retailing industry were made worse recently when Walmart and Target both disappointed investors with forecasts and poor results. This is not a Home Depot problem and we still love the company. Here’s why.

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Five Reasons to Not Worry About Amazon’s Growth

Five Reasons to Not Worry About Amazon’s Growth

Recent headlines have some fretting about Amazon downsizing its warehouse space. The implication being that business is falling and the prospects are poor for the company. This is erroneous and shallow reporting. Amazon may be putting about 10 million square feet of warehouse space up for sublease for the NEXT FEW YEARS…

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McDonald’s Still Golden Despite Russia Exit

McDonald’s Still Golden Despite Russia Exit

McDonald’s exit from Russia costs it about nine per cent of its revenues and about three per cent of its profits, so it’s no big deal. The mega chain will maintain its trademarks in Russia leaving room for re-entry at some point, but will immediately remove the McDonald’s name, logo, branding and menu from its units in Russia in a process the company referred to as “de-Arching.”

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Five Best Stocks for a Bear Market

Five Best Stocks for a Bear Market

Bear markets are an inevitable if particularly unpleasant part of the market cycle. But investors who hold the best stocks to buy for bear markets can mitigate at least some of the damage. The S&P 500 on Friday dropped into bear market territory – down 20 per cent from its recent peak. The Nasdaq Composite, for its part, fell into a bear market a while ago. And so if this is how things are going to continue, investors might want to arm themselves with the best stocks they can find. And right now, those stock picks should focus on resiliency during deep downturns.

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“Risk is Not Volatility. If You’re Not a Seller, Don’t Worry About It.”

“Risk is Not Volatility. If You’re Not a Seller, Don’t Worry About It.”

Don’t worry about? Easy to say, right? But if you’re a long-term investor and you’re comfortable with your stock and bond positions – even if they’re going down in the short-term – then you shouldn’t do anything or be concerned. Market volatility should not shake you out of your positions if you have conviction in them. John O’Connell expounds on that idea in this brief video. 

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Is Elon Musk Repeating the Mistakes of Henry Ford?

Is Elon Musk Repeating the Mistakes of Henry Ford?

Let’s assume for a moment that Elon Musk fits into the rarified category of madman/genius. In that context, the clearly brilliant visionary behind Tesla, Tesla Energy, SpaceX, The Boring Company, Neuralink, Open AI, and supposed bidder for Twitter, may be teetering into the madman part of the equation. His increasingly impulsive and erratic actions make him appear to be unfocused and distracted from doing any one thing. For Bloomberg Opinion contributor Stephen Mihm, it brings to mind the trajectory of Henry Ford about a century ago. Mihm argues Musk may be in danger of following the meandering path of Ford, whose non-automotive pursuits ultimately resulted in his company getting leap-frogged by the competition. 

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Investors Need to Remember This One Key Thing

Investors Need to Remember This One Key Thing

It’s important to remember the basics of investing when your portfolio’s under pressure and going through some volatility. When your stocks are generally going up, everything’s mostly a-okay. But when the opposite is true, no one likes the feeling of losing money – on paper or otherwise. To get some clarity, John O’Connell says there’s one key thing investors must ask themselves during times like these. 

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Shopify’s Crash…

Shopify’s Crash…

…And Why It Can’t Beat Amazon. Question: Do you own or have you ever owned shares in Shopify? John O’Connell was asked countless times the last several years by clients and non-clients whether he owned the stock of the e-commerce company. And when he always answered no, he was asked why not? The questions have stopped. Shopify is down nearly 80 per cent from its peak and could still fall a lot more. O’Connell is not beating his chest or enjoying any schadenfreude at investors’ expense. But he had his reasons for never owning the stock. And he has some definite ideas about why Shopify’s business model is flawed and easily copied. Here are his views on Shopify’s fall from grace and why it will never be able to beat Amazon…

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How to Handle a Bear Market

How to Handle a Bear Market

We sat down with John O’Connell to get his experienced views on what’s actually occurring in the stock market at the moment and why it’s happening. John covers: Valuations, Investor sentiment, Strategies he’s deploying, Stocks he’s been adding to, How investors should handle a bear market, and much more. As usual, we humbly suggest it’s a good idea to listen to the opinions of a pro who’s seen it all in his more than 35 years prudently managing other people’s money.

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