Q: What are your thoughts on the market right now?
• I’m in the camp that things are getting better (sneaky bull market no one wants to acknowledge or is ready for)
• When you look across all the different sectors, you can see that stuff is working again
• I think the market is saying that the worst may be over
• I don’t think most market participants are ready for this - everyone is defensive
Q: Thoughts on Tech?
• Tech companies are making tons of money
• Tech companies are cutting costs which makes me bullish
• Stocks are down a ton and expectations are incredibly beaten up
• Every investor is sitting there waiting for the end of the world because that’s what they’ve experienced during the other two recessions in the last 20 years
• The market is telling you it’s time to get bullish
• We’re getting to that point where it’s time to start adding risk to portfolios
• I’m not telling you to go out and buy your favourite meme stock (still risk out there)
Q: Would you describe your investing style as positive change?
• I’m focused on positive change - what’s getting better
• Companies I like to own have moved from high expectation to low expectation
• The most exciting move in the market is when those stocks go from horrendous à bad
• That’s when you make all the money
• Tech companies are firing people and calling it “restructuring” or “reduction of force” and when they do this their stock price goes up
Q: Thoughts on consumer discretionary?
• Buying
• Consumer discretionary stocks are the most shorted on the planet right now
• What if the worst-case scenario doesn’t happen? Stocks are going to react to that and are going to go up
• Look at PulteGroup, Inc. (NYSE: PHM)
• They’re a residential home construction company
• Their stock bottomed in October and has doubled since then
Q: Thoughts on health care?
• Health care is your classic defensive sector
• I don’t think there’s a ton of money to be made in health care
Q: Where are you playing offense?
• It’s all over the place
• It’s actually very similar to my Top 10 Holdings in December 2021 except right now, all those stocks are 50-75% cheaper
• I don’t think that owning the S&P 500 is a winning strategy in this market
• I think the broad market is going to continue to churn with a ton of opportunity underneath
Q: Thoughts on financials?
• Like financials right now
• I haven’t liked the banks for a long time
• Canadian banks are pretty cheap
Q: Are you still interested in energy and materials?
• It isn’t a big part of my portfolios anymore
• Energy had its big relative move in history
• A lot of people are sitting there holding energy right now
• I don’t think it’s going to be the best performing sector
Q: What are you watching in the markets?
• I’m watching inflation and the path of interest rates
• The pattern of behaviour among stocks and sectors looks very constructive
• I’m also watching the price of oil which leads inflation
• I think oil could go lower
Q: What about industrials?
• Industrials have been a great group
• They’re benefitting from a lot of tailwinds
• Industrials is a stock picking group - there’s always something to buy and there’s always something to sell
Q: Thoughts on semiconductors?
• These stocks are moving quickly
• We need semiconductors for basically everything we do
• They’re no longer going down on bad news which probably makes them all buys
Q: Where do you see market leadership?
• Energy was the leadership for the last two years
• You can see it losing its edge now
• Technology and consumer discretionary have been beaten down so bad
• The market is saying that we’re going to have a garden variety recession and so these stocks are all buys
Q: What kind of stocks are you looking to own?
• I’m an omnivore
• I’ll own any stock, in any sector, in any size, in any country
• It really doesn’t matter
• I just want to own great companies