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[music] >> Hello, I'm Greg Bonnell.
Welcome to MoneyTalk Live, brought to you by TD Direct Investing.
Every day, I'll be joined by guests from across TD and elsewhere, many of whom you'll only see here.
We're going to take you through what's moving the markets and answer your questions about investing.
Coming up on today's show, we will get a contrarian view on the current market environment with Benj Gallander for Contra the Heard Investment Letter.
and in today's WebBroker education segment, Jason Hnatyk is going to show us how you can research the commodity space using the platform. So here's how you can contact with us.
Just email moneytalklive@td.com or fill out the viewer response box under the video player on WebBroker.
Before we get our guest today, let's get you an update on the markets. First trading day of the weekend, of course, when we close the books on this one on Friday, heading into our long weekend, I will be the first half of the year behind us. The TSX Composite Index up 170 points right now, a little shy of a full percent.
Seeing some movement into energy names. The pipelines, the oil and gas producers. Let's take a look at TC Energy at this hour at 5351, it's up a little more than 3%.
Hydro One was a little weaker to start the session.
I want to check in now. Nothing too dramatic. It is coming off the lows. At 37 bucks even, it's down about 1/3 of a percent. South of the border, the S&P 500, let's take a look at this broader read of the American market.
It's pretty much just flat, down a little more than a point or three tics. The tech heavy NASDAQ, we have this nice multiweek rally going on the got broken last week as the AI excitement move to the sidelines.
AI is of course a longer-term play but there was a lot of excitement for a couple of weeks they are in the chip names as well.
But interest rates, geopolitics all that kind of stuff, monetary policy it started to creep back into the conversation. Your down 45 points right now for the NASDAQ, about 1/3 of a percent.
And Hazlitt, seems like there's some sentiment on the street about perhaps a challenging demand environment for electric vehicles with all that economic uncertainty, higher borrowing costs. These arebigger ticket items.
That's weighing on Tesla today.
At 249 bucks and change per share, it set about 2.7%.
And that's your market update.
Well, markets have defied the expectations of money so far this year. Stocks actually climbing throughout the last several months despite rising interest rates, fears of a recession. Joining us now with his view on where we can go from here, Benj Gallander, coeditor of Contra the Heard Investment Letter. Great to have you back on the show.
>> Great to be back.
>> Time flies.
We are almost at the halfway point of the year.
But for many market pundits heading into 2023, things haven't transpired like they thought they would, whether it's interest-rate policy or market moves. How do you see it?
>> I would have expected things to be more negative than they have been.
So it's a bit of a surprise there.
We have been doing this a long time. We've seen a lot of markets. And I know to try to predict virtually anything short-term, I consider six months to be short-term, is very, very difficult. So we are often looking at the longer term, what's going to happen, where things are going to go, stock specifically.
But if I'm looking forward, I would think that the markets would come down. I'm certainly more pessimistic than optimistic.
And I keep on waiting for something to happen to send markets down quite a bit. But I think still there was so much money pumped into the markets, so much money pumped into the system when there was COVID, and a lot of that money found a place to go right away, but a lot of that money is still washing around.
It may have found a place that's looking for other places, and I think simply that's being a primary reason that the markets have gone up so far.
Now, at some point, that money will be used up, so to speak, and the markets could easily come down.
>> Let's talk about some of the things that have happened so far this year. I think at the halfway point now that we are almost, there was an expectation from some market participants that the central banks would have been done by now. And then at one point, the bond market was pricing and not only would they be done by this point, they'd be thinking about cutting rates may be in the late summer or early fall. All of that seems to have been washed away. What's your regional monetary policy right now, where we might be headed?
>> I think they would be making a huge mistake and everything's been concentrating on interest rates.
And I think, if I may, that's fairly simplistic. I think that's wrong. I think what has to happen now is governments have to cut back their spending. If they want to get inflation to come down, government should start running surpluses instead of continual deficits.
The United States, as you know, they just raise the debt ceiling again.
I mean, it's absolutely enormous. In Canada, we keep running these deficits.
And it would be lovely, in my opinion, if the government would say, wow, the employment rate is way down, markets are doing well, the economy is doing well.
It's time we started to run a surplus instead of a deficit. Hi… Can't say exactly why they won't do it except maybe it's politically expedient.
But I think it's a major mistake. Right now, we have an envelope of opportunity to start getting our fiscal house in order, and they are simply not doing it, which, to me, it's a shame.
>> I mean, the whole idea is that you're supposed to get your house in order when times are good so when times are bad, and obviously things got pretty bad very quick and 2020 with the pandemic, you can show up with the support. So the next time we had a big bump in the road, are we setting us up for a situation or maybe the government is not in the position to stimulate or they always seem to find a way?
>> They always seem to find a way. Unfortunately, they do. I think when the government was throwing so much money out there during COVID, I was saying, it's a mistake.
They should be throwing some money out there. I think they threw in about twice as much as they had to, because I don't think they knew what to do. So they figured, we will do that.
so yes, you want to be in a position when times get bad that you can do something as a government.
Running deficit after deficit after deficit is a mistake.
It gets you in worse financial position.
And what you are alluding to makes perfect sense.
You want to be in a position to actually run a surplus so that later on when you need the money for the next thing that comes along, and there's always something, as we know, you are financially in better shape to do that.
> Doesn't make it a bit harder than from an investment point of view to figure where things might be headed because you had obviously outsized reactions to what happened during the pandemic. A lot of liquidity.
Maybe some of that money still washing around.
Things aren't playing out the way you might logically think they would in the market because they're all these other factors pushing in?
> It's always hard to predict what markets are going to do, plain and simple.
I don't do a lot of protecting in that way. As you know, I'm a stock ticker. That's the primary thing that I do.
But if markets have gotten hit badly because the economy isn't doing well, to me, that's a good time to buy.
I have done virtually nothing this year.
I've been sitting on my hands, I hasn't bio, high have continued to do lots of research, but I'm just watching what's going on. People often think you have to be active and to me, that's a major mistake. Often, the best thing to do is sit back and do absolutely nothing, keep on watching, keep on researching.
As you know, because we've done this a few times you and me, I do almost all my buying at the end of the year during tax-loss season.
So I will be ready.
I'm sure there will be a few positions.
There will be more if markets took a hit.
But I have no desire to be active. As we know, active traders do not do as well as more passive traders. I wouldn't say I'm completely passive, but I lean towards the passive side.
>> When you are doing this research, you said, you haven't had a lot of activity but you're doing research, what are you finding the most compelling narratives right now? What's the most interesting thing that you're sort of looking at?
>> That's a great question, and I don't have a great answer.
But finding an awful lot of stocks to add to my watchlist. My watchlist a few years ago when markets got hit, it was over 300 companies.
Now most of those aren't companies that I'm really interested in.
I've got my baseball thing, AAA, the ones I like the most, which might be 12, 15 companies, others not so interesting.
Right now, I'm adding virtually nothing to the list at this point in time. I have to go through the Canadian again which I will do in the next two weeks.
I might find a few things.
Just not finding a lot of compelling sayings to attract me.
But I've been doing this, it's kind of scary to say, but I've been doing it for about 45 years.
I started early.
And that to me is a little bit scary, but I know the pattern.
The people that I work with, they know what they do.
We all know what we do. I will just keep doing the same thing.
But sometimes, the list really expands and really grows.
I try not to force anything and if the stocks are ready to be added, I'm happy to do it.
>> Interesting stuff. We're going to get to your questions about contrarian investing for Benj Gallander in just a moment's time.
as always, or minor you get in touch with us at any time.
Just email moneytalklive@td.com or fill out the viewer response box under the video player on WebBroker.
Now let's get you updated on some of the top stories in the world of business and take a look at how the markets are trading.
Suncor energy says it has experienced a cyber security incident and warns some transactions of customers and suppliers may be impacted.
Now, the energy giant is in providing many details but says it's working with 1/3 party to investigate and try to resolve the situation.
Suncor also says it's not aware of any data being compromised or misused because of the incident. You see the broader energy spaces higher today along with Suncor up to the tune of about 2%.
let's take a look at shares of carnival, they are in the spotlight today. The cruise operator NOW expects to lose between $0.08-$0.20 per share this year. It's actually lower than previously forecasted.
Carnival is saying and seeing steady demand for cruises, reporting positive adjusted free cash flow for the quarter.
All that said, you are looking at the screen and you see that the shares are down to the tune of about 10%.
They are clearly under pressure. They have gained a little more than 80% this year before today's pullback on all of this news.
Pfizer says it's abandoning work on one of its obesity treatments due to health concerns about liver safety.
Now, the pharmaceutical giant says it will continue to develop another obesity pill that it has in development.
Pfizer is in a race with its competitors to deliver an obesity drug to market, a segment believed to be worth billions in annual sales.
On the wake of that news, you got Pfizer down to the tune of about 4%. A quick check in on the markets. We will start your own Bay Street with the TSX Composite Index. We are seeing a boost energy stocks. Financials are fairly firm today as well. You got a triple digit gain of 165 points, a little shy of a full percent.
South of the border, the S&P 500 not quite the same rally actually, moving in a different direction.
At about 11 points, nothing too dramatic, about 1/4 of a percent.
Okay, we are back with Benj Gallander, taking your questions about contrarian investing.
First one here, do you see the SPAC market, the special-purpose acquisition company is making a comeback, and if so, where might that comeback be? For the longest time we talked about SPACs but not recently.
> Part of the reason is they did so poorly.
in 2021, but 70% of them were down in value. It's funny how these things work. A certain sector that's really hot and the SPACs, I always thought was super stupid because you want to put money into something or give it to somebody, hopefully it's people who have a good record, but you don't know what they're going to invest in.
Personally, just me perhaps, I like to know what time investing in and with SPACs, you really don't know. So it doesn't make a lot of sense to me at all. What's also happen is there's been more regulation.
So with more regulation, some people think this is not nearly as attractive. Now there's negatives when there's too much regulation, but there's also positives.
When you put regulation into a space that's like the wild West show.
I think that SPACs were more like that. In terms of what areas of SPACs people would be investing in, I don't know. But one of the things is that there's a lot of money for the people who put the SPACs out there. So they are incentivized to actually do that and to attract people to them.
There are certain areas that I would avoid like the plague. Again, that's just me. So I would stay away from SPACs.
Certainly there are some that have had tremendous success, but overall, they have not done well.
I am a probability guide.
If I see that so many of them have done poorly, as a part of the whole, I just say, I don't want to deal with them. Let me think about something else.
>> What do you think the lure was for investors?
Do think it was a lot of capital washing around in the markets, looking for a play, a place to get deployed with the idea of cashing in?
>> Well, some of them were doing well. There's no question.
And there was a certain sexy aspect to them, something new, something with potential for big returns.
And then there was a lot of marketing going on around SPACs. And when things are going moderately well, that's when companies really advertise. It's fascinating when you watch and see an area that people are in love with and then it falls off the radar because it is so poorly, and then people don't go to it.
But there's people who are involved in promoting certain sectors and some of the people in certain sectors, they are a little more dangerous to get involved with. Even a sector like mining, you have to be aware when investing or buying. The people who run mining companies, and a lot of them are great, they might not be quite as straightforward, shall we say, as people who are in the food business. So SPACs was an area where I think you brought a lot of people into it, a lot of people you had to be wary of.
>> And reminder, always do your research at home when you're thinking about making investment decisions.
Another question here. Is it a good time to take a look at Nutrien?
I think the shares have been under pressure this year.
>> Yeah, they have been under pressure. They come down a long way.
Last year I think it was around $58. It was one of those hot stocks.
everyone was talking Nutrien, Nutrien, Nutrien. It soared, went up over $100.
it was one of those sexy stocks that people loved.
I look at those things just because I find it curious.
But it's been going down. If you look at the stock and you look at the financials of the stock, they are not great. The debt load relative to the revenues is, to my way of thinking, quite high. Now, because of the industry they are involved in, it has to do with food effectively, that's a great area. People have to eat.
There is potential there.
But again, whatever you're buying into, you have to look at it and say, is it worthwhile? And Nutrien to me is still overpriced. I wouldn't buy into it. But if you are looking to buy into a leader in the field, it is a leader in the field.
>> A name like that, do you sort of have to become an amateur crop analyst?
The US government is always putting out reports about the yield and the harvests and whatever is looking at.
In the end, they are selling nutrients to farmers.
>> My business partner, Ben, he grew up on a farm.
I used to go and visit the farm.
We met at University of Western Ontario.
So he knows quite a bit about that.
He worked on the farm, etc.
I don't know that you have to become an analyst in that way. Certainly, if you're willing to take the time, certainly, if you want to study were different crops are in terms of their cycle, their pricing cycle, look at the futures. Sometimes, corn all of a sudden will dive and praise and it will go way down. You know there's going to be a demand in the future for corn.
Other times, he goes way up, and you say you should stay away from corn. So how much you would have to analyse is an interesting question.
It's good to read and it's good to try and understand.
The nature of analysis, to my way of thinking, is some analysis is on the surface and there's other analysis where you really go into depth, but a lot of it you can pull from other people.
But at the same time as you pull it from other people, you have to think, okay, why are these people looking at it in a certain way? Is it all perfectly straightforward or did they own a lot of Nutrien or any stock for that matter?
So again, you want to keep a cynical vein in your brain, so to speak.
>> My only expertise is that finally plants are growing in my shady backyard. Basically it's just let us.
> I'm ready to come over for a good salad.
>> I think I can definitely serve a big salad.
Let's take another question from the audience.
What is your guest think of REITs, real estate investment trust?
What do you think of the space?
>> I mean, I've invested in a lot of REITs over time.
I like it less now in the short term, so to speak.
REITs are usually very highly leveraged. With interest rates going up, that definitely hurts them.
So one has to watch for that.
If you think there's a recession in the cards, depending on what the REITs invested in, if it's malls, whatever, if it's housing or something else. But if it's malls, often that's going to be that the occupancy rate is going to go down. So you have to think about that. REITs generally pay a really good distribution, which is nice because I like getting a distribution.
I like to sit on it and get a dividend because at least I am getting some sort of return.
But as we've seen in the past year, some of the REITs have cut them, and there's a danger there that they may do more of that.
So when things are great and companies are expanding, it's a wonderful place to be.
But in times like this when we could be facing a recession, when corporations might not be doing as well, I don't think there's that many corporations that are expanding their footprint at this point in time.
More of them because a lot of people aren't going to work, are contracting and a lot of people who stop going to work because they virtually had to with COVID, a lot of them decided, we don't want to go back to work. Plain and simple.
I'd rather stay at home five days a week or two days.
Some corporations were saying we want you to come back to work and if you don't come back to work, we will let you go.
Some people will go back to work maybe for a bit but they may look for something else.
A lot of things we don't talk about, one of the primary things as quality of life.
I've worked at home forever.
Mid 90s was the last time I went into an office and even then, I had an option. I love it. It's not for everybody.
But I can be very productive working at home. Sure, there's things that attracted me to me away from the work, but often I will work more if I need to you and I work when I want.
So that's going to hurt REITs, that kind of thing.
So there still a lot of building going on in different places.
the question about occupancy rates and where they are going to go from here. But over time, long term, I think a lot of the REITs will do well.
But shorter-term, not so much. And again, be wary of that debt level because they have to cover it, they have to pay the piper.
>> That was definitely a better commute for 18 months during the pandemic which I spent at home although I am back to five days a week.
>> I'm sorry.
You gotta do what you gotta do.
>> At least we got together.
>> Yes. As always, make sure you do your own research before making any investment decisions.
And a reminder that you can get in touch with us any time. Just email moneytalklive@td.com.
Now look at today's educational segment.
If you're looking to track the commodity space, WebBroker has tools which can help. Joining is now with more Jason Hnatyk, Senior client education instructor at TD Direct Investing.
Let's talk about using WebBroker to track the performance of commodities.
>> Unmuting yourself is normally the first good step.
So all right. Great to be here, Greg.
While we don't have the opportunity to invest directly in the commodities space in WebBroker,maybe you're looking to stay informed or understand the direction he believe the markets going to go, so let's jump into WebBroker so we can identify where those quotes will be found in the platform.
First of all we will take you to the research tab at the top of the page.
under the markets tab, we are going to go to the trustee markets overview page.
There so much useful information here and the commodities is no different. You'll start by seeing some news on the overall market.
We can continue to scroll down and from here, we get a general sense of the indices that we may be watching as well as maybe some of the foreign indexes as well but if we continue to scroll down about halfway down the page, you will notice to come across a commodities page.
Lots of great information here. We got commodities from agriculture, so if you're interested in learning about pork belly or a hog future prices, you can look at some metal future contracts for gold, silver and platinum, really keep yourself informed them that space, and finally we can and off looking at the energy sector.
Here we can see that we've got West Texas crude, natural gas amongst others.
Let's focus in on the West Texas crude futures here. We can see where we've got, this happens to be the July contract as we can see noted on the table. We can see the last traded price for the specific contract and we can see that it's up $0.40 from its previous day's close but also importantly, if we continue on to the right hand side of the table, we are also getting a chart that should look fairly familiar if we are thinking about the ranges that that commodity has traded in over the lifetime of that specific expiration.
We can see that this particular West Texas contract is a little low on the low side of the halfway point but close to the metals we are getting a sense of how this is traded over time.
So we are a little bit more informed than we were previously.
>> A nice bit of real estate there on the platform.
we are talking about quite a few things only talk to commodities. What about stocks related to specific commodities? How would I use the platform for that?
> Yeah, let's do that. We have looked at the screen are still in the past and this is going to be a great opportunity to leverage thatcapability of the platform, thoughts jump in and take a look at how that can be done. The screeners are house once again under the research tab. This time we are going to go into the tools column and we are going to choose screeners.
Now we've got an opportunity to, we are going to be looking at stocks and a little bid but you can also screen for mutual funds as well as the ETFs that have a commodities focus where you can scan for commodity focused stocks and their technical events. So lots of different capabilities. Let's jump in and take a look at the stock functionality right now.
You're going to go ahead and choose, click on screening. You can go ahead and wipe the screen clean to start fresh. We are going to do a broad-based screen looking at the oil and gas industry but you can really narrow the focus down for whichever suits your own specific criteria.
I'm going to choose more criteria button.
Appear at the top of the company basics area, you have a sectors and industry selection. We are going to go ahead and choose that.
We scroll down the page. These are all of the different sectors industries that you got the opportunity to find investments that meet your needs.
Go ahead and clear them so we can make one specific choice. Energy that we focus on a little bit earlier is located in the bottom right. I need to do a broad selection of all of the stocks in the energy sector or I expand this area and then get specific about what I'm really looking for.
And when you go ahead and choose oil and gas. Up the top of the screen, to start narrowing down a little tighter, I'm going to change this and have it focus specifically on Canadian companies. And as I scroll down, I noticed the screen will be complete and we have 258 matches.
You can add in your own criteria to whittle that down.
But this is a great opportunity to see how we can find specific stocks in specific areas so you can leverage those commodity quotes to diversify yourself.
>> Great stuff as always, Jason. Thanks that.
>> Is my pleasure.
>> Jason Hnatyk, Senior client education instructor at TD Direct Investing. And make sure to check out the learning centre in WebBroker for more educational videos, live, interactive master classes and upcoming webinars. Before we get back your questions back contrarian investing for Benj Gallander, a reminder of how to get in touch with us.
Do you have a question about investing or what's driving the markets?
Our guests are eager to hear what's on your mind, so send us your questions.
There are two ways you can get in touch with us.
You can send us an email anytime at moneytalklive@td.com or you can use the question box right below the screen here on WebBroker.
Just write in your question and hit send.
We'll see if one of our guests can get you the answer right here at MoneyTalk Live.
Okay, we are back with Benj Gallander, we are taking your questions about contrarian investing.
This one coming in in the past couple of moments. Can I please get his opinion on individual stocks versus ETFs? This is an interesting one in terms of how people want to deploy capital in the market.
>>to me it's like you're setting up a hockey team.
Would you rather go with All-Stars or have everybody in the NHL?
I would rather go with All-Stars.
If they practice together, I think they are going to win. I would rather choose specific stocks and still diversify and have say 15 to 25 than go with an ETF where you will probably have a lot more stocks. What happens then is some of the stocks we down a lot of the other stocks in terms of returns. So I'm a stock picker. I like to do that. I like to have enough to be diversified. What does it mean to be diversified?
>> how many names would you have in a basket to have diversity?
>> I've heard some people say you can have us use six.
I don't believe that. I like the idea of 15 to 25and that's what we have generally in our portfolios.
I will also have other stocks on the side that don't fit into them. Maybe some preferred, etc.
, that don't fit into the contra system.
Although I will still be looking at getting gains of at least 50%. I think it's better to choose positions and build up a portfolio that way. Now, if you want simplicity, if you don't want to take the time, and I understand that.
A lot of people say, I don't have time to manage a portfolio. I want to spend time with my family, I want to go boating, I want to do this.
If you want to do that, then look for an ETF that has low MER's.
You want low expense ratios and that's key. Generally the lower the ratio, the better you will do over time.
It's been interesting over the past number of years because it used to be and may still be that our expense ratios were the highest in the world. Effectively, we were getting ripped off.
They've come down to some degree.
But for me, I have the time, this is what I do, I pick and choose stocks.
if people have some time, a lot of people who manage other people's money make you think it's like brain surgery.
It isn't. But again, you have to read, you have to think.
You have to learn. And one way to start it is paper trades.
If you're not confident, do some paper trades and see how they do.
Over time, start making investments.
doing it yourself is not for everybody but to me you're going to make more money, I believe, doing it that way.
>> Interesting set. Let's take another question. This wind is coming in.
Given that Mr. Gallagher's comments regarding the markets doing well, does he think a correction is imminent and if one, how deep might it be?
This is Jeff.
It's good to hear from you again, Jeff.
He also says, PS, it's nice to hear someone talking about government and fiscal restraint.
You got a fan.
>> I'm a wordsmith in a lot of ways. I write for the Globe and Mail and I've written best-selling books about the stock market.
If anyone wants to contact me, just email me.
So in terms of markets, in terms of what they are dealing, in terms of fiscal restraint, in terms of what's going to happen, you always have to try and deal with probability.
And I think that's essential whenever you're looking at anything here.
Try and do that and imagine a different size.
So is a market downturn imminent?
I love playing with words.
>> Tomorrow, next week, six month period >> Today, I sent off my next globe article to be edited but the word imminent, yeah, exactly what you're saying. I know myself well enough that I don't know what's going to happen in the next couple of months.
So I won't say it's imminent but it could be, but before the end of the year, of course, it's more certain the further you go out. So someone who predicts a major stock market drop, they're going to be right.
>> Eventually.
>> Eventually, they are going to be right.
So I just don't know, plain and simple.
I think the question is, how do you play it if you think it's imminent?
I'm not saying it is.
The way I play it is I buy less.
So that's my key. If I think that things aren't going to do well when I'm in my buying phase at the end of the year, I will buy less.
I will also tend to buy more or sell more if I think there's a drop off in store.
So that's what I do.
I won't sell things before they hit the cell target anyhow, but I will look to lighten up a little bit more than I would otherwise.
So some people say, oh, you thinking a market meltdown is imminent? Sell everything.
Well, I would never do that because that's stupid.
And I know the timing that way is very difficult. Now some people say that market timing is a stupid approach but in my methodology, I do use market timing to a degree in the way that I use it is when the market is really high, well, I'm not buying as much.
there is a timing aspect. If markets are beaten up really badly, I'm buying more. So there is a market buying aspect to it. But certain stocks, it's exactly the same thing.
So again, people pooh-pooh market timing, but I use it as part of a larger model, so to speak.
>> Interesting stuff there. We got another question now about uranium. What are your views on the uranium space? Like some of the companies? There are a handful of companies that you can play if you are interested in uranium.
>> Yeah. Uranium stocks have gone up an awful lot.
Cameco is one that people love to play. Matter of fact, Inc. research is all about insider training and his buying and selling certain companies and for me, it's very, very useful.
I've used it for years.
And then each day during the week, they highlight one stock and they highlighted Cameco today and said how many people the insiders have been selling. If a lot of insiders are selling, that is a clue that maybe you shouldn't be buying, plain and simple.
We used to have Cameco in the portfolio but that's gone. Years ago, Ioan Denison Mines, but I don't have that anymore.
These are things that I used to have at different points in time.
So uranium to me is not very attractive at this point although looking at the nuclear industry, nuclear is another industry that comes in and out of favour and right now, it's more in favour.
And then what happens is you have a nuclear accident and you know there's going to be another nuclear accident.
But nuclear, even with nuclear accidents, it has a place, but nuclear power is dangerous and we have to recognize that.
We've seen it with Chernobyl years ago, going back into the 80s, I had 3 mile Island out of Pennsylvania, most people don't remember that, but I bought that after they had the problems.
So something is going to happen again, but uranium has had a great run so at this point it doesn't interest me.
>> Yes, you were mentioning the Inc. market insider reports.
For those of you familiar with the plot from, you can find them on the platform.
For those of you haven't seen it yet, if you go to the research tab and look for the reports area, you will actually find some of the Inc. material there if you are interested in checking it out yourself.
We are going to get back to questions for Benj Gallander on contrarian investing in just a moment's time. As always, make sure you do your own research before making any investment decisions.
and a reminder that you can get in touch with us at any time.
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[music] We are having a look at TD's Advanced Dashboard, platform designed for active traders available through TD Direct Investing. We look at the heat map function here, parsing to the TSX 60, look at price and volume.
Obviously dominating the screen in the upper corner are some of the energy names. You have crude prices, it was quite dramatic weekend in Russia and we've been watching the oil market to see whether it be a reaction. West Texas intermediate is not up all that much, it's up about $0.46 on my screen, below 70 bucks per barrel, but money is moving toward some of the big energy names, whether it's a pipeline name like trap there, TRP, up to the tune of almost 4%, and oil and gas, you've got Suncor and Cenovus to the upside as well. The financialsare adding to the Upline number on the TSX. You can see some modest strength there as well. As far as a weakness right now,Shopify is down a little bit, nothing too dramatic on the 60 in terms of stocks to the downside but definitely some upside moves in some of the big parts of the market.
You can find more information on TD Advanced Dashboard by visiting TD.com/Advanced Dashboard.
We are back now with Benj Gallander from Contra the Heard Investment Letter, talking contrarian investing and taking your questions. We were just talking about the energy strength you are seeing in the market today.
Where do you think energy companies are going to be by the end of the year? Another one of those crystal ball question.
> Yeah, it's a six-month crystal ball.
In the short, you go with the crystal ball, the harder it is.
I will say quite frankly I don't know.
As you know, I say I don't know more than most people who call on the show. They are more all-knowing than I am.
So much depends on the possibility of a recession and if stock markets take a beating.
I would think that there's a good chance that energy stocks will go down more than they will go up before the end of the year. To me, it just makes sense because of the recessionary clouds. The price of oil seems quite reasonable in terms of words are right now, but I would be wary. If you can pick certain companies that appeal to you and have good balance sheets and have good management etc., then that can be more worthwhile.
But in six months, I just don't know.. And quite frankly, and this may sound horrible, I don't care all that much because I'm longer-term.
That doesn't mean people shouldn't care.
People who invest using other systems should care. But it's just not what I do.
And you have to know your area of expertise and where you like to invest and if you're looking at where things are going to go in the next week or the next two weeks of the next six months, you have to be honed in more to your computer.
I spend a lot of time on the computer.
I don't want to be watching it every nanosecond.
>> You want to get outside and enjoy some sunshine. Not today though in Toronto. Pretty stormy now. This is an interesting one. Warren Buffet recently invested more in Japan. Can you discuss Japanese ETFs?
I don't know about ETFs but what about Japan in particular?
It comes up more and more in investment conversations lately.
>> Warren Buffet's been buying it and I just was in Japan. I took my eldest son there. We were just there for three weeks.
I've travelled to almost 40 countries, I worked in many countries.
And I got some real insight to the Japanese method. It was fascinating. I've never been to a country like that.
It's so well organized.
It's so clean. It's such a pleasure in that way.
The… Hit a high of 1989 I believe. Since then, it's been on a roll recently.
If war and like something, I will go with it. I actually took my two lads to the Berkshire meeting in the first weekend of May because I want to go before either Warren or Charlie dies and given that Charlie is 99 and Warren is 92, the probability says they are not going to have another 20, 25 years.
And it's great. If you get a chance to go because Warren and Charlie spend about 45, excuse me, over four hours answering questions and it's a wonderful listening because here are two of the best investors of all time,and the way they do it, I like telling people this, war and answers may be a few minutes, and Charlie comes in with a brilliant pity comment that's fast, and then more and add some more to it.
But given that Warren likes Japan, I can see why you might, but there's been a lot of time to invest in there because you had 30 years where it really wasn't doing all that much.
Now it is close to a high again. Is it a good time to invest there?
I wonder about it. But certain countries and certain people, they are just… Smarter in some ways, I think, than people in other countries. I'm not denigrating anybody here.
But if I was looking to invest in a country, Japan would be one of them. The people are incredibly intelligent, incredibly hard-working.
Their stock market did nothing for so long.
>> Always a fascinating conversation. I look forward to the next time.
>> We are done already?
>> We are done already.
> Always a pleasure.
> Our thanks to Benj Gallander from Contra the Heard Investment Letter.
Be sure to always do your own research before making any investment decisions. Stay tuned for tomorrow show.
Robert Both, macro strategist with TD Securities is going to be on the show, he's going to give us his reaction to the latest Canadian inflation data that is coming up tomorrow morning before the markets open.
He's also gonna take your questions about the economy and interest rates.
A reminder of course even get a head start with your questions. Just email moneytalklive@td.com.
That's all the time for the show today.
Thanks for watching. We'll see you tomorrow.
[music]
Welcome to MoneyTalk Live, brought to you by TD Direct Investing.
Every day, I'll be joined by guests from across TD and elsewhere, many of whom you'll only see here.
We're going to take you through what's moving the markets and answer your questions about investing.
Coming up on today's show, we will get a contrarian view on the current market environment with Benj Gallander for Contra the Heard Investment Letter.
and in today's WebBroker education segment, Jason Hnatyk is going to show us how you can research the commodity space using the platform. So here's how you can contact with us.
Just email moneytalklive@td.com or fill out the viewer response box under the video player on WebBroker.
Before we get our guest today, let's get you an update on the markets. First trading day of the weekend, of course, when we close the books on this one on Friday, heading into our long weekend, I will be the first half of the year behind us. The TSX Composite Index up 170 points right now, a little shy of a full percent.
Seeing some movement into energy names. The pipelines, the oil and gas producers. Let's take a look at TC Energy at this hour at 5351, it's up a little more than 3%.
Hydro One was a little weaker to start the session.
I want to check in now. Nothing too dramatic. It is coming off the lows. At 37 bucks even, it's down about 1/3 of a percent. South of the border, the S&P 500, let's take a look at this broader read of the American market.
It's pretty much just flat, down a little more than a point or three tics. The tech heavy NASDAQ, we have this nice multiweek rally going on the got broken last week as the AI excitement move to the sidelines.
AI is of course a longer-term play but there was a lot of excitement for a couple of weeks they are in the chip names as well.
But interest rates, geopolitics all that kind of stuff, monetary policy it started to creep back into the conversation. Your down 45 points right now for the NASDAQ, about 1/3 of a percent.
And Hazlitt, seems like there's some sentiment on the street about perhaps a challenging demand environment for electric vehicles with all that economic uncertainty, higher borrowing costs. These arebigger ticket items.
That's weighing on Tesla today.
At 249 bucks and change per share, it set about 2.7%.
And that's your market update.
Well, markets have defied the expectations of money so far this year. Stocks actually climbing throughout the last several months despite rising interest rates, fears of a recession. Joining us now with his view on where we can go from here, Benj Gallander, coeditor of Contra the Heard Investment Letter. Great to have you back on the show.
>> Great to be back.
>> Time flies.
We are almost at the halfway point of the year.
But for many market pundits heading into 2023, things haven't transpired like they thought they would, whether it's interest-rate policy or market moves. How do you see it?
>> I would have expected things to be more negative than they have been.
So it's a bit of a surprise there.
We have been doing this a long time. We've seen a lot of markets. And I know to try to predict virtually anything short-term, I consider six months to be short-term, is very, very difficult. So we are often looking at the longer term, what's going to happen, where things are going to go, stock specifically.
But if I'm looking forward, I would think that the markets would come down. I'm certainly more pessimistic than optimistic.
And I keep on waiting for something to happen to send markets down quite a bit. But I think still there was so much money pumped into the markets, so much money pumped into the system when there was COVID, and a lot of that money found a place to go right away, but a lot of that money is still washing around.
It may have found a place that's looking for other places, and I think simply that's being a primary reason that the markets have gone up so far.
Now, at some point, that money will be used up, so to speak, and the markets could easily come down.
>> Let's talk about some of the things that have happened so far this year. I think at the halfway point now that we are almost, there was an expectation from some market participants that the central banks would have been done by now. And then at one point, the bond market was pricing and not only would they be done by this point, they'd be thinking about cutting rates may be in the late summer or early fall. All of that seems to have been washed away. What's your regional monetary policy right now, where we might be headed?
>> I think they would be making a huge mistake and everything's been concentrating on interest rates.
And I think, if I may, that's fairly simplistic. I think that's wrong. I think what has to happen now is governments have to cut back their spending. If they want to get inflation to come down, government should start running surpluses instead of continual deficits.
The United States, as you know, they just raise the debt ceiling again.
I mean, it's absolutely enormous. In Canada, we keep running these deficits.
And it would be lovely, in my opinion, if the government would say, wow, the employment rate is way down, markets are doing well, the economy is doing well.
It's time we started to run a surplus instead of a deficit. Hi… Can't say exactly why they won't do it except maybe it's politically expedient.
But I think it's a major mistake. Right now, we have an envelope of opportunity to start getting our fiscal house in order, and they are simply not doing it, which, to me, it's a shame.
>> I mean, the whole idea is that you're supposed to get your house in order when times are good so when times are bad, and obviously things got pretty bad very quick and 2020 with the pandemic, you can show up with the support. So the next time we had a big bump in the road, are we setting us up for a situation or maybe the government is not in the position to stimulate or they always seem to find a way?
>> They always seem to find a way. Unfortunately, they do. I think when the government was throwing so much money out there during COVID, I was saying, it's a mistake.
They should be throwing some money out there. I think they threw in about twice as much as they had to, because I don't think they knew what to do. So they figured, we will do that.
so yes, you want to be in a position when times get bad that you can do something as a government.
Running deficit after deficit after deficit is a mistake.
It gets you in worse financial position.
And what you are alluding to makes perfect sense.
You want to be in a position to actually run a surplus so that later on when you need the money for the next thing that comes along, and there's always something, as we know, you are financially in better shape to do that.
> Doesn't make it a bit harder than from an investment point of view to figure where things might be headed because you had obviously outsized reactions to what happened during the pandemic. A lot of liquidity.
Maybe some of that money still washing around.
Things aren't playing out the way you might logically think they would in the market because they're all these other factors pushing in?
> It's always hard to predict what markets are going to do, plain and simple.
I don't do a lot of protecting in that way. As you know, I'm a stock ticker. That's the primary thing that I do.
But if markets have gotten hit badly because the economy isn't doing well, to me, that's a good time to buy.
I have done virtually nothing this year.
I've been sitting on my hands, I hasn't bio, high have continued to do lots of research, but I'm just watching what's going on. People often think you have to be active and to me, that's a major mistake. Often, the best thing to do is sit back and do absolutely nothing, keep on watching, keep on researching.
As you know, because we've done this a few times you and me, I do almost all my buying at the end of the year during tax-loss season.
So I will be ready.
I'm sure there will be a few positions.
There will be more if markets took a hit.
But I have no desire to be active. As we know, active traders do not do as well as more passive traders. I wouldn't say I'm completely passive, but I lean towards the passive side.
>> When you are doing this research, you said, you haven't had a lot of activity but you're doing research, what are you finding the most compelling narratives right now? What's the most interesting thing that you're sort of looking at?
>> That's a great question, and I don't have a great answer.
But finding an awful lot of stocks to add to my watchlist. My watchlist a few years ago when markets got hit, it was over 300 companies.
Now most of those aren't companies that I'm really interested in.
I've got my baseball thing, AAA, the ones I like the most, which might be 12, 15 companies, others not so interesting.
Right now, I'm adding virtually nothing to the list at this point in time. I have to go through the Canadian again which I will do in the next two weeks.
I might find a few things.
Just not finding a lot of compelling sayings to attract me.
But I've been doing this, it's kind of scary to say, but I've been doing it for about 45 years.
I started early.
And that to me is a little bit scary, but I know the pattern.
The people that I work with, they know what they do.
We all know what we do. I will just keep doing the same thing.
But sometimes, the list really expands and really grows.
I try not to force anything and if the stocks are ready to be added, I'm happy to do it.
>> Interesting stuff. We're going to get to your questions about contrarian investing for Benj Gallander in just a moment's time.
as always, or minor you get in touch with us at any time.
Just email moneytalklive@td.com or fill out the viewer response box under the video player on WebBroker.
Now let's get you updated on some of the top stories in the world of business and take a look at how the markets are trading.
Suncor energy says it has experienced a cyber security incident and warns some transactions of customers and suppliers may be impacted.
Now, the energy giant is in providing many details but says it's working with 1/3 party to investigate and try to resolve the situation.
Suncor also says it's not aware of any data being compromised or misused because of the incident. You see the broader energy spaces higher today along with Suncor up to the tune of about 2%.
let's take a look at shares of carnival, they are in the spotlight today. The cruise operator NOW expects to lose between $0.08-$0.20 per share this year. It's actually lower than previously forecasted.
Carnival is saying and seeing steady demand for cruises, reporting positive adjusted free cash flow for the quarter.
All that said, you are looking at the screen and you see that the shares are down to the tune of about 10%.
They are clearly under pressure. They have gained a little more than 80% this year before today's pullback on all of this news.
Pfizer says it's abandoning work on one of its obesity treatments due to health concerns about liver safety.
Now, the pharmaceutical giant says it will continue to develop another obesity pill that it has in development.
Pfizer is in a race with its competitors to deliver an obesity drug to market, a segment believed to be worth billions in annual sales.
On the wake of that news, you got Pfizer down to the tune of about 4%. A quick check in on the markets. We will start your own Bay Street with the TSX Composite Index. We are seeing a boost energy stocks. Financials are fairly firm today as well. You got a triple digit gain of 165 points, a little shy of a full percent.
South of the border, the S&P 500 not quite the same rally actually, moving in a different direction.
At about 11 points, nothing too dramatic, about 1/4 of a percent.
Okay, we are back with Benj Gallander, taking your questions about contrarian investing.
First one here, do you see the SPAC market, the special-purpose acquisition company is making a comeback, and if so, where might that comeback be? For the longest time we talked about SPACs but not recently.
> Part of the reason is they did so poorly.
in 2021, but 70% of them were down in value. It's funny how these things work. A certain sector that's really hot and the SPACs, I always thought was super stupid because you want to put money into something or give it to somebody, hopefully it's people who have a good record, but you don't know what they're going to invest in.
Personally, just me perhaps, I like to know what time investing in and with SPACs, you really don't know. So it doesn't make a lot of sense to me at all. What's also happen is there's been more regulation.
So with more regulation, some people think this is not nearly as attractive. Now there's negatives when there's too much regulation, but there's also positives.
When you put regulation into a space that's like the wild West show.
I think that SPACs were more like that. In terms of what areas of SPACs people would be investing in, I don't know. But one of the things is that there's a lot of money for the people who put the SPACs out there. So they are incentivized to actually do that and to attract people to them.
There are certain areas that I would avoid like the plague. Again, that's just me. So I would stay away from SPACs.
Certainly there are some that have had tremendous success, but overall, they have not done well.
I am a probability guide.
If I see that so many of them have done poorly, as a part of the whole, I just say, I don't want to deal with them. Let me think about something else.
>> What do you think the lure was for investors?
Do think it was a lot of capital washing around in the markets, looking for a play, a place to get deployed with the idea of cashing in?
>> Well, some of them were doing well. There's no question.
And there was a certain sexy aspect to them, something new, something with potential for big returns.
And then there was a lot of marketing going on around SPACs. And when things are going moderately well, that's when companies really advertise. It's fascinating when you watch and see an area that people are in love with and then it falls off the radar because it is so poorly, and then people don't go to it.
But there's people who are involved in promoting certain sectors and some of the people in certain sectors, they are a little more dangerous to get involved with. Even a sector like mining, you have to be aware when investing or buying. The people who run mining companies, and a lot of them are great, they might not be quite as straightforward, shall we say, as people who are in the food business. So SPACs was an area where I think you brought a lot of people into it, a lot of people you had to be wary of.
>> And reminder, always do your research at home when you're thinking about making investment decisions.
Another question here. Is it a good time to take a look at Nutrien?
I think the shares have been under pressure this year.
>> Yeah, they have been under pressure. They come down a long way.
Last year I think it was around $58. It was one of those hot stocks.
everyone was talking Nutrien, Nutrien, Nutrien. It soared, went up over $100.
it was one of those sexy stocks that people loved.
I look at those things just because I find it curious.
But it's been going down. If you look at the stock and you look at the financials of the stock, they are not great. The debt load relative to the revenues is, to my way of thinking, quite high. Now, because of the industry they are involved in, it has to do with food effectively, that's a great area. People have to eat.
There is potential there.
But again, whatever you're buying into, you have to look at it and say, is it worthwhile? And Nutrien to me is still overpriced. I wouldn't buy into it. But if you are looking to buy into a leader in the field, it is a leader in the field.
>> A name like that, do you sort of have to become an amateur crop analyst?
The US government is always putting out reports about the yield and the harvests and whatever is looking at.
In the end, they are selling nutrients to farmers.
>> My business partner, Ben, he grew up on a farm.
I used to go and visit the farm.
We met at University of Western Ontario.
So he knows quite a bit about that.
He worked on the farm, etc.
I don't know that you have to become an analyst in that way. Certainly, if you're willing to take the time, certainly, if you want to study were different crops are in terms of their cycle, their pricing cycle, look at the futures. Sometimes, corn all of a sudden will dive and praise and it will go way down. You know there's going to be a demand in the future for corn.
Other times, he goes way up, and you say you should stay away from corn. So how much you would have to analyse is an interesting question.
It's good to read and it's good to try and understand.
The nature of analysis, to my way of thinking, is some analysis is on the surface and there's other analysis where you really go into depth, but a lot of it you can pull from other people.
But at the same time as you pull it from other people, you have to think, okay, why are these people looking at it in a certain way? Is it all perfectly straightforward or did they own a lot of Nutrien or any stock for that matter?
So again, you want to keep a cynical vein in your brain, so to speak.
>> My only expertise is that finally plants are growing in my shady backyard. Basically it's just let us.
> I'm ready to come over for a good salad.
>> I think I can definitely serve a big salad.
Let's take another question from the audience.
What is your guest think of REITs, real estate investment trust?
What do you think of the space?
>> I mean, I've invested in a lot of REITs over time.
I like it less now in the short term, so to speak.
REITs are usually very highly leveraged. With interest rates going up, that definitely hurts them.
So one has to watch for that.
If you think there's a recession in the cards, depending on what the REITs invested in, if it's malls, whatever, if it's housing or something else. But if it's malls, often that's going to be that the occupancy rate is going to go down. So you have to think about that. REITs generally pay a really good distribution, which is nice because I like getting a distribution.
I like to sit on it and get a dividend because at least I am getting some sort of return.
But as we've seen in the past year, some of the REITs have cut them, and there's a danger there that they may do more of that.
So when things are great and companies are expanding, it's a wonderful place to be.
But in times like this when we could be facing a recession, when corporations might not be doing as well, I don't think there's that many corporations that are expanding their footprint at this point in time.
More of them because a lot of people aren't going to work, are contracting and a lot of people who stop going to work because they virtually had to with COVID, a lot of them decided, we don't want to go back to work. Plain and simple.
I'd rather stay at home five days a week or two days.
Some corporations were saying we want you to come back to work and if you don't come back to work, we will let you go.
Some people will go back to work maybe for a bit but they may look for something else.
A lot of things we don't talk about, one of the primary things as quality of life.
I've worked at home forever.
Mid 90s was the last time I went into an office and even then, I had an option. I love it. It's not for everybody.
But I can be very productive working at home. Sure, there's things that attracted me to me away from the work, but often I will work more if I need to you and I work when I want.
So that's going to hurt REITs, that kind of thing.
So there still a lot of building going on in different places.
the question about occupancy rates and where they are going to go from here. But over time, long term, I think a lot of the REITs will do well.
But shorter-term, not so much. And again, be wary of that debt level because they have to cover it, they have to pay the piper.
>> That was definitely a better commute for 18 months during the pandemic which I spent at home although I am back to five days a week.
>> I'm sorry.
You gotta do what you gotta do.
>> At least we got together.
>> Yes. As always, make sure you do your own research before making any investment decisions.
And a reminder that you can get in touch with us any time. Just email moneytalklive@td.com.
Now look at today's educational segment.
If you're looking to track the commodity space, WebBroker has tools which can help. Joining is now with more Jason Hnatyk, Senior client education instructor at TD Direct Investing.
Let's talk about using WebBroker to track the performance of commodities.
>> Unmuting yourself is normally the first good step.
So all right. Great to be here, Greg.
While we don't have the opportunity to invest directly in the commodities space in WebBroker,maybe you're looking to stay informed or understand the direction he believe the markets going to go, so let's jump into WebBroker so we can identify where those quotes will be found in the platform.
First of all we will take you to the research tab at the top of the page.
under the markets tab, we are going to go to the trustee markets overview page.
There so much useful information here and the commodities is no different. You'll start by seeing some news on the overall market.
We can continue to scroll down and from here, we get a general sense of the indices that we may be watching as well as maybe some of the foreign indexes as well but if we continue to scroll down about halfway down the page, you will notice to come across a commodities page.
Lots of great information here. We got commodities from agriculture, so if you're interested in learning about pork belly or a hog future prices, you can look at some metal future contracts for gold, silver and platinum, really keep yourself informed them that space, and finally we can and off looking at the energy sector.
Here we can see that we've got West Texas crude, natural gas amongst others.
Let's focus in on the West Texas crude futures here. We can see where we've got, this happens to be the July contract as we can see noted on the table. We can see the last traded price for the specific contract and we can see that it's up $0.40 from its previous day's close but also importantly, if we continue on to the right hand side of the table, we are also getting a chart that should look fairly familiar if we are thinking about the ranges that that commodity has traded in over the lifetime of that specific expiration.
We can see that this particular West Texas contract is a little low on the low side of the halfway point but close to the metals we are getting a sense of how this is traded over time.
So we are a little bit more informed than we were previously.
>> A nice bit of real estate there on the platform.
we are talking about quite a few things only talk to commodities. What about stocks related to specific commodities? How would I use the platform for that?
> Yeah, let's do that. We have looked at the screen are still in the past and this is going to be a great opportunity to leverage thatcapability of the platform, thoughts jump in and take a look at how that can be done. The screeners are house once again under the research tab. This time we are going to go into the tools column and we are going to choose screeners.
Now we've got an opportunity to, we are going to be looking at stocks and a little bid but you can also screen for mutual funds as well as the ETFs that have a commodities focus where you can scan for commodity focused stocks and their technical events. So lots of different capabilities. Let's jump in and take a look at the stock functionality right now.
You're going to go ahead and choose, click on screening. You can go ahead and wipe the screen clean to start fresh. We are going to do a broad-based screen looking at the oil and gas industry but you can really narrow the focus down for whichever suits your own specific criteria.
I'm going to choose more criteria button.
Appear at the top of the company basics area, you have a sectors and industry selection. We are going to go ahead and choose that.
We scroll down the page. These are all of the different sectors industries that you got the opportunity to find investments that meet your needs.
Go ahead and clear them so we can make one specific choice. Energy that we focus on a little bit earlier is located in the bottom right. I need to do a broad selection of all of the stocks in the energy sector or I expand this area and then get specific about what I'm really looking for.
And when you go ahead and choose oil and gas. Up the top of the screen, to start narrowing down a little tighter, I'm going to change this and have it focus specifically on Canadian companies. And as I scroll down, I noticed the screen will be complete and we have 258 matches.
You can add in your own criteria to whittle that down.
But this is a great opportunity to see how we can find specific stocks in specific areas so you can leverage those commodity quotes to diversify yourself.
>> Great stuff as always, Jason. Thanks that.
>> Is my pleasure.
>> Jason Hnatyk, Senior client education instructor at TD Direct Investing. And make sure to check out the learning centre in WebBroker for more educational videos, live, interactive master classes and upcoming webinars. Before we get back your questions back contrarian investing for Benj Gallander, a reminder of how to get in touch with us.
Do you have a question about investing or what's driving the markets?
Our guests are eager to hear what's on your mind, so send us your questions.
There are two ways you can get in touch with us.
You can send us an email anytime at moneytalklive@td.com or you can use the question box right below the screen here on WebBroker.
Just write in your question and hit send.
We'll see if one of our guests can get you the answer right here at MoneyTalk Live.
Okay, we are back with Benj Gallander, we are taking your questions about contrarian investing.
This one coming in in the past couple of moments. Can I please get his opinion on individual stocks versus ETFs? This is an interesting one in terms of how people want to deploy capital in the market.
>>to me it's like you're setting up a hockey team.
Would you rather go with All-Stars or have everybody in the NHL?
I would rather go with All-Stars.
If they practice together, I think they are going to win. I would rather choose specific stocks and still diversify and have say 15 to 25 than go with an ETF where you will probably have a lot more stocks. What happens then is some of the stocks we down a lot of the other stocks in terms of returns. So I'm a stock picker. I like to do that. I like to have enough to be diversified. What does it mean to be diversified?
>> how many names would you have in a basket to have diversity?
>> I've heard some people say you can have us use six.
I don't believe that. I like the idea of 15 to 25and that's what we have generally in our portfolios.
I will also have other stocks on the side that don't fit into them. Maybe some preferred, etc.
, that don't fit into the contra system.
Although I will still be looking at getting gains of at least 50%. I think it's better to choose positions and build up a portfolio that way. Now, if you want simplicity, if you don't want to take the time, and I understand that.
A lot of people say, I don't have time to manage a portfolio. I want to spend time with my family, I want to go boating, I want to do this.
If you want to do that, then look for an ETF that has low MER's.
You want low expense ratios and that's key. Generally the lower the ratio, the better you will do over time.
It's been interesting over the past number of years because it used to be and may still be that our expense ratios were the highest in the world. Effectively, we were getting ripped off.
They've come down to some degree.
But for me, I have the time, this is what I do, I pick and choose stocks.
if people have some time, a lot of people who manage other people's money make you think it's like brain surgery.
It isn't. But again, you have to read, you have to think.
You have to learn. And one way to start it is paper trades.
If you're not confident, do some paper trades and see how they do.
Over time, start making investments.
doing it yourself is not for everybody but to me you're going to make more money, I believe, doing it that way.
>> Interesting set. Let's take another question. This wind is coming in.
Given that Mr. Gallagher's comments regarding the markets doing well, does he think a correction is imminent and if one, how deep might it be?
This is Jeff.
It's good to hear from you again, Jeff.
He also says, PS, it's nice to hear someone talking about government and fiscal restraint.
You got a fan.
>> I'm a wordsmith in a lot of ways. I write for the Globe and Mail and I've written best-selling books about the stock market.
If anyone wants to contact me, just email me.
So in terms of markets, in terms of what they are dealing, in terms of fiscal restraint, in terms of what's going to happen, you always have to try and deal with probability.
And I think that's essential whenever you're looking at anything here.
Try and do that and imagine a different size.
So is a market downturn imminent?
I love playing with words.
>> Tomorrow, next week, six month period >> Today, I sent off my next globe article to be edited but the word imminent, yeah, exactly what you're saying. I know myself well enough that I don't know what's going to happen in the next couple of months.
So I won't say it's imminent but it could be, but before the end of the year, of course, it's more certain the further you go out. So someone who predicts a major stock market drop, they're going to be right.
>> Eventually.
>> Eventually, they are going to be right.
So I just don't know, plain and simple.
I think the question is, how do you play it if you think it's imminent?
I'm not saying it is.
The way I play it is I buy less.
So that's my key. If I think that things aren't going to do well when I'm in my buying phase at the end of the year, I will buy less.
I will also tend to buy more or sell more if I think there's a drop off in store.
So that's what I do.
I won't sell things before they hit the cell target anyhow, but I will look to lighten up a little bit more than I would otherwise.
So some people say, oh, you thinking a market meltdown is imminent? Sell everything.
Well, I would never do that because that's stupid.
And I know the timing that way is very difficult. Now some people say that market timing is a stupid approach but in my methodology, I do use market timing to a degree in the way that I use it is when the market is really high, well, I'm not buying as much.
there is a timing aspect. If markets are beaten up really badly, I'm buying more. So there is a market buying aspect to it. But certain stocks, it's exactly the same thing.
So again, people pooh-pooh market timing, but I use it as part of a larger model, so to speak.
>> Interesting stuff there. We got another question now about uranium. What are your views on the uranium space? Like some of the companies? There are a handful of companies that you can play if you are interested in uranium.
>> Yeah. Uranium stocks have gone up an awful lot.
Cameco is one that people love to play. Matter of fact, Inc. research is all about insider training and his buying and selling certain companies and for me, it's very, very useful.
I've used it for years.
And then each day during the week, they highlight one stock and they highlighted Cameco today and said how many people the insiders have been selling. If a lot of insiders are selling, that is a clue that maybe you shouldn't be buying, plain and simple.
We used to have Cameco in the portfolio but that's gone. Years ago, Ioan Denison Mines, but I don't have that anymore.
These are things that I used to have at different points in time.
So uranium to me is not very attractive at this point although looking at the nuclear industry, nuclear is another industry that comes in and out of favour and right now, it's more in favour.
And then what happens is you have a nuclear accident and you know there's going to be another nuclear accident.
But nuclear, even with nuclear accidents, it has a place, but nuclear power is dangerous and we have to recognize that.
We've seen it with Chernobyl years ago, going back into the 80s, I had 3 mile Island out of Pennsylvania, most people don't remember that, but I bought that after they had the problems.
So something is going to happen again, but uranium has had a great run so at this point it doesn't interest me.
>> Yes, you were mentioning the Inc. market insider reports.
For those of you familiar with the plot from, you can find them on the platform.
For those of you haven't seen it yet, if you go to the research tab and look for the reports area, you will actually find some of the Inc. material there if you are interested in checking it out yourself.
We are going to get back to questions for Benj Gallander on contrarian investing in just a moment's time. As always, make sure you do your own research before making any investment decisions.
and a reminder that you can get in touch with us at any time.
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[music] We are having a look at TD's Advanced Dashboard, platform designed for active traders available through TD Direct Investing. We look at the heat map function here, parsing to the TSX 60, look at price and volume.
Obviously dominating the screen in the upper corner are some of the energy names. You have crude prices, it was quite dramatic weekend in Russia and we've been watching the oil market to see whether it be a reaction. West Texas intermediate is not up all that much, it's up about $0.46 on my screen, below 70 bucks per barrel, but money is moving toward some of the big energy names, whether it's a pipeline name like trap there, TRP, up to the tune of almost 4%, and oil and gas, you've got Suncor and Cenovus to the upside as well. The financialsare adding to the Upline number on the TSX. You can see some modest strength there as well. As far as a weakness right now,Shopify is down a little bit, nothing too dramatic on the 60 in terms of stocks to the downside but definitely some upside moves in some of the big parts of the market.
You can find more information on TD Advanced Dashboard by visiting TD.com/Advanced Dashboard.
We are back now with Benj Gallander from Contra the Heard Investment Letter, talking contrarian investing and taking your questions. We were just talking about the energy strength you are seeing in the market today.
Where do you think energy companies are going to be by the end of the year? Another one of those crystal ball question.
> Yeah, it's a six-month crystal ball.
In the short, you go with the crystal ball, the harder it is.
I will say quite frankly I don't know.
As you know, I say I don't know more than most people who call on the show. They are more all-knowing than I am.
So much depends on the possibility of a recession and if stock markets take a beating.
I would think that there's a good chance that energy stocks will go down more than they will go up before the end of the year. To me, it just makes sense because of the recessionary clouds. The price of oil seems quite reasonable in terms of words are right now, but I would be wary. If you can pick certain companies that appeal to you and have good balance sheets and have good management etc., then that can be more worthwhile.
But in six months, I just don't know.. And quite frankly, and this may sound horrible, I don't care all that much because I'm longer-term.
That doesn't mean people shouldn't care.
People who invest using other systems should care. But it's just not what I do.
And you have to know your area of expertise and where you like to invest and if you're looking at where things are going to go in the next week or the next two weeks of the next six months, you have to be honed in more to your computer.
I spend a lot of time on the computer.
I don't want to be watching it every nanosecond.
>> You want to get outside and enjoy some sunshine. Not today though in Toronto. Pretty stormy now. This is an interesting one. Warren Buffet recently invested more in Japan. Can you discuss Japanese ETFs?
I don't know about ETFs but what about Japan in particular?
It comes up more and more in investment conversations lately.
>> Warren Buffet's been buying it and I just was in Japan. I took my eldest son there. We were just there for three weeks.
I've travelled to almost 40 countries, I worked in many countries.
And I got some real insight to the Japanese method. It was fascinating. I've never been to a country like that.
It's so well organized.
It's so clean. It's such a pleasure in that way.
The… Hit a high of 1989 I believe. Since then, it's been on a roll recently.
If war and like something, I will go with it. I actually took my two lads to the Berkshire meeting in the first weekend of May because I want to go before either Warren or Charlie dies and given that Charlie is 99 and Warren is 92, the probability says they are not going to have another 20, 25 years.
And it's great. If you get a chance to go because Warren and Charlie spend about 45, excuse me, over four hours answering questions and it's a wonderful listening because here are two of the best investors of all time,and the way they do it, I like telling people this, war and answers may be a few minutes, and Charlie comes in with a brilliant pity comment that's fast, and then more and add some more to it.
But given that Warren likes Japan, I can see why you might, but there's been a lot of time to invest in there because you had 30 years where it really wasn't doing all that much.
Now it is close to a high again. Is it a good time to invest there?
I wonder about it. But certain countries and certain people, they are just… Smarter in some ways, I think, than people in other countries. I'm not denigrating anybody here.
But if I was looking to invest in a country, Japan would be one of them. The people are incredibly intelligent, incredibly hard-working.
Their stock market did nothing for so long.
>> Always a fascinating conversation. I look forward to the next time.
>> We are done already?
>> We are done already.
> Always a pleasure.
> Our thanks to Benj Gallander from Contra the Heard Investment Letter.
Be sure to always do your own research before making any investment decisions. Stay tuned for tomorrow show.
Robert Both, macro strategist with TD Securities is going to be on the show, he's going to give us his reaction to the latest Canadian inflation data that is coming up tomorrow morning before the markets open.
He's also gonna take your questions about the economy and interest rates.
A reminder of course even get a head start with your questions. Just email moneytalklive@td.com.
That's all the time for the show today.
Thanks for watching. We'll see you tomorrow.
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