Montreal Analyst

MOST IMORTANTLY   We are always looking to be fully invested as we invest when specific stocks have suffered severe declines to prices indicating that they are severely undervalued. Admittedly, they often decline even more before they turn around; but that has always been our strategy. While working in Quebec, I would leave open limit orders in New York for specific stocks at prices that were far below the prices they were trading at when I put in the orders. While I could never buy all the shares we wanted and none of many companies, I would get some superb bargains. This was a strategy described in an interview years ago by the late legendary investor Sir John Templeton. We do see high risk today in many popular heavily recommended stocks. Opportunities for exceptional capital gains are always present but too many stocks have been touted and bought at the high end of their price ranges. Again, many of the best performing stocks are now selling at high valuation levels which usually end sadly. History shows that “paying up” generally leads to disasters.

Canadian investors after having seen the American primaries, the campaigning, the elections and the results, should now realize that the American mainstream media is shamelessly biased and has no credibility whatsoever with a huge percentage of Americans. Any prudent Canadian should take most opinions and views from the American media with a grain of salt. As the American economy has an enormous influence on the Canadian economy, Canadian investors should try to get a good balance from the non-mainstream media sources and the internet. We have no faith in the accuracy or the opinions of the American major media particularly the three major television networks in their reporting (their own interpreting) of news. Classic example: The media elite clowns were calling Hillary the winner up to the final hours based upon their very erroneous and biased polling data which they had obviously concocted. These biased manipulators have demonstrated themselves as duplicitous and devious as well as extremely inaccurate particularly over the last year. Their reporting was so biased at times that it bordered on outrageous.

TAXATION WITHOUT REPRESENTATION is more than just alive and kicking Federal Reserve Board Chairman (I’m of the NOT POLITICALLY CORRECT GENERATION) Janet Yellen, just saddled the American public with a $50,000,000,000.000 (THAT’S FIFTY BILLION DOLLAR$$$$$) new yearly tax for the foreseeable future…. (until she raises interest rates AGAIN)

 The pathetic and laughable American mainstream media has no credibility whatsoever with the vast majority of Americans so we thought we might report on what some of our Canadian friends think of the U.S. media. Very little difference! We are sure that our American readers know well some of our closest neighbors and cousins. Of course you know those polite, kind, quiet, unobtrusive, benevolent, unassuming people just north of New York, Michigan, New Hampshire, North Dakota and a few other states.  Last May, on this site I reported on what a native born Canadian (of many Canadian generations) thought of the American presidential election. He held back nothing in his comments. His view could have come from somebody from Florida or Texas as well as it was in line with actual American opinion. He sees the situation from the Montreal region often from the main-stream American media. Fortunately, he is able to pick up fair news’ views from the internet and networks other than the big three networks. The following are his comments from earlier this year.    

In recent weeks, American politicians and the US media have been suggesting that President-elect Trump be given the benefit of the doubt and that the wisest course is to adopt a wait-and-see posture. After all, he is still selecting his Cabinet and will not officially become President of the United States until inaugurated in January. These gestures are generous, well intended and imply that a pause for the holidays would be in order. However, the real world has not waited to start offering its responses. Portfolio managers and professional investors make asset allocation decisions regularly. Global total return funds can alter their investment mix, shift assets and adjust their currency exposures around the world on a weekly basis.

Your analysis counts.  The private investor’s judgement is usually more accurate as or usually better than the analysts or so called “experts opinion.” Make sure that any advice makes sense to you. Cycles? On a cyclical basis, gold and silver are due soon for major moves up which do not have to occur exactly on schedule. Often cycles are early or late in their occurrences but nonetheless are significant. They fool the majority. But note well that over the last three years during a period of a severe bear market in gold and silver mining stocks we have recommended and bought gold mining stocks that have rocketed up 900% (Richmont); up 1400% (Claude Resources was taken over by Silver Standard); and Niogold up 400% (was taken over by Osisko). Many others have had large moves up. Bottom line? The best and most opportune time to invest in precious metals and mining stocks is during bear markets and brutal corrections.

The World of technology has changed. It’s ever evolving cycle has now in fact changed the World. I, for one try to embrace the advances which happen at an alarming rate. In my 50’s, the only disappointments I hold are the fact we are all not flying around like the Jetson’s, and 3D glasses at the movies still suck. It is imperative that we all try to keep up with these changes to remain competitive, and valid in our existence. Jobs, careers, and Industries have been streamlined and even wiped out, as we make way for the modern World.   The technological revolution in the Capital Markets has been devastating. Much like automated tellers and checkout lanes, the roles of an Equity Trader have been surpassed by the abilities of intelligent mathematicians and their aptitude to apply their skills to take advantage of Markets with lightning quick speed. I use this only as an example because I am, or perhaps was an Equity Trader. Flash crashes are real-keep that in mind!    The dependence of algorithmic programming on Trading desks has, and continues to reach ultimate capacity. To give credit where due, the individuals who create the programs have worked hard to achieve their goals, and in some ways have led to liquidity. Unfortunately, the “auto-pilot” use of program trading has brought us to an extremely unfair playing field for other investors.    As I write this, all Major Markets have been reaching record highs on a daily basis. This […]

    We have expected the stock market to have suffered 20% corrections over the past three years each time to be followed by returns to the upside, they did not occur. Those normal corrections  would have prevented the stock market from its current extremely high overall valuation. More importantly, harsh corrections offer investors and institutions exceptional opportunities to accumulate shares at lower prices while they are “on sale.” The stage is now set for another brutal bear market. We do not want it to occur and we are not short sellers; we are studying various indicators and they strongly suggest caution. Near zero interest rates and QEing have been enablers supporting the stock market.  We have said many times, odd as it may seem, that bull markets do not end due to overvaluation. They end with interest rates rising sharply, often with a decline in the money supply or recession. But note well that dangerous market tops are usually accompanied by overvaluation and euphoria. Are we seeing that now?

What a Trump win means to the technology sector President-elect Trump may shake up things in more than the wall construction industry. As some of you may have noticed recently, executives from well-known companies such as Amazon, Netflix and Salesforce, to name but a few, were rather vocal about president-elect Donald Trump. He’s been known for his tremendous sense of humor, right? All right, so perhaps having even one of these industry leaders comparing him to certain historical dictator might have been a bit much.

Much to the dismay of Republicans, a surprising amount of press is given to the S&P 500’s performance under Democrat and Republican presidencies. But doesn’t Congress control the purse strings? Since 1945, whenever Republicans controlled both houses of Congress, the S&P 500 rose an average 13.3%, and gained in price in two out of every three years. Whenever the Democrats were in control of both houses, however, the S&P 500 gained an average of only 7.4%, but rose in price a more consistent 73% of the time.