Bill’s Blog February, 8 2021
Firstly, I want to thank Michael Campbell and his team for putting this two-day event together. Very well done with little glitches in their first online event. I sat and listened, took notes for almost 10 hours, Friday evening and most of Saturday till diner time. There were over a dozens exceptional guests, diverse expertise and insights that I hope to give you the main points. So let’s get started.
Michael Campbell, the host and organizer, started the conference with several important factors concerning Canada and the world.
- We now live in a world of “Unprecedented financial happenings.”
- The Central Bank of Canada is buying a minimum of 4 billion dollars of bonds per week to keep the Federal & Provincial massive deficit going.
- Trudeau’s government has indebted Canada with an additional 400 billion and growing in less than a year.
- Provinces have added 100 billion in new debt with no sight of ending soon.
- This debt binge is a global phenomenon. Because bonds pay near nothing, large amounts of capital have gone into equities (in the US, big FANGG stocks) and created distorted evaluations.
- Michaels caution: Always evaluate risks before you implement capital.
Victor Adair: Commodities Picture 2021
- Commodities hit a 50 year low in March of 2020.
- We are now in a commodity bull market, including agricultural, lumber, base and precious metals.
- A ten-year bear market in commodities ended in April 2020, and a multi-year bull has begun.
- Due to massive money printing, our currencies are losing our purchasing power and devalued.
- People are waking up and wanting real-assets: real-estate, land, commodities and gold and silver.
- Consumer inflation is on the rise.
- Central bank policies favour commodities—the Green new deal.
- Victor’s caution: We may have a short term correction, but the bull market has begun.
Lance Roberts: The great bubble of 2021
- Stocks have the 2nd highest evaluations in market history.
- Stock margin debt highest ever!
- Valuations are a terrible indicator of timing. Meaning, bubbles can extend longer than one can imagine.
- Market cap to GDP highest historically. Expect lower stock returns for the next decade.
- We are in a bubble-market trend and expect interest rates to rise soon.
- Bubble markets happen due to human psychology: FOMO (fear of missing out) and greed.
- Lances caution: Avoid bonds. Avoid Zombie companies with low income, high debt and repeatedly refinancing. Take profits when they are there. Don’t lose your capital.
Robert Levy: Gold in 2021, why own it?
- Acts as insurance and a substantial investment
- Key supporters for precious metals: 1). Central bank easing (money printing). 2). Ballooning fiscal deficits (governments). 3). Dollar diversification and volatile stock markets.
- Gold and silver very liquid and protect your wealth and purchasing power.
Mark Leibovit: A traders guide to 2021.
- There are significant threats in the news these days that can affect our lives: potential wars, covid risks, and social unrest globally.
- Housing bubbles in the US and Canada: interest rate uptick will pop the bubble.
- Investment ideas: Gold may correct, then up to $3000. Bonds, going down. Quality sustainability and green companies. Cryptocurrencies (EFT).
- Marks caution: He thinks we will experience a down market event in 2021 and BIG volatility.
Martin Armstrong: Preparing for the great reset.
- US dollar hit bottom and going up.
- Political turmoil is increasing, and the EU’s crazy lockdowns…draconian measures.
- The Euro is to go down and political problems.
- The fake bad news is becoming fake good news!
- The Canadian dollar to weaken against the US dollar.
- The “Build back better” agenda is communism 3.0…very dangerous.
- Commodities are going up till 2024 based on shortages.
- The Green economy is very inflationary.
- Central banks cannot afford interest rates to go up, and negative interest rates don’t work (NIRP).
- The Central banks are debt-trapped.
- Socialism has failed.
- Our current financial system is not sustainable. Governments will have to default.
- Agricultural prices are going up.
- We are in a cooling trend with temperatures globally.
- Solar and wind are not able to create enough energy to sustain our current lifestyles. Fossil fuels are essential for decades. We need more advanced technologies to replace oil and gas.
- Martin’s caution: Food prices will continue to rise due to the government’s intentionally shutting down production and supply chains.
James Thorne: Populism has just begun
- Millennials, Gen X and Y, invest very differently than boomers. Younger investors like options, Index funds, target stocks and sectors and cryptos’.
- 2021 Forecast: S&P 4500, volatile year, Covid slows down, cyclical recovery, green economy, structural changes coming, central banks reflate and driven by their policies, and we are in a ten-year transitional period (Fourth Turning, Strauss and Howe). High inflationary period. The 60-40 portfolio is no longer relevant. Interest rates will rise and destroy bonds. James prefers growth stocks over value stocks.
- James caution: Stock evaluations are very different now, and the old metrics don’t matter. He is not saying this will not create a crash, just not yet! Volatility is here. It would be best if you were proactive in your trading and portfolios. A 10% corrections mean nothing now.
Greg Weldon: The Age of Aquarius Redux
- Increased volatility in 2021
- The Age of Aquarius Theory: Increase in the magnetic field around the earth causes more extreme weather events and seismic activity. Greg has done extensive research around this theory.
- Central bank policies stupid and negative interest rate policy (NERP) insane. Eventually, these policies will fail.
- There is still very high unemployment in the US. Hospitality and retail sectors in the toilet.
- The FED’s creative acronyms that don’t work.
- The FED wants inflation; unfortunately, they may get it in spades. Then they are forced to raise interest rates as Paul Volker did in the late 1970s and early ’80s.
- Central banks desperately want people and governments to borrow, and guess what, it is working!
- The FED thinks they can communicate their way to success. They believe they are the master puppeteer until the day they are not.
- Central banks create currency wars.
Greg’s caution: Bonds are worthless. Gold and silver are critical to saving your wealth. Likes gold but like silver even better, also, like many base metals. Greg is a believer in Bitcoin and Etheruem. Government and public debts are historically massive. Long-term bond yields are going up (30-year debt). Bonds are an accident waiting to happen.
Paul Beatty: My top stock picks in 2021
- Watch what is happening in the USA. Big stimulus coming.
- The US wants to legalize cannabis. Paul likes US cannabis companies, not Canadian.
- Paul likes the Uranium sector and companies (a tiny industry).
- Hard assets should be strong performing, and Canada to benefit over the next 3 to 5 years.
- Electric vehicles (EV) industry = big for copper.
- Likes gold, silver and base-metals sectors
- Paul likes health care services, particularly Protech Home Medical.
- Finally, he likes the hot spot in the US home fitness products like Nautilus.
- Paul’s warning: See’s good year but very volatile.
Ozzie Juraock: The upside-down real-estate world.
- Single-family homes averaged 15% across Canada in 2020.
- Why real-estate: local, hard asset, and you control it.
- Inflation vs. deflation? You need to understand timing, trends, cycles and supply and demand.
- We have been in an inflationary cycle in Vancouver since 1998.
- For the next three years, Canada’s immigration policy, 1.2 million new people and 60% will live in Vancouver or Toronto.
- Hong Kong policy will also bring more people.
- Home sales hit records in 2020 in Canada.
- Condo prices were down in Vancouver in 2020.
- Office, retail and commercial real-estate down.
- Industrial and farmland stable and up in price
- US real estate a tale of different States and cities: People fleeing many big cities with huge taxes (think New York, LA, Chicago) and moving to tax-friendly States like West Florida, Texas and Arizona.
Ozzie’s warnings: Ozzie suggests not to buy hotel condos, times shares, quarter shares, or resorts. Protect what you have and have some cash. Many things can effort real-estate negatively: Stock market crash, change to capital gains exemption, tax changes and expect more taxation schemes, and foreign ownership rule changes.
Ryan Irvine and Aaron Dunn: 2021 Small-cap portfolio and income stock picks.
- Lots of subsidies to US and Cdn. Companies, which distorted their real earnings in 2020.
- There is no need to have more than 15 to 25 stocks in your portfolio. The old model of 50 to 150 equities does not work, nor does it provide any added benefit.
- Must invest in the US or other markets as Canada is too concentrated in three sectors.
- Ryan suggests focusing on companies with proven management, a strong balance sheet and growth.
- Aaron: S&P PE ratio not cheap 34.33 and almost as high as dot.com bubble.
- Because interest rates are historically low, big money is flooding into stocks.
- Even though valuations are extreme, Aaron does not believe a crash is imminent, but he thinks it will eventually happen.
- Look for stocks in technology and staples.
- Top 2021 picks (two to three-year time horizon) Microsoft, Polaris Infrastructure, Boardwalk REIT and Brookfield Infrastructure.
Josef Schachter: Buying the bottom of the energy sector:
- Josef sees a potential downside and pullback until April 2021. There is a glut of oil till late April. A possible downside of $40 or lower.
- New commodity bull market. Oil lags at first and then outperforms.
- There is a potential, $60 per barrel in late 2021.
- Commodities are very cheap right now.
- Covid has significantly impacted energy demand, and until 70 to 80%, herd immunity price will not rise.
- Outlook till 2040: Oil demand slowing, natural gas dominate energy source, and renewables are in a large growth phase (solar and wind).
- 2021 energy lacks spending and drilling.
- Fight between Saudi’s and Russians for China market.
- 2019 global demand in energy: 26% coal, 32% oil, 23% natural gas, nucular 5% and renewables 12%.
Josef caution: The oil and NG markets are lagging short-term, but strong growth for the next 4 to 5 years. Governments constantly interfering with pipelines are a significant problem for Canada’s economy. Huge job losses.
Peter Grandich: Junior mining Investing.
- Stock markets have dramatically changed since he was a trader in the 1980s. Algos, sophisticated products and passive index funds have stacked trading against individual traders.
- Peter sees a new commodity bull market and opportunities.
- One must have a shorter-term outlook in the junior commodity sector.
- Electrification of the world requires a massive amount of select metals (copper, silver).
- Copper and uranium are vital assets to focus on in this bull market.
- Uranium is Peter’s top pick, followed by gold. Mining friendly and safe districts are crucial in picking companies. He likes Quebec.
- Final Session, Martin Armstrong: Martin forecast 30K Dow over a decade ago, and no one believed him. Today the Dow is over 31K.
- US stock market is still the number one place for the world for international capital.
- The 2021 markets look very choppy.
- Martin sees significant risks in markets from March till May/June. Summer to year-end stock markets looks a lot better.
- Martin forecasts equity resistance in 2022 at 35K to 37K Dow. His target is 65K Dow in 2032.
- Gold will rise, and silver will dramatically increase.
- Martin’s concerns: Martin sees authoritarianism on the rise till 2032 in, US, Canada, EU and UK. The government style is not a democracy, and this movement is all about control and colossal taxation.
- Martin warns governments will come after cryptos and Bitcoin.
- Our current financial systems are not sustainable, nor are deficits. Martin sees currency and pension crises in 2022.
- Martin ended, 2021 to be very volatile and geopolitical changes and risks in the cards.
All the best,