Barry Schwartz, chief investment officer and portfolio manager at Baskin Wealth Management
Focus: North American large caps

MARKET OUTLOOK

Investors are very good at laying out all the uncertainties and risks in any given current market. What many forget is that over the long term, there are only two things that matter to stock prices: earnings and the level of interest rates. We believe that the certainty of low interest rates for many years outweighs all uncertainty in the market and that earnings will continue to go higher given the clear recovery in the North American economy. Of course, the worries of a second wave and the upcoming U.S. election could cause extreme volatility in Q4. However, we think it important to compare potential asset class returns over a multi-year period. If you believe that interest rates are going to stay low for at least the next three years, you will probably outperform by investing and holding quality growing franchises that can be acquired at reasonable valuations. The hardest decision in investing is to sit tight and do nothing; generally, doing nothing is the right winning strategy.

TOP PICKS

Apple (AAPL NASD)

In our opinion, Apple is the most dominant company of our generation and may be the greatest business the world has ever seen. Apple continues to delight its massive and growing user base with its elegant, must-have products. We believe the 5G upgrade cycle will be extremely positive for shareholders. Even with the 60 per cent price move this year, Apple’s shares are attractively valued.  

Stryker (SYK NYSE)

Stryker is a leading provider of orthopedic implants and surgical tools. It should benefit from the tailwinds of an aging global population that will increasingly require Stryker implants. Its shares have been under pressure as hospitals pulled back on elective surgeries due to COVID, but we believe that volumes will return as patients continue to suffer. We believe this is a chance to own a great business at an attractive price.

TFI International (TFII TSX)

TFI is a large provider of trucking services in Canada and the U.S., with a terrific track record of lean, profitable operations. TFI has quietly built one of the largest same-day delivery services in North America and will benefit from e-commerce growth. Due to a U.S. listing in February and an equity raise in August, TFI has ample liquidity to make deals and has already made six distressed acquisitions since March. We believe that at just 13 times forward earnings, shares are extremely cheap for a great capital allocator.

PAST PICKS: SEPT. 5, 2019

Activision Blizzard (ATVI NASD)

• Then: $54.58
• Now: $81.68
• Return: 50%
• Total Return: 51%

IAA (IAA NYSE)

• Then: $47.53
• Now: $52.12
• Return: 10%
• Total Return: 10%

BlackRock (BLK NYSE)

• Then: $424. 72
• Now: $70.98
• Return: 34%
• Total Return: 38%

Total Return Average: 33%