Brian Acker, president, CEO and chief investment strategist at Acker Finley
Focus: North American large caps

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MARKET OUTLOOK

We believe we’re in the middle stages of a secular bull market in the U.S. dollar (now four years since I first started mentioning this on this show). This will ignite the rates of return of all U.S. assets, including equities, real estate and others.

According to Model Price metrics, we believe the S&P 500 has a fair value of 3,597. That’s 30 per cent higher than this index is trading today. Fair value is 4,168 twelve months from June 2018, assuming current earnings estimates.

For a value manager like us, there are many discarded, unloved and broken-down growth story stocks to choose from. If the U.S. economy can struggle along here or, God forbid, accelerates, these value names would produce great rates of return in our opinion.

At the same time, we’re in the midst of ever-increasing interest rates (or interest rates in the U.S. are normalizing). That’s a good thing. Even though it’s 2018, this market has the feel of 1994, which was our last bear market in fixed income. This American equity market will keep on looking over its shoulder at the U.S. Treasury market.

As interest rates make new highs, U.S. equities go into a spasm, a correction, until the U.S. Treasury market settles down. Then equities will try to move higher. Wash, rinse and repeat throughout 2018.

TOP PICKS

INTEL CORP (INTC.O)

  • Last purchase at $49.89 on Feb. 28.
  • Upside to Model Price of 50 per cent as of June 25.

BANK OF AMERICA (BAC.N)

  • Last purchase at $29.62 on Dec. 20, 2017
  • Upside to Model Price of 14 per cent as of June 25.

CISCO SYSTEMS (CSCO.O)

  • Last purchase $31.68 on May 31, 2017
  • Upside to Model Price of 22% as of June 25.

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
INTC Y Y Y
BAC Y Y Y
CSCO Y Y Y

 

PAST PICKS: AUG. 4, 2017

CITIGROUP (C.N)

  • Then: $68.98
  • Now: $65.02
  • Return: -6%
  • Total return: -4%

APPLE (AAPL.O)

  • Then: $156.39
  • Now: $184.41
  • Return: 18%
  • Total return: 20%

INTEL (INTC.O)

  • Then: $36.30
  • Now: $49.77
  • Return: 37%
  • Total return: 40%

Total return average: 19%

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
C Y Y Y
AAPL Y Y Y
INTC Y Y Y

 

FUND PROFILE

Acker Finley Select US Value 50 F
Performance as of: May 31,2018

  • 1 Month: 2.40% fund, 3.12% index
  • 1 Year: 7.56% fund, 7.75% index
  • 3 Year: 2.64% fund, 5.36% index

* Index: S&P 500 Total Rate of Return in CAD dollars from Globefund.com
* Fund’s returns are based on reinvested dividends

 TOP 5 HOLDINGS AND WEIGHTINGS

  1. Apple Computer: 4.8%
  2. Microsoft: 4.6%
  3. Pfizer: 4.5%
  4. Cisco Systems: 4.4%
  5. Marsh and McLenn: 4.3%

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