Sep 19, 2018
David Burrows' Top Picks: Sep. 19, 2018
David Burrows, president and chief investment strategist at Barometer Capital Management
Focus: North American large caps
MARKET OUTLOOK
U.S. equities remain in a long-term secular revaluation against other asset classes.
Despite a nine-day 10 per cent short-term correction which made its lows in early February, the current bull market is part and parcel of the early stages of reflation having seen a secular, generational low in interest rates and inflation globally in June 2016. Since then, for the majority of the time, sectors leading the market are those that benefit from a strengthening economy (the economically sensitive). Driven by earnings growth, capital spending, consumer confidence, deregulation, tax reform and animal spirits, markets appear to be able to continue to shake off near-term trade concerns with a view towards a continuation of improving business conditions beyond current concerns.
Biggest winners are likely to be the most economically sensitive groups (tech, industrials and energy), those that benefit from rising rates (financials) and also those sectors that are more domestically focused (healthcare and consumer discretionary).
Technically solid market breadth continues to point to broad-based equity market health. Multiple indexes, including the Value Line Arithmetic Index (an equal weight index of 1,700 stocks) have hit new all-time highs. This makes it clear that it isn’t simply a few of the biggest stocks carrying the indexes higher.
TOP PICKS
HESS CORP (HES.N)
JPMORGAN CHASE (JPM.N)
BOEING (BA.N)
DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
---|---|---|---|
HES | N | N | Y |
JPM | N | N | Y |
BA | N | N | Y |
PAST PICKS: AUG. 16, 2017
RIO TINTO (RIO.N)
Sold on March 13, 2018 at $52.45.
- Then: $45.24
- Now: $49.28
- Return: 9%
- Total return: 16%
FORTIVE CORP (FTV.N)
We still own this stock.
- Then: $66.15
- Now: $85.99
- Return: 30%
- Total return: 31%
E*TRADE FINANCIAL (ETFC.O)
Sold on September 6, 2018 at $55.73.
- Then: $40.42
- Now: $55.78
- Return: 38%
- Total return: 38%
Total return average: 28%
DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
---|---|---|---|
RIO | N | N | N |
FTV | N | N | Y |
ETFC | N | N | N |
FUND PROFILE
Barometer Global Macro Pool – Class F
Performance as of: August 31, 2018
- 1 Month: 6.45% fund, 0.52% index *
- 1 Year: 24.97% fund, 1.94% index
- 3 Years: 15.06% fund, 1.71% index
- 5 Years: 16.09% fund, 3.14% index
* Index: Barclays Global Macro Index ($USD).
* Returns are net of fees and dividend.
TOP 5 HOLDINGS AND WEIGHTINGS
- SPDR S&P SEMICONDUCTOR ETF: 6.25%
- FIRST TRUST INDUSTRIALS/PRODUCERS DURABLES: 5.68%
- ISHARES MSCI MEXICO ETF: 5.51%
- ISHARES U.S. CONSUMER SERVICES ETF: 5.39%
- ISHARES TRANSPORTATION AVERAGE ETF: 5.23%
WEBSITE: barometercapital.ca