Jaime Carrasco, portfolio manager at Canaccord Genuity

Focus: North American equities (precious metals, pipelines, utilities, REITs and dividend-paying stocks)


MARKET OUTLOOK

I continue to recommend that investors have some consideration in the precious metals sector, as a hedge for the negative consequences for the monetary experiment of the last 10 years. I think central banks are also beginning to hedge for that possibility, considering their 2018 announcement that they purchased more physical gold since Nixon unleashed the FIAT system. Since this experiment began, I have remained steadfast of the view that since we have never fixed a debt problem with more debt, the result would not be different this time. Therefore, in view of history my mantra has been: the longer it takes, the bigger the fiscal mess, the higher the REAL cost.

Since my last appearance the markets have undergone a correction, as I expected, but have also had a great rebound. While I did take the opportunity of the correction to add a few more dividend payers at good value, I remain cautious on the ability of these markets to maintain these valuations. I attribute the rebound in markets to the treasury secretary’s intervention through the Plunge Protection Team and the fact that Trump was able to “influence” the Fed to not only reverse its tightening policy, but to also begin to discuss re-starting quantitative easing. However, we all know that a recession is building with the ongoing slowdown of the U.S. and global economy. Sooner or later that reality will catch up to these markets.

As a student of history, I am amazed at the current parallels to the 1930s and the lessons left behind to help us prepare for what might lurk ahead. From a historical vantage point, the current political dislocation, socialist populism, geopolitical shifts and social inequalities are but symptoms of a dying currency reserve system in need of replacement. Throughout history, as in the 1930s, that process has always been achieved through the number one rule of power: he who holds the gold makes the rules. Those rules are used to transfer the purchasing power of the currency reserve from the old to the new, in the same way that it transferred from the Pound sterling to the U.S. dollar in 1933. That occurrence is inevitable and has already been cast, but we do not know the exact timing. Luckily history offers hints as to how to prepare.

I continue to recommend caution and to stay positioned for rougher economic waters. Asset allocations stand at higher cash and fixed income levels of around 25 per cent, precious metals at least 15 per cent and the remainder in good quality equity income securities in my preferred dividend paying sectors are pipelines, utilities, energy and REITs.

TOP PICKS

Jaime Carrasco's Top Picks

Jaime Carrasco of Canaccord Genuity shares his top picks: North American Palladium, Kirkland Lake Gold and Valens Groworks.

NORTH AMERICAN PALLADIUM (PDL.TO)

KIRKLAND LAKE GOLD (KL.TO)

VALENS GROWORKS (VGW.CD)

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
PDL N N Y
KL N N N
VGW N N Y

PAST PICKS: June 22, 2018

Jaime Carrasco's Past Picks

Jaime Carrasco of Canaccord Genuity reviews his past picks: Hive Blockchain, Agnico Eagle Mines and North American Palladium.

HIVE BLOCKCHAIN (HIVE.V)

  • Then: $0.70
  • Now: $0.48
  • Return: -31%
  • Total return: -31%

AGNICO EAGLE MINES (AEM.TO)

  • Then: $59.54
  • Now: $58.93
  • Return: -1%
  • Total return: -0.1%

NORTH AMERICAN PALLADIUM (PDL.TO)

  • Then: $10.66
  • Now: $16.70
  • Return: 57%
  • Total return: 57%

Total return average: 9%

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
HIVE N N Y
AEM Y Y Y
PDL N N Y

 

TWITTER: @IJCarrasco

LINKEDIN: linkedin.com/in/carrasco1