Michael Smedley, executive vice president and chief investment officer at Morgan Meighen & Associates
FOCUS: Canadian equities
_______________________________________________________________

MARKET OUTLOOK

As anciently named by an ancient Chinese philosopher, 2018 will be The Year of the Repetition. Oil and gas should stay unspectacular, as will be the related stocks. The somewhat revived mines sector will continue to hum along steadily, raising enough capital to function mostly on the small scale, proving up mainly smallish projects. It will hum along nicely in safe country Canada, where sadly we have given away most of our great mining companies. That is not all bad because the best stock market gains are made in the small stocks. Apart from our world leadership in mining skills we have great names across sectors which now peep through a forest of ETFs that make up most of the top performance lists every day. Those stocks you must own if you want to excel.

Small gains should continue in interest rates, too gradual to disturb the stock market. Our magnetizing property markets will stay the best despite the destructive efforts of our politicians. On the broad political scene extreme anguish will persist and provide me with a juicy lead article for my newsletter month after month.

On the political theme I have arrived at the vision that Trump is a kind of ringmaster in a circus, in a red uniform with shiny brass buttons and his straw hair, putting the growling lions through hoops, goading them, superior in cunning if not intellect, keeping them frustrated and uselessly focused on stupid obsessions like Russian hacking, towering walls and most lately that the "dems" sold to the Russians their precious uranium which in its raw state is commonly available, even in a cup of tea. (No mention yet that the Russians sold their enriched waste to the U.S. on a long term contract. Preposterous, though, he seems there is a purpose in everything.) That is my one tiny bit of religion as the year approaches its close.

TOP PICKS

BOMBARDIER (BBDb.TO)
A top performer (more than 20 years ago), ironically on a path to possible resurrection caused by the Boeing crushing machine, forcing it into the hands of the not exactly valiant but powerful knights of Europe, Airbus.

HUDSON'S BAY COMPANY (HBC.TO)
Canada's greatest company historically, but with an unappetizing track record. A representative of the ghastly department store industry but lushly endowed with real estate and run by the most expert and creative controlling owners. The stock is capable of a long-term 200 per cent uplift.

PRETIUM RESOURCES (PVG.TO)
Not at the earliest point in its successful development but one of the best examples of success in new gold production in the quite friendly province of British Columbia.

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
BBDb Y N N
HBC N N N
PVG N N N

PAST PICKS: DECEMBER 14, 2016

KNIGHT THERAPEUTICS (GUD.TO)

  • Then: $9.92
  • Now: $8.07
  • Return: -18.64%
  • Total return: -18.64%

SPIN MASTER (TOY.TO)

  • Then: $34.34
  • Now: $50.03
  • Return: 45.69%
  • Total return: 45.69%

NORTHERN DYNASTY MINERALS (NDM.TO)

  • Then: $2.18
  • Now: $2.72
  • Return: 24.77%
  • Total return: 24.77%

TOTAL RETURN AVERAGE: 17.27%

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
GUD Y N Y
TOY Y N Y
NDM Y N Y

FUND PROFILE
Smedley Special Opportunities Fund
Performance as of: October 31, 2017

1 Month: 4.2%
3 Months: 11.7%
1 Year: 11.2%
3 Years: 5.0%
5 Years: 12.6%

*After fees, no dividends paid to reinvest
*No benchmark

TOP HOLDINGS AND WEIGHTINGS, AS OF OCTOBER 31, 2017

  1. Premium Brands Holdings: 8.0%
  2. Morguard Corporation: 5.7%
  3. Spin Master: 4.9%
  4. OTC Markets Group: 4.6%
  5. The Middleby Corporation: 3.9%

WEBSITE: www.mmainvestments.com