Michael Smedley, executive vice president and chief investment officer of Morgan Meighen & Associates
FOCUS: Canadian equities
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MARKET OUTLOOK

There is nothing new going on by way of change in market behavior. The dominance of the ETFs layered atop the real market is now so conclusive in Canada it is hard to find a dozen real companies in the performing shares list each day. This could never happen in the glory days of the mutual funds long gone, because they were never in the stock lists. It is a pity the ETFs could not have been listed in an ETF marketplace, at best on another planet, so that all of my stock ideas would not be smothered.

I should stop whining. There are occasional dashes for freedom as with lithium and cobalt right now, and something nice appears to be happening for Bombardier. What ought to have been the obvious has happened. The nasty crusher move by Boeing in the spirit of American protectionism though seemingly under international plane making principles has backfired as Airbus moves in on the Quebec planemaker. There will now be a future outside the United States for a Canadian plane that puts a real gap in the range. One should hope the brave Delta Airlines will not be the loser. They should change their head office to somewhere in the Beauce.

Regarding the market's future: I have written quite heavily on blockchain in the next issue of our newsletter and I have reached the conclusion that it will extend the vitality of the software age and allow the globally-warming world to survive. That should be good for globally warming the economy.

TOP PICKS

SAVARIA CORPORATION (SIS.TO)
Building stairlifts to the skies! A little-known specialist in bringing mobility to the elderly and others in need, Savaria was started up in 1979 but has been getting a big push since 1989, when Marcel Bourassa bought it for $200,000 on the stairway to an estimated $187 million in sales this year.

PATRIOT ONE TECHNOLOGIES (PAT.V)
Covert, camera-free, behind-the-wall-radar, quietly scanning the scene for weaponry that a little later might have been installed in the Mandalay Grand. Production is the next step rather than finding clients as these are already lined up by the John le Carre-type team behind the new venture.

COHBAR (COBu.V)
Just to give viewers something they have never heard of. This one emerges as a Californian biotech pioneer looking for remedies for fatty liver conditions. It is under the guidance of two eminent Israel-originated scientists and others who are computer/technology age and corporate development guys who go back some 30 years and have a very strong investor following through all of that time.
 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
SIS Y Y Y
PAT Y Y Y
COBu Y Y Y

PAST PICKS:  DECEMBER 14, 2016

KNIGHT THERAPEUTICS (GUD.TO)

  • Then: $9.92
  • Now: $8.58
  • Return: -13.50%
  • Total return: -13.50%

SPIN MASTER (TOY.TO)

  • Then: $34.34
  • Now: $50.42
  • Return: 46.82%
  • Total return: 46.82%

NORTHERN DYNASTY MINERALS (NDM.TO)

  • Then: $2.18
  • Now: $2.46
  • Return: 12.84%
  • Total return: 12.84%

TOTAL RETURN AVERAGE: 15.38%
 

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

FUND PROFILE
Smedley Special Opportunities Fund
Performance as of: Sept. 30, 2017

1 Month: 5.2%
1 Year: 3.5%
3 Years: 4.3%

*no benchmark
**after fees
***no dividends paid to reinvest

TOP HOLDINGS AND WEIGHTINGS

  1. Premium Brands Holdings: 7.9%
  2. Morguard Corp.: 5.9%
  3. OTC Markets Group: 5.2%
  4. Spin Master: 5.0%
  5. The Middleby Corporation: 4.0%


WEBSITE: www.mmainvestments.com