Ross Healy, chairman of Strategic Analysis Corporation
Focus: North American large caps

MARKET OUTLOOK

Although I had never seen a Christmas bear in all my time in the business, the year-end often sees the conclusion of one trend and the start of another. This year, this conclusion appears to have begun two weeks early.

As I had warned viewers repeatedly over the past three months, our short-term trading low for the S&P 500 was 2,530 – and it did get there—, but failing there, we would have a sell signal that targets roughly 20 per cent lower as a solid investible bottom (at twice book value, where the S&P also bottomed in 2002). I don’t have a sell confirmation from the Nasdaq yet at least, although historically once we get there the market tends to plunge abruptly. A lot of stocks are showing clear signs of heading lower, ranging from the FAANGs to the banks.

2019 will be a lot slower in terms of earnings growth (if any at all) and the analysts are sort of “shuffling” their estimates lower. No flashy downgrades, just a few pennies here and there. The upside is improving as the market falls, but there’s still not enough on which to base a solid, investment-quality advance.

TOP PICKS

IMPERIAL OIL (IMO.TO)

I’m looking to buy into Imperial at $32.25. It’s back at its lowest price-to-book value in 25 years.

ALAMOS GOLD (AGI.TO)

Bearish markets should be hedged with gold shares.

EMERA (EMA.TO)

Looking to buy into Emera at $40 as I think interest rates aren’t going up, especially in the longer term.

PAST PICKS: JAN. 19, 2018

YAMANA GOLD (YRI.TO)

• Then: $4.18
• Now: $3.37
• Return: -19%
• Total return: -19%

ENBRIDGE INCOME FUND (ENF.TO)
Acquired by Enbridge (ENB.TO) on Nov. 9, 2018.

• Then: $29.15
• Now: $31.88
• Return: 9%
• Total return: 17%

CIBC (CM.TO)

• Then: $122.53
• Now: $115.23
• Return: -6%
• Total return: -3%

Total return average: -2%

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