Ross Healy, chairman at Strategic Analysis Corporation and portfolio manager at MacNicol & Associates Asset Management
Focus: North American large caps

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MARKET OUTLOOK

If we look ahead for the next 12 months, the intrinsic value (or what we call the fair market value) of the S&P 500 is now about 3,000. That number was recently validated separately almost right on the nose by Bryon Wein’s company, Blackstone Group, so we're very comfortable with that as a maximum target for some time. We've also never experienced any time in the past 25 years that our FMV has been exceeded. Equaled earlier this year at the January peak, but never exceeded. On the downside, the S&P has found powerful support at what we call its mid-growth value, or two-and-a-half times adjusted book value, which currently sits at about 2,500. If the market fails to hold on any correction to that level, then you should look out below: something far worse is coming. Historically, this has been an extremely reliable support/resistance level for trading or investment purposes.

There's no point in hashing over all of the drivel that's coming out of Washington, worrying about whether NAFTA will or won't be eventually ratified, or if, as and when relations with China will be normalized. They both will be. Not to do so is to invite a catastrophe that no one wants. As North Korea and Europe have already showed, toss Trump a bone so he can declare victory from the heavens and let him walk away proud.

The elephant in the room is the U.S. debt problem, which is getting rapidly worse thanks to the unfortunately timed tax cuts. There's no point in discussing it as no one really wants to hear about it and that’s because no one knows what to do about it.

TOP PICKS

HOME CAPITAL GROUP (HCG.TO)

CANADIAN UTILITIES (CU.TO)

LAURENTIAN BANK (LB.TO)

PAST PICKS: OCT. 5, 2017

MANULIFE FINANCIAL (MFC.TO)

Manulife has been stuck range-bound currently by $23 on the bottom and $28 at the peak. Right now, it's close to its usual lows, and I would expect a move to $28, although the FMV has been rising very nicely and it should go higher.

• Then: $25.43
• Now: $24.02
• Return: -6%
• Total return: -3%

FORTIS (FTS.TO)

Fortis is one of four really cheap power utility stocks, which we like a lot. Their defensive countercyclical nature is very attractive (to me, at any rate), given the extreme valuation condition that the markets, notably, the S&P 500, are in.

• Then: $45.22
• Now: $42.16
• Return: -7%
• Total return: -4%

HOME CAPITAL GROUP (HCG.TO)

Home Capital appears to be breaking out technically on strong fundamentals and the hope that a dividend may appear at some time soon.

• Then: $13.82
• Now: $15.25
• Return: 10%
• Total return: 10%

Total return average: 1%

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