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

MARKET OUTLOOK

For some time, I had indicated that our fair market (intrinsic) value for the S&P 500 was 3,150 points, the same valuation top of the market in the dot-com era. Even that temporarily failed to stop the advance under the pressure of massive stimulus and a president bound for re-election, but only for a moment. The supporting values weren’t there and the market was wide open for a setback of significant proportions, as I have said on this program for some time. It has been a perfect storm, with the COVID-19 virus terrifying everyone and leading to a global semi-shutdown while oil prices collapsed to top everything off.

This will be the first bear market and economic recession (or possibly worse) in the era of social media. I don't know how long the fallout of this event will last, but the economy was already in a situation where it could not easily withstand a shock. The knock-on effects of a major slowdown will be serious. How long we will be in lockdown mode is anyone’s guess.

One concern I have is that, strangely enough, many of the value stocks such as the banks have been massacred, while many of the high-tech and growth stocks have held up much better than I would have suspected. I do wonder if there is another shoe to drop.

TOP PICKS

CASH

ENBRIDGE (ENB TSX)

BARRICK GOLD (ABX TSX)

PAST PICKS: FEB. 11, 2019

BANK OF NOVA SCOTIA (BNS TSX)

• Then: $74.48
• Now: $52.66
• Return: -29%
• Total return: -26%

PHILLIPS 66 (PSX NYSE)

• Then: $94.23
• Now: $48.27
• Return: -49%
• Total return: -46%

VANECK VECTORS JR. GOLD MINERS ETF (GDXJ NASD)

• Then: $31.84
• Now: $26.68
• Return: -16%
• Total return: -16%

Total return average: -29%

TWITTER: @svaInsights
WEBSITE: strategicanalysis.ca