Paul Kornfeld, President at SIACharts joins us for an comprehensive update featuring SIACharts' insights - we talked about relative strength rankings and how they can guide your investment decisions globally. Small-cap stocks in the US may be lower ranked compared to their large-cap counterparts, but Canadian small-cap stocks are showing promise. We also discussed the movement in energy markets – they've been on the decline but set for gains, while alternatives have been gaining momentum. And fixed income? While it hasn't shown much improvement, it's waiting for that bounce back when interest rates start dropping. Stay away from underperforming areas, follow the analysis, and keep an eye out for sector opportunities in Canada and the US. And, we even explored potential investment opportunities in Mexico, and India. These countries are aligning with western interests, less vulnerable to China's influence, and have charts showing clear breakouts.

Timestamped Highlights:

[00:03:24] We discuss discuss market performance, interest rates, inflation.

[00:10:48] Market recovering, room for growth, market breadth.

[00:15:17] Mega-cap tech stocks dominate market returns. Breath problem persists. Financial recovery underway. Transportation sector improves. Sector flows signal concerns. July historically positive, but caution for August-September.

[00:26:48] Seasonality varies across different market areas. Building an ensemble of indicators is important. Market could be overbought and a bit exuberant. Consider tightening risk levels and taking profits. Summer seasonality may present challenges.

[00:30:02] Expectations for Q4 earnings are changing, with certain sectors predicted to have higher earnings. Information technology remains strong, while utilities have surprisingly high expectations.

[00:36:00] Stocks lagging, utilities messy, no clear trends

[00:44:11] Rankings show US outperforming Canada due to sector composition.

[00:46:50] Global, Europe, international, US Small Cap, Canadian Small Cap, energy markets, alternatives, North American Equity, emerging markets, fixed income, bond valuations, underperformance, sector analysis

[00:53:07] Real estate market booming in Calgary.

[00:56:58] Price expected to pause at resistance level. Support at 125. Potential move down 1%. Resistance at 139. Range between 128 to 138. Short-term outlook weakened. Not bullish for USD.

[01:03:10] US has performed well, Nasdaq has potential.

[01:09:15] Point figure chart eliminates short-term noise. Candlestick chart has more noise. Point figure chart shows value in different time periods. Visuals help identify upside and levels. Long-term view is important. Russell 2000 chart is noisier with a smaller range.

[01:13:06] International markets have potential, particularly Argentina, Mexico, and India. Emerging markets may catch up with developed markets.

[01:20:33] Security mindset challenges, breakout opportunities, orderly uptrend. Reassuring narrative: supply chain shift to aligned countries. Risk management and accumulation strategies. Pay attention to new highs in portfolio.

[01:36:42] Summarizing the text in 6 words: Simplified commodity strategy with low volatility.

[01:40:41] Increased dispersion across asset classes creates opportunities.

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Where to find Paul Kornfeld and SIACharts:

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Paul Kornfeld on Linkedin

SIACharts.com

SIACharts on Twitter

SIACharts on Linkedin

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Where to find the Raise Your Average crew:

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ReSolve Asset Management

ReSolve Asset Management Blog

Mike Philbrick on Linkedin

Rodrigo Gordillo on Linkedin

Adam Butler on Linkedin

Pierre Daillie on Linkedin

Joseph Lamanna on Linkedin

AdvisorAnalyst.com

Meketa Investment Group, a consulting company with a rich history, wants to make the complicated language of investing easier for everyone.

In this episode Jason Josephiac and Ryan Lobdell of Meketa Investment Group discuss the educational paper they released this year that tries to clear up much of this confusion.

They note that calling something a "hedge fund" is a bit like saying "sports" without saying which sport you mean - which could be anything from football to car racing (think football ≠ car racing). Just like in sports, it's important to have a well-rounded team with different strengths, and Meketa's Josephiac and Lobdell want to help investors do this with their investments.

Our conversation delves into how the best teams have both a strong attack (offense) and a strong defense. It's the same with investing. If your investments are all attacking (basically going after growth), you might be taking on more risk than you think and leaving yourself open (to being attacked) on the defense side. This might mean you're not set up as well as you could be to consistently do well. They also point out that some programs that are supposed to protect you (like playing defense in sports) might not really be doing that job well.

We discuss all of the accessible investment tools and strategies an investor have at the ready to build a championship level portfolio.

Thank you for listening.

Ryan Lobdell on Linkedin

Jason Josepiac on Linkedin

Read the whitepaper: Risk Mitigating Strategies (RMS) Framework

Recorded June 23, 2023 - Recorded June 23, 2023 - In this conversation, Pierre Daillie talks with Hugh Hendry, Founder, Eclectica Macro, a.k.a The Acid Capitalist, about the current financial landscape. They discuss topics such as the debt ceiling deal, the fear of supply, the rise of tech stocks, the appeal of long duration treasuries, and the deficiency of demand caused by China's oversupply. They also touch on the impact of Xi Jinping's policies and the posturing between China and the US. Overall, the conversation highlights the potential risks and opportunities in the global financial system. In this conversation, Hugh Hendry discusses the wealth destruction caused by the flat stock market and the growing debt problem with China. He highlights the symbiotic relationship between the Communist Party of China and Wall Street, as well as the conflict of interest in US capital markets. Hendry emphasizes the importance of trend in trading and shares his investment strategy, including the allocation of assets such as stocks, treasuries, and Bitcoin. He also discusses the potential opportunities in long bonds and the glitch at Boeing, and a trade in Apple.

• The fear of a synchronized global recession and the potential impact on the financial markets.
• The appeal of long duration treasuries as a safe haven asset in a potentially weakening economy.
• The concentration of market gains in a few mega cap tech stocks and the potential risks of a market correction.
• The impact of China's oversupply on global markets and the deficiency of demand caused by their trade surplus. The stock market is flat, causing wealth destruction.
• There is a symbiotic relationship between the Communist Party of China and Wall Street.
• US capital markets have a conflict of interest that prevents them from addressing the real market problems.
• Trend is crucial in trading and asset allocation.

[00:00] Introduction and Setting the Stage

[02:31] Debt Ceiling Deal and Liquidity Concerns

[03:44] The Fear of Supply and Risk Aversion

[05:29] The Rise of Tech Stocks and Riskless Securities

[07:02] The Appeal of Long Duration Treasuries

[07:36] Inflation and Real Rates

[09:36] Mean Reversion and Treasuries

[11:44] The Market's Dependence on Mega Cap Tech Stocks

[13:29] The Hated Rally and Missed Opportunities

[14:38] The Belief System and Valuation of Stocks

[16:09] The Coiled Spring and Potential Correction

[19:45] Debt Ceiling and the Chinese Economy

[20:34] Mutually Assured Destruction and Debt Ceiling

[24:35] The Deficiency of Demand and Chinese Oversupply

[29:18] The Impact of Xi Jinping's Policies

[37:57] China's Wealth and Posturing

[39:21] The Wealth Destruction

[40:35] The Real Problem with China

[41:39] The Symbiotic Relationship between China and Wall Street

[42:43] The Monetary Policy of the US

[43:50] The Conflict of Interest in Capital Markets

[44:45] The Search for Equilibrium

[46:33] Investment Strategy: Quadratic Expression

[47:52] The Role of Cash in Asset Allocation

[49:52] The Potential of Bitcoin

[51:39] The Relative Sizes of Gold and Bitcoin

[55:26] The Correlation between Bitcoin and NASDAQ

[57:19] The Importance of Trend in Trading

[58:47] The Decline of Hedge Funds

[59:23] The Glaring Opportunity in Long Bonds

[01:02:24] A Parallel with 2003

[01:03:39] The Conflict of Agendas

[01:06:22] The Glitch at Boeing

[01:11:27] The Most Glaring Opportunity

[01:13:49] Where to Find Hugh Hendry

The Magnificent Seven Stocks:

• Hendry notes that in every major bear market, certain stocks, referred to as the "Magnificent Seven," are perceived as being independent of broader market trends. These include companies like Nvidia and AMD, considered less economically sensitive within equity allocations.
• He draws parallels between the valuation of these stocks and Bitcoin, suggesting that their market value is more influenced by belief systems than traditional financial metrics, similar to how art is valued.
• Hendry discusses the valuation of the U.S. stock market, highlighting its size relative to the GDP and expressing skepticism about overly optimistic market projections.
• He mentions a cautious investment approach, allocating about 15% of his portfolio to these specific stocks, emphasizing the importance of following market trends in his investment decisions.

On US Treasury Bonds:

• Hendry addresses concerns about the U.S. Treasury issuing a large amount of bonds and its impact on prices.
• He draws parallels with the 2008 financial crisis, noting the importance of confidence in collateral, which often includes U.S. Treasury bonds.
• Hendry observes a mean reversion in Treasury prices, suggesting that current trading levels are relatively rare and could present buying opportunities.

On China:

• Hendry discusses the probability of a confrontation between China and Taiwan, expressing concerns about the increasing likelihood of such an event.
• He critiques China's economic growth, labeling it as 'fake growth' and pointing out that despite the appearance of progress, real wealth creation has been lacking.
• Hendry also touches on China's role in global trade and economic imbalances, particularly how it redistributes wealth within its economy and buys financial assets in the United States.
• We discuss the symbiotic relationship between the Communist Party of China and Wall Street, suggesting both have prospered in the current environment. As a result, there is no desire on Wall Street for the was the US manages its Capital Account.

On Bitcoin:

• He talks about the changing correlation between Bitcoin and NASDAQ, suggesting that such correlations can be misleading.
• Hendry expresses interest in investing in Bitcoin, particularly as its value had significantly decreased.
• He discusses Bitcoin's potential for growth, considering its market size relative to the larger segment it belongs to.
• Hendry likens Bitcoin's valuation to a belief system, similar to how art is valued.

Copyright © AdvisorAnalyst.com

In this episode we welcome Peter Bowen and Michelle Munro from Fidelity Investments Canada, two leading minds in the field, to discuss their insights and discussing the findings from the recent 2023 Fidelity Retirement Report.

Today's financial climate is more complex than ever. The cost of living continues to rise, and market volatility seems like the new norm. Yet, amidst all of these challenges, Canadians are maintaining an optimistic outlook towards retirement, thanks in part to sound financial planning and advice.

Fidelity Investments Canada' 2023 Fidelity Retirement Report, now in its 18th iteration, is a vital resource for financial advisors and investors alike. It aims to shed light on current retirement trends and offer strategies for both preparing for and living during retirement.

The report discusses a wide range of influencing factors, including inflation, housing costs, interest rates, and, of course, market volatility. All of these elements play significant roles in how we plan and strategize for our retirement years.

Peter is Vice President of Tax and Retirement Research and Michelle is Director of Tax and Retirement Research at Fidelity Investments Canada.

Thank you for listening. Don't miss what Peter and Michelle have to say about how we can all better equip ourselves for the financial realities of retirement, no matter what changes the market throws our way.

Read the 2023 Fidelity Retirement Report

Copyright © AdvisorAnalyst.com

In this episode, BMO Global Asset Management's Jeffrey Shell and Lillian Ferndriger join us to discuss newly accessible opportunities in private market assets. Jeffrey is Head of Alternatives, Commercial ESG and Innovation from BMO Global Asset Management. And Lillian is Director of Alternatives Distribution at BMO Global Asset Management.

We delve into the realm of private market investing, now a more widely accessible and vital instrument for portfolio diversification that promises attractive risk adjusted returns.

These markets offer an entrance into asset classes and strategies that were previously largely inaccessible territory in the public domain. Moreover, the defining features of private markets, their risk return profiles stand as a powerful key to unlock the full potential of a private wealth portfolio.

A look back in time reveals the compelling performance of private markets as they have consistently outshone public markets becoming a beacon of wealth accumulation and differentiated return stream. In recent times, this asset class has been winning hearts transitioning from its longstanding institutional clientele to captivate high net worth individuals, the segment that's been growing the fastest.

Now we're witnessing an exciting shift, often referred to as the democratization of access. This transformation marks a significant stride for the wealth management industry as it throws open the doors to a broad suite of previously inaccessible specialized strategies within private equity, private debt, real estate infrastructure, and other real assets.

The allure of reduced minimum tickets, enhanced transparency in reporting and lower fees adds to the appeal of these markets. But perhaps the most enticing advantage of this democratization is the boon it provides to private wealth. It serves as the final puzzle piece in portfolio construction, enabling clients to harness and all-encompassing asset allocation in private market sub strategies.

This allows for portfolio diversification, enhanced returns, volatility reduction, and crucially a shield against inflation. Today we're gonna delve deeper into these fascinating dynamics of private market investing. Thank you for listening.

Jeffrey Shell on Linkedin

Lillian Ferndriger on Linkedin

More on BMO Partners Group Private Markets Fund.

In this episode, Cole Smead, CEO & Portfolio Manager at Smead Capital Management, which oversees in excess of $5-billion AUM, joins us to discuss markets, the current investment climate, investing, and his firms 8 criteria investing philosophy. Our conversation begins with Smead discussing how he and firm work to uncover underloved, and underfollowed investment opportunities à la Charlie Munger, Peter Lynch and Warren Buffett. We then get into a discussion about the significant differences between value factor investing and what Smead does in its long term investing strategy, both in the US and Internationally. Though Smead's investment strategy is go-anywhere, their current investment darling opportunity is in the energy and commodity complex, where they have uncovered what can only be described as generational opportunities, something Smead has gotten right in the 15 years since William Smead, Cole's father founded the firm, following a long career in the industry, investing on behalf of other firms.

Thank you for listening. Smead has an encyclopedic knowledge of both the fundamental and quantitative aspects of investing, so it made for a lot for an enthralling discussion on markets, value investing, making money, avoiding losses through exceptional views on risk management.

[00:02:18] Investment discipline includes 8 criteria developed by Bill Smead reflecting great investors, concentrated portfolios of 25-30 securities, and low turnover. It is a negative art based on eliminating things rather than finding things that fit, and markets change over time.

[00:14:47] Various investors needed to outperform by 40% to beat the index at some point. Volatility is unpredictable and there is no ability to price momentum. Understanding individual investment values is unique and cannot be commonly attached to a group.

[00:21:27] This text discusses the Jevons paradox and the relationship between technological innovation and energy consumption, arguing that as technology advances, energy consumption increases. The author also emphasizes the importance of having a framework for understanding an unknown future and the impact of energy consumption on economic growth in different parts of the world.

[00:23:53] "We've never used less energy doing all these great things in human society with all the ingenuity and all the innovation and all the technology available to us and Devin's really you know his the paradox he he created really pushes back on the scarcity of supply argument as well as the um lack of demand argument because we always have more and more and more."

[00:26:47] Investing in renewable energy and solar is necessary due to high energy needs. Market is picking winners and losers, but the need for more of everything is present. Lithium batteries are a great technology but require a lot of energy consumption and deplete metals. Combustion engine paired with electric motor is a feasible hybrid model.

[00:36:33] The fear of repercussions for owning certain investments causes portfolio managers to allocate capital based on what is profitable and to avoid "bad commodities." This is leading to a lack of competition and oligopolies in certain markets. Taxing these investments could make them acceptable across society.

[00:41:05] "There are those who want to invest in funds that invest in oil and those who don't correct? To your point it appears to be becoming binary where you have  a cohort of investors saying oh no no i don't want fossil fuels in my portfolio and then that's actually creating this huge inefficiency."

[00:44:05] The NBA has evolved to favor the three-point shot due to its efficiency, with players opting to shoot from beyond the arc rather than take shots from closer to the basket. Similarly, in investing, easy money strategies like the S&P 500 may no longer be the most rewarding, with riskier investments like commodity-driven businesses and those that align with ESG frameworks offering better returns.

[01:01:06] Bear market rally may be misleading, as companies' revenue growth decline due to inflation. Market participants are uncertain about their investments. Potential opportunities in commodity and cyclical businesses, but overall caution is advised.

[01:06:48] The next decade will be tough and require perseverance. It will be challenging for all investors and necessary to diversify and stay educated.

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Where to find Cole Smead and Smead Capital Management

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Cole Smead on Linkedin

Smead Capital Management Blog - Advice Blog

Smead Capital A Book With Legs Podcast

Seeking strategies to capitalize on the current market conditions? In this episode, featuring Paul Kornfeld, President of SIACharts, we discuss the utility of a framework to cope with fluctuating markets. We delve into the significance of technical analysis amidst zero interest rates and undervalued fundamentals over the past decade, along with the challenges of risk management during market shifts, such as the current climate of inflation and rising rates.

Kornfeld provides an overview of current market conditions, underscoring cautious optimism and a bullish stance on international markets. He also introduces new SIACharts' developments, emphasizing the importance of chart analysis, particularly point and figure charting.

He explains SIACharts system, which performs billions of calculations daily, employs point and figure comparison charting to examine the supply and demand dynamics of various asset classes. The system's rankings, based on longer-term trends, are not designed for day trading but to provide forward insights into stocks, ETFs, mutual funds, asset classes, sectors, and model portfolios.

The key takeaway is the essential role of tools like SIACharts in offering immediate and ongoing guidance to navigate markets. Using charting analysis to highlight investment opportunities, it liberates advisors from daily analysis rigors. SIACharts aids in identifying top investment prospects and offers risk management tools to minimize drawdowns and enhance the total capture ratio.

Thank you for listening!

Importance of having a framework to navigate changing market conditions [00:00:15]

Importance of charting analysis and point and figure charting [00:02:05] The usefulness of charting analysis and point and figure charting

Shift in market leadership [00:08:04] The speakers discuss the importance of having an exit plan and tools to adjust one's narrative.

The winter of discontentment [00:10:31] Paul Kornfeld talks about the quarterly outlook and recap, called "The Winter of Discontentment."

Concentrated Market [00:17:41] Discussion on the current market conditions, including the concentration of the market and the performance of underlying stocks.

Asset Allocation and Risk Management [00:18:30] Importance of having a framework to navigate changing market conditions.

Asset Class Rankings [00:23:17]

Point and Figure Comparison Charts [00:24:09] Explanation of the methodology behind the rankings.

Identifying Long-Term Trends [00:26:31] Importance of longer-term trends in the market and how the rankings help advisors make informed decisions for their clients.

European stocks and international opportunities [00:30:56] The speakers discuss the surprising performance of (surprise) European stocks despite the ongoing war and energy vulnerability.

ETF country heat map tool [00:33:17] Paul Kornfeld introduces the new ETF country heat map tool, which visually shows the performance of different countries and sectors over timeframes.

Following the money [00:38:04] The speakers discuss the importance of following the money and tracking money flows

Avoiding hitting bottoms [00:39:27] Importance of avoiding dead money in the portfolio and staying out of trouble.

Sector analysis [00:40:23] Using charting analysis to visually see the money flowing in and out of markets and the importance of sector analysis.

Short-term overbought/oversold [00:43:06] Understanding short-term overbought/oversold sectors, portfolio weighting and timing.

Using the Reports Tactically [00:48:28] Paul Kornfeld encourages advisors to use the reports tactically as a confirmation tool for allocation decisions.

Staying Away from Banking [00:49:24] Paul Kornfeld provides an example of how the reports e.g. helped advisors avoid sectors like banking, which has been red since December and has fallen by 18% over the last quarter.

Finding Opportunities in the Market [00:50:54] Paul Kornfeld discusses using a top-down approach and combining sectors to find the best names.

Eliminating Guesswork with Relative Strength [00:52:53] We discuss how using relative strength eliminates guesswork and biases when deciding where to invest.

Saving time in volatile markets [00:56:51]

Reservations about technical analysis [00:59:25] Paul Kornfeld addresses two reservations about technical analysis.

Using SIA Charts to empower advisors [01:05:13] Paul Kornfeld discusses how SIA Charts can empower advisors.

(One of) SIA Charts' Most Valuable Feature [01:08:59] Paul Kornfeld discusses the most valuable feature of SIA Charts.

Risk Management and Analytics [01:10:34] SIA Charts' biggest value add is risk management, which is not talked about enough.

Simplifying analysis for advisors [01:16:12]

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Paul Kornfeld on Linkedin

SIACharts.com

SIACharts on Twitter

SIACharts on Linkedin

Cole Smead, CEO & Portfolio Manager at Smead Capital Management joins us for a fascinating conversation. "Investing is not just about buying stocks and hoping they go up in value. It requires strategic thinking, planning, and a willingness to learn about niche industries," says Smead.

In this new podcast episode, Smead discusses the importance of seeking out profitable opportunities by investing in industries (the energy sector is their current focus) that other investors are not playing. He calls this "mafia investing," and believes that this strategy can lead to high returns and the possibility of becoming "insanely wealthy."

Smead instead chooses to be one among a choice of ten shrewd investors, rather than one among a million average investors.

He cites the example of the oil tanker market, where high steel prices have led to a shortage of supply and higher cash rates for those still in operation. He also notes that there are opportunities to become billionaires in commodity businesses that may not be popular, such as the coal business.

Smead emphasizes the need for active investors to earn their profits through the learning process and by studying successful capital allocators and billionaires. He recommends the book "The King of Oil" by Daniel Amman, to listeners, which, among others, intensified his interest in commodities.

To clarify, Smead Capital Management are 'go anywhere' investors, but one of areas that has become the current focus of their long term strategy is the energy sector.

Overall, Smead's investment philosophy emphasizes the importance of strategic thinking, planning, and a willingness to learn about niche industries. By seeking out profitable opportunities in these industries, investors can potentially achieve high returns and become "insanely wealthy."

This was a fascinating conversation. Buckle up and thank you for listening.

Background and Investment Philosophy [00:01:54] Cole Smead discusses the genesis of Smead Capital Management and his investment philosophy, including the eight criteria used to find investment opportunities.

Starting in the Investment Business [00:02:30] Cole Smead talks about how his father's legacy and teachings inspired him to get into the investment business.

Investing in stocks [00:05:16] Cole Smead talks about his early interest in investing in stocks and how it drove him to pursue a career in the investment business.

Psychology of markets [00:06:40] Smead shares his experience of the late 1990s and how it left a huge impression of the psychology of markets and how damaging they can be.

Disagreement with markets [00:08:05] Smead discusses the huge rewards of being in disagreement with markets at times with businesses that produce good economics and how people forget about those ideals.

Bear Market Rallies [00:10:21] Speaker 1 discusses the nature of bear market rallies and how they can frustrate investors.

Top 10 Market Caps by Decade [00:11:49] Speaker 1 talks about how the top 10 market caps by decade have historically underperformed the S&P 500, and how this affects investment probabilities.

Active Investing [00:14:28] Pierre and Cole discuss the negative sentiment towards active investing in recent years and how macro and fundamental factors have been overlooked.

Active Investing is Dead? [00:15:29] Discussion on the dispersion of returns within the index and the belief that active investing is dead.

Flexibility of Investing [00:17:03] Importance of being flexible in investing and not limiting oneself to certain industries or sectors.

Sticking to Investment Philosophy [00:20:18] The history of Smead Capital Management and their investment philosophy of active management and concentration.

Importance of Reading [00:22:52] Cole Smead and Pierre Daillie discuss the importance of reading and how it inspires their work.

The Jevons Paradox [00:24:08] Cole Smead explains the Jevons Paradox and how it relates to energy efficiency and consumption.

Efficiency and Energy Usage [00:25:42] Cole Smead discusses how technological efficiency does not necessarily lead to a decrease in energy usage, using the example of LED light bulbs and the laser. In fact, it has tended to lead to maximum use of efficiency - i.e. energy enables more technology and more technology unlocks demand for more energy, and so on.

Energy usage and economic growth [00:26:36] Discussion on the relationship between energy usage and economic growth, and the potential consequences of going back to lower levels of economic growth.

Electricity usage and technology infrastructure [00:28:58] The potential shortfall in electricity usage versus growth of technology infrastructure, and the risks of having too little energy.

Germany's last nuclear reactor [00:32:29] Germany's closure of its last nuclear reactor and the implications of relying on different sources of electricity.

Nuclear vs Oil and Gas [00:34:19] Comparison between nuclear and oil and gas as the most economic forms of energy, and the geopolitical risks of nuclear energy.

Renewable Energy [00:37:15] Discussion about the economic return of $3 trillion spent globally on renewables, the least concentrated form of energy being solar, and the concentrated form of energy being gasoline.

Electric vs Combustion Engines [00:38:54] Cole Smead discusses the benefits and risks of electric and combustion engines, and predicts a hybrid world for cars.

Continued Energy Shortages [00:40:20] Cole Smead and Eric Al discuss the inventory shortfalls and the need for more energy, warning against governments' calls for less investment.

Long-Term Holdings [00:40:57] Cole Smead shares the story behind his key long-term holdings, including the importance of paying attention to great capital allocators and the value of longer duration assets in the oil and gas industry.

Long-dated asset production [00:44:12] Cole Smead discusses the importance of long-dated asset production and the potential for consolidation in the oil and gas industry.

Capital allocation [00:44:54] Smead explains the importance of capital allocation in the oil and gas industry and the benefits of buying back stocks.

Investing as a liberal art [00:47:29] Smead and Daillie discuss the importance of learning and education in investing, and how it is the last liberal art.

Interest and Passion in Investing [00:49:21] Cole and Pierre discuss the importance of being interested and passionate about investing, as it requires a significant investment of time.

Underinvestment in Energy [00:50:35] Cole and Pierre talk about the underinvestment in energy over the past 10 years, leading to shortages in new production and the need for significant catch-up investment.

Consolidation in the Energy Industry [00:54:08] The speakers discuss the potential for consolidation in the energy industry, with many small Canadian companies having less than $3 billion in market cap, and the benefits of acquiring existing assets versus developing new ones.

Fractured dollar system [00:55:39] Cole discusses how the post-pandemic and post-Ukraine world has created niche opportunities to make money in the oil and gas business, such as the oil tanker market.

Studying successful investors [00:56:21] Cole emphasizes the importance of studying successful investors and capital caterers, such as John Fredericks and Harold Ham in the oil and gas business, and Jay Gould, the railroad baron.

Investing in coal [00:57:40] Cole talks about how he learned about the coal business and how there are good economics in the coal business, which has created billionaires in the last 10 years.

Consolidation and Active Investing [00:59:37] Cole Smead discusses how consolidation feeds into the moat idea and how active investors should seek to earn profits.

Investment Philosophy: Commodity Businesses [01:00:17] Smead explains how he uses a negative art approach to investing in commodity businesses, particularly in the coal industry.

Tech and Glencore's Bid for Teck [01:04:28] Pierre Daillie asks for Cole Smead's thoughts on Glencore's bid for Tech and how it seeks to take advantage of ESG.

The Genesis of Interest in Commodities [01:04:54] Cole Smead discusses his interest in commodities and how reading the book "The King of Oil" intensified his interest.

The Dual Commodity World [01:05:44] Smead explains the dual commodity world and how companies like Tech Resources are trying to detach themselves from coal to focus on copper.

Glencore's Coal Business [01:08:38] Smead discusses Glencore's coal business and how they plan to spin it off, while still owning it and paying out 100% of the income or free cash flow of the business.

Extracting High Returns [01:10:15] Cole Smead talks about his investment philosophy of extracting high returns in places where other people don't want to invest.

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Where to find Cole Smead and Smead Capital Management

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Cole Smead on Linkedin

Smead Capital Management Blog

Smead Capital A Book With Legs Podcast

Copyright © AdvisorAnalyst.com

In this episode, Mark Noble, Executive Vice President and Head of ETF Strategy at Horizons ETFs, joins us. We dive deep into the benefits of yield producing strategies, fixed income strategies, and the focus of our conversation – covered call ETFs. We dive into the current market volatility and how rising interest rates and inflation are impacting market dynamics, and explore how investors can shift some of their matched equity exposures in this period of economic and market uncertainty to enhance portfolio yield, mitigate risk, discuss their tax advantages, and the idea that these strategies enable you to do all of the above without having to alter core fixed income allocations, or investment policy.

Mark discusses the launch of Canada's first ultra-short-term Canadian and US T-bill ETFs, discussing why these weren't previously available. Mark also offers his insights on alternative assets, diversifying strategies, and the role of covered calls as a timely and productive equity alternative strategy.

Our conversations turns to Noble's take on the interesting macroeconomic shifts in the gold market and the impact of the financial crisis and Fed's balance sheet expansion.

Finally, we wrap up with a discussion on the optimal conditions for implementing covered call strategies, especially in our current uncertain market environment. Tune in for a deep dive into ETFs, market volatility, and timely strategic investment tactics.

Yield Producing Asset Strategies - Why Now? [00:00:00] Introduction

Launch of Canada's First Ultra-Short-Term Canadian and US T-Bill ETFs [00:02:13] Mark Noble talks about the launch of Canada's first ultra-short-term Canadian and US T-bill ETFs by Horizons ETFs, and why there were no T-bill ETFs on the market before.

Current Market Conditions and Volatility [00:03:11] Mark Noble and the host discuss the current market conditions, volatility, and the shift in market dynamics due to rising interest rates, inflation, and investors seeking strategies to outpace inflation and traditional GICs.

Short-term T-bills as a cash alternative [00:08:33] Discussion on the attractiveness of short-term T-bills as a cash alternative and a low-risk way to generate income on the bond portfolio.

Market conditions and volatility [00:10:09] Talk about the current market conditions, volatility, and the shift in market dynamics.

Covered call ETFs [00:14:25] The rise of covered call ETFs as a mainstream investment strategy, their risk-return perspective, and how they can enhance the yield of an overall portfolio.

Covered Call Strategy and Premiums [00:17:29] Mark Noble explains how demographic shifts and rising interest rates have increased premiums for covered call strategies, which aim to generate monthly income while maintaining capital appreciation.

Tax Treatment of Covered Call Income [00:22:17] Mark Noble discusses the tax treatment of covered call income in Canada, which is viewed as hedging and generally taxed as capital gain. However, there are nuances to this treatment, and in some scenarios, the income may be taxed as return of capital.

Alternative Assets and Diversifying Strategies [00:25:22] Pierre and Mark Noble discuss covered call strategies as alternative assets and diversifying strategies, particularly when writing calls at or near the money. They also touch on the importance of considering the total return and the potential impact on the underlying securities.

Covered Call ETFs and Equity Alternative [00:25:50] Mark Noble explains the risk-return profile of covered call ETFs and how they can be an equity alternative.

Gold Market and Macro Shifts [00:27:27] Mark Noble discusses the macroeconomic shift in the gold market and the central bank gold buying trend.

Financial Crisis Contagion and Fed's Balance Sheet [00:33:22] Mark Noble talks about the similarities between the current situation and the financial crisis, and the Fed's balance sheet expansion due to the bailout.

Covered Call Strategies Case Wrap-up [00:38:11] Mark Noble and the host discuss the benefits of covered call strategies in the current market conditions, with interest rate volatility and uncertainty around inflation creating an advantage for call writers.

Optimal Conditions for Covered Calls [00:39:32] The host and Mark Noble talk about how covered call strategies have always been available, but the current market conditions make them more optimal than ever before.

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Mark Noble on Linkedin

In this episode, we explore the concept of diversification by way of capital-efficient investing, through a strategy coined 'Return Stacking' and how historically, institutions have traditionally had more access to sophisticated strategies than retail investors and financial advisors. That has changed in the last 2-3 years with the advent of the introduction of ETF wrapped strategies now available to retail investors.

We discuss why diversity and prudent use of implicit leverage are important factors in investing, and how adding leverage to an asset that is already expected to outperform cash can increase excess expected returns. We touched on the performance of a 60/40 portfolio and why adding something to the portfolio that will diversify and have positive expected returns may be beneficial, particularly if you don't have to trade down or out of core model portfolio allocations.

We also discuss the 2022 market environment as an example of a growth down/inflation up environment and how using capital efficient ETFs can allow investors to introduce a diversifying secondary return stream and enhance returns, without introducing tracking error risks.

The episode also covered the lack of building block solutions in the ETF space, led Newfound Research to partner with Resolve to bring several ETFs to market. The ETFs, called "Return Stacked," were launched in February 2022, offering diverse combinations of stocks, bonds, and alternative trading strategies as building blocks for diversified portfolios.

Both Newfound Research and ReSolve Asset Management understand deeply the importance of education, which is why we prioritize engaging with the advisor community and providing accessible content.

We encourage you to reach out to us via LinkedIn, Twitter, or our websites (Newfound.com, InvestReSolve.com and Returnstacked.com) with any questions or comments.

We hope this episode provided valuable insights and tools to help you make informed investment decisions.

Thank you for tuning in, and we look forward to bringing you more unique perspectives in future episodes.

[00:07:24] "ETFs: Key Driver in Evolution of Investment Strategies"

[00:14:10] The Capital Efficiency Strategies of Institutions Explained

[00:24:15] "Unlocking Capital Efficiency through Alternative Investments"

[00:35:39] "Exploring how investments respond to economic environments"

[00:38:34] "Managed Futures and Systematic Macro: Diversification Done Right"

[00:43:47] Newfound and ReSolve Launches ETF Building Blocks for Advisors.

[00:48:37] The Pros and Cons of Leverage in Investing

[00:59:51] "Understanding Hurdle Rates and Leveraging Investments"

[01:04:05] "Efficient markets drive fair compensation for risk"

[01:16:37] "Maximizing Advisor Allocation with Passive Investments"

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Where to find Corey Hoffstein, Rodrigo Gordillo, ReturnStackedETFs.com

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Return Stacked ETFs

Newfound Research

ReSolve Asset Management

Corey Hoffstein on Linkedin

Corey Hoffstein on Twitter (@choffstein)

Rodrigo Gordillo on Twitter (@rodgordillop)

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Where to find the Raise Your Average crew:

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ReSolve Asset Management

ReSolve Asset Management Blog

Mike Philbrick on Linkedin

Rodrigo Gordillo on Linkedin

Adam Butler on Linkedin

Pierre Daillie on Linkedin

Joseph Lamanna on Linkedin

AdvisorAnalyst.com