Sangoma Technologies Corp T.STC

Good Advice

[retiredcf]

COMMENT

A Commentary

01/12/2022 at 07:00pm

 

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Investing Mistakes: Too Much Focus on Macro Issues. This year has been a challenge for stock pickers because companies do not matter now. It is all about inflation, interest rates and geopolitical events. There are debt-free companies with high margins and growth rates in the 70-per-cent range, yet their stocks are half, or less, of what they were seven months ago. Everyone worries about the macro picture, and no one cares about the companies. But guess what? You own part of a company when you buy its stock. You don’t own gross domestic product. You don’t own inflation. You don’t own interest rates. You own a company. Many companies will continue to grow and thrive despite the bad economic headlines. Don’t forget what you actually own.

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Stockchase Insights

 

[Torontojay]

This is generally good advice for the long term investor. My strategy going into 2023 is to hold a larger cash position than I normally would to take advantage of any potential pullbacks. I'm going to begin buying stocks when I see the unemployment rise and real gdp begin to fall. How do I know the unemployment rate will rise? Well, Jerome Powell told everyone at the Jackson Hole meeting

[AlwaysLong683]

Economist David Rosenberg shares your bullishness on long bonds, though note he is talking US Markets, not Canadian, in the article. Quote from article: "I think the total return in the long bond is likely to be more than 20% of the next year. I don't think the stock market's making 20% in the next year." (Rosenberg said it was a "big mistake" not to buy long-dated

[Torontojay]

The Canadian 10 year savings bond doesn't even come close to matching the 10 year US treasury. As of Dec 2 the 10 year on the Canadian is 2.77%  If the 10-year on the Canadian drops to 2% then you're looking at annual returns of approximately 0.77% *10 =~ 7.7% annual return.  The US 10-year is at 3.6% and if interest rates come down to 2% then you're looking at

[CandyC]

but Powell said he's not even thinking about thinking about raising rates.  this  was shortly before he did the fastest rate increases in their history 

[Torontojay]

I'm not sure I understand. The next date for the Fed rate announcement is Dec 14th and they are likely to increase by 50 basis points. There is still a large gap between expected inflation and current rates across the yield curve.  I'm more interested in where the peak terminal rate will land at and for how long the actual pause will be. My guess is there is at least another 100

[AlwaysLong683]

I think what Candy was referring to was Powell's claim in the latter part of 2021 that inflation will be transitory and there's no need to increase interest rates. Then he did a 180 and started raising interest rates like crazy starting in early 2022 while admitting he was wrong about the transitory nature of this inflation and that it was indeed becoming a force that needed to be tamed by

[Tan4646]

with container traffic from China down 40% and rates down >80% to pre pandemic levels, would it seem plausible that the fed signal an earlier than expected pause on rate increases?  When looking at the latest job numbers, ,most gains were in the travel, leisure and social services and flat to decrease in manufacturing and retail.... The free money that was used to buy stuff during the lock

[Torontojay]

  Bringing inflation down requires interest rates to remain at restrictive levels. Typically this means the Fed Funds/Overnight rate to stay above expected inflation by at least 100 basis points. Increasing rates 25- 50 basis points above inflation would be your neutral rate territory.  I think at the next meeting, Tiff Macklem may do a 25 basis point hike and then it would be best