Paul Bagnell and Robert Tétrault
Paul: We’re back with our guest-host Rob Tétrault Portfolio Manager at National Bank Financial. Based in Winnipeg but we’re lucky enough to have him right here in Toronto. Today you think crude oil is going to $60 U.S. rail. That would be a good thing the Canadian stock market. What do you think get’s crude to sixty this year?
Rob: I think crude gets to sixty in some sort of negotiation/pact that will and I feel has to happen. I think we’ve seen a lot of inventories go up in the last while, and that’s somewhat worrisome for some investors. But we’ve been in that range between fifty and fifty-five and you could see around this fantastic chart your that your wonderful team has put up. And last time I was on the show here, oil had fell to forty-seven, forty-eight and I was of the “you’re going to get back to that trading range. I think once we break on a technical bases through that fifty-five the next trading range is naturally fifty-five to sixty. If we see the Opec agreement if we see it kind of come to fruition and I think we will, that will provide range to move from fifty-five to sixty. Long-term I’m bullish on oil, and short-term I’m mildly bullish.
Paul: What about stock markets generally driven of course by the election of Donald Trump over the past five or six months but cooling off recently as it looks like some of the bloom coming off the Trump rose.
Rob: You know what I’m excited about? I’m excited about the fact that there are people predicting the end of the world and there are people predicting you know, we’ve got another ten years in the bull cycle. I love seeing that. I love seeing the opinion on both sides because that means the market will not surprise us. You know in 2008, in 87, in every significant correction that we’ve seen, every opinion was on one side of the ledger and that’s a bullish opinion. So right now we’re seeing some on both sides. The market will not surprise us. We might see a small correction but I don’t think we’re going to see anything drastic like some people are saying. I anticipate a kind of moderate to good year in terms of gains in the TSX somewhere in the 6…call it 5 to 10 range, which will be fantastic for portfolios once you put the dividend in there, and the valuation I think are somewhat reasonable given what we’re seeing in forward innings.
Paul: What kind of waving do you have in equities compared to historical levels? Are you at the high end of your range on equities?
Rob: Well, fixed income is almost impossible these days so yes, I am at the high end of equities and we’re always looking at alternatives, and whether that’s equity linked GICs in the fixed income space or even mixed mortgage investment corps or whatever that may be. The fixed income space is very, very tough right now, even the new crafts are good, so whatever we can get away from the 2% ten year bond, right?
Paul: And cash position, where are you in terms of your cash holdings right now?
Rob: I don’t believe in holding cash very much. I’m a firm believer in being fully invested. If we do a tactical shift we go from one sector to another, so, very low on the cash side.
Paul: Canadian stocks versus U.S. stocks where do you see most opportunity?
Rob: I like the Canadian sector right now. Specifically we’ve kind of trailed a bit this year. I think there’s an opportunity oil does come back. I think we could see a nice rally in Canada. I think we’ve been lagging, and I think eventually some movement in Canada.
Paul: Thanks a lot for coming by. Great to have you on the show.
Rob: Thanks for having me, guys.