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Compiling comments that experts make about stocks while on public TV.

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Joey Mack , Director, Fixed Income

ScotiaCapital


Date Signal Chart Symbol Company Opinion Price
2014-06-10 N/A Must be logged in to use chart A Commentary A Comment -- General Comments From an Expert

Bond Markets. Heading into this year, there was a pretty nice selloff. We saw US 10’s get up to 3%, and it was almost one of those year-end capitulation type trades. 2013 was obviously a bad year, and had negative returns. It’s very unlikely to have a repeat, so he was less negative. However, we have had a pretty nice rally, and are up almost 5% on the year in Canada already. Thinks the market got overdone. Everyone was calling for higher rates to happen for the last 5 years, so he has always stayed positioned to stay Short on ordinary credit. We had some bad weather and economic data has not been as strong as most were hoping for, whether it was overseas, China or Europe. US numbers have not been great, and there was a contraction in the 1st quarter. We are now at the point where we may slowly creep back up. The record lows right now are in Europe. German 10 year yields are at 1.3%, whereas the US hit that level back in mid-2012. He is probably back to where he was this time last year, where within your overall asset allocation you want fixed income to be at a minimum. For example, someone who is usually 60% equities and 40% bonds, they are probably down to 30% in bonds with the balance going to equities or elsewhere.


Price:
$0.020
Subject:
FIXED INCOME
Bias:
UNKNOWN
Owned:
_N/A
2014-06-10 N/A Must be logged in to use chart A Commentary A Comment -- General Comments From an Expert

Real Return Bonds for 2026? To go that far out is very dangerous right now. A Real Return Bond pays you a guaranteed rate of return in past dollars. A 2021 bond would have been issued in 1991, and it will pay you in 1991 dollars, which is worth about $2 today. The problem with Real Return Bonds is that rates have been depressed by the Federal Reserves quantitative easing program, and Canada has followed suit. As rates are expected to rise over the next several years, it is not about rising inflation expectations, but about rising real yields, which means these are really going to get hurt. Either stay Short and look to getting some credit, or floating rate notes will give you the same sort of inflation protection that a Real Return Bonds does.


Price:
$0.020
Subject:
FIXED INCOME
Bias:
UNKNOWN
Owned:
_N/A
2014-06-10 N/A Must be logged in to use chart A Commentary A Comment -- General Comments From an Expert

Earning 2% on bonds versus 7% on a stock? It’s all about the guarantee. With a Canada government bond yielding 2%, you are guaranteed to get that 2%. On the stock, 7% is not just on the dividend stream but what are you going to be able to sell the stock for when you need the money. There is a lot more risk and volatility on stocks. There is always a place for both stocks and bonds.


Price:
$0.020
Subject:
FIXED INCOME
Bias:
UNKNOWN
Owned:
_N/A
2014-06-10 N/A Must be logged in to use chart A Commentary A Comment -- General Comments From an Expert

With the potential onset of inflation and higher interest rates, what could the impact be on high risk, high-yield corporate bonds, and is there a tipping point where the risk is going to be far greater and not worth it? We are getting close to that tipping point. The real story with the higher yield and high risk bonds is the yield pickup over government bonds. Historically that has been as low as 3% extra to as high as 12% extra. Right now we are at around 4%-4.5% extra. Relatively expensive. When that does start to turn, this asset class will sell off just as hard as equities will. Be very selective of the bonds you are buying or hire a good manager that can do that for you.


Price:
$0.020
Subject:
FIXED INCOME
Bias:
UNKNOWN
Owned:
_N/A
2014-06-10 N/A Must be logged in to use chart A Commentary A Comment -- General Comments From an Expert

How would you structure a bond ladder with $100,000 in a registered account, including types and maturities of the bonds? On an RRSP ladder you are going out every year to 10 years minimum, because the RRSP is a long-term strategy. He would exclusively go into strip coupons with a 50-50 mix between provincials and corporates for the extra yield.


Price:
$0.020
Subject:
FIXED INCOME
Bias:
UNKNOWN
Owned:
_N/A
2014-06-10 PAST TOP PICK Must be logged in to use chart A Commentary A Comment -- General Comments From an Expert

(A Top Pick Feb 24/14. Up 3.39%.) Ville de Montreal 3.5% Sept 1, 2023. Had a pretty good run alongside what you have seen in bond markets overall. Municipal space is still very cheap compared to investment grade corporates.


Price:
$0.020
Subject:
FIXED INCOME
Bias:
UNKNOWN
Owned:
Yes
2014-06-10 N/A Must be logged in to use chart A Commentary A Comment -- General Comments From an Expert

Target Bond ETFs (RQE-T) or (RQF-T)? He is not a fan of bond ETFs. They are targeted to pay out most of the capital, on the maturity date that you put in on day 1. Bond funds are a great one-stop shop giving you exposure to the bond market without having to do a lot of legwork. If you have more than $10,000, there is no reason why you shouldn’t buy bonds directly. You can take out a lot of the excess manager fees. By their nature, bond funds have to sit on cash where you don’t have to. Also, these are pretty concentrated portfolios, and there is no reason you couldn’t replicate it on your own.


Price:
$0.020
Subject:
FIXED INCOME
Bias:
UNKNOWN
Owned:
_N/A
2014-06-10 N/A Must be logged in to use chart A Commentary A Comment -- General Comments From an Expert

Convertible debentures? When you look at the convertible market, especially in Canada, you are buying the debt of unrated small cap companies. Pretty risky market. Doesn’t think there are enough names out there that you would want to buy.


Price:
$0.020
Subject:
FIXED INCOME
Bias:
UNKNOWN
Owned:
_N/A
2014-06-10 N/A Must be logged in to use chart A Commentary A Comment -- General Comments From an Expert

Preferred shares. Can the issuer convert Fixed-Reset Preferreds to Fixed-Floating Rate Preferreds after 5 years at the rate reset time? Every 5 years, with most of the preferreds but not all, as an investor you have the option of taking a new five-year fixed rate or going to a floating rate for 5 years. Interestingly the spread that you get on the preferreds versus Canada bonds is preset at the time of issue.


Price:
$0.020
Subject:
FIXED INCOME
Bias:
UNKNOWN
Owned:
_N/A
2014-06-10 N/A Must be logged in to use chart A Commentary A Comment -- General Comments From an Expert

Laddered GICs? With government bonds, you can cash them in any time, but with GICs, you are locked in and can’t get your money out. Because of that, GICs do give you a better yield. GICs are constrained to just financials, and you have to trade every 5 years. With the bond market you can go a lot further to maturity, and you can create a much better long-term strategy.


Price:
$0.020
Subject:
FIXED INCOME
Bias:
UNKNOWN
Owned:
_N/A
2014-06-10 PAST TOP PICK Must be logged in to use chart ATD.A-T Alimentation Couche-Tard (A)

(A Top Pick Feb 24/14. Up 4.09%.) Nov 1, 2019 3.19%. Was trading at a discount just 4 months ago, but is now trading at a nice premium. Still decent to look at, but your yield is getting below 3% right now.


Price:
$30.000
Subject:
FIXED INCOME
Bias:
UNKNOWN
Owned:
Yes
2014-06-10 HOLD Must be logged in to use chart BBD.B-T Bombardier Inc (B)

7.35% Dec 2026 bond? This is a speculative credit. The company is rated BB, the higher end of the junk bond market, but it is still junk. Company has a lot of leverage. Have done a great job of refinancing in the current marketplace, but this is going to be volatile because it is long. However, you are getting fairly compensated for the risk you are taking


Price:
$3.850
Subject:
FIXED INCOME
Bias:
UNKNOWN
Owned:
Unknown
2014-06-10 TOP PICK Must be logged in to use chart ENB-T Enbridge

(ENB.PR.D-T) 4% Series D Preferreds. This company has a whole bunch of 4% dividends and a whole bunch of 4.4% dividends, because of where credit spreads have gone. This one will pay you 4% until 2017, when it will reset at +2.37% over the then 5 year Canada. He can see a dividend increase when it comes up for reset.


Price:
$50.650
Subject:
FIXED INCOME
Bias:
UNKNOWN
Owned:
No
2014-06-10 TOP PICK Must be logged in to use chart PWF-T Power Financial Corp

(PWF.PR.D-T) 5.5% Series D Preferred. This is a perpetual issue, so there is no rate reset. Effectively with this, you are getting a huge pick-up over what you would get in the long-term bond market right now.


Price:
$33.590
Subject:
FIXED INCOME
Bias:
UNKNOWN
Owned:
No
2014-06-10 TOP PICK Must be logged in to use chart RY-T Royal Bank

(RY.PR.I-T). 3.52% Series AJ Preferreds. This has gone down while the rest of the bond market has gone up. This is symptomatic of the preferred share market overall. This is a Rate Reset, and just had a reset in February at 3.52% for the next 5 years. Because of a change in bank regulations, there is a very high likelihood that this will be taken out in 2019, which makes it a five-year investment.


Price:
$75.230
Subject:
FIXED INCOME
Bias:
UNKNOWN
Owned:
No
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