Outlook for November 2019

Earnings season is in full swing and it makes for interesting times. Well run companies are posting near-record top line growth, while the mediocre ones continue the “miss-by-a-penny or beat-by-a-penny” earnings game.

Interesting moves on the central banks front as well in the past few days. The US Fed cut interest rates again and hinted that this will be the end of the rate cut cycle — but the bond market is calling their bluff sending yields further down post announcement. I will be keeping my eye on the bond market for further developments there.

The Bank of Canada held steady hinting at rate cuts coming early next year if not earlier. I just might hold onto my Canadian bond funds longer since the Canadian rates are going nowhere but down from here.

Outlook for November 2019

Work on portfolio management is never complete when it comes to investing. I continue to tweak and look to add to my high conviction ideas while looking for opportunities to trim others. You can track my recent buys and sales here.

I intend to remain focused on high-quality companies & high-conviction investment ideas. In my hunt for deep value, I have ended up with some weak companies that are cluttering my portfolio. I am slowly going through the cleanup activity and expect to have this completed before the end of the year.

As of Oct 31, 2019 our portfolio is diversified as shown below.

For the first time in over 2 years, my cash position has dropped below the 10% mark. I have been deploying more and more capital into the markets over the past few months and will probably slow down as the cash position dwindles.

Looking for investment ideas? Check out this Top Investment Picks for 2019, where 30+ investors present their top pick and a reason to invest in those securities.

I have also started putting together a series of posts for Investment Ideas, where I explore different ways of looking at companies and finding inspiration for further research.

What are your thoughts on the points mentioned above? Do you have any specific thoughts on the markets and looking at anything interesting? Are there any stocks that you believe is a strong conviction buy here? Share with a comment below.

Full Disclosure: Our full list of holdings is available here.

4 thoughts on “Outlook for November 2019

  1. Jan Blanckaert says:

    i’m a Belgium pensioner and investing for some additional income en wealth for my kids and grandchildren .
    I recently looked at some Canadian preferred reset shares and read that they are misplaced versus US preferred and therefore invested invested in the following preferred reset shares :
    – ENB.PF.V and NPI.PR.C both bought recently under 18.50 C$ .Do you believe those are good income investment for the next coming years?
    – I also bought some VET shares after the quarterly results for 13,85 . They are high dividend paying and in danger of a dividend cut but I like the longterm potential and diversity of their investments and in the meantime get a good income while the shares may be a bit volatile
    -I also have order outstanding for E-split shares at 13,85 C$ but price is for the moment above so order is still outstanding . E-split seems to be good play on the potential of Enbridge while paying a decent dividend ( 8% ) .What do you think of such E-split type of shares , Seems like a alternative play in a small segment with some risks that I’m not totally familiar with but sometimes in this overvalued market we need to look at some alternatives .
    I can afford to take some risks soling I diversify and not overdo it as a % of my overall portfolio .
    I also have a full position in Enbridge shares as I believe this is a good company with long term good income potential

    • My understanding of preferred shares is pretty basic, so I dont really own any. I considered it when the interest rates were rising to own some via an ETF, but didnt get any. Dont they perform better when rates are rising? Again, my understanding of preferred and how to trade them is very basic — something I need to read and understand more before I can dip my toes into that area. Sorry, not much advise I can offer on this front.

      Enbridge is well run…should do you well for you over the long term.

      Best
      R2R

  2. JC says:

    I have no doubts that the Fed will continue to cut. At best they might be able to skip the next one, but they’ll be cutting again before they raise. Even worse is the not QE, QE, that they’ve been embarking on. The balance sheet is back up above $4 T with no signs of stopping. My long gold, via GDX and GDXJ shares and options, are loving it though. Culling the herd is something I want to do. There’s still some great companies that I want to add, but the portfolio is getting pretty unwieldy and many of my larger conviction businesses have pretty measly weightings. There’s at least 3 companies that I intend to drop probably before the end of the year and several more that I need to do some thinking on.

    • Good to own GDX and GDXJ during these times if you dont want to own individual names. I did see that the “Not QE” has resulted in balance sheet expansion over $4T already. Wonder how far it will climb over the coming quarters. I need to build on my high conviction ideas more — couple of them are only 1/2 positions and one is one of my smallest position right now.

      R2R

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