Tuesday, October 26, 2010

Gordon Pape, Toronto Money Show 2010

Gordon Pape is the Editor and Publisher of The Canada Report. He had a speech called “2011 and Beyond – The Outlook for the Canadian Markets”. Gordon Pape thinks that there will be lots of uncertainty. We had a fast rebound and then the economy decelerated. We have the worse budget deficit in our history. He thinks that the loonie will rise strongly, but gold will be even stronger. He thinks that the TSX will outperform the S&P500 again and that the Trust wind down will be profitable.

The Canadian advantages he talked about were our strong currency and the world’s strongest banking system. We also have relative fiscal strength and resource wealth. We also have a stock market that is holding its own in a tough market. Our disadvantages would be the strong loonie, our trade deficit and our heavy dependence on resources. We also have a stock market concentrated in banking and resources.

We may have to contend with a weak US economy and the loonie at a premium, but inflation will be low and interest rates will be stable. He expects that the TSX gains will be in the low double digits in 2011. He expects that gold will go above $1,500 an ounce. Pape thinks our banks are going to raise their dividends in 2011 and their stock prices will then go up. Our Income Trusts will become corporations, their stock prices will go up, and their dividends (or distributions) will go down. There will be a growing demand for high yield securities. He thinks that our resource stock will do well, but that the rising loonie will be bad for non-resource exporters.

Pape expects that the TSX outlook is better than the US and European markets. He feels we should add some US stocks to our portfolios, but we should avoid US government bonds. He thinks that emerging markets will be attractive, but very volatile.

He recommended some stock for 2011. The first one was Agnico-Eagle Mines (TSX-AEM) because they operate in stable countries and have good reserves. The next one he recommended was Teck Resources (TSX-TCK.B) because it is highly diversity and they just recently updated their senior debt. The last one he recommended was Manulife Financial (TSX-MFC). He said it is a moderate risk with good long-term capital gain potential. It is a good solid company that is trading below its book value. He expects this company to double within the next 12 months.

Gordon Page mentioned he had a web site called Building Wealth.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.

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