Michael Smedley, executive vice president and chief investment officer at Morgan Meighen & Associates
FOCUS: Canadian equities

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MARKET OUTLOOK

Something astounding happened last week: a conference audience bigger than any I have seen on Bay Street in Toronto, in more than 30 years on the street. It meant that investment professionals, acting in herd format as they always do, had caught up with blockchain as “the new cannabis” for 2018, front and centre and of high velocity along with the Big C. It is my first time being able to forecast anything with certainty.

People thought blockchain was distant and they also did not try to understand it. By coincidence I kind of explained it in my December newsletter. It is now evolving so fast I shall have to follow-up in the January issue. As for the bulk of market, forecasts are fiction or fakes as usual. First thoughts: there could be a bit of rationalisation – not much – in the ETF factor, consolidation in some offerings and I note with some relief that The Globe & Mail Report on Business appears to have recognized ETFs as a bunch of indicators for sale listed on their own, and not mingled with the companies that they squeeze out of the stock lists. After all, the hugely owned ETFs could create us or destroy us in massive rallies or corrections never seen before, as they buy or sell the stocks on which they depend.

Apart from that, I sense that interest rates should still stay quite low and the great stock rally of the Trump era could go on. It will continue to be a preposterous time in politics, but there might be surprise wins. Trump and little rocket man stoking up the scare tactics and insults could bring them to the table for a mutual admiration session and a handshake that 10 years of American diplomatic warbling through intermediaries could never achieve. Kim could say, “This guy is for real. We might be in trouble for the first time." The revelation could be constructive. Either way, a lot of progress should continue to be generated among companies, and although we have experienced the best year ever, I am optimistic about picking stocks through 2018.

TOP PICKS

Michael Smedley's Top Picks

Michael Smedley, executive vice president and chief investment officer at Morgan Meighen & Associates, discusses his top picks: Jamieson Wellness, Sherritt International and Funko.

JAMIESON WELLNESS (JWEL.TO)

SHERRITT INTERNATIONAL (S.TO)

FUNKO (FNKO.O)

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
JWEL N N Y
S Y N Y
FNKO N N Y

PAST PICKS: MAY 26, 2017

Michael Smedley's Past Picks

Michael Smedley, executive vice president and chief investment officer at Morgan Meighen & Associates, discusses his past picks: BlackBerry, CCL Industries and BTL Group.

BLACKBERRY (BB.TO)
The lengthy overhaul, the reduction, and the software skills and directions suggest a reasonably progressive future is likely to ensue at low risk. It should continue to earn quite a lot of money, though it is not likely to be among the spectacular performers.

  • Then: $14.95
  • Now: $13.72
  • Return: -8.22%
  • Total return: -8.22%

CCL INDUSTRIES (CCL’b.TO)
CCL should continue to be a great long term hold for its strength in the labels business and its newer adoption as the leader in the growth of the nasty but sensible polymer banknote sector. 

  • Then: $62.19
  • Now: $59.35
  • Return: -4.57%
  • Total return: -4.03%

BTL GROUP (BTL.V)
BTL Group, a Canada and U.K. creation, is timely for review purposes. On the Venture exchange, it was the first publicly listed blockchain company I coud find and talk to, and it's up now since purchased by me and the Smedley Special Opportunities Fund last May when few knew of its existence. There are American peers that are larger but still not listed, and BTL has become the big market mover – not for earnings achievement but for completing the lengthy process of platform building, tuning up blockchain processing of trading and records and for just making sense. It is now into setting up a solid portfolio of clients.

  • Then: $4.65
  • Now: $11.37
  • Return: 144.51%
  • Total return: 144.51%

TOTAL RETURN AVERAGE: 44.08%

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
BB Y N Y
CCLb Y N Y
BTL Y N Y

FUND PROFILE
Smedley Special Opportunities Fund
Performance as of: November 30, 2017

1 Month: 2.4%
3 Months: 12.2%
1 Year: 13.3%
3 Years: 5.6%
5 Years: 12.7%

*After fees, no dividends paid to reinvest. No benchmark.

TOP HOLDINGS AND WEIGHTINGS

  1. Premium Brands Holdings: 7.9%
  2. Spin Master: 5.4%
  3. Morguard Corp.: 5.4%
  4. OTC Markets Group: 4.7%
  5. The Middleby Corporation: 4.1%

WEBSITE: www.mmainvestments.com