Donald Coxe

Re: Donald Coxe

Postby winston » Wed Feb 09, 2011 6:36 pm

Don Coxe – Investment Recommendations (February 2011)

1. Despite their recent run-ups, long-reserve-holding base metals stocks remain very attractive.

2. If Egypt’s crisis is peacefully resolved, reduce precious metals stock exposure in commodity stock portfolios but retain these stocks in general equity portfolios as risk-reducers. However, the other commodity classes have superior short-term fundamentals if the global economic recovery continues and the uneasy peace in the Mideast holds.

3. Do not sell the Australian iron ore and coal producers’ shares because of the Noahan events there. Their earnings are obviously taking a hit, but the prices of their products have been driven sharply higher, and that means those earnings setbacks will be swiftly recouped.

Besides, investors should have longer time horizons than what is needed to clean up after a flood. For investors who missed the big run-ups in those stocks, now is an excellent entry point.

4. Maintain a strong position within the agricultural sector, (assuming that you include the fertilizer stocks in that sector, rather than in your mining allocations). The Obama Administration remains impaled on fixation for ethanol, which means its minions in the Environmental Protection Administration will move forward in their plans to increase the ethanol allotments for gasoline blending.

At a time of a global food shock, to be increasing the demand for highly-subsidized ethanol is immoral public policy. However, it is assuredly good news for the leading agricultural stocks.

5. The euro’s recent strength is probably unsustainable. Company treasurers should be borrowing in euros and bond investors should be wary of euro exposures.

6. Bond portfolios’ durations should be near benchmark levels. The time for extending durations because of an increased chance of a double-dip recession in Europe and/or the US, would also be a time for loading up on gold.

http://www.scribd.com/doc/48002091/Don- ... age-020111
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Re: Donald Coxe

Postby winston » Fri Apr 29, 2011 9:16 pm

Don Coxe – Investment Recommendations (March 2011) by Prieur du Plessis

1. In global equity portfolios, cease underweighting Japan and move to above market weight, emphasizing the great global brands.

2. The fall of the Harper-led Conservative government in Ottawa is a reason for concern for global investors if a minority Liberal government relying on a coalition with the NDP or Bloc Quebecois were to take its place. The best outcome for investors – and for Canadians – would be a majority government.

3. The outbreak of revolutions across the south of the Mediterranean took investors’ minds off the problems on the northern shores, and the euro climbed from $1.30 to $1.42. However, the challenges facing the northern tier of the sea are far from resolved.

Underweight European financial institutions and euro-denominated debt in global portfolios. Emphasize exposure to Swiss francs and Canadian dollars.

4. Investors should prepare for the strong possibility that nearly all the good news from the Arab revolutions has already come. No one foresaw these dramatic developments. Overweight precious metals in commodity stock portfolios, and include exposure in all balanced portfolios.

5. Agricultural stocks remain the commodities group with the best balance of risk and reward among all the possible outcomes of the current crises in the Mediterranean region and the Arabian Peninsula. Even without the possible effects of global cooling, food and fuel inflation already besets most of the world. Perhaps the only strong argument against overweighting companies oriented toward global food production is that it is so obvious.

6. Triple-digit oil prices have returned, and pricing of oil production is becoming near-chaotic, with widening spreads in prices between sweet and sour crudes – and the day-to-day pricing of political risks. The US has been remarkably insulated from the worst of the price increases, due largely to its imports of Canadian oil sands products.

The latte liberals and their friends who have sought to block US imports of “dirty Canadian oil” have suddenly become remarkably silent. Investors should overweight the oil sands companies and, for now, continue to emphasize oil and coal in North American energy portfolios. We believe that industrial clients should be hedging against the remote risk of catastrophe in the Mideast through purchase of far out-of-the money calls on crude.

7. The US government’s Export-Import Bank is heavily invested in low-cost lending to Brazilian companies developing the deepest offshore oilfields in the Hemisphere. Obama exulted in this “cooperation” in his trip to Brazil last week. At some point, he may have to explain why he remains so obdurate against drilling deepwater off US shores, and yet is willing to let American taxpayers guarantee loans to develop Brazilian oil at much deeper depths than in the Gulf.

With an election campaign now only a year away, we believe he will, within months, proclaim a cease-fire and issue licenses for big new projects. Overweight offshore companies that do not face continued litigation risk from Macondo.

8. Cicero lamented, “The people’s memory is short” before he was garroted. The nuclear power industry wishes he were right. Memories of Three Mile Island and Chernobyl have been remarkably durable, but they were finally fading when Fukushima imploded. Continue to avoid uranium stocks.

9. The global economic outlook which looked so promising in January has darkened. Food and fuel inflation are combining to shrink or erase consumers’ discretionary incomes. The eurozone’s internal fault lines are re-opening; big banks in Europe and the US are once again paying bonuses and dividends, but the question whether the mix of diseases gnawing at the tissues in their portfolios is merely debilitating or is potentially fatal is being questioned anew.

Investors aren’t fooled: the BKX and KRE have been sharply underperforming, although financial firms accounted for nearly one-third of total US corporate profits in Q4. If the Arab revolution story turns from triumph to tragedy, much of the investor optimism that fueled strong equity markets outside Japan could fade fast.

10. Base metals stand to benefit near-term from the rebuilding of Japan, but thereafter we expect scrap to compete with virgin metal as the recovery continues. Weakening economic prospects from emerging economies beset with food and fuel inflation and, at the margin, from the OECD, will trim previously-expected strong demand for copper and steel. Underweight base metal stocks.

11. Just because Stagflation of Seventies proportions is only a remote possibility doesn’t mean that meaningful stagflation-style damage won’t be inflicted on bond portfolios – particularly those denominated in currencies of grossly overindebted countries. We think the risk of a real stagflationary bond bear has now arrived, and have therefore reduced recommended bond durations. Unless the stagflation risk recedes, we shall be reducing those durations further in coming months. So should you.


Source: www.investentpostcards.com
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Re: Donald Coxe

Postby winston » Mon May 30, 2011 6:41 pm

Don Coxe – Investment Recommendations (May 2011)


1. Reduce overall equity exposures, particularly to non-Canadian financial stocks.

2. Maintain commodity stock weightings in balanced portfolios, because their value proposition is clearer than that of most groups.

3. Hold high exposure to gold and gold stocks—the bad news investments.

The protection they offer is going to be more valuable in coming months. It has been a long time since the stocks outperformed bullion but that could be coming: in the Seventies, it took years for the stocks to catch up. Silver and silver stocks are for those of speculative bent.

4. Maintain strong weighting in energy stocks, emphasizing oil and coal producers. Canada’s oil sands producers were in the winners’ circle after the Canadian elections, in which the electors voted for financial stability, good management, and economic growth. The oil sands companies are Canada’s biggest private sector capital spenders, and their strategic value to North America is becoming clearer to all but the idiotic.

5. It is no secret to our clients that we have been big boosters of agricultural stocks since 2006. The investment case for this sector is stronger than ever, and the problems for the economically-sensitive commodity sectors make food—at the farm gate—a particularly appetizing investment theme. Underweight exposure to packers and processors, who may have great difficulty in passing along their raw food costs.

6. The Canadian dollar should hold its own against the greenback as that beaten-down currency rallies from its lows, although we think it will have trouble outperforming. The US dollar can be expected to benefit from its comparison with the bleak situations in the heavyweight yen and eurozones.

Canadian bonds have appeal for investors located anywhere, now that the election risks are out of the way. Canada’s constitution asserts that the nation is dedicated to “Peace, Order and Good Government.” This is a rather modest variant of the US promise of “Life, Liberty and the Pursuit of Happiness.” From a risk-averse bond investor’s standpoint, those Canadian goals are commendable and reassuring. That the loonie doesn’t soar relative to the greenback should be a boon to much of the Canadian economy.

7. Scale back exposure to Treasurys in favor of quality corporate bonds. Avoid joining the mad rush to junk bonds.

8. The LinkedIn offering orgasm was not a sign of a market heading higher. When a stock can sell at more than 100 times the company’s revenues, it is a sign that there’s too much money around, and speculators are desperate to find something that works.


http://www.scribd.com/doc/56565511/Basi ... ay-26-2011
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Re: Donald Coxe

Postby stilicon » Sat Aug 13, 2011 12:47 am

indirect link to August (dated 28/7/11) recommendations : http://www.advisoranalyst.com/glablog/2011/08/09/don-coxe-investment-recommendations-august-2011/
In summary :

1. In debt portfolios, put emphasis on high quality corporate bond issues.

2. Keep adding high quality Canadian assets, such as banks and bonds.

3. Keep an emphasis on exposure to gold and gold equities.

4. Maintain overweight allocations to global agricutural stocks, in particular the machinery and fertilizer companies.

5. Be cautious about Brazil.


6. Oil and Coal remain favourable within the Energy group. The purchase of a shale gas producer at a high premium, by BHP, is an indication that long-term investors could be slowly creeping back into the leading natural gas companies with attractive ‘long-duration’ reserves.

7. The shares of large base metals companies with long-duration reserves are cheap, however they will most likely become cheaper over the next year or so. In the base metals stocks, remain underweight.

8. Reported earnings from U.S. multinationals will continue see a boost as the U.S. dollar declines in value. Despite the earnings and corporate excellence ‘mirage,’ U.S. equity investors can enjoy them during a period when earnings are harder to come by.

9. Raise exposure in Japan to Overweight. Share of Japanese companies have completed their ‘Triple Waterfall’ crash, and are showing indications of a ‘renaissance.’
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Re: Donald Coxe

Postby winston » Thu Sep 22, 2011 7:45 pm

Don Coxe – Investment Recommendations (September 2011)
by Prieur du Plessis

1. If possible within your investment guidelines, avoid European bank stocks.

2. Avoid investing in US banks that have dubious balance sheets, that give top executives big stock option deals, and that squander Bernanke-supplied funds in stock buybacks.

3. We recommend that investors hold their current positions in Canadian oil sands stocks, but exercise caution about new commitments.

4. Maintain heavy weighting in precious metals, emphasizing gold stocks.

5. Maintain heavy weighting in agricultural stocks.

6. Retain strong exposure to US oil producers operating on land.

7. Prices of copper and iron ore remain at levels that appear to rule out any global economic slowdown. Strikes and floods have sustained base metal prices—but only demand can keep them at these levels. We don’t see that rescue on the horizon. Underweight base metals.

8. Bond investors should be sure that they are earning yields commensurate with the risks they are almost forced to assume at a time of surreal interest rates.

9. The Canadian dollar is suddenly looking weak.

10. Bullet-proof dividend paying stocks with a record of sustained payout growth should be the core investment asset class for income-oriented investors, as long as central banks continue to suppress interest rates, and as long as the Deficient Frontier exists.

http://www.investmentpostcards.com/2011 ... mber-2011/
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Re: Donald Coxe

Postby winston » Sun Mar 25, 2012 5:28 pm

Don Coxe – Investment Recommendations (March 2012) By Prieur du Plessis

1. Income investing is here to stay in a deleveraging, slow-or-no growth world. Collapse of the CAPM means bond investors should run—not walk—away from government bonds and seek quality corporates—and find new equity-based income vehicles.

2. Emerging Markets stocks and bonds look relatively attractive. The vast oversupply of debt means economic growth in the industrial world will be, at best, modest. The relative scarcity of debt in the Emerging Economies means their growth rates relative to the First World will improve.

3. Go with growth—buy commodity stocks. Emerging Markets citizens spend more of their earnings on commodities than we do, and their demography is more favorable for economic growth than ours. A world in which EMs’ share of growth continues to increase is a world in which commodity prices will be strong relative to other prices.

4. Within the industrial commodity stock groups emphasize oil stocks over gas stocks, and emphasize copper stocks over aluminum stocks. As the Freeport McMoRan debacle shows, miners in Third World countries sometimes face worse risks than commodity price risks.

5. Record-low Treasury yields and record-high real fiscal deficits have combined to produce 2% economic growth. Those stimuli are unsustainable but they should sustain the Obama Presidency. He will have to deal with the problems in his second term, and that will mean much higher taxes—if not higher interest rates. US economic growth will be closer to Continental growth rates next year. Invest for dividends—not growth.

6. Gold’s yield is now roughly the same as T-Bills’. It was an excellent investment when T-Bills yielded 5%. Its relative value continues to improve, as economies struggle and governmental finances deteriorate. It belongs in all portfolios—either as bullion or stocks. Bullion has been better for a surprisingly long time. The next time gold is nearing $2,000, investors will take the stocks more seriously. Those with virtually no political risks are astonishingly cheap.

7. The really oily Canadian and US stocks are excellent value, particularly the oil sands companies. Oil stocks haven’t kept up with oil prices, mostly because of the drag from collapsing gas prices. Obama is losing big with voters on Keystone, and he may need to disappoint his deep-pocketed environmentalist backers who invest in government-backed windmills that slaughter birds and bats, and in government-backed, money-losing solar panels, and cars that catch fire. Naturally, they hate profitable pipelines that supply low-cost, reliable energy with near-zero impact on animal populations.

8. Grain prices remain strong, despite mostly good crops worldwide and a mild winter in the US corn belt. The agricultural sector has the best blend of profitability and economic variability in an uncertain world. It is also the sector that has the greatest offering of great global companies at modest cost. (The risk of crop disappointments due to Colony Collapse Disorder in apiaries continues—as does the absence of certainty about the cause of the annual destruction of at least one-third of the honeybee population.)

9. An Israeli attack on Iran need not lead to strangulation of Gulf oil flows—as long as Iran’s oil production facilities and the mullahs’ cash flows are left largely intact. The surprise could be that Israel launches a surgical strike, and Iran’s Hezbollah minions launch hundreds of rockets from Lebanon and Gaza, and oil prices spike—then fall back. In other words, investment programs should not, perhaps, be held hostage to Armageddon fears.

Source: Scribd, March 2012.


http://www.investmentpostcards.com/2012 ... pe+Town%29
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Re: Donald Coxe

Postby winston » Tue Oct 01, 2013 6:06 am

Why Don Coxe Expects Gold to Soar on Good Economic News

The standard wisdom on gold is that it does well in times of economic bad news such as in the 1970s, a period of stagflation and recessions, when the yellow metal rose from $35/oz to peak at $850/oz in 1980.

But this time, Don Coxe, a portfolio adviser to the BMO Asset Management, believes things are different. In this interview with The Gold Report, Coxe explains why gold will rise when the economy improves.

http://www.theaureport.com/pub/na/why-d ... nomic-news
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