This quarter is looking to make records for low activity on my part. I’ve been attempting to scan the markets for various opportunities but have been coming up with blanks.
In general, most of the debt markets out there are trading out of proportion for risk. Blow-ups on unsecured debt like Toys R Us continue to be a reminder that something can go from 95 cents to 30 in short order.
The fossil fuel industry (specifically natural gas production) appear to have headwinds, and despite rumblings of a recovery in the crude oil market, I still do not see anything on the equity side that appears to warrant action at this point.
Retail has also been killed, but in many cases there is a lot of substance to the story – there is a generational shift occurring for physical shopping, similar to the digitization of newspaper media.
Indeed, it appears that two industries have been dominating the mind-share for investment capital: Marijuana and Blockchain technologies, neither of which I have any interest. I note with amusement that Village Farms (TSX: VFF) appears to be attracting disproportionate interest due to its announcement that it is preparing to grow marijuana in its greenhouses (presumably in British Columbia and not Texas!). I have no idea how far up the market can take these stocks (similar to Bitcoin itself), but it can always be father than one can believe is possible, let alone rational.
The good news is that when a few sectors dominate the allocation of capital, it usually means that other sectors do not receive the same attention and these can be scoured for opportunities.
Despite my antagonistic view on the general marketplace, most of my cash is deployed in cash-parking vessels and are earning incremental yields while I wait for higher risk/reward opportunities. Although I do not think a market crash is imminent, if one did occur, I would not mind.
Any thoughts on ENT.DB ?
Although they re-did their credit facility, they’re paying quite a bit more for it and they are much closer to a debt wall than I would prefer in relation to their market price… they are not the only exchange traded debentures I’d consider like this.