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September-10-19

BNN Bloomberg Market Call - Stephen Takacsy's Top Picks: Sept. 10, 2019

After rebounding strongly this year as fears of an impending recession faded and central banks cut interest rates, equity markets have starting getting volatile again as the U.S.-China trade war drags out and corporations start feeling the impact. Large caps have become extremely expensive as a result of passive ETF investing to the detriment of small- and mid-cap stocks which have gotten even cheaper. Michael Burry of The Big Short fame recently called this phenomenon an index bubble and he’s investing heavily in small-cap value stocks. We also see many good long-term opportunities in the neglected and mispriced Canadian small- and mid-cap sector at valuations well below private market values. IPOs such as Uber priced at ridiculously high valuations signal a market top for money-losing tech stocks, which are now starting to deflate, with the WeWork IPO valuation to be priced nearly 50 per cent lower than the last private equity round.

Watch the interview with Stephen here