ENR Asset Management, Inc.
1 Westmount Square, Suite 380 H3Z2P9 Westmount, QC, Canada

Bitcoin isn't a Reliable Store of Wealth but it's a Great Speculation An asset that crashes 80% one year (2018) and then skyrockets 185% two years (2020) later, isn't a reliable store of wealth. You need a pack of Tums to own Bitcoin -- it's incredibly volatile. Though I recognize and appreciate how digital currency is changing how we transfer funds while reducing SWIFT fees, I still don't think most professionals in finance can fully explain what IS Bitcoin. Myself included.... I'm also going to argue Bitcoin is in a Bubble. One Bitcoin today at $23,248 is worth more than a Honda Civic, 510 barrels of oil and a down-payment on a house in most affordable residential markets. That's a bubble. Another challenge facing Bitcoin is eventual government regulation. It's only a matter of time until Bitcoin is regulated or banned. Bitcoin has a finite supply; it's also possible we'll see more Bitcoin hit the market, aggravating prices. Supply and demand anomalies, volatility tied to Bitcoin and the boom and bust cycles suggest a speculative vehicle that should not represent a significant holding in portfolios, unlike gold -- a monetary hedge and reliable store of value for 5,000 years. Yeah, gold might be boring compared to Bitcoin, but it'll still be here tomorrow. Bitcoin? I'm not so sure.

The Mother of Speculative Frenzies With global debt now approaching a record $277 trillion (latest IIF data) and speculative asset bubbles permeating almost everywhere amid super low interest rates, future returns are likely to be the equivalent of bread crumbs. Central banks, which have essentially nationalized our credit markets since 2009 and most recently last spring amid Covid,, are the culprits; though emergency backstops were necessary in March 2020 and in late 2008, c...entral banks can't turn off the monetary spigots. The resultant barrage of 'easy money' has ballooned deficits, spurred speculation with borrowed money and created asset bubbles that ultimately will deflate. We are literally living in a dangerous environment of musical chairs. Don't complain when this party ends as warnings abound: S&P 500 short interest continues to fall to new lows; the CBOE Puts/Calls Ratio hit a multi-year low last week; S&P 500 Index market cap-to-GDP ratio sits at new highs and debit balances in customers' securities margin accounts are at fresh highs. Over the last 20 days, an average of more than 20 million call contracts have traded each day across the U.S. -- the highest ever., according to Bloomberg and Mohammed El-Erian. Enjoy the good times...

Stocks are still our preferred asset class in late 2020. In our view, interest rates dictate the primary bullish case for equities amid the lowest rates since the 1950s. Because bond yields have fallen so much in the past few years, many companies already offer dividend yields that exceed those of ultrasafe government bonds. As of October 23, about 70% of S&P 500 companies had dividend yields above the ten-year T-bond yield compared with nearly 48% at the end of last year, ac...cording to Dow Jones Market Data. The Fed’s asset purchases, prolonged low interest rates and the possibility of a dollar bear market should help to support stocks and other risk assets into 2021. Stick to large-cap multinationals. A divided government in the United States might resemble the markets of the 1990s when President Clinton (a Democrat) and Congress (Republican) stifled legislation. The Democrats appear to have less support in this election and will probably have a lower majority in the House of Representatives while the GOP controls the Senate. The S&P 500 Index recorded its best decade in history in the 1990s.

Disreputable Oil Offers Best Upside Ahead of Covid-19 Vaccine in 2021; CLR Insider Buys $111 Million Stake There's not much to like about crude oil. Long in a secular bear market, oil and gas are probably the most hated commodities among investors and environmentalists. Indeed, as ESG grows more prominent in institutional portfolios, companies and pension funds are ditching oil and gas stocks in favor of renewables. Though that's a smart long-term bet on the direction of ener...gy consumption, it's a not a value trade with renewables commanding high stock prices and expensive multiples. Contrarians should take a look at Continental Resources (NYSE-CLR) and Halliburton Co. (NYSE-HAL). CLR's stock price has crashed 83% from its ten-year high and HAL's is down 80%. M&A activity is accelerating this fall in the energy patch as a bear market in margins forces consolidation. Continental's CEO, Harold Hamm, has purchased $111 million of shares since March and my guess is he might want to take CLR private. Insiders own 80% of the company. I'm not an oil bull long-term. But as the world goes overboard for tech stocks, it might be a time to buy energy ahead of a recovery in 2021. For an aggressive portion of a growth portfolio, energy is appealing in late 2020.