Live chat with hedge fund manager Steve Palmer

stock picks from hedge fund manager steve palmer

Hello everyone.

by Steve Palmer 4/12/2012 4:00:07 PM
Steve, just to start things off, let's get your view of the equity market right now. A second day of nice gains today. Was the recent sell-off a good buying opportunity?

by Darcy Keith 4/12/2012 4:03:08 PM
Yes, it was a great buying opportunity. we may see more volatility before going higher but a correction/consolidation like that was needed.

by Steve Palmer 4/12/2012 4:04:22 PM
My take is this months drop is just tax payment sell off, my concern is when the printing press runs out we will be looking at the dow below 6000, how could you read it any other way? BLS numbers are a pack of lies with constant later corrections, growth in the states is anemic 1-2%, salaries are limp, I am long gold and everyone else should be....

by mollycochon 4/12/2012 4:05:11 PM
Steve, any response to Molly's view?

by Darcy Keith 4/12/2012 4:05:35 PM
That is definitely not my view. the US economy has improved considerably over the past few months.

by Steve Palmer 4/12/2012 4:06:40 PM
What's your view on gold Steve? GFMS yesterday painted a rosy view, calling for a second half bounce back, with $2,000 a target for the next 12 months. Overly optimistic?

by Darcy Keith 4/12/2012 4:08:07 PM
GFMS always paints a rosy view. That is nothing new. Gold is the last place I am currently looking to make new investments. It has been underperforming now for months and I believe other commodities have greater upside.

by Steve Palmer 4/12/2012 4:09:22 PM
Gold will likely rise this year but it will lag other commodities.

by Steve Palmer 4/12/2012 4:10:00 PM
Here's a related question from Diana. Just to add to it, what commodities do you think will be the star performers?

by Darcy Keith 4/12/2012 4:10:05 PM
What do you think of the metals and mining sector, as this is usually the time when these perform well?

by Diana 4/12/2012 4:10:07 PM
I like the base metals. We currently have an overweight position in the AlphaNorth Growth Fund in this area.

by Steve Palmer 4/12/2012 4:10:55 PM
Mongolia is coming back on the map. What do you make of it? and what stocks would you recommend for jr resources?

by Jinn 4/12/2012 4:11:59 PM
We don't make stock specific recommendations typically. Mongolia is a higher risk jurisdiction in my view. Valuations need to reflect that.

by Steve Palmer 4/12/2012 4:13:19 PM
We have a couple comments questioning your bullish views.

by Darcy Keith 4/12/2012 4:14:44 PM
you think 1-2 % artificial growth in the form of corporate stock buy backs when inflation is 3% is "considerable" with all due respect that would seem very, dangerously bullish.

by mollycochon 4/12/2012 4:14:47 PM
How can anyone be bullish on stocks? The macro picture of deleveraging across europe /japan and finally the US over the next 10 years combined with the fact that we have hit peak earnings and the baby boomers are retiring - makes me a bear for 10-15 years....and...with bonds not having much room to run...not sure how we make any money in this environment for 10+ years

by Rob edited by Darcy Keith 4/12/2012 4:14:52 PM
Any comments in response Steve?

by Darcy Keith 4/12/2012 4:15:03 PM
That is correct that bonds are earning miniscule returns. At the end of the day it comes down to valuations. There are always problems/issues in the world....

by Steve Palmer 4/12/2012 4:16:31 PM
If you check the Wall Street Journal online you can go back 10-15 years and see that all the same issues were around then....US debt issues, Japanese bank insolvent etc....yet equities rallied

by Steve Palmer 4/12/2012 4:17:47 PM
Let's switch our focus now to RIM - and there's no shortage of questions flowing in on that topic! Just for starters Steve, what's your latest view on the stock? It was another lousy quarter and the stock is still flirting with multi-year lows. What can turn this thing around?

by Darcy Keith 4/12/2012 4:19:09 PM
Many people are waiting for the new BB10 phones later this year which should improve sales considerably. RIM added $600m cash in the Q and trades at 6.7x consensus earnings.

by Steve Palmer 4/12/2012 4:20:35 PM
what is the view on RIMM over the next 12 months? Is it more likely a buyout candidate than a growth story at this point?

by Inder 4/12/2012 4:20:53 PM
The smartphone market is still growing rapidly. Even if RIM is losing market share they can still grow. I believe RIM will be higher in 12 months. A take-out is also a possibility.

by Steve Palmer 4/12/2012 4:22:22 PM
Any buyers in particular that you think may launch a take-out? Microsoft was once again rumoured yesterday

by Darcy Keith 4/12/2012 4:23:14 PM
There have been rumours for a long time. It is always a possibility.

by Steve Palmer 4/12/2012 4:24:33 PM
RIMM's ecosystem & developer program are a disaster. Isn't that a concern as the winners in this space (GOOG, AAPL) are clearly measured more on software, interoperability, & apps than hardware design?

by skeptical 4/12/2012 4:24:43 PM
There are a lot of silly apps. Blackberry remains the best as a work tool for typing and security. I, personally would never consider switching just so I could play games.

by Steve Palmer 4/12/2012 4:26:22 PM
those of us that are long in rim, should we stay???

by bruce 4/12/2012 4:26:48 PM
I am personally long rim and I am staying. I realize this is a contrarian call.

by Steve Palmer 4/12/2012 4:28:20 PM
Steve, you sound like the employees at RIM who are in denial. The bottom line is , blackberries are out of date and the software is severely crippled. Do you think they have the talent to compete with Google and Apple in a software war?

by Mike 4/12/2012 4:28:43 PM
It is unrealistic to believe that everyone in the world will have an Apple product. RIM has made some recent mistakes. Technology often leapfrogs product cycles. There are many smart people in Waterloo. All the smart people don't just work for Apple.

by Steve Palmer 4/12/2012 4:30:57 PM
We have a few people asking about Nokia, which has had a rough week. What do you think of the stock Steve - and could it be a takeover candidate?

by Darcy Keith 4/12/2012 4:32:08 PM
I don't follow Nokia closely.

by Steve Palmer 4/12/2012 4:32:40 PM
Let's move along then to some other sectors and stocks. And to start this off, Steve can you tell us a few stocks you are really bullish on right now and perhaps have a large position in?

by Darcy Keith 4/12/2012 4:33:27 PM
I typically don't make stock specific comments but I have previously commented on Trimel Pharmaceuticals (TRL) in the biotech space.

by Steve Palmer 4/12/2012 4:35:07 PM
What makes you interested in TRL?

by Darcy Keith 4/12/2012 4:35:40 PM
Experienced management team. multiple unique late stage products with $1 billion potential

by Steve Palmer 4/12/2012 4:36:27 PM
What do you think the TSX will avg going forward? 5%? I don't see the aging boomer issue a problem, as we will have population growth of 2-3% per year with immigration and the non-boomer growth.

by J Henry edited by Darcy Keith 4/12/2012 4:36:41 PM
I was looking at some data recently on the rolling 10-year return. this recently went negative for the S&P. It has fluctuated in cycles from slightly negative where we are now, to +15% annualized. I believe both the TSX and S&P could return to 10% annual growth going forward.

by Steve Palmer edited by Darcy Keith 4/12/2012 4:38:52 PM
That certainly sounds appealing. Are we talking about those kinds of returns for the next several years - and isn't Europe and China big threats to that type of forecast right now?

by Darcy Keith 4/12/2012 4:40:49 PM
There is always a threat somewhere. The biggest risk for the Canadian market is a dramatic slowing of Chinese growth. I don't believe this will happen in the short term.

by Steve Palmer 4/12/2012 4:42:02 PM
What is your view on Canadian Banks going forward?

by Josef 4/12/2012 4:42:25 PM
As yields begin to rise I believe that banks will initially benefit. Yields on common shares of Cdn banks are 4%+ and combined with capital growth should provide a good alternative to bonds.

by Steve Palmer 4/12/2012 4:44:02 PM
What do you think of uranium stocks presently?

by Derbyshire4 4/12/2012 4:45:01 PM

Live chat with hedge fund manager Steve Palmer

stock picks from hedge fund manager steve palmer

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