Manager Picks: Michael Smedley
David Pett, Financial Post Published: Thursday, December 18, 2008
Michael Smedley, chief portfolio manager at Morgan Meighan & Associates, manages the Canadian General Investments closed-end fund with a focus on capital preservation through diversification across geographic regions, industry sectors and individual securities.
Mr. Smedley's market outlook for 2009 is less than optimistic.
"I would bet on only a 5% chance of a good recovery next year," he says. "The financial crisis and the many effects of it will continue throughout next year, absolutely."
He says he hopes the economic recession will not be a deep one, but given the unusual elements out there, including zero percent interest rates and massive taxpayer-funded bailouts, he remains cautious.
He suggests investors investors buy companies that have strong cash flows and little debt.
"The core of my future portfolio would be consumer staples stocks with Shoppers Drug Mart Corp. (SC/TSX) and Canadian Tire Corp. (CTCa/ TSX) two both fitting the bill."
Mr. Smedley also likes strong gold companies like Barrick Gold Corp. (ABX/TSX) and Agnico-Eagle Mines Ltd. (AEM/TSX) to weather the stress. The manager said gold prices should remain firm and may accelerate further if the U. S. dollar moves back into decline.
