Likes/Dislikes - November 13, 2020

Below are Evergreen Gavekal's Likes/Dislikes for November 13, 2020.



Changes highlighted in bold.


  • Large-cap growth.  (For the most part, there continues to a better risk/reward ratio with growth-at-a-reasonable-price—GARP—type issues.)
  • Certain international developed markets, especially Japan (Note Warren Buffett’s recent foray into this market.)
  • Publicly-traded pipeline partnerships, i.e., MLPs and other mid-stream energy securities. (This week’s very positive vaccine news has catalyzed a major rally in mid-stream/MLP issues; thus, be more selective with new purchases even though future return prospects continue to look outstanding.)
  • Gold-mining stocks (Pfizer’s vaccine announcement triggered a sharp correction in the gold miners, creating a decent buying opportunity.)
  • Gold (Both gold and silver have held up better than the miners; for now, the miners appear more attractive.)
  • Silver 
  • Select international blue chip oil stocks (Buy more carefully after this week’s robust rally.)
  • Short-term investment grade corporate bonds (1-4 year maturities)
  • Emerging market (EM) bonds in local currency (focusing on stronger countries)
  • Large-cap value (Value stocks, such as energy and financial issues, have been the biggest winners from the vaccine news; accordingly, buy somewhat more cautiously even though this style is likely to be the biggest beneficiary of the reflation/reopening trends in 2021.)
  • Copper producers. (Expect a near term correction after a sharp rally off the lows. The damaging effect of the coronavirus on copper demand could be high in the short term, but the fundamentals of Copper supply/demand remain attractive long term.)
  • High-dividend equities with safe distributions (As interest rates disappear, investors will go searching for yield.)
  • Most cyclical resource-based stocks (Buy more carefully but considerable long-term upside remains as many of these are beneficiaries of inflation/pricing power due to supply chain disruptions and Fed debt monetization.)
  • BB-rated corporate bonds (Buy more selectively after a spectacular rally.)
  • A wide range of high-income securities, including preferred stocks (Many of these have surged, as well, so buy less aggressively.)
  • Canadian REITs (Avoid office issues for now.)
  • South Korean Equities (This is another area in which to be less aggressive given how much this market has risen since late March.)
  • Small-cap value (Based on this week’s vaccine-driven rally, a buying pause is prudent; small cap issues are typically hit the hardest during corrections and COVID infections trends are worsening, elevating the chances of a pull-back.)
  • Intermediate-term investment-grade corporate bonds, yielding approximately 2.5% (This is another corner of the bond market the Fed is actively supporting; attractive yields are becoming harder to come by, however.)
  • Uranium and uranium producers (These now offer a more attractive entry point after the recent correction caused by supply-side announcements; their pull-back looks to have ended with a resumed rally probable based on a very tight supply/demand condition with U2.)
  • Certain “Virus Victim” equities such as refiners, homebuilders, and select retail stocks (After a powerful rally in homebuilders and certain retailers, be more selective; however, refiners have broken multi-year support. Exit for now but look to re-enter; there is abundant long-term upside.)
  • Investment-grade floating rate corporate bonds (Despite a vigorous rally in recent months, there remains decent long-term value in this bond market niche.)
  • The higher quality mortgage REITs (These have risen materially from our initial recommendation; therefore, less aggressive buying is appropriate even though we continue to like the multi-year outlook.)


  • Renewable Yield Cos
  • Mid-cap value
  • Emerging stock markets; however, a number of Asian developing markets look undervalued
  • US-based Real Estate Investment Trusts (REITs) (It is critical to be highly selective with this sector; fundamentals for many REITs are likely to be very challenged.)
  • Cash
  • Long-term Treasury bonds
  • Canadian dollar-denominated short-term bonds
  • Intermediate-term Treasury bonds
  • One- to two-year Treasury notes
  • Traditionally “safe” sectors such as Staples and Utilities
  • Virus Victors (I.E, those companies that have benefitted from global lockdowns and now sport premium valuations.)
  • Small-cap growth
  • Long-term investment grade corporate bonds (Following intervention by the Fed, this asset class experienced a powerful rally off the March lows and current yields are no longer attractive. Inflation concerns could also eventually become an issue at such low yields.)


  • European banks (Moving to dislike status due to a second round of lock-downs in many key eurozone countries; additionally, negative interest rates in Europe are very hard on bank profitability.)
  • Most municipal bonds (Both intermediate-term and long-term muni bonds have had big rallies with the Fed entering the market, rewarding those who followed our buy recommendation earlier.  We are now moving munis to dislike due to our longer-term inflation concerns and also as a result of the present paltry yields.)
  • US dollar (The recent snap-back in the greenback provides an opportunity to shift into other currencies or enter hedge positions against the dollar.  Its long-term outlook appears very challenging and it remains materially overvalued.)
  • Many semi-conductor tech stocks (Despite the recent pull-back we generally find this sector unattractive with some notable exceptions; however, even in these cases we typically acquired them far lower than they trade today.)
  • Mid-cap growth
  • Floating rate bank loans (This refers to the junk variety; spreading bankruptcies and a big price recovery push this asset class back down into the dislike category.)
  • Lower-rated junk bonds

DISCLOSURE: This material has been prepared or is distributed solely for informational purposes only and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy. Any opinions, recommendations, and assumptions included in this presentation are based upon current market conditions, reflect our judgment as of the date of this presentation, and are subject to change. Past performance is no guarantee of future results. All investments involve risk including the loss of principal. All material presented is compiled from sources believed to be reliable, but accuracy cannot be guaranteed and Evergreen makes no representation as to its accuracy or completeness. Securities highlighted or discussed in this communication are mentioned for illustrative purposes only and are not a recommendation for these securities. Evergreen actively manages client portfolios and securities discussed in this communication may or may not be held in such portfolios at any given time.

  • Categories