Claude Lemire is the founder of the very successful Montreal based Canagex Placements (long ago acquired) which began as a money management arm of Banque Canadienne Nationale. By the time Claude left for other pursuits, Canagex was successfully managing approximately $14 Billion. I can say first hand that his talent in analyzing stocks and markets was a major contributor to the firm’s success. In recent years, he has been advising specific pension funds and focuses on his own personal investments. I have worked with Claude for over thirty years and he has been a source of excellent advice. Readers may find his thoughts on the markets and economy to be quite useful.
To begin with, Claude employs in-depth fundamental analysis to choose stocks and sectors; he will then use technical analysis for timing purchases and sales. As the average up-down price variation for most large industrial stocks in one year is 25% to 35% and over 60% for most gold stocks, the value of using technical analysis is quite clear.
Claude uses several private research services and various internet sites when analyzing companies. One of his favorites has been the “Value Line” Service. Right from the start he has had little use for the research from the major U.S brokerage houses. They seem to have all the answers, opinions and advice and yet required bailouts just to survive themselves. However major U.S. brokerage research can be useful for puppy training and lining the bottoms of birdcages.
The economy for North America? Claude believes that while not exceptional strong, it is doing “fairly well” but he expects significant world growth outside of North America in countries such as China and Vietnam. He believes the world growth potential is now exceptional and that is where he feels the greatest investment potential is.
The North American stock markets? Claude thinks that they are performing reasonably well but the high valuations that many stocks carry today are of concern. High valuations often lead to severe declines. Basically the stock market is not cheap but the yields on bonds give investors little choice-for now.
Gold? Three years ago very near their price bottoms, Claude commenced investing in Canadian gold mining and exploration stocks. His analysis suggested that they offered greater profit potential than the popular industrial stocks (Dow types, S&P 500). He was correct as the industrial stock markets continued to perform well but his gold stock choices far outperformed them on a percentage basis. I should add that his specific stock investments have been extremely profitable despite the fact that while we probably have seen the bottom for gold we are not in a true bull market in gold bullion yet…..yet!
He remains as a patient investor of mining and exploration stocks that his analysis finds as overlooked and undervalued. He is always alert for “bargains “and when they move into his buying range he will invest using limit orders. Sometime within the next 18 months, he hopefully expects an enormous move up in the price of gold that will carry many of the mining and exploration stocks up sharply.
Claude sees inflation in the economy and thinks the current reported inflation statistics are inaccurate; he finds it to be higher and expects it to be a visible problem soon. Moreover, higher rates could cause trouble for the stock market.
The U.S. Dollar is of the greatest importance. Moreover Claude sees the possibility that payment for Saudi Oil which since 1974 required payment exclusively in U.S. Dollars could be in the process of being altered, other currencies would be acceptable. If that should occur, a major influence and support of U.S Dollar strength would drop precipitously. There is a huge relationship between the Dollar and the price of gold………a weak dollar will send gold up dramatically.
Back to the Future? Claude has said to me for several years now that due to the government spending excesses and totally out of control government and personal debt that he fears that we are heading into a period like the 1930’s which was the depression in Canada and the United States. Above all else, he hopes that he is wrong.