“A spiral spring that is about to explode:” It seems that the home prejudice of Canadian investors may finally pay off

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Add a period of reflation to that, a theory BlackRock has recently advocated, and investors will quickly look to trade their US tech stocks for exposure to companies that would traditionally benefit from that kind of environment: banks, energy companies, manufacturers. of gold and REITs.

“We will go back to 2008, when the United States was on its knees,” said Horan, who suggested investors take a look at production stocks like Martinrea International Inc.

Short selling stocks in Canada has a better reward because there seems to be this perpetual player market

Jason Mann, chief investment officer of EHP Funds

Jason Mann, chief investment officer of EHP Funds, has a 50% weighting on Canadian equities in his North American portfolio, but perhaps not for the reason one might think. The fund is a long / short fund and for Mann, “shorting the stock in Canada has a better reward because there seems to be this perpetual player market”.

Mann is not as high on Canadian stocks as Horan. Even if the portfolio consisted only of long positions, he said he would likely split around 75/25, but he is getting more bullish on the Canadian side of his portfolio.

“The gap has become so wide between high-priced growth and cheaper cyclical stocks that it’s really hard to ignore,” said Mann, who advises natural gas producer Tourmaline Oil Corp. and Element Fleet Management Corp.

Mann is also betting on a rotation towards cyclical stocks and a reflationary trade that could even allow the S&P / TSX to outperform the S&P 500 again. Energy may not take part in that rally due to the investor moving away from the “Dirty energy,” he said, but the heavy weightings in banks and gold miners should be enough to lift the S&P 500 index in a scenario where US technology continues to trade sideways.