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Stock markets plunged this week as investors reacted to signs of weakness in the global economy and Europe's debt problems. Most of the big gains that followed a Federal Reserve pledge Tuesday to extend super-low interest rates have since vanished.

Norman Levine, managing director at Portfolio Management Corp., answered questions on in the markets in a live discussion.

Mr. Levine's corporation invests in large and medium cap stocks worldwide. He deals exlusively with high net worth individuals and helps manage more than $300-million.

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A portfolio manager's insights on the markets

11:57 Chantaie ROB web editor - Thanks for joining us today, readers. Norman Levine, managing director with Portfolio Management Corp. will be joining us shortly so you can start sending in your questions now.

11:59 [Comment From Ron ]

Hello, What do you think of high yield and emerging markets bonds now?

12:00 [Comment From Norman Levine]

I do not have expertise in emerging market bonds but as far as high yield bonds go, they trade more like stocks than bonds. We believe that stock markets will be higher a year from now so you can selectively buy them here.

12:00 [Comment From Guest ]

How do you see the Swiss Franc responding in relation to the Euro and Europe's debt problems?

12:02 [Comment From Norman Levine]

The Swiss Franc has been an excellent place to hide. That said, the Swiss Central Bank has said they temporarily want to tie themselves to the Euro as they believe the Franc is overvalued so I think the ride is over for now.

12:03 Chantaie ROB web editor - Mr. Levine, given the current volatility in the markets should investors see this an an opportunity to buy, or should they be holding off until things settle down?

12:05 [Comment From Norman Levine]

We are value investors and as such are always looking for opportunities when markets are down. We have a list of stocks we would like to buy at the right price and some of them are there now so we will shortly begin to put some cash to work. I wouldn't invest all your cash at once but some buying now should prove worthwhile a year from now.

12:06 [Comment From Nick ]

What do you think about Canadian Banks especially Royal?

12:07 [Comment From Norman Levine]

We have been light in Canadian banks with National being our only holding. We thought they were expensive. Their valuations are getting more reasonable but not enough to tempt us yet. Royal would not be one of the names. We do not like its balance sheet relative to the others and after selling its US retail operations we are left wondering where their growth will come from.

12:08 [Comment From Guest ]

do you see the tsx going below 10000 in the next few months

12:09 [Comment From Norman Levine]

That would be a huge drop and while it could happen in an extreme situation, we do not think it likely.

12:10 [Comment From Tony ]

For some time i have had 100% of my company pension (approx $240,000) in UBS Can Equity, I have 10-15 yrs to retirement, married with 3 children, and am thinking to move approx 25% to US Equities and 10-20% to Emerging markets and leave the rest in Can Equities, I would appreciate your opinion or a plan B. thx....Tony

12:12 [Comment From Norman Levine]

What you have done to date has worked out well as Canada has been the best major market in the past ten years. That is the past, however. Now many parts of it seem relatively expensive. We invest worldwide so we would be the first to recommend you diversify to other markets. I believe your plan is a good one although I would not rule out other areas such as European companies.

12:13 [Comment From Thomas]

Is it better to hide in food and utility stocks as people need to use these items on a daily basis?

12:15 [Comment From Norman Levine]

We have an inordinate amount currently in what I would call non-financial defensive stocks such as utilities, pipelines, telecom, and non economically sensitive stocks. They have been great places to hide and most pay great dividends. We are going to keep most of them but looking forward, if the markets continue to weaken, we will look at somewhat reducing that weighting and buying some more economically sensitive stocks.

12:47 [Comment From Guest]

Hi Norman, based on the markets temporarily inflating in a positive manner but the looming debt issues still surrounding us do you feel that our markets are only up due to investors money moving in from a buying opportunity standpoint? Do you feel that the global debt issue will rise up again and negatively impact our markets in the near future?

12:47 [Comment From Norman Levine]

We are very worried about the Euro as we believe that the weaker members (PIIGs) would be better off leaving it and its valuation will be dragged down by the weaker members. Its effect on Canadian equities, though, will be indirect rather than direct as markets are highly correlated but most individual Canadian companies will not be directly impacted by the Euro.

12:45 [Comment From Harry]

Are you concerned re the shambles that is the Euro ? If it implodes completely, what would the impact be on Canadian equities ?

12:44 [Comment From Norman Levine]

We don not own any directly but indirectly own Great West Life through our ownership of Power Financial. We remain underweight financials here but if we were to buy a new financial in Canada at this time it would probably be a bank and not an insurance company.

12:43 [Comment From Max]

What is your opinion on Canadian LIfe Insurance Companies

12:42 [Comment From Norman Levine]

Sorry, but I do not follow it.

12:42 [Comment From Peter]

Good-afternoon Norman! Could I get your comments on EON.AG (EONGY) PLEASE; they reported a loss this week AND reduced their dividend. Thanku!

12:42 [Comment From Norman Levine]

No idea and anyone who says they know is fooling themselves. What we do know, however, is that many stocks are now trading at very reasonable valuations and we are happy to buy them as we are long term investors.

12:40 [Comment From Bill]

When will the markets go back to "normal"?

12:40 [Comment From Norman Levine]

If you are young you probably don't have a lot of money to invest so I would divide my money between a few ETFs (exchange trade funds) such as ones that invest in the TSX, S&P 500, Europe, and emerging markets and just add to them as you accumulate more money. At your age you shouldn't worry about market fluctuations and should be happy when markets decline as it will give you buying opportunities.

12:38 [Comment From Kevin]

I am young and looking to take on some risk? Any suggestions?

12:37 [Comment From Norman Levine]

I am not close to the coal industry but I can say that it is probably down due to worries about demand as metalurgical coal is used in the steel business and an economic slowdown would hurt demand.

12:36 [Comment From Steve in Richmondhill]

The Coal spot price has sharply been down (Dow Coal Index) and the move seems extreme based on fundamentals. What is your take on the coal sector? Thanks

12:36 [Comment From Norman Levine]

The world views the Loonie as a resource (mostly oil) currency and pretty much ignores our fiscal state. That said, I think oil prices will remain strong so I don't see a big sell-off for the Loonie but I also don't see it running to $1.10.

12:34 [Comment From Ken]

What do you see for the Canadian dollar? People were saying it would go up to $1.10 U.S. this year.

12:34 [Comment From Norman Levine]

I would say most investors own too few individual stocks or tend to own too many mutual funds. I would say an investor should own at least 20 individual stocks and I would do it by industry and geography (Canada, US, Europe, Asia). As for mutual funds, I would do the same. You only need a few as they own lots of stocks and buying more just duplicates what you already have.

12:31 [Comment From Sue]

What's the best way to diversify your portfolio in today's markets?

12:31 [Comment From Norman Levine]

The auto business is a very tough one both operationally and in the stock market. That said, I am warm to General Motors as it has a perfectly clean balance sheet (thanks to the US and Canadian taxpayers) and will be refreshing its offerings dramatically over the next few years. We do not own any auto companies at this time as the economic uncertainty is a bit too high and auto stocks are extremely economically sensitive.

12:29 [Comment From Jason]

thoughs on GM in the future?

12:28 [Comment From Norman Levine]

In the US specifically, I mentioned Pfizer above. I would also look at Pepsico, Baxter, and General Electric here. We do not own a lot of US stocks at the moment but are looking to add some in the near future.

12:26 [Comment From Rick]

What US equity stocks are a good by now?

12:26 [Comment From Norman Levine]

Its purchase of Countrywide will go down in history as one of the worst acquisitions ever made and the problems from that will haunt them for quite some time as the bank will have to take continuous hits to their bottom line from it and will undoubtedly have to raise a lot of capital to offset the massive losses.

12:24 Chantaie ROB web editor - Any reasons why?



12:23 [Comment From Norman Levine]

Bank America remains my least liked bank in the US.

12:23 [Comment From Iggy]

Whats your opinion on BAC?

12:22 [Comment From Norman Levine]

I have been negative on Yellow Pages for many years as those who watch me regularly on BNN can attest to. I think their future continues to be quite poor so I would continue to avoid it and any of its related securities unless you see something I don't and are a gambler, not an investor.

12:21 [Comment From Guest ]

do you see any value in ylo at this point

12:20 [Comment From Norman Levine]

No idea. Long term, probably as gold has become an alternative currency and a place to hide in the current uncertainty.

12:19 [Comment From Jarod ]

Do you believe we will see $2,000 in the short term?

12:19 [Comment From Norman Levine]

Gold has had a huge run to here and I have no idea in the short run where it is going. We are not gold bugs but do own a couple of stocks, Newmont and Goldcorp, in our portfolio. I think all portfolios should have some exposure.

12:17 [Comment From Guest]

Is gold a good buy now?

12:17 [Comment From Norman Levine]

Some of the stocks we already own that we think have become excellent value here include: Vodafone, ABB Ltd., Pfizer, TransCanada, Suncor, and National Bank.

12:16 [Comment From Swapnil Rege]

What are you current value picks?

12:15 [Comment From Norman Levine]

We have an inordinate amount currently in what I would call non-financial defensive stocks such as utilities, pipelines, telecom, and non economically sensitive stocks. They have been great places to hide and most pay great dividends. We are going to keep most of them but looking forward, if the markets continue to weaken, we will look at somewhat reducing that weighting and buying some more economically sensitive stocks.

12:13 [Comment From Thomas]

Is it better to hide in food and utility stocks as people need to use these items on a daily basis?

12:12 [Comment From Norman Levine]

What you have done to date has worked out well as Canada has been the best major market in the past ten years. That is the past, however. Now many parts of it seem relatively expensive. We invest worldwide so we would be the first to recommend you diversify to other markets. I believe your plan is a good one although I would not rule out other areas such as European companies.

12:10 [Comment From Tony ]

For some time i have had 100% of my company pension (approx $240,000) in UBS Can Equity, I have 10-15 yrs to retirement, married with 3 children, and am thinking to move approx 25% to US Equities and 10-20% to Emerging markets and leave the rest in Can Equities, I would appreciate your opinion or a plan B. thx....Tony

12:09 [Comment From Norman Levine]

That would be a huge drop and while it could happen in an extreme situation, we do not think it likely.

12:08 [Comment From Guest ]

do you see the tsx going below 10000 in the next few months

12:07 [Comment From Norman Levine]

We have been light in Canadian banks with National being our only holding. We thought they were expensive. Their valuations are getting more reasonable but not enough to tempt us yet. Royal would not be one of the names. We do not like its balance sheet relative to the others and after selling its US retail operations we are left wondering where their growth will come from.

12:06 [Comment From Nick ]

What do you think about Canadian Banks especially Royal?

12:05 [Comment From Norman Levine]

We are value investors and as such are always looking for opportunities when markets are down. We have a list of stocks we would like to buy at the right price and some of them are there now so we will shortly begin to put some cash to work. I wouldn't invest all your cash at once but some buying now should prove worthwhile a year from now.

12:03 Chantaie ROB web editor - Mr. Levine, given the current volatility in the markets should investors see this an an opportunity to buy, or should they be holding off until things settle down?

12:02 [Comment From Norman Levine]

The Swiss Franc has been an excellent place to hide. That said, the Swiss Central Bank has said they temporarily want to tie themselves to the Euro as they believe the Franc is overvalued so I think the ride is over for now.

12:00 [Comment From Guest ]

How do you see the Swiss Franc responding in relation to the Euro and Europe's debt problems?

12:00 [Comment From Norman Levine]

I do not have expertise in emerging market bonds but as far as high yield bonds go, they trade more like stocks than bonds. We believe that stock markets will be higher a year from now so you can selectively buy them here.

11:59 [Comment From Ron ]

Hello, What do you think of high yield and emerging markets bonds now?

11:57 Chantaie ROB web editor - Thanks for joining us today, readers. Norman Levine, managing director with Portfolio Management Corp. will be joining us shortly so you can start sending in your questions now.





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