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Managing to the Other Side

T. Rowe Price presented opportunities for 2021 on equities and bonds:
The financials and energy sectors could offer particularly attractive shorter‑term value opportunities in 2021, according to Giroux:

Financials: Steepening yield curves have improved net lending margins, and the reserves set aside to cover expected pandemic loan losses appear to be larger than needed, Giroux says. European banks appear especially cheap based on price/book value multiples, Thomson adds.
Energy: A broad collapse in capital spending should reduce excess oil and gas supplies, potentially supporting prices, Giroux predicts. An easing of the pandemic could boost travel in 2021, reviving demand. However, the longer‑term outlook for traditional fossil fuel producers remains challenged by renewables and regulatory pressures.


  • Asking for one of the MFO participants, do Canadian banks appear cheap as well ?
  • I believe the banking sector including overseas ones are under-valued. They are often held in int'l value funds. Rotation to value stocks including banks started late last year - trending that Lynn Bolin talked about in his February commentary.
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