Buy Canadian oil stocks

Contrarian newsletter editor Chris Damas says if war is about to break out in Ukraine, investors should be looking at Canadian small-cap oil stocks. These stocks could benefit from the sort of spike in oil prices that was happening on Monday. Crude prices  CLJ4 +2.04%  jumped to a five-month high amid fears of supply disruptions.

What does Damas, who writes the BCMI Report,  like? Longview Oil  LGVWF  CA:LNV -1.12% , Surge Energy  ZPTAF  CA:SGY -2.37%  and Crew Energy  CWEGF  CA:CR -0.75% .

But Canada isn’t everyone’s favorite market these days. The world’s biggest bond investor says it’s time to get out out of certain investments in that country, or at least cut way back.

Ed Devlin, who is in charge of developing Pimco’s Canadian economic outlook and portfolio strategies, told the Financial Times in an interview over the weekend that the investment firm, a unit of Allianz SE, has been bearish on Canadian housing for some time. He posted a note to investors on Pimco in February in which he argued that the economy was at a tipping point.

The FT ran the stats and found Pimco halved its exposure to Canadian debt to 2% of its portfolio in the third quarter from nearly 4% a year earlier. Devlin says the country’s housing market is overvalued and he thinks investors are going to start seeing that this year. Canadian banks have the highest ratings among global credit agencies, but some are worried that Canadian banks risky lending is getting out of hand.

Not everyone agrees, but we all know how that lending to riskier buyers worked out the U.S. back in 2007.