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Mike Newton is portfolio manager and director at The Newton Group, ScotiaMcLeod. His focus is North American large caps and ETFs.

Top Picks:

Canadian National Railway Co. (CNR-TSX)

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Canadian National Railway has experienced a decline in sympathy with oil prices that appears to be a buying opportunity for longer-term investors. The overall crude-by-rail and frac sand revenue exposure in 2014 stands at ~9 per cent. Capacity remains tight across the entire transportation complex, which bodes well for pricing, which will be much more impactful to earnings than weakness in the "energy vertical" from lower oil prices. CNR has the highest operating margin amongst the peer group at 37.1 per cent vs. 31 per cent for the industry and recently confirmed that they will be spending $900-million in Q4 on capital spending.

Starbucks Corp. (SBUX-Nasdaq)

In a recent Starbucks investor day, the company outlined its 5-year growth plan. Expanding services in its user-loyal mobile pay, mobile ordering and food delivery as well as new initiatives in wine, beer, and tea will certainly drive North American growth. But it will be China and India that will drive growth post-2018. I continue to believe that Starbucks is a destination and not just a coffee shop. Even my 9-year old daughter was looking for their store in a recent mall trip.

Tesla Motors Inc. (TSLA-Nasdaq)

Tesla has certainly traded down on the recent oil decline which puts the advantage of alternatives in question. This is not a gas price play. Instead, Tesla is a high-design, beautifully innovative luxury car company that caters to the high-end consumer. Quoting Bespoke, "This American car-maker has been a true technological game-changer for the auto industry much like the original iPod was for the electronics industry – buy into strength with the understanding that this is meant to be a long-term position and perfect entry is less critical."

Past Picks: December 17, 2013

LVMH Moët Hennessy Louis Vuitton SA (LVMUY-ADR(OTC))

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Then: $35.54; Now: $33.00 -7.15%; Total return: -5.02%

Dassault Systèmes (DASTY-ADR(OTC))

Then: $118.50; Now: $59.80 +0.92%; Total return: +1.83%

Catamaran (CTRX-Nasdaq)

Then: $45.74; Now: $45.72 +6.52%; Total return: +6.52%

Total return average: +1.11%

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Market outlook:

One word that scares every investor is "systemic". Systemic risk refers to the risks imposed by interlinkages and interdependencies in a system or market, where the failure of a single entity or cluster of entities can cause a cascading failure. In today's framework, the speed of this current oil price crash is more important than the magnitude of this drop. The rapidity alone causes economic dislocation and political uncertainty, which puts nerves on edge and currencies and bonds in a tizzy. After a long period of relatively co-ordinated central bank policies and remarkably low volatility, the macro scene is becoming more dynamic. Diverging forces are pulling stocks in opposite directions. In this confusion, great growth companies can be delivered into investors' hands at attractive prices, but keep in mind that much can go unexpectedly wrong in a relatively short period of time. Traditional portfolio approaches need to be re-visited in the event that dislocation and systemic risks ignite.

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