10 Stocks We're Watching After Big Drawdowns

[00:00:01] This is The Canadian Investor, where you take control of your own portfolio and gain the confidence you need to succeed in the markets. Hosted by Braden Dennis and Simon Belanger The Canadian Investor Podcast. Welcome to the show. My name is Braden Dennis. As always joined by the patriotic in red, Mr. Simon Belanger.

[00:00:27] Jay, dude, are you ready to have quite a rant today? I might be buying stocks up the corner of my desk today. So if I'm not paying attention during a segment, you know I am executing a trade. Yeah, if I see an eye wandering off, it's on the other screen. But yeah, I have my eye on a couple of stocks, actually quite a bit of stocks with this correction we've seen.

[00:00:56] And that's what we'll finish with is stocks on a radar and stocks with an S. I just took 10. I'll probably do another segment like this next week or the week after because I think I have about 30 that they're great companies, but they were just never on my radar because I thought the valuations were just too nosebleed. And, you know, Donald Trump helped us out and got those valuations down a little bit.

[00:01:21] Yeah, let's do that. So I'm going to talk about – I have some tariff thoughts and some might be a – not really a good way to say it. I got a lot of stuff here to talk about. So the pod might be a little bit long. And then the two of us are both going to talk about stocks on our watch list. But, you know, I want to just make a quick point on Q1 2025 earnings coming up here.

[00:01:44] We're recording this mid-April, Big Tech reports the week of the 25th, I think, Tesla Netflix the week before. So, you know, we're coming up here on earnings season.

[00:01:56] And it's going to be very, very strange to a lot of investors trying to match up, talk about weakness in the economy and Jamie Dimon talking about credit going to be a disaster this year. And everyone's saying if these policies hold true, pause or not, just given the uncertainty and no one can invest in CapEx and, you know, just kind of throwing the whole economy in for a whirl.

[00:02:26] Oh, there's going to be a recession. Polymarket's got like a 75% chance now on that. And you're going to see Q1 earnings come out and they're going to be great for a lot of companies. Yeah. Mm-hmm. Yeah. Just because of the timeline here. It's going to be all about the guidance. Yeah, exactly. It's going to be all about the guidance, but the trailing, you know, January, February, March numbers might be all-time record years. And then it's going to be all about the guidance, just as you said. Yeah, exactly.

[00:02:55] Well, we made a point, Dan and I, yesterday, well, last Thursday for the release is we made a point to find companies that reported after Liberation Day. Right. Just to see what they were saying in face of uncertainty. And two of the companies we've pinpointed was Levi's and then was Delta. Like the jeans company. The jeans company. And they're saying exactly what you're saying. They had a pretty good Q1.

[00:03:24] Q2 should be all right. And they're not seeing impacts of tariffs just now because as a clothing company, they already have their product ready to put on the shelves for spring and summer. So for them, they're not seeing an impact. They were not removing their guidance, but they were also saying that they'll reevaluate essentially at the end of the quarter because there's so many moving parts.

[00:03:49] They source from 28 different countries and they have to figure out, too, there are some mitigation strategies that they'll be looking at. But it's so rapidly evolving that they essentially kept it unchanged. But without saying it, they said we can't really provide guidance. They kept it unchanged, but they also said it will likely change the way they were speaking.

[00:04:12] I mean, what an impossible task to be a public CEO or CFO on an earnings call right now. Right? Like impossible task. Okay. So up to this point for some context when we're talking about this. Liberation Day sent the markets in turmoil. Then there was a fake rumor from our boy Walter Bloomberg about a pause.

[00:04:38] And then later the pause actually did come out as of yesterday. Canada and Mexico not included in those pauses around mostly around the stuff around the autos that we've been pushing back on. And an increased number on China. So markets rallied huge on that because a lot of the main concerns around these made up tariffs were going to be paused.

[00:05:07] And then, okay, it was like, all right, the bully is just trying to bully. He's just trying to negotiate, blah, blah, blah. Okay. So I have a lot of thoughts. Let me cook here, Simone, but please jump in or else no one wants to hear me. Well, the couple of things I'll just mention quick. So a lot of people now are speculating that the information was leaked on Monday to just test out what the market reaction would be. And then they actually came out with the 90-day pause.

[00:05:36] And then the other thing I've been reading from some really good macro accounts on X is that essentially a big portion of the rally yesterday and were recorded. We should probably timestamp this on April 10th at 2.20 p.m. We are recording in case new stuff comes in the next few hours or tomorrow. But they were saying that a lot of it were shorts, a short squeeze.

[00:06:01] A lot of the up was actually shorts having to close out their position, which push prices higher. So we'll have to see. But just a little tidbit I wanted to jump in and mention there. Crazy seeing major indices up 7% in like an hour. Crazy. Crazy. Yeah, almost double digit. Yeah. Okay. Lots of thoughts here. Some tinfoil hat stuff too. So get excited for that. All right.

[00:06:28] Let me start where you're probably not going to think where I'm probably not going to start. Just giving my sentiment out of the gate here. Is I don't think the US administration is totally unwise to throw their weight around here and get something like a 10% tariff policy. And negotiate free trade where it makes strategic sense. I don't think that that's an insane idea. And there are wise to throw their weight around. Okay.

[00:06:55] Additionally, Trump campaigned on tariffs and reshoring. So when he goes and does what he campaigned, part of me is surprised. Part of me is like, why am I surprised? So there's that. Third, I genuinely think the track record of folks in his posse, like Besant, was a bullish move and smart move to bring these types of people around him, despite what you think about this administration.

[00:07:22] I guess what I didn't fully realize is that Trump, one, had a bunch of people being like, no, you can't do that. And now with the Senate and the House and this posse of yes men, he can do whatever the hell he wants to do. Lastly, as of now, they have doubled down and held firm on some things like China. Oh, yeah. I haven't ruled out that this madness could work with some key trading partners.

[00:07:51] So with that out of the way, that's like my like, okay, let me play the other side of the coin for a second. And then I have a lot of thoughts on how they completely butchered this whole rollout. And most of it is complete and utter nonsense. But before I continue, what do you think? Yeah. I mean, I think you're making a mistake if you're not looking at some of the people in the administration. You mentioned Scott Besant. Like he's a very smart guy. If you take the time and actually listen what he has to say, you may not agree with him.

[00:08:21] But he's no dummy. He's been on Wall Street for decades. He knows how things work. And a lot of things I think that we need to keep an eye on is actually not the stock market. It's not Trump on his first term here. It's really the bond yield for US bond long-tongued treasuries. The 10-year especially. That's the one that's the key bond yield if you'd like. And this one has been really trending up. It's been moving like crazy.

[00:08:50] And people may say, oh, it doesn't look like a lot. But you're seeing this move 30, 40 basis point in the span of 24, 48 hours. And these are massive, massive moves for the bond market. You're also seeing credit spreads are going up. So credit spreads for especially companies that are rated below investment grade.

[00:09:13] So the credit spread is just the difference between what you'd get for US Treasury compared here to the premium you have to offer as a junk company or below investment grade company to be able to get credit. So that is widening. Not to alarming levels, but it's still up. And you're also seeing the move index, which is essentially the VIX for those familiar with it. It's an indicator of volatility. The VIX is for stocks and the move index is for bonds.

[00:09:42] It's through the roof as well. So what you're seeing here is there is definitely a lot of movement in the bond market. And if you want to get an idea of where things may go with the US administration, it's probably more useful to look at the bond market than the stock market, at least at this point in time. Yeah, credit's the story today. No question. Yeah. Yeah, good call out. All right. So let's do a quick recap on how they...

[00:10:10] Did you guys talk yet about how you calculated the tariffs? Yeah, we did. But you can do a quick recap on it. Okay. So right when they did the announcement with his little board, remember when I texted you, I actually screenshotted our text into the dock here. I texted you this. My memory's not good because I didn't fully remember the text, but I had to go back. But I have the screenshots. You can see it now here. I said to you... Oh, I know.

[00:10:39] Even with their negotiation tactic is simple. They went very arbitrary on the additional rates, i.e. your tariff is 30, mine will be 20. Yours is 10. Okay, we'll be 10 as well. Like no sort of matching up. What you want is, okay, we'd agree to drop ours against if you do the same and we have free trade, aka reciprocal. If you want to negotiate, you need this. If you pull numbers out of your ass, what can you do?

[00:11:07] And so later on that evening on Twitter, someone had cracked the code. Their fancy formula for each country was simply just exports minus imports in brackets divided by imports, aka deficit minus divided by imports. And for countries that are, you know, there's a surplus or it's less than 10, it's a flat 10. Okay, that was the formula. And that's when it hit me like, oh man, these guys are actually dummies. These guys are dummies.

[00:11:36] Like how can you negotiate reciprocals when your silly made up rates are based on trade imbalances? Like if you only did businesses that you had perfect trade imbalance or a surplus with it, that would be completely 100% idiotic. No, like that would be completely ridiculous. So on the camp that they're like, but they're just negotiating, I understand. But this is a blunder in my view on strategy. Complete blunder in my view on how they rolled out this formula.

[00:12:05] Number two, if this doesn't stay, and I did these notes before they flip-flopped on their ideas and they're going to flip-flop a million times. But tariffing Southeast Asian countries and other major low-cost manufacturing partners not named China is the equivalent of shooting yourself directly in the foot every single morning. American businesses diversified away from the purely Chinese manufacturing strategy, Vietnam, for example, specifically.

[00:12:35] Textiles. Yeah. Your cold war and trade war is with China. So complete silly strategy there. And maybe they know that and that's what they're doing. I don't know. Next point. I don't understand the rationale economically nor politically for many of the decisions that they've made. And I haven't ruled out permanent brand destruction as a trading partner.

[00:13:05] What do you think about that? Is that an overreaction, short-term overreaction? Yeah, I think it's a way to see it. The more I've been thinking about this, obviously, a lot over quite a period of time. You know me. I've read a lot of Ray Dalio's book, which, by the way, for people who have never read or listened to Ray Dalio, like now's the time. If you haven't done it, you really should get familiar with that because we are, I think, in the middle of a changing world order.

[00:13:33] I think that's what we're seeing in front of our own eyes. It's happening right now. And I think my view has really shifted, especially with the approach that Trump took with all the other countries and then China, where there seemed to be a lot of leniency towards the other countries, but not against China.

[00:13:52] And what that tells me is that I think the U.S. government is almost trying to say, okay, if you want to work with us and be on our side, well, we'll give you a good deal. But you have to basically say no to China. You have to choose between us and China. And I think what we saw in the last week, week and a half, and that's just my interpretation. I could be completely wrong. But that feels more and more like it's what's happening.

[00:14:20] And I mean, China, let's be honest, it's the second most powerful country in the world. Like that's what it is, right? The most powerful country right now is the U.S., but China is not that far behind. It is in certain aspects, but military, they have a very powerful military, so they're not that far off from the U.S. And in terms of sheer numbers, they're actually, I think, more advanced than the U.S. In terms of the sheer number of either soldiers, but also type of equipment.

[00:14:49] It may not be as good, but the sheer number, they have that. And all that to say that I think they will probably use a position that really you're either with us or you're with China. And my prediction is that when the Canadian election is done, one of the negotiating cards of the Canadian government, whoever is elected, I don't think it actually matters whatsoever. Whether it's Pierre or whether it's Mark Carney, doesn't matter whatsoever.

[00:15:17] This is one of the cards that they will use with the U.S. They will say, see, we'll work with you. One of the things that we can give you as a concession, we will match whatever tariffs you put on China. Canada will match whatever tariffs. I know nothing is a certainty, but I think to my view, in my head, this is as close a certainty as it can be. And it doesn't matter who the prime minister is. They will both do it.

[00:15:45] Yeah, I don't think you'll have anyone that has a different stance on that, no matter who's sitting in the chair. It'll be an easy concession for them to do. Tinfoil hat time. Bill Ackman, who is a bit of a hypocrite for this, he made a statement. I just figured out why Howard Lutnick is indifferent to the stock market and the economy crashing. And Cantor is talking about Cantor Fitzgerald, the very large New York City investment bank, are long bonds.

[00:16:15] He profit when our economy implodes. It's a bad idea to pick a secretary of commerce whose firm is levered fixed income. It's an irreconcilable, what's that even, what does that word even mean? Conflict of interest. It's a conflict of interest. Now, yesterday on the rally, there was Unusual Wales pointed out extreme amounts of call options put on the NASDAQ just moments before the announcement.

[00:16:44] And a video of senators in Trump's office and him bragging about how much money some of the senators made that day as well. So that is proof. Now, of course, all the Dems are pushing towards a ban of trading from Congress people, which is also very ironic and hilarious given, you know, Nancy Pelosi's the poster woman for this.

[00:17:15] So Ackman later apologized and said, sorry, this is a bold claim. I have no facts on this. Here's where I step in here, okay? Which is, let's not forget that the president of the United States rug pulled his following 46 days ago on a meme coin scam.

[00:17:36] Let's not forget about the just complete missing genome of ethics that the people in this grift economy have. Truly pathetic, unethical, unpresidential criminal behavior in my view. So like, why are we ruling out that there's no precedence here? I hope to God I'm wrong. But would this surprise anyone in this golden age of grifting?

[00:18:05] Like, honestly, would this surprise anyone at all that there could be market manipulation here? Of course, I hope I'm wrong. But we literally have precedent that the president of the United States ran a crypto meme coin scam 46 days ago. Why did everyone forget about that already? Right? Like. Yeah, no, I know. And I'm showing on the screen what you're talking about. So you don't need to understand the whole screen.

[00:18:33] But essentially, it's the call options for the S&P 500. Basically, exactly what you're saying. You see a huge spike in volume right before the announcement of the 90 day pause. And then obviously that's paired up with this announcement earlier in that data was a good time to buy stocks. And then you also combine that with the leak that happened on Monday.

[00:18:58] So they clearly knew that the markets would pop if the 90 day pause would be announced. It just it smells fishy. I'll just say that whatever actually happened. It just does not smell good. No, there's smoke and there's certainly fire somewhere, whether it's someone who seriously needs to be held accountable for it or I don't know. Like we know something's up.

[00:19:26] So I guess what would when would Congress people have to submit their trades? May 15th, the public will know. So I think that would be I don't know what the frequency is. Yeah, I have no idea. It would be it would be May 15th that we would know. So look, I mean, I'm losing faith in the ethics of some of the folks around around here when it comes to this stuff. It's just shameless at this point.

[00:19:56] All right. Longer term strategy. If this holds this type of strategy, the on shoring strategy, why help me understand why you would want to bring back the glory days of manufacturing in Detroit? In expense of so many other things like why fight for for Detroit and lose Silicon Valley.

[00:20:25] And if I'm them, I want as much globalization as possible. That's been such a good move for the US. You would rather want to have every computer in the world run Microsoft Excel, everyone buying iPhones, American AI powering the next revolution in technology, Amazon cloud infrastructure running every American and every global computer. Then have people buy an American made Ford F-150 than a Toyota Tacoma. Right. Like just strategy wise, like what what do you want to win? Yeah.

[00:20:55] I mean, I think at the end of the day and I was listening to Darius Dale. Are you familiar with him? Who? Darius Dale. So he's. No, I don't. He's I know. OK, I can't remember his firm, but I wanted to just give him credit for what I heard from him. And what he was saying is that, look, whether you agree it or not with Trump, one of the things Trump is doing and he has the pulse of is his base.

[00:21:21] Middle America, America that God decimated by factories moving to other countries overseas. And he knows that these are the people that elected him, not the only people that elected him. But these are the people that were supporting him in his first term and then again in his second term. And these are the people that were behind him after January 6th that stayed behind him that whole time. Probably not the swing voters, though. Yeah. Maybe that core rally group, but not the swing voters.

[00:21:52] That core. Yeah, exactly. Not the swing voters, but even that Rust Belt. Right. There's a lot of MAGA supporters and a lot of these people. I think what happened is they felt like they were not listened to for decades and decades. And yeah, whatever you want to think about Trump, they felt like he listened to them. Exactly. So he's I mean, I think he he's trying to show them that he's trying to do something about that. I don't agree with what he's doing.

[00:22:20] I don't think obviously I think there are some big problems with the U.S. debt. And I think that part, obviously, they're trying to tackle it. But again, I don't agree with the solutions, with the actions that they're taking. But I think this it does make you understand maybe a bit more why they're trying to do that is they're trying to completely change the status quo. And I think he's catering to his base. That's my best guess.

[00:22:46] And when I was listening to Darius Dale, that's what he was explaining, especially he also came from a impoverished background. So it made me a it gave me an understanding a bit more of where Donald Trump may be coming from. Again, I don't agree with it, but I'm trying to just understand what's going on in his head. And it really feels like in terms of an administration, he has different people telling him different things.

[00:23:14] And then he'll decide to do what he decides to do. That's the sense I get. Yeah. Look, I mean, I get it. Putting that, you know, like Canada needs to do this same rhetoric, which is, you know, Canada first. They're saying that U.S. first, like, you know, people are probably reading the headlines like I got no food on the table, but we just gave X billion to you to the Ukraine war.

[00:23:41] And that touches on a very close to home point when a lot of to a lot of people when they say, like, look, like we got to take care of, you know, inside of the border here first. And I totally understand that. I totally understand that.

[00:23:57] And what I worry about here as a Canadian a little bit, that what's happening south of the border is going to make us lose the script a little bit on like tackling the deficit, getting spend under control, making sure everything is good at home, tackling core issues, not having the only growth of jobs be in the public sector.

[00:24:20] I'm worried that we're losing the script a little bit about how those have become Elon and MAGA type of political points. Do you know what I mean? I really worry that the branding around those logical things that we need to do in Canada have been branded in MAGA south of the border and that we could really lose the script on. I do worry about that.

[00:25:14] And we might lose the script on that a little bit because it'll be branded as MAGA. And I think that that's going to be a huge mistake. Yeah. I mean, we I think one of the things to remember is before Trump took office, we had a lot of things, a lot of problems we need to take care of in Canada. Like this is not obviously Trump as exasperated the kind of issues that we're seeing. It's going to probably push us into a recession if we're not already in one.

[00:25:41] And it's probably going to push us further into recession because of the tariffs and what happened. But the reality is Canada has not been doing well on the economic front. The most commonly used figure is G7 performance. Yeah, that has been. Yeah, that has been constantly trending down over the last decade. So that's a good indicator. It's not perfect, of course. And you can debate whether GDP itself is a flawed metric for economic growth. There are some pros and cons there, too.

[00:26:10] I completely understand that. But I think it has shown that we need to use the advantage that we have. We may not be the U.S. We're much smaller, smaller, but we also need to use the advantage that we have. And the reality is we do have a whole lot of advantages. We just have one neighbor really to the south. There's no one else that are a neighbor, I guess, to the north, fire up north. You can say that Russia is our neighbor. But again, we have two oceans from a geographic standpoint.

[00:26:39] That's very advantageous. In terms of wars, for example. Think about countries that are surrounded with five, six other countries. That all have unrest. That all have unrest. The geography does matter quite a bit. And our country is also so vast that we have a whole lot of natural resources that are key for economic growth. So there's a lot of stuff that we have going for us.

[00:27:06] And also being able to make it more attractive for businesses to invest here. So that I think David Rosenberg was talking about that. And he said, look, we have to make sure businesses will think twice before they decide from relocating from Canada to the U.S., for example. Even despite tariffs.

[00:27:27] If it makes no sense or the potential upside of moving to the U.S. is just so low that it's not worthwhile of just moving their whole operations there. Then businesses will probably stay in Canada. And how do you do that? You give ways, whether it's cutting taxes for reinvestment, whether it's making reinvestment in Canada tax-free.

[00:27:52] Whatever they decide to do, we have to incentivize businesses to invest more in Canada. And there's different ways to do it, but I think that's important. And Rosenberg had a really good point there. Yeah, and it starts grassroots with the right policies to keep movers and shakers and entrepreneurs who are going to build the next great big companies in Canada in Canada. We don't ship Waterloo software engineers to go get $450K plus stock options at Uber in California.

[00:28:21] And I think my proposal would be match QSBS, capital gains tax treatment in Canada. This would be my number one proposed tax policy. And what it basically means is in Canada, if you sell your business or something, you have a lifetime capital gains tax exemption. It's like a million bucks and 50K. Call it a million bucks and change.

[00:28:47] QSBS, if you hold the shares for five years in the US, you hold those shares, you sell your business or there's some big exit, then you pay very minimal tax, net net. And look, those kinds of incentives really matter for where you're going to grind on building a company for the types of people who might build the next Shopify, who might build the next big company and bring private sector jobs here.

[00:29:13] I think matching QSBS would be a great way to stop high skilled driven job makers go to the US. That would be my proposal. Yeah. And I mean, I think we've talked about that for me. I think it would be I think the idea of just however you structure it, but just essentially removing capital gains tax if you use that money to reinvest in Canada. And obviously, you'd have to put some guidelines around that.

[00:29:43] But that could be an option to do it. And people may say, oh, well, then, you know, when do they pay taxes? I mean, you can always cap it if you want or you do it on the tiered level. There's different ways to do it. But that would be a way, in my view, to encourage investment in Canada. Look, you made you made a killing. You had a lot of capital gains. It's fantastic.

[00:30:04] Either you get taxed at the whatever inclusion rate or, you know, you don't get taxed at all, provided that you invest, whether it's the whole amount, a certain percentage, whatever it is. There's different ways to do it. You can reduce corporate income tax as well. There's there's all different ways to do it to make things more attractive. But at the end of the day, if you make companies think twice about moving to the U.S., I think that's what's really important.

[00:30:31] Just so companies, it's not a no brainer for them to move to the U.S. Just think of Mag7 companies, right? Those companies exist because in the last 30 years, the U.S. has built a financing ecosystem and investment to have those types of world changing ideas thrive.

[00:30:56] These are three trillion, two trillion, one and a half trillion dollar companies created immense amount of value, have thrived in an area that is far away from Washington with less regulation, far, far, far away from Washington geographically. And the right financing ecosystem to thrive and the right capital gain structure for incentive to not go somewhere else. I mean, that's the formula, right?

[00:31:23] So I think that I think that we should look at look at that. All right. So back to on shoring. One thing on shoring guarantees and I and again, I resonate with that story in the Rust Belt and you as well, like take care of take care of your people at home. I get that. But one thing pushing on shoring for the sake of it does is it guarantees worse products at higher prices. Almost always.

[00:31:53] Concepts like Kaizen with continuous improvement, just in time production, quality obsession. Everyone in the world uses the TPS, Toyota production system, if they're manufacturing goods. It is it is the staple. They wrote the book on it. They're the best at it. The Vietnamese are expert craftsmen. Have you ever been there? Did you go to Vietnam? No. No, I haven't. No. People who are listening have been there. I went in 29, 2018, 2019. They'll know what I mean.

[00:32:20] Unmatched tailoring, vast selection, materials, unbeatable prices. It's part of the culture that they're expert tailors and craftsmen with textiles. You know, Lululemon and Nikes of the world. That's why they make all their stuff in there, right? Taiwan revolutionized the world through semiconductor fabrication with the world changing company of TSMC. Without their innovations, your iPhone, your computer, your electric vehicle doesn't exist.

[00:32:49] The Dutch, they produce the only machines on Earth capable of advanced lithography for chip making. Canada, we're not just good at hockey. You know, state-of-the-art technology and energy, not only in oil and gas, but look at nuclear. Like, the innovations of the Canadian deuterium uranium reactor is world-class. Other countries are adopting it.

[00:33:09] Now, the U.S., they are elite at technology, software, hardware, entertainment, aerospace, defense, and ultimately providing entrepreneurs with the right financing ecosystem at the right time. This has been their advantage. This has been their advantage for a long time.

[00:33:30] So, you know, they have a deep bench, but trying to push onshore against all of those factors in a global economy, it guarantees that you break capitalism. And the only rule of capitalism is the best product at the best price wins. So, if you ignore that fundamental law, then you will end up with a worse product at higher prices.

[00:33:59] So, I just don't think that that's the fight worth fighting, in my opinion. Yeah, and there's also other stuff, right? So, think, I was hearing an example make sense. There's, I think it's a country in Africa. I can't remember the country itself, but it's just the example makes a whole lot of sense. Essentially, the only thing they export to the U.S. is vanilla. And vanilla cannot grow in the U.S., but they're still being imposed these massive tariffs. Yeah, exactly.

[00:34:28] Like, they're still being imposed these massive tariffs. But at the end of the day, it's like, okay, like, yeah, they have a deficit because the U.S. has a trade deficit with this country because the country is so poor that they can't really buy anything from the U.S. And the only thing they ship out is what grows there and only in a handful of countries around that region. So, that's why a bit of the lunacy about these tariffs and the ways it was implemented.

[00:34:55] And even the 10% because there are countries that the U.S. actually has a trade surplus with. And I think Australia is one of them, if I remember correctly. And the U.S. still imposed 10% universal tariffs on them. So, if they had a trade surplus with you, it's not like you were off the hook. You were actually just getting the 10% blanket tariffs. It was the base 10%, which, by the way, it came off the top.

[00:35:22] I don't think is an egregious idea for the U.S. What isn't egregious is what you're talking about with, say, that company that only ships you vanilla or only ships you cocoa or only ships you coffee that you're not going to have naturally occurring in your country. You're going to have a trade deficit. So, get people to the negotiating table and maybe the big brain shit works here.

[00:35:49] But when you roll it out based on a calculation of a deficit, how do you – they need to backpedal and re-figure that out. Because you're not going to get out of a trade deficit with a small country that only ships you cocoa beans. Yeah, and I guess the last thing that's lost in all of this, unless you listen and read a lot of macro stuff, is the capital accounts.

[00:36:18] So, what tends to happen is that you'll see, for example, let's take China. So, the U.S. has a massive trade deficit with China. So, what ends up happening is China ends up with a lot more U.S. dollars. So, what do they do with these U.S. dollars? Well, they used to buy U.S. treasuries, but this has been going down, down, and more down over the last, I think, decade. Roughly, it's been steadily going down.

[00:36:43] But some of that capital will be going into U.S. stocks, will be going into other asset. Because the U.S. dollar is still the currency of the world. And if you have those U.S. dollars, at some point, you have to park them somewhere. And obviously, China has also been buying gold. That's well known.

[00:37:01] But it just goes to show that I don't fully think they've thought this true because they could really put some pressure on the U.S. stock market with what they're doing. And essentially slowing down the flow of U.S. dollars to other countries and potentially forcing those foreign investments out of the country as well. So, let's talk about stocks on our watch list.

[00:37:27] But before that, Simone, should we talk about what's next for the podcast here? A couple of items? Yeah, I'll do my best because your connection is not great. So, I have to really focus today's podcast and piece in some of the words you're saying. Dude, my office that I just got, I just went to them and I went crazy. I was like, you guys need to get faster connection. Like, I can't do this.

[00:37:55] I can't let alone do the podcast on this connection. So, yeah, you're coming live on my hotspot right now, Simone. All right, so what's next for the pod? We are coming on episode 500 and we're going to do something pretty amazing for that. More details to come in early, mid-July-ish. It is going to be pretty, it's pretty awesome. We're going to have set up with one of our major bank partners. And it involves the Toronto Stock Exchange. I'm going to leave it at that.

[00:38:25] So, we're going to have that set up and announce when people can sign up and be part of that event. And it'll be limited to the first hundred signups. So, it's coming. Let me nail down some key details and then I'll announce it on the pod and people can sign up on, you know, whatever form or eventbrite we put together.

[00:38:45] And in content news, Simone and all the listeners, I will be moving a little bit away from the content weekly cadence starting later in this month. It has been such a good ride with you, you know, coming up to 500 episodes, a couple hundred on the real estate podcast. I feel I've said all I have left to say.

[00:39:14] I got so much going on with FinChat, raising a pretty significant amount of capital, bringing the company to 50 people. And so, all of my efforts will be on that. However, Simone, we will be doing a quarterly kind of mastermind show with you, me, and Dan Kent. Yep. Yeah. And then, Dan will be taking your place on a more full-time basis. That's right. Yeah. So, what happens with our spot is still going to be twice a week.

[00:39:44] I'm going to take this time to do a little bit more strategic stuff with the podcast, bring more sponsor partners on, and potentially another show too. A little bit more on the entrepreneurship side, maybe a little Shark Tank style kind of thing. That's on my radar. But, yes, the weekly stock talk has run its course for me. So, that's that. Yeah, that's all right.

[00:40:10] I mean, it's been a great five and a half years, believe it or not. It's been that long. Definitely been fun. We still have. Don't make me cry. You know. Well, it's okay. I can't see it. It's lagging so much. No, it's been great. And obviously, I think for both of us, grown a lot over the last five and a half years. And I think there's just going to be some exciting stuff for the podcast. You'll still come on every now and then.

[00:40:39] Knowing you, if there's a massive piece of news, you may try to jump in and come in, you know, once in a while when it's not planned. I feel like I may get a text from you from once in a while and say, oh, my God. There's only so many tariff rants my fiance will be able to listen to. So, I'll need the void. Yeah, exactly. But there's going to be some more stuff coming on the podcast.

[00:41:02] So, we're working on creating some YouTube content for the listeners, the audience. We're going to be rolling out some new stuff on JoinTCI as well. More details to come in the next few weeks. So, I'm the one that's the most on JoinTCI. So, I try to go there and respond to questions. When our subscribers have any questions, I usually respond to them within max two days. But now that I am podcast full time, it's usually either the same day or the next day.

[00:41:33] So, there's going to be some more content coming up on there. So, stay tuned. I have a few ideas in mind. We'll probably look at different tier as well. But there's some fun stuff coming. So, people shouldn't worry. Fun stuff coming there. And I'll also be looking to get some more guests on. So, maybe these bonus episodes you've been seeing on Wednesday. A bit more of those as well. As I also have more time to dedicate to the podcast. Yeah. So, that's the news.

[00:41:59] Of course, Simone, you're dedicated more time on it now. So, things are going to only improve. And I know this show's in good hands and the listeners love Dan. So, you know, it's going to work out. All right. You want to start here with Stocks on our Watchlist presented by our beautiful friends at Ike Bank. Yeah. It's a lot of stock on our watchlist. Yes.

[00:42:24] I decided to do it now because I've been more active on Twitter slash X for the same reason I just talked about. Because now I'm full-time on the podcast. And I think it's important for me to pose there also. Like, it creates some engagement. So, if you want to engage with me, by all means, follow me at Fiat underscore Iceberg. I, you know, I'll engage with people from time to time. I can't respond to all comments. But it is something I like to do.

[00:42:52] And what I've been seeing is more and more people asking me, like, what stocks do I have on my watchlist right now? And the list, like I mentioned at the beginning, is quite long now with the drawdowns we've seen. There's quite a few. I won't go into huge details for each name because a lot of them are well-known. But I'll just say a few points as to why I think it's a good idea despite what we're seeing on the trade front.

[00:43:16] And that's what's really difficult right now because I've seen people post, like, oh, stocks are so cheap. My first question always for them is, like, how do you determine that they're cheap? Like, how do you determine that the stocks are actually cheap when it's so hard to figure out in the short, medium, and even some cases long-term, what the impact of earnings and free cash flow will be? I don't know what your thoughts are on that before I get started with the names.

[00:43:44] A stock down 15% from where it was before doesn't imply that it's cheap. I think that I'll just blanket statement that, right? Like... Yeah, exactly. Something extremely overvalued might take a 50% to 75% haircut before it's in the strike zone. That happens all the time. So a little correction doesn't mean it's all of a sudden an attractively priced stock. It's almost...

[00:44:13] You have to separate the reality from the price action. Exactly. No, that was my point because I've seen a lot of people post like, oh, they're so cheap, but I think they're just looking at the dollar amount. So that's my view of that. But they're looking at line go down and it's red and equals sign opportunity. Yeah, exactly. The first one here is NVIDIA. I've talked about it recently.

[00:44:41] Again, the US has said that semiconductors are exempted, but this exemption, I did some research, is definitely a gray area. Based on what I read, some GPUs will face tariffs, some won't. But regardless of tariffs or not, NVIDIA is still clearly in the lead when it comes to GPUs that are used for AI. And that will probably still be the case for a few years before competitors catch up. It could even be longer.

[00:45:06] But I just think that demand will likely remain pretty strong here, even if there's a price increase because of tariffs. Because if you're looking for the best GPUs, there's not really any other alternatives right now. The second one, anything you want to add? You're nodding. How many NVIDIA GPUs, H100s and Blackwells are going to be black marketed into China in the next several years?

[00:45:34] There is going to be a legitimate black market around GPUs. It's already happening. Oh, yeah. Just because of the trade restrictions and it is an AI race, AI cold war. It's an AI cold war, right? And there will be an entire sketchy economy around H100s. It's already happening. Yeah.

[00:46:04] And it's going to get bigger. It's crazy to say. Who would have thought? You know, this gaming GPU technology would all of a sudden become like the most hot globally, red hot demand that is blacklisted from going into certain countries. So all of a sudden there's like a black market around it. It's going to be a big thing. Yeah, exactly. And then TSMC, Taiwan Semiconductors, same kind of angle here.

[00:46:34] They produce 90% of the world's most advanced semiconductors. Again, the rising risk of a global conflict is there. There's no doubt about that. But the demand for semiconductors should remain pretty strong as companies and governments try to not get left behind on the AI front. So I think TSMC should do pretty well. The only thing is it's hard to factor the geopolitical risk with them, especially because so much of their production is still in Taiwan.

[00:47:04] And clearly with the escalation that we've seen in the trade war between the US and China, that's a risk that should not be ignored, in my opinion. So keep that in mind. At 11 times forward operating income, I'm happy to take the risk. That's where it's trading today. Take the risk, yeah. Simone, I am literally buying TSMC. It's on my watch list for too long. I'm literally buying the stock right now. Carry on. Carry on.

[00:47:31] While you buy, I'll talk about a company that I don't think he'll buy. It's okay. So the next one on the list, completely different. So CP, Canadian Pacific. I've had this one on my watch list for a while. I'm definitely glad I've been patient. They'll likely see an impact from tariffs. But the more this plays out, the more it does look like North America will be a tighter trading zone. I know people will point to the tariffs that were imposed on Canada and Mexico.

[00:47:58] But the reality, there's still a lot of exemptions due to the USMCA. And in the big picture of things, I think those tariffs will end up being quite low compared to the rest of the world. And I think CP will be fine long term because of that. I think you're going to see a North American block probably form, whether Canadians like it or not. I think it's probably where we'll be going.

[00:48:23] There's going to be a tighter trade union within the next 2, 3, 4, 5 years in North America. That's my prediction. And I think CP is point to benefit from that, even though it looks a bit grim right now with the state of things. So did you buy TSMC or what? I'm literally, I just put in an order right now. Okay, okay. So I'll talk, the next one here is Uber. Uber has really become a fantastic business.

[00:48:51] They're now profitable, generating tons of free cash flow. It's, of course, a slowing economy will impact results. I don't think there's any doubt about that. But they're likely going to be more available drivers, which means that it could help their margins because they will not have to pay as much for their driver. If there is more offer of labor, clearly they'll have more to choose from.

[00:49:16] They will no longer have to do those big hiring bonuses for Ubers like we saw during the pandemic, which I don't think they're doing still. But just to give an idea that they'll probably have the bigger end of the stick here. And it's the delivery platform. I think we can say that now. Or the transport platform, however you want to say it. I think they're definitely well positioned to thrive here.

[00:49:42] And as autonomous vehicle are pushed out, I think you'll see them expanding that offering through their partnership with Waymo or potentially another company who might jump in Tesla or another company that is doing self-driving. Moving on to the next one on the list. This is actually three companies. I'll bucket two together and then one slightly separate. You may have guessed it by me saying that. So it's Visa, MasterCard and American Express.

[00:50:10] Visa and MasterCard, clearly they're the payment rails. So tariffs will have an impact on cross-border spending in the economy. There's no doubt about that. It could spur inflation, though, in some countries, which would benefit them. And sure, there could be some disruption down the line coming from stable coins, for example, the crypto space.

[00:50:30] But at the end of the day, I still think there's a high probability of these two companies still being dominant players five to ten years down the line with higher revenues, profits, cash flow. So they are definitely on my radar here. And American Express is almost it's a Visa, MasterCard, lesser network in terms of size. But you get the added benefit or downside of it also being a bank. And they also do issue their own cards. So, yes, clearly they will.

[00:50:59] They're a bank because they issue their own cards and they actually are the ones offering the credit. But by the fact that they're issuing their own cards, they're actually getting a nice fee revenue from those premium cards. Whether this stays going forward or not, if people are struggling financially, maybe that's something they drop. We'll have to see. But I will be checking their delinquencies trend. And it's not something I would pull the trigger right now. I would probably weigh the quarter or two just to see how their earnings are trending.

[00:51:27] But this one is definitely on my watch list. You're nodding as I see you in a non-lagging version. So it's kind of nice to not try to decrypt what you're saying. The death taxes and Amex rising their average spend per card is one of the most sure things in terms of pricing power.

[00:51:54] It's not like they raise the price on the card by 30% year over year. But almost every quarter it goes up a few bucks. And I don't see that trend changing too much just because of how much pricing power they have on some of the higher end cards and some of the higher end business cards. So on the lower end of the curve there, consumer-wise, yeah, that is more cyclical.

[00:52:19] But it's been one of the strongest pricing power businesses I can think of, which is how much they charge on a per card annual fee basis. No, and yeah, exactly. And that's a good point. So those are definitely on my radar. The next three are in the same space here. I think it's a great opportunity, to be honest, for the oil and gas space. I know it's not for everyone. So I'm thinking here Canadian Natural Resources is a really high-quality one.

[00:52:47] I already have it in my portfolio. I actually added to it a couple days ago before the big rebound. I will probably add some more. The reason I think it's a great time to buy is because it's time to buy oil and gas companies when price of the commodity is low and trending down. The key is to buy the high-quality players, though, in this space because the poor, the not-so-good quality players will usually have a break-even cost that will be much higher. They'll have more debt.

[00:53:17] They'll have less cash flow, less room to maneuver. A Canadian Natural Resources type of player, though, their break-even cost is in the low to mid-40s of the West Texas Intermediate WTI. And it's currently in the high 50s, low 60s. It's been kind of hovering there. Clearly, there's some pressure on that because of the recession risk because if there's a global recession, demand will go down.

[00:53:42] But we also saw the U.S. ramp up coal production, and they're really promoting having power generated by coal. So it's not like the demand for oil and gas is going away anytime soon. And this is the kind of situation where the cure for low prices, if you're thinking about oil prices, is low prices. If prices remain low for some time, there will be less investment in this space.

[00:54:10] There's probably going to be a bunch of companies that will go under. There's going to be less production. As the economy picks back up, then what you'll see is there's going to be more and more demand, and it's going to push up the price of oil. It always does. It's always like this that it happens. And then a company like Canadian Natural Resources will be the biggest benefactor for that down the line if it plays out like that.

[00:54:34] I know it's not easy when the company, the price is tanking and oil price is tanking, but you have to play the long game. Now's the time to buy them, not when the price is trading $100, $110 or whatever it is. When you own cyclicals, don't be surprised when there's cycles. Exactly. That's it.

[00:54:57] No, it is actually one of the big lessons I learned this year, getting smacked a little bit on the wrong side of some cycles and just being wrong about some stuff. Like, don't be surprised when you own cyclicals and they act like cyclicals. It happens. And, you know, if you're going to own them, own the really good ones. Exactly. And that's key.

[00:55:24] And that is Canadian Natural Resources. And the beautiful thing about Canadian Natural Resources, obviously dividends are not guaranteed, but it's yielding 6%. So at this price. So you're definitely paid to wait. And in this kind of environment, obviously, we always talk about total returns. A company like this to be paid to wait a little bit as things turn around, it's not a bad thing to get that 6% dividend. And then the next one, same kind of vein.

[00:55:53] I've talked to it a long time ago. It's Marathon Petroleum. It's the largest oil refiner in the U.S. The stock has drawn down close to 50% over the last year. Lower demand will clearly affect them. It's going to affect their margins. But again, it's a great play if you're betting on the turnaround of the North American economy. And then Tourmaline, similar to Canadian Natural Resources. So again, if natural gas prices take a hit, Tourmaline and Tourmaline does well.

[00:56:21] I'll definitely be adding to this position. It will go down with the price of natural gas. But surprisingly enough, natural gas has been more resilient than oil and gas. That's for sure in terms of the price what we've seen. So that's another one. Those are 10 on my list. But in the next few weeks, I'll be talking about likely another 10 or 20 more because the list is quite long. Because now we're starting to see valuations that are making a bit more sense.

[00:56:49] Even though, like I prefaced it, it's actually quite difficult to figure out if a company is cheap or not right now. Yeah, good point. The CEOs of these companies can't even begin to give any sort of sense of guidance or what CapEx, specifically what CapEx spend is going to be like. And it's really, really tricky to make those kinds of guesses.

[00:57:15] What I will say is you have a nice list here. I think it's really important to be buying quality into weakness. Yeah. Right? Like you can get your face ripped off buying really cheap junk when quality is starting to look a little bit more attractive. That's typically the way I like to move. No, you're absolutely right.

[00:57:41] But what's so hard is not all businesses, but some businesses that will be impacted by tariffs. Like you can look, there's a bunch of high quality businesses that the outlook is very, very much murky. Let's just say that. Like it's very hard to figure out what the outlook will be. Like an example of that, I think they'll be fine long term. But, you know, Walmart has a lot of headwinds facing it. With these tariffs.

[00:58:09] Doesn't take a genius to just think about Walmart for a second and where a lot of their stuff is produced. And say, okay, they're definitely going to feel some hit from tariffs. And people might say, well, they'll just pass it on to the consumer. Well, the consumer doesn't have unlimited amount of money. So at some point, the consumer will probably say, you know what? This item I don't need. Yes, I'll still shop there. But I actually lower the amount of items that I purchase.

[00:58:35] So that is an example, a prime example, in my opinion, where you have a high quality business. Walmart has been around forever. They're there for a reason. They're well managed. They're very efficient. But there is some doubt. Like it's not going anywhere. But there is some doubt on the level of profitability they'll be having in the face of these tariffs. Definitely changes the margin profile. Yeah. Maybe like an understatement.

[00:59:04] But no, I hear you. My order just filled with TSMC, by the way. I am now a shareholder. Yeah. Thank you. Thank you. Go to visit Taiwan. Make sure that the trade war is at its peak. Peak between both. And then you'll book. You'll probably get a good deal on those. Peak uncertainty is like how I like to operate. No, look. I mean, I've wanted to be a shareholder of this in ASML, kind of equal weight them, which I now officially have. So this is actually a pretty sizable purchase.

[00:59:34] And look, I mean, it's 30% off. It's high. It trades at 11 times forward. Maybe that's a good segue into my ones on my watch list. When it comes to large cap tech, TSMC and Amazon are pretty juicy in terms of things that I don't own. So I'll call those out. Now, four companies that I own that I like more here. Uber, you mentioned. ASML, TSMC, the semis business.

[01:00:03] Intuitive Surgical is still crazy expensive. But I was buying it recently and it's down another 10%. So I still like it. It's a freaking expensive stock. So it's not like a drawdown makes this thing cheap. But it's a world-class company. And then I'd like to call out one in particular on the US side, lastly, of Google. On the Canadian side, I like TerraVest still a lot here.

[01:00:30] It's still had an amazing year. Unbelievable year performance-wise. It has been just face-rippingly good stock for me and shareholders. I like it a lot here. I think the valuation is really good. I like the acquisition playbook that they're doing right now and the things that they've just recently tuck in as well. So worth mentioning that. And Brookfield is getting pretty cheap here too. I will say that. Yeah, that's another one.

[01:00:59] Actually, all the companies you mentioned there except TerraVest and Alphabet, I also have on my bigger watch list. Bigger list. Yeah. I just didn't want to make it like 30 names. It would have taken forever. So I'll probably break it down over a few more episodes. I also have American Express on there for the reasons you mentioned. I think we've both back-to-backed that one in our stocks on our watch list. But I want to take the last moment of the show here to call out Google specifically, aka Alphabet.

[01:01:29] I have been warning listeners of the podcast the risks of this stock for two years now. You know, I said that when the stock was very in favor two years ago. And it's been flat since then, by the way, which is crazy. Despite the risks that I think are still very real for what happens when a business like Google Search goes from 90% market share to even a 75% plus dominant position,

[01:01:58] is it's hard to make the stock work. You know, you get massive compression on the forward multiple. It's exactly what you're seeing. It's now down to 13 times forward earnings for this business. Crazy, right? It's getting hard to ignore on this drawdown. I like the upside in Waymo, more market share in cloud and workspace. YouTube is a beast.

[01:02:21] The catalyst that I think can start to make the stock work again here is Gemini is getting really impressive, especially on the API. It's become a developer favorite. It's extremely low cost compared to OpenAI and Anthropic. It is very consistent, which is a very nice thing for developers when it comes to the API. And it is now leading every single category on the developer rankings in Hugging Face.

[01:02:51] They have now six of the top 10 models on Hugging Face for developer rankings. That came out of nowhere. That was not a story for this business, even just two, three months ago. So that's a fairly new development for someone who's in that world personally. And so I think Google here at 13 times forward is starting to get too cheap to ignore.

[01:03:18] It's still a small position here for me because I sold a bunch of it like a year and a half ago on the concerns around, you know, what if search goes from 90 to 80? Everyone will say, oh, look, they still have huge search market share. It's hard to make a stock work when it loses market share. Even if it's still 80%, it's really hard to make stock work. So I still think that that's a concern.

[01:03:42] But the upside in Waymo, Cloud, Workspace, YouTube, the catalyst here with Gemini, I think it could rewrite higher to closer to something like a Microsoft 20 times. Yeah, I mean, I think there might be some good opportunities to buy Google if that's your premise for owning Google in the next year or two, especially as the risk of a recession increase. Like Google and Meta will be especially at risk because they have some ads.

[01:04:11] Exactly. They have business models that are heavily reliant on ads. It's not the only thing. Don't get me wrong because you mentioned some of their good products like Google Workspace. They do have revenues coming outside of that. But where do companies cut back when there's a recession and they want to save money? Advertising will be one of those things. So it could definitely be one that gets under pressure under like in the next year or so where there could be some good opportunities to enter that. It's just something I wanted to chime in here.

[01:04:40] Yep. No, good point. Good point. But again, everything comes at a cost, right? Exactly. I don't like it at 30 times forward. No, exactly. But probably doesn't deserve the same multiple as Microsoft, but maybe somewhere split the difference between now and there. I guess time will tell. Small name for me. I'm not jumping out of my seat to buy the stock here. I still think those concerns are real.

[01:05:05] But it deserves a highlight again of something that I've been pretty bearish on for two years, even if I've been very cautiously optimistic. And now that's turning into like, okay, everything's got a price. I'm interested here. Yeah, I guess the last thing I'll finish on is, man, gold is reaching out by my son. And U.S. Treasury yields are still climbing.

[01:05:31] It's almost as if the traditionally, right, people would flee to U.S. Treasuries as a safety play in times of uncertainty. But what we're seeing right now, it's not the case. If that was the case, U.S. Treasury yield will be going down because the price of the treasuries would be going up and yield is inverted to that. So you'd see the actual yield go down. So what you're seeing now is, who knows?

[01:05:58] I'm sure there's some market dynamics that we're not aware of that are happening. Whether China is dumping U.S. Treasuries, who knows? It could be happening. But it's just fascinating to see gold reach out time highs where the yield for the U.S. 10-year keeps creeping up. Thanks for listening to that very full episode of the Canadian Investor Podcast. We appreciate your support. You can support the show at jointtci.com.

[01:06:24] Thank you, everyone, for what has been nearly a six-year. Every single week, show goes on without missing a beat run. I am extremely grateful for all of you. I'm not going anywhere, but I'm just not going to be a weekly guest on the show. You are in great hands with Simone and Dan. So I've got a couple more weeks here as we transition Dan on the pod.

[01:06:54] Again, seriously, thank you guys so much. It's been a good run, man. It really has. It has been. I appreciate the heck out of you. Yeah, same. The appreciation is mutual. Appreciate it, brother. I'm going to tear up here on my... Thank God I'm going. What kind of podcaster has crappy Wi-Fi here? Oh, my God, dude. I thought you were going to pull there. Oh, no, I'm losing my connection.

[01:07:24] I'm about to tell my office landlord here, this new office I got, that check ain't in the mail. How about that? Check ain't in the mail. It's about to bounce if you don't fix this. We appreciate you taking the time to listen to the show through all these years and moving forward. Thank you. Thank you. Thank you. Take care. The Canadian Investor Podcast should not be construed as investment or financial advice.

[01:07:51] The hosts and guests featured may own securities or assets discussed on this podcast. Always do your own due diligence or consult with a financial professional before making any financial or investment decisions.