12 Stocks We’re Watching as the Market Pulls Back

[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 in to the show. My name is Braden Dennis, as always joined by the resourceful Simon Belanger. You having fun yet buddy? We having fun? A little drawdown to start the year?

[00:00:28] Hey, it's making, it's definitely making things not too boring, that's for sure. Yeah, that's for sure. I mean, this is nothing. This is nothing. You know, it's good to taste a little volatility every once in a while, especially when you know, things just go up into the right every once in a while. Got to be grounded a little bit. This is normal. Of course, there's lots of news. We're going to talk about how there's lots of news and lots of moving parts.

[00:00:56] But there's also just a lot of, hey, this is what happens. All right? Like you can point to reasons X, Y and Z, but this is, this is what we signed up for. Yeah. Yeah. And I mean, I think for a lot of people, it's a reality check. Unfortunately, I mean, that's, that's what it is. If you haven't been in the markets for too long, this will be a bit of a reality check that it does not always go into the right.

[00:01:22] Right. And it's probably going to get as volatile as it has been since probably the last 15, 20 years. I'm going that far back as March 2020. Yes, we saw some big drawdowns, but it was short lived. Quick. Yeah. But with the truther down south there, is that what they call it? So truth social, the truth social.

[00:01:46] He truthed with his constant truthing will definitely be having a lot of volatility in the market because I mean, I think at this point, Canada and even the US is probably heading into recession with everything that's happened. And obviously markets don't like that. And the uncertainty clearly the markets don't like. Yeah. It's, it's also just like folks zoom out. Like, you know, it doesn't, it's, it's, it's not a smooth up into the right all the time.

[00:02:16] Of course, zoom out a little bit. I mean, the performance of, of some of the major indexes on a trailing one year are, are nothing short of fantastic. I mean, look, Apple stock total return, like the largest constituent of their index total return trailing one year, even after this pullback is 28%. Like, yeah. That's the largest, large cap, you know?

[00:02:42] Yeah. That's not one, that's one I would not touch with a 10 foot pole, but you know, my opinion on Apple. I think it's just too much for winning that. Okay. Let's look at the S&P 500 trailing one year. You're at 9% after, after a drawdown, right? It's like, guys, let's zoom out a little bit, but let's get into the content. I think that this is relevant here. I got, I got a segment. You're going to talk a little bit about the, how markets don't like uncertainty.

[00:03:10] And then we got, uh, stocks on our radar presented by our friends at EQ bank, a fan favorite. We got, we're doing something a little bit different today. We're talking about lots of different companies and ideas on our list today. So yeah, lots, lots to look forward to. Yeah, exactly. And yeah, you're right. The markets don't like uncertainty. And I, I mean, I think with Trump, that's what you get.

[00:03:32] You get a whole lot of uncertainty. No one really knows. And before I go into this, um, I was actually, as I was eating, preparing for a recording with Dan, I'm like, Oh, let me see what, uh, Fox business news is saying about tariffs because they're notoriously pro Republican and very favorable to Trump.

[00:03:52] So I just wanted to see, see how different it is. And because today we're recording this and Ontario imposed 25% export tariffs on a New York for electricity. And then Trump announced that he was raising the tariffs from 25 to 50% for aluminum and steel. So I wanted to see, uh, what they were saying. And they were actually interviewing the Alcoa CEO and they're like, Oh, are these tariffs making you want to invest more in America so that you don't do that is like,

[00:04:22] to be honest, no, because the issue is like tariffs come and go and we can't plan long-term with just the threat of tariffs. Like for us, we're planning for like five, 10, 15, 20, 30 years down the line when we're building these. They have like a legitimate CapEx cycle. Yeah, exactly. And he's like, our main concern is low electricity costs. And the reality is most of the aluminum Canada offers it.

[00:04:52] The most of the aluminum comes from Canada into the U S and we just don't have that much incentive in the U S. And they were asking him about Trump's policy of build baby drill, making energy, uh, dominance, making energy cheaper. And again, he's like, well, I mean, it's a step in the right direction, but we'll have to see whether it materializes or not.

[00:05:14] So I thought that was really interesting, especially on Fox business news that the alcohol SEO is basically pushing back on this saying like, it doesn't change all that much for us. Mm-hmm. Yeah. I mean, again, those CapEx cycles and lifetimes that they're building when they're spreadsheeting out all that math and, and getting into the nitty gritty, there's no timeline. That's a, Oh, over the next three months, this matters.

[00:05:42] No, they're, they're planning for like actual capital recycling and actual replacement of large, sometimes five year life cycle type equipment, 10 year life cycle type equipment. Right. So that's what they're looking at. Mm-hmm. But I thought that was a fun little anecdote, um, just to see, right. Cause we get our news, right. We're like Canadians. I wanted to see that other side of the aisle news in the U S but you're today talking about the uncertainty.

[00:06:09] TSX 60, which I was looking at with ZIU from BMO is flat. Uh, the S and P 500 is down 4.1% looking at it in us dollars. And the NASDAQ is down 7.3%. And I actually think it's a bit little worse than that for the NASDAQ in the S and P 500 year today, just because I took these numbers earlier this morning. And it's been a yo-yo today, which seems like it's every day.

[00:06:35] It starts positive, negative, positive, it goes up and down and looking at the last six months, which is about a month before Trump, um, was elected. Uh, the drawdowns are more noticeable. So you're looking at negative 4.6% for the TSX 60, negative 8.5 for the S and P 500, negative 12.4 for the NASDAQ. Now, of course, if you isolate the mag seven, it gets pretty rough when looking at drawdowns over the last six months.

[00:07:04] So you have Tesla down 54% and video down 29%. And that's from their maximum drawdown. So from the peak to where they are now and down 20% for Google and Amazon, down 19% for Meta, 16% for Microsoft and down 13% for Apple. Now, to be fair, and that's what I had in my notes is if you're looking at them for the last year, the only one that's negative. No, it's not Tesla is actually Microsoft.

[00:07:33] So Microsoft is the only one. If I, I'm sure if I would have asked you, I don't even know if you probably would have said Tesla, not Microsoft, right? If I asked you which one is, uh, in the negative for the one year. Yeah. Well, I knew that it was a huge run up before this, this drawdown on, on, on Tesla, such a battleground stock. And now it's like a battleground comp. It's moved from a battleground stock to a battleground company, which is interesting to see.

[00:08:02] Before it was like a battleground stock, but just kind of generally loved by consumers. And now it's a battleground company politically. It's crazy seeing what's happening. I mean, like Elon, like what did you expect? Honestly, like you put yourself so close to polarizing president. And he's been so visible that at some point, you know, people that are really against Trump, I think they'll start pushing back on the products and just offer alternatives.

[00:08:30] Like, I mean, to me, like this, just the way it's been played out, like obviously it would have an impact on his business. And he's also saying, and I feel for the guy in that way is that I think he's having trouble running his businesses because he's spending so much time on Doge, which I mean, at the end of the day, it's a bit worrying. But again, I would not bet against Elon. That's the other thing I will probably mention. What are your thoughts on that? Yeah, I tend to agree.

[00:08:59] I mean, it doesn't matter what your thoughts are on how close to the sun he's getting here in this administration. There is no debating that he is a generational type of innovator and generational type of ambition in what he's accomplished. And I mean, look, like he's going to, it doesn't matter who it is.

[00:09:22] Because you're going to ruffle a lot of feathers if you're digging in some old creaky closets of the U.S. government. Like, let's just call a spade a spade. Like, he is leading an organization that is turning over rocks of the U.S. government in places, a lot of places that people have hoped that you wouldn't look and hope where no one's tracking where money goes for a long, long time.

[00:09:51] Like, a lot of kind of built up, like, you know, it's like when you have a lot of clothes in the closet and you're like, you look at it and you're like, I need to go to Salvation Army. Yeah, yeah. I need to go to Salvation Army with some of this stuff. So, of course, he's going to get some pushback on that too. So, it's a perfect storm, really. And what's funny is, like, if I had to guess, I would have to guess that Trump is probably not, not Trump, but Musk is probably not that supportive of tariffs in general because it affects his businesses.

[00:10:21] But he's taking a lot of flack because he's so close to Trump, right? So, I think, and you're seeing a lot of other countries like Canada. I mean, people are starting to push back too. It's just interesting to see how it is impacting the stock prices. I don't think there's any doubt that it's impacting the Tesla stock price at this point negatively. Unrelated, but do we have a date for the official transition for Carney?

[00:10:50] No, it's supposed to be in the next few days is what I thought. I was listening to a few. Maybe by the time this, I mean, people are listening to this probably know the answer to that. But for us recording right now, I don't think we have a date yet. No, I was listening to a couple of political podcasts just to get a sense when the election would happen and this transition.

[00:11:09] And I think no one knows for sure, but they're saying, like, probably within a week transition to Carney and then probably within two weeks an election call is what most were predicting. So. I have a I've had I have the still the exact same viewpoint that I've had this whole time. What is it's going to be the very last? It's going to be the very last second is not going to be that early election call. I could very well be wrong. Yeah, I have always had the stance that it is going to drag all the way till October.

[00:11:39] And because they want to ride the momentum of this is the this is the party. This is it's not the Trudeau party. Right. And they want a longer time for that to resonate with voters, in my opinion. So I just don't think it's going to be pulled earlier. I mean, I'll go with the ones that are more connected and say it's probably going to happen in two weeks. But I get where you're coming from. Well, we'll see. Yeah, we'll see. Yeah, we'll see. Exactly.

[00:12:09] So aside from that, right, like going back to the uncertainty, obviously, the tariffs threats and it's not just like tariffs threats. It's like, you know, going on and off, increasing pause, like all this stuff going on. Like, oh, clearly it is making things difficult. It's not easy to invest, make large investment if you're a business, because, you know, as much as Trump is trying to get businesses to invest more in the U.S., a lot of the time it just doesn't make sense for these businesses to invest for the U.S.

[00:12:38] for X, Y, Z reason, because other countries are just more competitive, even when you factor in those tariffs for whatever reason, whether it's labor, whether it's cheap energy costs, you name it, natural resources. It just doesn't make sense. So what's the best course of action for your investments? I mean, the first thing we've talked about this time and time again, if you didn't know already, know what you own.

[00:13:03] There's a lot of uncertainty right now in the markets, and big part of it is because Trump, but it's not the only thing. The tariff uncertainty is a big one, but there's also reduction in the U.S. government spending, which will put downward pressures on the economy. So the cuts that Trump and his team are doing and the fact that they want to reduce spending, that's money that's no longer being spent and going into the economy, even if there's fraud and waste.

[00:13:28] You know, even if only 20% of that spending goes down to the economy. I mean, it's still a lot of money that will be subtracted from the GDP. And that's something to take into account. And I think it's a big reason that the U.S. is also likely going to enter a recession at some point this year. And a lot of companies will be refinancing debt that was issued during the pandemic years. And that's something that you should know.

[00:13:57] So if that's your company, while I'm trying to look at my notes because Brayden is copying and pasting. There's a lot of charts flying around above you on the dock here. So, you know, after five years, he still does it, but I digress. I don't think I'll ever learn. No, no, exactly. Just like going up and down all over the place. But a lot of companies refinance their debt during the pandemic and they'll have to refinance at likely higher rates in the next few years.

[00:14:27] So make sure you know if that's a company you own and just understand what the impact could be through their bottom line in their business. And there's just the reality is there's going to be businesses, not all of them. It's probably going to be just a small portion of businesses. But some businesses that are publicly traded will get absolutely crushed in the next few years because of the uncertainty, the tariffs. Some business will just not survive because of this. And that's the hard, cold reality. It may not be a lot.

[00:14:56] I don't think it will be a lot. The best businesses will be resilient. But that's the reality. Some businesses will not be able to survive that. And you need to understand whether, you know, maybe one of the 20 companies you own could be at risk of that. I'm not trying to alarm anything, but I think that's just a cold, hard reality is this will systematically change some businesses and will have an impact to a lesser degree on other businesses as well.

[00:15:24] And some will probably feel little to no impact from all of this. Yeah. It's a mixed bag. Yeah. Which inherently makes for investment opportunities. Yeah. I know it's hard to like, you know, that's kind of our job, you know, find the light at the tunnel and the positive spin around this. We're kind of eternal optimists because to be honest, I think that's how you make money in the stock market.

[00:15:50] But when you have a mixed bag and real nuance, that's when there are opportunities. Like just as a blanket statement, bar none, that's one of the best opportunities come up is when there is nuance, when everything is, you know, all the, there's a leak in the bathtub and all the rubber ducky sink. There is, there's opportunity there. Yeah. Yeah. And I guess one thing that I think for me, it's very important. And I know for some people, they like to be more concentrated and that's fine.

[00:16:19] But I think diversification will be key. I know some people will be a hundred percent in stocks and that's fine. You'll probably be fine over a long enough olding period. If you're thinking, you know, 10, 20, 30, 40 years, you'll probably be fine.

[00:16:35] The only thing I was caution people is that we are going through, I think the early stages of the changing world order and what we've seen over the last 20, 30, 40, 50, even going back close to a hundred years after the second world war. Not quite, but let's say 80. I think there's a lot of things that will be. Which Ray Dalio book did you just finish? All of them. No, but I think it is true. I think we are changing.

[00:17:05] The world order is changing. And I think we have to just be caution, just exercise caution on taking what has happened in terms of return for stocks, bond, gold, cash over the last 20, you know, historically. Just because I think that going forward period will, there's a good chance that it will be looking very different. I'm not trying to say like, oh, everything's crashing. That's not what I'm trying to say.

[00:17:30] I'm just saying that maybe other assets will perform much better than stocks or maybe certain stocks will perform much better than others that you can't really group all of them together. That's entirely possible. But the fact that if you're diversified, not only in stocks, but also in other assets, I think it will help you mitigate kind of that risk so that your portfolio perform well. And you can take my portfolio, for example.

[00:17:59] Most people will think I own way too much Bitcoin and Bitcoin ETF. It's about a third of my portfolio. It's not for the faint of heart because it is pretty volatile. Bitcoin is up 39% over the last six months and down 14% year to date. And despite that, I'm only down 5% for the year and I am up 9% in the last six months. And for the year, that's similar to the S&P 500. And over the last six months, I'm crushing all the indices. Now, I just wanted to put that into context.

[00:18:27] And even if you take my parents' portfolio, which is much better balanced, I would say less concentrated from a balanced perspective. They still have Bitcoin, gold, U.S. treasuries and stocks exposure. And they're still up 5% over the last six months and 4% year to date, despite having a mix that a lot of people would be like, wow, this should not be in a retirement portfolio. But again, it is diversified. It's not. They don't own a third in Bitcoin. Of course not.

[00:18:55] But it just goes to show that having a diversified portfolio in terms of assets and different sectors, of course, and geographies. I think the geography part is quite important too, can be a really good approach to have going forward because it allows you to do well in a wider range of outcomes. Yeah, hard to disagree with any of that.

[00:19:18] I mean, the traditional diversification will not include the assets that you're talking about if you go to a financial planner. But that doesn't mean that there's not merit to it. And I mean, the results speak for themselves, right? Like, I love when people can kind of hate on an asset for a really long time. Yeah. And then you just get to like, be like, look at the performance. Like, there's this viral LinkedIn post about this guy bashing Bitcoin.

[00:19:48] And he's like, oh my God, it's fallen to like 75 grand on how anyone would hold this. Like, how could anyone hold this? And it's up like 15 times in five years. Even if you back out the, like, even if you include the fact that it just lost like 25 grand on the share price, US dollars. Like, you're still going to pick that battle? Like, we can all keep score, right? Like, we can all keep score.

[00:20:14] And if you keep score over one month, two months, three months, I don't think that that's good, right? That's like only a few minutes of the first period. But if we're keeping score over a whole multiple years or like keep the hockey analogy, like, you know, by the all-star break, the results matter. And we've been keeping score. And, you know, you're kind of, I don't care about your biases. I care about facts. That's all. Yeah.

[00:20:39] And a great way too, and we probably should do another segment on that, but it's just allocation, right? Having proper allocation sizing. I think that's important too. You know, I say that with that much exposure to Bitcoin and I know you're the same with Constellation software. But, you know, having, using that sizing to your advantage to lower volatility is a very powerful tool that's available for investors.

[00:21:05] And unfortunately, I think a lot of retail investors don't always do all that well and don't understand the consequences of not doing that well. We may be a bit more concentrated, but we also understand the consequences of being more concentrated, whether they're positive or negative. Yep. Makes sense. Anything else? No, let's move on because I think people are probably waiting for your next segment so we can move on after that to Stocks on a Radar. Yeah. Yeah. Yeah. We'll do Stocks on a Radar.

[00:21:35] We have like 10 different names plus here that you and I are going to talk about. But I have something called, that's relevant to this discussion, called Everyone's Looking for a Reason. That's what I've called this. Everyone's Looking for a Reason.

[00:21:51] A Reason why the stock price jumped today, a reason why the business disappointed on earnings, why the market is down, why gold is up, why Bitcoin is down this month but up last year, why Canadian stocks are outperforming, why growth is doing better than value and value is doing better than growth. And utilities better than real estate. And, you know, the list goes on and on and on and on. Why this sector is rotating to that sector and just CNBC stuff.

[00:22:19] Like, I don't know how else to categorize it. CNBC stuff. They're really loving the market and turmoil right now. Oh, markets and turmoil. Red, red, red. By the way, I forget the stat. I brought this up on the podcast. The positive forward returns for every time markets and turmoil happens on CNBC. The results are incredible. And we're talking about like a pretty large sample size every time CNBC's had their markets and turmoil.

[00:22:49] Of course, there are certain scenarios where the market keeps falling. But historically, it has been a fantastic time to buy stocks. Yeah. Sorry. It's market route now. It's not market and turmoil. So we were wrong. No, they had markets and turmoil yesterday. Oh, they added. Okay. They have to mix it up a little bit. Yeah, exactly. It's another route today, but a turmoil yesterday. So everybody wants a reason, right?

[00:23:18] It's intellectual porn to have a reason of why things are the certain way that they are, right? Sometimes the reason is obvious. I'll give you some examples. So CrowdStrike caused a major global tech outage last year because they made a mistake. Stock down. Okay. Not that hard to understand, right? Not difficult to understand, you know, one plus one equals two. Starbucks just hired an exciting new CEO from Chipotle. Look at his track record.

[00:23:48] Stock went up. Not anymore, but, you know, on the news, on the news, there is a reason why that you could point to and go, okay, I don't need to look further into it. This is why. Okay. Trump slaps on tariffs, which hurts a Canadian manufacturer's ability to be competitive. Some examples, right? Sometimes the reason is not obvious. Maybe there's some natural rotation from one sector to another sector.

[00:24:16] Large funds are moving from growth into value or, you know, they're moving from data center REITs to office or, you know, people are moving from sector A to sector B for reasons X, Y, and Z, right? Like some of these reasons are not as obvious.

[00:24:37] And I think that there's some natural rotation that happens in the market all the time that you don't really have to have any sort of rationale or understanding other than the fact that it's happening. Sometimes value stocks are more or low PE stocks are more in favor. Sometimes high growth or stocks are more in favor. Sometimes certain sectors are really hot because, you know, people who are maybe excited about utilities because of the growth of AI. These kinds of things. There's these kind of like second order effects that are not as obvious. Okay.

[00:25:07] Sometimes it's a combination of the two, which can magnify the results when you have a combination of the two. And that's where you get like some huge bull run or some massive kind of quick correction. And I believe that's to be the case today. You know, you're seeing bad sentiments, bad sentiment from tariffs coming online combined with, look, the market is expensive, man.

[00:25:32] The market has been really, really on a tear and is due for a pullback. You get kind of this combination of it's time for it to blow some hot air. High PE, like high multiple growthy stocks are getting smashed more because the stock market corrects all the time and more speculative companies get magnified in those sell-offs. They can run up faster, but they can also fall off the cliff faster.

[00:26:00] I'll use an example, Cloudflare. Okay. Cloudflare is a, what's the, what's the market cap on Cloudflare? Cloudflare. I haven't looked at it in a while. 40 billion. 40 billion US today. It's a micro cap in today's number. Yeah. It's a tiny tech stock. No, of course, for BeachVachesis, this is a massive enterprise of a business, a huge technology company.

[00:26:28] They power a lot of the, they power a lot of Finjet. I'll tell you that for sure. So, it is a high growth tech stock that I personally would love to be a shareholder of at an attractive price, but that's neither here nor there. You have a company that's what I believe a fantastic product. They provide great value to customers compared to what they charge. The market knows all of this stuff. The numbers are great. It grows very consistently at high rates.

[00:26:56] The market knows all of that, but it's sold off 32% in like, you know, the last week and a half. And it still trades at 25 times sales. So, this is not some like, screamingly cheap stock just because the share price fell off, you know, a third in like, a couple weeks. Now, you zoom out a little bit. Cloudflare equity is up 5X in five years. So, investors have, you know, held on.

[00:27:25] They've made 5X their money in five years. And my God, it's been a bumpy ride. I mean, the stock ran from, you got there on the chart there, the stock ran from 20 bucks to 200 bucks, down to 40, up to 180, and down to 120 again. Now, that's a lot of volatility for a company that if you just looked at their financials, everything kind of goes up into the right. You know, you have three times the customer base during that time, three times the revenue.

[00:27:53] They're now generating positive free cash flow. Nice product enhancements. I know that, you know, as a user. Nearly 5X the big enterprise customer count. So, you got the market in a 10% drawdown, but Cloudflare is in a 32% drawdown. And it was in an 80% drawdown in 2022, which is, my God, I punched myself for not. I knew it was a fantastic purchase there, and I chickened out.

[00:28:21] Anyways, so that's what happens is more richly valued, inconsistently profitable stuff just falls faster. It is what it is. I mean, Simon, we've seen enough in the markets to know that the high growth, high PE, high multiple stuff, people flight out of it. They flight out to safety. They flight out to different asset classes, or they flight out to more value stocks.

[00:28:50] You know, they go buy General Motors or something. And so, there's that flight to safety. And third, Simon, okay, is actually fourth. Sometimes there's no reason at all, okay? Sometimes there's no reason at all. And this is the one that really, really messes with investors.

[00:29:12] I'd say you got to have a few years of experience under the belt to just kind of know and feel out and be okay with. There's no reason. And I don't need a reason. And I know it's so difficult for the intellectually stimulated folks, people who listen to this podcast, people who like to analyze businesses.

[00:29:35] That's a really frustrating reality is when there's just no reason at all. Like, the market fluctuates. That's what more do you want? That's the reason. So, those are the kind of four things that happen and kind of categorizing them and understanding them. And it comes with experience, but they just create opportunity typically. Yeah.

[00:30:01] And I mean, sometimes I would probably say there's almost always a reason, but sometimes it's very difficult to understand the reason. Because if you start looking at hedge funds, I think the best hedge funds can usually see those coming, whether it's one thing I've been reading more and more about is just global liquidity. But it's so difficult to measure that. You can't with just traditional metrics. So, there's like experts that have their own formulas. Like, that could be one.

[00:30:28] But without like massive resources behind you, it would be very difficult to be able to, you know, to be able to quantify that. And some people do a pretty good job of doing so. But even then, you know, for how long, for how long will the cycle last, for liquidity and so on. So, it's very difficult to pinpoint. And oftentimes, you don't know until several years after the fact anyways. Yeah. Yeah. Good point.

[00:30:55] I mean, based on those factors, I mean, there is always technically a reason. But it's very hard to identify. And that reason is like, you know, oh, well, there's more sellers than buyers. Yeah. And some ways you can measure that and somewhat, not reliably, but somewhat predictably forecast that.

[00:31:15] But for the purposes of me, many of the listeners, the buy right, sit tight, the manage a portfolio of diversified assets, the try to grow your wealth over time. And you just don't need a reason a lot of times. And that's like, once you can be comfortable with that, you'll actually see your returns go up.

[00:32:09] And I'm not just saying that.

[00:32:11] And that's what the valuation is.

[00:32:41] Of course, it's fine to take some profits. You don't need to sell at all. If you still like the business, but you realize that it's training very expensively, just take a little bit of profits and keep the position, the rest of it. Yeah. Yeah. Especially if the thesis is still intact. Yeah. Nothing wrong with that. But I really, you know, nothing on the podcast is advice here before. No, no. One thing I strongly believe personally. Yeah. Is if the thesis is intact and you've got yourself a winner.

[00:33:11] Sure. Trim it, as you said, but don't sell the freaking thing. You only get a few monster winners in your career. Don't mess this up. That's why trimming is a good alternative. If you're feeling nervous about it, then just take a little bit of profits. Then you'll know you have that in the bank. Let's move on to stocks on a radar presented by EQ Bank. I saw that you threw on a bunch of different names and I thought let's do that. Rapid fire a little bit. Yeah.

[00:33:40] Let's just kind of offload our list that we have here. Why not just talk about one? Let's offload a list of companies here. So take us away. By the way, we have two that overlap. Yeah. I saw your notes. But I just pasted mine from FinChat watch list. Okay. There's two that overlap. So I'll start with the ones that don't overlap and I'll finish the two that do overlap. So then you can jump in and go with yours. That work? Sure. Okay. So the first one, one we've talked a little bit, you and I, Dan and I have talked about it,

[00:34:09] is TFI International. And you'll see some themes for a few businesses. But I think where you can get some amazing businesses right now. Well, maybe not right now. But you'll be able to get it in the next little while. Well, in the short term is businesses that are dependent on the economy. Because let's be honest, I think nothing is 100%. But from all the signs we're seeing, whether you're looking at Fed productions in the US,

[00:34:38] the Bank of Canada talking here in Canada is like, I think there's a really reasonable case to be made and a strong case to be made that there's going to be a recession. And investors will be selling off companies that are tied to the economy. And TFI International is clearly one of those companies. So it's a name I have on my radar because as investors become more and more bearish about the economy, they'll be selling off a company like TFI probably even more than it is right now.

[00:35:08] Maybe not, but it is one I have on my radar. The next one in the same category is CP. So obviously Canadian Pacific, fantastic company. We know all the moats associated with railways. It goes from Canada to the US to Mexico. CP is clearly going to be in the crosshair if the economy weakens and you add that in terms of tariff uncertainty. I would not be surprised if you see CP trading at a much lower valuation in the coming months.

[00:35:37] It's still relatively pricey, in my opinion, with all the uncertainty ahead. But I think medium to long term, fantastic company. So if I can get it in decent valuation, that is one I have on my radar. Believe it or not, NVIDIA is one that I'm looking at closely. The main reason for it is it's trading at 0.8 roughly price to earning growth ratio. Typically, I think who was it?

[00:36:04] Peter Lynch that said, you know, a one peg or lower becomes very attractive because you're looking not at the price to earnings, but you're looking at the price to earning in relation with the growth that is coming up. Where it gets a little tricky for NVIDIA is, you know, you had mentioned this on the podcast and now it's starting to come out even more is the pass through issues that are happening

[00:36:29] with Singapore sales that are being funneled to China despite export bans. So what is the extent of that? What impact will it have on the business? There's still some uncertainty relating to that. And clearly, with everything that we saw with DeepSeek and the advancements of AI, like will the growth slow more than analysts are predicting? And I don't think it'll stop growing. It's just the rate of growth could affect that peg ratio.

[00:36:58] So that's why it's a little trickier. But if it goes down enough that maybe you get to 0.7 peg, then you're like, OK, I still have a decent amount margin that even if growth estimates are reduced, it's still looking as a pretty decent place. So that is another one, believe it or not, that I have on my radar. What? I see you nodding there. Yeah. No, I don't think it's crazy at all. I do not think it is crazy at all. It's a fantastic business. It's a fantastic business. It really is.

[00:37:28] There's a lot of questions about the next few years. Exactly. For sure. In terms of technology, how it's going to change. But right now, today, I can't think of many better businesses. Yeah. Really. Like the margins are like cheat codes. Their margins are cheat codes. It's unbelievable how much money they're making. Yeah. And where I've been critical of NVIDIA in the past was always like about the expectations and the valuation.

[00:37:53] But hey, if it gets to a reasonable enough valuation with the growth, I mean, why not? And then you have Costco. Costco is still very expensive, but it's currently in about a 13% drawdown. It's a drawdown for ants. Yeah. Drawdown for ants and has had a remarkable time. So it's still very highly prized, but definitely one of my radar kind of goes into the same category as CPTFI just in terms of the reasoning behind it.

[00:38:20] So clearly, if there's a recession, people will probably pull back on the spending a little bit and it could impact Costco short term. But I still think it's a wonderful business and it should be relatively resilient with a membership model that it has as well. But hey, if the market becomes bearish enough on Costco and there's a big enough drawdown, again, could be a name. And then the two names we have in common, American Express is the first one, ticker AXP, currently

[00:38:49] in a 20% drawdown. Clearly, it's going to be, I think, a company that will be affected. If there's a slowing economy, you can probably even put a MasterCard and Visa there. But I like American Express just because it targets premium members a little more. And the fact that it would give me some banking exposure because American Express is a bank and it's a company. It's almost a hybrid between a bank and Visa and MasterCard. Clearly, their network's not as big.

[00:39:18] But I think it is, for me, it's kind of attractive because of that reason, because it's a hybrid. I'm not a fan of owning banks in my personal portfolio. And that would give me that exposure with some extra payment exposure as well. Yeah, it's a little bit more attached to financials in terms of performance. And that's why there was some outperformance there because financials did so great last year. Shocking, honestly, how well they did.

[00:39:45] But I'll add to that, which is, yes, it's a hybrid between that. And it's also about 30% membership club. Yeah. It's about 30% Costco, 30% Visa, MasterCard, 30% bank. That's kind of like what the business is today. I have some thoughts on this as well because it's also on my list. And I've always just preferred to own Visa and MasterCard.

[00:40:09] But as I sit here, I'm looking at, okay, there's 146 million active cards in force for American Express, which is obviously lower than the other two players. American Express has increased the average fee per card. I knew exactly where you were going. Look at the screen. Yeah, you got it up there. What do you got? $39 to $103.

[00:40:37] So they've more than two and a half times the price of the cards in terms of average. Now, I'll raise you one. Go to the quarterly data. This is how effective they are at dragging out more and more value from cardholders in terms of the fees paid. It has gone up every quarter, not just every year over here. It's gone up every single quarter during that timeframe.

[00:41:04] It's just a remarkable pricing power business. It is a top tier pricing power business, in my opinion, like on the Mount Rushmore right now. And the brand is resonating with the next generation, which is a question that I never was able to understand until the last few years with American Express. It always felt like such an older brand. And it is crushing it with Gen Z. They love the perks.

[00:41:33] That's as simple as that. I've been listening to their conference calls because we've been talking about them a bit more often for the earnings and news, Dan and I. And that's what they've been saying. They've been really focusing on that younger generation and offering those perks. And people are happy to pay the premium if it gives them additional perks. And from what I've heard, too, is their customer service compared to competitors, you know, issued by the big banks.

[00:42:02] It's not even comparable. Yeah. I know Dan Foch was like on a big rant because he was having so much issues, like trying to, I think, change his seat for his daughter because he was going on the flight. And he has his credit card with one of the big Canadian banks. It's obviously a Visa or MasterCard. But he was saying it's just a pain. And he was basically saying, like, next time I'm just using my American Express card and my points because for them, like, they'll bend over backwards to help you out where the

[00:42:30] big banks is just like, well, good luck. We'll transfer you to five different people and you won't get a resolution. Five different people. They all say a different thing. Yeah. For one, there's no really consistency in their message. I had a problem the other day with American Express. I called them just to clarify. I couldn't get one of my statements to come through online. And I called them and it's like I had, what's the, who's the Batman's assistant?

[00:43:00] Robin? No, no, no. Not his sidekick. The butler. Alfred Pennyworth. Yeah. Okay. I had Alfred pick up the phone. It was like this proper English man. And he was just like, I couldn't believe, like, how often do you get like that kind of person on the, on the customer support line? I had like Alfred Batman's assistant helping me out and just like, boom, boom, boom, boom. My problem was fixed.

[00:43:29] And it's just, it is refreshing for sure. Because when you call the bank issued cards, let it like get to someone. It's a wild goose chase, but just getting to someone you're on hold for 30, 45 minutes, man. Like who has time for this? Yeah. So I think, yeah, I think they're doing a lot of things right. And the last one that we share without going into too much detail, because it's a pretty well-known one is just Amazon. Amazon, I think is around 19% drawdown, 20%.

[00:43:57] What's not to like with the retail and cloud Amazon web services? It's growing at a nice clip. And at this point, I mean, why would you doubt Amazon? I don't know. I don't have any better, better ways of putting it. Yeah. I also like that Jeff's kind of a little bit more involved in the business again. Like I know that doesn't hinge on him, but you have a kind of generational type founder,

[00:44:21] CEO in that chairman position, really focused on AWS and how it works with AI in the next vision of the company. I think that that's quite nice to have Jeff involved again. I mean, look, the company did 40 billion of operating income on just cloud last year, right? 40 billion of operating on just cloud. And people are very excited about how cheap Google search is right now.

[00:44:49] And don't get me wrong, that makes sense. But that's around 200, just 200 billion. That's just, yeah. What's a billion? Operating income. What's 10, 15 billion, you know, 100 billion, whatever. Which is obviously fantastic. But you're talking about a significantly different growth clip and not having your business under attack from all these different angles of AI. And look, is search volume going to go down and fall off a cliff? No. Look, I own Amazon. I own Google stock.

[00:45:19] You're preaching to the choir, the people who have those thoughts. But I'm just looking at what we've done with AWS, the subscription business. This thing is just gushing cash on kind of the ex-retail part of the business. And yeah, I'd be happy to be a shareholder today. Yeah. Yeah, exactly. I think this is just one. Like, I think a lot of things and a lot of the names that we have, they're just great businesses. And we're just looking at a more attractive entry point. I think that's at least that sums up most of my names here.

[00:45:49] Yeah, exactly. Yeah. That's what a watch list is. It's businesses. I kind of have two watch lists. I have my big list of interesting ideas that I want to do research on. And then I have my workbench of watch list positions that I do not own. That if the price was right, I've already done the work. You know? And I think that that's an important list to hold. All right. So that list that I don't own, I stripped it down a little bit into things that I'm excited about.

[00:46:17] You know, you and I both share Amazon and American Express. Just talk about that. I'm going to talk about some Canadian names and some US names. The three Canadian names are MDA Space, which I've talked about more and more on the podcast in previous times. They're a space and aerospace contractor. They've won some huge, huge contracts with the Canadian government recently. Impressive execution in stock has been a beast lately. Neat.com, which I've talked about before as well too. They're a Canadian software company.

[00:46:47] Pull up a neat.com income statement and KPI list. It is really, really impressive what they're doing right now and digitizing kind of the more blue collar workforce industries. And then three, a stock, you know, that I don't own anymore. Ironic, you know, presented by our friends here at Iki Bank. Stock I don't own anymore, but is still sitting on that. Would be happy to, you know, go back. Yeah.

[00:47:16] It's so, so there you go. In terms of the US list, mentioned names on American Express. Thermo Fisher. Now, Thermo Fisher and what I'll also call, it's probably just the one I understand the best, but life sciences and pharma are so cheap. Like I actually be hard pressed to find a better place for value hunting than pharma and bio life sciences. Large caps in the US.

[00:47:46] They've been depressed for a long time post pandemic now. Yeah. I mean, I think even more. So I think it's accelerated with Trump winning and then naming RFK Jr. I think that's put a lot of pressure on that. Like a specific, like I haven't looked recently, but when we looked at it a month or two ago, you could see a demarcation line with Trump naming RFK for a lot of these stocks. Yeah. Yeah.

[00:48:13] So very interesting that the three Canadian ones I listed, like they probably can be honestly moved off this, this main list. I'm mostly looking at US stocks here. Yeah. In terms of like ready to pull the trigger. So Thermo Fisher, QXO is something I'm really trying to dig in and understand more. It's, you know, XPO logistics, Brad Jacobs. This is his latest thing he's working on right now. And it's just one of those things where everything he touches turns to gold and his newest listing

[00:48:42] that he took and is taking is called QXO. The ticker is QXO. Hmm. Yeah. First thing I hear of it, but. Mm-hmm. Yeah. He's, he's doing it again. He wrote that book called How to Make a Few Billion Dollars. Now he's finished the book. Yeah. Well, he's done it a few times now. He's made a few billion dollars a few times now and he's doing it again with QXO. So. Hey, good for him. Yeah.

[00:49:12] Pay attention. And Cloudflare. Yeah. We talked about it earlier. So that's the list. I think the, the most difficult thing too right now is just finding, finding value, but factoring that in with how things will generally play out over the next, like, I would say medium to long-term. I think that's the biggest thing and how it's, it's, it's not easy, right?

[00:49:38] Like I think of it can be overwhelming for a lot of people and I understand why, because you're looking at this and you're seeing, you know, a lot of the foundations that we've known for a long time. And how will these potential businesses be affected to that? I think that's where it, you need to, you know, think in probabilities and that's where you'll be able to either make a lot of money or lose a lot of money as making those right bets when there are some

[00:50:07] opportunities that show up. But again, you have to figure out which opportunity is actually a value play versus a value trap. And that's where it's a little bit more difficult. I would say right now. Yeah. Yeah, definitely. Don't need to rush into anything. No, I mean, I'm sitting with like 15, close to 15% in cash. So for me, I'm definitely looking and I'll, I'll be strategic about some additions, but I'm starting

[00:50:33] to, my hours are starting to open because yeah. I deployed some cash yesterday. Nice. I bought some, I bought some more intuitive surgical. I had not bought intuitive surgical since my original purchase like four years ago. Oh wow. Yeah. I just been sitting there with the initial, initial shares that I bought. So it's got a little, little trot. It was like a tiny, like 0.8 position. I tripled it yesterday. Yeah.

[00:51:00] A little 19% drawdown for intuitive, but it's not, uh, still expensive, but still a little less, a little less. But when you get a chance to finally add to a workbench position in your portfolio, it's like, okay, well, I've kind of been waiting for this. So yeah. You know. And what's nice too right now with, uh, I know we're both using Questrate. They are a sponsor, but the advantage of having $0 commission is you, if you really want to

[00:51:29] add a little bit at a time, if you think these discorrection is going to go on for a longer period of time, or you're going to have a lot of fluctuations. I mean, it allows you to do it without taking on some additional fees. So yeah. Yep. And, and so those are just the, just the names on our, on our watch list that we don't own, but we, I have lots of names in my portfolio that I'm adding to and liking, but, uh, you know, you can go see those portfolio breakdowns in a spreadsheet at join TCI.com.

[00:51:58] You can go see there. It's our multi-portfolio updates, spreadsheets and, and holdings. Guess what I'm going to be buying tonight? You said tonight. So I feel like it's not a stock. No. What are you buying? I'll, uh, buy some Costco gold probably. Oh. Yeah. Probably a little more. Do they have inventory? I thought they couldn't ever get inventory. Yeah. Yeah. They do. I mean, it's just because the price. So you'll go and if the prices have gone up a lot in the last few days, what will happen

[00:52:26] is it'll be sold out of the lower priced one, but then they'll have new of the higher price one. That's, uh, and then it's actually quite interesting if you have the executive membership. Because you get the 2% cash back on it. So last year, because I bought a decent amount of gold, I think I got like four or $500 back in cash back when they cap it, I think to like 700 a year or something for total.

[00:52:55] So you can't like, you know, buy 200, like a million dollars worth of gold and then get, uh, you know, 20 grand worth of cash. Arbitrage. Yeah, exactly. But, um, no, it's probably what I'm going to do. Just, uh, I've been adding a little bit more gold. So, uh, we'll probably, I like to do it 50, 50 between ETF and physical gold. So you gotta be, we'll be doing that. Yeah. But, uh, definitely we'll be adding probably for our joint TCI, uh, listeners.

[00:53:24] I'll probably have some addition, whether it's new companies or, um, some companies that I've added. Uh, I'm thinking I'm going to be doing a bit of adding this month. You are so you're Ray D'Alio. I can't, I can't read his books. I'll, I'll be going to Costco and buying gold. They're good. I mean, it's, uh, the opposite of a gold bug. Cause that's me. Yeah. Yeah.

[00:53:48] But, uh, Ray, I mean, I could hear that guy talk like I would, I would go a full day without a being able to get up dehydrated. I would listen to him for like a full eight hours or something. Yeah. Oh my God. That's hilarious. Full, full man crush, but you know, Hey, what he's, he's, uh, he's your kind of guy. I get it. I get it, man. Thanks for listening folks. We, we appreciate you tuning into the show.

[00:54:18] Uh, lots going on, but you know, that's why, uh, that's what we're here for. So, uh, the pods here Mondays and Thursdays is also a lot of, a lot of interesting opportunities coming up real estate wise in different parts of, of the market. Um, and so if that interests you at all, go listen to Dan and Nick on the Canadian real estate investor podcast. Yeah.

[00:54:43] I think you're going to see for people who have enough money to, you know, to be able to purchase, um, some real estate. I think the next year or two, you could start seeing some really good deals. Like I'm not as obviously you either, but, um, yeah, I'm not as connected as Dan and Nick are, but they, uh, they, they start seeing some opportunities. They definitely talk about it. So it's definitely worthwhile if, um, that's something that interests you. Can I bring up a theory that I have for you that I tweeted out yesterday?

[00:55:13] Go for it. I'm not a, I'm not a trader, but if I was, I would be using, uh, I would be using this, this theory as an instrument. And probably people are, I'm probably not that smart. There's probably lots of people doing this. Is Robin hood stock a spot price on retail sentiment? That's yeah. I mean, maybe it's not, uh, I haven't looked at it, uh, in a few months, but wow.

[00:55:43] Cause it sure as hell seems like it. Yeah. Yeah. I mean, they've actually done a lot of cool stuff underlying business wise, but, but, you know, in the short term, who cares? Doesn't matter. No. Robin hood is, I believe my working theory is a spot price on retail sentiment. Yeah. I mean, it's, um, I would need to see like maybe overline it with like the feed and Greg, uh, fear and greed index. Yeah. Yeah.

[00:56:13] But it does look like it. I mean, it literally peaked mid March, uh, mid February. And that's around the time that, so Trump had been talking about tariffs, right? My stance have always been like, okay, when they actually go into effect, sure. But he kept delaying, delaying. And then people will remember, he said he would have them first day in office delayed to February 1st delayed again. But then if you look at this, it kind of lines up with most risk assets. Mm-hmm. Is that a... The 2022 drawdown.

[00:56:43] And then, you know, basically did nothing as people were like waiting to get back in the market as soon as things ripped up. 2024 ripped, ripped, ripped. But the day it started crashing is the day he announced his steel and aluminum tariffs. That's literally the day it peaked where I think when the market started to realize that it was, it might start getting serious. Yeah. Yeah. Which is interesting. No, I hadn't never thought about it. So that is definitely an interesting one.

[00:57:10] That was like a bathroom thought of mine yesterday that I tweeted out into the internet world. And I was like... You don't need to provide any additional detail on what you're doing in the bathroom. Oh, let me give you more detail. And I was like, that's kind of a banger. Like, I think it actually is. I think it's actually just fully a spot price on retail sentiment. It's crazy, like how lined up it is. Anyways, if I was a trader, I'd probably be looking to use that as an instrument. Yeah. Just straight up the equity.

[00:57:39] There's probably like... Is there levered Robinhood ETF? Probably. I mean, at this point, Dan was like doing a search... The T-Rex 2X Longhood Daily ETF. Of course there is. Robyn. R-O-B-N. Is there more of like a market peak warning sign than all those levered ETFs coming up in like the last... Single stock levered ETFs. Yeah, exactly.

[00:58:07] Or even like Dan was telling me he was searching on Google. He had forgotten one of the Mag 7 names. I'm always like that too. I like come with six and then I'm always like, it's a different one. I'm like, oh, which one am I missing? And eSender was a 5X Long Mag 7. That thing is just getting destroyed this year. Oh, yeah. Is there... What's the 5X Mag 7? That's like... Yeah, I think it's 5X.

[00:58:34] I don't even think you could do leverage shares. Yeah, 5X. Dude, this stuff is crazy. Yeah, yeah. So 5 Longs Leverage. Yeah, it's the leverage shares. So I think it's just Mag 7 the figure. Mag 7. Damn. I mean, look, if you're a trader, you kind of like... You're happy that these instruments exist. But, you know, from 99% of people, they just stay far away.

[00:59:04] Yeah, it's... Yeah, that's how people get wrecked, right? Like I think right now, as much as like the drawdown might suck for your portfolio, if you have more growth names, you might be looking at 20, 30%, whatever it is, right? Yeah. You're going to be fine, I think, as long as you're not levered. Levered is how you get wiped out. That's how you do it. If you want to get wiped out, just levered. And then you may be doing well. But then if you're too late on selling when the market starts rolling over,

[00:59:33] that's where you get in a lot of trouble. Liquor, ladies and leverage, end quote, Charlie Munger. Yeah, I think it's a good point to end it. Thanks for listening, folks. We'll see you in a few days. We're here Mondays and Thursdays. Appreciate you. The Canadian Investor Podcast should not be construed as investment or financial advice. 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

[01:00:02] before making any financial or investment decisions.