5 Reasons To Be Bullish on Stocks and Assets

[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

[00:00:15] The Canadian Investor Podcast. Welcome into the show. My name is Braden Dennis, as always joined by the stellar Simon Belanger. Today is a banger of an episode.

[00:00:29] You and I both have two discussion points that we're going to talk about. You're talking about the bullish case for stocks.

[00:00:38] Where your daily dose of optimism in a world where the news wants to sell you everything ugly.

[00:00:44] And then you and I are both going to have a pick for stocks on our watch list here at the end of the show.

[00:00:51] So, let's get into it. I like your segment here, man. We need some optimism, man.

[00:01:01] Yeah, yeah. I mean, I guess doom and gloom does sell better, but I think it's more of a nuanced take to...

[00:01:09] Yeah, there definitely can be some bullishness with stocks and assets in general.

[00:01:14] All right, I'm going to kick us off with what I'm calling, are we in a 2022 hangover for growth software or is this still a trap?

[00:01:27] So, I just did a screen of software companies that have had negative year-to-date performance while revenue growth has been over 25% in the trailing 12 months.

[00:01:48] So, it's like... And by the way, they've had to have positive three-year hangover of that as well.

[00:01:54] So, the business has to still be growing on the longer-term trend and in the short-term trend, but the stock is down bigly.

[00:02:04] If I look at some of the names here, like Bill Holdings is down 51%.

[00:02:09] Snowflake is down 25%.

[00:02:12] Asana, the work management software company, that's where it's down 36%.

[00:02:16] And so, that list, you know, you get MongoDB, Okta, Unity, Procore, Workday, these kinds of names, right?

[00:02:25] And this type of company has been very, very unloved.

[00:02:32] And so, we did a piece on the FinChat newsletter a few weeks back of just companies that have had huge revenue growth, but really poor performance.

[00:02:42] Examples like Alibaba, you know, the revenue being up 1,500% while the stock is bigly negative.

[00:02:51] Zoom Video, you know, revenues up way, way like, you know, 900%, but the stock's down, you know, for a lot of reasons.

[00:02:59] Roku, HelloFresh, Lightspeed, Twilio, Teladoc.

[00:03:04] A lot of these, I'd say COVID up into the right names that came back to reality.

[00:03:11] But ultimately, it comes down to factors that the market dislikes today that I think was willing to overlook in 2021.

[00:03:21] Is that a fair assessment?

[00:03:22] Yeah.

[00:03:23] These are not new factors that are like these, that are wrong with these businesses.

[00:03:27] They're not profitable now.

[00:03:28] They sure as hell weren't profitable then.

[00:03:30] Yeah, I mean, it's nice to have a business that has profits.

[00:03:34] That's as simple as it is, right?

[00:03:36] So, it's, I think it's just a market kind of returning to looking at profits, free cash flow, you know, what's actually being generated and returned to shareholder.

[00:03:45] Because sales, increasing sales are nice, but increasing sales is no guarantee that eventually you'll be returning money to shareholders.

[00:03:53] Correct.

[00:03:54] Look at Celsius, that energy drink stock.

[00:03:56] Yeah.

[00:03:57] Yeah.

[00:03:57] Explosive growth, 60% drawdown right now.

[00:04:01] Yeah.

[00:04:01] And sure, you could make money with capital gains, right?

[00:04:04] That's, you know, that's fine if the market agrees with you.

[00:04:08] But then when the market starts looking more at profits, you might have a tougher time getting some capital gains there.

[00:04:14] It's that idea of growth at any cost.

[00:04:17] Like, at any cost.

[00:04:20] Now, those debts are being paid for those costs, right?

[00:04:23] Like, stock-based compensation.

[00:04:25] Like, you can't just inflate the share count 3x.

[00:04:28] But look at our revenue growth is 5x.

[00:04:30] It's like, well, net, net, right?

[00:04:32] Like, shareholders did better with the, you know, boring industrials.

[00:04:37] And I think people remember, right?

[00:04:39] It's been recent enough that a lot of people invested, myself included, have been burnt in these companies.

[00:04:46] Like, Teladoc ended up making a bit of money.

[00:04:49] But if I sold towards the top, I would have made a pretty penny.

[00:04:52] But, I mean, at the end of the day, a lot of companies just grew too quickly.

[00:04:58] And then when money dried up, whether it was their stock price, you know, crashed down or had a significant pullback,

[00:05:05] they probably, you know, they had to issue more shares if they needed more funding, dilute shareholders even more,

[00:05:13] or tap into the debt market at higher rates, which is not good, again, for shareholders.

[00:05:18] I think a lot of investors are looking at it, well, is your business sustainable?

[00:05:21] Is this growth sustainable?

[00:05:24] Can you be profitable going forward?

[00:05:26] Or are we going to get hit again with this high growth, but down the line, we're going to be diluted,

[00:05:31] or you're going to have to tackle some high interest debt?

[00:05:35] One that I got smoked by was Unity.

[00:05:38] I bought it like 80 bucks.

[00:05:41] It was expensive stock, but the story was there.

[00:05:43] Shot up to 200 bucks.

[00:05:45] I think it peaked at 198 US.

[00:05:47] I felt like a genius.

[00:05:48] And then they did these string of goofy, goofy, goofy acquisitions.

[00:05:54] I was like, I'm out, did lose some money, but would have lost a lot more had I stuck around and held out.

[00:06:03] So, you know, I guess minor consolation after losing a boatload of money.

[00:06:08] But the peak 2020 euphoria into this 2022 hangover, you had zero interest rates, COVID growth rates pulled forward.

[00:06:20] This is what I'm referring to.

[00:06:21] Stimulus.

[00:06:21] Stimulus.

[00:06:22] Left, right, and center.

[00:06:22] Yeah.

[00:06:24] And this is what I'm calling that 2022 hangover, because let's not forget the NASDAQ 100, which is a fairly good index to what I'm tracking here on like growthy, high stock-based compensation, a lot of tech, finished down 33% in that calendar year.

[00:06:42] On top of a variety of things that the market dislikes now that it was willing to overlook, willing to turn a blind eye, huge stock-based compensation, reckless expense lines, huge SG&A costs, still not particularly cheap today even after these drawdowns.

[00:07:05] Gap profits are a distant future.

[00:07:08] You have adjusted, adjusted, adjusted EBITDA to maybe tell a story.

[00:07:12] Growth is still there.

[00:07:14] That's the other side of this coin.

[00:07:18] Like when I do this screen and I list a bunch of those companies I'm talking about, Mongo, Okta, Procore, UiPath, Snowflake, the growth is still there.

[00:07:30] Of course, it's decelerating.

[00:07:32] They're not going to double every year forever.

[00:07:34] So I think the answer here is some of these names I think are worth another look.

[00:07:39] Some of them for sure no.

[00:07:42] And it's actually a very good hunting ground, I think, particularly in that first list of growthy software companies that are still achieving a true rule of 40,

[00:07:51] which means revenue growth plus EBITDA margins is over 40.

[00:07:57] The rule of 40 is a really good kind of rule of thumb for buying software companies that are fast growing or super profitable because you get that rule of 40.

[00:08:08] Again, that is revenue growth plus EBITDA margin being over 40 is a sign of a really healthy growth name.

[00:08:16] They're not cheap, but I think that there's some unloved companies that are still in that hangover.

[00:08:23] And the stock price and valuation can somewhat be justified here again after going briefly parabolic and then going, you know, jumping out of a plane.

[00:08:34] So I'm just bringing that up as a potential hunting ground.

[00:08:38] Yeah.

[00:08:38] And even looking at MongoDB, one of the names that was there, I mean, everyone knows I like to look at free cash flow, but especially free cash flow per share because it accounts for the share dilution.

[00:08:50] And MongoDB has actually been performing, you know, it's turned into the positive for free cash flow per share until like, well, it's been what the last year and a half probably or so.

[00:09:00] So it is something to, you know, to look at.

[00:09:04] It's not crazy amounts and it's still a company that's growing quickly, but it may not be profitable on a net income basis, but they are doing decent on a free cash flow basis.

[00:09:13] Yeah. And like, it's really easy to kind of track metrics, like, like on FinChat of, of things that really matter for these types of companies, like total customer counts, customers that have over a hundred K of annual recurring billings, total annual recurring revenue, different margin profiles across the different products.

[00:09:37] They have net retention, dollar based net retention.

[00:09:42] These kinds of things really, really matter for these companies.

[00:09:45] And a lot of them look fantastic.

[00:09:49] So, you know, if you liked them, then, you know, it's the old saying, if you liked them, then you're going to love them now.

[00:09:55] And so some of them really hard to justify between the stock based compensation, between some of that goofy acquisitions that they did between the expense line items and the SG&A still being out of control.

[00:10:10] Profits a distant future.

[00:10:40] And so, you know, I think, you know, I think, you know, there was a lot of risk baked in already.

[00:10:44] And that's where, you know, there's some crappy, I was going to say, another companies in China, don't get me wrong, but I think, you know, you can probably assume that Alibaba is a pretty solid company and, you know, their financials are pretty accurate overall.

[00:11:00] So that's just an example that came to mind.

[00:11:05] Okay, so now we'll move on to my segment.

[00:11:07] So the bullish case for stocks and assets.

[00:11:10] So I'll talk about assets in general.

[00:11:12] I'm talking here a bit more about kind of, I'll say, air quote, hard assets, whether you want to call stocks hard assets or not doesn't matter.

[00:11:20] But there's clearly no shortage.

[00:11:22] I mean, you said it right.

[00:11:23] No shortage of bearish.

[00:11:25] I think they call it like bearish porn almost in terms of stocks here.

[00:11:30] So there's no shortage of that.

[00:11:32] Clearly, you don't have to look very far.

[00:11:34] You can find a lot of macro experts that will give you tons of reasons to be bearish.

[00:11:40] And I try to listen to both sides of the bearish and also the bullish because oftentimes you have really, really smart people that bring you data forward and both make a very compelling case.

[00:11:51] So that's why I think it's important to remember that if you kind of start focusing on everything that's bullish or everything that's bearish, you end up having a little bit of kind of narrow view of what could happen.

[00:12:05] Because the reality is, we've said it time and time again, the future is probabilities.

[00:12:10] There is multiple different paths and it's just trying to figure out which path has a certain type of probability.

[00:12:17] And then, you know, you kind of do your investments that way.

[00:12:20] At least that's the way I see it.

[00:12:22] It's easy to understand, right?

[00:12:24] The bearish news.

[00:12:24] There's tons of bellwether companies that are issuing warnings.

[00:12:27] We look at earnings pretty frequently.

[00:12:29] I look at them, you know, on a weekly basis with Dan.

[00:12:32] So if you're looking at FedEx recently, that revised its guidance lower.

[00:12:36] Canadian Tire has been well known in Canada now that they've, you know, said the consumer is not doing well.

[00:12:43] Walmart, Alimentation Cousteau, BRP, Winnebago.

[00:12:47] Like there's really no shortage of companies that are saying that the consumer is stressed.

[00:12:51] I mean, you can even look at companies like GoEasy Financial, which is a subprime lender.

[00:12:57] And their loan originations are through the roof.

[00:13:00] And when you look at subprime lenders, usually when their loan originations tend to go through the roof is when, you know, there could be some problems down the line.

[00:13:09] Because you're not paying 20, 25, 30% interest on loans unless you really have to.

[00:13:15] So these are just examples, obviously.

[00:13:17] And of course, every month it seems like there's a report of record levels of debt for households, high consumer debt, and specifically credit card debt.

[00:13:28] So, and then you add in, you know, geopolitical tensions, what could have the impact on the economy, whether, you know, it's the price of increasing oil because of the Middle East tensions that are happening, the U.S.-China relations.

[00:13:42] You can look at the U.S. or the commercial real estate space, especially certain sectors that are really struggling.

[00:13:49] So there's really no shortage of bearish things.

[00:13:53] But again, you've done segments on this before for the wall of worry.

[00:13:57] I mean, there's always going to be some indicators that are not good.

[00:14:02] But the real question, I think, and the biggest case to be bullish right now, in my opinion, is liquidity.

[00:14:10] So just a few weeks ago, we talked about it actually last week, just a little bit, is China announced some significant stimulus measure.

[00:14:17] I mean, it's the second largest economy in the world after the U.S.

[00:14:21] The U.S. has a $1.9 trillion deficit for this year alone.

[00:14:25] That means they are spending a whole lot of money that goes into the economy.

[00:14:30] So, again, same in Canada.

[00:14:32] I think the government in Canada were projecting a $40 billion deficit, probably going to be higher when they come out with their fall economic update.

[00:14:40] But again, that's more money that's being pumped into the economy.

[00:14:44] France, one of the largest economies in Europe, is expected to have a 6% of GDP deficit, which would be around $200 billion.

[00:14:52] Clearly, this could cause some problems, but it could also be a big tailwind because you have a whole lot of liquidity.

[00:15:00] And there's different measures that you can use for liquidity.

[00:15:03] You know, there's a lot of different experts here.

[00:15:07] But I think a good way to look at it is the growth of the M2 money supply.

[00:15:13] So, M2 money supply measures the money that can be relatively quickly accessed, like checking account, savings account, time deposit, something like GIC would be a time deposit, money market funds.

[00:15:27] Well, the M2 has been rising pretty, you know, it started to rise again, I would say, after central banks were contracting the money supply with quantitative tightening,

[00:15:39] which is essentially reducing the size of their balance sheet.

[00:15:41] But now it's starting to increase again.

[00:15:44] So, for those on joint TCI, I'm showing the M2 money supply.

[00:15:47] And there's an M1, M2, I think there's M3, possibly an M4.

[00:15:52] But M2 is the one that's most widely used in terms of the money in circulation.

[00:15:57] And you can see in the U.S. where it really ballooned in 2020 for obvious reasons because of all the stimulus that was happening.

[00:16:05] And then it kind of went down a little bit.

[00:16:07] And now it's starting to creep back up.

[00:16:09] And if you're looking at Canada, same kind of thing.

[00:16:13] So, Canada, if you're looking at the last five years, kind of leveled off a little bit, although it seems like it never really stopped increasing for Canada.

[00:16:22] And China would be in a similar boat here.

[00:16:26] So, that's kind of a sign that liquidity, there will be more liquidity in the system.

[00:16:33] And that typically is a tailwind for asset because if you think about it, it's quite simple of an argument.

[00:16:39] That's because most assets are just finite supply or at the very least have very slow growth compared to the growth of the M2 money supply or money supply in general.

[00:16:50] So, what ends up happening is there is more and more dollars competing for assets like stocks, real estate, Bitcoin, gold, other precious metals, even collectibles, right?

[00:17:02] If you have rare collectibles.

[00:17:04] So, it really could be a big tailwind here.

[00:17:08] But, of course, I mean, if there is a major liquidity crisis that happens that triggered whether like it's a major G-SIP bank.

[00:17:16] So, that kind of, you know, is in trouble or something like that.

[00:17:20] There is some fear and people are really selling their assets to try and get some cash as quickly as possible.

[00:17:25] Of course, that could impact that.

[00:17:27] But, I mean, there are scenarios where, you know, it is just bullish going forward because of this.

[00:17:35] And what I decided to do is it's pretty interesting.

[00:17:39] I talked to you a little bit before we started recording and I'll share this for our joint TCI listeners is comparing the return of stocks and real estate and real estate specifically in Canada to gold.

[00:17:53] So, I'm sharing here and I'll explain the chart.

[00:17:57] So, the chart goes back to, I guess, 1928.

[00:18:00] So, you have the S&P 500 compared to ounces of gold and pretty much it bounces between, you know, as low as, you know, 0.19 roughly, you know, the ratio for the S&P 500 in terms of ounces of gold and then goes all the way up for the max to 5.

[00:18:20] So, it kind of goes in between that ratio over the years.

[00:18:24] But the important thing to think about when you look at this is just think about the charts that everyone has probably seen for the S&P 500 but denominated in U.S. dollars.

[00:18:36] Brayden, what does that chart do?

[00:18:38] Well, you just talked about it.

[00:18:40] It climbs the wall of worry.

[00:18:41] It just goes straight up in the right pretty much, right?

[00:18:44] Straight up into the right.

[00:18:45] It looks like a nice, if it's log, if it's a log scale, it's pretty linear.

[00:18:49] If it's not, it's pretty exponential.

[00:18:51] Exactly.

[00:18:52] And then, so, the other one that's really interesting is, again, you use the same thing and everyone in Canada, I'm sure, can relate to this.

[00:19:00] So, what I'm sharing here is a tweet from, a really good tweet from Hanif Bayat.

[00:19:05] I think he's the founder of WoWAD, the S site where you can compare, I think, mortgages amongst other things.

[00:19:11] And he did a really good chart which compared the average, the benchmark home price in Canada in Canadian dollar since the early, late 1970s.

[00:19:22] So, 1971, Q1 of 1979, sorry, up until Q2 of 2024.

[00:19:28] And it's very interesting to see the divergence between, you know, home prices denominated in gold versus home prices denominated in Canadian dollars.

[00:19:40] So, yes, you know, the benchmark home price has gone up in Canadian dollar.

[00:19:45] But, spoiler alert, since pretty much, I would say, mid-2000s, it's been going down slash sideways in gold prices.

[00:19:56] So, it just goes to show, and the reason why I'm using gold here is I think it's the best historical kind of monetary unit, if you'd like,

[00:20:04] that has proven, you know, over the years, over thousands of years.

[00:20:10] So, I think it's a good one to benchmark against these real assets to see what the assets are actually doing.

[00:20:16] And when you denominate them in prices of gold, they're probably not doing as well as you had thought.

[00:20:21] And I'll probably just finish on that, is clearly the S&P 500 has outperformed gold.

[00:20:27] But in terms of, you know, measuring it compared to gold, especially since 1971 when the U.S. went off the gold standard,

[00:20:36] I think performance of gold is around 8% since per year, which is quite good.

[00:20:40] And the S&P is probably around 10.5% roughly.

[00:20:44] So, you're still outperforming by a couple percentage point, you know, on a yearly basis, on an average basis.

[00:20:52] But very different performance than, you know, comparing to dollars.

[00:20:57] And that was my point is, holding cash, having cash if you don't invest, I mean, it may feel safe.

[00:21:04] And I mean, it's fine.

[00:21:05] I do have a little bit of cash myself to have a little bit as a hedge.

[00:21:09] But if you have too much cash because you're scared, this is what the risk you, this is the risk you're facing,

[00:21:16] is that the value of your purchasing power, you may feel safe, but the value of your purchasing power is actually eroding slowly over time.

[00:21:25] Yeah, there's an inherent risk in holding cash if you just look at that M2 money supply chart that you showed.

[00:21:32] Yeah.

[00:21:32] Right, that's the only, so this is a one chart story.

[00:21:38] That M2 money supply is up into the right and looks better than any stock chart I can find when it comes to the S&P 500.

[00:21:48] With no signs of slowing, zero signs of slowing, especially in the U.S.

[00:21:54] I think it was two, three days ago the U.S. put out there the budget.

[00:21:58] And it's like, this is just, you know, they don't.

[00:22:01] Major governments don't have a revenue problem.

[00:22:03] They have a spending problem.

[00:22:04] Yeah.

[00:22:04] This is...

[00:22:05] Well, and revenue.

[00:22:07] And revenue.

[00:22:08] Well...

[00:22:08] I guess the revenue is not, yeah, is not as...

[00:22:11] Well, yeah, the revenue is never going to be good enough if you do have a spending problem.

[00:22:14] Yeah, yeah.

[00:22:14] You know, I can live pretty good.

[00:22:17] But if I buy seven G wagons tomorrow, then I'm not going to be making enough revenue either.

[00:22:21] I guess my only kind of pushback is I just don't find gold...

[00:22:29] Like there's not really anything better to use.

[00:22:31] So I see your point.

[00:22:33] There's just not really like a perfect measure here.

[00:22:36] But gold is just not like it's just not a currency anymore.

[00:22:40] And I get it's a store of value, but you could just kind of put this against anything and see how it's performed against prices of Ferraris.

[00:22:49] And, you know, it might look terrible if you do that too.

[00:22:52] So I don't know.

[00:22:54] Like I just...

[00:22:54] I mean...

[00:22:55] I just don't think gold is a very good measure of currency anymore.

[00:22:59] I know that's not a particularly...

[00:23:01] I know it's a controversial take that I have, but I just don't think it is.

[00:23:06] There's probably...

[00:23:08] There's no perfect measure, like if you'd like to talk about currencies.

[00:23:12] But I think personally gold is probably one of the better ones, at least from a historical basis.

[00:23:18] And you still...

[00:23:19] It has the history.

[00:23:20] It has the history.

[00:23:21] It certainly has the history.

[00:23:21] And you see central banks accumulating gold as well.

[00:23:25] So there is definitely a monetary premium of all the different, you know, metals.

[00:23:31] Gold has the highest, by far, monetary premium assigned to it because there's a lot less industrial uses for gold.

[00:23:37] So that's why, you know, it's basically jewelry and, you know, using it as a store of value.

[00:23:43] And so that's why I use gold.

[00:23:45] Of course, you could use all different kind of assets and compare them to, you know, to the money supply or the, you know, the purchasing power.

[00:23:54] I think it's more to try and compare the purchasing power in one constant currency that hasn't been debased like our fiat currency, which was more, you know, obviously my point here.

[00:24:08] You know, the summation here for me is stay invested, remain invested.

[00:24:13] It's been a good bet.

[00:24:15] I continue to think it's a good bet.

[00:24:18] But just remember that the market, as it has climbed that wall of worry for, you know...

[00:24:25] I zoomed out quite a bit.

[00:24:27] Yeah.

[00:24:28] For, you know, the last good 150, 60 years of good data here, it has climbed that wall of worry, sure.

[00:24:36] But there has been mega, mega drawdowns on large bearish macro events.

[00:24:44] Don't hear what I'm not saying.

[00:24:46] Yeah, right in the bear.

[00:24:47] That's a change of thing.

[00:24:47] Don't hear what I'm not saying.

[00:24:49] You know, it's just setting expectations for the fact that there could be some real ups and downs, but you stay invested through it.

[00:25:00] Dude, there is a lot hanging in the balance with what's happening in the Middle East.

[00:25:06] All right.

[00:25:06] Right now.

[00:25:07] Yeah.

[00:25:07] There is a lot of tension.

[00:25:10] I mean, this is a surprise to...

[00:25:12] This is news to no one, but there is a real risk of it turning into something a lot bigger than it already is.

[00:25:21] And it's already there.

[00:25:23] There's two major international wars with large powers involved today.

[00:25:29] And people need to be aware that if you are investing in equities, buckle up.

[00:25:36] But I'll counteract that with I remain invested.

[00:25:40] I continue to invest regularly.

[00:25:42] And nothing will change because it does climb that wall of worry.

[00:25:47] But don't think like, oh, it just goes up into the right.

[00:25:50] I mean, there are going to be major drawdowns over the next 10 years, next 20 years, next 30 years, next 40.

[00:25:56] That's what we sign up for if you're heavily invested in equity markets.

[00:26:01] Yeah, exactly.

[00:26:03] I mean, there's going to be some ups and downs.

[00:26:05] But at the same time, I'm sure there's still some people that are sitting in cash from 2008, hoping for a better entry point.

[00:26:13] And they've been completely crushed in terms of purchasing power ever since.

[00:26:17] So you have, of course, if you can't handle the volatility, by all means, sit in cash and watch it erode over time.

[00:26:24] You're purchasing power.

[00:26:25] That's your prerogative.

[00:26:26] But again, it doesn't have to be an all or nothing.

[00:26:28] I think we've talked about that for long periods of time.

[00:26:32] You know, you can balance things out if you want a bit of cash for some more safety in your portfolio, give you some dry powder, some ammunition, still collecting 4% on short term treasury bill.

[00:26:44] By all means, I mean, I do it myself.

[00:26:45] But I think it's when you start having like massive allocations that gets pretty dangerous.

[00:26:51] And the one thing I'll mention about the Middle East, and I highly recommend that you can look up Ryan Bohl, B-O-H-L, fantastic Middle East expert.

[00:27:02] If someone is looking, if you're looking for a very objective view, so understanding the conflict from all the different perspective they don't make.

[00:27:12] So they do a consultation work for different institutions to how to invest and stuff like that.

[00:27:18] But they look at it very from each different potential actor, whether, you know, it's Israel, it's Iran, it's Russia, it's China, it's the US.

[00:27:29] They look at it from each different perspective.

[00:27:31] They have no bias.

[00:27:32] They just say it what each actor's perspective, how it could escalate, how it could potentially not escalate.

[00:27:39] They don't make recommendation.

[00:27:41] They just tell you how it is and how they view things.

[00:27:44] He's very good because I find a lot of the experts will tend to have one bias on one side or another.

[00:27:50] And that's their thing the firming works for is they do not – they're one of the only firms that do not have a bias.

[00:27:59] Move on to stocks on our watch list presented by our friends at EQ Bank.

[00:28:06] You and I both have some names here.

[00:28:09] You did yours first.

[00:28:11] Sure.

[00:28:11] And you said that you're – well, you wrote yours first and you said that you're breaking the rules.

[00:28:15] And so I'm like, hey, I'm going to break the rules too.

[00:28:19] Who wants to go first?

[00:28:20] Why don't you go?

[00:28:21] Because I feel like I need a little break.

[00:28:24] You just did the big macro segment.

[00:28:27] All right.

[00:28:28] I'll kick us off.

[00:28:29] It's called the Nike Killers.

[00:28:32] So it's actually two stocks.

[00:28:33] Going off the board here, usually it's one name.

[00:28:36] But, you know, this is two names because we make the rules and there are no rules.

[00:28:39] So the stocks on my watch list today that I've added to that list are the Nike Killers.

[00:28:46] And let me just be clear.

[00:28:48] Nike is an epic brand.

[00:28:50] The Nike swoosh is on the Mount Rushmore of brand connection with consumers.

[00:28:55] I basically only wear a fresh pair of white Air Forces for casual shoes.

[00:29:00] I was at the gym two hours ago.

[00:29:02] I was wearing the Metcon trainers.

[00:29:05] Like my runners are Nike shoes.

[00:29:08] Iconic shoes.

[00:29:09] Love them.

[00:29:09] The workout stuff.

[00:29:11] It's good.

[00:29:12] It's all solid.

[00:29:12] I like the golf.

[00:29:13] Everything.

[00:29:14] Good.

[00:29:14] If they get dirty, just have a magic eraser and boom.

[00:29:18] Good to go.

[00:29:19] Boom.

[00:29:19] Gone.

[00:29:20] And so let me be clear.

[00:29:22] Nike is an absolutely epic brand and still the king today.

[00:29:26] But there are a few two in particular brands coming from new angles in the shoe category.

[00:29:35] And I say this mostly tongue in cheek because Nike's product lines are much more than just running shoes.

[00:29:41] But the company Nike is doing 50 billion in sales.

[00:29:47] And there's no question that they are a shoe company.

[00:29:51] 32 of their 50 billion in sales comes from footwear.

[00:29:55] This is on their annual reports.

[00:29:58] So I see a lot of people saying, ah, they're not just a shoe company.

[00:30:02] But yeah, but 32 of 50 billion comes from footwear.

[00:30:06] So if that gets disrupted, Nike is going to have some problems.

[00:30:10] And they have.

[00:30:12] And the stock is on a huge, huge drawdown right now.

[00:30:16] It's been really, really rough for Nike stock.

[00:30:20] So as a result, Nike revenues are actually decreasing slightly just by a few percentage points year over year.

[00:30:26] And the stock price has basically been cut in half since August 2023.

[00:30:32] So it's been tough sledding.

[00:30:36] Now, the two companies I'm talking about are the two brands of Hoka and On Running.

[00:30:42] Hoka is a brand owned by Deckers Outdoors, which is a $25 billion shoe conglomerate company.

[00:30:51] They operate four brands, but the three big hitters are UGG.

[00:30:55] So everyone knows those UGG boots.

[00:30:58] Hoka, which I'm going to be talking about today, which are mostly running and training performance shoes.

[00:31:03] And TiVo, which are sandals.

[00:31:05] So Hoka, they've taken from a tiny little brand to now nearly 50% of Deckers Outdoors' total revenue,

[00:31:13] doing $100 million in 2017 to now $2 billion in sales in the last 12 months and growing very fast.

[00:31:20] The shoes are stylish, comfy, popular for runners, casual, and particularly popular for healthcare workers who are on their feet all day.

[00:31:29] So they've really won that niche.

[00:31:31] It's generating nearly half a billion in operating profits for their company, Decker Outdoors.

[00:31:37] So some pretty nice operating margins.

[00:31:40] And it's no secret that Hoka is an exciting story.

[00:31:43] Decker stock is up 10x in the last 10 years.

[00:31:47] Next is On Running, ticker OnOn.

[00:31:50] So ticker for Deckers is DEC.

[00:31:53] On Running is ticker OnOn, O-N-O-N.

[00:31:55] Only founded just in 2010 by Switzerland former Ironman champion Olivier Bernhard, David Alleman, and Caspar Capetti out of Switzerland.

[00:32:08] They've been ultra successful, reaching $267 million in revenue in 2019 when they got Roger Federer,

[00:32:16] who was obviously the legendary Swiss tennis player involved.

[00:32:20] Since then, sales have 10x to $2 billion.

[00:32:23] So both brands are nearly identical in scale.

[00:32:27] Hoka and On are both doing right now $2 billion in sales and growing at 30% year over year and doing phenomenal.

[00:32:36] Both carving out a very similar type of market share from the big dogs, which is Nike.

[00:32:44] Before I go on, have you tried either of these shoes?

[00:32:47] They are very, very popular right now.

[00:32:48] No, I need to buy new shoes because I feel like mine are disintegrating.

[00:32:53] So I need to go buy some shoes.

[00:32:56] So maybe I'll look at those.

[00:32:59] Try the Hoka's.

[00:33:02] They have them everywhere.

[00:33:03] Like, dude, I went to Sport Check even just the other day.

[00:33:05] They have like the premium spot.

[00:33:08] Like they have the real estate right now.

[00:33:11] Yeah, I like DSW just because I can do my own thing and try them out.

[00:33:15] And I don't have to wait for the person to bring me my size and stuff.

[00:33:19] Yeah, I know what you mean.

[00:33:20] I'm a self-serve kind of guy.

[00:33:22] I know what you mean.

[00:33:24] It's like, sometimes I want to try on the half sizes, you know?

[00:33:29] Yeah, exactly.

[00:33:29] These things matter, right?

[00:33:30] You're going to wear the hell out of these shoes.

[00:33:32] You got to get it right.

[00:33:34] But try them on, them and On running.

[00:33:36] The popular shoes for On are the Cloud line, the Cloud Monsters.

[00:33:41] I tried them on when I was in LA.

[00:33:43] It's like you're bouncing.

[00:33:45] It's like you got springs in your shoes.

[00:33:46] Okay.

[00:33:47] And it's kind of got like a rocker camber on them.

[00:33:50] It's pretty cool.

[00:33:51] It's different, but both are extremely comfy.

[00:33:55] Like, people are figuring out how to make shoes comfier

[00:34:00] when I tried these two new brands on.

[00:34:03] And the performance is there.

[00:34:05] Here, here's the key part, Simone.

[00:34:08] Both brands, especially Hauka, I'd say, are cool.

[00:34:14] Both brands are cool.

[00:34:16] This is the key.

[00:34:18] This is the key.

[00:34:19] There have always been high-performance running shoes

[00:34:22] like Saucony, Asics, Brooks, New Balance.

[00:34:26] Like, Saucony and Asics, like, these are like the purest if you're a runner.

[00:34:30] Like, these are the best brands.

[00:34:32] Do they look cool?

[00:34:34] No, not really.

[00:34:35] Merrill would be a good one for like hiking, I would say.

[00:34:38] For hiking, yep.

[00:34:40] Yep.

[00:34:40] So, they're a niche brand.

[00:34:43] No, they're very like dad.

[00:34:45] Dad shoes.

[00:34:46] It's right in my alley.

[00:34:47] Yeah.

[00:34:48] Yeah, they're right up your alley,

[00:34:49] but, you know, they're not up the Gen Z's alley, right?

[00:34:52] So, those brands have always been there and they're like known as the performance shoe,

[00:35:00] but they're not cool like Nike.

[00:35:03] They're not cool like Nike.

[00:35:05] It's just a thing.

[00:35:07] And so, they don't have that it factor.

[00:35:12] And the bigger to total addressable market here is more use cases.

[00:35:17] It's performance.

[00:35:18] It's casual.

[00:35:19] It's going out.

[00:35:20] It's, you know, the healthcare workers.

[00:35:23] It's the, you know, the more people.

[00:35:24] It's the cool factor.

[00:35:26] And this is why these two brands are really, really interesting right now.

[00:35:29] They're winning those markets beyond just the performance market.

[00:35:32] And particularly in the younger generation, like anecdotally, the younger generation,

[00:35:38] like they don't care about Starbucks.

[00:35:40] They don't care about Nike.

[00:35:42] You know, it's like the two millennial dominant brands.

[00:35:45] They don't care.

[00:35:46] They want something else.

[00:35:48] They want something different.

[00:35:50] And so, there's two brands here to look at.

[00:35:52] It's apparel.

[00:35:53] I'm allergic to this market.

[00:35:55] But the $25 billion and $15 billion in market cap today.

[00:36:00] So, big, pretty big companies.

[00:36:02] These, respectively.

[00:36:03] And trading at premium valuation multiples.

[00:36:06] But the thesis is pretty clear here.

[00:36:08] Nike does $32 billion in shoe revenue.

[00:36:11] These players are a combined $4 billion.

[00:36:14] So, buckle up.

[00:36:15] We'll see what happens.

[00:36:16] Nike is at a pretty bad level of sentiment right now.

[00:36:21] Yeah.

[00:36:22] And, you know, I'm surprised you, man.

[00:36:24] You put Starbucks in there.

[00:36:25] I mean, I'm sure I'll raise you a Brian Nichols.

[00:36:28] See how he does.

[00:36:31] See how he does.

[00:36:32] I guess Lululemon, too, right?

[00:36:34] They're also in the shoe market.

[00:36:38] Yeah.

[00:36:38] They just started, I think, a couple of years ago.

[00:36:40] I don't know.

[00:36:41] They're underwhelming.

[00:36:42] I tried them on.

[00:36:43] Yeah.

[00:36:43] They're not good.

[00:36:44] Yeah.

[00:36:45] My wife.

[00:36:46] I didn't love them.

[00:36:46] My wife had the women's one.

[00:36:49] She liked them.

[00:36:49] But, again, kind of a bit underwhelming, too.

[00:36:53] I tried them on in the store.

[00:36:54] I was very underwhelmed compared to these companies that are specifically focused on shoes.

[00:37:01] Look, I mean, people are like, they're making comfier shoes.

[00:37:04] Like, it's happening, right?

[00:37:06] Like, the shoes are getting better.

[00:37:08] And they're more comfy.

[00:37:09] They last longer.

[00:37:11] They look cooler.

[00:37:13] Yeah.

[00:37:14] So, two ones for the watch list.

[00:37:16] Growth is fantastic.

[00:37:18] Yeah.

[00:37:18] No, I think that's a great name.

[00:37:20] So, I'm going to go a completely different direction.

[00:37:24] Different direction.

[00:37:25] I mean, it's a name I talked about a while back on Stock on My Watch.

[00:37:29] I think it was like a couple of years ago.

[00:37:32] Related to a little bit what my segment I did earlier.

[00:37:35] So, Franco Nevada.

[00:37:37] So, this one, it's a company I do own.

[00:37:39] So, full disclosure.

[00:37:41] I had done this segment for last week.

[00:37:43] And I actually bought.

[00:37:44] I added to my position about a week ago.

[00:37:47] It's a little bit down since, but not a whole lot.

[00:37:50] So, for those not familiar with Franco Nevada,

[00:37:52] it is a precious metal streamer and royalty company.

[00:37:56] If you have no idea what that means, that is okay.

[00:37:58] I will just give a brief overview.

[00:38:01] So, royalty just mean that what they'll typically do is they'll provide cash up front to a company

[00:38:06] in exchange for a percentage of their revenue.

[00:38:09] An example of this was recently with New Mount Gold Corporation,

[00:38:12] which is not a small mining company.

[00:38:15] Franco Nevada made an up front payment of $210 million,

[00:38:18] which will give them 1.8% of net smelter returns on all minerals for the Yanacoka,

[00:38:25] I hope I'm pronouncing that correctly,

[00:38:28] operations that are owned by New Mount.

[00:38:30] Net smelter just means that the metals have been extracted from ore.

[00:38:35] Now, streaming is a little bit different.

[00:38:37] A streaming agreement involves an up front payment to a mining company

[00:38:41] in exchange for the right to purchase a fixed percentage of future production at a predetermined price.

[00:38:48] So, this model provides mining companies with immediate capital,

[00:38:52] while giving Franco Nevada access to future production at very favorable terms.

[00:38:57] This is especially attractive for junior miners

[00:39:00] because sometimes they will have found deposits of precious metals,

[00:39:04] but are unable to get financing or desperately need financing.

[00:39:08] So, a company like Franco Nevada can come in and actually provide some financing for them.

[00:39:15] And oftentimes, they'll get some pretty good term,

[00:39:17] especially if the environment is not very good for those mining projects and getting financing.

[00:39:25] Now, the bonus here, because the problem with mining stocks oftentimes is,

[00:39:30] unless you own like an ETF or a basket,

[00:39:34] you'll be pretty concentrated in a few projects.

[00:39:37] And that's where Franco Nevada is great.

[00:39:39] So, they have interest in a total of 432 projects.

[00:39:43] 118 of them are in production,

[00:39:45] while the rest are pre-production or still in exploration stages.

[00:39:49] So, what they do is they take a whole lot of small bets with that business model.

[00:39:54] And it also allows them to not be overly dependent on a single project

[00:39:59] if, you know, there's an issue that happens.

[00:40:02] And, of course, those familiar with this company

[00:40:05] will probably be saying to me right now while listening to this.

[00:40:08] Well, a year ago, Franco Nevada lost one of its bigger projects

[00:40:13] that they have an interest in, in Cobra Panama,

[00:40:16] stopping production, which they had a streaming interest in.

[00:40:20] It definitely hurt the financials here.

[00:40:23] It hurt the total amount of GEO,

[00:40:26] which is gold equivalent houses,

[00:40:28] that they were able to get.

[00:40:29] It reduced that amount by about 34%,

[00:40:32] but it was offset by higher gold prices,

[00:40:35] which led to only a 21% decline in revenue.

[00:40:38] Now, why do I like this business?

[00:40:41] Well, first, it is a pristine balance sheet.

[00:40:44] And despite losing, you know, the Cobra Panama,

[00:40:47] stopping production,

[00:40:48] and I guess it's a non-zero chance that it comes back online,

[00:40:52] but that was a decision taken by the Panama government over there.

[00:40:56] Again, even despite that, they have so many other bets

[00:40:59] that I think it's safe to assume that,

[00:41:01] you know, a few years down the line,

[00:41:03] this will likely just be a blip on the radar.

[00:41:06] And they also have zero debt and $1.4 billion in cash.

[00:41:10] They generate large amounts of free cash flow.

[00:41:13] I mean, they don't have any high operating costs

[00:41:18] because they don't actually operate the mines.

[00:41:21] Their pressing balance sheet allows them

[00:41:23] to take advantage of Distress Miner with a lifeline

[00:41:26] on extremely favorable terms.

[00:41:28] Like I mentioned earlier, the stock has lagged gold prices.

[00:41:32] And that is one of the things that makes,

[00:41:35] I think, this name really attractive.

[00:41:37] So the stock was up about 2.8% when I did this,

[00:41:41] these notes a week ago over the previous six months,

[00:41:45] while gold was up more than 13% during that timeframe.

[00:41:49] So I think it could be that investor is still a bit snake bit

[00:41:53] by the Cobra Panama mine decision.

[00:41:56] And the stock is trading rather cheaply because of that.

[00:41:59] But I think it does provide a pretty good opportunity.

[00:42:03] Anything to mention before I continue?

[00:42:06] A snake bit by the Cobra Panama?

[00:42:10] Yeah, I didn't even think it.

[00:42:11] That was well played.

[00:42:11] Yeah, thank you.

[00:42:12] Yeah, hi.

[00:42:12] Well played.

[00:42:15] No, this is one of the better business models

[00:42:19] in the entire commodity sphere, without question.

[00:42:25] There's a reason you like it.

[00:42:27] There's a reason their balance sheet looks like that.

[00:42:29] Yeah.

[00:42:30] It's a really good model.

[00:42:31] It's almost like a venture capital, right?

[00:42:34] Like they just take a lot of different small bets

[00:42:36] and some end up paying quite well.

[00:42:40] And it's trading in the low 30s on a forward P basis

[00:42:43] and a forward pre price to free cash flow basis,

[00:42:48] which is actually historically pretty low for them.

[00:42:50] Forward basis is the way to go here, I think,

[00:42:53] because you don't really want to factor

[00:42:55] in the Cobra Panama result, which would be in the past year.

[00:42:59] And again, I think it's just, I don't know.

[00:43:02] I have a feeling that the market will probably,

[00:43:05] once earnings come out and they start reflecting higher

[00:43:09] and higher gold prices that they're being,

[00:43:12] they're able to be selling, you know,

[00:43:14] a lot of their streaming gold that the agreements

[00:43:17] that they have, I think the market will probably realize

[00:43:20] that they've been overly bearish.

[00:43:21] Because keep in mind for those streaming contracts,

[00:43:24] their cost basis is constant.

[00:43:27] So any appreciation in gold prices

[00:43:29] go straight to their bottom line here.

[00:43:31] And a lot of the royalties that they have

[00:43:34] will be based on the top line

[00:43:37] in terms of the gold being produced or precious metals.

[00:43:40] So they do have a whole lot of upside

[00:43:42] if the price of gold keeps going up.

[00:43:45] And again, I think this is just a way

[00:43:49] for people to play precious metals

[00:43:52] if they want to stay away from owning actual gold,

[00:43:55] for example.

[00:43:56] This is a great way to play it

[00:43:57] because it will have some upside

[00:43:59] because of those precious metals.

[00:44:01] And even if the prices go down,

[00:44:03] they've shown that they can generate

[00:44:04] a whole lot of cash flow

[00:44:06] regardless of lower gold prices.

[00:44:09] Again, because a lot of these streaming agreements

[00:44:12] allows them to purchase gold at such low prices

[00:44:14] that they just end up generating

[00:44:17] a whole lot of cash flow.

[00:44:19] And they just, you know,

[00:44:20] what's not to like of, you know,

[00:44:22] a company with 1.4 billion cash

[00:44:24] as well on the balance sheet.

[00:44:26] Definitely, I think in my view,

[00:44:28] it's one of the better place to,

[00:44:31] better way to play gold

[00:44:33] if you're looking at equities.

[00:44:35] What are the major risks to this model?

[00:44:37] Well, like we saw with Cobre,

[00:44:39] Cobre Panama,

[00:44:42] Cobre I think is,

[00:44:43] Cobre Panama,

[00:44:45] Cobre Panama,

[00:44:46] Yeah, my French is coming here,

[00:44:49] in here, but

[00:44:50] That's my French speaking.

[00:44:52] Yeah, I think that's one of the bigger risks,

[00:44:54] right?

[00:44:54] Like geopolitical risks

[00:44:56] because they have mining interests around the world.

[00:44:58] So oftentimes,

[00:44:59] whether governments topple,

[00:45:01] there's change in regime,

[00:45:02] they can get more aggressive

[00:45:04] towards different mining companies.

[00:45:07] And at least for them,

[00:45:09] it's, you know,

[00:45:09] they have an interest in those mines.

[00:45:11] So there's probably less of a risk.

[00:45:14] I can't remember the mine company

[00:45:15] was behind the Cobre Panama mine

[00:45:19] because they had an agreement with them.

[00:45:21] It's a Canadian company.

[00:45:22] I think it was like

[00:45:24] Quantum something,

[00:45:25] but

[00:45:26] they have a whole lot less risk

[00:45:28] than the actual mining companies.

[00:45:30] But yes,

[00:45:30] they still have geopolitical risks.

[00:45:32] I think that's one of the

[00:45:33] bigger ones that they have.

[00:45:35] Yeah.

[00:45:35] Got it.

[00:45:36] That's a,

[00:45:37] it's a really cool,

[00:45:38] cool story.

[00:45:39] I guess

[00:45:40] I just asked,

[00:45:42] I just asked Finchat,

[00:45:43] what are some of the

[00:45:44] main risks

[00:45:45] that,

[00:45:46] that it can point out?

[00:45:48] And it said that there's a lot of

[00:45:50] potential political

[00:45:51] and social term turmoil

[00:45:52] in their

[00:45:54] Cascabel project

[00:45:55] in Ecuador.

[00:45:57] The company has structured

[00:45:58] the transaction

[00:45:59] to mitigate these risks,

[00:46:00] but the situation remains

[00:46:01] a concern

[00:46:02] source from

[00:46:04] the conference call on Q2.

[00:46:07] And Cobra Panama mine

[00:46:08] is

[00:46:08] currently on preservation

[00:46:10] and safe management.

[00:46:11] The new administration

[00:46:12] in Panama has indicated

[00:46:13] a willingness

[00:46:14] to reopen negotiations,

[00:46:16] but the company's awaiting

[00:46:17] comprehensive environmental review

[00:46:18] before further discussions.

[00:46:20] Very interesting.

[00:46:21] Yeah.

[00:46:21] When I meant

[00:46:22] geo.

[00:46:22] I love AI,

[00:46:23] dude.

[00:46:23] This is amazing.

[00:46:24] When I said geopolitical,

[00:46:25] that's what more I,

[00:46:26] I think you probably understood

[00:46:28] the way I was saying it

[00:46:29] is more like,

[00:46:29] yes,

[00:46:30] kind of,

[00:46:31] you know,

[00:46:31] local governments,

[00:46:33] social unrest,

[00:46:35] things like that.

[00:46:36] Change in regime

[00:46:37] for local government

[00:46:38] is definitely going to be,

[00:46:39] I mean,

[00:46:40] we've basically read out,

[00:46:42] right?

[00:46:42] That's what it is.

[00:46:43] Those are the biggest risk.

[00:46:44] And I guess the other,

[00:46:45] not a risk as much,

[00:46:47] but potential downside

[00:46:49] would be a strong correction

[00:46:51] in gold prices,

[00:46:52] for example.

[00:46:53] That could be a risk.

[00:46:55] But again,

[00:46:55] I think their cost basis

[00:46:56] is so low

[00:46:58] for a lot of these

[00:46:59] streaming deals

[00:47:00] that they have

[00:47:01] that it's more limiting

[00:47:03] their upside

[00:47:03] than an actual risk,

[00:47:05] I would say.

[00:47:06] Yeah.

[00:47:06] It's got a cool story

[00:47:07] with Seymour Shulick.

[00:47:09] I think we were talking about this.

[00:47:11] That's the roots

[00:47:12] of this business.

[00:47:13] For people who

[00:47:15] recognize that name,

[00:47:16] Seymour Shulick,

[00:47:17] he's the,

[00:47:18] the Shulick School of Business

[00:47:19] is like named after him

[00:47:21] at the York University

[00:47:22] at the York University

[00:47:23] Business School.

[00:47:24] Very successful

[00:47:25] Canadian entrepreneur.

[00:47:26] Yeah.

[00:47:27] And I guess the last thing

[00:47:28] I'll just mention here

[00:47:29] is if you compare it

[00:47:31] to miners,

[00:47:32] those who are looking,

[00:47:33] you know,

[00:47:34] really focusing on valuations,

[00:47:36] I mean,

[00:47:37] miners will be much cheaper.

[00:47:39] Like they're,

[00:47:39] you're going to be able

[00:47:40] to get them

[00:47:41] at a much cheaper valuation.

[00:47:43] So,

[00:47:43] but again,

[00:47:44] the miners,

[00:47:45] their costs

[00:47:45] for the most part

[00:47:46] are not fixed,

[00:47:47] right?

[00:47:47] So that's the,

[00:47:48] that's the one thing

[00:47:49] that you have to deal

[00:47:50] with with miners

[00:47:51] is yes,

[00:47:51] you can get them

[00:47:52] probably in the low

[00:47:53] double digits

[00:47:54] forward price

[00:47:55] to earnings ratio.

[00:47:58] But again,

[00:47:59] if oil prices go up,

[00:48:01] one of their big inputs

[00:48:02] starts going up

[00:48:04] in terms of operating costs.

[00:48:05] So it is

[00:48:06] kind of give or take.

[00:48:08] I'm going to go

[00:48:09] personally,

[00:48:09] I'd rather own

[00:48:11] the more premium

[00:48:13] business of the two,

[00:48:14] even if it means

[00:48:14] I'm paying a bit more

[00:48:15] of a premium

[00:48:16] in terms of valuation.

[00:48:18] Yeah,

[00:48:19] performance has been solid.

[00:48:20] It's been kind of

[00:48:20] flat for a while,

[00:48:21] but pays a nice

[00:48:23] little growing dividend

[00:48:24] as well.

[00:48:25] And I think

[00:48:26] it's $32 billion

[00:48:26] market cap.

[00:48:27] That's a lot bigger

[00:48:28] than I was expecting.

[00:48:29] And the market is,

[00:48:30] I think the market

[00:48:31] is probably underpricing

[00:48:33] it a little bit

[00:48:35] just based on

[00:48:36] how much gold

[00:48:37] that is appreciated

[00:48:38] and how sideways,

[00:48:39] I mean,

[00:48:40] gold is up like

[00:48:41] 30% year to date

[00:48:42] and Franco Nevada

[00:48:44] is not up 30%

[00:48:45] year to date.

[00:48:47] Yep.

[00:48:48] I like it.

[00:48:49] Interesting pick.

[00:48:50] You know,

[00:48:51] something for everyone

[00:48:52] on the show here.

[00:48:53] You want running shoes

[00:48:56] or a gold streamer?

[00:48:58] Yeah, hey.

[00:48:58] Take your pick.

[00:49:00] Or go buy your house

[00:49:01] with gold ounces.

[00:49:03] Exactly.

[00:49:04] Thanks for listening

[00:49:05] to the show, folks.

[00:49:07] As Simo mentioned

[00:49:07] multiple times,

[00:49:08] you're sharing

[00:49:09] fancy charts

[00:49:09] on the screen,

[00:49:11] fancy data

[00:49:12] on the screen

[00:49:12] that is available

[00:49:14] for our Patreon subscribers

[00:49:15] who get not only

[00:49:17] every episode

[00:49:17] on video,

[00:49:18] our faces

[00:49:19] for radio

[00:49:20] on video,

[00:49:20] but you also get

[00:49:22] our monthly portfolio

[00:49:23] updates

[00:49:24] every single month.

[00:49:25] And so,

[00:49:26] we just did one

[00:49:27] last week

[00:49:27] and we'll do one

[00:49:29] again when the

[00:49:30] month rolls over.

[00:49:31] So,

[00:49:31] that is at

[00:49:33] joinTCI.com.

[00:49:35] It's what,

[00:49:35] $9 Canadian a month?

[00:49:37] It supports the show,

[00:49:38] what we do here

[00:49:39] and gives you

[00:49:40] an awesome

[00:49:41] portfolio

[00:49:42] tracking spreadsheet

[00:49:43] as well.

[00:49:44] The exact one

[00:49:45] that we use

[00:49:46] to track

[00:49:47] our portfolio,

[00:49:49] track our returns

[00:49:50] over time.

[00:49:51] Let me give you

[00:49:52] a nice little template.

[00:49:53] Dan Kent,

[00:49:54] when he first saw

[00:49:55] the spreadsheet

[00:49:55] that I built

[00:49:56] for that template

[00:49:58] and like

[00:49:59] how we track

[00:50:00] the portfolio,

[00:50:00] he's like,

[00:50:01] are you,

[00:50:02] like,

[00:50:02] are you selling,

[00:50:03] like,

[00:50:03] why don't you sell

[00:50:04] this online?

[00:50:04] Like,

[00:50:05] this is like

[00:50:05] one of the best

[00:50:06] I've ever seen.

[00:50:06] I was like,

[00:50:07] well,

[00:50:07] I am kind of.

[00:50:08] It's on

[00:50:09] joinTCI.com.

[00:50:11] So,

[00:50:12] there it is.

[00:50:13] It's on,

[00:50:13] it's available

[00:50:14] there for you.

[00:50:15] And,

[00:50:15] if you have not

[00:50:18] supported

[00:50:18] the awesome

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[00:50:22] I highly recommend

[00:50:23] you do it.

[00:50:23] Everything that we

[00:50:24] talk about

[00:50:24] on the podcast

[00:50:25] here are things

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[00:50:29] lives here on

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[00:50:31] you support them,

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[00:50:33] We'll see you

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[00:50:34] Take care.

[00:50:34] Bye-bye.

[00:50:35] The Canadian

[00:50:35] Investor Podcast

[00:50:36] should not be

[00:50:37] construed as

[00:50:38] investment

[00:50:38] or financial

[00:50:39] advice.

[00:50:40] The host

[00:50:41] and guest

[00:50:41] featured

[00:50:42] may own

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[00:50:47] due diligence

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[00:50:50] professional

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