Stocks to Watch for the 2nd half of 2024

[00:00:00] 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 into the show, my name is Braden Dennis.

[00:00:20] As always joined by the perspicacious Simon Belanger. You're gonna have to tell me what that means because I have no idea. What if I told you I don't know either? Having a- So it took me a long time ago.

[00:00:38] You know what, this is actually the best adjective for a podcast or you could possibly think of. Okay. If you're perspicacious, you should be on a podcast. Having a ready insight into and understanding of things. Having a ready insight.

[00:00:57] That means you're just always quick draw with the facts and insights to be able to add to the conversation. I wouldn't say always, but I would say pretty good. Pretty good. Yeah. Okay, so you're fairly perspicacious.

[00:01:12] This is a Friday morning slash afternoon recording which is uncommon for us. The Canadian R show comes out on Mondays. We can kind of be timely on the hot topics here. This morning, that was widespread, it actually happened late last night.

[00:01:30] It was widespread outage from a crowd strike update that got pushed. Whatever software engineering intern just broke the world because that affected Windows software and a lot of services with Microsoft Azure across many of Microsoft's customers. So it's really quite simple.

[00:01:54] No Windows, no Microsoft, no commerce gets done around the world. I think that people know now how ingrained that company is into worldwide commerce now. Yeah, I woke up to it and I wake up earlier than you do.

[00:02:09] So I woke up to that and I checked my phone just to get an update on the news and the whole world was breaking down because of that. You had like airports almost shut down.

[00:02:20] Well, not shut down but the flights were all canceled because they couldn't make it work. Across the world, obviously in North America I don't know exactly where it's at. It probably may be slightly better than Europe and Asia because typically there's

[00:02:34] not that many flight that early in the morning. By the time they fixed it, it was probably 6, 7 a.m. around that time. I know there's some implication. One thing that came to mind and I'm not an expert on crowdshrite but

[00:02:46] you do wonder if there's gonna be some lawsuits tied to this because there's gonna be some companies that will lose a whole lot of money and they will have a lot of expenses related to that. And I don't know how the contracts are set up but

[00:03:02] I'm pretty sure there's some busy lawyers today look at what kind of recourses that they have. Every indemnity clause is being looked at in every contract right now. That's a very perspicacious idea you've come up with there. And now another thing too is semis this week.

[00:03:22] We'll do these two news topics and then we'll get into the juicy guts of the podcast today. I'm gonna be talking about the equal weight S&P and you're gonna talk about a bunch of stocks that you've sold through the years

[00:03:33] and how they've done so I'm excited to hear that. But semis this week, you wanted to talk about this really quick. The geopolitical overhang that has loomed for a long, long time nothing's really changed in my view.

[00:03:53] It's just when you have things priced to perfection last time I checked this geopolitical overhang still has a risk on all these companies and their price to perfection. It's just a recipe for stock volatility and some drawdowns. It's ripe for drawdowns basically.

[00:04:13] Yeah, exactly and I've been very vocal on that. You've also been vocal in terms of being priced very highly to perfection like you just said and I've been saying this for over a year pretty much since Nvidia started just blowing results out of the water.

[00:04:29] I think it was around the spring of 2023 when it really started on the whole AI boost and one of the things I said and ever since I've been very consistent on this is there's some real geopolitical risk when it comes to Nvidia because

[00:04:47] pretty much all of their chips are being produced in Taiwan by Taiwan semiconductors but it's like investors completely disregarded that even for TSMC. It's as if people were not thinking that was a risk and to me look it may

[00:05:03] not you may have your opinion on the you know how big of a risk it is. That's fine but nonetheless it's still a risk and I read so many articles about Nvidia TSMC, ASML which I will touch a little more on because they've really

[00:05:19] been hit this week in terms of some news that came out but when you have all these pundits that going on mainstream media just pumping Nvidia and none of them are talking about these risks that to me was a big

[00:05:31] warning sign that the hype may be too high when you just focus on the upside and not no mention of the potential risks and downside to these businesses. Look I really hope that there's not going to be some sort of tipping point

[00:05:49] but it feels like a pressure cooker with Taiwan and you know neither you or I have any foresight into what's going to happen with that situation but it has been a pressure cooker for a long time and the reality is

[00:06:07] it's not just Nvidia it's not just ASML it's not just Taiwan Semi-conductor it's basically every single industry is bottlenecked by a very very fragile choke point in the Taiwan Semi-conductor corporation. It just that's the way that we've built modern chip infrastructure

[00:06:30] and you know that's you and I were talking offline. There's not many things that the US the two party system agrees on you know especially now it just feels so divisive you know more than ever right you just have this like brutal situation with US politics.

[00:06:50] There is no one that disagrees on the situation around China and the need for on-shoring semiconductor infrastructure. Everyone can agree on that. Yeah, yeah exactly. And so what happened with ASML like just to keep it short is that Bloomberg reported

[00:07:11] that the Biden administration was looking at putting additional restrictions on tools that are essentially used to make these semiconductors or computer chips being shipped to China. So right now ASML obviously so they make these machines there's EUV so Extreme Ultraviolet and EUV Deep Ultraviolet.

[00:07:32] They are currently not allowed to ship the EUV machines the most advanced ones to China, but they are allowed to ship the EUV ones currently and what's concerning here for if you're an ASML shareholder is that China in their latest quarter was 49% of their revenue

[00:07:51] despite the ban on EUV shipments. And now the Biden administration is trying to essentially prevent them from or putting more restrictions on companies like ASML because they do get some of the technology and the parts in those machines from US companies. So they're trying to leverage that.

[00:08:09] We don't really know to what extent these restrictions would go. So I think it's a little bit in limbo right now. Obviously there could be varying degrees of you know, it could be real bad like it could not be as bad.

[00:08:22] But the issue is that that news came out and ASML this year their guidance was already not like that great. So the guidance remain unchanged earnings were as expected but they're essentially expecting revenues to be flat.

[00:08:36] And that's with the assumption that China is not going to take a big hit. So that's a big reason why it's lost a lot of value since I think is down probably 15 20% this week around in that range.

[00:08:48] And it's one of the reason I sold my position in March is just not that I didn't like the business. It still has a monopoly in EUV machines. They're the only ones who do those. But the uncertainty because of the geopolitics

[00:09:00] a geopolitical space and the tension between the US and China and the fact that the valuation when factoring those risk. I just didn't think it was warranted. And that's the reason I sold my position. ASML in the quarter shipped 92 dv systems tracking this year on FinCet and eight

[00:09:23] extreme ultraviolet systems during the quarter. Now those extreme ultraviolet machines are much, much higher revenue, much more complicated, way more expensive, way, way more expensive. So this is not apples to apples whatsoever. But they're they're shipping a lot of dv machines still. That's that's for sure.

[00:09:44] Look, I mean, the US is looking to potentially weaponize the right word chips and AI. So for my company, for instance, with FinCet we got a message from Open AI saying we cannot have any calls, any API calls from IP address coming from mainland China. Really? That's interesting.

[00:10:16] Yeah. So we have had to completely cease operations of any of those customers being able to use the product, at least the co-pilot API product. Yeah, which is kind of wild because like how how dangerous is that from a national security perspective?

[00:10:33] But I guess they are not different. It's probably kind of a blanket kind of restriction. Yeah. Look, I mean, it's it's they're building a intelligence arms race against other major powers in the world. And AI is a good place to start, right?

[00:10:52] Yeah. No, it's I mean, it's you you can't understand the logic behind it. But I think the issue is kind of the blanket things that are being applied. You know, to me, like just what you just told me, I just don't really understand the logic behind that,

[00:11:07] pertaining to your business specifically. Yeah. But I mean, that's often how regulations are, right? They tend to be broad base, you know, governments try their best, but they sometimes just don't have enough knowledge or it's just easier to do something broad and not fully understand

[00:11:24] the consequences behind it. So I'm not surprised that's the case. But I think it's just a reminder to understand the risk of companies that you own, no matter how great the prospects may seem. I think we're seeing at least with ASML and Vidya, TSMC is that,

[00:11:40] you know, a lot of that risk was kind of just just disregarded. And now I think it's a lot of people are facing reality that these risks were in fact real and it could, you know, you said Biden and Trump kind of agreed those two administration on China.

[00:11:56] But from what I've read is Trump will probably if he gets elected be even harsher on China in terms of restrictions. So it's something to keep in mind. ASML may be a great play longer term, though, because I think they'll probably be facing some shorter term headwinds.

[00:12:12] But the reality is they still have the monopoly for UV. So as their orders kind of adjust and shift, maybe around other place around the world and other countries that are friendlier to the US are starting to get companies

[00:12:25] to purchase these UV system, it could definitely turn around. But don't be surprised if there's kind of a sideways thing for ASML over the next few years. I think that's very possible or even downward pressure.

[00:12:37] But longer term until there is a competitor, I think there's still a bull case to be made even despite the fact that I don't own it. And if the valuation gets cheap enough, I'm not saying no.

[00:12:47] So if the valuation is cheap enough, whereas I can live with the risk, you know, I'm happy to buy it again. If more foundry capacity needs to be built out worldwide, we're going to sell some more UV machines. I am a shareholder, a very small one and it.

[00:13:07] I kind of bottom ticked it and then it went straight up into the right. Oh, it got it. So, you know, it's been like a workbench position for me because I haven't been able to just accumulate more shares at a reasonable price.

[00:13:19] I don't sell it, but, you know, so if if. If this continues to get pushed down, you know, perfect. You know, that's what I'm looking for as a one as someone looking to acquire more shares. All right, let's shift gears.

[00:13:35] My first segment of the day is about the equal weight S&P. If someone was to ask me what is the story of the stock market in 2024? For me, it's been the performance and outperformance of US mega caps against the rest of the market.

[00:13:54] And up until basically a few trading days ago, it's it's it's like, you know, I see some life out of the more value index RSP ticker. Equal weighted one. Yeah, ticker RSP. Yeah. So the S&P 500 market cap weighted up around, you know, 27 percent using SPY

[00:14:16] and the S&P 500 is around 12 percent year to date. And these are this week notes. Same companies, different weightings. I mean, if you look at the S&P traditional market cap waiting, you got 7 percent Microsoft, 7 percent Apple, 7 and I'm doing rounding here.

[00:14:38] 7 percent Nvidia, 4 percent Amazon, two and a half percent Meta and Google. A little bit more if you include both Google tickers Berkshire, Eli Lilly. I think by the way, I think Cosmos like the ninth constituent in the QQQ now, by the way. Jamie Diamond is in there too.

[00:14:58] I mean, JP Morgan. JP Diamond. JP Diamond, you know, so it's it's it's quite a disparity. Same 500 companies, different weightings. And let's not get ourselves RSP, the S&P 500 equal weight ETF. It's a value index. Even though it's a it's a equal weight on the 500.

[00:15:24] There's a lot of companies that I would say are industrious, not high multiple companies in there. And so I wanted to parlay this into a mini segment of stocks on my watch list

[00:15:35] presented by our friends at the Q Bank to spread the word that there are a bunch of really awesome publicly traded businesses in that index or large caps around the world, not just a handful.

[00:15:49] So I'm going to go through a bunch of companies that I think are worth a look here, Simone, none of this is advice. Some of them I could find a bunch of ugly skeletons in the closet. That's kind of the whole point of investment research here.

[00:16:03] But at least there can be a helpful list of stones to turn over any thoughts here before I get into the list. No, no, I mean, I think it's you did a good overview in terms of yeah, just the discrepancy between the two.

[00:16:16] It's pretty amazing every time I know the chart and every time I look at it, I just get amazed how big that the gap is between the equal weighted and the index. And I think it's just a reminder to people that yes, I mean,

[00:16:29] just be aware that that's the case or not trying to scare you one way or the other. It's just, you know, it could continue a year, two, three, four, five years, but you know, there's also some additional risk when you start

[00:16:43] having so much weighting into just a handful of names or let's just say 10, 10, 15 names. Yeah. Like the S&P is a very effective trend following strategy. Exactly. Yeah. Right. And so it's been a good strategy. But be aware of you own the strategy. Right?

[00:17:03] Like, I that's like what you said, that's the most important part. It's been a good strategy and it probably, you know, historically is the correct strategy moving forward is the like S&P is the best trend following strategy ever made, you know, buys more of the stuff

[00:17:18] that's working and sells more of the stuff that's not working. But trends can go up and down. Right. I know like recently we kind of forget it can't go down, but you know, it's a non-zero scenario like non-zero probability that you

[00:17:30] get a lot of these, you know, index are definitely getting a lot of flows by the fine contribution pension where, you know, indices are actually, you know, you automatically contribute every pay and it goes into there.

[00:17:43] But what happens if there is a bit more layoffs in the US and Canada and then people start potentially drawing down on those or at least not making those contributions because they're laid off, they're no longer getting that paycheck, then you could see a

[00:17:57] move downwards just based on that because the trend kind of reverts. And then you have baby boomers, right? That are starting to draw on those savings as well. So I'm not saying this will happen, but it just these are all kind of possible outcome going forward as well.

[00:18:12] The following companies have growing revenue on average of more than 10% on five years and three years. So there's been, you know, longer trend and more recent trend of consistent top line revenue growth. They all have positive operating margins.

[00:18:30] They're all down more than 10% in the last 12 months and they're fairly large and quality industry leaders. So I took the big screener list of, okay, growing the top line, positive operating margin and the stocks down on the trailing 12 months.

[00:18:47] So that that removes all that big mega cap stuff that's gone up bigly. And then I qualitatively selected and handpicked a couple of names that are large quality companies, industry leaders. All right. A couple of European names. Luxury has been getting smashed.

[00:19:04] I think this is probably the most attractive place of my segment here. Luxury is getting smashed. So LVMH, one of the world's largest companies, luxury, good conglomerate, Christian Dior along the same lines. One is Arnaud, just going to go buy them. I wonder.

[00:19:22] Dissalt Systems, which is the European company well known for their 3D modeling software called Solidworks. Massive Business. Adion. So Adion is the stripe type equivalent competitor out of Europe that has, you know, they facilitate payments of credit cards and business to business transactions.

[00:19:44] The payments companies finally catching a bit a little bit after getting pummeled, but quite attractive when compared to the stripe latest private valuation, which I think is 70 to 90 billion. The profitability and EBITDA margins of Adion versus Stripe, it's like unbelievable that they're doing the same thing.

[00:20:04] You know, one is VC backed monopoly money out of Silicon Valley and the other one is Run Very Lean in Europe. It's very impressive. Evolution Gaming. They just did another acquisition, I think yesterday. But the gambling API company, maybe not the most ESG company

[00:20:21] for some folks, but looking pretty attractive here. All right. Now looking in the US, Monster Beverage and Celsius, the two energy drink companies are getting smashed a bit. Fortinet, the cybersecurity company. CoStar, the real estate data company. Alta Beauty, the makeup company.

[00:20:41] Align the company well known for an Invisalign. PayPal. You know, you guys make your own judgment on that one. I think they definitely have some issues for sure. But take that what you will. John Deere and Starbucks. Lastly in Canada, Brookfield infrastructure. Lulu Lemon.

[00:21:01] Well, they don't have the Canadian listing anymore, but who's counting? And Nutrient. So those are my three for that list in Canada. So overall, a lot of like stall warty growth companies and payments and luxury. That's how I would bucket these companies getting smashed a bit. Yeah.

[00:21:24] And what I was showing while you were chatting is actually, and I'll share this again for joint TCI is Burberry talking about luxury. So listed in London, that thing is down. It's pretty. Yeah. It's down total returns down 66.3% over the last year. Press the drawdown.

[00:21:43] Press the drawdown chart. Yeah, drawdown. That's the second one. Yeah. Yeah. Yeah, it's not not the right direction. I'll just say that. But yeah, it's I mean, it's had a rough go and that was the first thing.

[00:21:57] And I was talking with Dan on that too is luxury in general has been really hit hard. I think if you look at Lulu Lemon, I wouldn't say it's a luxury brand. It's more kind of them like more middle, I would say. It's not cheap. It's not luxury.

[00:22:15] It's a lifestyle brand, I would say a bit more. But again, I think they're being pulled down by Nike. And I think Nike is kind of in that same space as Lulu Lemon. Different obviously different offerings. But Nike has had some a rough go in terms of sale.

[00:22:31] And I think that's pulling down Lulu Lemon because they're, you know, they're different offerings, but they are competitors at the same time. So I think despite Lulu Lemon still doing well, that's being pulled pulling them down recently.

[00:22:44] Burberry's drawdown reminds me a lot of Snapchat when they release earnings before everyone else and Snapchat reports dog shit numbers and meta gets sold off like every quarter. It's like investors never learn like this happens every single quarter for as long as Snapchat has been public.

[00:23:03] That reminds me of Burberry and LVMH like LVMH gets sold off because Burberry does. Burberry is not luxury the way that LVMH is in my, you know, take that opinion for what you will. But I do not think Burberry is nearly luxury like LVMH is.

[00:23:21] Now it's interesting because Ferrari, which is certainly a luxury stock, has not had a similar fate as of late. Yeah, I think you're talking though. Like to me, it's they're both luxury, but again, I think it's more different kind of luxury.

[00:23:38] Right. I think a lot of people can spare buying like for women, like I think Burberry make handbags and stuff like that. That's how well I know. Neither of us have a single. Yeah. Yeah, exactly. I know they was very popular when I was speaking of Taiwan

[00:23:51] when I was in Taipei in 2007. I know Burberry was very popular there, but there's a difference between buying, let's say, I don't know how much it is, but let's say it's $500 handbag and buying a half a million dollar car or whatever a Ferrari cost nowadays.

[00:24:05] Right. So I think there's still a lot of more aspirational luxury or aspirational people in terms of buying luxury that probably shouldn't be buying luxury, but they can still, you know, afford and figure out how to either you put that bag

[00:24:22] on your credit card, whatever you do, but it's a bit harder to put that Ferrari on your credit card. It's such an important distinction between the the line between premium and luxury versus true luxury. Yeah, exactly. Such an important distinction because the true luxury category,

[00:24:45] their customers don't face economic hardship ever. No, I mean, they might a little bit, but not to the extent of those like kind of luxury. Ferrari doesn't make enough cars that for it to matter. Like they're only if they're only shipping 13,000 cars that customer base is completely insulated.

[00:25:06] Say, you know, one billionaire becomes an 100 million air and they don't want to buy Ferrari anymore. Another billionaire took their spot. Yeah, no, that's a good point. But yeah, I think that's that's more like the sense I get as you get.

[00:25:18] Yeah, like it was just the extreme luxury and then kind of aspirational luxury. You know, I could buy a Barbary bag. I can guarantee you I cannot buy a Ferrari. So I don't know. Another couple years of that Bitcoin run and you're.

[00:25:34] Yeah, I mean, it's been I mean, it's been crazy. Yeah, just to watch Bitcoin, what's been done like we'll probably have to talk about another show. I think a lot has to do with Trump and his change in hard.

[00:25:47] And then who he nominated as a VP who I think is disclosure shows that he does own some Bitcoin as well. So I think that's been been good for the price right now. We'll have to see where it goes going forward.

[00:26:00] But the rest of the year in the markets is going to be a theater. It's going to be crazy. Yeah, just because now obviously. Well, I mean, obviously like we don't talk much about politics. But again, it has an impact on markets because now the markets are trying

[00:26:15] to position themselves on what they think the outcome will be of the elections and what whoever wins depending if it's Trump or Biden. And then is it like a split Congress? Like how is that working? Because obviously that impacts legislation too.

[00:26:30] So you have like probability markets that are trying to make bets on what they think might happen. And at the end of the day, obviously if Trump wins, it's way more bullish for Bitcoin than Biden administration, which has been very harsh on cryptocurrency

[00:26:45] in general. So there's just so many moving parts. I mean, I just find it fascinating. That's kind of my view on it. Yeah. Let's move to stocks that you have sold and how they have done over time. I'm pumped to see this list here.

[00:27:01] And I can see it on the document here, but let's get into it. Some I actually kind of forgot. I held them because it's been so long because I went on Questrade, the broker I use and essentially I went and you can pull reports

[00:27:17] and I switch my from TD over to Questrade in late 2019, early 2020. So that's as far as I could go. But I thought it would just be an interesting exercise to see, you know, did I do OK selling that? Did I make a good move?

[00:27:35] And for the most part, I think it's, you know, it's I've done pretty well selling these names. Some there's a couple of names, especially one I wish I would have kept. But the first one and feel free to interject, Brayden, if I

[00:27:50] if you have some comments on here as well. So the first one here that I have is Suncore Energy. And I will share my screen here. So the first one is Suncore Energy. People will see that on Joint TCI, the data I have sold, but essentially

[00:28:06] ranging between January 2020 and March 13, 2020. So basically right before the pandemic kind of started. So I sold Suncore Energy and the price that all returns since is 51 percent. In terms of the reason why I sold Suncore Energy,

[00:28:26] at the time, it was just I wasn't sure I was still learning about oil. And I figured I would learn a bit more and potentially choose some different names in the future. It's what I've done since I own. I bought a couple of years ago.

[00:28:40] I started in position in Canadian Natural Resources, and that's been quite a good play here. The second one is JD.com. Their total returns for this one has been minus 28 percent since. Although you'll remember, Braden, JD.com had like a crazy run up right after the pandemic started.

[00:28:59] So that one, I mean, depending if my timing would have been good or not. If I sell, I probably could have made a profit. But long term investing for me looking in hindsight, obviously was probably a good move. I'm not trying to time the market.

[00:29:13] And I had doubled my money on JD.com as well. So I can't really complain there. The third one is Spin MasterCorp. That one down 7 percent since it's a company actually liked. I still kind of like, but I've learned the hard way that investing

[00:29:29] in toy companies is very, very difficult because they will kind of have been flow in terms of what kids are into, what kind of brands. They also have licensing agreement with like big kind of content producers, for example, who gets a licensing agreement with Disney and

[00:29:46] stuff like that, that will impact what their revenue. So it's a very difficult business, to be honest. And my learning from that is just probably not best. It's probably best to not invest in toy companies. I see you nodding there. Yeah.

[00:30:02] I don't have any experience investing in toy companies per se, but it is very, it's an almost identical business to mobile games, which are heavy upfront licensing costs for some asset. If you're piggybacking on the top of, let's say, so I know a guy

[00:30:23] who sold his company for a lot of money and he had a mobile game company. And what they would do would be like, they'd go to Family Guy and be like, OK, we're going to make the Family Guy mobile game.

[00:30:36] That upfront cost would be like ten million dollars for the licensing of the thing. Then they got to go build it out. And then they got to go, OK, here we go. Now, you can piggyback off the back of that.

[00:30:48] But like you just said, like what happens if the new frozen is a flop? Exactly. Yeah. You have like a lot of outside risks with these names. And I find it like I think fashion investing in fashion is harder.

[00:31:01] I think it's even harder to guess what kids are going to like. Yeah, exactly. And the reasoning for me at the time I remember is just that I like some of their brands. So like Paw Patrol, for example, which is still going strong.

[00:31:13] But again, it wasn't enough to to offset some of the other brands that didn't do as well in their portfolio. The third one here is a BLX is the ticker, so it's Bank of Latin America. The reason why I had to invest in that one and my knowledge

[00:31:29] in banks was not as good as it is today. But the reason I invested was more of a play on Latin America at the time. I can't remember if I had taken a profit or a loss. I think I may have taken a small loss.

[00:31:41] But since then it's been up 100 percent. So a clean double, I would say. Well, probably from about a week ago is when I took the data. So I think, you know, give or take a couple percent here. The next name.

[00:31:53] So the fifth on the list, one that Canadian investor will be very familiar with Bank of Montreal. So that one, the total returns since has been 38 percent. And that's around the time as well that I decided to shed most of my bank holdings.

[00:32:07] It's just again, banks are extremely complex to understand. I just didn't love owning a lot of of banks because of the risk associated with them. That's the reason why I decided to sell. I the other one I owned was TD.

[00:32:26] And I think I sold it a bit after that, if I remember correctly. But ever since then, total returns has 38 percent. So definitely, I think overall happy that I sold Bank of Bank of Montreal almost said Bank of America there.

[00:32:40] But that's the main reason it's not a bad bank per se. But I haven't really held banks since I sold my TD position. I think it's the last one. The next one is shock communication. So people may wonder, like, what the hell did you buy shock communication?

[00:32:57] The reason back then I do remember it was a play on their acquisition of wind mobile that became Freedom Mobile. And my thesis was mainly that they would be able to kind of erode the big three, so tell us Bell Rogers and gain some market shares

[00:33:12] and that there could be some upside related to that. This one would add 61 percent total returns in big part because they got purchased by Rogers. So that's kind of the big part of the returns. If not, it would have been kind of just sideways ever since.

[00:33:27] Anything you want to add there before I finish the last four? You didn't look into your crystal ball and know that they'd get bought out at a premium. No, no, I did not. So you should bring your crystal ball into the shop.

[00:33:38] I got my tuned up the other day and it's working good. Yeah. The next one, this one glad that I sold. So I bought Laurentian Bank again. So I kind of forgot about that one. That was another bank that I held.

[00:33:51] But the main reason is that for people who are not aware, I can't remember exactly when happened, but it was 2018, I believe, or potentially 2017, where they had this big issue with mortgages that they issued without the proper documentation. And then they sold it to another financial institution,

[00:34:09] which pulled down the results for years. And at the time I thought it may have been a bit overblown. But then when I, you know, I started the position, I held it for a while. And when I saw that these issues were not getting resolved

[00:34:22] and were actually getting worse, I decided to sell it. And the total returns for Laurentian Bank has been negative 13 percent since. So I think I'm pretty happy that I sold. The next one, Enbridge, well known for people. I've been quite critical for Enbridge recently just because

[00:34:38] I don't think your payout ratios and their dividends are very sustainable. They have large amounts of debt. But back then it wasn't as high. There was also the line three, if I remember correctly, that was overhanging that they were trying to replace.

[00:34:53] And it kept going to court and the stock kept getting hit because of that, whether they had good or bad decisions. They tended to be like decisions that didn't favor them. But I thought longer term that Enbridge could do well

[00:35:06] and that people were just focusing too much on it and not as much on their total assets decided to sell mainly because of some of the concerns with the financial health. So the debt metrics not improving as much as they would say.

[00:35:21] So I decided to sell that, but I did make, I remember I made a decent profit on Enbridge. So my timing was kind of good. The last two name here, one that I talked recently with Dan on the earnings and use because we were...

[00:35:34] We just did not have a lot of earnings and use. It was kind of that in between quarter season, in between financial results season. So I sold Moulton cores back in March of 2020. The price ever since would have been a total return 7%.

[00:35:51] So again, I think that was a good move. I sold this one because they were trying to get into Seltzer's different kind of option and the revenues were just not kind of going in the direction that I wanted.

[00:36:03] So I think I sold after holding it for a few years. And then the last one that I wish I would have kept, last but not least is Fairfax Financial Holdings. I think a lot of people may be familiar with that. It's an insurance company,

[00:36:19] but they also invest in other companies. I think maybe a little bit similar. I know he's been kind of compared to a little bit like the Warren Buffett of Canada. Take that with a grain of salt, but he does invest in companies as well.

[00:36:31] So one, they have Steak and Blackberry. I think they're behind the Toys R Us reopening in Canada. They've done quite well. So 199% since I sold that. The main reason I sold it was just because I started a position and I probably didn't understand the business

[00:36:49] as well as I did. It's quite complex to understand that business and I just decided to sell based on that. Clearly, I probably should have learned more about it and kept it, but you win some, you lose some. So those are the 10 companies that I sold

[00:37:04] and I can definitely go through some more recent one on another podcast if people are interested in that. How many stocks do you own right now? Do you know? Offhand maybe like 14 or 15, Max, yeah. I'm gonna look at your thing on... Yeah.

[00:37:20] And during that same period for those intros... 16, okay. So during the same period for those interested, I actually had 124% returns in my portfolio. So overall, I mean, they've all underperformed my portfolio with the exception of Fairfax. I just, I'm actually realizing you have less.

[00:37:39] If I take out one, two, three, four, five, six, seven. Oh, you have actually hardly any. Yeah, it's all index funds, yeah. Yeah, it's actually a lot less than I thought. Cool? Yeah, I get that simplified to say a bit more, yeah.

[00:37:55] You and I have both gone more simple through the years. You know what I was thinking before we started recording? I'll get to commentary on your sales here, but every time I think to my... Every investor goes through this. Every investor who invests in individual equities

[00:38:16] thinks themselves, one of these days I'm gonna buy the index and go to the beach. I'm selling it, I'm draining the swamp and I'm going to the beach. Every investor has that. For me, it's like quarterly. And then now we're in right now

[00:38:35] and next week is full on. Earning season comes around. And I'm like, I could never do it. I could never sit on the sidelines here. This is too fun. I like it. I enjoy, I like keeping up with everything. It's what I do.

[00:38:51] And so we're right in the thick of earning season now. Yesterday was a big day. Next week all the big techs and just like over a thousand US stocks reporting or something nuts. Earning season is too fun when you're an individual equities guy.

[00:39:06] I don't do much, I don't trade, but it's intellectually stimulating. Yeah, it's definitely fun. I mean for me as well doing the earnings and use with Dan, right? So you have to stay on top of a bunch of different companies. I actually find it maybe even harder

[00:39:22] to be doing some deep dives in any individual companies where I'm trying to stay on top of so many of them that are reporting. But definitely, I mean, I've used more of an index approach, but you can make a case especially right now

[00:39:36] with your first segment highlighted that indices being so heavily weighted. I mean, you can make a case that if you pick stocks well over the next two, three, four, five years plus that you will probably perform better than the index

[00:39:52] because the indices are so highly valued right now. I'm not saying that will be the case but you can definitely make a solid case for that. When you look back at any of these names, do you have any, I mean, are there anywhere you're like,

[00:40:06] okay, sure, maybe based on the performance I shouldn't have sold? That doesn't make it a mistake necessarily. If I look at this, maybe that money got deployed to do something much better even for some of the winners like a Fairfax. Are there anywhere you look at and go,

[00:40:26] I need to revisit this name? It's probably Fairfax to be honest, even with obviously the returns kinda show that it's good. The rest, I mean, JD.com was an interesting business but then you got the China risk that I don't think I'm actually willing to get into

[00:40:46] and then Fairfax would probably be the one, whether I would buy it or not, I'm not sure but I would definitely be willing to learn more about the business. And Molson and Coors, I mean, you can't even buy this stuff in the good old LCBO. Is it, yeah.

[00:41:03] Isn't it, I thought the beer store was still open. The beer store's still open, you're right. Yeah, and can't you buy like you can buy wine and the loblaws we have near here has beer as well. But they're cleaned out. So for those who are not familiar

[00:41:18] with what we're talking about, in Ontario, and people are in Ontario, I'll obviously know what we're talking about. Yeah. But the LCBO is the- Dry summer baby. Yeah, it's it. It is full on prohibition. The LCBO has gone into on strike over fighting over the fact that

[00:41:36] the government is allowing grocery stores to now sell ready to drink cans like seltzers and stuff like this. And this is a, this is the big business in the LCBO these days is yes, of course, people still have to go to the LCBO

[00:41:52] and buy like bottles of, you know, two-sixes of liquor and stuff like that. But young people in the world, especially in the summer, they're ready to drink cans are what dominate sales volume in this place. So you can buy in the grocery stores,

[00:42:13] but right now it's completely cleaned out. Like it looks like zombie apocalypse in there and the alcohol section makes us look like a bunch of degenerates. Well, and not in there. I think that's now I just realized not in Ottawa because we're lucky we have the Quebec side

[00:42:29] where the sakeus are open, right? So I know a lot of people that are just go on the Quebec side and buy it. So I think that has kept the shelves in Ottawa relatively stock for grocery stores because of that reason.

[00:42:41] Cause I had family over a couple of weeks ago right after the strike started and I wanted some white claw and they're on the Quebec side and they were coming over for a barbecue and like, oh, like can you buy me some white? Pick me up a couple.

[00:42:56] Yeah, I'll just eat, transfer you the money and that's what they did. So I don't drink all that much. It's not really a big impact for me, but yeah, it's definitely much easier in the region. It's a little bit more inconvenient

[00:43:08] cause you have to go across the bridges and they tend to be very busy, but I guess it's one of the advantages of living right on the border. I'm going to a buddy's birthday party tonight and we have like a group chat going

[00:43:21] and I can't put them on blast or say anything. Just make some moonshine. Yeah, yeah, I need some moonshine. What do we do? Like I just went to all the grocery stores, nothing, cleaned out, can't get it. The beer store in my house is completely wiped.

[00:43:38] It's like full on prohibition, like what do we do? Everyone's going to start buying weed I guess. You'll see. It's going to be a very different party, but we have a buddy who works at one of the big liquor companies and we have a backup. So he's supplying.

[00:43:58] But dude, it's full on prohibition. Yeah, we're going to turn into like a pass the blunt type party. But you know, I said that as a joke, but as I was thinking about it, like it'll be interesting what to see if sales are actually have picked up

[00:44:13] at like Canopy and Aurora and all the big players during this quarter as especially if the strike goes on for longer. Like I would this thing. I bet you dispensaries are having increased traffic. Yeah, I would think that as well. Just because you know, people are looking

[00:44:30] for a way to unwind or whatever it is. It's the summer just relax and there's even like, you know, there's the edibles like drinks as well. They're kind of self-serves as well. So people may kind of offer those, but it'll be now I'm kind of looking forward

[00:44:44] to their next earnings to see if there's actually an impact in what management has in terms of commentary. Yeah, they'll probably lie. They'll lie even though it's good. Yeah, yeah. They'll lie even if it's good. They'll still make up some numbers, but bio steel.

[00:45:01] I just had a question for you and I'm completely blanking, that's okay. Should that be the pod? We have we have a couple more segments here, but you know, we've chewed up a lot of time. We'll save this for next time.

[00:45:14] I have a good segment here on stock based compensation and buybacks done at the same time, which I think is a great little discussion for us. Tune in next Monday and we'll go through that. Thanks for listening to the podcast folks. We really appreciate you.

[00:45:34] And as I just mentioned, we're here every single Monday and Thursday. It's earning season, so make sure you're turning into the Thursday calls. I forgot something because Dan is on vacation for a couple of weeks, so we recorded episode 400 in advance, but we forgot to talk about it.

[00:45:52] So this is 399. Maybe just a little reminder that this is 399 and the next episode that you'll be listening to, we will be at episode 400. Wow. Glad I remembered. What are we gonna do for 500? What are we gonna do for 500? That's only...

[00:46:10] I don't know, we'll have to think something good. Yeah, it's gonna come up, yeah, like probably in the spring next year. Yeah, like late spring, yeah. Yeah, about a year from now. 25 weeks from now. Yeah, I don't know, we'll have to think about something. Yeah.

[00:46:26] If you guys have suggestion listening, let us know. So we have time to plan. Yeah, maybe we should do something out West. We have a fairly big listenership out there and we haven't done anything out West in a while, whatever.

[00:46:38] I'm saying in a while, like we've done something before. Like we haven't done anything. So that could be the first. Thanks for listening folks, we'll see you in a few days. Take care, appreciate you. If you wanna support the show, you can go ahead and join tci.com,

[00:46:53] that's our Patreon monthly portfolio updates come out on the first Monday of each month, unless it's holiday, call it a Tuesday. And all the research numerical deep dives into every single company on the platform. Simone Sharon is a little screen. That's all done on finchat, finchat.io.

[00:47:12] If you want 15% off exclusive for podcast listeners, use code TCI15, let's go TCI15 on finchat.io. See you in a few days, take care, bye-bye. The Canadian investor podcast should not be construed as investment or financial advice. The hosts and guests featured may own securities

[00:47:34] or assets discussed on this podcast. Always do your own due diligence or consult with a financial professional before making any financial or investment decisions.