The Canadian Investor - 25 Bellwether Stocks That Everyone Should Track

Episode Date: May 1, 2023

In this episode, we go over bellwether stocks that serve as indicators of how various sectors of the economy are performing. Symbols of stocks discussed: FDX, CAT, CNR.TO, ACN, BCE.TO, SBUX, LVMH, V, MA, PG, XOM, SU.TO, INTU, MCO, WMT, HD, CTC-A.TO, LYV, ABNB, CP.TO, CNR.TO, CPRT, RY.TO, BUD, JNJ, MCK Check out our portfolio by going to Jointci.com Our Website Canadian Investor Podcast Network Twitter: @cdn_investing Simon’s twitter: @Fiat_Iceberg Braden’s twitter: @BradoCapital Want to learn more about Real Estate Investing? Check out the Canadian Real Estate Investor Podcast! Apple Podcast - The Canadian Real Estate Investor  Spotify - The Canadian Real Estate Investor  Sign up to Stratosphere for free 🚀 our platform for self-directed stock investing research. Register for EQ Bank, the seamless digital banking experience with better rates and no nonsense.See omnystudio.com/listener for privacy information.

Welcome back into the show. This is the Canadian Investor Podcast, made possible by our friends and show sponsor, EQ Bank, which helps Canadians make bank with high interest and no fees on everyday banking. We also love their savings and investment products like GICs, which offer some of the best rates on the market. I personally, and I know Simone as well, is using the GICs, which offer some of the best rates on the market. I personally, and I know Simone as well, is using the GICs on a regular basis to set money aside for personal income taxes in April of every year. Their GICs are perfect because the interest rate is guaranteed, and I know I won't be able to touch that money until I need it for tax time. Whether you're looking to set some money aside for a rainy day or a big purchase is

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And I think this is going to be a fun listicle to go through. We're talking about lots of different companies, lots of different industries and businesses. We think that tracking them and specific metrics around them can give you a kind of unique insight and pulse onto the broader economy. We're not macro guys, but this is the way we do macro on a company specific basis. And I think that that's how it makes sense to my brain. How are you doing, brother? I'm doing well. Yeah, I'm excited to do this.

I don't know if we have 20, but I'll just kind of go on. You got to say some number that sounds sexy for the title man yeah 22 22 all right well there you go um but yeah no i think it'll be a fun discussion and before we get started um let's define what a bellwether stock is i think for most people they may be aware but for new listeners, maybe they haven't heard the term before. So according to Investopedia, and I'm not going to use the Nick Shannary here. For those who are wondering what this is, our real estate, the Canadian real estate investor, Dan and Nick. And Nick always uses this term, Nick Shannary, when he defines a new term. So I'll take a page out of his book.

It's the Siminissary. No, it doesn't quite rhyme the same way, but we can work on that. It's a work in progress. We'll work on that. So according to Investopedia, it refers to a stock that is believed to be a leading indicator of the direction of the economy

as a whole, a specific sector, or the market in general. So there's different ways to look at it. And that's what we'll be doing is Braden, I think, is doing a bit more kind of more segmented areas, I would say. It's probably the right way to put it, where I'll try to look at it a bit more at broader sectors. But we'll have a bunch of names. I don't think there's any right

or wrong way to look at it. It really depends what kind of information you're looking to gather just at looking at a specific type of company. And some will give you much better indication on the broader economy, and some will be much better indicator on kind of specific segments of the economy. Yeah, that's a good point. Because like, the way I'm looking at this is I'm not going to do a deep dive into any particular one of these companies or the industry that they're in. But just to give you an idea of how I think about this, because, you know, you and I, basically you told me, let's do this Bellwether segment for the podcast. And I was like, I think it's a great idea. And then I looked at what you had written on your notes. And I was like, Simone, this is not how my brain works, but that's okay.

Let's do it our own way and explain it on the podcast because you're much more well-versed in macro. You have your finger on the pulse a little bit. I think you understand it better than me. I'm more bottoms up as an investor. I don't think I have any sort of edge on the broader economy or having a pulse on the macro, but I'm really good at focusing on individual businesses. I think the combination of... I think that's always how my brain works and being an operator of a few businesses myself. That's just automatically where I go to. And I'm just going to go through a couple signals that I find particularly useful. And sometimes I might just focus on one specific metric from these businesses. I think you'll understand what I mean. So two companies, actually three companies

I like looking at a lot for the broader economy, like as macro as you can kind of get. And those businesses are FedEx, Caterpillar, and any of the rails, but we'll use CN Rail for this example. So for FedEx, I like looking at daily package volumes and average daily freight pounds. So how much is being moved on FedEx? And again, I do the same thing with UPS. I make a little tab on Strato and then I put them together. Because you kind of an idea long-term. And when you chart this out, Simone, it's been a bit of a slow decline quarterly, quarter over quarter since when everyone was getting stimmy checks in 2020. So that's one I like to track.

Next is Caterpillar backlogs. So total order backlogs for Caterpillar has a good kind of idea on new construction, infrastructure projects globally. And then last is CN Rail, which is looking at gross ton miles. Construction, infrastructure projects globally. And then last is CN Rail, which is looking at gross ton miles. So how much product is, how much goods are moving via the rails over a certain period, in this case quarterly, so gross ton miles. So those are three metrics I like to look at from three different companies.

One caveat I'd like to say for today, for all my content that I'm talking about today is, of course, there's other competitive factors at play here. If Caterpillar loses a bunch of market share, does that mean that there's no new construction project starting? No, of course not. There's more competing factors at play here. But many of these businesses are pretty blue chip and solid and steady. So that shouldn't be too big of a concern when you're trying to extract some information from it. Yeah. And I mean, Caterpillar, I would say on top of construction, it's a good indicator for the economy as a whole, but especially infrastructure projects or large government funded projects. Caterpillar is usually like a it's very, very frequently quoted as a bellwether stock.

So probably it doesn't come to any surprise for anyone. And then Canadian National Rail or even a CP, I think they're a great indicator on what's going on with the broader economy. And I talked about it with Canadian National Rail in the previous episode is that they're starting to see a bit of a slowdown and they believe we're in a mild recession. know whether that's true or not until a couple of quarters from now when the data starts coming out from StatsCan in Canada or the official sources in the US. So that's kind of why these bellwether stocks are so interesting. And that's a great example there. I'm using our fancy new tool here. Yeah, exactly. These are for people who are watching the podcast. We're doing video now for joint TCI subscribers. Hopefully, this gets up there in time. No promises, but you can see total order backlog.

It's actually at an all-time high here on the last 12 quarters of data at over $30 billion. So I think it's a pretty useful metric. Let's see if we go out annually. Yeah, you can see it really picked up. Yeah, that's pretty sweet. So if we sound a little confused at times, it's because we're using this new tool and discovering features as we're doing it.

Look at us, old dogs learning new tricks. Look at us. Exactly. So the way I'll take it next here is I was looking a bit more at this sector specific of the S&P 500, which we also have these similar sectors in Canada with the TSX. For example, it includes so many different things, at least in the S&P 500, where they'll have, for example, like telecoms, but also companies like Google, which are, you know, one's kind of a pure, not necessarily a pure play, but it's very ad specific where telecoms like AT&T or something like that in the US would be, you know, much different. It could be also kind of shifting trends and patterns of behaviors for consumers, whether, you know, they're not using their cable anymore in favor of the internet and

things like that. But I do think there's a good Canadian company that's a fantastic weather bell stock here. And that's BCE, also known as Bell Canada Enterprises. The reason why I use Bell Canada is just because Bell is so massive. And one of the reasons is that they have wireless operations, wireline operations, which is your traditional cable or also if you're getting high speed broadband Internet. But they also have a pretty large Bell Media segment. So if you're thinking about TSN, CTV and things like that. One of the things I'm going to share here for those who are watching is that I actually, you know, I'm on Stratosphere here and just taking a little bit of time as I'm getting used to the tool. But you can actually see the various segments. BCE, the Bell Media is definitely the smallest segments of the three that I just talked about.

And the biggest one, to my surprise is still the uh kind of broadband wireline is still their largest segment and then you have the wireless that's getting closer and closer over time but it's just kind of i think in my opinion it's definitely a very nice and good way to look at things when it comes to uh communication services i think it's a really good bell weather stock at least for for canada when it comes to that if you look at like net fiber ads that are going to be coming into like it's it's going to be a pretty good uh measure of population growth here in this country as well and yeah that is for sure with all of the people i mean what, who's going to ring the bell when we hit 40 million if we

haven't already? So it's definitely going to be a nice tailwind for these businesses. As do-it-yourself investors, we want to keep our fees low. That's why Simone and I have been using Questrade as our online broker for so many years now. Questrade is Canada's number one rated online broker by MoneySense. And with them, you can buy all North American ETFs, not just a few select ones, all commission free so that you can choose the ETFs that you want. And they charge no annual RRSP or TFSA account fees. They have an award winning customer service team with real

people that are ready to help if you have questions along the way. As a customer myself, I've been impressed with Questrade's customer service. Whenever I call or email, every support rep is very knowledgeable and they get exactly what I need done quickly. Switch for free today and keep more of your money. Visit questrade.com for details. That is questrade.com. Here on the show, we talk about companies with strong two-sided networks make for the best products. I'm going to spend this coming February and March in an Airbnb in South Florida for a combination of work and vacation and realized, hey, my place could be a great Airbnb while I'm away. Since it's just going to be sitting empty, it could make some extra income. But there are still so many people who don't even

think about hosting on Airbnb or think it's a lot of work to get started. But now it is easier than ever with Airbnb's new co-host network. You can hire a local quality co-host to take care of your home and guests. It's a win-win since you make some extra money hosting on Airbnb, but can still focus on enjoying your time away. Find a co-host at Airbnb.ca forward slash host. That is Airbnb.ca forward slash host. Let's talk about Accenture. Accenture is one of the largest businesses on the planet now, and they are a giant consulting business. And what they do particularly well is outsource and build technology for large Fortune 500 companies. So they do a lot of outsourcing and a lot of consulting work for special projects for these big companies who don't have the in-house tech talent to build some of these internal tools or have the capacity to take on some of this space when it comes to specialized in tech.

And if you look into their segments and you look into their transcripts, it's also really helpful to know in which segment where spend is going. And that's important because you'll see spend from these Fortune 500 companies go up or down in certain categories that they're focusing on. And through all of this, we've seen lots of resiliency in technology, digital adoption, digital transformations for some of these more lethargic, older traditional companies, and cybersecurity, as well as cloud. So it's a good place to track bookings, net bookings in a lot of these segments of where some of these large Fortune 500 companies are allocating spend on outsourcing and developing new tools for their business. Because when people are trying to cut costs, it's pretty easy to cut costs on consultants. And so you can see which ones are being affected,

where they're winning. And maybe it's not the best indicator because Accenture keeps all of their segments firing and continuously growing because they're not only growing organically, but also acquiring. So it's hard to decipher signal from noise there, but still, yet again, a specific business that can give you insight to more than just their own business because of how massive

they are and the nature of their work. Yeah, no, I totally agree. Not much to add there. So the next one, again, going a bit more by sectors here, consumer discretionary. It's really interesting, this one, because there's a lot of different kind of businesses in this sector. I'll just go over the top 10 waiting for the S&P 500. S&P 500. So the first one is Amazon, second Tesla, Home Depot, Nike, McDonald's, Lowe's, Starbucks, booking holdings, TJX. I guess it's the TJ Maxx and all that. I'm not quite sure.

Winners and home sellers. Winners, all that. That's right. And then O'Reilly Automotive. So there's a lot of different variables here. The one I actually like as a really good bellwether stock for consumer discretionary. So things that, you know, people like, but they don't have to spend on is Starbucks. Starbucks, I think, especially if you're looking at the same store sales, because clearly you can see, you know, if you're looking at Starbucks specifically, it can be wild. They're still growing because they're opening tons of stores in China, for example. But if you look at the same store sales, it can give you a really good indicator whether things are going well or not in terms of consumer be willing to spend on small luxuries like Starbucks coffee. Because at the end of the day, people may be addicted to coffee

and I'm one of them clearly, but there's cheaper alternatives. I can buy a massive bag at Costco for like $11 and I'll have coffee for a whole month basically. So that's, you know, for the costs of what to Starbucks latte basically. So I'm good. Yeah, I'm good for the cost of what? Two Starbucks latte, basically. Yeah, pretty much. So I'm good for the whole month. So for me, that's a really interesting one because it's something that is easily cut for people and it's definitely discretionary and there are some other cheaper alternatives available.

Dude, I am hooked on Kicking Horse Coffee. You can get it at like every major grocery store now. It's a Canadian brand. I guess it's from out west in Kicking Horse. It must be where it came from. I got hooked on it when I went out west recently, and I run that through my coffee maker every morning. It's so good.

They should send us a sponsorship deal for that yeah for sure i try it i mean i'm i like uh the cheaper alternative with costco but uh hey give it i'll give it a try what i figure is like like to what you're saying i'm already saving so much money by buying the fancy at-home coffee compared to those trips to buy no fat, no foam, no taste Starbucks, that I'm willing to do it. It's a couple extra bucks a month, maybe. Yeah. Yeah. And I mean, it'll make... Yeah, it's true. Definitely just going from buying almost you know i know some people that buy coffees takeouts every day if you kind of cut that down to once or twice a week you can save quite a bit of money but uh what's your uh i i like your next pick over here lvmh for the luxury market which has been on fire, to say the least. And I've been very persistent about my thesis here is that a business like LVMH doesn't feel recessions because their customers are not

affected by recessions. We're talking about the most exclusive, the LVMHs, the Ermis, the Ferraris that sell everything they make no matter what. Ferrari is another perfect example of this kind of luxury market where they sell every car they make. And if you want to buy a Ferrari, the exclusive, exclusive, like we're only going to make 50 of these Ferraris, you have to already own a Ferrari. You cannot go out and buy one of these exclusive, exclusive collectible Ferraris without already have been in their funnel buying Ferraris. It's insane. And people who are feeling the effects of the economy are not buying two Ferraris. And I feel the same way about a lot of segments with LVMH. And if you look at LVMH's organic revenue growth, they're achieving double digits consistently for the past five years, minus that blip in 2020 when no one cared what they look like or flexing

on their friends because they're at home. Very consistently, you're seeing this growth organically from LVMH's different luxury brands. Luxury is just an entirely different beast that can't even be looked at like anything else because it's just so different. And the laws of the economy and consumer confidence don't exist there. don't exist there. Yeah, you know how I discovered Louis Vuitton is I had never heard of it until I was like 21. I went to Taipei for a language exchange to learn Mandarin. Some fake stuff. What's that?

Was it the fake stuff? Here, go ahead. No, it was real. Yeah, and I met a girl over there and she was like talking to me about Louis Vuitton and she kept saying the name. I'm like, what? I'm like, I never heard of it. Like, what's this? And then she's like, you just explained how poor you are.

You don't know what Louis Vuitton is. And then we go into the shopping district and she's like pointing it to me in this like luxury store like 500 us for like a tiny handbag or whatever it was back then in 2007 so that's actually how i learned about the brand i had no idea until i was 21 i thought most people when they say like you know lvmh when i'm traveling they you know go somewhere and buy the knockoff stuff, but I guess not when you're there in Taiwan. And these are, I'm talking like flea market, you know, the knockoff stuff.

Oh yeah. No, no. This was in the, like the, the one she showed me was definitely legit. It was not a flea market. It was like,

you know, even wearing something nice. I felt underdressed going to that store. Yeah. It's so funny. Cause I want to do a podcast episode with you and I. I just wrote it on the documents when you were

talking because I thought of it. I want to go through a personal episode and what we like to spend a lot of money on. More than most people, but pretty frugal. What are some things that, you know,

we just love to spend like a lot of money and find it like provides a lot of value for your life. Throw Louis Vuitton and LVMH products in the list of, I could not give two shits. Like I couldn't imagine spending the money on some of this stuff for some fancy belt or pants. But hey, if that's what you like really splurging on, all the power to you. I want to do an episode about that, though. Yeah, I think that would be fun

i definitely i think we're on the same page for lvmh i don't mind we're not adding to the organic growth right here no exactly i don't mind paying extra for like good quality stuff that will last a long time but i will not pay just to get like a brand because you know i'm paying for the brand but for no additional added value that's kind of where i come from that's because you know i'm paying for the brand but for no additional added value that's kind of where i come from that's why you know i like lululemon because their products last for a long time but uh yeah stuff like you know canada goose and stuff like that i'm like i do not care on having the little patch on my eye i think you and i are similar. We will be brand snobs if it's a functional thing. If it's a bike or golf clubs, those would be on our list transactions. That's a great barometer for travel. You saw cross-border basically go to basically zero during the pandemic and come back with a

vengeance on people tapping their cards from outside of the country that the card was issued. It's obviously a great barometer for digital payments as a whole, seeing that shift from cash to digital payments. And then overall, just consumer spending. I mean, I can't think of a better proxy for consumer spending than Visa MasterCard quarter of a quarter. So I like all three of those looking at total transaction volume, cross border volume growth. And that tells you a lot. And it tells you a lot about how good these businesses are as well when you graph them out. Yeah, I mean, I don't have too much to add. These are master cards, especially for consumer spend as a whole. It's a very good indicator of how things are going. The next one on my list here is Consumer Staples. So the one that comes to mind the most is Procter & Gamble, ticker PG.

It's a really easy one here to look at. It has a whole bunch of different segments, which I'll show here for those watching on video. So we have the different segments, we have beauty revenue, grooming revenue, healthcare revenue, fabric and home care revenue, and baby feminine and family care revenue. So you'll see, you know, some segments are bigger than others. But for the most part, these are all things that people will need. And that's why it's a consumer staple. And I believe Procter & Gamble is the largest of the companies, or if it's not, it's really up there in terms of that sector. So this is really an interesting one, a company that will pretty much do well, regardless of the economic

environment. But I think it's a good company to look at, especially if you start seeing some spending patterns. People may be going more for generic brands and things like that. But one that is worth keeping an eye on won't, you know, it's not the most exciting company, but it should provide some good indication if, you know, at least how things are going in terms of what you need in terms of essentials. Yeah. In terms of like, you know, I look at those companies, you know, the Procter and Gamble and they're different, but you know, there's also the Johnson and Johnson's and those kinds of just like ridiculously large conglomerates. I was looking here. Do you know what the market cap of LVMH is today? I think it hit half a trillion, didn't it? Yeah, I think it's the largest European listed public company.

I'm pretty sure I've heard that somewhere this week. It is. It's half a trillion in market cap. Holy. In market cap. Holy. So it's more than TSMC. It's the largest international by market cap.

Other than, I guess, Saudi Aramco. Yeah. We kind of forget about that. I guess we can't forget about Saudi Aramco, I want to know. But yes, largest in Europe. Yeah, it's crazy. Bernard Arnault is the richest man in the world, if not Europe. Yeah, no, it's crazy.

I wouldn't, I mean, until I heard it, I knew it was a large company. I never thought it would have been. I don't know. I thought there would have been something else. I never thought that would have been the largest company. And one company, company i mean we've talked about it before i can just see them you know the 2.8 billion market cap of canada goose in canadian dollars uh would be very easy for a company like lvmh to swallow up seems like a pretty easy tuck in and you've talked about that i could see that happening very easily. Even if they give it a good premium. Yeah.

Yeah. Just, yeah, food for thought. Who knows it will happen, but it feels like it would be a pretty good fit. As do-it-yourself investors, we want to keep our fees low. That's why Simone and I have been using Questrade as our online broker for so many years now. Questrade is Canada's number one rated online broker by MoneySense. And with them, you can buy all North American ETFs, not just a few select ones, all commission free so that you can choose the ETFs that you want. And they charge no annual RRSP or TFSA account fees. They have an award winning customer service team with real people

that are ready to help if you have questions along the way. As a customer myself, I've been impressed with Questrade's customer service. Whenever I call or email, every support rep is very knowledgeable and they get exactly what I need done quickly. Switch for free today and keep more of your money. Visit questrade.com for details. That is questrade.com. Here on the show, we talk about companies with strong two-sided networks make for the best products. I'm going to spend this coming February and March in an Airbnb in South Florida for a combination of work and vacation and realized, hey, my place could be a great Airbnb while I'm away. Since it's just going to be sitting empty,

it could make some extra income. But there are still so many people who don't even think about hosting on Airbnb or think it's a lot of work to get started. But now it is easier than ever with Airbnb's new co-host network. You can hire a local quality co-host to take care of your home and guests. It's a win-host at airbnb.ca forward slash host. That is airbnb.ca forward slash host. Now we'll kind of shift on something else that's pretty essential, energy. I'll kind of focus a bit more on oil here because it's still a big part of the economy. To me, the type of businesses are best in terms of bellwether stocks here are just integrated oil plays like an Exxon Mobil or Suncor.

I could have chosen a Canadian Natural Resources, but they don't have refineries. They also don't have retail operations. So that's why I thought an ExxonMobil or Suncor in Canada is just a really good indicator on how that overall space is doing just because their operations are so broad and, you know, just gives you a good idea whether it's firing on all cylinders or there's a lack of investment in the space and so on. So those are the two picks that I think are good bellwethers talking to space. Good picks. Good picks.

And just thinking like why you said that, it touches on a lot of different things. Maybe it's retail, maybe it's mobility kind of tracking, but there's also CouchTard in there as well. All right, let's move to small business. Small business. I don't think there's a better public co to look at than maybe Intuit. And their suite of software offerings, they have their small business and self-employed segment, which is the largest segment, includes QuickBooks.

And I think they also include MailChimp in there as well. So two massive businesses now. It is doing a bajillion in revenue these days. That segment is doing over $7 billion on a TTM. So gigantic right now, and they're flexing their pricing power. You're seeing the number of QuickBooks subscriptions continue to go up. So they're not only eating market share, but they're showing the digital adoption of small business. So that's one that I keep track of. And then of course, Moody's and S&P Global when it comes to bond issuances,

And then, of course, Moody's and S&P Global, when it comes to bond issuances, track over time. Moody's, you look at their segment and you can see on the graph here, it hasn't been such a strong line item for the business as when interest rates were basically zero and everyone was issuing bonds. Yeah. And I mean, I think liquidity is also tightening up big time um i'm not sure obviously that goes the graphic you have goes until december so their latest quarter i guess um i'm assuming it's probably gonna be morning i think so okay i'll look that up while you're talking okay yeah i mean which makes sense but i i feel like it's probably in the same direction just because what we've seen, one of the byproducts of is helping them in terms of slowing down the economy, because if credit tightens, it has the same type of effect that, you know, raising rates would have. So I think that's why we're seeing the Fed being more cautious on future rate hikes.

We might still see some more. But, you know, before the bank failures, I think people were projecting like an extra 100 basis points, if not more until the end of the year. And that's not what's being projected right now because of that credit being tighter. Their report, I'm just pulling it up here. Moody's Investor Services, their segment. That's just the analytics segment and the investor services segment. And then there's the corporate finance, structured finance. And yeah, you're seeing 11% year-over-year decline in revenue for the Moody's Investor Services. Yeah, makes sense. I mean, for people who just put yourself back a year ago.

So the quarter just finished, I'm assuming it was probably the first three months of the year. Yep. January to March. was probably the first three months of the year, January to March. So if we go back to 2022, rates were still quite low at that time. So rates didn't start really picking up until later in 2022. So it makes sense that you'd see a pretty sharp decline. The decline may be less pronounced when we start looking at Q2, 3 and 4 later this year, because then you have the kind of base effects that are not as significant as the first quarter of last year. Yeah, that's a good point.

Next one here, retail. So there's a couple of different ways to look at it. I'll look at it from a Canadian perspective, but also massive retail plays in the US. Obviously, Amazon would be an obvious choice here because they have such a pronounced presence in online retail. But another one that I really like here is the good old Walmart. They had $611 billion in revenue in their latest full year, with approximately 17% coming from international and 13% from e-commerce. So it still gives you a pretty good idea of, you know, worldwide global retail sales. Home Depot is another one worth looking at, especially if you're looking at a

bellwether stock when it comes to housing and home improvement. They have a big pro, you know, they do a lot of pro sales. So, you know, you have contractors and things like that, that have preferential pricing and things of that nature. So it's something really interesting to look at if you're wanting to gauge where the housing market is going. Not the only one, but I think a good indicator. And from a Canadian retail perspective, I think the good old Canadian Tire is a pretty good one when you think about it, because they have several segments. And if you're really just looking at the Canadian economy, they have Canadian Tire, they have SportCheck, they have Mark's Warehouse, Helly Hansen, they have obviously gas-related revenue with their gas stations, and they also have financial services revenue.

The largest of them is clearly the flagship Canadian Tire revenue, but I think it's a pretty good indicator because they just sell such a wide range of stuff. I mean, they even have some little grocery items when you go in there. So I think that's a really good bellwether stock for the overall Canadian economy. Not a company I'd invest in. I think these are just, you know, bellwether stock doesn't mean that we, you know, like the companies necessarily, but it's still a good indicator on where things are going. Dude, every time I go into Mark's Work Warehouse, I ask myself, why don't I go to Mark's Work Warehouse more often?

I love that stuff. It's good stuff. You need a flannel. It's good value. It's good quality. I'm all in. I mean, I love Canadian Tire now because we have the largest one in Canada, in Ottawa. So it's always... The flagship, exactly. I mean, if anyone lives in Ottawa and you haven't been to the new one in kind of the Ottawa center west around um around the woodruff uh woodruff avenue people will live in all know where that is go and have a look it's just a massive store it's it's hard to explain dude what heli hansen has like doubled their business in four years looks Looks like it. I mean, I don't know the site I pulled the data from.

Telling me. Helly Hansen is $645 million in 2020. It looks like your screenshot's a little cut off there. So I have to look at the newest version.

But the Helly Hansen, I didn't know was that big of a business. I mean, I know they- I didn't know either. I know they have like great market share, ski jackets. You know, you see them all over the place and you're at the ski hill, but that seems like a lot more than I would have expected. So that's a pretty good asset.

Yeah. I think they had paid how much? I think they had paid like a billion for it or something like that. It wasn't a crazy price. I'm assuming the margins are pretty wonderful. It's a premium product. Yeah, I mean, when you go through your next one, I can. Yeah, take a look.

All right, let's talk about experiential spend. So I'm going to pull up Live Nation and Airbnb. So Live Nation, of course, the owner of the infamous Ticketmaster, and they track total fans. It's an estimated number, but it's pretty close. Given they're the ones that sell the tickets, it's pretty close. And so total estimated fans has come roaring past the 2019 numbers. So of course, we had a complete drop off in ticketing and fans and events 20 through 21.

But it is now at 121 million total estimated fans at Live Nation experiences last year. So that's one to track. I think experiential spend is going to persist even when people have tight money. You and I were just talking about what do people want? There's only so much leftover. What are you going to use it on? I think experiential is here to stay as well as those trips and those experiences, whether they're local or vacations out of country in Airbnbs, nights and experiences booked continues to compound an exceptional rate. Of course, that is Airbnb have been taking market share from hotels over time. But I think we're going to reach a steady state where Airbnb has its place.

Hotels have its place. Events have their place. And they're all, I think, going to be beneficiaries of experiential spend increasing over time. Yeah. Yeah. I mean, I don't have too much to add to that. We'll move on to industrials because I guess we still have a little bit left to go through. Not too much to add here, but industrials typically you'll have companies like CP, Canadian National Rail that we just talked about. The same thing as before as the general economy and Caterpillar, like we said, for infrastructure spending is definitely a good one to keep an eye on or construction projects. For those not familiar with CAT, they do like large construction vehicles like bulldozers and things like that.

Let's talk about used cars. None other than Copart, ticker CPRT. Total used vehicle revenue is a line item I like to look at. And of course, they have a long list of businesses that compete with them. But I think Copart is the most high quality asset here as a whole. It's a very wonderful business, kind of the salvage business. And then there's this used vehicle business. They've really done a good job. And it has really taken off on the used car market as of basically since you had real supply issues in 2020. It's been persistent, not only in the demand for used cars, but also the price of them

as well has been elevated for those reasons. And of course, they're connected. But Copart, there's a couple other names in there as well. Used cars are a good proxy for that market. Yeah. Yeah. And I think to add there, the next one here, again, going a bit more by sectors, financials. So the first thing about financial is, you know, you'll have different type of businesses that will be considering that financial sector, a lot of banks, obviously, but also a lot of insurance companies. That's why I pick Royal Bank here, a Canadian company, because they're really well diversified. So yes, they're a traditional bank,

but they also have different parts, including personal and commercial banking, wealth management, insurance, and treasury services. So like treasury services would be like custodian type of services, so holding funds for other companies. So to me, it's a really good bellwether stock for the financial sector as a whole. Even over a JPM like JP Morgan in the US because they don't have any insurance services. So I think that's where Royal Bank kind of differentiates itself in terms of being a bellwether stock for the financial

sector. Alcohol, looking over then Anheuser-Busch, the large conglomerate of alcohol brands, beer brands, and they will break out in segments geographically, but also total volume. segments geographically, but also total volume. So this is helpful to track because I had a segment there the other day that Canada had a net negative decrease in volume of alcohol sold for the first time in, I don't know, like 30 years or something, but sales were up because of inflation. And so if you actually track total volume, I think that that's an interesting way to understand alcohol trends and consumption more than revenue, because that's including pricing. And so you get a little distracted there. If you look at total volume globally for Anheuser-Busch, it has increased steadily. It's been basically flat since 17, but it's increased steadily on the long run.

And of course, that's them also tucking in brands and growing as a company. But the North American volume has been on a steady decline basically since 2013-ish, decline basically since 2013-ish. A very steady decline on the North American volume of alcohol sales from Anheuser-Busch. So of course, there's competing factors in here. There's market share factors in here as well. But this is a global alcohol brand. They don't just sell just bush or just bud it is uh corona as well there's there's tons of brands in there this is the the giant long list of them and uh you know they've they've had their uh fun time in the media as of as of late with uh wouldn't corona be a consolation so it's interesting how this works. Constellation Brands has like the distribution rights or something. Okay, okay.

I've studied this before and I forget it all the time, but there's some unique relationship between Anheuser-Busch and Constellation Brands. and constellation brands no that's fair and i mean it looks like i mean millennials and gen z aren't picking up the slack for uh baby boomers i think for uh you know baby boomers maybe get drink a bit less as they get older and then gen x and gen z and millennials uh not picking up if it's been a trend over, what, 10 years or so. Yeah, we'll see where this lands. We've talked about this quite a bit, but I think the millennials, Gen Xers, we'll keep drinking. It's really the big question around this Gen Alpha and Gen Z cohorts where it's a strong change in uh the tiktokers let's call them the tiktokers

a strong change in demand for alcohol on the on the downside maybe on the upside for humanity, but not for an anhyzer bush. Yeah, and the next one here, so again, staying with the sector, so healthcare, it's a really big sector, especially in the U.S., not really that big in Canada for publicly listed companies. There's not much to choose from here. So for the U.S., I think there's a couple of ways to look at it. First, you have like insurance, health insurance insurers. So those United Health is probably the most obvious name because it's a massive company in the US. The other one that comes to mind as a good bellwether here is Johnson and Johnson pre-spinoff because they will be spinning off their consumer business, which

represents about 17% of their sales. The rest is their pharma division. The new consumer division will be called Canview. If you're looking to understand why they use that name, I'll kind of reference what they mentioned. Makes no sense, but I you know, I'll just say what it says. It was inspired by two powerful ideas, the word can, K-E-N, meaning knowledge, an English word primarily used in Scotland, and the word view referenced site, so Canview, which makes no sense for the consumer business, but whatever, that's the name that they chose. But the reason I, yeah, I think as a whole, before the spinoff,

I think it's definitely a good bellwether stock for, you know, not just pharma, not just consumer, but all of it as a whole. I like how when you said that, there was going to be like some sort of thing that connected those two things, you know, one like one plus one equals two. And it was just like Apple plus orange equals what is going on here? Pretty much.

I don't know how they come up with drug names like these just like a random word generator. I don't know. Yeah, I mean, this is like like gonna be a publicly listed company too for consumer products i mean it's gonna have brands like tylenol listerine and band-aid so i don't know i don't associate these things with canview that's just that's just me maybe you do i don't know don't bucket me in there i'm not on board of canview let's talk about mckesson which is a I'm not on board with Kenview. Let's talk about McKesson, which is a Cardinal Health and McKesson Corp are the two large pharma distributors. So they huge by revenue businesses with razor thin margins in the distribution of drugs business.

And this has been, side note, a stock. And this has been, side note, a stock. So how many times on the podcast have I said, why is the stock so cheap? What am I not understanding? And oh man, I should have bought the stock. I think it's had an absolute field day. Yeah, it's up 130% since – it's up 200% since 2019. I should have put my money where my mouth was. Because trading like 16 times earnings today and it was a single digit.

That's all multiple expansion, that return. So pretty tremendous performance. So that's McKesson Corp and Cardinal Health. They're two large drug distributors and it can tell you a lot about the pharma business is just the actual distributors yeah yeah i think so because the trickiness with pharma business and you know coming up with new drugs is that it's a bit tricky because there's patents related to that. So they kind of have a monopoly for a number of years and then they don't.

So it's I mean, at the end of the day, it's almost like the company who has the best research and development and the best pipeline of new drugs and existing drugs that will do the best. And that kind of can go be up and down depending on what they have in their pipeline. So that's the trickiness of pharma companies. But Merckx is one that has really stood the test of time as well if you're looking for pharmaceuticals. But obviously J&J as a whole as well. There's some pretty massive companies in that space there are some massive names and you just look at like the total return on united health over time it's like absurd uh yeah it's been i mean i guess you know people

in the states it's private private health health care and people need health care. So and you have a country as massive as the US, you're going to have some big winners there. Yep. It's it's got such a nice tailwind behind health care, and I don't know how to analyze any of it. If I was a doctor, honestly, I feel like I would strictly play in healthcare, know what I'm doing and make so much money and have like a nice edge. That's what I would do if I was a doctor. Yeah. Or pharmacist. Pharmacist would probably be the best at understanding the drugs. I mean, the doctor, I think for the most part, I mean, if we have doctors listening to us, I think they tend to specialize, right? Unless you're more of a generalist and kind of a family doctor or ER doctor.

But if not, it's very specialized. I don't know how well they'd be equipped to analyze like different types of healthcare companies, depending on what their specialty is. Maybe they are. I just don't know. Yeah, I guess it's just a huge field it's like saying like yeah like you're an engineer so you must be good at analyzing construction and then you're just like well i don't i'm not a civil engineer actually i am a nuclear engineer or i'm a chemical engineer so of course i think i'm oversimplifying it here but just like if you have an edge here at all it's there's a lot of money to

be made here i feel like in health care and i don't know what i'm doing so i just kind of steer clear yeah yeah pharmacists i feel like would probably be really well placed at least for pharmaceutical because they probably know you know what kind of drugs are the most used or what type of drugs are the most used or what type of drugs are the most used frequently. So they can probably... The competitive landscape. Yeah. The relationships between the distributors,

the pharmacists, and the doctors prescribing. Like, there's layers to this stuff that insiders understand a lot better than generalist finance backgrounds. Yeah. No, exactly. And I'll go oftentimes, I don't know, like just if you have kids, you know, at some point or if anyone has kids is, you know, there's been a shortage of baby Tylenol. And, you know, one thing you can do is you take the ones that are for kids that are a

bit older, but then you just go to the pharmacist that's there and they'll give you a chart in terms of how to adjust the dosage for a baby, for example. So they're really good at, I mean, at the end of the day, they're the experts when it comes to understanding the prescription drugs or any type of over-counter drugs.

And I think they're an underutilized resource for a lot of people. That's a good point. I am. I'm on board with that. All right. Thanks for listening, folks. We appreciate you very much.

This has been 20 with an asterisk, how many names we talked about. Yeah. It's anyone's guess at this point. A bunch of names that are bellwethers for the economy or bellwethers for certain segments of the economy. And I think this has been pretty useful for both of us. I know I've built a bunch of different views on the web portal on some of these names to just take a look at and uh it's interesting seeing which companies

disclose which metrics because some of them are more kind of generous than others as you can tell yeah yeah definitely and i mean if we missed any let us know because i'm sure we did miss a few yeah a few uh important bellwether stocks stocks. So let us know on Twitter or however you want to reach us. You can let us know at joinTCI.com. That is our Patreon to support the show. Get some video. Get our monthly portfolio that we'll have just basically dropped when this comes out. Our updates on our monthly portfolio.

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one, Simone, one day at a time. Hey, yeah. One day at a time. In the meantime, you know,

we have the podcast. Oh man. So many stuff, so much stuff going on. And, uh, it's, it's,

it's hard to keep on top of all of it, but it's a lot easier with the support of all the listeners on the show. So we really appreciate you. We'll see you in a few days. Take care. Bye-bye. The Canadian Investor Podcast should not be taken as investment or financial advice. Brayden and Simone may own securities or assets mentioned on this podcast.

Always make sure to do your own research and due diligence before making investment or financial decisions.