The Canadian Investor - 6 Poker Lessons That Made Me a Better Investor

Episode Date: August 11, 2025

In this episode of The Canadian Investor Podcast, Simon and Dan share the stocks and ETFs currently on their radar and dive into the surprising parallels between poker and investing with lessons from poker that apply to long-term investing. Ticker of stocks and ETFs discussed: WCN.TO, ZHU.TO, IXJ, VHT, PPH, IHI, IHF Check out our portfolio by going to Jointci.com Our Website Our New Youtube Channel! Canadian Investor Podcast Network Twitter: @cdn_investing Simon’s twitter: @Fiat_Iceberg Braden’s twitter: @BradoCapital Dan’s Twitter: @stocktrades_ca Want to learn more about Real Estate Investing? Check out the Canadian Real Estate Investor Podcast! Blossom Investor Conference Apple Podcast - The Canadian Real Estate Investor  Spotify - The Canadian Real Estate Investor  Web player - The Canadian Real Estate Investor Asset Allocation ETFs | BMO Global Asset Management Sign up for Fiscal.ai for free to get easy access to global stock coverage and powerful AI investing tools. Register for EQ Bank, the seamless digital banking experience with better rates and no nonsense.See omnystudio.com/listener for privacy information.

Do you keep hearing about these all-on-one ETFs lately? Well, I have some exciting news. BMO ETFs just cut the fees on their flagship all-in-one ETFs to 0.15%, making them one of the lowest cost options in Canada. That's right, more value, same smart diversification, all in a single ETF. Whether you're just starting out or simplifying your portfolio, BMO all-in-one ETFs make it easy to invest with confidence. Just Z-It and forget it.

Considering ETFs like Z-E-Q-T, BMO's All- Equity E-T-F, or Z-GRO, B-M-O's growth ETF. Investing is simple, but don't confuse that with thinking it's easy. A stock is not just a ticker. At the end of the day, you have to remember that it's a business. Just my reminder to people who own cyclicals, don't be surprised when there's a cycle. If there's uncertainty in the markets, there's going to be some great opportunities for investors. This has to be one of the biggest quarters I've seen from this company in quite some time.

Welcome back to the Canadian investor podcast. I'm back with Dan Kent. We are here for a regular episode today. So our regular episodes for those are bit newer. We talk about, concepts whereas our Thursday episode will look at more news and earnings so what's going on in the markets more timely so today we have a fun episode so we'll be talking about the stocks or ETFs on our radar switching it up a little bit and then we'll be talking about things that we've learned from poker because we both played poker quite a bit in the past and that also apply to investing so we'll finish that at the end you don't have to be really a poker player all that much, to be honest.

There's some really good learnings from that that do apply to both. So I encourage everyone to stay for that. Some quick housekeeping. Braden texted us saying that you will be attending and a speaker at the Blossom Investor Conference 2025 that will be happening on Sunday, September 21st, at the Rogers Center in Toronto. So for those interested, you can use code TCI 15 for 15% off

if you're looking to buy some tickets. There's going to be some great speakers there, and obviously it's hosted by Blossom. Unfortunately, I will not be able to make it, but I'm sure it'll be a good time for anyone going. So now we'll get to the episode. So in terms of the stocks on a radar presented by our great sponsor, EQ Bank, I'll get started. Mine's a bit longer. It's also more of a general play. The reason that I'm looking at a more general place is because the sector, as I find a sector, a bit more complex.

and not one that I necessarily want to go digging into, spend some time learning, it's healthcare. So healthcare in general has been a sector that's been not doing all that well. It's been actually one of the worst performing sectors. I think it's been the worst in the S&P 500 over the last year or so by far actually. Yeah, I mean, if you look to many of the larger, you know, healthcare plays like a Pfizer, a United Health, like a Novo, like they're just down massively.

Yeah, even today, I think. Yeah, it's like they've taken an absolute beating, you know, post-pandemic. I mean, Pfizer was 62 bucks a share back in 2021. It's now 24. It's, it's been a crazy slide for a lot of these companies. I think, you know, these are, most of these companies kind of operate, like kind of as bond proxies in a way, like they're kind of, slower growing, you know. Depending on the type, yeah, because healthcare, let's remember, it's a pretty, there's a wide-ranging array of companies, whether you're looking at pharmaceutical, biotech, more kind of consumer discretionary products for pharmaceutical. You can also have health care providers, insurers. So these are probably the big categories that you'll see.

Yeah, like United Health is what, wiped out hundreds of billions of dollars just over the last month or so. But yeah, I mean, it's been a rough go for them. But the one thing, and you'll probably go over it, is a lot of them are looking cheap right now. But, you know, sentiment is very poor. It's very poor. So looking at the past year, so if you're looking at Joint TCI, you'll see here. So I was correct where healthcare is by far the worst performing sector of the S&P 500. Over the last year down, let's just round it up, say 10%.

Now, the only other sector that's down is energy, and we can say it's pretty much flat at negative 1%. And then every other sector is either flat or up in the 30% being led by, of course, technology and communication services. Yeah, financials that are also doing well, industrials. I mean, pretty much anything except energy, healthcare, materials, real estate are kind of the four laggard, but for sure, help care is standing out and not for the good reasons here. Yeah, and it's interesting, too, because materials have done so well in Canada. I mean, you look at all the precious metal plays in Canada. They're just absolutely ripping, but on the S&P 500, they really haven't done all that much over the last year. It may be a different mix a little bit, though, in terms of metals, maybe

and I haven't looked into that all that much, but maybe it's a bit more heavily weighted to were precious metals in Canada, because overall you have commodities that, depending on the commodity, it's not necessarily done all that well, but of course, with the exception of precious metals. Yeah, and we also have, you know, many of the major precious metal producers that are listed here in Canada and are from Canada, obviously because we're very resource rich, but, uh, yeah, healthcare, I mean, if you look at this chart, there's a lot of green and then, uh, there's one standout red and it's, yeah, healthcare sector. That's, that's it. So, and I don't have really any, I do have a little bit, I guess, with my

ETF, the all-world excluding Canada, so there's going to have, going to be some pharmaceutical plays. But again, I don't really have any direct exposure. And like I've said before, for me, it would be more of an ETF play. And that's what I'll go over. I'll go over some ideas in terms of ETF. So in terms of why it's down so much, there's a few reasons here, but a lot of them are down south,

you know, surrounding Donald Trump, I would say. It's a big reason why a lot of these names are down. So RFK Jr., obviously, the controversial person that was named Secretary of Health and Human Resources, so HHS in the U.S. He's been very critical on the U.S. healthcare system, and with him being at the helm of the HHS, HHS, it has been putting pressure on the slew of health care stock. Obviously, United is probably the poster child here for that. He's been very critical of pharmaceutical companies and is an outspoken skeptic of vaccines. I know he's been critical of even advertisement that happens on TV. You know, listen to what he says.

I think there are some things that he probably has a good point. There are some other things that I think it's also a bit of a head scratcher. But nonetheless, he's clearly taken aim at the healthcare system and the big companies that are, like a better words, the backbone are running the healthcare system in the U.S. He's also been outspoken against certain drugs, including GLP1, those weight loss drugs, and he's also made some sweeping changes at the head of the HHS. So those are some of the reason. There's also, it's not just RFK Jr.

There's also some policy and pricing risks, so investors are increasingly concerned about revived drug pricing policies by the Trump administration that could significantly limit pharmaceutical margin. I know Trump has been saying that the U.S. should have, similar prices as other developed countries because it's more expensive in the U.S. There's costs and earnings pressures and insurers, more specifically, major insurers like United Health, Centine Elevents. They've reported elevated costs, lower earnings in recent quarters, and obviously the market is

fomowing in some pockets of the markets right now, whether it's AI, tech rally, capital has really swung away from health care, but also other defensive sectors. So we mentioned that earlier. Like if you're looking at energy, that's more of a commodity play, but materials, real estate. They're typically a bit more defensive sectors, and they're fallen out of favor for a lot of the speculation that's going on in the other sectors that we just mentioned. So that's some of the reasons why it's trailing the overall market. but I like to approach things from a contrarian point of view,

and especially right now where a lot of the market is looking very richly valued. There is still a lot of uncertainty regarding trade. We still don't really know how much of an impact it will have on the economy. Will it really impact inflation, won't it? There's a lot of lagging effects that there's an argument to be made that we still don't fully know if there will be an impact yet. It's like we're partying like it's 1999 again. the tech boom bubble it feels like so that's why i decided to look at this area because it's

definitely one of the most if not the most out of favor in the markets right now yeah i mean a lot of potential regulatory changes i mean i know yeah i mentioned novin ordis like i think yeah they're the ones who make ozempic i'm pretty sure and they're uh yeah like they're down god it's like the og i think uh glp one yeah exactly like that i mean there's so much fear in these stocks right now, like that said, and of course you'll go over ETFs. And I would imagine it's because you just don't understand the space all that well, like, you know, in terms of individual companies. So I mean, an ETF does make sense in that regard. I mean, I don't own any U.S. healthcare options covered United Health quite a bit. That was

on the insurance side. So I was a little more comfortable with that. But, yeah, I mean, there's a lot of, I don't know of any, you know, healthcare options that are doing good right now just because of, yeah, there's a lot of, a lot of potential shakeups. I know RFK, like, he's kind of, he was very vaccine critical, but I think now he's kind of like, you know, pulling some comments back. It's, yeah, it's, it's a pretty tough environment right now for them overall. Yeah. Yeah, I haven't kept up with everything. I mean, the one thing I do like about RFK is that I'm like, that's, Just an anecdote, I would go to the US, right, when I was younger, and my parents sometimes would go to, like, Cape Cod and stuff like that. So you'd go on the beach, and I would always get, like, surprise how many obese Americans there would be compared to Canada.

And that's just to compare it to say, look, I think RFK is proning more of a kind of prevention approach where people eat healthier and so on. And for me, it was been, I was actually pretty obese when I was younger and I lost them when I was a teenager. But for me, that kind of rings a bell. So that part, I feel like it's hard to argue that, I mean, eating healthier is probably pretty good because you lower the risk of getting a lot of these chronic diseases later in lives. But again, I'll say it again, he said a lot of controversial things.

So, of course, like I usually am, I think I'd like to be nuanced. I don't like to just throw everything. out with the bath water or the baby out with the bat water. There is one thing I think I do agree with is, you know, a lot of people could probably benefit from eating healthier in general. Oh, yeah. I don't even think it's anecdotal down in the states. Like, I think they're the most obese population, I think, you know, in the developed countries. Like, it's pretty bad. Yeah, exactly. In this kind of market, I like having some cash on the sidelines. It gives me the flexibility to jump on opportunities when the right stock goes on sale.

But just because the cash is waiting, it doesn't mean it shouldn't be working for me. That's why I use EQ Bank. They offer some of the best interest rate among Canadian banks, so my money is still earning while I wait. You can even get a boosted rate by setting up direct deposit for your payroll and depositing $2,000 or more per month into your EQ bank account. Your cash stays liquid and ready to go when it's time to invest. And if you're not in a rush to access your funds,

EQBanks' notice savings accounts and GICs are great ways to grow your returns even more. It's a smarter way to park your cash. Visit EQBank.ca to learn more and keep your money earning even while you wait. Want to buy a stock but don't want to shell out hundreds or even thousands for a single share? With Questrade's new fractional shares, you can invest any dollar amount and build a diversified portfolio. instantly. No delays, no trade fees, no excuses. Want to put $10 into a stock trading at $100? No problem. Questrade has you covered. They're the first broker in Canada to offer real-time

commission-free trading for U.S. fractional shares in ETFs. It's simple, powerful, and finally available in Canada. Head to questrade.com to open and fund an account. Use code TCI and you get $50 to get you started. Calling all DIY, do-it-yourself investors, Blossom is an essential app for you. It has been blowing up with now more than 50,000 Canadians plus and growing who are using the app. Every time I go on there, I am shocked. The engagement is amazing.

This is a really vibrant community that they're building. And people share their portfolios, their trade. or investment ideas in real time. And it's all built on the concept of transparency because brokerage accounts are linked. And then once you link your brokerage account, you can get in-depth portfolio insights, track your dividends,

and there's other stuff like learning duolingo style education lessons that are completely free. You can search up Blossom Social in the app store and join the community today. I'm on there. I encourage you go on there and follow me, search me up,

some of the YouTubers and influencers and podcasts, that you might know, I bet you they're already on there. People are just on there talking, sharing their investment ideas and using the analytics tools. So go ahead, blossom social in the app store and I'll see you there. So why would you be bullish on health care? Well, at the end of the day, I think the biggest hell win for healthcare companies, the fact that there's a lot of people getting older. In advanced economies, there's aging population. Demographics are not on the right side, meaning population growth is not that high meaning there's going to be more and more of an aging population. So that's a big tailwind there. There's also a lot of hype about AI, but you don't really

hear about it all that much in the news at the very least. I'm sure some of them will talk about it on their conference call, but you don't hear about it all that much for a healthcare perspective, but it could definitely help speed up R&D, research and development, cheaper and more efficient drug development as well, improved diagnostics when it comes to clinical care, tailored therapies based on individual DNA, better overall care for patient. These are all things that could be like really helpful for a lot of companies in the healthcare sector, whether they boost profits or just speed up things. I mean, at the end of the day, it's probably going to be beneficial from one way to another. So that is another thing to be bullish on. And the last one is kind of coming back

to what we were saying is valuations are very attractive right now for healthcare companies are actually very attractive on a historical basis. For obvious reasons, there's a lot of pressure from a regulatory perspective, especially in the U.S., so clearly that's dampening and investor sentiment, but where you have these valuations that are historically attractive, it's a pretty stark contrast to the overall market where valuations are historically very expensive so that's that's a reason to be bullish on it but then again it's not without its risk there's a reason why it hasn't performed all that well because investors are a bit scared of the sector right now but it's definitely a if you are contrarian it's definitely it's a plate to

look at of course do your research and due diligence and it's not investment advice but that's those are the big uh big reasons here anything else you'll want to add then? Well, I would just say on the, on the AI front, like that's, I mean, obviously they want to get drug prices down. And I mean, I believe that would probably be one way to do it. I mean, if you can make, you know, trials more efficiently. Yeah, ultimately, you can bring cost down without impacting margins. Now, whether or not these companies would use AI to try to grow margins and keep prices the same. I mean, they are publicly traded companies, I guess. But, um, There's a lot of tailwinds there in regards to probably, you know, trying to satisfy both ends.

You know, they want drug prices down. They have to get more efficient. This could end up doing it. And, yeah, and like you said, they're all very cheap right now. Again, I don't know the space well enough to really know if there's a ton of opportunity in there, but you're going to go over some funds where at least, you know, you can get some. That's why I would do it through the ETF form because it's a bit of a complex space. for me as well. It's not something I necessarily want to spend countless hours learning about

either. So that's why I would go to the ETF route. So the first one is ZHU.com. That's a ticker. That's a BMO equal weight U.S. Healthcare Index. Of course, BMO is our sponsor, but they have some. There's a reason why they sponsor the show because they have a lot of really great options that are Canadian listed. When it comes to health care, there's not many options in Canada in terms of like companies listed in Canada. So a lot of these ETS will be, will have exposure to the U.S. and Europe. So that's kind of what you'll see a bit more.

So this one is a Canadian listed ETAF, provide exposure to U.S. L.C. Stox, equal weighted, equal weighted. Take that with a grain of salt. I think it's between one and two and a half percent. But it's not, there's not one name. That's like 15 percent, like some of these market cap weighted. The fees, so the management expense ratio,

is 40 basis point here, 0.4%. The next one is I-XJ, so that's the I-Shares global healthcare ETF, gives you exposure to the global healthcare stock market. Also have a MER management expense ratio of 40 basis points. The next one is VHT, Vanguard healthcare ETF. This is a market cap-weighted one, so keep that in mind. I think the top names, if I remember correctly, are like, significant. They're like 15% in that range.

It has a MMR of 0.09% so 9 basis points. Next one is PPH. That's the VANX pharmaceutical ETF. It gives exposure to the 25 largest US and international pharma companies has a MER of 36 basis points. The last two, IHI, that's the I shares US medical devices ETF. So if you want to look at more specifically medical devices, and obviously the previous one pharmaceutical was really pharmaceutical.

And then the healthcare ones that I mentioned previously kind of encompass a bit more of the whole space altogether. So the I shares US medical device, CTF, that's a mer of 0.38% 38 basis point. You'll have exposure to companies like intuitive surgical and Abbott Laboratories, some pretty big companies in their. as well. And then the last one is the U.S. healthcare provider ETF, ticker IHF. That's a MIR of 40 basis point and you'll get exposure to some of the large providers and insurers like United Healthcare, Cigna, and CVS. So that gives you a bit of different options if you want to look at, you know, a portion of the healthcare sector a bit more, or you want something a bit more

diversified. You have all the option. You even have the Canadian listed option with ZHU.TO. So that's, those are the ones that I would have on my radar. I'll probably keep an eye on them. If Trump's keep going at it against and bashing on these pharmaceutical companies and the prices keep going down, I may take a little position just to, you know, to get some exposure, fully knowing that it could always go lower, especially if sentiment is really that, yeah. Yeah, it's pretty crazy, like the amount of selection you have when it comes to ETFs now. Like you can get the healthcare space, but you can also subdivide it to, you know, medical devices, pharmaceuticals, you know, global US. Yeah, it's, it's pretty crazy. I mean,

ETFs, uh, they've come a long way to, to kind of help people who, you know, don't necessarily want to pick individual stocks in these sectors, but want broad based, you know, based on a particular area of a particular industry. Yeah, yeah, exactly. So that's it for the ETFs on my radar. So up to you, Dan, with the actual company on your radar presented by EQB. Yeah, so I went with Waste Connections. So they're a company that pretty rarely goes through double-digit drawdowns.

If we look back to the company's largest drawdown since the pandemic, it fell by around 18% in 2022, compared to the S&P 500's peak loss of around 27% in that year. And the company is currently in a double-digit drawdown right now, which is kind of why it's caught my eye. I mean, I would imagine, you know, this is a defensive style company. I would imagine the market's getting pretty lofty on growth overall. So I would imagine there's a, there's a bit of a shift out of this company, but I do think it is an outstanding company overall. I mean, obviously, by the name, it deals with waste disposal. So you can think of things like residential and commercial waste disposal.

It deals with recycling. It deals with hazardous waste disposal in energy sectors, for example. It has a bunch of landfills that it not only utilizes itself, but charges other waste companies' fees to use them. And, I mean, in terms of what makes this company unique, is it's a Canadian traded ticker, but it's pretty much a U.S. operator. 85% of the revenue comes from south of the border. And it's a very rare stock that has kind of provided double-digit growth in terms of earnings, revenue, free cash flow per share,

all while being, as I had mentioned, in a very defensive sector that is, for the most part, immune to economic cycles. This is often, this is why you'll see the company trade at the valuations it does, which I'll get to that a bit later. But the industry overall heavily fragmented, which kind of leaves plenty of room for growth through acquisitions. So Waste Connections does this a lot. They deploy anywhere from 300 to 500 million a year in smaller tuck-in acquisitions. So they'll go into smaller municipalities.

They'll acquire local haulers who are probably not as efficient or profitable, and it'll turn them into higher margin, more profitable with contracts from the municipalities to haul the garbage. They're the third largest private waste collection company in the United States, but has just 6.9% of total market shares. So that should kind of give you an idea of how fragment the market is. And most of the contracts they have with these municipalities, they're long term and they come with pricing escalators. So this is kind of an element to the moat they have, particularly in smaller regions. So I'm in a town just outside of Calgary,

and our waste disposal used to just be a local. guy and you know family run and it wasn't waste connections but it was waste management pretty much came in acquire the business you know set up the the facility there and they kind of operated now and this is a lot of what waste connections kind of does overall it's just there's so many small towns with you know tiny or operated waste disposal companies they come in they take them over they they just improve them and overall just kind of you know small tuck and merge them into the fold. And the one element of them being able to grow at a double-digit pace consistently, despite operating and about as boring of an industry as you get is no doubt it's pricing power.

So total pricing growth during normal environments, like for example, pre-pandemic, would have been in the mid-single digits. But if you look to the company's core pricing today, it has easily been able to offset inflationary pressures by just raising prices and continues to raised them by six plus percent today. So there was, you know, during the high inflation periods, this company was realizing like core pricing growth of like 9 percent, you know, when we had that kind of runaway inflation. And this is kind of why it hasn't been all that impacted by an economic drawdown. So you have, you know, the construction industry, the oil and gas industry, they're pretty

slow right now. So volumes are down. They're down around 2.9%. But when you're growing prices by 6.6%, it kind of offsets. this and you still get that growth overall. And it kind of also adds a tailwind to the company in the situation. The economy recovers, let's say that recycling activity picks back up, construction picks back up, energy picks back up.

Those price increases they've done over the last while won't really go away. They'll just kind of be applied to higher volumes. I don't know if you have anything or you want me to keep going or? Yeah. No, no, you know this company better than I do. I know it decently well, but no, I'll probably chime in, but keep going. going for now. Yeah, so another element here is high barriers to entry. I mean, the infrastructure to enter the industry is very expensive. I wouldn't say it's like railway expensive, but it's

definitely expensive. I mean, when we're talking landfills in particular, like, I mean, you have these 500, 600 acre landfills. If you can just think of the amount of money that it would cost to actually acquire one of these and run one of these, waste connections owns around 82 of them. So, I mean, it would not be easy, especially if you think of all the trucks that it would cost to acquire. So they do have that area in terms of, you know, there's not a lot of people who are entering this industry. It's mostly the three major players. There's waste management. There's waste connections. And there's one more main one in the, in the U.S. It starts with an R, but I just can't think of the name right off the top of my head. But they carry the lion's share of the market. So

in terms of financials they have some debt 11.4 billion so interest coverage ratios are not as high as I would I would usually like when I'm looking at a company so they're 3.5x so this would effectively be their EBITA to their interest but the thing about these companies is cash flows are so reliable that the company is probably able to operate on tighter ratios just because you know those residential and commercial contracts are bringing in cash flow no matter what like I tend to say, you know, it doesn't matter if you're, you just got a promotion or you just got laid off. I mean, you're putting your garbage out on garbage day and, and they're, they're kind of coming to collect it. It's very consistent in that regard.

In terms of operating margins, they're actually quite high, especially again, when you think of like a little, like kind of a low volatility defensive business. They're in the 19% range, which is kind of similar to competitors. But since 2021, they've, they've been able to maintain a relatively steady income. increase in operating margins. And just overall, the company has around a 10 year compound annual growth rate on free cash flow per share, about 10%. And they don't really buy back shares all that often. So this is all just kind of growth from the underlying business. And the final thing would be the valuation, because this is kind of where a lot of people get tripped up with a company like this. So it trades at 42x free cash flows and 32x expected earnings. So historically, this company

has traded in the 35x free cash flow range over the last 10 years. So, I mean, as soon as evaluation is this high for this amount of time, I think, you know, it's just kind of what the market is going to pay. But there's no doubt it's still a tad expensive here, which is kind of why it's on my radar at this point in time. Would I like it if it got cheaper? Absolutely. I think I will eventually buy it.

I'm not pulling the trigger right now, but I do believe I'll eventually add it. And I think for these types of companies, evaluation comes down to the fact that the market is really going to kind of appreciate a defensive stock that has a moat like this and can also grow at a double-digit pace. I mean, you have the moat, high barrier to entry, you have the pricing power, you have, I mean, just the fact that it's residential and commercial waste disposal, long-term contracts, pricing escalators, things like that.

It kind of has a little bit of everything. So obviously, you know, it looks expensive when it's a company that's growing. growing in the high single digits, but I mean, the market's probably going to pay for it just because of how reliable it's going to be. Like, you know what you're going to get. Yeah, if you want to increase the price, you can just change the name to waste an AI connection. Yeah, exactly. And you just double the valuation right there. They'll have the AI trucks out there picking up the garbage. Exactly. No driver is required. It's all automated. Boom. I would not doubt. Yeah. I wouldn't doubt we do eventually see that. But I mean, even if you did see something,

something like that, it's probably going to be these major operators that are running it. So, yeah, I mean, you just kind of know what you're going to get with this company. I follow it quite a bit over at Stock Trade's Premium. I can't remember the last time this company reported a bad quarter, and I've probably followed it for like five plus years now. It's just, it's consistent. It's not a sexy business, but yeah, it's consistency, and it's probably not going away anytime soon, so there's definitely some value in that.

Yep. But yeah, that's it. Okay. Yeah, no, I think that was a good overview. I think the company you were looking for was Republic Services. Yeah. Yeah. Yeah, that's the one. So I think they have like 20% market share in the U.S. And then, yeah. Waste management is around 20 and then Waste Connections. Yeah. Yeah. So I think those are the big three there.

That's another element there as well. Like, you know, Waste Connections is sitting at under 7%. Whereas these other major players got, you know, the other 48% of the market. So there's, there's room to grow there. I mean, it's, it's pretty tough in this industry to take competition away from the major players because it's just, I mean, if you think about a waste, like I said, in the town that I'm in, waste management now has the facility. You're never going to get any competitor to enter the space. So for waste connections to gain market share, it would mostly be through. you know, those acquisitions, a little bit of grabbing contracts from competitors,

but it's mostly going to be those smaller tuck-in acquisitions. Yeah. No, I think that's a good one to have on your radar. I mean, it's one that I always have, I think, in the back of my head. You gave a good breakdown. Obviously, it's not a deep dive, but it's always, uh, there's something to like about those steady businesses, steady as they go. And it shouldn't be very cyclical either versus like the railways, for example, that

a bit more cyclical. In this kind of market, I like having some cash on the sidelines. It gives me the flexibility to jump on opportunities when the right stock goes on sale. But just because the cash is waiting, it doesn't mean it shouldn't be working for me. That's why I use EQ Bank. They offer some of the best interest rate among Canadian banks, so my money's still earning while I wait. You can even get a boosted rate by setting up direct deposit for your payroll and depositing

$2,000 or more. more per month into your EQ bank account. Your cash stays liquid and ready to go when it's time to invest. And if you're not in a rush to access your funds, EQ banks notice savings accounts and GICs are great ways to grow your returns even more. It's a smarter way to park your cash. Visit EQBank.ca to learn more and keep your money earning even while you wait. Want to buy a stock but don't want to shell out hundreds or even thousands for a

share? With QuestTrade's new fractional shares, you can invest any dollar amount and build a diversified portfolio instantly. No delays, no trade fees, no excuses. Want to put $10 into a stock trading at $100? No problem. Quest Trade has you covered. They're the first broker in Canada to offer real-time commission-free trading for U.S. fractional shares in ETFs. It's simple, powerful, and finally available in Canada. Head to quest trade.com to open and fund an account. Use code TCI and you get $50 to get you started. Calling all DIY, do-it-yourself investors, Blossom is an essential app for you. It has been blowing up with now more than 50,000 Canadians plus.

and growing who are using the app. Every time I go on there, I am shocked. The engagement is amazing. This is a really vibrant community that they're building. And people share their portfolios, their trades, their investment ideas in real time. And it's all built on the concept of transparency because brokerage accounts are linked.

And then once you link your brokerage account, you can get in-depth portfolio insights, track your dividends, and there's other stuff like learning duolingo-style education lessons that are completely free. You can search up Blossom Social in the App Store and join the community today. I'm on there. I encourage you go on there and follow me, search me up,

some of the YouTubers and influencers and podcasters that you might know. I bet you they're already on there. People are just on there talking, sharing their investment ideas, and using the analytics tools. So go ahead, Blossom Social in the App Store, and I'll see you there. That's a good overview. We'll move on to the last segment here. some of the learnings that we I say we but I feel like I'm talking to you for you a little bit so some of the learnings that I've learned for poker that actually apply very well to investing so feel free to I did most of the segment so feel free to you know add in a little bit as you see fit the first thing is thinking long term so if and like I've said before you don't need to know all that much about poker or anything at all to understand the takeaway.

ways here but the best poker players that top poker players think in really large sample sizes that's because there is an element of luck to poker if you ever play poker you'll know that you can make the correct play time and time again the best play and still get pretty unlucky you can put your money in with 90% chance to win a couple times in a row and still lose those couple times in a row but when you start zooming out just like you would do for investing for example and large start looking at a larger sample size where investing would be a longer time period, that's when you really have a good idea what your profits actually look like and that you're able to determine whether you're a winning player at poker or not. And that's honestly, that's a lot of

what we do preach. Like that's the approach that we take is we try to think long term when it comes to investing. And I think a lot of people get into that mindset like what have you done for me lately and then they'll just get on whatever has the hype or momentum because it's been doing well for the last two three four five six months and not zoom out and realize that yeah the waste connection or the CP rel they may not have done as well over the last six to 12 months but when you look at the very long term five 10 15 20 years those are the companies that have really compounded and done extremely well and probably outperform a lot of those hot stocks that are currently in favor. Yeah, I think, I mean, this would be, yeah, an element of chasing returns. A lot of people

tend to do it. I mean, the main goal should be to earn average to above average returns over, you know, an above average period of time. And that's when you'll really accumulate wealth. But when you start trying to, you know, when you start worrying about, you know, when you start worrying about buying stocks and your whole basis is you hope they're up by the end of the year or even up by, you know, over the next 18 months. I think you really start to make a lot of suboptimal decisions. Whereas, you know, as you had mentioned, if you're thinking long term and you're buying a company with the intentions of holding it, you know, over the next decade, over the next two decades, that's ultimately the better mindset to have. And again, like you mentioned, you can still

get unlucky. I mean, you might buy a company with the intentions of holding it for that long and it doesn't work out. Like, everybody's going to buy stocks even with the intention of, you know, a long-term mentality where it just doesn't work out. I mean, I've done it numerous times. Yeah. And you can also get pretty lucky and think that you made the right decision when it was

purely luck. And you see that all the time at poker is you'll get someone who makes like a really terrible play but they just get lucky and uh you know you don't really know what they're thinking but they might be thinking they're the best player in the world because they're very result oriented and the process was complete poo lack of better words and they don't realize that if they repeat that same kind of behavior with their invests or with in poker they'll actually end up losing a lot of money long term and you can see that a whole lot especially when there's a lot of speculation around with investing is people will be really focused on the short term and they may get like

lucky with the name and then think oh i need to you know get this penny stock again the the last one got me like a three four x return and what do you know the next 10 penny stock that they bet on most of them go to zero so you end up being a big loser because you were too short term focus and looking too much for the bigger gains and not being objective with your approach. That's something you see very often in poker. And from the things I've seen on four, like on, for example, sometimes going on Blossom and so on, and just some of the comments that we get and people reaching out to us, I think sometimes people just chase too much those short-term returns and it really ends up hurting them big time in the long term. Even more so they get

lucky early on because then they think they've done something really well. But they'd they aren't really that truthful with themselves and not realizing they were just really lucky. Well, yeah, especially in a market like we're seeing today where pretty much everything, again, outside of what we mentioned, healthcare is up, you know, a ton of money. It can kind of give some misguided confidence, I guess. But yeah, I mean, if you approach it like you want to earn money now and like the decision as to whether or not you made a good investment is whether you're up or down money over six months or even a year, or even potentially like two years, it's kind of the wrong way to approach it.

But a lot of people, that is kind of what they're doing right now. They're kind of ignoring a lot of value in the market because there's always going to be value in pretty much every market. But a lot of people want to focus on the stocks that are moving right now. Yeah, yeah, exactly. Just chasing the words return. So the next one is emotional control. So this is one of the most overlooked things in poker. A lot of top players end up focusing on improving their game from a strategic and math.

mathematical standpoint, but forget the emotional part of it. And you can be the best player in the world, but if you don't have good emotional control, you won't be able to make money playing poker long term because you'll likely go broke. Emotional control is very important when investing as well. You see it all the time. Market enters a correction and you see people sell their investment during the correction because they're caught up in the emotions of it. And they tell themselves, you know what, I'll just buy at the bottom and then I'll reenter and then I'll make a, I'll crush it, right? I'm selling before it drops even more. But what ends up happening is then they never buy back or they buy back at a higher price than they sold. So then they

missed out on 5, 10, 15, 20% returns. So yes, emotional control is very important. Having a plan is also very important setting some guidelines. I think those both, things apply very much to poker and investing. Yeah, I mean, this, like, emotional control in the market is effectively what stops you from costing years of retirement. I mean, ultimately for your portfolio, I mean, like one bad decision emotionally during, whether it be a bear market or a bull market, I mean, you can buy something on emotions when it's, when it's going through the roof during a bull market, which can end up costing you

a lot of money or you can panic sell during a bear market go to cash in order to try and time it and you know you just it becomes a vicious cycle of you know selling the lows and buying the highs when again like if you take the first point we talked about the long term mentality it tends to kind of take away the the emotional aspect of it because you're not really worried about where the markets are right now you're just more so worried about where you're going to be and five years, 10 years, 15 years. Yeah. No, exactly. I mean, it's probably one of the best argument for dividend-only investing is that emotional control where I know it's not logically a lot of people will push back.

And I'm not one. Like, I think people know and you know me. Like, I'm not a dividend-only investor. It's not all about dividends for me. It's all about total returns, but also managing the risk between different asset classes and making sure my portfolio is as resilient as possible depending on what happens in the future. But I will say this, if the fact that you have dividend paying company prevents you from panicking and selling your stocks,

and that's the only thing, no matter how much work you do, no matter what you tell you know that's the only thing that will prevent you from panic selling, then dividend investing might be the best strategy for you. Yeah, specifically. And I think even a lot of people who kind of advocate against dividend investing, I think they agree in that regard. Like if it's going to be the thing that stops you from making a very poor emotional decision during a particular time in the market, then yeah, it's probably the most optimal strategy for you.

Is it probably the most optimal strategy from a total return standpoint? No, but again, if you sell your stocks or your ETFs in a bare market. you've you've taken away a monumental amount of returns from one very poor mistake exactly that's it so i think you know i think people know we like to be as balanced as possible so um i just wanted to mention that the number three one building on the emotions topic is fear is the emotion that is the india driver's seat that is true in poker or an oh boy it is true in investing as well so in poker, most players' actions are driven by fear, especially if you play in person and not online.

Online's a bit harder to, I'm sure it is still that, but it's harder to kind of decipher, especially because people can be playing multiple tables at once online as well. Whether it's fear of calling a big bet or fear of making a big bluff when all the information you have show that it has a high likelihood of working, it doesn't matter, or it's fear of missing out on money when you have the best possible hands.

So you end up making a big bet when it's clear that your opponent does not have a big hand. So in that situation, you'd be probably better making a smaller bet to extract maximum value. Well, you see that all the time in poker. Literally in person, I mean, we've talked about it. You and I, people literally tell you what they have just by their actions. And if you remember that fear is driving their actions, not every player. But I would say 90% of the players, fear is a big driver. And it's also similar here to investing because a lot of investors end up making decisions because of fear.

They might even not know it, whether it's fear that markets will go down or FOMO, fear of missing out. I think right now we're seeing a lot of FOMO happening to markets. And I mean, fear isn't a natural emotion to have, and we are hardwired that way, unless you have some kind of psychological condition, like you're a psychopath or something. you'll have fear too so it is a healthy thing like you know at the end of the day it's normal right like you probably you know most people will not want to go take a selfie on the edge of a cliff because there's fear there and that's probably a good thing to have fear when you're on the edge of a cliff and thinking about taking a selfie but as an investor you need to acknowledge when the fear is there that little voice in the back of your head and make sure that your decision are not

driving by fear but by sound process. And I think that's really important poker as well. It's just making sure you have a good process in place so that fear doesn't overtake you, but also emotions like we just talk, it doesn't overtake. And when, you know, you feel those emotions rising, you always have something to fall back on. It's that process that you follow and that you know that long term, that process will pay dividends. Yeah, what is it? We fear loss twice as much as we strive for that. Yeah, the gains. Yeah.

This is exactly why you'll see a lot of people buy a bunch of stocks in a bear market, or sorry, in a bull market. And then, you know, when we get a 20 or 30% correction, even though stocks are a better buy in that bear market, they're too fearful of that loss as they're going down. So, yeah, I mean, fear is 100% probably one of the biggest reasons people make sub-opt. decisions. I would argue selling too early comes from a big element of fear. I mean, if you buy a stock and you're up 100%, I mean, your fear is that those profits will somehow go away. You sell the company. It goes up another, you know, two or 300 percent. I mean,

holding on too long to a loser out of your just simple fear of, you know, acknowledging that loss is another thing that drives a lot of it. But yeah, it's fear is what causes, I would say, probably the most mistakes in the market overall. Yeah, yeah. Yeah, yeah, you see that so often. It's just being able to acknowledging them and again, having that process, I think it goes long ways for that. The next thing here is game theory.

So for those not aware of what game theory is, it's actually, I think you can take courses in university for that. If you have that option, I would highly recommend it. Probably one of the best kind of courses that you can take in terms of helping you in life with decisions. So essentially game theory is how people make decisions when the outcome depends not just on their own choices, but also on the choices of others. So it makes, it forces you to think what other people will also think and what they also think and do how that will impact the decisions you take. So it's used in poker, in business, in politics, anywhere

strategy and competitions involved, it will be used. In poker, there's something called GTO, which is short for game theory optimal, essentially it's a way to play in which you cannot be exploited. No matter who you're playing against, if you follow this strategy, which is almost impossible to follow, you can just attempt to follow it. You will not get exploited, but again, it's very, very hard to always have right, because there's oftentimes millions, if not more of possibilities depending on the cards that you have and what cards come afterwards and then the opponent and so on. And the thing about GTO is that it's very powerful against very good opponent, but it's not necessarily the best way to play against weaker opponent. That's because

a good player can deviate from GTO to exploit the tendencies of weaker opponents and make much, much more money. For example, if you know someone does not like to fold, while when you have a good hand, from a game theory perspective, you may want to mix it up a little bit, but against someone that does not like to fold and will call big bets, even with marginal holdings, then you should be betting pretty strongly your hands, because against that kind of person, that's the way to exploit them. And in other words, GTO is profitable, but it's not always the most profitable way to play. And for investing, it's a similar thing. You could say that, you know what, maybe the GTO of investing is index investing because you'll match

whatever the market is doing, which is a fine approach. You will never be a loser because you're matching the market. So you won't do better awards in the market, but you'll do the same. But you could also say that, you know, I think the market is mispricing a certain sector and decide to overweight because you think it's undervalued and you're taking advantage of that And you think that by doing so, you'll actually beat the market. Or maybe it's something like I'm doing right now and I've been doing for the last year and a half two years is I'm building a pretty good gold allocation because I think a lot of the market is underestimating some of the forces that we'll see that we'll keep pushing the price of gold up medium to long term. And I think once powerful actors in the market, aside from central banks that we've been seeing, start noticing and start embracing that even more. So you see now it's not just dependent on me.

It's dependent on what other people are doing. Then I think this will be a really powerful play down the line. But that's some examples that how game theory can be applied to not only poker but also investing. Yeah, that was pretty much going to be my comment. But you said it at the end. The GTO of investing would be, buy an index fund and never look at it again. Yeah. And you, yeah, but a lot of people, I mean, not a lot of people.

Well, I would guess more and more people are doing that now. But again, if you are indexing, you will earn average returns slightly less than the index. You'll earn the index minus fees and whatever the tracking error is, whereas, you know, if you own individual equities, if you want to put the time and research into trying to find misprice equities, I mean, you could. end up outperforming the market. Most people will not succeed in doing so, but some people certainly will. Yeah, exactly. So you could outperform or you could underperform the market. And if you do the index, then you just kind of follow the market. So whether you're willing to put the work and, you know, live with that risk or you just do the index version and then you don't have to worry about it. The GTO thing probably, it's a bit, I would say, yeah, some people may, would be better

suited to just follow it and then some other people like i said uh they just adjust to their opponent and they that kind of strategy wouldn't be the best but then the last thing here uh actually two last things will rifle them off because we're getting a bit long here we have about five 10 minutes left expected value so expected value is the expected outcome that you'll get if you repeat a decision over a large sample that's extremely useful in poker because you're looking to maximize your profits and you always want to make the best EV expected value play, especially if you're playing cash games. And investing, it's something that can be extremely useful as well.

For example, say you have a stock that's currently trading at $100, you do your research and you think that there's a 25% chance it goes to $200, 50% chance it goes to $125, and 25% chance that it goes to $50 over the next five years. So that means the expected value of that investment is $125. Pretty simple to arrive to that. You just multiply the percentage by the amount you think it'll go to, and then you just add them all up afterwards. That means that if you want the situation you're in,

an infinite number of times, so the investing situation, you'll end up with an average of $125 at the end of five years for that $100 invested. Now, obviously, that's a simplified version. And, of course, when you're playing with expected value, you're looking, you'll have to make your assumption. It's not an exact science, so you have to place some probabilities, but it's still a very useful concept for investing because you can try to,

you can even do it, you know, a kind of neutral scenario and an optimistic and then a pessimistic, and then you assign a value for all three, and then a probability for each. That's probably the most simple way to do it. And then it can give you a good kind of expectation in terms of what you can expect long term by making that bet for a lack of better words into that investment. Yeah, I would say this is the most accurate when you're looking at building out some sort of investing thesis, I guess. You know, you got the top end, the middle end and, you know, the low end. And then after that, you'll kind of come to a conclusion as to whether or not it's worth the risk for you. But yeah, that's all I got on this one. Yeah, the last one

is probably the most powerful one and the one that basically makes or break a lot of really good poker players and a lot of good investors both. So it's bankroll management and that's bankroll management for poker. But the thing that it's pretty much identical to when you think about it is position sizing or allocation for investing. So in terms of a poker that would be called like I said bankroll management. Bankroll simply means the money that a poker players dedicate to playing poker. So, for example, if you have $10,000 for playing poker and then you decide that you want to take a shot and play a game, that's $10,000, well, there's a good chance no matter how good you are that you're going to go broke. You may get lucky and then triple it and then just be on your way or

whatever it is. But if you put all of your bankroll at once, there's a high risk of going broken. There's countless stories of really good poker players that had played beyond their means. They were extremely talented, very good at what they were doing, but they had poor bankroll management. And these are the players that you hear that kind of come and go from the poker scene. Oh, other people, tons of money, not necessarily, no necessarily pay it back all the time. That's because they have really bad bankroll management. The top players, they have really good

bankroll management and they will never risk too big of a portion in a single game. So whether that's 5%, whether that's 2%, whatever it is, they'll always stick to that and they will go down in stakes if they need to. When it comes to

investing, that's all about position sizing. So we've talked about it before, but if you put 100% of your money in a single company. I don't care how good that company is. I don't care how blue chip. I don't care if it's Costco. I don't care if it's name your blue chip company. Here, waste connection. We just talked about it earlier. If you put 100% of your company, it is extremely risky. You don't know what can happen that can disrupt that company. Even if it doesn't go at zero, what if it drops 30, 40, 50%. You just

lost half of your investments right there. And then you can adjust the sizing depending how much risk you want or how risk in investment is. For example, at one or two percent allocation in a risky stock is way safer than 100% in Costco or waste connection. I know a lot of people may be saying, what? What are you talking about? No, that is true because the sizing here, the worst you can lose is that 1 or 2%, whereas with Costco, waste connection, if you have 100%, then the worst you can lose is 100%. So you have to keep that in mind. And that's how you can really adjust risk within your portfolio. Obviously, I'm giving extreme examples here, but it is probably something we should talk about more on the podcast, position sizing, and how important it is.

Yeah, I mean, you can have a portfolio of 20 stocks and, you know, small allocations to the 19 of them that perform outstanding and you have that one outlier that's 30% of your portfolio yeah and it does even something like 30 40% could have you know a detrimental effect on your portfolio if it just so happens that that one company is the one that doesn't perform very well i mean i i kind of like to keep it to six, six, seven percent maximum for an individual equity. I mean, that's obviously my personal decision. I know a lot of people who are 20, 30 percent into individual equities. And I know a lot of people who own 70 different stocks and they make up, you know, two, two and a half percent

of the portfolio. So it's, yeah, it's, yeah, it's, it's all personal preference. But I mean, it does get to a particular point where if you're, if you're going very, very heavy into an individual equity you're you're increasing your risk of ruin exponentially because again like you said like obviously nothing has happened to Costco yet i mean i'm not saying nothing's going to happen no it's just it's purely an example yeah but something could you know what i mean like look at united health i mean they were set to be the world's first trillion dollar healthcare company and now they're down 50 60 percent over the course of like a month yeah yeah yeah know exactly and I think that's why allocation is so important and bankroll management is such a good

parallel for poker because the same thing like you you know people that know poker pretty well will like nod their head as I'm saying this those who don't I mean just just Google or I go on chat GPT and ask it to give you some example of some top poker players top poker pros that went went broke because they just played in games that they had too much of a bankroll. I mean, I guess we can finish on this because we're wrapping up, but I was watching a video of a kid who had his whole bankroll on the live stream playing poker, and then he got put into a decision all in, and he had the third best possible hand, and he ended up like not knowing what to do, and he was saying, well, I didn't tell you guys, because you would have taken advantage of me, but this is my life's worth.

and he ended up having to ask another player to if he flipped the one card he called and if he flipped the other card he folded and ended up flipping the right card and he called and won the pod but just goes to show how dangerous yeah he was on the verge of either going broke or doubling up yeah crazy yeah so anyways we'll we'll finish on that but i think there's some i think it was fun to do that like i said even if you don't understand poker all that well it There's a lot of parallels between both of them and there's a lot of things that I was able to use from poker and translate into investing. Yeah, I think obviously we don't talk about trading all that much too, but I think there's a lot of professional poker players who turn into traders and there's a lot of traders who kind of get involved with professional poker too just because of the mathematics of it, the edge standpoint of it. But in terms of long-term investing, I mean, there's a lot of, a lot of elements that kind of interlink with each other. And you wouldn't, if you don't know poker all that much, you wouldn't really think so. But there definitely is. Yeah. Okay, well, that's a good point to wrap it up.

Thanks again for everyone listening. And we'll be back next Thursday for a news and earnings episode. The Canadian Investor podcast should not be construed as investment or financial advice. The host and guests featured may own securities or assets discussed on this podcast. Always do your own due diligence or consult with a financial professional before making any financial or investment decisions.