The Canadian Investor - AI Just Crashed SaaS Stocks — Can They Recover or Is This Permanent?

Episode Date: February 5, 2026

Markets have been chaotic over the past few sessions, so we pivot to a mostly-news episode to unpack what’s really driving the volatility. We start with “SaaSmageddon” — the sharp selloff across software stocks following rapid advances in AI, including Claude’s new capabilities. We discuss why investors are suddenly questioning data-driven moats, seat-based subscription models, and whether traditional SaaS businesses can defend their margins in a world where AI agents can replace large portions of knowledge work. From there, we connect the dots to private credit and private equity. With software making up a major portion of many private portfolios, we explore the growing risks around payment-in-kind lending, potential default cycles, and why business development companies (BDCs) could be the next pressure point if AI disruption accelerates. We also cover the historic gold and silver flush — a classic leveraged shakeout driven by forced liquidations, stop-loss cascades, and thin liquidity — and why ETF volumes exploded during the move. Finally, we touch on broader market weakness, AMD’s earnings reaction, and how Bitcoin continues to trade like a high-beta risk asset. Tickers of Stocks Discussed: TRI.TO, ADBE, CRM, SHOP.TO, SPGI, MCO, ARCC, OWL, OBDC, BXSL, MAIN, FSK, SLV, GLD, SPY, AMD Watch the full video on Our New Youtube Channel! 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 Dan’s Twitter: @stocktrades_ca 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  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.

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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. My name is Simone Berengen, and I am back with Dan Kent. We are back for mostly a news episode. We wanted to do a news and earnings, but given that what's been happening with the markets in the last couple of days, we thought it was probably a better idea to do mostly news.

We will have an extra episode this week. We haven't decided whether it will be released Friday or Saturday, so be on the lookout. That one will be a bit more on the earnings front, So we'll be talking about some of the recent earnings. And then we'll have our normal episode on Monday. There might be some spillover of earnings, but some concept too. So I think it's going to be a jam-packed episode.

Hopefully people, it makes a bit more sense of what's happening, especially in the software-as-a-service stocks. But also we'll talk about what happened, the historical crash from last Friday and Monday with precious metals, so gold and silver too. Yeah, it's been a very, interesting time for the markets, like especially on the SaaS front, obviously, I think AI is, is advancing so fast that, I mean, the sell-off has just been so amplified because new platforms,

new systems are coming out. Like I had, we had mentioned before we started recording, like my bold prediction, like none of this stuff existed when I made my bold prediction. And that was what one month ago. But yeah, you want to, you want me to dive right into it? Yeah, and just a quick note, we had mentioned we wanted to do a live episode. We're still planning to do one most likely next week, so just stay tuned. Make sure you subscribe to our YouTube channel. The reason's pretty simple. I just had to put down our family dog over the weekend unexpectedly. So I was just not feeling like having to start something brand new, all the logistics behind it while we're recovering from that. So we're still doing that extra episode because there's so many news and earnings. But just in case people were wondering or looking

forward to that. I do apologize, but mentally, I don't know if I had the mental capacity to figure all the inner workings of that and making sure it's ran smoothly. Yeah, there's definitely, you know, more to life than podcasts sometimes, but we'll get around to it sooner. Yeah, exactly. So let's switch over. Let's get started. So what's going on with SaaS stocks? Do you want to go over that? Then I'll chime in as we go. Yeah. I would say, what did you call it, Sassmageddon or whatever? I called it. Sassmageddon. I've seen a few different. Black Tuesday. Yeah, black. Yeah, there's a few, a few different things. It was a pretty ugly day yesterday for a lot of software as a service stock.

And I mean, it's not just yesterday. Like a lot of these companies have been getting, I mean, you can just say wrecked for the better part of six months. Some of them, some of them have been even longer. So what ended up happening yesterday is Claude came out with a legal plug in that you can, you can put into their LLM. So for website owners, it's kind of similar to. something like WordPress, you have the core website and then you can kind of buy your design plugins. So effectively you plug them into whatever your LLM or your website. It adds features,

enhancement, stuff like this. So what you would do with Claude is you would plug in this legal plugin and it would give you access to data that you can serve for, say, a paralegal or any sort of thing like that that can make it faster. And I kind of rock the software world, especially those with large legal exposure. So the first start. that immediately comes to mind would be Thompson Reuters because, I mean, if you think of their stocks, Big Three, it's legal, it's accounting, and it's kind of corporate governance, like all that type of stuff. So what it would do, by the way, I am showing for joint TCI subscribers, the chart here the last six months, I'm showing Thompson Reuters, I'm showing Adobe and

standards and pores, right? That's the SPGI. Yeah. Yeah, exactly. So all three, So it has not been a great six months for all of these. And then if you kind of go and look in there even a bit closer, you can see the sharp drop in the last month alone, which is is pretty phenomenal. So Thompson Reuters, the one you were talking about, is down 53% in the last six months. Yeah.

And if you're thinking like companies like Moody's or SPGI, like what do they have to do with this? We'll get to that in a second. But Thompson Reuters, like this is a low beta stock. So it has a beta, it has a five year beta, which would be pretty much the way it moves with the market of 0.3. So, I mean, quickest way to explain this, when the TSX drops 1%, Thompson Reuters would drop around 0.3 on average.

So 50, 50 plus percent decline on a blue chip low beta stock is like unheard of unless there's massive, massive news. And this would pretty much be it. So Thompson Reuters, the bulk of its money is made by selling subscriptions to, say, these law firms. So the idea that they can, you know, kind of get access to this quicker or they can take Claude's plugin, plug it into their LLM and Thompson, they can access Thompson Reuters data faster, say to the point where it doesn't take five paralegals to do so. It takes one. Then you start to get into that seat issue, right, where they don't need as many seats to kind of achieve the same thing. There was a ton of other stocks with legal focus yesterday that had massive drawdowns. I don't know. what any of these companies do. I just know they kind of have a focus on law subscription-based types. So Lexus Nexus fell by 15%. Walter's Clueber by 13, Gartner IT by 21%. So I think what

happened here is it sparked fears across the entire software sector yet again. I mean, Constellation lost 7%. Adobe, 7 and a half, Salesforce 7 and 7%. And there's even some fears like trickling into the e-commerce world, like Shopify got hit hard yesterday, 10% on the news. And I think what's really scaring people is how good Claude has gotten in such short order. So like Claude code came out in February of 2025. It was amazing, but it was very hard for non-tech people to navigate. You effectively had to hook it to your computer. And it was like a command prompt that you would tell it, you know, what to do in particular folders. Then you have co-work that came out, like, I think it was January 12th or something like that, where it's like desktop interface,

you tell it what to do and it'll do it. Like you need no knowledge, whatever, of terminal access to your computer or anything. And then like three weeks later, you get this legal plug in. And I mean, when we look to the credit agencies, like I had mentioned, like SPGI Moody's, like they don't really have any exposure to this. But I think where the market is getting spooked is if your remote is related to data or information in any way, like collection, distribution, like leveraging anything like that, the market just thinks your moat is toast. Like with these credit rating agencies, like,

the theory there is they have large moats because they got to go through a monumental amount of documents to assign you a credit rating or something. So what's to say, you know, AI can't do this much faster. So I think that's where like a lot of the fear is coming through from, I mean, from the ratings companies, if you don't need, you know, junior analysts to kind of analyze credit ratings and instead you can just use Claude to do it, but not necessarily Claude, but, you know, another segment. It just paints a pretty poor story. I mean, I don't think the credit agencies are near any sort of level of disruption, but that's not really the point of the segment, but I don't know if you have anything to add yet or if you want me to just carry on

with what else I got here. Yeah, I mean, like, I don't have too much ad. I just wanted, like, we're recording this on February 4th on Wednesday. And today it's SaaS stock are still, some are a bit more up, some are kind of flat, but today it seems like it's like a lot of the chip stocks and Vitiya AMD just reported. They didn't have time to look at the full earnings report, but my sense is that the guidance disappointed. So MD's down like 16%. So the NASDAQ, I think as we're recording, is down like 1.5% following the big drawdown from

yesterday and then you also have coin that's definitely trading like a risk asset i think it's trading around 72,000 so it's down now probably like 40% or so 35 40% since its peak and it's been down just mental math here about 15% probably in the last a week or so so just wanted to provide some context that now it seems like sastogs may have you know found their footings a little bit, but it's other stuff now that's declining in tech. Yeah, because I just refresh it, the NASDAX down 2.3% today. Okay. It's worse than when I was looking at. It's taken ahead. Yeah. Having cash on hand is essential for any business. Traditional business accounts hit you with high fees while paying little to no interest on the cash you need for day-to-day operations.

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We can decide to host our home only when it works for our schedule. Your home might be worth more than you think. Find out how much at Airbnb.ca. slash host. Back to this, like, you again, you would think like it's a simple release of a legal plot. And so sure, like Thompson Reuters maybe should fall because they have a lot of exposure to that. But some people are like I've seen a few people on say X saying like, you know, this has nothing to do with Adobe.

Like why did Adobe fall seven and a half percent? But I think that's kind of a situation where you're missing the forest for the trees. Like you're focusing too much on the fact that this is just a legal plug in. I mean, this is today. Like who knows what it'll be. Like the market is going to price in. two years from now. Like what are they going to have?

Yeah. Yeah. And you had like a great, speaking of Adobe specifically you had when we were texting earlier today. So you were saying, well, what if they come out with a plugin where the like AI can do like 80, 90% of the video editing and then you,

the content creator only have time, only have to tweak it on the edges, right, do a few things. Maybe the branding is a bit off. But for overall, like most of the video is done. mostly to your preference to what you ask it to do, well, that would definitely impact Adobe, or another way to view it is what it makes coding so much easier now.

It reduces my view Adobe's mode. So even if a claw doesn't come out with that kind of extension that you mentioned, think about it the other way where you could be someone looking to launch a new video editing software, and it takes you way less resources to launch something that's almost as good, if not better, than Adobe. So you really are putting some moat risks with Adobe in place and you're making the barrier to entry much, much easier with a tool like that. Like you do not require the same amount of capital to create that kind of product that you

would have required even a year or two ago. Exactly. And I think like a lot of people say, you know, kind of the ecosystem or something like that is more so the moat. But if, if you think of it on an Adobe side of things, like content creators like us are largely irrelevant in the grand scheme of things, like their enterprise level. Yeah. But like if you think of somebody who, and I'm just going to use Premiere Pro as an example,

because I'm more comfortable with the video aspect of it. But like if you think of a large enterprise who's, say, editing videos for some reason, like, that video might touch seven different people doing different things. that video before it gets put to production. Whereas you know, something like this, I mean, you could effectively have one person and the AI agent, the AI plugin, whatever it may be that can do all those jobs and effectively you've just trimmed down your seats needed from seven to say two or one. Like that's the issue there.

So I think where you're going to see. You're almost like the the humans almost more like a quality control person. Yeah. You just make sure that everything's done properly. the AI may have, because it's not perfect, right? If you lose LLMs for whatever reason, it will make mistakes. And you just kind of make sure it did things correctly, then remove any stuff that it shouldn't have removed.

Maybe the branding's a bit off. So you tweak that. Like I said, maybe you're able to get 80% done without doing too much. And you just reduce the human presence from 100% to literally like 15, 20% at most, right? Yeah, and that's, that is the risk with these companies. I mean, you can think of like somebody, a company who wants to run some ads. Like normally you'd probably have, you know, somebody sizing them, another person doing the branding, another person doing the copywriting, all that type of stuff. And you have one person that looks all that over.

Now, if you can get the agent to do it and you only have one person who's looking it over, like there's a big issue there, which is why I think like a lot of the companies that do come out, I don't even know if it's on top. of this, but like surviving is like task-based charges or they're going to have to charge a boatload for agents to actually operate the systems. But yeah, I mean, there's pretty much, as I had mentioned, like there's zero question. The market, if you collect, organize, distribute, use data as a means to generate money for your business, like the market is pricing and the fact that your moat is pretty much completely gone. And I think as an investor, you kind of got to determine whether or not the software companies you're looking at will will survive. I mean, my overall opinion on this, I think there will be a lot of companies that do get disrupted by AI. Like, I probably, and I guess

just as, you know, I, because I own consolation and topic is I don't think this happens to the vertical market because that's probably going to be a question a lot of people ask. But I probably wouldn't have even said this two months ago, but like now even the stuff that I'm doing, I mean, even before we recorded, I showed you like a task even in my business, like stock trades. I pretty much eliminated a five figure a year task that we had to operate. And it took me, I probably met three, four hours on Claude. And I eliminated it completely. And it's going to cost us like a fraction.

So there's going to be a lot of software companies that leverage AI to their benefit come out on top. But I just think you need to be very, very, very careful about the companies you choose. Like there's a lot of people I've noticed this. And I don't know if you notice this. It might just be like the algorithm. But on X, like some people are making software, literally their entire personality. They are buying whatever SaaS stock on the dip. And like not all of them are going to survive this.

There's no question. And I think my tweet that I did yesterday, I think encompasses this the best is in five years, we'll look back at today for SaaS stocks in one of two ways. obviously I was simplifying things, but it was either a generational buying opportunity or the start of the disruption by AI. And it's true. If AI does become as good as like some of us or the market suspects, this is probably just a start. But the reality is probably that the answer here is both. There's going to be some companies that will essentially never recover from this that are in the SaaS space. And there are some companies that will be fantastic buys.

So of course, I simplified it, but I think the answer is likely both. Yeah. And that's kind of why like taking either side of the fence, like thinking that they will, none of them are going to get disrupted and thinking that software is completely cooked, I think is a little bit extreme on both ends. But I mean, the one thing is the market does not get something this wrong. Like it's pricing and disruption and disruption will occur in some instances. Obviously, we have a lot of companies being thrown out, you know, and some will not be able to adapt.

some will be able to adapt and it just, you know, figuring out what that is right now, especially like with all these new elements is definitely, it's not easy at all. Anything more you want to add there before we move to SaaS and the private credit and private equity space? No, I'll, uh, I'll get into that. This is, I didn't originally have this, but then it was just probably it was too good to not include because it's just, it's wild. So also provide an example.

probably one of the better example that's actually happening right now. Yeah. So it's kind of terrifying, I think, if you think about private credit, private equity, because transparency is not the highest. Valuations are obviously not marked to market. Like Thompson Reuters takes a 19% hit in a day as a publicly traded company. You don't know what a basket of these SaaS stocks are privately, you know, valuation multiple wise.

the one thing for certain is the highest allocation in private credit is software. So the vast majority of private credit funds, you're looking at 20% plus allocations. Obviously, some have less, some have more. Some as we'll go through are getting rid of a lot of the allocations. But you're talking about, yeah, about one fifth of average private credit funds, you know, their money is in software. So a lot of these private credit, equity companies are, you know, the software that they have are in the exact same sectors that Anthropic is disrupting right now. And a lot of them were dishing out these loans, not even based on profits. They were on revenue multiples. And a lot of the multiples were at just ridiculously high levels. I mean, if you think of a publicly traded company like Adobe before this drawdown, they were trading 1520x sales, was not out of the norm. I think now they're trading at something like four and a half. So the largest payment in kind industry among business development companies is software. So that's at more than 22% of loans. So payment in kind effectively means

I can't pay you the interest on the loan. So I'm going to issue more debt and I'm going to tack it onto the loan. So I guess the best example I would think of this in a real world example is remember back in the pandemic when the banks gave you mortgage relief, like when you get you like the six month mortgage relief. Like they didn't they didn't just say, oh, you don't have to pay for your mortgage over the next six months. They did say this, but all they did was tack the interest on to the back end of your mortgage. Like you still are paying that money. You just got some immediate cash flow relief. So that's kind of what that payment in kind means. But, you know, in the instance of extend extend. Extend and pretend. Yeah. That's what it's called.

Pretty much. Extend and pretend. Yeah. And, you know, if somebody was doing this in the public markets, their stock would get wrecked. Like there's absolutely no question. It would be disastrous. But in the private market, I mean, obviously this is, this is actual, like I verified this data. It is correct. Like there's a lot of software stocks that are in this type of situation. But in the mortgage deferral situation, most people got their jobs back with these private

software companies, like they don't have the supposed modes of a lot of these public companies, the switching costs, the ecosystems. I could see some of them getting. absolutely wrecked by a lot of this stuff because for a very long time, I think you could build anything you wanted to in regards to SaaS, you know, private equity, private credit would give you a bunch of money. And yeah, and that was it. And the danger here is as the tab keeps growing in terms of payment in kinds, company value keeps declining. There comes a point where you're, you're not going to be able to pay the money back. Like there's going to be no way you're going to be

able to pay the money back. And as you'll go over here, there's a lot of, you know, private credit companies, Blue Owl would be an example, I think, who went from like 20% to what we'll talk about. Yeah, exactly. So there's quite a few of them. Their call for the most part BDCs, so business development companies will provide credit or equity to small, medium, usually private companies. So some large BDCs, some of the largest, there's Aeros Capital Corporation, ARCC, Blue Owl Capital Corporation, OBDC, Blackstone Secured Lending Fund, BXSL, Main Mainstream Capital Corporation, and then FSKR Capital Corp, ticker FSK. So those are some of the larger companies I'm sharing how they've performed here for joint TCI. Over the last year, it's not been great, but especially over the last six months.

You have Blue Owl here that is really not doing L at 21%, but also FSKKR capital is also, uh, performing pretty badly. They're all in the last six months. Pretty much the only one that has done decently well is Main Street Capital is down 5%. The rest are down 15% or more. So these are companies that they're definitely at risk. Like you said, there's a lot of software exposure for these companies. And Blue Owl is definitely a really good example here. So essentially asset managers, like private credit really got crushed. But it started back in the fall. We did talk about it on the podcast, if you remember.

I can't remember the exact names, but it was like in the auto part industry. There had been some private credit losses. So that happened back in the fall. And then obviously yesterday with the tool that you mentioned from Antropic being relief, release. So what happened is private lenders like a blue owl that'll be talking about here.

They love software companies because they viewed them as safe utilities with sticky recurring revenues. And that was the business case. That was the investor, the bullish case for the last five plus years, if not more than that, right? SAS, that's why they were so, they were not capital intensive, very sticky. They would just generate tons of cash flow. And Blue Owl essentially gets fees from managing OBDC. So Blue Owls like the parent company.

So OBDC is the one that actually provides the funds where this is the public version of the fund. And Blue Owl is like the management. manager. And the fees are viewed almost like as these cash flows. So a bit like BlackRock would do, right? Like they get their fees and then they manage these assets. And the new reality here is the market is waking up that AI is a real displacement risk. So the safe cash flows that these companies are generating with those fees could evaporate overnight if AI starts replacing the software because there are some investors that, you know, there are some investors that, that are starting to get nervous and actually withdrawing capital here, right?

Oh, yeah. Yeah, I'll just to give a good idea of this, I'll share my screen here and show you, I'll show that article we were going to show here. And maybe I can just add while you're pulling that up. So UBS analysts estimated that FAI disruption is aggressive, private credit default rates could surge to as high as 13%. And that's pretty high when you have a lot of these private credit funds that have a lot of their loans and the equity tied to those software companies.

Yeah. And I mean, there'll be some charts in here. This is Pitchbook, which is Morningstar. So they put out this article back in August. And I'll kind of talk about like the data, why it, you know, probably doesn't paint as bad of a picture as it actually is right now. So you can see the like in the chart here, the P.I.K. Interest Income of the 15 largest BDCs. And you pretty much went over all of these companies.

like the ones who are on the far left here. So P.I.K. Interest income would be that, you know, interest only income I'm talking about that a lot of these companies are dealing with. And you can see they show the last 12 months from 2023, 2024, and 2025. And what you can see among the three biggest is it's escalating every single year. Like every single year that interest income that is effectively just interest being tacked onto the loan is getting larger. And this is from March. So this data is actually only back from March. So we're not even talking like, you know, who knows like peak disruption in terms of some software company.

So you don't really know what's going on under the surface here because how many software companies have, you know, been impacted thus far. And then the other one I wanted to show. And I think it's important just so people are not too familiar with this. So the reason why private credit would do this is these are oftentimes newer companies that don't have tons. of cash flows that they may not be able to actually kind of, it would hurt their cash flow and their business too much to repay or pay the interest on the loan. So it just gets added to the loan and oftentimes I think they will get additional equity down the line. Right. Yep. Yep. They can do that. They can do a combination of both. So you can, like, they can even

keep the debt the same if they give, you know, the private credit or private equity company more shares, things like that. Like there, there's a lot of ways they can go, I mean, I can think about it like a company like Go Easy. There's a lot of flexibility in regards to how you can make the payments. But a company has to stay somewhat valuable, right? So if the business goes down the drain, then that loan goes down the drain pretty quickly. Yes, exactly. So this is what I was talking about before, which is like how many loans by, you know,

the percentage of loans in the industry that are in, you know, pretty much interest only payments or like interest deferral, I guess I should say. Software and services, I mean, you're looking at 20 plus percent. Healthcare would be the second and then you have, you know, all these others. But software is the largest by quite a wide margin plus healthcare. But yeah, these two charts kind of give you an idea of how bad the situation was a year ago. So you're looking at March of 2025. So what's it like this year is the thing.

Well, and I think so now I'm going to share what it looks like for Blue Owl, DURP portfolio, because I'm just going to continue talking about essentially what's going on, them here and Blue Owl is definitely in that category where internet software and services on their website here so you can go on Blue Owl Capital Corporation.com and you can view their portfolio and it breaks it down by geography and by a type and 12% of their portfolio is into internet software and services and what happened here with Blue Owl Capital specifically is they're really facing a war on two fronts so first there's that software risk We just talked about with AI and then the liquidity risk that happens a lot to these that are real risk when things starts going south for these kind of private funds, whether it's private credit or private equity.

So what happened is they tried to do a major, almost like a bailout with themselves by merging their private and public funds in November. That didn't work because what they were seeing is one of their private fund, Blue Owl Technology and Income Corp, was facing redeminent. request totaling 15.4% of the fund and that's far above the 5% limit per quarter. So the investors were asking for their money back and what happened I guess is investors push back and now they're facing lawsuits because they're being sued on the fact that they're being accused of securities fraud. Investors claiming executives lied when they said there was no meaningful pressure on their asset base. The asset base meaning that you know, the assets that are under management. And the lawsuit alleges that Blue Owl secretly face massive

withdrawals, including 150 million quiet withdrawals while telling the public everything was fine. So they're alleging that they lied about their finances. And then obviously you're layering that on top of the news that came out with Claude and all the fears regarding software in general. So it's really, it's not looking great for Blue Owl. And this is one of the bigger players in the space too. So if they are facing some pressure, and I think to me the key is just investor redemption, because what happens in these kind of funds, if there's too much redemptions from investors, you really have kind of two options as the fund manager. If you want to allow investors to redeem their money, you can sell assets, but clearly if you try selling asset in this current

the climate, you'll have to sell them pennies on the dollar at a loss. And then that lowers your assets under management and then your fees that you get for the mothership for the corporation that actually manages, Blue Owl, ticker owl, then obviously their revenues start going down because they don't get as many fees. So it's clearly not a great option for them to do that. The other option is to simply gate redemptions and not allow investors to actually withdraw their funds, which, again, Not great because then if you want to try and get more funds in the future, it's all about confidence. It really doesn't look great when you have redemptions gated. So this is what Blue Owl, one of the bigger players, that's what they're facing.

So that leads me to believe on top of what we went through in the fall, where there were starting to be some cracks out appearing in private credit. And even Jamie Diamond said there's probably some more cockroaches. that that was almost like just the tip of the iceberg. There's probably some more stuff that's going to come out about private credit, I think, this year. I think this is unlikely to be the only thing when you have a big player like this.

Yeah. And I was trying, while you were talking, I was trying to look up like way back machine or whatever to see like what they had software like a year ago, but it wouldn't work. Okay. Yeah. Yeah, I mean, I think a lot of people,

like we've talked about this quite a few times. Like, and it's nothing to say like, say bad. against wealth simple. Like they, but they come out with this private credit. I think a lot of people just buy it with no idea what they're buying. Yeah, they sell it as like democratizing. Yeah. Investing.

But anytime I hear that from Wall Street or Bay Street, like I said it on the podcast. To me, every time I hear that kind of talk from Bay Street or Wall Street, it's just like warning signs that go off in my head. Because if it was so lucrative, they would not be coming to retail investor. They would only coming because they need retail investors. And oftentimes it's when thing is about to hit hit the fan. I won't say the exact word here, but shit, well, let's just say it's about to hit the fan.

Yeah. So that's usually when they'll start offering that. And to me, that's always, always something that I'm really aware about when I start seeing that. Yeah. And there's huge, there's huge growth in it. Like if you go, like even like, even like, I know again, I'm mentioning well simple. There's nothing well simple as doing wrong, but you go on their website.

No, no, they're not the only ones. It's fine. Like, they, they offered it because there was, there was demand for it. There's demand for it. It's not, it's nothing on well simple. They just offered it because there was demand for that. Yeah. That's it.

And you, like, you go to the front page. It's, you know, you're, you're, you're going to get a nine and a half percent, nine point four percent distribution yield. You're going to get eight percent annualized returns and, and people just, okay, like, yeah, let's do it. That seems like, that seems pretty decent. But, I mean, you're starting to see now there's a lot of cracks here.

And then you really, when you own something like this, you really don't know what is going on. Like, you don't actually know what is going on under the surface. Like what you do know is a huge chunk of these private equity companies or sorry, private, private, I don't know why I can't think of the word right now. Private credit. Credit. Credit. Yeah, private credit companies. Yeah.

Yeah. Like you know they have a huge, you know they have huge exposure to software. Mm-hmm. And you have no idea. idea what's going on under the surface. So could be nothing. Yeah, I read that now they're getting like, I think they're getting like people that are like analysts to like look at their portfolio or like to examine their portfolio to see how much RISD there is. Yeah, something like that. I read an article. It's probably not the right word analyst, but they're getting like they're hiring people to literally

dig through their portfolios of software company to see how much RISD there is for them. Yeah. And I mean, you like you have no idea. If you own that fund, you have no. idea what's going on under the surface. So yeah, I think it's kind of a good lesson. It's a pretty good segment on like what's going on plus that it was too good to not talk about that private credit segment. No, exactly. Having cash on hand is essential for any business. Traditional business accounts hit you with high fees while paying little to no interest on the cash you need for day-to-day operations. That was our experience too, until we switch to the new EQ bank business account. Now every dollar earns high interest with no monthly fees and no

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us extra money to put towards all those lobster rolls in Alifax. And the nice thing is the flexibility. We can decide to host our home only when it works for our schedule. Your home might be worth more than you think. Find out how much at Airbnb.ca slash host. So we'll finish this off by, you know, people may have heard if you're following me on Twitter, you would have seen that as well. There was a small gold and silver crash on Friday.

Started Thursday. So I'll just go over what happened here. it's some really big news. If you just saw the swings that happened, they're pretty massive here. On Wednesday last week, the price of gold was trading above $5,500. Silver on the other end was trading above $120. If you remember, I did mention on a podcast, I trimmed my position. I took some profits.

They did not really trim my gold position because that one I see as less volatile, more of a long-term store of value. On Thursday, things started shifting with what appeared to be some profit-taking in both gold and silver. There's also some conspiracy theories that, you know, the U.S. government may have or tapped some people on the shoulder to do some large sale orders to kind of initiate all of that. But let's just say that there was some profit taking. It's really hard to prove anyway, whether it's true or not, the conspiracy theory, maybe that down the future will have more clarity on that. The drawdown accelerated during the night when news came out that Trump would be

announcing that Kevin Warsh would be the next chair of the Federal Reserve or his nominee. It still has to be confirmed by the Senate, I believe. Now, just to be clear, we will do a segment, I think in the next episode on Kevin Warsh and what it could mean for investments, different kind of investments that you might have. So we'll just leave it at that for now. Then during the day on Friday, things just kept accelerating. And what happened was a classic over-levered market shakeout. So you get something that triggers the selling.

And then when things go up that violently or that quickly, if you just look at a chart for gold and silver, literally in the few last, like in January, in a few weeks it'd gone like completely vertical. And usually when you see something go completely vertical, it means there's a lot of people levered long. So then what happened is the levered long started to get margin calls, forced liquidation.

Then you get stop losses that get triggered, which increased the cell pressure and then it just keeps gaping down a bit of a doom loop so liquidity gets thinner as there are just simply not enough buyers to make up for the wave of sellers and with silver the move was magnified

because the silver market is much smaller than the market of gold to give people an idea it's about like 20 times smaller the market for silver is probably close to 1.5 trillion where gold depending these are just estimate because it's really hard to know what's above ground in terms of the metals, but gold is probably market cap between 30 and 35 trillion, so just to get

a general idea of what it looks like. And when it was solid set and done, silver dropped 37 perm its peak, one of its, if not the largest, one of the largest ever, and gold dropped 20%. Silver went from 120 to 75. Gold went from 5,500 to 4,500 from top to peak. So some pretty significant, both down here and just looking at ETF volumes, if you look at SLV, GLD, so SLV is the silver, the big silver ETF in the U.S. GLD, same thing for gold.

The two large ETFs in the U.S. The volume had just gotten crazy. I think the silver ETF was having higher volume than the SPY. That's just how crazy it was. Then the SMP 500 ETF, that's the main one.

And clearly, a lot of speculation happening. And the prize, though, as kind of rebounded. So it's around like mid-80s now for silver. It went up up to about 90 and then gold. I don't have it on my screen for gold, but 4,900. So it did go back above 5,000, I think, yesterday.

So it's definitely recouped a little bit. I think it's showing that there's those who have cast that we're not speculating are starting to reenter the market or just adding to their position. So just using that correction to add to their position. but it was definitely something pretty historical, whether it was something that was kind of orchestrated. The timing was definitely strange with the start of the selling and then the announcement by the White House that Kevin Warsh, like rumors or news that Trump was going to make the announcement kind of came out and the selling had already started. So it just makes you to kind of believe that whether they wanted the sort of

crash or something like that or whether kind of, Trump or in the administration tip tops, tip tops some friends to be like, hey, by the way, we're announcing that. He's seen as a bit more of a conservative free market, not as easy money than than some other candidate. You may want to sell your gold and silver and take some profits now. I don't know, but the timing of the event is definitely odd to say the least. We will never know, I don't think.

We'll never know. We'll never truly know. But yeah, I mean, the, I can't remember what that one ETF, I showed you. was, but we had talked about it. Like we weren't necessarily advocating for it or anything, but it was the 2x silver. Yeah. No, 2x long.

Oh, 2x long. It was a it was the 2x long and I sent you a chart of it the one day. What did it lose like 70 some percent or something? Yeah, something like that. Yeah. So I mean, if you were looking to speculate on on silver and went 2x long at $120, you you pretty much lost all your money in a matter of what four hours, five hours, five hours like that happens. Yeah. Yeah. Yeah. Crazy. It's a crazy time. Yeah. So I think that's a good way to

end it here for, uh, for this episode. So I be on the lookout for the podcast feed like we mentioned, having decided yet either Friday or Saturday, you're going to see a bonus episode. So another, that will be focused a bit more on earnings and then we'll get back to our regular schedule with Monday next week as well. So just be on the lookout. There was just so much to that. talk about and given that everything that's happened yesterday, we wouldn't really have time to talk either about this or earnings. We just would have had to make a decision one way or another, so we decided to do those two episodes. Thank you for listening. If you haven't done so, if you could give us a five-star review on whichever platform that you are listening on,

make sure you give us a follow on YouTube. We also have joined TCI for those who want to join as members for $15 a month, so you get some additional content, including our monthly portfolio moves. You can see how much our portfolio are bleeding every month. It's pretty good right now. But obviously, I do also the monthly update for my parents and we also pose the full video, our podcast recording. So thanks a lot for listening. We appreciate all the support and we will be back in a couple days. The Canadian investor podcast should not be construed as investment or financial advice. The host and guest 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

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