The Canadian Investor - Big Trends for 2022 and Beyond

Episode Date: February 7, 2022

In this episode of the Canadian Investor Podcast we start the episode by discussing ARK Invest’s big ideas of 2022 and beyond. We then discuss RRSPs and businesses that revolve around connected TVs . We finish the episode by explaining the 4% withdrawal rule and looking at large cap companies that have had large drawdowns in the past year. https://thecanadianinvestorpodcast.com/ Canadian Investor Podcast Twitter: @cdn_investing Simon’s twitter: @Fiat_Iceberg Braden’s twitter: @BradoCapital Precious metal streamer episode: https://thecanadianinvestorpodcast.com/episode/lightspeed-short-report-moats-and-gambling-on-stocks  CRA RRSP information: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans/contributing-a-rrsp-prpp/contributions-affect-your-rrsp-prpp-deduction-limit.html Vanguard Canada article: https://www.vanguardcanada.ca/documents/literature/dynamic-ret-spending-paper.pdf Earlyretirementnow.com withdrawal rate series:https://earlyretirementnow.com/safe-withdrawal-rate-series/   Stratosphere 🚀 https://www.stratosphereinvesting.com/   Tickers of stock discussed: ROKU, TTD, BABA, PYPL, SE, PDD, UBER, MELI, SQ, SNAP, ZM, NIO, DASH, SPOT, TWLO, U, TWTR, PLTR, AEM, BEPC.TO, LSPD.TO, BB.TO, PAAS.TO, BTO.TO, WEED.TO, BLPD.TO, INE.TO, BLX.TOSee omnystudio.com/listener for privacy information.

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

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This is the Canadian Investor Podcast. My name is Brayden Dennis, as always joined by Simon Belanger. Man, let's go. This is going to be an awesome episode. We have some interesting kind of like futuristic topics, but also lots of like practical stuff. Like you're going to talk about RSPs and how to withdraw on them and just that kind of stuff. So let's get right into it. You sent me the ARK Innovation Big Tech Trends for 2022. Before we get into that, we have, as people know who listen to this podcast, we do earnings releases one episode of the week and then talk about things like this episode on the other episode of the week. How have you been feeling about earnings season though? We're not going to go

into the results, but what's been your takeaway so far? It's been interesting. Definitely all over the place, I would say. It looks like big tech is just firing on all cylinders. I mean, I think everyone saw the results from Google. We talked about Apple earlier this week as well. So it's been – it seems like big tech is just doing extremely well. Tech and – not tech in general. So, I think that's something interesting. Right. And I'm sure we'll discuss a bit more. But is that your impression as well? Yeah, I agree, which is like the large caps on the NASDAQ and the rest of the NASDAQ

are acting very differently. They're telling two completely different stories. But we'll talk more about that for next Thursday's release. So look out for that. We'll talk about Google for sure. All right. Let's look at ARK 2022's big ideas list. I'll rifle them off here. There's 14 of them and then we can chat. big ideas list. I'll rifle them off here. There's 14 of them and then we can chat. Number one, artificial intelligence, two, digital consumer, three, digital wallets, four, public blockchains, five, Bitcoin, six, Ethereum and DeFi, seven, Web3. So a lot of repeats of Web3. It sounds like they're double dipping a bit. Gene editing, multi-omics. I don't even know what that is, I'll be honest. Electric vehicles, 11 autonomous ride hailing, 12 autonomous logistics, 13 printing and robotics, 14 orbital aerospace. Robotics, 14 Orbital Aerospace. So I'll just start with this. ARK are very good marketers,

right? And they're very good at drawing attention to their research. And here we are talking about it here as well. I think some of them are worth talking about, but a lot of them are big ideas for much further out than 2022. Yeah. Yeah. I think. Yeah. And they did say it's right. It's big transfer 2022 and beyond. But I'll agree with you there. They're good at marketing. But the reality is when Kathy would, I didn't put the yes for once when Kathy would. You kept calling her Kathy Woods, like like she was related to Tiger Woods. Yeah, I'm just too used to that last name. But, you know, when Kathy talks, people listen. So that's the reality, whether you agree or not, you know, when she talks or releases something big, it gets a lot of attention. Same for me. I mean, there's a lot of emphasis

here, clearly on blockchains in general. Web3, I'm surprised she put that and not metaverse because Web3 and the metaverse are not necessarily the same thing and we can dive into this in a future episode and especially differentiating web 1 2 and 3 i read some interesting articles recently which people can easily wrap their heads around it but i digress we can probably do a full segment another another episode on that. But the one that I do find very interesting in the list is the 11 on our list here, the Autonomous Ride Hail. Because I'm thinking here of, you know, Uber comes to mind, Lyft, and even some of the main reason that those companies have struggle at becoming profitable over the years is because they have to pay a good amount for their drivers, right? They're still kind of most of them contractors. But a lot of people think that if autonomous vehicles become a thing, these business models could become very profitable. Yeah, that's a good point because if you look at their unit economics, they're not good.

The unit economics on these things are pretty terrible. So if they can majorly change that with making that autonomous, that'll be interesting both from like a lot of people rely on the gig economy as well, too. So it'll ultimately we'll have to figure out if it's good or bad for society. I just looked up multiomics because I didn't know what that was. It is a biological analysis approach in which data sets are multiple ohms, such as genomes. OK, like, dude, I'm not even going to go there. I don't know what the hell any of that means. Let's talk about RRSP is something that we can speak to.

You have a little segment here. RRSP season's coming up. So I think that we'll touch on it now and we'll touch on it again, probably at the end of the month. Yeah. Yeah, exactly. So I wanted to talk about that because at this time of the year, I see it with my work, but we see it all the time. All the advertisement that you'll hear, all the banks, all the financial institutions, you know, financial advising services. It's all about RSPs. Well, the main reason for that is there is the RSP deadline that's coming up on March 1st, 2022. This is also known as the 60 day of the year. This is also known as the 60 day of the year. So that means that you can actually apply any contributions that you make within that time window on the previous year.

So if you are making a contribution, the first thing I have to say, always make sure to look at your notice of assessment. You can view that by going to your MyCRA account. A little tip, if you don't know how to log into your my CRA account, you can usually do it through your bank as a sign-in partner. If you've never set it up, you'll probably have to contact the CRA for setting up the first time. When you do, make sure you have your T4 from the previous year because they're going to ask you some questions from there to validate your identity. So that's just a tip from me because I lost. I changed banks, like I mentioned, not too long ago on episodes. So I had to kind of get things reinitiated with my new banks.

It was a bit of a pain, but now I got it done. It's really easy. So one thing I wanted to explain is how will your RSP room be calculated for 2022 and keep in mind it's i checked yesterday on mine it was still not there my rsp deduction limit for 2022 i think it typically comes out around february uh not quite sure exactly on the timing they need to have all your information from your your previous year and how they calculate that. So the first thing they'll do is it'll be 18% of your earnings or the annual RRSP limit, which was $27,210 in 2021. So it'll be whichever one is the lowest amount of the two, that will be the starting point. So for example, if you made $100,000 last year, this would equal $18,000. So

the $27,000 limit, it's really for people that make a pretty substantial salary here. Then they would subtract your pension adjustment if you have a company pension for 2021. That'll be found on your T4 if ever you're interested. They'll also subtract any contributions you made from your RRSP for 2021. And they'll take all of that and they'll add it to whatever room you had carried over from previous years or 2020. So this will equal your 2022 RRSP deduction limit. I just wanted to mention that because a lot of people have no idea how the RSP limit is calculated. And I thought it was a good idea to add that there. Before I go on to the next portion, did you have any questions, any comments there? My main comment is if you forget

your CRA My Account login, or you forget maybe what one of those security questions they make you answer every time you log in is, find that out immediately. Because when March, end of February comes around, the RRSP deadline, you're going to call the CRA to reset it, and there's going to be a higher than normal call volume. And this time they'll be telling the truth. Okay, everyone has a higher than normal call volume. And this time they'll be telling the truth. Okay, everyone has a higher than normal call volume, but they will be flat out telling the truth. The RSP probably gets crunched with calls at that time. So get ahead of that curve. That's my number one tip right now. Yeah. And you can also find out what your TFSA contribution room is, right, by going on your notice of assessment. So it's really, really useful, especially, obviously, if you have tons of room and your TFSA doesn't really matter.

But if you're pretty close to your limit, that's something that's really useful. So the last thing I wanted to talk about is one of the biggest misconceptions that I hear all the time about RSPs. Because in my work, I work in the pension retirement space. So I do answer a lot of questions. I see people being very confused about this. And this question comes back over and over and over. So someone will look at their notice of assessment. They'll see that they have a thousand dollars of RSP deduction limit, for example, and they'll freak out thinking that their pension will bust their room.

Well, your room for the upcoming year is based on past year for your RSP deduction limit. So keep in mind, the CRA cannot project what additional room you'll be accumulating in 2022 because they don't know what amount of money you'll be making this year. So it would be really reckless for them to actually project that. And keep that in mind, because the CRA doesn't know what your salary will be,

if you get a new job, if you lose your job and whatnot. So your 2022 deduction room will be what I explained earlier based on past years. So all this to say, if your contribution limit is, you know, $2,000 for 2022, you can safely contribute that amount to an RRSP without worrying, even if you have a very generous pension plan. That's because the pension plan is conceived in a way that you could have zero room in your RRSP deduction limit and you'd be okay. It's actually made to ensure that you do not go over your RRSP deduction limit. That's a good little caveat to have because these are the questions that people are actually struggling with.

And go on that CRA My Account and that deduction limit will be, it's right on the front page when you log in, right? It's like the TFSA contribution limit and your RRSP are both in like the bottom left of the screen, if I can picture the CRA mic correctly right now. Yeah, yeah, exactly. It's on the, and I mean, it's not the prettiest website, but it's fairly easy to use. I'll give the government that. I mean, you know, it could be prettier, but it's still not complicated to use. It's the government that i mean you know it could be prettier but it's still not complicated to use it's it's not a bad one the only thing that can get hectic is like i said

it's not a very clean forget your password experience and i have forgot my password to the cra my account several times because you can't use unless they've changed it you can't like use characters like beyond letters and numbers at least when I set up my account so I was always using ones that were different from my normal password so just don't don't be like me and uh you know remember password for one, but get ahead of it now because it is a pain. It is a pain. Telling you from lots of experience, it's a pain. So get ahead of that. As do-it-yourself investors, we want to keep our fees low. That's why Simone and I have been using Questrade as our online broker for so many years now.

Questrade is Canada's number one rated online broker by MoneySense, and with them, you can buy all North American ETFs, not just a few select ones, all commission-free, so that you can choose the ETFs that you want. And they charge no annual RRSP or TFSA account fees. They have an award winning customer service team with real people that are ready to help if you have questions along the way. As a customer myself, I've been impressed with Questrade's customer service. Whenever I call or email, every support rep is very knowledgeable and they get exactly what I need done quickly. Switch for free today and keep more of your money. Visit questrade.com for details. That is questrade.com.

So not so long ago, self-directed investors caught wind of the power of low-cost index investing. Once just a secret for the personal finance gurus is now common knowledge for Canadians, and we are better for it. When BMO ETFs reached out to work with the podcast, I honestly was not prepared for what I was about to see because the lineup of ETFs has everything I was looking for. Low fees, an incredibly robust suite, and truly something for every investor. And here we are with this iconic Canadian brand in the asset management world, while folks online are regularly discussing and buying ETF tickers from asset managers in the US. Let's just look at ZEQT, for example,

the BMO All Equity ETF. One single ETF, you get globally diversified equities. So easy way for Canadians to get global stock exposure with one ticker. Keeps it simple yet incredibly low cost and effective. Very impressed with what BMO has built in their ETF business. And if you are an index investor and haven't checked out their listings, I highly recommend it. I bet you'll be as pleasantly surprised as I was that BMO, the Canadian bank, is delivering these amazing ETF products. Please check out the link in the description of today's episode for full disclaimers and more information.

Let's talk about connected TV, and I'm going to lead it into also the trade desk. So switching gears quite a bit here, I'm going to do a into also the trade desk. So switching gears quite a bit here. I'm going to do a little deep dive here on connected TV. So two terms I need to identify first out of the gate, CTV and OTT. Okay. So CTV is just connected TV. Go on. What's up, Simon?

Yeah. And not to be confused with the CTV, the channel in Canada and OTT with Ottawa as short. Yeah. There's a couple of different things that these letters might stand for, but hear me out. CTV is not the channel. I'm talking about connected TV. And what a connected TV is, really simple. It's not complicated at all. It just means a TV that's connected to the internet. So we like to make these like fancy little terms.

A connected TV just means a TV that is connected to the internet. Now, over the top programming, okay, OTT, this is a term used synonymously with CTV, and it just means services that deliver TV and video through the internet, like on streaming or video on demand format. So OTT over the top, like it just means services, for example, like Netflix, Disney+, ones that require a paid subscription. Other OTT services that you can watch on-demand content, which is ad-supported. Think of YouTube. That is, again, a service that is going over the top, just means because you're getting it via the internet and not traditional means of getting your content on your TV.

So that's what connected TV is. It's a TV. It's connected to the internet over the top. OTT just means you are watching it via the internet. So connected TV, you probably have one in your home, like a smart TV, or you can get a device like Roku to make it a connected TV. If it's not a smart TV, you can make it a smart TV. eMarketer has the percent of households with connected TV at 24% growing to 35% by 2024. I actually think that it might even be higher than that. 35% sounds quite

conservative to me personally. Connected TV is the fastest growing media segment right now. Across all of the segments and all of the advertising media segments, and all of the advertising media segments, connected TV is growing extremely fast. And us being sent home from COVID is definitely one. There's also other drivers, like people what are doing called cord cutting. They're saying, okay, we already subscribed to Netflix, Disney+, ESPN on demand.

Why am I paying for traditional TV package with my provider? The total hours of connected TV device usage was up about 80% in 2020 versus 2019. So there's now over 180 million CTV viewers in the US. So that's quite a sizable amount. Now, this ad spend in connected TV is projected to go from 9 to 29 billion from 2020 to 2024. Now, connected TV ads involve what are called programmatic advertising, which is the automated buying and selling of digital inventory using a service like the trade desk. I'll get right into that. You can actually do real-time bidding. Basically, there's this auction that happens for programmatic advertising. These services can provide that edge.

There are three types of ads on a connected TV. I'll give some examples. If you have an in-stream video ad, this is like an unskippable 15 to 30 second long ad that plays before or in the middle of your program. Again, think of YouTube. Interactive pre-roll ads. These are like allow viewers to click through to a landing page. And then home screen placement ads. I'm starting to see these more, which are basically just like an image ad

that sits on the home screen of your smart TV. We're seeing this more and more and Roku is a big part of that. All right. So there's a couple of things here that I'm going to leave you with to think about. The Trade Desk, ticker TTD, is the leader in providing the largest demand side platform for ad buyers in the world. And Connected TV is one of their fastest growing segments. So they provide this demand side platform where they have this auction and exchange for ad buyers. And Connected TV is one of their biggest segments. And it's very fast growing. I'm talking about 80% year over year on revenue. I've owned the stock personally since mid 2020. The problem with regular, number two here on my list is the problem with regular TV ads is you can try to spend money in places you know the general

demographics of where people are watching. With connected TV, you get way more insights and analytics about who you're actually showing your ad dollars to. Now, we could eventually see a world where every ad on TV is actually personalized, just like it is for social media. I know this is a creepy thought, but this is the reality. I don't make the rules. We are currently browsing and searching on the internet using social media and the ads that we are seeing are based on what may be our potential purchases. This is targeted advertising. So that's basically a general rundown on CTV and the opportunity and where it might go. It could be pretty fascinating to think about if you go watch the Super Bowl in two weeks, that you and I see different ads. There are other players here, but the Trade Desk is a

fantastic founder-led software company. It's led by Jeff Green. This is a company I know well and cover for Stratosphere members. After the large drawdown in SaaS, it's basically down to its 2020 stock price. So it could be quite interesting here. Yeah, yeah. I mean, it's down, I think, about 20% in the past month or so. Yeah, at least. Yeah. Yeah. With everything else, obviously, that's high growth and not a mega cap tech stock. I think it's pretty standard here. But no, it's definitely an interesting sector. For me, the trade desk, I've known them for a while. And, you know, and the fact that they're into the programmatic ad space.

It's always been a company I was fascinated with. But I guess the valuation has always been pretty nosebleed. It's never been cheap. That's for sure. Yeah. It is my smallest position because it's one of those companies where you're like, oh God, the valuation could rip my face off like it currently has. But it's such a strong business and the fundamentals are strong.

It's actually free cash flowing and it's very profitable. So it's kind of an outlier in these fast growing SaaS company names. But yeah, it trades at the sales multiple you can expect, but it's come down quite a bit. Yeah, that's a good overview. Now we'll shift back to, again, a little bit more towards retirement. And I'll talk about the 4% withdrawal rule or the 4% rule, a rule that you'll see mentioned a lot for people that are part of the FIRE movement. So, financial independence, retire early. Brayden, I'm

sure you've heard of this rule before. Yeah, yeah. With the 4% rule or the FIRE movement thing? Both. The FIRE movement thing is a mix of cool stories and a lot of cringe. So I'm mixed feelings on it. Lots of cringe around there. But hey, you know what? There's a lot of good to it as well. Yeah. Yeah. And the 4% rule as well, right? I'm sure you've heard that before. That's right. Yeah. Yeah. So the rules, let's start with the basic. So if you've never heard of it, or you may have heard the term before. So the rule says that you can safely spend 4% of your investment portfolio the first year of retirement, and then adjust it this amount for inflation for the rest of your life. To use the rule,

you have to you to first calculate your expenses for the year. Once you have that, you divide that amount by 4%. So for example, say your expenses are 40,000 a year, you divide that amount by 4%. So for example, say your expenses are $40,000 a year, you divide that by 4%. It means that you need a starting portfolio of $1 million based on this rule. And I'll mention some of the limitations here a bit further down. The rule, like I said, has gained a lot of popularity over the years, and especially with the FIRE movement in recent years. over the years and especially with the fire movement in recent years. The two main goals when thinking of a general withdrawal strategy at retirement is to minimize two main risks. The first one is called the sequence risk. So, a sequence risk simply means that if you have a negative return early in your retirement, for example, this could have a major impact on the outcome.

So for example, say the first year of retirement, you think you're good to go with a million dollars like I just mentioned. Well, if the markets go way down and you experience a 20% drop that year and you withdraw 40K, $40,000, you're actually withdrawing 5% and not 4%. And just that year could essentially mess up the whole plan just right there. So that's one of the risks you try to mitigate with a withdrawal strategy at retirement. The other one is longevity risks. So no one knows how long they will live and how their expenses might vary, excluding inflation, of course, based on that. Now, if we get back to the 4% rule, it was proposed by William Began, Bergen, I'm not quite sure how to, it's my French, right?

So I'll say Benjen. Blame it on the French Canadians. Exactly. In 1994 and looked at a 50-50 split of bonds and stocks and look at historical data for the U.S. market. And I think this is important here. What Williams said is that he found that the 4% rule always provided sufficient funds throughout retirement when he back tested the data. There's a few things to take note here that are important. First, the time horizon that was used was for 30 years. So if someone retires early and say at age 50 or

55 and is in good health, there's about a 50-50 chance that they'll live past age 85. So right there, there's an issue with that 30 years because there's a pretty high probability that, especially nowadays, that people will go past a 30 years life expectancy from the date of retirement. And longevity of life expectancy is only on the up. It's only on the increase. So that's a good point to bring up. Yeah, exactly. And the other things to put in context here is when this was published and the data used because interest rates, we've been talking a lot about them recently because they're so low and they might be increasing. But even if they increase right now, there'll be nothing compared to a lot of the data that was used. And the reason why interest rates are important is because this whole premise is based on a 50-50 split of bonds and stocks. I found also some interesting information on earlyretirementnow.com and they had a series called the safe withdrawal rate series

in which they show that the longer the time horizon the more waiting you should have in equities. So that 50-50 split is not necessarily the best outcome when you're looking at longer time horizon. And that's not surprising, again, because of the low interest rates and how equities perform better than bonds over time. And personally, I might view the 4% rule as maybe just kind of a starting point for creating a withdrawal strategy because it is not perfect. And it is based on historical data. And the fact is that we don't know how the markets will perform equities and bonds going forward. And there's an argument, and we've talked about high valuations before, but there's an argument to say that the market is pretty highly valued for both bonds and equities,

actually. Bonds are highly valued because interest rates are so low. And the last two things I'll mention here is you may be, if you're considering retirement, Vanguard came in with a very interesting paper about withdrawals and what they suggested in that paper. And I can add the link to the show note as well for people who are interesting to read it because it's about 15 pages. But they were advocating in this paper as a more dynamic approach. So where you have a floor and ceiling in terms of withdrawal percentage, and they suggest a 2.5% floor and a 5% ceiling. a 2.5% floor, and a 5% ceiling. So what this means is if your portfolio goes down one year and you have to withdraw a bit bigger percentage

to meet your expenses, then you can go to that ceiling or close to it at 5%. And if the portfolio is doing extremely well, well, you can withdraw a lesser percentage, but never lower than 2.5%, depending on market fluctuation. So it actually gives you a lot more flexibility and not a rigid rule. And the last thing here too is if you retire, it doesn't mean that you have to stop working completely. So you could be retired

and you have a part-time gig somewhere, something that you love doing. So that might give you a bit more flexibility in terms of having a hard set rule as well. If you have that little extra income coming in, even if it's a part-time job and it doesn't pay all that much per hour, it might be that little extra safety net that you need. Do you have a dream retirement gig in terms of just like keeping the mind sharp and making a little bit of money do you have you thought about that you're still you're in you're in your you're in your mid 30s the podcast for life you're in your mid 30s so

i'm sure that's not something you think about regularly but just imagine 75 year old simone you know doing the podcast just rambling away you'll have done it for like 60 years and then still be like i'm not sure how to plug my mic in brayden and i'll be like in my late 60s and i'll be like oh come on man come on get it together i think we i think we could do it deep into our wow this is going to be a long a long road we're setting out on here buddy but it could be for me like I've talked about mountain biking before. So it could be like something like just working in a local bike shop part time. Just a few hours just because I enjoyed talking about it, enjoyed doing it.

Something like that. I mean, it would be different for everyone. But have you thought about something at retirement? Like it's probably going to be golf related. Who am I kidding give some golf lessons but i don't want to just like work at the golf course like i don't i don't know i don't know give some golf lessons like oh wait i'll show you how to do it let me stretch for 30 minutes and then i'll show you i'll draw there's guys here in toronto that like take

care of the public skating rinks that people play hockey and shinny on, I'll drive the Zamboni around. When I was a young kid, I told my parents that that's what I was going to be when I was going to grow up. I would go to my brother's hockey games before I was playing hockey, and I'd tell them that I was going to be a Zamboni driver. They're like, oh, that's great, Brayden. That's a wonderful career. As do-it-yourself investors, we want to keep our fees low. That's why Simone and I have been using Questrade as our online broker for so many years now. Questrade is Canada's number one rated online broker by MoneySense. And with them, you can buy all North American ETFs, not just a few select ones, all commission-free so that you can choose

the ETFs that you want. And they charge no annual RRSP or TFSA account fees. They have an award winning customer service team with real people that are ready to help if you have questions along the way. As a customer myself, I've been impressed with Questrade's customer service. Whenever I call or email, every support rep is very knowledgeable and they get exactly what I need done quickly. Switch for free today and keep more of your money. Visit questrade.com for details. That is questrade.com. So not so long ago, self-directed investors caught wind of the power of low-cost index investing. Once just a secret for the personal finance gurus is now common knowledge for Canadians, and we are better for it. When BMO ETFs reached out to work with the podcast,

I honestly was not prepared for what I was about to see because the lineup of ETFs has everything I was looking for. Low fees, an incredibly robust suite, and truly something for every investor. And here we are with this iconic Canadian brand in the asset management world, while folks online are regularly discussing and buying ETF tickers from asset managers in the US. Let's just look at ZEQT, for example, the BMO All Equity ETF. One single ETF, you get globally diversified equities. So easy way for Canadians to get global stock exposure with one ticker. Keeps it simple yet incredibly low cost and effective. Very impressed with what BMO has built in their ETF business. And if you are an

index investor and haven't checked out their listings, I highly recommend it. I bet you'll be as pleasantly surprised as I was that BMO, the Canadian bank is delivering these amazing ETF products. Please check out the link in the description of today's episode for full disclaimers and more information. All right, let's talk about large caps that are down more than 25% on a trailing 365. So on a trailing one-year basis, I went on to Stratosphere, stratosphereinvesting.com, quick plug. What I did was I said, large caps that are down more than 25%. So I dragged the slider on performance on the trailing 365 days and did more than 25% drawdown. And this is the list that I came up with US listings. So these are companies that are listed in the US and not like OTC. So this is with largest market cap down to smallest market cap in this list, even though they're all large companies. Alibaba. So there's 16 on the list

here. Number one, Alibaba. Number two, PayPal. Number three, C Limited, Pinduoduo, Uber, C Limited, Pinduoduo, Uber, MercadoLibre, Square, Snapchat, Zoom, Neo, DoorDash, Spotify, Twilio, Unity, Twitter, and Palantir. I own three stocks on this list. You know what? Today, you can probably – I would venture to say, oh, never mind. You did say PayPal. Just with the drop-off today, yeah, I was like, oh, they have to be in that list for sure. I ran this screener last night. So yeah, PayPal is on the list.

So I just wanted to pull that up because this is so funny. And I have a list for Canadian names here as well. And let's talk about some themes here on the US list. But the reason I thought this was so interesting to pull up is the market is so recency biased. When these companies were all performing exceptionally well last year, all of them, if I look on this list, which one wasn't doing well, especially in 2020? I don't know if I can pick one out. And so they're in huge drawdowns because they got bid up too much. And a lot of it's like factor rotations.

But there's some really good businesses here. There's some really, really high quality businesses here. Some more than others, for sure. There's some really, really high quality businesses here. Some more than others, for sure. But it's interesting because this is what the name of the game is. If you own some of these, I own some of these. I know you own, I'm looking at at least two you own here.

I know I own Spotify and Unity. Yeah, yeah, just two. Okay, so I think we're both at two. Yeah, just Square and PayPal. I guess I own Alibaba as well indirectly through that ETF that I have. The tech ETF? Yeah. So I look at this list and I think from business fundamentals perspective, many of them are doing exceptionally well. Like exceptionally well.

MercadoLibre is growing super fast. PayPal, we'll talk about their earnings in a second here. Spotify has lots of controversy, but last time I checked, monthly ads are way up. Zoom has become a household name. Snapchat has completely transformed their business and they're a legit player now. Twilio is a beast. Like there's some good ideas here. Twitter still sucks. But if you look at this list, this is the name of the game if you own stocks, is that there will be large drawdowns. If you focus on the business fundamentals and you zoom out, you'll find a

completely different story. A few themes here I thought of, a lot of them are trading on factors. Emerging markets large tech has been getting crushed. If you look at a lot of these names, how many of them are Chinese tech? Well, Alibaba, C Limited, it's not China, but it's the rest. It's like Southeast Asia tech. Pinduoduo is Chinese tech pin duo duo is chinese tech neo is chinese electric vehicles so there's a mercado libre's latin america there's a lot of emerging markets that have gotten just crushed um and that there's large large drawdowns in big covid winners

is what i'll say so there's a couple of themes there. Anything from you? Yeah, well, I was gonna say, so some people might be wondering why Tencent is in there. So Tencent's over the counter. So when Braden said OTC, that's what it means. It's not a major US exchange. But Tencent would be in there if it was listed on the NASDAQ, for example, because it's down 30 something percent over the past year. So yeah, for me, obviously, what you all said, the emerging markets, but definitely the China aspect comes up, pops out to me. And that's why I wanted to mention Tencent for that reason, because, you know, there's still, I don't think those companies in China are actually highly valued and were that highly valued before the drawdown. I think it's all been regulatory pressures.

Oh, completely, I think. Yeah, definitely. Yeah, Tencent would definitely be on this list, but I screened out OTC stuff, but it would be number one on the list because it's larger than Alibaba on market cap. So something to think about there. All right, let's look at Canadian listings because I ran the screen on Canadian as well. You can go to the top left and pick the country. We have US and Canadian listings right now. Okay, so let's go through here. I have

10 names here. The market caps on these are way smaller, of course. Well, the range of them is way smaller because, well, a mid cap in the US market is like $40 billion like Twitter here. But for the Canadian market, you're looking at like $2 to $10 billion. So that's just kind of an interesting thing here. Number one, Agnico Eagle, which is a gold producer. Number two, Brookfield Renewable. I know you've been feeling that drawdown because you you own it in size not really it's my it's i mean i yes in my portfolio value but uh i have drips on so i've just been buying more shares with the dividend reinvestment yeah exactly that's great for you yeah they pay that they pay that nice yield and you just get more shares uh lightpeed, that goes without saying, that's faced a huge

drawdown. BlackBerry continues to suck majorly, as you and I have been pretty vocal about that. Pan American Silver, number six, B2 Gold, or seven, Canopy Growth Corp, eight, B Ballard Power, nine Interjects Renewable, and 10 Boralex. The two main themes here beside Lightspeed and BlackBerry, which are trading down on two completely different reasons, not some sort of tech factor. The two main themes here are gold and renewables. Renewables got bid up too much, I think. And gold, I mean, how many times have you heard gold is a good inflation hedge? It's been said so many times that it's become fact. And the reality is that it's not. Yeah.

And for gold, well, I mean, I would say metal producers in general, at least a traditional miner, it's always, it's so intensive that they're very dependent on the price of gold for the most part. And if you want an interesting play on precious metal, we did an episode a while back about metal streamers. I think personally, that's the play I would look at. Go look at that episode. We can put it in the show notes as well just for an interesting play because a lot of people are interested in precious metals as an investment. And personally, those are the kind of companies I would consider. I don't own them. And just a quick question for you. You said these were mid caps right well no i just screened by like i just sorted them by large caps so agnico eagle would be the number one and then brookfield renewable and then lightspeed okay okay i wonder why uh shopify is not in there so on a one year basis when i ran this screen yesterday it was down 15 on a trailing now if i ran the screen today since shopify is having it would be on there

having a bad day it's down like six percent it would make this screen but that's why so it's funny how you can just take little snippets of time yeah which is a good reminder for people how volatile volatile things are right now like day difference, it would have popped up on this screen versus not popping up. Yeah. Yeah. And it's like, it's such a telling tale

of what we've been saying the whole time, which is like, this doesn't matter. Like this doesn't matter. However, it does give you some ideas. And that's why I like running screeners. Screeners tell you nothing except for

idea generation, in my opinion. I never look at a screener and be like, make investment decisions based on it. However, as much as people hate on screeners, I love them for finding ideas, especially if you just screen for certain factors. Like, okay, show me profitable software companies growing revenue more than 30% a year. Let's see what a basket of stocks looks like that. And so, I think that they're very useful for that perspective. But again, yeah, here's a snapshot in time where Shopify is in this list and the next day it's not. know like that's just the nature of the game yeah no i think it was a fun little list to pull i mean i know we like like you mentioned i own brookfield and i know a lot of our listeners will own brookfield renewable or bam so just keep in mind to like

for me i've owned it for so long that even this drawdown i'm still like it's i'm still i think it's a double bagger if if not more for me still. So keep that in mind and having that long-term mindset when you invest in these type of companies. And if you bought Brookfield last year and you're down, I mean, it pays a nice dividend. It has great management. As long as you're in it for the long term, there's no need to panic. And keep in mind, that's just BEP. It's just the renewables that's been lagging.

Brookfield, the BAM, the mothership, is up 40% on that same timeframe. So there is a disparity. Yeah, and Brookfield Infrastructure Partners is doing quite well too. That's why I just like to own BAM, man. You get that diversification, but you also get the asset management business. But we talked about that enough. All right. Anything else interesting out there, Simal?

These earnings are coming out left, right, and center. Yeah, mixed bag of results. Google, holy crap. Google, YouTube is a bigger business than Netflix. Just the ads. Google, YouTube's a bigger business than Netflix. Just the ads. Yeah, yeah. It's pretty amazing that YouTube within Google is a bigger business than Netflix. It's not surprising.

I mean, obviously today with the earnings from PayPal, that was pretty, that was something with PayPal being down 25%. And we'll be talking about it in our next earnings call. I know it'll be a bit delay just when we record and when it's released, but we'll provide some more context. I know I had a few people asking about PayPal because they know I own it. So I think it'll be a fun earnings calls for sure. And we'll make sure to have a few clips in there from the earnings call. Yeah, we'll have to. PayPal looks looks looks cheap to be honest trades at the same ev to ev to ebita as pepsi right now pepsico you know the one that grows four percent a year that

one yeah i think it definitely it's a bit of an overreaction i i listened to the call um so i don't want to spoil their next earnings episode too much. But it's definitely one where it's, you know, you took a haircut if you own it. But if you don't, it could be an interesting play. That's right. All right. Thanks so much for listening, folks. If you want to hear that on the earnings, it's going to come out in a few days. Go ahead and check out Stratosphere. You can go to stratosphereinvesting.com. You can run that screen around. I was just talking about you can find all kinds of stuff. We got some really exciting stuff on the product roadmap as well. So go ahead and check that out, stratosphereinvesting.com.

You can get 15% off the membership by using code TCI for a Stratosphere membership. Thanks so much for listening. Take care. Bye-bye. The Canadian Investor Podcast should not be taken as investment or financial advice. Brayden and Simone may own securities or assets mentioned on this podcast. Always make sure to do your own research and due diligence before making investment or financial decisions.