The Canadian Investor - Buffett’s New Buy & FTX Collapse

Episode Date: November 17, 2022

The markets are roaring on a better than expected US CPI print and the crypto world is shaken by the fall of FTX. We make sense of these two major events and discuss a beloved Canadian stock that is facing some major headwinds and now has a dividend paying more than 9%. Tickers of stocks discussed: HD, AQN.TO, WEED.TO, BRK-B, TSM, BAM Shakepay Bitcoin Survey Check out our portfolio by going to Jointci.com Our Website Canadian Investor Podcast Network Twitter: @cdn_investing Simon’s twitter: @Fiat_Iceberg Braden’s twitter: @BradoCapital Want to learn more about Real Estate Investing? Check out the Canadian Real Estate Investor Podcast! Apple Podcast - The Canadian Real Estate Investor  Spotify - The Canadian Real Estate Investor  Sign up to Stratosphere for free 🚀 our platform for self-directed stock investing research. Register for EQ Bank, the seamless digital banking experience with better rates and no nonsense.See omnystudio.com/listener for privacy information.

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

coming through the pipeline or simply want to lower the risk of your overall investment portfolio, EQ Bank's GICs are a great option. The best thing about EQ Bank is that it is so easy to use. You can open an account and buy a GIC online in minutes. Take advantage of some of the best rates on the market today at eqbank.ca forward slash GIC. Again, eqbank.ca forward slash GIC. This is the Canadian Investor, where you take control of your own portfolio and gain the confidence you need to succeed in the markets. Hosted by Brayden Dennis and Simon Belanger. The Canadian Investor Podcast. Today is November 15th. How are we doing? Welcome into the show. My name is Brayden Dennis, as always joined by the wonderful Simonanger. And the now richer than a couple of weeks ago, Simon Bélanger, because the index is up about 10% from the lows. So, you know, we're back, baby.

Of course, I'm saying this tongue in cheek. I'm just kidding. No victory laps allowed yet. But how are you feeling? I'm feeling good. But by the time people hear this, you know, the markets might be down. It's been so volatile one way or the other. That's true. Let's just say it's recorded a couple of days in advance, depending on what it's doing the day that you're listening to it. Yeah. And you may be a Bitcoin guy, but thank God you're not a shitcoin guy because you'd truly be wiped out at this point. We're going to talk about the scandal, the scam of all scams from Mr. Sam Bankrenfried

and FTX. We're going to talk about that juicy story later in today's show. And that way for people who just don't care much about that, then, you know, it's at the end. So we don't have to talk about it. But dude, oh man, you know I love this documentary that is going to come out in the future. I already, you know, this is right up my alley. I'm always so fascinated by these next level scams, how people can have the hubris and psychopathic tendencies

to really pull this level of fraud off. And I don't want to hint. I don't want to give away too much. So now we'll move on to some more positive news. So October CPI in the US came in lighter than expected. And that's really what's been sending the markets way, way up. So, you know, I'm going to ask you, so what planet do we live on where 7.7% CPI print sends the NASDAQ up 7%? It's pretty crazy, huh? Dude, we live in fantasy land. Yeah, exactly. Here's the thing, right? Like, this is the market short term in general, not only with macro prints like this, but also on a micro level with each company, right? It doesn't matter what the fundamentals are on the day of the earnings release. It just matters in relation to if it came higher or lower

than expectations. Because the idea is that that is, quote unquote, priced in what the expectations are. I don't necessarily agree with that, with the efficiency of the market on the short term. So, yeah. What planet do we live on? I don't know. Not this one, to answer your question. Yeah. I can just see Powell, too, coming out in a week or two and just like hammering interest rate hikes again.

And then the markets will just revert. I could see that happening. Maybe not. But just funny to see how the markets are reacting. And this is just why you DCA, right? This is why you dollar cost average. I just mentioned, we're not taking victory laps, but the index is up 10% from the lows. And no one rings a bell at the bottom. No one rings a bell and lets you know, hey, today's the day. And that's not to say the bottom is in the past. Shit can go really wrong. Don't get me wrong. But no one rings the bell at the bottom. And so you just keep dollar cost averaging. In the short term, I mean, this is just a blip in the radar for a long investment time horizon. So just keep sticking to the plan and buy depressed assets in bear markets. That's the dream, man. Yeah, yeah, exactly. So like we referenced,

the print, even though it was really high, came in lower than expected. So consensus was around 8%. So it came in at 7.7%. It was still up 0.4% on a sequential basis compared to September. So that's still pretty high just to keep in mind. So in's still, you know, pretty high just to keep in mind. So in my view, there's still some big concerns here when you look at the various categories. I'll give a few examples because I always find it interesting just to look at what's going really up fast, what's not, what could be declining. Now food was up 10.9% as a whole and 0.6% versus September. So that's still very high and putting a lot of pressure on less fortunate segment of the population because a higher proportion of their income is actually going towards food. Energy, another one that affects pretty much everyone, was up 17.6% year over year and

1.8% versus September. Gas was up 17.5% although last year you know gas was definitely not as high so keep that in mind. May sound like a lot but it was still up 4% versus September. And the one there's a couple of items that were down one of the main ones that made headlines but you can view the full report on the U.S. government's website used vehicles continues its decline for the fourth straight month in a row so that's good news for people looking to buy a car now there's still a long way to go because Powell did say the week prior when they raised rates that the goal is still to go to 2%. So we're still a long ways there.

Well, in my view, I think the biggest tell here will be if we start seeing a trend between now and the end of Q1 2023. The reason why I say end of Q1 2023 is because it will give us a good idea of, you know, if inflation is really starting to go down because inflation didn't really start to pick up rapidly until the fall of 2021. So we no longer have the base effects right now. But second, the Fed did its first 75 basis point increase in June of 2022. So it will have been more than six months since the first large interest rate increase. And we all know there's a lag effect between the interest rate hikes and the impact on the economy. So it'll be very interesting. I think Q1 2023 will

give us a really good idea what direction is going. This is a good overview and gives you an idea of just where we've come from that a 7.7% print doesn't send absolute alarm bells to come back to your question, which planet are we on? No, I think this is a good overview, persistent sequential growth on the food thing. I mean, when does that turn, right? Like that's, I don't know, like who, I have no idea. No one really does. No, no, I mean, probably, you know, I'm going to go on a wild guess and probably a resolution in the Russian-Ukrainian war that would probably go a long way to pull food prices down a bit.

But again, I haven't been following that very closely. But in my view, there doesn't seem to be an end in sight, unfortunately. So, we'll see. I really don't know when those food prices will start kind of leveling off a little bit, hopefully sooner rather than later because it does impact everyone. But even more so, like I said, those that are less fortunate and the lower income brackets. Man, I am a big no-frills guy. And this is not like inflation tougher times, Braden, no-frills. I'm a big fan of Loblaws is just what they do and especially their in-house brand, the President's Choice brand, but without the Loblaws type prices. So I'm a no frills guy.

Hey, no frills. Come sponsor the pod. Look at this. This is organic reach right here. You're living in style. I go for the no name brands, even cheaper. Dude, no name brand and no frills actually. They have the best commercials on TV. I find them to be quite clever. on TV. I find them to be quite clever. 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 Home Depot. Speaking of going into retail locations, because Home Depot is the best smelling retail location of all time. Home Depot reported earnings this morning, hot off the press. And Simone, this is hilarious because every time I tune into the call or just like read their IR, Ted Decker is probably the best CEO name for a home renovation retail model. Ted Decker, it is absolutely perfect. Sales increased 5.6% year over year from the third quarter of last year. Ownings per share up 8.2%. So still hitting that high single digits number that you can kind of expect from this gigantic business. And same store sales growth of about 4.5%. So pretty decent,

able to flex their pricing power. Nothing crazy, but we're talking about tough comps. You know, we've been talking about a lot of tough comps. Home Depot, tough comps after the insane demand for home renovations and outdoor projects last year. You know, everyone was doing them. But two questions for you. Yeah. Have you been in Home Depot recently? And is Ted Decker not the best CEO name for Home Depot ever?

I mean, yeah, it's a really good name. And I've been to Home Depot a couple of times. I was there yesterday and then a couple of weeks ago as I was getting the renovation material for my home studio. So, yeah, I've been there recently. So, I bought it all from Home Depot. So yeah, no, it's been still pretty busy. I mean, I haven't seen really, and I went during weekdays and it seems to be pretty busy. A lot of the pro construction, right? They do a big portion of

Home Depot's revenue is actually the pro side. That's been a big growth driver for them. So, I mean, I'm not surprised by these numbers because it seems like the ITES definitely aligns with that. Yeah. So, you're building a little home studio for the podcast in the basement, right? How's that going? Pretty good. I've seen little sneak videos of the insulation's finished now, right? Yeah.

Insulation's finished. So, I think we should be finished in a couple weeks. Nice. And a sponsor, a future sponsor of the Canadian Real Estate Investor Podcast helped out. With some soundproofing, right? Yeah. Yeah, exactly. Sonopan. So, I'll probably put some pictures on Twitter when it's all done. Yeah. Yeah. Those guys at Sonopan, they're nice guys. And I mean, you're going to have a bunch of the stuff up in your home studio. And look, I'm like HDAF on the camera right now.

So, you know, we're leveling up here to give you guys a bit of a look into our plans. We do plan on incorporating video for the podcast a little bit in the future, kind of leveling up our setup as well. Just over time, you know, we're just trying to continually get better, especially on the pod here. All right. So just to round this out with Home Depot, here's my... I included a screenshot from the new platform on Stratosphere. You can see all the KPIs really nicely with sparklines over time, like on a long-term trend as well. And the one that sticks out for me is,

yeah, sure. They have that comp same-store sales growth. But look at the comp same-store sales growth in the third quarter of 2020 and the first quarter of 2021. It was anywhere from 23% to 31%. So, you're seeing that really pulled forward. So, the fact that they're still hitting mid single digits on same store sales growth off the back of that is pretty impressive. And you're seeing them pass on the cost of inflation with that average ticket size trend up from about 68, 29 to over $90 for each basket happening in the store. So these are the types of metrics that we have built out on stratosphere.io

and want it to be really obvious because this is the stuff we talk about on the podcast so much. So, it's really nice to see this in one place. But yeah, that average ticket size, that not only is very impressive from the business, but you can see them flexing on their pricing power over time. Yeah. Yeah, no, exactly. And a little sneak preview, I'll be doing a dividend stock portfolio on the next episode. And I'll also post some more detailed info on Joint TCI. So, that'll be coming out Monday. And one of the names is Home Depot, because I think it's a great dividend play. It allows you to get exposure to the construction market without the same kind of cyclicality that you'll see in some publicly listed U.S. home builders, for example. Right.

Like they're not going to be as macro affected and like government spending in infra dependent as well. Because, you know. Yeah, exactly. And in the States, right, you have-year mortgages so you have a lot of people that are kind of stuck in their homes because they have these three percent 30-year mortgage and they can't port those mortgages like they do in canada so people end up not moving because if they do they have to lock up for seven percent so what do you do when you're not moving you're renovating your home and where do you get your materials from i'm just gonna let you guess that. Lowe's. Exactly. All right, let's move on.

Yeah, so next name. I always like to keep an eye on this one just because I know there's a lot of people that invest in the marijuana market when it was a hot thing a couple of years ago. And Canopy is still one of the largest players in this space. Obviously, it's backed by Constellation Brands, which is pretty significant. So I always think it's a pretty good barometer to see how that industry is going. So revenues were down 10% over a year, but they made a point to highlight on their earnings release that it was up 7% on a sequential basis. So of course, they want to highlight the good.

There was more bad than good, but there were a few kind of interesting nuggets here. They had a net loss of 232 million their net cash position now sits at 1.14 billion down 16 that's really important to look at net cash position especially when you have companies that are still losing a bunch of money because at some point when you run out of cash you have to do something so typically there's kind of two things right you issue more shares or you have to do something so typically there's kind of two things right you issue more shares or you get debt so something to keep an eye on here they lost 135 million on a free cash flow basis which is 34 percent more than last year now there is some good news like i said the good news is they are continuing to cut costs they divested their

canadian retail operation which should allow them to save all of it yeah all of it like tokyo smoke and stuff right yeah yeah exactly it sounds like it i mean my when i read it it looked like it was the whole thing they said i mean if they're saving 70 to 100 million a year in sgna i would think it's all of it personally so it will i think they if i remember correctly in the tokyo smoke deal they sold it like at a huge loss like for pennies on the dollar so what they bought but again i think it just goes to show that you know the model at least for ontario i don't know how well it was done in other provinces i know quebec has their own kind of thing going on there with the provincial system.

But I know in Ontario, it was a bit of a crapshoot, right? They were issuing licenses, and it didn't really matter where they were. At first, it was very tough to get a license, and then they became widely available. And I know you saw that. I know I saw that in Ottawa. You literally had two cannabis stores right next to each other yeah and they're buying the same stuff they offer the same stuff because they have to buy it directly from the ontario cannabis store so it's not like they have you know a special product completely different so i think they realize that probably a good move to just cut your losses here. And then the other good spot, the one that's unrelated to cannabis, and it's kind of weird that it's in this business, but it's BioSteel.

I always forget they have a majority stake in BioSteel. Yeah. Yeah. And I think, I don't know. I think they flat out bought it all. I'm not sure, but. I think it's just a majority stake here. It's one of their segments. Yeah. 72% stake.

Oh, 72, okay. Oh, with an agreed path to 100% ownership. Okay, there you go. So this one- I'm sure it's just vesting over time. Maybe it's complete now, I'm not sure. Yeah, and this one, the revenues increased essentially 300% to 30 million year over year.

So it's growing quite quickly. Obviously, they have tons of deals with I think hockey players and other types of sports. So, it's funny that the biggest growth segment is not related to marijuana or cannabis. Funny how that works, isn't it? Yeah. Though you know what? BioSteel is good. I like it. And they're always handing it out everywhere around Toronto to try to get

some more awareness. So whatever they're doing marketing wise, clearly it's working. Now, speaking of Toronto and what is not working, and you were just talking about it, is the absolute concentration of cannabis retail locations. And dude dude they would open them thinking hey we'll have some like apple like really modern feel to the retail concept and that's going to be such a differentiator until they all did the exact same thing at the exact same time so something had to give clearly and it was not a model that was going to work with that much competition all at once so yeah they had to take the l on this one yeah and the one thing i'll say is i kind of feel clearly, and it was not a model that was going to work with that much competition all at once. So, they had to take the L on this one.

Yeah. And the one thing I'll say is I kind of feel bad for some of the companies or even, I think some were independent too, right? They opened stores. I read somewhere that apparently they couldn't even have access to see if there were other stores planning to open in the same area. So, they were, yeah, they didn't even have access to that data. So I think what ended up happening- Next thing you know, you're like both your neighbors are like weed retailers. Yeah, that's brutal. Pretty much. Yeah.

So anyways, just my two cents on that. So it's still kind of work in progress, I think, for this space. But you know, one day they might be profitable. One day. All right. Let's talk about Berkshire Hathaway's because 13Fs came out, what, yesterday? Yeah. And Berkshire Hathaway bought about $4 billion worth of Taiwan Semiconductor,

aka TSMC, aka ticker TSM. So when I say TSMC or TSM, it's the same thing. It's Taiwan Semiconductor. When I say TSMC or TSM, it's the same thing. It's Taiwan Semiconductor. It is now a 1.4% position for Berkshire Stock Holdings, which doesn't sound like that material, but I think now it's like a top 10 name. I mean, you look at Apple, right? It's like 45% of their stock portfolio, but they clearly see value in these beaten up semiconductor names like you have and clearly value in TSM. So I like it. I mean, hey, this is one of the most critically important businesses on the planet today.

And there are so many reasons to avoid it, right? It's like unsexy, hard to convince your portfolio manager to buy it when the tensions geopolitically between China and Taiwan seem just so uncertain. And rule one is don't lose money. And people are like, well, if something goes wrong down there, I lose all my money on TSM. But I mean, I get that perspective. It's sure it's probably overblown, but look, the buff dog, or more likely Ted and Todd, given the position size, or more likely Ted and Todd, given the position size, think the price is right on TSMC. I could see semis and TSM being something they keep adding to personally from here. That's been a recurring theme. They keep adding to these oil and gas names quarter after quarter after quarter.

And I wanted to use this as two kind of lessons to think about and something for me to think about too as well is one, you got to go against the grain. That's how guys like Buffett and the people at Berkshire and some of these amazing results types investors over like 40 plus year periods have done is really go against the grain. They're value investors at heart, but they're buying good companies or great companies, but at good prices or potentially great prices. So that's one thing to think about. But number two is a reminder to not follow anyone into trades, whether it's Buffett, whether it's me, whether it's you, finance, TikTok bros on the

internet. This is an interesting signal, sure, and maybe a good way to get idea generation to look at something like TSM because, hey, look, the GOAT himself and Berkshire Hathaway buys the stock, but you can't borrow someone else's conviction. You got to build that conviction yourself. And so this buy happened in the third quarter because it's on their 13F filing that just came out. But let's just say hypothetically, this trade happened six months ago or a year ago. You follow the buff dog into TSMC because Buffett bought it, the stock falls, you know, 33% like it has. And you're like, why? You haven't built any conviction up into the business.

You don't know what their competitive position is. You know, the narrative is going to be driven by the stock price. So what do you do? Incoming capitulation, right? Like that's what's going to happen. And so that's just two interesting things to think about here because a stock can go from really unloved to really loved as soon as Berkshire owns it, right? And so that kind of thinking, I think so a quick way to lose money. And by the way, capitulation is just a term I just used. It's a fancy term and you're going to hear it a lot

in bear markets and you've probably heard it a lot over the last six months, which is just referring to a situation where investors sell their stock eventually after getting grinded down lower and lower. So they're tested lower and lower, extended period of time of stock price declines until they finally just lose complete faith in the story. That's what capitulation means. Yeah, yeah. And I mean, I was not surprised on one hand to see the move, but I was on the other. Obviously, I know Taiwan Semiconductor pretty well, just because I've kind of gone down the Semiconductor rabbit hole. I'm still learning about the whole thing. Almost finished a Chip Wars book that I talked about a couple of weeks ago. Granted, I've been sidetracked a little bit because I was listening to almost anything I could on the whole FTX debacle.

It's too juicy not to, man. Oh, man. It's addictive. But I mean, it's a wonderful business. Like, there is no way around it. I mean, it's pretty amazing what type of mode they've built themselves because you need so much capital investment. The capex required to be able to compete. I don't think people really realize.

Like we've talked about Brookfield and Intel, you know, the foundry they're looking to build in the US. That's just the tip of the iceberg here. That's actually not that much money when you compare it to the types of capital expenditures that companies like TSMC is doing. And that barrier that it puts against competitors is immense. And I don't think a lot of people realize that that's why they're able to pay a dividend, but still reinvest, you know, in the company, because right now, they produce 90% of all the most advanced chips in the world, they don't produce 90% of, you know, the semiconductors in the world, but the most advanced one, they essentially have a monopoly on that. But again, the biggest risk here is the whole China, you know, question whether at some point they do invade Taiwan. So obviously, that's a dark cloud hanging over that. If you do invest in that, you almost have to have part of your outcome. You decide what percentage you want to put on that it could potentially go to zero because of an invasion.

Yeah, I don't think, you know, I personally think even if there was an invasion, China would probably try to protect those assets. But again, it's a huge risk. And even if they did, then who's to say how they would use the assets from TSMC? So that's the elephant in the room for them. Am I insane on my thinking? Am I off on something here? Because the performance just doesn't seem to represent my thinking here. But with hedging it with something like Intel makes sense, or those just going to perform in a basket like crap if anything happens anyways. That's what it seems to look like correlation wise and performance yeah i mean

you'd almost have the issue is intel's not a pure foundry play that's right that's the issue it's an integrated play and the semiconductor space has really seen kind of the direction they're going is you have like kind of the chip designers and then you have the producers obviously there's companies like asml involved and other types of companies as well but it's like one or the other that's why you see an amd that's why amd divested i think 20 years ago their foundry capacities they really focus on chip design that's what nvidia does and intel has kind of kept the older models so So they still design their chips, but they also produce them. So I don't know going forward whether they'll kind of go towards one way or another or if they're kind of stick to that model.

But that model has not worked all that well, at least in the last decade. It blows my mind. I almost feel like the market is insane for this because the price extreme geopolitical risk on something like tsmc meanwhile they make all of apple's chips yeah and you know the market doesn't seem to care about that or price any of that risk in like if something happens you know they ain't making as many iphones or any you know and over a potentially extended period of time as well as we're at a complete standstill in the way we live our lives from a consumer which comes to the point though like that's a great point especially now when you think like berkshire has a lot of exposure to that to both

yeah yeah yeah so i don't know maybe buffett knows something i guess it's it's almost like one of those things where like if if that happens, we have bigger like things to worry about. Like it would be such a cascading contagion effect to the entire economy if something happens with TSM. Yeah, that's a fair point. Yeah. You know what I mean?

It's like, oh no, my stock portfolio went to zero because the sun imploded. And it's like, yeah, well, the sun imploded. Who cares about your stock portfolio? I mean, it's not as extreme as that, but you could kind of make the argument. Last thing I'll say, like TSMC, I mean, it has to be one of the most important companies in the world. Like it has to be the top five. I agree wholeheartedly. I think it's way up there personally. I agree wholeheartedly that it is one of the most important businesses

on the planet today, full stop. It's not valued like it. Same with ASML because they're both choke points in the ecosystem. Anyways, we'll go on to the next name because we'll have a really long episode. We're going to be talking about Sam Bankman Freed until midnight. 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. This one here is, I think, a name that a lot of our listeners actually own. episode for full disclaimers and more information. Avenues were up 26% to $666 million. Net loss of $195 million, which was six times worse than last year. Management said that their quarter was challenged.

They said there's pressure because of renewable energy project delays and higher interest rates. On that note, interest expense was up 45% versus last year. That's really massive. 45% versus last year. That's really massive. Obviously, it's not surprising if you look at their balance sheet because they've added $1.5 billion in debt since last year, and then you factor in some higher interest rates. Now, the other reason why the market did not like this earnings release is they reduced their 2022 adjusted earnings per share guidance by 9% if we take the mid-range. It also said that it was evaluating its longer term targets and financial expectations. They did not provide an update on that, but they said they would at their investor date in early 2023. Another thing

hanging over the company is the Kentucky Power Acquisition. It sounds like it's going forward, but at a slightly lower price than originally agreed on, which is good for Algonquin, but they would still be assuming $1.2 billion worth of additional debt, assuming the transaction goes through. So that would put some more pressure on the debt here, especially looking at the interest expense that's already going up much higher. And that's straight up the interest expense that's already going up much higher. And that's straight up cash. So that's not good to see. The markets obviously did not like it. The stock is down close to 30% since the earnings released last week. I don't know this name overly well, but I looked at a few people who follow this name closely, looked at their financials, their earnings release as well. And I don't, it sounds like, you know, there could potentially be a dividend cut here.

You know what it reminds me of? It reminds me of AltaGas years ago. So AltaGas was kind of in the same, a similar situation where they did an acquisition where it wasn't really well planned. where they did an acquisition where it wasn't really well planned. They added too much debt. They had to cut the dividend. And I ended up buying the stock after the dividend got cut. And it was a great investment for me. But people who bought it before it was cut ended up being a terrible investment for them. So I'm not going to say for sure it's going to be cut, but there's a lot of pressure that's going to be put on that dividend just on the stuff I talked about here. Yeah, I have some quick comments on this because it is an industry I used to work in with renewable power and utilities. And so,

I'll just say my piece here and then we'll talk about Brookfield quickly and then get into the juicy story of FTX. Yeah. The reality here is like, I'm pretty glad I sniffed this one out last year. I mean, our comments on a podcast we did, it was two things. We did a deep dive on it when it was like, the one takeaway we had was like, yeah, you get growth and a dividend, that's all good. But I sold it somewhere around 19 bucks. I actually owned it for a hot second there just to collect some yield while I was unsure of what to do. They issued, I believe the number was 600 million in stock. And then I immediately sprinted for the exit. Do you remember this? Yeah, I remember that. You were even saying

that they seem to finance a lot with equity over debt compared to other utilities. But now, it sounds like they've switched around and just started issuing debt. Well, they should have been doing that with rates so cheap. Look, I mean, it was such an easy one to just say, yeah, it's a safe utility. And because that's a pretty safe thing to say is that it's a safe utility. But I was really on this one and confused about how they were funding this dividend. This and Enbridge. I mean, I could do all the accounting until the cows come home and I still will never understand the freaking dividend. And so, it never made sense to me. The financing was so weird. I remember I was like, how and why are they diluting so heavily via issuing stock instead of just tapping into the ESG craze with green bonds

or something. I used to work with this. I used to help our finance team show why we're awesome on issuing really, really cheap ESG friendly, in quotes, green bonds. We're talking about rates that are so low, no one else in the world can achieve this low of financing. This debt was so cheap and it was even cheaper before. It does feel a little oversold. I'll come around here and say it feels very oversold here for utility. I mean, not often you have a utility get cut in half like this. But I don't understand the decisions they've made, like from a CFO role perspective. I just included a screenshot from Stratosphere. Look at the share count.

This does not look like a utility. No, it does not. This looks like some cash burning software name. Yeah. That share count over the last 10 years does not look like utility. It's very head scratching. They basically were doing anything and everything to pay this dividend. I guess it's fine if you're diluting as long as your earnings are increasing as fast or faster, right? But now I think they're-

Hopefully faster. Yeah, but now they're starting to see that not being the case. And I'll just add one last thing. It's yielding over 9% right now. Holy crap. But that's, you know, that's also potentially a cut is really priced in here. Yeah. People are thinking potentially a price cut. I would just say like, you know, if someone's interested in this, do your homework and don't be surprised if a price cut happens. Personally, I would not touch this. A dividend cut. Yeah, sorry. A dividend cut. Personally, I would not touch this until management does that kind of longer term projection in early 2023. I'd rather be a bit late to the party than early here.

I agree. I think that that probably makes sense. I do think it's oversold. So I mean, we were just talking about go against the grain. I think it's a little oversold. That doesn't mean I like the stock like at all, but I do think that it's oversold. Or buy it and know that a dividend could be a possibility, right? If anything, you hope for it. I mean, yeah. Pretty much, yeah. It's like another Canadian name, WSP.

Dude, I think the stock would double if they freaking cut the dividend. I'm exaggerating. It won't. But they pay this dividend that hasn't grown at all since they started it and they're achieving really high returns on capital. It's like, dude, just cut this stupid dividend. No one owns the stock for 20 cents on a $200 share stock. It makes no sense. All right, let's quickly do BAM because it's the Canadian Investor Podcast. We're talking about BAM and BAM is doing BAM things. So I'll do this quick with three quick metrics year over year. I'm going to talk about funds from operation, total assets under management, and fee-bearing capital. Funds from operation

was up 4% to almost $1.5 billion for the quarter. That long-term trend is really nice from an FFO perspective, but no crazy gains here. Total assets under management and fee-bearing capital are what is really exciting about this business. Total assets under management up to $762 billion, up 15% year over year. It is not very far off that you and I will be celebrating $1 trillion in AUM for Brookfield as a whole. Fee-bearing capital up 17%. This is money that they're managing for alts that is collecting management fees on. Management fees are the best business, really. No one is able to do the things that they are at scale from both an owner, investor, and operator. They have that unique

little trifecta going for them. I'm excited for the spinoff. And so is bullish Bruce Flatt, as per usual, seeing some pretty really high expectations for how this business is going to compound over time. So, you know, the man has done nothing but excellence for over 20 years now. So, I'm not going to discredit anything he says at this point. No, no. I mean, yeah, Brookfield just doing Brookfield things. And, you know, another spoiler alert is there may be a Brookfield name or two in that dividend portfolio. Okay. So, hold on. Let's talk about that really quick. So, you are putting on a dividend portfolio because you and I put our portfolios every

month on joinTCI.com for the Patreon. It's $9 Canadian per month. And so, you get to see, we update it on the first of every month. And you are putting a dividend portfolio because we don't all play the same game. And a lot of people who are listening to this are looking for income portfolios like in retirement or very close to retirement. And so, you're basically doing the one that you kind of set up for your parents. Is that fair to say? Yeah, similar. Basically, what I would probably do for myself if I were to retire tomorrow. Okay. So, yeah, something where I would try to rely on

dividends as much for the income because you can always make a case, right, for a retirement portfolio that, you know, look at total returns and then you just kind of trim whether you use a 4% rule or kind of use a variable rule depending. There's different ways to go at it. But the issue with that I've always found is, you know, which stock do you trim if you end up trimming, right? You always get into that difficult situation. And I personally think for my, you know, I know it may not bring the best total returns, but for me, the best approach would be build mostly a dividend portfolio, and then you get the majority of your income from that. And of course, I have some additional safeguards, I would say, especially with yields being so high. So I don't

want to ruin it for the next episode and the joint TCI subscribers. But I'll talk on the podcast. I'll go over the portfolio. But there's just going to be a bit more details on the joint TCI. That's it. Yeah, I like that. I like that. I'm excited to see what you come up with. And so, that's going to be at jointtci.com and you're going to update it quarterly, you said, right? Quarterly? Yeah. Yeah. Quarterly is the plan. Yeah. Yeah. Because it was a pretty long exercise, longer than I expected. Yeah. Yeah. I'm not surprised. Well, I thank you for putting it together and the people who

really could use that will thank you for sure too. So go ahead and do that. Join TCI.com. Check it out. All right. Let's talk about the shit show of all shit shows. In case you have been living under a rock, there is – and you're going to go into all the players who are there. But the five-second summary is FTX. Was it the largest exchange or Coinbase? Second largest. We're going to go into all the players who are there, but the five-second summary is FTX.

Was it the largest exchange or Coinbase? Second largest. Second largest after Binance worldwide. Which are both ahead of Coinbase? I think Coinbase is the largest in the US. Don't quote me on that, but Binance worldwide, yeah, it's the largest. Okay, interesting. So, gigantic cryptocurrency exchange, FTX, has gone from being like throwing people lifelines, like you and I were talking about, like how just somehow, you know, everyone who's in trouble, he just invents money and like throws people lifelines to bankruptcy in a matter

of like 24 hours, it all unfolded on Twitter. Yeah, pretty much. And actually, now that you say it, I think you might be right. I think Coinbase might be the second largest because I watched an interview with Brian Armstrong, who's the CEO of Coinbase after the whole follow-up was happening. And when he was talking about the revenues and then the revenues that was being claimed by FTX, it sounds like Coinbase was larger. Interesting. Okay. Well, they're big dogs regardless. Yeah, exactly.

It's not a small player. Let's just say that. So obviously, this is going to take some time to go over all of this. I'll try to make it as clear and just go on the assumption that not everyone is aware of exactly what happened. So first of all, I'll go over who's involved here, the main players, because I'll be referring a lot to these during my explanation. First of all, the main person here, Sam Bankman-Fried, I'll refer to him as SBF.

He was the CEO of FTX. Dude, my buddy called him scam, bank run, fraud, SBF. I heard that. I was laughing so hard when he said that. So SBF was the CEO of FTX and also controlled 90% of Alameda Research. Alameda Research was a crypto-focused hedge fund run by SBF. Well, he wasn't the CEO, but it was, let's just say, as there's things that have been coming out that was like his girlfriend on and off, I would say.

But he still controlled a 90% interest in it. So let's just say he was mostly running it So Alameda research was the rise to fame of SBF because it did so well and he was able to open FTX in May of 2019 and that was really an accomplishment because there were already prominent players in the space so being able to get a an Exchange when there's already established players like Binance, like Coinbase, obviously ShakePay in Canada. There's some smaller players located in different countries.

And I'll talk a little bit about ShakePay at the end too. They're not involved with this, just to say. They said they have no ties to FTX. So if anyone was wondering, they've already issued that. And actually, I'll just say it now, ShakePay has been very, they've always encouraged people to get cold storage. And cold storage is basically you control your cryptocurrency, no one else, this kind of stuff that we're going to talk about cannot happen if you have it in cold storage. ShakePay is actually a big proponent of that. Yeah, thanks for calling that out. Because I

mean, obviously, they sponsor the show and a lot of people had been sponsoring. A lot of people in this space, like talking about finance stuff, had been sponsored by FTX in the past. And people now are dunking on them being like, these people shouldn't have been promoting this. And then they're like, dude, you had your money in there. You had no idea any of this was happening. It's so easy to speak in the past, but thank you for calling that out. ShakePay has not only issued a statement saying, it's all good, but hey, this market is changing drastically. And so cold storage has been something they talk about regardless. Yeah, I think that's a good call. Yeah, exactly. So obviously, FTX was one of the largest worldwide

exchanges when its downfall started happening last week. Now, another big player here is Changpeng Zhao, also known as CZ. He's the CEO of Binance, and Binance is the largest crypto exchange in the world. And Coindesk, which I'll talk about, is a crypto-focused news website. Now, although the story unfolded mostly last week, it actually started back in the spring. So I'm sure people can recall. We talked about it a little bit. The fall of Terra Luna and Celsius, which caused some contagion in the crypto space. One of the casualties was 3 Arrow Capital, which was a crypto hedge fund. Now, surprisingly at the time, Alameda Research,

the hedge fund run by Sam Bankman Freed, seemed to have escaped the contagion. So much so that we saw FTX and Sam Bankman Freed obviously come to the rescue, in air quotes, of other crypto forms. A prominent one was BlockFifi which received a 250 million credit facility from ftx back in june blockfi is also a crypto and exchange and lending platform now sbf at the time was held as a crypto savior i think he was compared to like jp morgan in some sort bailing out the industry players obviously i mean I assumed at the time that FTX was well-funded because like how the hell are they doing this if they don't have any money, right? I think everyone assumed that. I had assumed because I knew how lean they were doing

this. Like they had reached that level of success and volume with like 30 employees, like total. And so, I just thought that they were making like exorbitant amount of profit and were just extremely well-capitalized, especially because I think he bought like $600 million with the Robinhood stock. Yeah, something like that. Yeah, yeah. I think they own 5% of Robinhood. Right, right. So, I'm just like, oh my God, man, I don't know what I'm talking about. So, this guy just has bank. Like this guy's banked, man. Like, Sam Bankman, holy freed. You pull back the curtain. It sounds too good to be true. It probably is. Yeah, exactly. And now, in reality, at the time, Alameda was

probably having substantial liquidity issues in the background during the spring as well. We're still, you know. Details are still coming out. So I think one few weeks, a month, a couple of months down the line, I think we'll just kind of learn more and get confirmation of what was actually happening. But so far, this is what has come out. And it looks like SBF was secretly using FTX funds to bail out Alameda Research with whatever funds FTX had available, including customer deposits, which is a big no-no and would constitute fraud if you're using customer deposit in an exchange. This is not a bank where, you know, in Canada or the US, they follow a fractional reserve system, but there's some very strong regulation. They can only invest in certain things. This is not the case and an exchange should not be doing that. And I don't

know if you saw the report is apparently had a backdoor installed into FTX to not trigger any alarms from accounting and also auditors when funds were being transferred to Alameda Research. Nothing can surprise me at this point. And now, I don't know if this is a part of your notes here, but now it's allegedly been hacked and like all the money's gone. It's like, well, is the hacker Sam Bankman-Fried who ran off from their sketchy palace in the Bahamas? Yeah. And that's the case. So, there was, I think six, it's not in my notes, but I know what you're referencing. I think it was like 600 million worth of assets. And that's the thing with a blockchain, right? Everything's transparent. So you can actually, you can't see a centralized institution like FTX, what they actually have on the books, necessarily the cash that they might have and stuff like that. But as soon as you start using the blockchain, this stuff can be audited. And, you know, Twitter started pointing out like,

oh, there's actually a large amount of funds that are being transferred from FTX to these other wallets. So I think there's still, we're still not sure whether it's a hack or it's an inside job. But those wallets are still like is anonymized. You don't know who, where that is. You just know that it's some address. Yeah, for the most part, it depends if it went to another exchange and if that exchange has KYC. So

KYC is know your customer. And that's one of the issues here when the learning lessons that I'll talk about is one of the big issues is a lot of these exchanges are not located in the US or Canada. They're located in areas that are either not regulated or not very well regulated. So, they can decide to not put things like know your customers, for example, just because they don't have to do it. Right. Like there's just, it's the wild west, but like the wilder west and it's happening right now and it's unfolding in front of our eyes. A lot of things are going to change. And one thing I'll add here is like, it's unfolding in front of our eyes a lot of things are going to change and one thing i'll add here is like it's just so interesting watching this all unfold and it's basically just

the community like figuring this all out you know it's not big institutions it's not the government figuring it's literally just individuals on the internet figuring this all out and uncovering the story. It's a fascinating time we live in right now. Yeah. And when it really started, so, you know, using customer deposits, if you have fractional reserve, you know, it's, I guess it's fine. And I say that loosely until, you know know people start withdrawing massively from your institution so what started happening last week is Coindesk the online publication that I mentioned that

focuses on cryptocurrency news in a piece said that Alameda Research had a large portion of its asset as FTT. FTT is essentially just a token that's used by the FTX exchange that provides customers with perks and equity like advantage if you'd like. So it kind of provides them with a portion of the revenues. It did have value, I guess there was a demand for that, but it's very illiquid. So it's not very easy to trade and any amount of large trade would definitely make the price tank because there's not a lot of demand for it. And the other thing they notice on the balance sheet is that there was a lot of loans that Alameda had that were actually backed by these FTT tokens. The figures I saw is that Alameda Research had approximately $3.7 billion worth of FTT tokens when CoinDesk came out with the article. Part of that was actually that I believe was unlocked and there

was another couple billions of locked tokens. So a substantial portion of Alameda's balance sheet was actually tied to the financial wellness of FTX. And after finding that out, CZ, who's the CEO of Binance, basically said on Twitter, which initiated the whole thing, that they would be liquidating $2 billion worth of these FTT tokens because Binance had received that along with some stable coins, which just followed the US dollar in terms of a cash out when they were early investors in FTX. So they received that when they decided to exit their position. And the fact that CZ announced that essentially started a bank run on FTX because then people were starting to freak out that had their money there and then withdrawal in large

numbers starting happening. So that's what a bank run is, is when a bank has fractional reserve and then pretty much all the depositors think that the bank's going to fail and they start withdrawing all at the same time because they don't have full reserves. At some point, they have to stop withdrawals. CZ engineered a bank run on them. A fierce competitor this guy is. I mean, he sniffed it out, right? And he sniffed it out. He knew they were going to get screwed by this. And the guy is ruthless and it happened. this FTT collapse, right? It's like, yeah. Okay. Imagine when it's great, by the way, here it is. Imagine McDonald's makes its own money and calls them clown bucks. That's, that's funny by the way. It's clever. It calls them clown bucks, keeps most of it and sell some of it on the market. McDonald's then use the remaining clown bucks as collateral for actual loans. And then people remember Clownbucks aren't

real. So, it's kind of like, you know, engineering that bank around and people are like, wait, I got to sell these Clownbucks. And then Starbucks comes and then the market sells the Clownbucks they were holding while reminding the market that the Clownbucks aren't really a thing. McDonald's balance sheet is trashed and their Clownbucks are wiped out. Anyways, that's what happened in crypto land this week. Yeah. Yeah. And so now basically now the end of this story is that this all created a whole of eight to

10 billion are the latest figures that I've seen on FTX balance sheet, basically, you know, making them unable to fulfill all the deposits that were with them. And on Friday, FTX, FTX.us, because FTX was the global company, FTX.us was a separate company, and Alameda, along with I think 140-ish other companies that were tied to FTX, filed for Chapter 11 bankruptcy in the US. So that's kind of this end here. Obviously, there's a lot of people that were impacted. I hope those had money on FTX. I'm sure there might be some that are listening to this podcast right now that may have had money on FTX. I do

hope that you see it. I know what it's like. I actually lost money. I think it was in 2014, 2015, CRIPSY. I had money on there was the early days of crypto, had like half a Bitcoin. And the crypto exchange ended up being a bit of a scam as well. So I learned my lesson. That's why I use the cold storage now. Man, we'll go on to your final thoughts here. And then I want to ask you some big existential questions on the future of this. Okay.

Yeah. So I have like some main thoughts here and obviously you know i'm still learning there's info coming out every day well first i think this shows the needs for clear regulation for crypto exchanges at the very least a framework to show proof of reserve so making sure the exchange actually has one for one the assets that its users or customers are buying on the exchange. Not, you know, if I bought one Bitcoin in your exchange, you should have one Bitcoin backing it. Not 10 Ethereums, one Bitcoin. If I have 10 Ethereum, don't have one Bitcoin backing it. You should have 10 Ethereum, one for one. And that was one of the big issues with FTX because

they were essentially saying, oh, no, no, it's fine. We're well capitalized and all of that. But what ended up being is they didn't have the same assets that the users had. So, in their mind, they're like, oh, no, we have sufficient capital. But the problem is they didn't have the right capital. Yeah, exactly. It's like, dude. And the capital was FTT, basically. And then as soon as these things, they go ahead and pause withdrawals, that's the end right there. That's the end, exactly. And Brian Armstrong, who's the CEO of Coinbase, has been saying for a while that there should be better regulation, especially in the US, because the fact is that a company like Coinbase is following regulation meant more for traditional financial institution.

It makes things a lot more complicated. And Brian Armstrong has been very steadfast on that in his view, the complicated regulatory space that they are following, but it makes it very unattractive for a lot of these exchanges to open in the US, to have operations in the US. So that's why they go for offshore areas like the Bahamas, for example, where FTX was incorporated. And you kind of have these issues. And I saw an interview from Kevin O'Leary. And he said, institutional investors will probably sit on the sidelines until there is clear regulation in the US. And by the way, O'Leary had invested in FTX.

Oh, yeah. He was one of the investors. He's down bad. Tom Brady's down bad. Yeah. Well, yeah. What a 12 months for Tom Brady. Oh, man.

Oh, man. Yeah. Well, we have also Sequoia Capital that was in there. Ontario Teachers, Pension Plan, SoftBank. Of course, SoftBank. Anything that's trash, don't invest in. BlackRock. BlackRock, private equity. And what I saw, there were, I think, at least 44 major investors in FTX. And it just goes to show that even these like professional institutions can make mistakes, right? And it got conned, man. And even these gigantic, most legit firms like Sequoia,

you know, you can just destroy your reputation in seconds by making these kinds of mistakes, as well as how cringy Sequoia was. Apparently, Sam Banker and Freed closed them, allegedly while playing a game of League of Legends while on Zoom with them. Yeah, I heard that. Can't make this shit up, man. And for those, we probably have teachers in Ontario. I would say, look, it's not great, but I would not worry about that. The teacher's pension plan has over $200 billion in assets under management. And this represents half of half a percent.

So, it's just peanuts. It's nothing. half of half a percent so it's it's just peanuts it's nothing but clearly you know it just shows that even these big pension plans can make mistakes and there's probably going to be more things coming out in the next weeks months and years about this whole situation so something just to keep an eye on also i've mentioned it before in my view if you own more than a thousand dollars worth of cryptocurrencies i would recommend getting cold storage why a thousand because the devices are a hundred to two hundred dollars each so you know it may not make that much sense to you know buy a device like a ledger for

example and pay 250 bucks when you only have 200 worth of crypto so you have to kind of keep that in mind i don't think crypto personally is dead by any means but it will probably set it back a few years at the very least that's my opinion here and you have to keep in mind and i think the mainstream media will probably kind of get these things convoluted but you know whether you look at celsius Mt. Gox, FTX, Three Arrows Capital, BlockFi, these are all centralized entities. And the irony of all of this is these entities were actually – It's so ironic, man. Yeah, because they were behaving like traditional finance operation in crypto but without regulation.

And let's not, you know, forget of what happened in 2008 when there is weak or lack of regulation in certain areas for financial institution. We saw what happened in 2008. So I do take offense of people saying this is a crypto issue because if there's no regulation or lack thereof or very weak regulation, we saw what can happen in traditional financial markets, the exact same thing. You know, the actual networks like the Bitcoin network, even Ethereum, they haven't missed a beat because these are full, you know, Bitcoin is fully decentralized. The network has kept working. People have their cryptos currencies in cold storage or, you know, exchanges that are well-funded. Sometimes we don't know which one it is, but, you know, exchanges that are well funded. Sometimes we don't know which one it is, but, you know, I still have my Bitcoin. I'm fine. No issues with that. So you have to keep

in mind, you know, it's not I don't think personally it's a crypto issue. It's more of a regulation. And a lot of our politicians, whether it's U.S. or Canada, have been kind of waiting to put some regulation in place. And this is what happened because you have decentralized organization who take advantage of it. It needs to hit the fan before anyone really cares, right? Yeah. And so, I think that's what this is. No, I agree with you. I mean, it's like there's no CEO of Bitcoin, right?

No, exactly. It's just a machine that it's a decentralized system and software that is just one source of truth. And I think that the technology is amazing and you and I both think that there's a real need for it. But all this shit happened

because of bad actors and other coins. What's the point of having like how many on CoinDesk listed coins are there? Like 3,000? Yeah. If you go CoinGecko is usually there. Like this is just so much garbage, man.

Like, and I think this is why people who like Bitcoin are just like, stop calling it crypto. Because crypto is where all the source of these scumbags come from. There's no CEO of Bitcoin, right? Yeah. There's 13,255 listed on CoinGecko. 13,000? Yeah. Yeah.

See, that's 12,999 of them are zeros. That's the way I think about it. And so, you have one perfect solution and then all these bad actors trying to get on top of it. And so, dude, have you seen that? We'll wrap this up quick. But have you seen that he's been tweeting one letter at a time? Yeah, I saw that. Do you know why he's doing that? No. Why? So, okay. So, this got uncovered like a couple hours ago and it's working. What he's doing is working. So, he's tweeting a letter, just a tweet. It doesn't matter what he tweets. He's tweeting at the exact same time he's written a script to delete tweets. And since it's

net net, the bots to detect his tweet activity on Twitter, he's bypassing it. And there's no, it's not picking up that he's deleting a tweet. And so, he found a loophole with deleting tweets because this guy's probably going to go to jail for life. Well, either. I mean, let's be honest. I'm going to... Good question for you. If you're SBF, I mean, what are you most afraid of? Jail or potential people that... Yeah. A lot of people. Because they didn't do KYC for a lot of large or wealthy people. That was one of the things and the cartels i'm sure that have been loving the idea all i'm saying is that there's probably some really scary people that

are owed money by sbf and ftx oof yeah i don't know i mean his life is materially over in my opinion i mean he's either gonna should be i mean he destroyed the lives of probably i i mean i heard a podcast which i we don't talk a lot about you know other podcasts often on here but i do encourage anyone it's called the breakdown by nlw and he was actually working with ftx as in the marketing department. And it's a one-hour listen. I fully encourage anyone to listen to it because you kind of feel for the guy because it kind of gives you a play-by-play of what was happening on their Slack and the black wall that was happening between a few of the executives,

including SBF and the rest of the FTX employees. And as things were unfolding, how he was kind of realizing that shit was going down. It's kind of a point of view I've never – I haven't heard anywhere else. So, I encourage everyone to listen to that one. Six months ago on a podcast, Sam Bankman Freed admitted that FTX is a Ponzi on a podcast. Yeah, I saw that. He's like, yeah, it's a Ponzi. And then Sequoia gives him money, you know, like unbelievable, unbelievable.

This guy is either going to be dead, like you said, or in jail for like, I mean, hopefully, right? Like this is Madoff level. What did Madoff get? Like five lifetimes of prison? Yeah. Or something like that? Yeah.

I mean, it's just crazy. He died in jail, right? Yeah. And one of the things too, last thing I'll probably add is some of the FTX employees that were in other countries where they have poor banking systems were actually getting paid and using FTX to deposit their paycheck. So, they lost their job and they lost all their money, these people. That's crazy.

I know a guy who runs a podcast that was his podcast is being sponsored by ftx and he said that he had like thirty thousand dollars that he got paid and he just didn't move any of it and he just like was like oh i'll get to it and he's like ah shit it's all gone okay well you're an idiot no it's it's pretty crazy yeah ah man i feel i feel really bad for people who got rug pulled by this. I do. This sucks. Yeah, me too.

This is really terrible. This sucks a lot. This can't happen anymore. This guy's a complete scumbag, liar, and should go to jail for the rest of his life. Even just the stuff he was saying while it was going down and just like, oh, like he was flat out lying on twitter and that's what's crazy yeah like as the company like he's like we are completely fine and then mentioned that they're doing bankruptcy proceedings like within a what like four hour window yeah it

was like it's just there he has to be like obviously he's a sociopath like yeah yeah yeah he's trying to say that he did know and stuff like that like come on you're installing back doors in your system so you can move funds of course you know yeah apparently his private jet like just flew to argentina or something this guy's just trying to run at this point like yeah probably going to countries that don't have extradition extradition the u.s yeah go try to survive from here on out in some mountain village in the top of Patagonia where no one knows who you are. Russia will take you. All you'll have to do is shave that stupid haircut of like the, you know,

raccoon nest that lives on top of his head. Maybe you'll end up in Russia. Yeah. Who knows? Who knows at this point, but time's ticking. Yeah. He's probably too busy playing League of Legends right now. That's ticking. Yeah. He's probably too busy playing League of Legends right now. That's right. All right. Good stuff. This has been a long one. Good stuff.

We appreciate everyone for listening. I can't wait for the documentary. You know, I'm going to binge that. Thanks for listening. We have two major things happening. Simone joined TCI.com, putting up that dividend portfolio, you know, the old income portfolio, because we're not all playing the same game. It's important to recognize that. I might not be playing the same game. Simone's not playing the same game as our parents, who's not playing the same game as someone who's

just nearing retirement. It goes on and on and on. So I think that that's good. That's at jointtci.com. It's $9 Canadian per month and helps us support the show so we can do this for a really long time. And we are exactly two weeks away out November 29th. Stratford.io, new platform. It is so sexy. It is so sexy. Can't wait to show you it. That is November 29th. Go on Stratford.io.

Final reminder. You know, I'm going to plug it next week too. But if you sign up for any paid plan today, you get grandfathered in at today's price. You're not going to pay more when we increase the prices substantially in two weeks. So you got about a week left on stratosphere.io. Take an additional 15% off with code DCI. That's going to lock you in for more than 50% off long term of what the actual price of the platform is going to cost starting November 29th. So go ahead and do that. Maybe last call, probably last call. Go ahead and do that.

Thanks for listening. We'll see you in a few days. 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.