The Canadian Investor - Canadians Love Costco & CPP’s Fire Sale

Episode Date: March 14, 2024

Simon and Dan dive into a concise exploration of the latest economic developments affecting investors in Canada and the US. The Bank of Canada stands pat with its policy rate at 5%, amidst mixed growth signals and persistent inflation, particularly in housing. We also dissect the surprising US CPI data for February 2024, which shows a slight uptick in inflation, influencing the Federal Reserve's interest rate strategy and its implications for the Canadian economy. Highlighting company earnings, we delve into Pollard Banknote's resilience in the face of economic challenges and explore strategic financial movements within New York Community Bancorp. Additionally, insights from Park Lawn Corporation and Costco reveal how businesses are adapting to changing monetary policies and consumer trends. Join us for a succinct analysis on The Canadian Investor Podcast, where we break down complex economic indicators and their impact on investment strategies, providing listeners with actionable insights in a rapidly changing financial landscape. Symbols of stocks discussed: PLC.TO, NYCB, PBL.TO, COST Check out our portfolio by going to Jointci.com Our Website Canadian Investor Podcast Network Twitter: @cdn_investing Simon’s twitter: @Fiat_Iceberg Braden’s twitter: @BradoCapital Dan’s Twitter: @stocktrades_ca Want to learn more about Real Estate Investing? Check out the Canadian Real Estate Investor Podcast! Apple Podcast - The Canadian Real Estate Investor  Spotify - The Canadian Real Estate Investor  Sign up for Finchat.io for free to get easy access to global stock coverage and powerful AI investing tools. Register for EQ Bank, the seamless digital banking experience with better rates and no nonsense.See omnystudio.com/listener for privacy information.

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. Welcome back to the Canadian Investor Podcast. I'm here back with Dan. We're here doing our Thursday news and earnings recording. Dan has a new look going on. He's bringing out his gaming headset. So he's going to get into the professional gaming career, right Dan?

So he's going to get into the professional gaming career, right, Dan? Yeah, my AirPods died like five minutes before this recording. So I had to pull a dusty headset out of the closet. It's probably 10 years old and I look like an alien right now. Yeah, so basically we had started and Dan's like, okay, my AirPods are dying. Let me reconnect with this headset. I had a completely different visual prepared in my head than when you popped up with that. But hey, the sound quality seems pretty good. So that's all we can ask.

Okay, well, we have a pretty jam-packed. I mean, we typically do on the Thursday episode in terms of news and earnings, especially now earnings season starting to wind down a little bit. But last week we had the Bank of Canada that announced that was keeping its policy rate at 5%. We also had this morning US CPI. So we'll talk about both of these right off the bat, kind of get the macro a little bit

out of the way here. And Dan, I'll be interested in hearing what you have to say as well. Now, the Bank of Canada, so they said that during their press conference that growth remains weak in Canada, while the US has stronger than expected growth. Labor markets have become in a better balance and job vacancies have returned to more normal levels. And although inflation is cooling, shelter price inflation is still elevated and remains the biggest contributor to overall inflation. So obviously shelter price, there's some pressure happening because amongst other things, but mortgages that are being renewed, because the interest is higher than it was for

their previous term. So it's putting some upwards pressure there, but also rents are staying quite elevated. And shelter price pressures are likely to persist. And it is something that they are aware and is putting pressure on the overall headline CPI. They expect inflation to be close to 3% until the middle of this year and easing in the second half of the year. The path will be slow. That's what they said. And the progress will be uneven, which obviously goes without saying inflation is not linear. So it kind of goes up and down. Very rarely do you have, you know, inflation going in one straight line in terms of a direction or

the other. And they don't want to lower rates too early, but also don't want to keep them elevated longer than necessary. I mean, okay. I mean, that's kind of given, right? That's kind of what you're supposed to do. And then they had several questions. So how these goes, usually they'll have their statements. Here, there was Tiff McClellan with thelyn rogers who's the i think deputy or senior deputy i'm not quite sure her title i find that she's pretty senior deputy okay yeah before i keep going here like i do find that uh she is quite good i find at answering questions typically she seems to have a better knack at explaining it properly maybe she's a little more

charismatic sorry tiff but that's just the sense i get when listening to her and i feel like they probably know that because i have a feeling that we'll be seeing her almost at every raid announcement that that wasn't always the case they said that now they will be doing essentially a press conference every time there's a raid decision, whether it remains unchanged, lower, higher, whichever it is. And I suspect that she'll be there more often than not. I mean, I've been saying that all along, that she does a much better job than him explaining where the bank stands on various issues. Yeah, I actually haven't had a chance to watch this one, but she's usually generally more open.

I mean, in regards to, I guess the the weakening canadian economy it was interesting because i just i did a video this morning for our youtube and i was kind of comparing like the s&p versus the tsx and the overall expected growth rate in terms of earnings for the TSX-60 this year is actually negative. So negative, they expect the TSX-60's earnings to drop by half a percent, whereas the S&P was like growth of 11.5% or 12%. So you can just tell the massive, massive difference in that. And I think a lot of it is due to the fact that, you know, a lot of the companies in the TSX-60 are also super sensitive to interest rates. So, I mean, we'll speak on US CPI after this, but I think the US CPI was a fairly bad result for Canada because I think they need to cut much faster than the US, it seems.

Yeah, and speaking of the TSX, I had a tweet that went pretty viral about a letter that was sent by CEOs of big Canadian companies to the Deputy Prime Minister, Christy Freeland, asking her to look into ways to force pension plans to actually invest into more Canadian companies. One of the ways that they were suggesting this is essentially penalizing in terms of expected returns, investments that would be outside of Canada. I'm oversimplifying it, but that's what they were suggesting. They're saying, well, we don't want regulations, but if we penalize them with a different discount rate, that's essentially what they were saying, which would affect the valuation and the funding ratios of these large pension plan. So they sent a letter. And I think that's incredibly stupid. I've had some people push back a little bit, but pension, I know pension plans extremely well and pension plans have one duty and they have a fiduciary duty to their plan

members and beneficiaries. It's not to help companies like, and Rogers communication was one of the headline, but let's be honest, it's not to help mismanage companies like and Rogers communication was one of the headline. But let's be honest, it's not to help mismanage companies like Rogers communication that are in a oligopoly situation. And we've known the drama with Rogers with our whole family and so on. So I was pretty, I was not impressed by that letter. I do hope that the federal government doesn't act on that. And, you know, you just said it with the TSX expected earnings. I mean, at the end of the day, if you're contributing to a pension plan, you want to make sure that you have a good retirement. You don't like it's not your job

to be propping up Canadian companies. But anyways, that's sorry. It was a little bit of a rant just there. But did you see that open letter or did you see my tweet regarding that? I was looking as you were talking. I was looking for the tweet. I can't find it. But I mean, it is a bit odd. Like as somebody who, you know, invests in the pension, you want the pension to earn the most it can.

You wouldn't want it to just invest in Canadian companies just for the sake of propping up Canadian companies. Exactly. Like, yeah, exactly. Like very weird not that the large pension plans don't make questionable investments from time to time not that this doesn't happen but I don't think they should be constrained to have like an outsized Canadian amount if they don't see that as being a good investment but back to the Bank of Canada the last thing here that I'll

mention is there was also a very interesting question. It was the first question. Can't remember who the reporter was, but props because he did not ask a question about interest rate cuts because clearly they were not willing to answer that later on in the press conference. But I'll paraphrase here. But the reporter asked about if they are seeing potential issues in the commercial real estate space in Canada, referencing comments from the U.S. Fed about CRE, so commercial real estate problems in the U.S. And it's clearly the Fed said that it is a problem, but they think it can be contained. Now, Carolyn Rogers answered this question. It was quite interesting what she answered.

She said it was something that they are watching closely. She also mentioned that they didn't see a reset in valuation in Canada, although she didn't elaborate on this. But the more I read on the subject, the more I'm inclined to say that, sure, there isn't a reset in valuation, but that's because there's a lack of transaction. but that's because there's a lack of transaction and you have you know these are typically you know large transactions and you know you have these institutional investors what investor a may have a an idea of a certain valuation especially let's say for an office real estate versus the buyer who has a completely different idea and there's no transaction because they can't agree on the price. So it is very hard to value right now without a decent sample. So to say that there's not a reset in valuation, I would kind of question or comment there because you need a decent sample

to be able to establish a valuation. And that's not any different from, you know, buying a home for people who own a home. How do you know how your home is valued? Well, you compare it. You have comps against similar homes in a similar area. That's how it's done. And it's the same thing for commercial real estate. And she also mentioned that they already started working on the financial stability report. This is actually due in early May.

And it is an area, so commercial real estate, that they will be taking a deep look into and that we should expect to hear more on it when it does come out. So it's clearly on the radar for them. From what I got from her answering that is that clearly, obviously, it's something that's on the radar, could be a potential issue. They don't want to elaborate too much. They seem to be keenly aware of what's going on in the US, where there's been some pretty sharp drop in valuation. Actually, the Canada pension plan made headlines, which I'll be talking about a bit earlier, about selling a stake in a project for a dollar. That's a bit misleading. I will say what

exactly happened, but the headlines were kind of everywhere and that just goes to show that there's some big pressure there and i think they're probably starting to see something but she didn't want to you know go into too much detail without having all the information that's the sense i got from it yeah and it makes complete sense when like it's harder to see the value of a piece of commercial real estate because there's not as much movement in the market. You can get a pretty good idea on a residential property, whether or not what it's worth. Whereas these big buildings and these large commercial properties, they don't really move that often. So it's really hard to understand how bad the market is going. Whereas residential,

I mean, it's very easy to watch trends and see which direction it's heading. Yeah, exactly. And you can get a pretty good idea of how the market is valuating those assets just by looking at REITs. So look at REITs that are in the commercial real estate space. And clearly that is a big space. So there are subcategories. I won't go into detail because people just wrote commercial real estate and they tend to just say, like, as a synonym of office, there's way more. There are some areas that are doing quite well, like data REITs are doing very well right now. That's a commercial real estate property. But if we just look at what's happening on the public side, clearly the market is less optimistic. I'll just say that about valuation.

So, yeah, there's a bit of a disconnect there. And I'll be interested in keeping an eye on that in the next few years to see if there's more and more transactions that we start seeing. As do-it-yourself investors, we want to keep our fees low. That's why Simone and I have been using Questrade as our online broker for so many years now. Questrade is Canada's number one rated online broker by MoneySense. And with them, you can buy all North American ETFs, not just a few select ones, all commission free so that you can choose the ETFs that you want. And they charge no annual RRSP or TFSA account fees. They have an award winning customer service

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

it could make some extra income. But there are still so many people who don't even think about hosting on Airbnb or think it's a lot of work to get started. But now it is easier than ever with Airbnb's new co-host network. You can hire a local quality co-host to take care of your home and guests. It's a win-win since you make some extra money hosting on Airbnb, but can still focus on enjoying your time away. Find a co-host at airbnb.ca forward slash host. That is airbnb.ca forward slash host. To go now to the US CPI, the print just came out this morning

and I'll just go through some quick numbers here. And then Dan, you can tell us a bit what this, what you think this means for Canada so the print just came out the headline numbers are were that inflation rose 3.2 percent year over year and 0.4 percent month over month consensus was actually a bit lower at 3.1 percent year over year and if you take the month over month data and annualize it so that would mean inflation of 4.8%. Again, to what Tiff was saying, it's not going to be a linear, you know, kind of downwards path.

It will go up and down. So take the annualized data here with a grain of salt. The biggest increases on month over month basis were tied to energy, although it was still down on a year over year basis. So it's still putting downward pressure compared to last year at that same time. And a big concern, I think, is that core rose 3.8% year-over-year, which excludes energy and food. It also rose 0.4% month-over-month. And services remain extremely sticky in terms of inflation.

So inflation for services excluding energy services was at 5.2% year over year and 0.5% month over month. Now, following the data release, there's definitely been a shift in the market expectation regarding US interest rates. So compared to yesterday, as of about 10am this morning, for the March Fed meeting, there's basically no chance of a cut, which is in line with probabilities from yesterday. So it's a 99% chance that they will stand path, 1% chance for a cut. Usually the 1% is if something I would say blows up and they have to do an emergency cut. For the May meeting, there's a 11% chance of a rate cut compared to 18% yesterday. So we've seen a pretty big shift in expectation in one day there. And the June meeting, there's a

70% chance of one or two rate cuts versus 72% yesterday. So not that much of a change for the June meeting. But where it gets interesting for the June meeting is the market pricing in two rate cuts. It's actually changed from 12% to 7%. So there is definitely we're starting to see a bit of a trend where the market is starting to say, okay, maybe rates will stay higher for longer. And I will just add one last thing here before I ask you what you think this means for Canada. But markets have been pretty much overly optimistic, I would say in the last like year, year and a half, maybe even two years on rates coming down in terms of what the Fed would do. So take this with a grain of salt. Maybe the markets are still too optimistic and we will not see rate cuts until later this year maybe q2 q3 who knows but then

you factor into the u.s election maybe they'll want to avoid doing cuts or starting cuts around that time so it remains to be seen yeah just i actually just dug up like an older because we actually take these tables every time yeah this happens it's fun to look at yeah it is like you look at so i can't remember when this would have been a few months ago but they would have figured there was a 55 chance of a rate cut in may and now it's 87 chance of no rate cut so i mean it's it's changed so dramatically i mean it seems like they just keep kind of kicking the can down the road i mean i the one thing that i'm surprised of is how, like, even after this, it was higher

than consensus. Like, it wasn't really all that good of an inflation print, yet the NASDAQ is up like a percent. The S&P is up like three quarters of a percent. It seemed to me like when this came out that the markets would have went down, but they seem pretty crazy right now. Oh, yeah. Just regarding the markets.

I mean, it's been zigzagging almost all day. So it kind of started negative, then went up, then still up as we're talking, as we're recording right now. But it's been up. And I think the market's not quite sure what to make of it. At least the equity market. I haven't looked at the bond market to see what changed today. I haven't had the chance.

But that would be interesting to see if there's a big difference between what the stock market and bond markets have reacted. Yeah, that definitely is. Just looking at it now. So it opened, it went down, the NASDAQ was down about a quarter percent. Then it went up as high as almost one and a half percent. And now it's gone back down. So yeah, people can't make up their mind, I guess. I mean, in regards to canada it's ultimately not good because it's kind of showing that the u.s economy can function fairly well at these rates whereas like canada's clearly can't which is probably you would think

a large portion of that is dedicated to you know the overall real estate situation i think it's putting a lot more pressure on the Canadian consumer who either has to renew soon or has already renewed and is facing significantly higher costs. Whereas somebody in the States, I mean, they have their mortgage rate locked in for 30 years. So their costs aren't increasing quite as much. I mean, there's probably more to it than just that. I think the Canadian consumer is on average, isn't it? They're in much worse shape than the American consumer in terms of household debt. Yeah. Yeah. I'm not exactly sure of the exact numbers, but we're in a lot. I don't have the numbers in front of me, but there's a pretty wide difference. I think the

US, what ended up happening is after the great financial crisis, US household really delivered, like delivered. So they got rid of a lot of their debt. And Canada, I mean, just, we got, let's just say we got high on debt pretty much since. So yeah. So I think that's pretty much what's happening. And the last thing I'll mention here is, yeah, bond yields have definitely jumped. they've jumped about 10 basis points on the u.s 10 year which is it's a pretty significant uh jump since the cpi print so the bond markets are saying that maybe rates will stay hot like they're they're pricing it slightly higher rates at the very least compared to yesterday yeah then just like in the simplest way possible, when you have, you know, the bank of Canada who may need to cut before the U S you have more money flowing to the U S rather than

the Canadian dollar, which will put pressure on our dollar, which ultimately makes imports more expensive, which could end up making inflation worse here. So it's not really a good situation for the Bank of Canada because I can't see them keeping rates at this high for the foreseeable future. I mean, they have a lot of people who are going to be renewing their mortgages at what, triple the rate, probably pretty close to. Yeah. Yeah. I i mean at least double for the most part right now like we're renewing next year and we're going into the the high twos and depending like next year what the rates are could be looking at five six percent maybe less who knows but that's a pretty big jump yeah but yeah that's all that's all i had to say. If you got any other thoughts? Well, just to add to that, people sometimes don't realize it. So okay, let's say the Bank of Canada

does a couple of cuts, 25 basis points, so 0.25% being one cut. So let's say they cut 50 basis points and the Fed still hasn't cut. Well, like you were saying, there's going to be more demand for the US dollar. It's going to weaken the Canadian dollar. And even though we do trade with more than the US, most of the trades are priced and denominated in US dollars. So it definitely would add some inflationary pressures and people would still be renewing the mortgages at a very high rate.

So there would still be some pressure, some inflationary pressure on the shelter prices at a pretty high rate because what's 50 basis points, right? I'll be renewing. If it's 50 basis point less, I'm still probably going to be renewing at four and a half, 5% and my mortgage payments are going to be higher. So I think a lot of people don't realize the implications. I know I'm probably making a lot of realtors pretty sad right now saying that are angry, but that's just the reality of it. They're kind of stuck between a rock and a hard place. Yeah. Like even when I, back when I built my house, so you can't lock in a mortgage rate until three or four months before it's being built. And I remember like I remember every time they hiked 50 basis points, our mortgage payment went up like $170 a month.

And we had 40% down and it was going up that much. It was just ridiculous. I ended up having to put more money down in order to try and reduce the payment. But I mean, there's a lot of people, I know a few people who are in the high 1% range on a fixed rate mortgage, and they're going to have to renew in the next year here at probably five plus, because unless something happens quickly. But I mean, I think you would see if the US situation was the same, they had these different term mortgages, I think they would be in a lot rougher shape, but the fact that you can just lock in a rate for 30 years is definitely helping the US consumer much more than the Canadian consumer. Yeah, yeah, definitely. Now, enough about macro

and the Bank of Canada, the Fed. Do you want to start us off with some earnings? the Fed. You want to start us off with some earnings? Yes. Let's talk about scratch tickets. So Pollard Banknote, they're a relatively unknown company. So they're a Canadian small cap, but they're actually, I think, the second largest producer of scratch off tickets in the world. So it generates a bulk of its revenue in the United States. And the company actually did report some pretty strong headline numbers. So revenue of 135 million was in line with expectations and earnings per share of 33.2 cents beat expectations of 30 cents. So I kind of thought this would be an interesting company to go over because usually, you know, when the economy gets tough, things like alcohol, tobacco, gambling, you know, the stocks gets tough things like alcohol tobacco gambling uh you know the stocks

tend to do quite well and if you had been following us what's that sin stocks exactly stocks yeah yeah scratch tickets become the new uh the new investment but uh if you've been following this company in any fashion during the pandemic i mean it was a pretty strong performer pre-pandemic but the pandemic pandemic, it absolutely exploded in popularity. But when inflation hit, it was a complete disaster for Pollard. So this is a company that typically has operating margins in the 8% to 10% range. At least it had for the decade previous to when inflation started going up. But inflation in 2022 and 2023 absolutely killed their margins. So their operating margins sunk from 10% to 0.9%. And at one point, the stock

was 75% off the highs. The lows it got to seemed to be a pretty good time to add, but it took an absolute beating. So the reasoning for this, you would think that the company would be able to simply pass on the cost to the clients. And I mean, you wouldn't think of much input prices when it comes to scratch tickets, but there is. And I guess the vast majority of their deals with those clients were long-term fixed pricing. So when the price of, I would imagine like maybe pulp and paper, like what they have to produce the cards on. Yeah, that's what I came to mind. It went through the roof and it just lost 10% operating margins to practically break even operating margins.

So it just absolutely killed them. I remember they had to pull guidance. Earnings just collapsed. So sales really aren't the issue here for Pollard. So it's grown revenue at a 7% pace annually over the last decade. And prior to inflation pressures in 2022, they had grown their earnings at a 22% annualized clip from 2014 to the end of 2020. And 2023 was a pretty strong rebound year.

So earnings improved materially, growing 62% year over year, and they seem to be getting a bit back on track, primarily because more of those contracts are coming due, I would imagine, and they're being able to pass on some of those costs to the consumer. And it seems to be getting, management seems to be getting back on track as well, or at least has confidence they will, because they announced a pretty big increase to the dividend they went from 16 cents to 20 cents a year so they bumped it up 25 it's definitely going to be interesting where the company goes in 2024 as more of its contracts get renewed it should be able to offset some costs

with higher higher material prices and it is actually stated that it has had to start outright denying work that it used to do because they just can't make up those margins in terms of passing costs on. They didn't exactly go into detail on what work that would be exactly, but they're starting to pass over those projects. Analysts, pretty bullish as well. So they figure that Pollard will increase earnings by nearly 50% in 2024 and a further 25% in 2025. It kind of makes sense if they can offset costs and get new contracts in. I mean, you wouldn't have to see revenue grow to see earnings grow just because margins will improve. It's probably not one that I pull the trigger on right now, but it it's an interesting business nonetheless and i mean as i mentioned it's only got a market cap

of around 900 million i think but it is the second largest producer of scratch off tickets in the world and they do i think they do vlts as well i mean they have like e-gaming stuff and bars and colleges and all that kind of stuff okay it's a pretty interesting company it was a very good performer up until uh up until 2022 and then it got hit pretty hard yeah isn't like pen gaming or something the biggest and the kind of slot machine type of deal pen gaming or something i'm not sure yeah i don't know if they do i didn't know i don't know that they do gaming like slot machines or anything oh did you like like you know how these days you can like it's so weird but you can go online and buy like a scratch off ticket and like click it and i i've never done it myself but

things like that and i do think they have like little e-gaming gambling things in the bars and stuff i don't know if they're full out vlTs, but. Okay. That's fair. That's fair. Oh man. All right. I can't, it probably tells you how much like scratch off tickets I do, but no, that's, I mean, that's interesting. I wasn't really familiar with this business and what I have pulled up here is their free cashflow per share. So it seems like from this free cashflow has remained decent over the time period maybe it's not showing in the operating margins so yeah there must be some other kind of accounting yeah you know items accounting charges that are not affecting the actual cash coming in or it could be very well that well y charts is usually pretty consistent with this stuff it says that they fell to about 0.9 but yeah they they had a rough go we could see free cash flow went down by

66 during like in 2022 when those costs were hitting up pretty hard and the stock went from almost 65 bucks a share down to 16 over that same time period so yeah i have it up now so definitely yeah free cash flow took a bit of a drop but per share has dropped as well but it's back up at least for last year so i guess it'll be interesting to keep an eye on especially if they can start passing those uh increased costs to customers yeah that's all i had for it i just figured it's it's a company that even I hadn't looked into for a few years just because of this. And then I kind of noticed they reported earnings and I dig into them and it was a pretty good quarter. So they seem to be rebounding quite

nicely. Yeah, I also have a smaller company on the dock. I'm not sure we'll get to it because we're already half an hour in, but we'll see. We'll see towards the end. So as do-it-yourself investors, we want to keep our fees low. That's why Simone and I have been using Questrade as our online broker for so many years now. Questrade is Canada's number one rated online broker by MoneySense. And with them, you can buy all North American ETFs, not just a few select ones, all commission free so that you can choose the ETFs that you want. And they charge no annual RRSP or TFSA account fees. They have an award-winning customer service team with real people that are ready to help if you have questions along the way. As a customer

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

But now it is easier than ever with Airbnb's new co-host network. You can hire a local quality co-host to take care of your home and guests. It's a win-win since you make some extra money hosting on Airbnb, but can still focus on enjoying your time away. Find a co-host at Airbnb.ca forward slash host. That is Airbnb.ca forward slash host. That is Airbnb.ca forward slash host. The next on the slate here is New York Community Bank. So there was an update basically the day after we recorded. So you and I were talking about it last week and we said it doesn't look good. And I think there was some actual real question whether the bank could stay solvent or not. Well, things move the day after. So a day later, trading halted and it was announced

that they would get a capital infusion of $1 billion in exchange for equity in NYCB. And this is a private deal. And it's not surprising because a public offering would have taken some time. And honestly, they probably did not have that amount of time because deposits, there probably would have been a mass exodus of deposits happening. I mean, that's essentially what happened with SVB last year. So they did this deal. Now, the deal is a mix of warrants for common shares and convertible preferred stocks. mix of warrants for common shares and convertible preferred stocks and they also reduced the dividend to a cent per share i'm not sure why they just didn't cut it at that point yeah yeah i mean i think it's still like a one percent yield just because the stock is so low at this point

because yeah that's a cent per quarter so it would be four cents per year. The stock's about three bucks, three something. So it's about a 1% yield at just a cent per share. So I don't know. Maybe some people wanted to make sure they still get income from them. Now, the headline was that Steve Mnuchin, who heads the Liberty Strategic Capital Fund, was part of the deal. And for those who are not familiar with the name, or maybe the name rings a bell, he was the secretary of the treasury under President Trump. And the other parties

involved in the deal are Hudson Bay Capital and Reverence Capital. On the announcement, the markets seemed to like the deal. Aside from being treasury under Trump, Mnuchin had been part of a group who bought assets from IndyMac back in during the financial crisis and ended up making some pretty good returns out of it. Now, as part of the deal, there is a new CEO, Joseph Othing. So they've gone through three CEOs in the span of a couple of weeks. That's pretty good, huh? Yeah. So they demoted the one guy, then promoted another. That's pretty good, huh? Yeah. So they demoted the one guy, then promoted another. And now this guy, where is he now?

Yeah. The guy who was CEO for two weeks. Yeah. So Alessandro Dinello, the CEO for less than two weeks, is now the non-executive chairman. At least he can say he was CEO. Yeah, exactly. He waso for a couple of weeks there are four new members to the board including steve mnuchin and joseph othing oting i'm not sure how to pronounce his name anyways the new ceo well we'll see if the

deals ends up working out but i still personally wouldn't touch this with a 10 foot pole. I mean, even if this group saw the financials, and obviously they saw the up to date financials, if they were willing to put a billion dollars of fresh capital on, I think there's some real question to be asked, because they came out with a presentation the day after this was announced on March 7. And on that presentation, and I went back to the slightly older presentation of a month prior. So on that presentation, they said that the total deposits were at 77.2 billion as of March, I believe, six or seven. That's compared to 83 billion as of February 5. So let's just say a month apart. That's a drop of 7% within a month in deposits. And based

on the presentation, it looks like three quarters of their deposits are demand deposits. So demand deposit just means that depositors can, you know, anytime they want, they can withdraw their money. So think about your savings account at your bank, your checkings account, stuff like that. So those are definitely deposits that are at risk. There's also term deposit. These are typically like CDICs in Canada and the US, it's CDs, where there's a fixed term to it. So for those deposit, there's more certainty about them. But to say that there's three quarters, and there's already been a significant flight of deposits, I mean, 7% a month is pretty significant. To me, this is just

something I'm happy to look on the sideline. If they end up making a buck with this play over several years, good for them. But it's not something that I would want to take any part of, even with this fresh infusion capital. No, this seems like a borderline scratch off ticket as well. Just buy it and try to hope. I mean, it doesn't seem like a billion dollars is even that much. Well, I think it was just a prop of the liquidity ratios that are required. Because at the end of the day, banks are all fractional reserves. So who knows how much cash on hand, like I didn't see the financials up to date that they have, but clearly they needed an extra billion in capital to meet those capital ratios. But again, will that be enough to reassure

depositors? I don't know. I mean, for me, no. Yeah, me neither. I'd still be getting out of there. Yeah. And even people that are not super well- versed in banks, I mean, you just need to hear that there's 77 billion in deposit and there's a billion dollar cash infusion, even though obviously it's to make sure that there's capital ratio. But if people don't know this well, I mean, they'll be like, OK, so what does that do for me? Like if there's a bank run, we're still screwed. Right. So I think it's it'll be interesting to keep an eye on. Clearly, it shows that there's still, I think, some issues happening in the regional bank in the US. Yeah, it's a much better situation up here in Canada with our major institutions,

less regional chaos. Less regional chaos, yeah know just higher fees and stuff but hey yeah they just take advantage of canadians and canadians can't do anything about it yeah no exactly um so you want to go with park lawn corporation that reporting uh reported some earnings and they're not a landscaping company for those that are not aware of them well i guess i guess yeah sometimes yeah i guess so i figure i do a segment on this is it's a stock i've been buying like quite a bit i've owned it for a very long time i think like eight nine years probably but i've been adding quite a bit over the last while just because of how cheap it's gotten. So they're a funeral home company. So they do crematoriums, cemeteries, funeral homes, things like that. So it's a pretty high margin business. And they grow. So they pretty much aim to grow around 70% through acquisitions and 30% organically once they merge those

acquisitions into the fold. But they reported some strong headline numbers. So revenue came in at 119 million, which was in line, and earnings beat estimates by about 22%. So this probably saved the company from a pretty large drawdown as their guidance was, I mean, I would say very weak moving forward in 2024. And it actually ended up outright pulling its five-year targets. So they always had a five-year target of $150 million in EBITDA, like US dollars. So they ended up just pulling that. And the gist of it is this company has a lot of floating rate

credit facilities. So it uses a lot of those credit facilities to acquire companies. And over you know, over the last few years, interest rates have absolutely skyrocketed and that impacts floating rate facilities. And they've ended up like financing costs have just crushed this company. I think they were trading at 45 bucks a share during the pandemic, and now they're down to like 18 bucks. Yeah. And maybe just to clarify, just quickly, floating rate facilities just mean they're essentially, I think it's like just what a line of credit would be the best way to say it. It's like a business line of credit and it varies based on the interest rates, you know, as they go up and

down with the central banks, that's going to be affecting this line of credit. Yeah. Yeah. So it'll be a prime plus whatever, you know, whatever the bank's prime rate is. And they usually tack on some, it's probably less for a company than it would be a prime plus whatever, whatever the bank's prime rate is. And they usually tack on some. It's probably less for a company than it would be for a consumer. But it still has gotten really, really expensive for this company. So on a year-over-year basis, revenue grew by 6.6%. It adjusted a bit to by 5.1%. And earnings actually declined 10.5%.

So this is a company that has consistently delivered double digit growth on practically all fronts. So it's definitely a bit of a surprise to see the company growing the top line that slow, but the bottom line is not really that surprising just because of how hard it's getting hit by interest expenses. It was a few quarters ago, but I kind of looked at the decline in net income and I figured out that about 75% of the decline in net income was solely due to financing costs. So it's just like it's strategy of just financing a bunch of these on floating rate credit just hasn't worked out that good. So in addition to the interest expenses, it's likely that pre-need sales and possibly added spending towards funerals is dipping.

So what this company will do as well, so they rely a lot on pre-need sales. So that would be somebody before their passing, just kind of organizing and prepaying for their funeral. So they use a lot of this capital to acquire other companies as well. acquire other companies as well. So the business is relatively foolproof recession-wise, but this pre-need area is one that definitely does get hit. So I think it's dipping now, which is causing... They may have to acquire... They have to acquire companies to grow. And if they have to finance it more than use that pre-need capital, it's definitely going to hit them as well. So again, I had mentioned that they had pretty lofty targets, 150 million US in EBITDA and earnings per share of $2. So the company pulled

that guidance. They pretty much said the material increase in interest rates just makes it not feasible, especially on the earnings front. So they're now going to be issuing just short-term annual guidance. And this year's wasn't all that bright so they expect a just a bit of 70 million at the low end and 80 million at the high point and earnings of 90 cents and 80 90 at the high 80 at the low so this is pretty much at the midpoint of guidance just flat growth and if they if they hit the lower end it's actually shrinking so i expected them to kind of bomb after this earnings report, but it held on quite well. And I'm still pretty bullish. So this was kind of my play over the last three, four months on just lowering policy rates.

I think it's losing so much money to interest expenses that when policy rates do come down, it seems like a company that should be able to improve earnings almost instantly when they start dropping. But I don't have any plans to sell, but it definitely was not a good quarter and they did not issue good guidance, which probably means they don't expect rates to decline materially either. And the one interesting thing about this, they operate mostly in the US. So that's probably, you know, a lot of their credit facilities are probably, they could be with US banks as well. So that could change the environment if the US, you know, can stay steady, but the Bank of Canada has to cut. So yeah, not a good quarter, but I still own.

Yeah. And for joint TCI listeners, I pulled up here, just the interest expense, how it's grown over the years. And you can clearly see what you're saying. Essentially, I mean, it started growing slightly in 2018, but really has picked up since 2020. I would say 2020, I'm sure they probably made some acquisitions around there. And then 2021, 2022, and then last year, big jump in interest expense. So I agree with you whenever you have those credit lines or revolving credit facilities, you know, it's going to be a bit of an issue when rates are going up. But, you know, if they want to expand and acquire in Canada, population growth. I mean, I know it's pretty morbid, but at some point, you know, the higher the population, the more people will eventually pass away and would benefit for a business like that. Clearly, it's probably not

going to see the benefits for several decades, but that is a potential bullish case as population grows, not only in Canada, but in the US as well. And you have a bigger pool of people that will need to use the services eventually. Yeah. I mean, what did they say? There's only two things in life that are certain, death and taxes. There you go. Yeah, taxes there you go yeah that's it and that's the question right in terms of interest rate when is it going to happen i'll just say my uh bold prediction is not looking good for uh for this year we'll see what happens but i think i was looking at what like 150 200 basis point cut i can't remember exactly but i'm not

sure it's going to happen at this point no No, it's not. I think I said, I might have even said more than you. Yeah, I think you thought I was being too conservative. Yeah, I've already given up on that unless, you know, there's some sort of credit event or something. Yeah. No, exactly. Now I'll go back to something that I had mentioned earlier. Exactly. Now I'll go back to something that I had mentioned earlier. So we had the headlines a couple of weeks ago. I know Dan Foch from our Canadian Real Estate Investor Podcast tagged me on Twitter. He's like, oh my God, he's like, can you make sense of this? So CPPIB, so it's the Canadian Pension Plan Investment Board, sold a stake in a Manhattan project for $1. So some people may have seen a variation of this

headline. I think it was on Bloomberg. It was I think a financial post as well in Canada. Now, to be clear, it did not sell the project for $1. It sold a project for $1 plus the debt against it. And I think that's really important because the value of the sale was more and it was a office building project so clearly it's a space that's been struggling in certain geographies in the U.S. it's been well publicized and the transaction was done at the end of last year but it made headlines just a couple weeks ago and CPPIB sold its stake in the Manhattan Project to Boston Properties Inc., which also agreed to take on CPIB's share of the project's debt, like I mentioned. And that's a really good reminder. And I know people are busy, but make sure when you see a headline, you actually read the article.

And, you know, I think it's important to also verify the article sometimes with some of the data they're providing, because I think there is a big incentive right now with journalism. I think there's some really good journalists, but there are also some that just want to pump headlines and pump content. And sometimes it's not the best vetted. And I'll give the example here. So, Dan, say I have a house that's worth five hundred thousand and I have a $400,000 mortgage against it. If I sell the house for $1, but the buyer agrees to take on my mortgage, have I sold the house for $1 or $400,000 and $1?

It'd be $400,000, $1. Because if you sold the house for just $1, you'd still have the $400,000 mortgage. Exactly. So essentially, yes, I think it's safe to say that they took a pretty significant haircut or discount for the stake that they sold. But I think you just have to take it with a grain of salt when you see those headlines. And from what I've read, it sounds like the project needed investment and CPPIB just preferred to sell its stake instead of making those additional investments. So that's the calculus that they took. And it's also not the first divestiture they've done in the last year when it comes to office real estate.

As of March 2023, I did some crunching. I went through the latest financial statements, so annual financial report from CPPIB. And I will be interested, by the way, to see how it looks when their new one comes out. I think it'll come out sometime in May this year, so in a couple months. So their commercial real estate exposure was just shy of $60 billion when including commercial real estate debt that they own. So they do own private debt. So that's why I included that because to me, it makes sense. It's all related to real estate. And that's slightly more than 10% of their total assets. I know a lot of people have been wondering what pension

plans have in terms of exposure. So CPP, this would be about 10%. And I'll start digging into the other big pension plans in Canada, just to get an idea what it is for the large pension plans, maybe those who have above $100 billion in asset under management. I think there is like probably seven.1% of their total assets under management. And I think that's just important to keep in mind. 2%, I mean, depending on who you are, that may be a lot, that might not be a lot. I'm not trying to sound the alarm here, but it's definitely worth keeping an eye on. The problem with some of these assets is, like we mentioned before, and when we talked about Carolyn Rogers' comments, is that there just aren't many transactions that happen on the private markets. And it's often hard to get a large enough sample to establish that value. And they also seem reluctant to compare the value of these assets with REITs in the same space. Although they do

say they do, I don't think they do because I question the value that's assigned to their portfolio in terms of private real estate, because I'm well aware of what REITs have done. And I can tell you that REITs are not being valued as highly as these private real estate in the same type of asset class. And it's not a knock specifically on CPPIB, estate in the same type of asset class. And it's not a knock specifically on CPPIB, but on a lot of pension plan that owns these types of assets. And CPPIB has been the ones kind of leading the charge with real estate investment, I think over the past decade, even potentially longer than that. And it'll be interesting to see the difference when they release their most up-to-date financial annual financial report. I'm

assuming they'll probably be talking about the transaction I just outlined. And I also reached out to them to know what exposure they have by country because they don't provide that. They provide general exposure for all their asset classes, but they don't provide the actual exposure that they have for specific real estate, for example, office by country. And I also asked them if they could give me some example of what they considered the fair market value in 2019 for those assets compared to the same assets that they still own today. Because I'm curious to see if they're assigning the same value. And if they are assigning the same value to office real estate, then I think there's some real questions to be had about how accurate some of these numbers are. And I know it's not a perfect science to evaluate these and put a valuation on them. But if you assign office real estate

the exact same value from 2019 to today, I think there's some big questions. Because I don't think in most spaces, in most cities and countries, I don't think that value is the same that was pre-pandemic. No, I think they've all. I don't know if you could find a city that would be maintained or grown at all. I mean, it's definitely fallen. I was looking. I was trying to look for a purchase price of mean, it's definitely fallen. I was looking, I was trying to look at for a purchase price of this, but I can't like the only thing I could find was this like the units that

they bought like 10, 13 years ago, or do you know that? No, I don't know. I don't know when they bought it. I mean, there wasn't that much detail. And again, like they'll probably post some detail about the transaction because it made headlines. i'm assuming they will probably touch on it their annual report for fiscal year 2024 which is like i said is coming up but something i'm really interested in i know someone was kind of coming at me this cfa kind of guy on twitter like oh why are you wasting your time and then i came in a lengthy response as to like oh well have you looked at this this this, this, and this with references, quotes?

Never heard back from him. So I guess- It's not surprising. Yeah, he was just basically saying, oh, these, you should trust the CPPIB. They're professionals. They know what they're doing. Worry about your own investments.

You know, I'll shoot that back to him and just say, okay, so how many investment professionals I got completely crushed in 2008, 2009. Yeah. And they were supposed to be the best and were considered professional. Like I, I'm not trying to sound the alarm there, but I think it's fair to question when there's definitely some questions to be asked. Yeah. I mean, it's's it's kind of odd like somebody telling you that you should just ask nothing that's pretty much ask nothing and let them do their thing like the one thing like the one thing i could find here is that it was a couple

joint properties in manhattan like a 50 000 square foot office property like i would imagine that's what it was could be one of those they acquired a 32 interest in it but this was back in 2011 and it doesn't really have a purchase yeah i think that could be it i think it was around one third if i remember correctly so it could be very well uh that one yeah it was kind of like a release in 2011 where they acquired a bunch of interests and properties and every single one of them has a purchase price except this one so it's kind of weird there was no purchase price on this but they you know they acquired something in seattle that they had no problem saying it was 138 million that it cost them but this one they they never mentioned anything so i mean a 50 000 office space sold for 400 grand.

Well, I guess you have a 31 third interest, but yeah. I don't know. It'll be interesting to see the full details on that. Yeah, I think so too. But no, sorry if I was a little rant. I mean, I will try to put more content on pensions. So if people are interesting in that, like I know pensions pretty well. I don't know everything about pensions.

I'm not an actuary, obviously. I, a bit how actuarial valuations work. I know a decent amount, but I think there's not that much content on Twitter on the subject. That's what I've noticed. Even Dan Foch and I were talking and he's like, yeah, there's like no one that talks about this stuff. And I think there's a lot of misconceptions as well. So I'll try to be posting a little bit. So if you want to, you know, you know, learn more about that, just follow me at Fiat underscore iceberg. But enough about the boring world of pensions. And let's talk about where I went yesterday morning at Costco, which I found a good Costco in Ottawa. that's not super crazy busy and there's ample parking spot because the one we used to uh to go to it was just a zoo every single time the new one is much newer a bit more

in the suburbs but uh it makes my blood pressure not go as high as the one i used to go to well the ones around calgary so they always like there's i think the one they call it it's in like deerfoot meadows it's one of the busiest costcos in north america so then they kept okay they kept building like out so you would go they would build a new one and you would go there for a bit because nobody would go there but then it would catch on and that would become just packed and then you just bounce around and now all of them are just they're're crazy, crazy busy. I mean, even Costco says like their stores are too busy, which is just crazy. I mean, the thing is they showed weakness for like the first time in quite a while. So revenue fell short of estimates by about 70 million, earnings still beat

by like almost 10% on street estimates, but the stock ended up falling, I think, 7% or 8% after it missed revenue expectations. So same-store sales are still strong. They're up 5.8% on the quarter. The surprising thing here, or maybe not that surprising to some, is the Canadian same-store sales. So they're the highest out of any other segment, and they came in significantly higher than expectations. So same-store sales canada grew by nine percent where analysts were only expecting 6.3 percent and i think this is probably a result of canadians just attempting to pinch pennies find bargains where they can i shop at costco a ton now i didn't really go there i went i still went there pre-pandemic but now i go there like i'm there probably 10 12 times a year. And it's a huge shift. We, uh, when we went yesterday, 800, $800. Yeah. Oh yeah. It's not nothing special, but, um, I mean, if you have a baby

diapers are really good deal at Costco and we bought like a bunch of diapers yesterday. So the baby stuff alone was like $150, but we'll be good for, uh, two, three months easily, but it's just stuff like that. Right. It just, uh, it kind of adds up, but we'll be good for uh two three months easily but it's just stuff like that right it just uh it kind of adds up but we try to buy especially stuff that doesn't go bad yeah whether it's household items and stuff like that i think you end up saving quite a bit yeah yeah i mean we just we kind of buy even the meat and stuff there i mean you buy it if you have the ability to vacuum seal it and throw it in the freezer like last forever and you say that's what we do yeah like a lot of people kind of wonder if you save any money there but i truly think you you have to buy more which is kind of a business

model you buy more they get cheaper prices through you know high volumes which but in the end i think you do save quite a bit of money just have to be strategic right if you buy perishables make sure you eat a lot of it or you know if it freezes well like you said you freeze it yeah yeah and then like you save quite a bit of money and i mean it's fairly evident they're growing like they're growing like crazy so e-commerce the shift to online shopping is definitely here to stay despite the pandemic being over so same same store sales, 18.2% growth on the quarter. When we look to the first six months of the year compared to last, it's up 12.2. Membership revenue, 8% growth on the quarter. So this is a pretty profitable segment for Costco. They drive a ton of profits through the memberships and just offer lower margin

products to the consumer to kind of make it a bit more sticky. It also gives a bit of an indication on how many people are sticking around and how many brand new people are heading there. So most retailers are kind of seeing flat growth in terms of foot traffic and how they're driving growth is through higher ticket prices. But Costco is actually seeing, I would say for a massive retailer like them, a large amount of increased foot traffic. So they reported 5.3% growth in year over year traffic. This is further amplified in Canada. It's 8.2%. So they're seeing huge, huge growth in Canada.

Renewal rates in Canada and the US are at 92.8%. Internationally, they came in at 90.5. So the company has explained this in the past their international renewal rates are typically lower because of how fast they're expanding internationally so when they open up new stores which again they're doing faster internationally than domestically they get a huge influx of new members many of which don't renew so the initial renewal rates are lower until you know and then they gradually creep up as, you know,

more and more mainstays stick with them and they sold. Aren't they in the low nineties? It's like pretty consistent in terms of renewal. Yeah. Canada and us is like 92% plus relatively consistently. I mean, as soon as people get a membership, they very,

very rarely give it up. The, the companies, I was, another interesting thing is the company sold a hundred million dollars worth of gold bars in the quarter they started selling gold i think it was like a year ago yeah yeah i looked them up i think they were sold down and one thing too they've been selling i think you can buy on the website i know they you could a couple years ago but it was this like apocalypse prep kit basically where you like it was like several thousand dollars and it

was like a palette of just like non-perishable foods like if there's basically a zombie apocalypse that you're ready to go they actually offered that whatever whatever they could do this i they have, I was listening while reading the conference call, but I actually had to run and I didn't get to finish reading it, but there's something weird. Like they're selling baseball cards. You can buy like old baseball cards and the price tags, like 20, $25,000 on them. I might be wrong about that. I'll have to go back and maybe touch base on it next week. But yeah, they were selling something really weird, like a collectible that was worth a ton of money.

In terms of their, so it reports inflation numbers. So they predicted that inflation would be in the 1% to 2% range in 2023, but they came out and said that it was in the 0% to 1% range. And I believe this is store-wide maybe they even they reported that there was even 20 to 30 deflation on some of its bulkier items so like furniture and all that type of stuff just because of reduced reduced freight prices and i mean overall it just kind of seems like a pretty big overreaction for such a small miss but like cost on a, like just straight up valuation basis is so expensive. It kind of makes sense for some people to take profits on a quarter miss when, you know, it's gone up. I don't even know how much it's up. It's got to be up nearly 60, 70% over the last year.

Yeah. It's pretty crazy that like they've performed really well. Yeah. I mean, it's, I think it's doubled over the last three years, yeah, since 2021. So it's been definitely good returns. And for Canada, I mean, I have it for our joint TCI listeners. In 2018, revenue has compounded for Canada only at around 10% per year. So really a stark increase in 2021. But yeah, you were definitely right i mean it's been doing quite well in terms of yeah in terms of canada and then if you look at for people if they want to see those

gold bars i'll just show uh for making that i think they seem to be in stock for a little bit a few of them so there you go so yeah i was aware of that i mean i'm not logged in with my memberships i don't see i think these are for members only so it'll be interesting what the prices are but this is announced the top one yeah but they do have some that are not members only so you can uh i guess you can get this uh bar necklace i guess guess. Oh, man. Oh, Costco. They just keep on surprising us. Yeah. Yeah. I was trying to find the, I'm almost positive it was baseball cards, but I'll have to look it up and mention it next week because it was something really weird. Yeah. And was that all for Costco before we get sidetracked too much by what they're selling?

And I think I'll keep the last one I had on the slate. I know as earnings are slowing down, there's a couple of companies that we had prepared for the podcast that we just didn't get to. So I think probably in the next few weeks, we'll be revisiting some companies that we wanted to talk about. But to make sure that the podcast wasn't an hour and a half, we ended cutting it short so we'll end up doing that and then aside from that anything else you uh you have for listeners or i think that that's pretty pretty good episode good place to wrap it up nope that's it but i did i did find it they are selling mickey mantle autographed baseball cards yeah that would not be cheap i know enough about baseball to sell yeah i don't think it's a rookie

card or anything yeah no auto grade 10 yeah okay yeah yeah i know enough about baseball collectibles or hockey cards so typically you'll get them graded i think it's a scale up to 10 and the higher the scale the more you can get for it especially the extra rare ones but if they're not graded usually like you really can't get as much and you need to get them certified. I actually sent, if you'd notice on the back rack there, I sent in a bunch of those cards that I have to get graded. Like on the back rack, I usually have them all layered out there, but I sent them in.

A whole bunch of them in to get graded. Well, people have to do the, you know, join TCI when they do come up, so they see them. But well, yeah, that was a great episode, Dan. For people that are new to the podcast, we do appreciate you joining in, tuning in to hear us talk about earnings and news. If you haven't done so already, if you can just please give us a five-star review on Spotify, If you haven't done so already, if you can just please give us a five-star review on Spotify, on Apple Podcasts, or any platform that you're listening to us from. It does help people find us with the algorithms. And definitely, if you enjoy it, talk to a friend or family member and tell them about it because that's how we can grow the podcast and keep doing that. Aside from that, I mean, you can get me, like I said earlier,

if you want to see what I'm posting at Fiat underscore Iceberg on X slash Twitter and then StockTrades underscore CA. Perfect. So we'll sign off on this note. Thanks again for listening and we'll talk to you soon.