The Canadian Investor - Elon Musk Buys a Stake in Twitter - Earnings Roundup

Episode Date: April 7, 2022

In this release of the Canadian Investor Podcast, we cover the following earnings releases and news: Elon bought 3B of Twitter stocks which now makes him the largest shareholder at 9.2% DHL makes an agreement with CargoJet Americans lost 7B in 202 to internet crime Netflix documentary on Quadriga CX Gamestop stock split S&P 500 has its first negative quarter in 2 years Tesla released its total deliveries Ryan Cohen gets vocal on twitter BRP earnings Dollarama earnings Chewy earnings Lululemon earnings Tickers of stocks discussed: LULU, GME, DOL.TO, CHWY, DOO.TO, CJT.TO, TWTR Our Website Canadian Investor Podcast Twitter: @cdn_investing Simon’s twitter: @Fiat_Iceberg Braden’s twitter: @BradoCapital 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. Check out the Yes We are Open Podcast from sponsor MonerisSee omnystudio.com/listener for privacy information.

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It's April 4th, 2022. My name is Brayden Dennis, as always joined by Simon Belanger. How we doing uh the richest man in the world is now the largest owner of twitter yeah that was quite the news today at first i thought you were talking about me for the richest man in the world but i guess not uh yeah you're referring to after seeing your bitcoin stake man you're you're up there you might be neck and neck with elon at this point i think i have long long ways to go uh but yeah elon did announce that he now has a stake in uh twitter i bought three billion dollars worth of stock which gives him a 9.2 percent stake in the company and is now the largest shareholder of the company so what are your first impressions on that? So he made, well, we have a couple of things here, right? Like he made this poll on Twitter

on March 25th saying, free speech is essential to a functioning democracy. Do you believe Twitter rigorously adheres to this principle? Yes or no. In this poll, principle yes or no in this poll. Two million people voted and 70.4% of people said no, that Twitter essentially does not adhere to free speech being essential. And later in the day, I guess at 4.26 AM, what is he doing? He replied, the consequences of this poll will be very important. Please vote carefully. And I just think like, little do we know he's talking about like potentially, you know, buying a ridiculous amount of the stock. One, he can afford it. Let's put it that way. He can afford it. But two, it's like let's put it that way he can afford it but two it's like dude this platform is so important to this guy not only from like a marketing perspective but like

his fanboys all follow him on on twitter as well and so i don't know i don't really have any particularly hot takes yet do you i mean not really i know he was uh he had talked about building his own social media platform about like 10 days ago and yeah i think he probably looked into it and figured it was just easier to invest what like uh the figures i saw is about like one percent of his net worth to acquire that stake in twitter so it's it's still know, as funny as it is, it's almost like pocket change for Elon to buy a $3 billion stake in it. But, you know, I tweeted earlier today on our Canadian investor Twitter account at CDN underscore investing. And the comments that we got for people, just their first impression, it was pretty interesting. Some people are kind of indifferent. I know C-Roy

compounding, that's what he mentioned. Someone had a pretty funny one. He replied, it's called mid-age honesty. He just replied Rupert Murdoch, which it's pretty funny when you think about it with his media empire. But I think for the most part, people are not quite sure what to think about this, just like you. I'm kind of in that same boat. I don't know if he wants to be more hands on. Will he nominate some directors on the board? What not? Are we going to see some big changes with Twitter? I mean, at the end of the day, it's not easy for Twitter as an organization. They have to really balance free speech with hate speech and not allowing it. And where do you draw the line? And yeah, it's a very difficult platform to monitor, if you ask me.

So I don't know either where he's going with this. I agree. And the public loves to hate on these social media companies lately and i am really glad i don't run one of them because like damned if you do damned if you don't you literally you can't please everyone that is one of the number one rules of life you cannot please everyone and this is just a conversation what elon is calling just like the town square where people talk. You're not going to please everyone. Damned if you do, damned if you don't.

We're actually going to talk quite a bit about Mr. Musk today because we're going to talk about earnings and Tesla deliveries at some point as well. A stock that we have not talked about in absolutely ages but you know people love to to trade the thing it's like the number one most traded stock in canada which actually blows my mind given given the share price and fractional so anyways yeah and it's the last thing i'll mention here not to drag on for too long is just the allureas right the stock was up what 25 last time I checked today just on the news? Yeah.

But it still doesn't explain, you know, how the business will change going forward. He's just a major shareholder. Well, the top shareholder. But, you know, will it make the business more profitable? Will it make it better? Who knows? Does it require 25% premium

because Elon is a major shareholder? I don't think personally it does, but people love investing in what Elon invests, I guess. Yeah, I think people follow him into pretty much every trade. We've seen that with some of the gambles and some other stuff as well. Everything the guy touches just instantly turns to gold because he has this name and his three billion i think it's 2.9 billion in stock is already up close to 30 percent like this guy needs more money like everything like it's actually egregious what uh what happens here but anyways let's uh let's get into the news here you have uh you have one here with a canadian freight airliner yeah so the news came out that dhl was buying up

to 9.5 percent stake in cargo jet so dhl express division which is an affiliate of deutsche post dhl group which is listed in germany, struck a deal with Cargojet, which would give the German company an option to buy up to 9.5% equity stake in Cargojet. So the deal means that the warrants would be issued by Cargojet would allow DHL to acquire that 9.5% of outstanding voting shares over a period of seven years at a price of $158.92 each with vesting tied to deliveries of approximately $2.3 billion in business volume during the term. Part of the reason that DHL is interested is because commercial airlines had picked up the slack during the pandemic with cargo transport due to their low passenger volume but now that things are picking up in terror in terms of you know

airline travel cargo jet is definitely one of the companies that can make up for this reduction in capacity it is an interesting uh agreement for sure and for those who own CargoJet, I think it's definitely something pretty positive here because DHL is a major logistics company in the world. Yeah, for sure. What have the shares done on this news? Oh, they popped quite a bit, like 20, over 20% since mid-March. I'm assuming that that deal has a great deal to do with it. Yeah, I think it may have been a mix of the earnings that were pretty good. I think probably a bit better than expected and then that deal. But I think it's looking good. If I remember correctly, Amazon also has a small stake in them from a couple of years back.

Yes. You don't get these big companies having a stake in your company if you're not doing a pretty good job i'll just say that yeah yeah you got to be doing something right exactly yeah yeah okay um well that's cool um to some uh cyber security news, the FBI came out and said that Americans, I don't know, I guess that includes just people and corporations, Americans lost $7 billion in 2021 to internet crime. The report says here, Americans reported loss surpassing 6.9 billion in internet crime last year, according to this report from the FBI. 847,000 complaints concerning a wide array of internet scams, which was up 7% year over year. We're going to talk about internet scam here later

in the episode as well. Dude, these things are so juicy. I've been watching all these Netflix documentaries on true crime and fraud. I'm addicted to them. Just inject these things into my vein. I'll watch all of them. Here's the quote. In 2021, America experienced an unprecedented, dude, I hate that word. Unprecedented is the worst word ever. Increase in cyber attacks and malicious cyber activity, said the guy from the FBI. So man, I just don't see a world where this number just doesn't continue to tick up and up and up like a good compounding stock in terms of cybersecurity losses over time. And I think that there's going to be some huge secular winners, whether you're like a CrowdStrike bull or whatever, what have you. I don't see a world

where you don't make a ton of money if you have a really long horizon investing in cybersecurity stocks, because this isn't going anywhere and it's going to get worse. Yeah. I mean, I think it's just unfortunately the dark side of human nature where people try to take advantage of new technologies to take advantage of people's steals, some of their hard-earned money. It's nothing new though i mean there's been scams forever right even before the internet uh people would get ever heard of bernie madoff exactly so bernie madoff but it could have been other types of scams i know there was a lot of uh fishy things going on with door-to-door like you know hvac salesmen's and stuff like that um so it's nothing kind of new it's just a new way of doing

it so i agree with you definitely cyber security companies should benefit from this in the long term yeah totally and if you look at what is going on i think that there's like this forum of like hackers and people that get together that this is what I'm gathering from just injecting all of these true crime documentary into my veins. There's like these online forums where people with basically not a lot of tech background can get into really complex internet scams. can get into really complex internet scams and it's just like i don't know man it worries me quite a bit if you like scale that up market to some of these scams um anyways i think that the big the big winners will win in a secular way yeah exactly and there are some simple things like people can also just do to be safer right right? You know, don't open emails from recipients that you're not aware or emails that you're not expecting,

any attachment or things like that. And when financial institutions reach out to you, as a general rule of thumb, they won't ask you for your information or your password or anything like that. So there's just some easy ways that people can be vigilant about that. As do-it-yourself investors, we want to keep our fees low. That's why Simone and I have been using

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

So Dollarama had their Q4 2022 or full year earnings as well. They have a bit of a weirder reporting schedule, of course, because they're finishing their full year earnings. So sales increased by 7.6% to 4.3 billion. Comparable store sales grew 1.7%. Gross margins were essentially flat here at 43.9%. I think they move a couple basis point, but nothing much, which is pretty good based on the inflationary pressures we've seen. It's damn good, actually, I think. Yeah, just staying for a lot of companies, like just seeing those gross margins not go down too much or staying flat, I think will be very good. Like that's probably the stronger companies that will see that in the upcoming year.

That's a real signal for pricing power. Yeah, exactly. Because their expenses are going up. There is no question about that. Diluted net earnings per share increased 20.4% to $2.18 per share compared to $1.81 last year. They added 65 net new stores to the year, well, year which brings its total to 1421 so 1421 they bought back 1.06 billion of stocks and the board approved an increase of 10 percent in their quarterly cash dividend their guidance looked pretty good too, I have to say. They had guidance for same-store sales of 4% to 5%.

And we'll introduce some new price points up to $5 for 2023. So I know we had discussed this the last time we talked about Dollarama. I think it was for an earnings episode too. So I think you were advocating, if I remember correctly, that they had some leeway to increase those price points and they'll really be testing that with the the five dollars this year um so what what do you think will happen do you think they won't miss a beat basically my hot take is that they will not miss a beat because the actual price point like the the nominal value, the nominal number that is on there is actually irrelevant. It's the value proposition of what they're doing, which is very low priced items,

basically compared to wherever else you can get it. And if you go there compared to where you're going to spend at a competitor, the value proposition still remains. And I have been banging the drum on this, that the actual dollar amount, they have a ridiculous amount of very good pricing power, which is very contrary to what the street has believed and what most people believe. And here's something interesting. The dollar stores in the US have really had a tough time doing this. They've had way more flack on the pushback for pricing of changing it from even to $2 from one. They've had real pushback on that. Now they're finally doing it because they have no choice really. on that now they're finally doing it because they what they have no choice really and dollarama has been selling four dollar items for how long now right like five what's five right like if it's if it's like if the competitor sells it for 10 and you sell it for five the value proposition remains i think dollarama has excellent pricing power which is know, very ironic to say in a lot of ways. Yeah, I think for me, I will, I'll wait until the end of this year. So the end of their fiscal 2023, let's say, so that will be most of 2022 in the start of 2023. I'm interested in seeing what

will happen in terms of their sales overall. So if they need that four to 5% increase, sales overall so if they need that four to five percent increase which i mean should be to me the baseline here because um if we're looking at inflation figures we're in that range right now four to five percent so you definitely want that to be at least a minimum in terms of growth sales for same store so i think it'll be interesting just to see how customer react if they do hit that even exceed it then clearly customers are on board like you're saying. So I think this year will be a good test for them. Now more on the guidance. They want to open 60 to 70 new stores.

And they are guiding for gross margins between 42.9% and 43.9%. So that would be a bit lower potentially than this year. But again, I think it's respectable considering everything that's going on with supply chain issues. I'm sure they get a lot of product from Asia as well. China's had some lockdowns recently, so that may have an impact on it. It'll be a fascinating case to look at when the full year is done for them. I'd like to reiterate that I think it's an interesting case study in a lot of ways on unit economics, what we're seeing in an inflationary environment, wages too.

It seems all of that seems very negative for Dollarama. And I see it in another way, which is every time they've been doubted on their ability to raise prices, the business has just gotten better over time. And so until I'm proven wrong about that, I have no reason to believe otherwise, basically. I've been talking about these scam Netflix documentaries. There's probably a bunch on the other platforms as well. Dude, I love a good true crime fraud scammer documentary. I don't know why. Something about it, about it uh it's a case study on sociopaths and money like they're so addictive and really like hard to stop watching so there's a bunch of them that they've came out and they keep pumping them out because they keep going to like the top five netflix when they release so i'm not the only one

that likes them clearly uh so have you seen the or do you do you know about quadriga cx you're a bitcoin guys yeah i knew about it before the documentary uh came out i don't know the full extent of the story i've watched half of it so far just because my wife is not super into that stuff so it's kind of when it's simone time i will watch it so i'm halfway through yes i still have to finish it but uh yeah it's definitely a fascinating story it is a fascinating story so dude i feel like a like a chump like i'm so out of the loop i had never heard of the story of gerald cotton and quadriga cx even though it's like a canadian guy so as a backstory, well, to be fair, I think I was getting into Bitcoin after this thing. Thankfully, maybe I would have been up and maybe my money would have been in Quadriga

CX. So as a backstory, Quadriga CX was at one point Canada's largest Bitcoin exchange. change. Scumbag, chief scumbag officer, Gerald Cotton, the co-founder and CEO. And to be honest, the co-founder as well, who's not really in the picture, he has a history of online scams. He's a convicted felon from California, I believe. And he's somehow just free roaming the streets. California, I believe. And he's somehow just free roaming the streets. They were essentially just running a Ponzi scheme behind like a front end of you investing in a site. Now, I don't want to give away all the details away because the story, you know, the documentary is entertaining and there's twists and turns. I actually watched it on the plane last week on my way home. So there were some interesting twists and turns. I'm not going to give the whole thing away, at least for a couple of weeks, give you guys

some time to watch it. But without like some spoilers and without what is like common knowledge on the story or basically given away on the trailer, this dude ran off with millions of dollars from Canadians and is allegedly dead. from Canadians and is allegedly dead. But the internet detectives of this world, who by the way, I love these guys, they have been trying to track down and are convinced that he has faked his own death in an exit scam. And so exit scams are pretty common. And like this elaborate fake your own death is just so wild, dude. Like how are these real things that have happened on Earth? Like it blows my mind.

Yeah, I mean, it's I mean, it's a harsh reality, too, for what is plague crypto currencies for the longest time now i think people right especially if you're just investing in like bitcoin and ethereum there is some very like you know safer ways to do it legitimate companies that are well regulated um you can also to be even safer if you don't want you know a company to potentially be a fraud and you don't know you can make sure that you have your cryptocurrency in cold storage and then you control them you're not at the mercy of any exchanges but you know i started the first time i started investing in crypto was in 2013 where a buddy of mine convinced me and i ended up losing uh back half a Bitcoin, which of... Holy...

Yeah, but back then it was only worth a couple hundred dollars, right? So... Okay. But again, at the time, you could only buy it through the exchange and you had a 5% fee via credit card. That was the only option. So every transaction that you made with fiat to buy cryptocurrency, essentially there was that five

percent fee and then i can't remember exactly what happened with the exchange i had it on but ended up being kind of a bit of a scam as well and i lost my my funds off of it yeah i mean it's i've come to peace i knew this happened to you but i i don't know all the details yeah and i just wanted to mention that because nowadays i I mean, you have major exchanges like, you know, you have in Coinbase that's active in Canada, in the US and around the world. You have ShakePay in Canada that's well recognized too. You have other major exchanges. So it's much easier for people nowadays. Fees are lower and you can have a lot more trust in the businesses that are there there's still some work to be done i think in terms of regulation but it's night and day

compared to even just a few years ago yeah totally and you and i both use shake pay uh shout out to shake pay uh and like it's very kind of obvious what is legit and what's not legit out there like just from like just from like a feel test you know even like i know that sounds ridiculous because you because you got to actually like do your due diligence but some stuff out there in hindsight just looks so obvious because like even the website looks off it's like so suspect so uh we use shake pay shake pay is great so if you want to buy but I'm by Bitcoin good she's shake pay okay moving on we got we got some more earnings release yeah well before we have more earnings release we had the game stonk who announced a stock

split so of course I'm talking about GameStop here. Their shares surged and extended trading last Thursday after the company said it planned to implement a stock split. So the video game retailer said it will seek shareholder approval at its next shareholder meeting for an increase in the number of Class A common shares from $300 million to $1 billion to partly conduct a stock split in the form of a stock dividend. So we all know we've talked about stock splits before. They're very popular for a lot of investors. It's pretty common to see that short-term pop but at the end of the day change

is really nothing for the business um you know it's just just you know we talked about the pizza analogy it's just slicing that pizza into more slices without making it bigger that's right and for the investor base who loves gamestunk this might make a difference. I'm not talking trash, but for the investor base, based on what I know about them, this might make a difference for them. Yeah. I mean, at the end of the day, we can say what we always say about stock split, but investing is psychology, right? So if enough investors think that this is a great move for the company and they see value in it and then they place a premium on the price of the stock because of it, well, it can, I guess, help the shares. Like it's not – there's no material value to it, but it's always the way that people will perceive it. And if there's enough people that do, then you can see maybe even a longer

term bump because of it. Yeah. And you could maybe argue there's some reflexivity there in the share price and the business. Sure. You and I take the side of long-term, it all comes out. It all comes out as a weighing machine and it doesn't make a difference for the business. machine and it doesn't make a difference for the business. Let's talk about Bombardier Rec Products. You guys know I talk about this one quite a bit. The owner of Sedu and Skidoo, they reported full year fiscal 2022. Revenues were $7.6 billion, up 29%. Earnings per share up 84% percent earnings per share up 84 percent year over year uh they gained a sizable market share gain from 2021 they estimate now they have 30 percent of that america north american power sports market share if you include like atv snowmobiles pwc which is like c c deuce i talk about this name you know over and over that's my style i rarely trade in and out of stuff so i keep tracking the same names most of the time if i like

it i think my thesis has continued to play out in this name i'll be honest here that and i still think it's extremely cheap you know trades at 11 times trailing earnings. EBITDA has exploded from 288 million in 2016 to almost one and a half billion. And the share count has decreased significantly. They've paid a yield and raised it over time. So shareholders have been issued back capital. And they're growing extremely fast organically. They expect continued growth across all of its product lines, ranging from 24 to 29% across their product lines compared to fiscal 2022, which I'm talking about now. So, I mean, more good things for a company that has had issues in production, big delays in actual

capacity and manufacturing capacity, you know, the semiconductor shortage that has affected all vehicles and power sport vehicles, recreational products, vehicles are included in that. Again, these things have become a computer. Even these type of machines have become moving computers and so that's definitely affected their ability to uh to meet demand yeah moving forward i mean what like i don't i don't see them losing market share that's for sure and i think you know for a lot of outdoor equipment like this would be, or, you know, whatever you think about, I do, I've mentioned it before, I mountain bike a lot,

but there could be a bunch of other things, whether you do, you know, paddle boarding, kayaking, whatever it is. I think the pandemic will actually have a long lasting tailwind for these type of businesses because I think it's really, it made people realize that you know they may have had a certain lifestyle before the pandemic and now knock on wood you

know everything's reopening and we're not going on to a lockdown once more again I don't lockdown number yeah exactly but I think even if everything is goes to somewhat normal in the years ahead of us, I think a lot of people will probably have realized that they really enjoy these outdoors activity. People that didn't even think that they would like to do that before the pandemic, but were forced to do it because it's either that or you stayed home or in your backyard if you had one. But now you got to enjoy this new activity. And even though the pandemic is over, I mean, you actually enjoyed doing it.

And it's something you'll continue doing. So I think there's going to be some, you know, definitely some pull forward demand for this. But I think we're going to see some consistent increased demand over time as well. Maybe not to the same extent, but just people realizing these new hobbies or passion that they've discovered. Two points there. One, I totally agree with you, yet the market seems to be pricing it like it's all pulled forward growth. I think anyways. I'll take the other side of that bet.

I will definitely take the other side of that bet. I will definitely take the other side of that bet. And a second point, which actually, I guess it's the same point, which is if you over the last year or two have been introduced to a jet ski, you sat on one of those things, you got the dopamine hit. You're not going back. You're getting one, you're getting, and you're getting two of them. If you can get, if you can find a way to get two of them, you're going to do it. Like that's the way I'm seeing it anyways. And I've been right so far and I still think the stock's cheap. So yeah, I'll continue to talk about it because I think it's a good name.

Those are all things too that, you know, there tends to be a positive feeling with those goods because you you experience something when you're using them it's not like buying a new tv where it's like oh it's nice i paid like whatever the price i got this brand new tv top of the line you're still watching the same show after like a month i'm pretty sure you you know you don't really care anymore that your tv is that new right like it's not yeah it's a little nicer than your old one. But aside from that, I don't think it's,

it creates an impression as much as just something where you can just have a whole new experience. 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. Now moving on to just some news that I saw. I think it was on CNNBC, but it was one of the major news media for financial news. And it said the S&P 500 closed down for the first time for the first quarter in two years. So the S&P 500 fell 5.2% in the first quarter of 2022, which was the first time since Q1 of 2020,

since q1 of 2020 which is obviously no big surprise because at the end of q1 2020 everything was going straight down like an arrow and the snptsx for that same period is up four percent so i mean here i'm talking about q1 2022 so of course go can right? We're just better than the S&P 500. Go Canada. And go Canada because you're talking about potential making a splash in the World Cup. That's right. That's right. Look at us go. Stock market performance, making it to the World Cup since, what, the 80s? My God.

I think you can get like 200 to 1 there's something like that for canada to win i would take that i mean i don't i've been watching all the games but i know that they've been good i think they're like they're i'm not a big uh soccer fan either but from what i've read from experts is that they're a bit of a underrated young team um so uh yeah so hey if you make that bet and you have the opportunity to cash out maybe you know they make it uh it can't be 201 anymore after what they did in the qualifiers then again i know absolutely nothing so i i checked on the weekend and that's what it was just because i think they have a pretty difficult pool i think that's fair enough uh sorry to

sidetrack but today is april 4th and i didn't write this down anywhere in our notes but sports gambling was officially legalized on those platforms today for single game sports betting i know this because i went to the score bet uh their launch party on saturday okay let me sam roberts band you know launch party on saturday okay you know me sam roberts band you know the uh anyways that's a story for another time but today april 4th uh sports betting legalized and we've been talking about before i think it's obviously going to be a gigantic market and penn national gaming took a score which was a tsxv listed stock they bought that out for like $2 billion. So shareholders in that made a good penny. Anyways, back to the S&P.

So as I was saying, the S&P 500 was down for the first quarter in two years. So I wanted to mention this quickly because you have to get past the headlines here. If you put things in perspective a bit more, well, if you invest in the S&P 500 around February 9, 2020, you would be looking at around 40% returns at the end of Q1 2022. And the reason I chose that date is pretty much when the S&P 500 peaked prior to the big drawdown in late February and March of 2020. So if you bought at the peak, you still would be looking at 40% return since then and clearly way better if you bought in March of 2020. The reason I wanted to put things in perspective is it's easy to see those big headlines, but once you have a longer time horizon and you actually zoom out, you see that, OK, Q1, sure, it was down a little bit.

And it really sucks if you started investing in the past, you know, the past couple of months or in late 2021, because you're probably looking at some losses, especially if you're doing index funds like an S&P 500 fund. But putting things in perspective really helps you just stay on course, stay on track and not panicking when you see those pull back. And 5% is not a lot, but I know if people are just starting to invest, it might not feel great either. I think that context and historical performance is needed. If you're looking at like, okay, the S&P does negative 5.2 in the first quarter. If you've held the S&P for the last 5, 10 years or even shorter, like two years, you've made stellar returns. If I could take that two years performance and just, you know, put it out there for the rest of my investing career, you'd make tons of money.

You'd make a killing. Like you, you put that into a calculator and you're like, holy crap. So it's a reminder that the market doesn't just move straight up into the right. But what it does tell you is that, you is that if you zoom out quite a bit, there's lots of reasons to be bullish today. There's lots of reasons to be bullish tomorrow. And I think it's a good time to be an investor. Let's talk about Tesla deliveries.

I hinted that we'd be talking more about Elon himself and the total deliveries of the company for the first quarter of 2021, or sorry, of 2022 was 310,000, which was up 68% from the Q1 of 2021. 14,000 deliveries, almost 15,000 deliveries of the models S and X, so that the more luxury line, and 295,000 deliveries for the model three and Y line, the less expensive versions of the cars. Really impressive execution. During that time of this first quarter of this year, during that time of this first quarter of this year, GM has delivered 457 electric vehicles. Not 457,000, 457 electric vehicles. Now, it has become quite obvious that their infrastructure advantage over competitors is becoming larger and larger over

time for Tesla. Now this stock trades at over a trillion in market cap. It seems to be immune from multiple compression, this expensive stock destruction that has happened. And as a shareholder base, I'm impressed. The shareholder base has continued to have the never sell attitude, at least as long as their god, Elon Musk, and who, to his credit, probably the greatest engineer inventor meets businessman in history. As long as he's at the helm, you can't rip shares out of their head shares out of their hand. And so you got to give it to them. I cannot comment on the valuation anymore because it has made little sense

to my brain in the past. And I have been consistently incorrect, but that's fine. It's not like I shorten the thing or trade options on the thing. So it's fine. Impressive stuff all around. I got to say, I'm not buying shares anytime soon, but I do reserve the right as all investors should to have the ability to continue to monitor a story and make decisions as facts change. I think we're a long way away from there. Two things have to happen. We're a long way away from there. Two things have to happen. One, the valuation has to give me some sort of IRR where I think I can make some money. I don't see that. Or number two, continued mind bending execution and expansion of the total addressable market. Like the bulls keep saying that they have what their data advantage. Time will tell.

I'm not saying anything negative about it anymore because I'm just flat out wrong repeatedly about this stock, which is fine. You don't have to be right about every single stock, especially ones you just have to be right about the ones you own, or at least most of them. And so, yeah, I mean, impressive execution and congrats to Elon and the squad. Yeah, and congrats to anyone who hasn't listened to us and just has bought this dog, held it for a while. Clearly, you know, a lot of the time it didn't make much sense for either of us, myself included. But, you know, happy to see they're doing well. And whoever owned this dog, I'm happy for you. And, you know, hopefully it'll're doing well and whoever owned his dogs i'm happy for uh for you and you know hopefully it'll just keep uh going doing better for tesla yeah look i i hope they keep killing it because um it's an important company it's an important company for decarbonization

for ev adoption um and they have an obsessive fan base and if you've driven the car have you driven one of the cars no i haven't no it's it's kind of like the the seedy thing you know do it and you'll believe it i've driven the car they're they're excellent they're it's kind of ridiculous how fast some of them go like your your head hits the back of the thing pretty quick and uh anyways i got uh only good things to say about the product yeah nothing more to add there so now moving on to chew weed which had their q4 2021 and full year earnings sales increased 24 to 8.9 billion that's impressive considering the pulled forward growth they had due to the pandemic in 2020, their sales had increased 47% over the 29 levels in 2020.

Gross margins improved 120 basis point to 26.7%. They had a net loss of 74 million, which was down 20% from the previous year. Their share count only increased by 1%, which was less than the 3.5% increase from the previous year. Their share count only increased by 1%, which was less than the 3.5% increase from the previous year. So a lot of positives here for Chewy. They had $7 million in free cash flow. That's an improvement over the previous year because it was $2 million the previous year and it was negative $2 million in 2019. So they're slowly getting better in terms of free cash flow generating by the business and following the earnings release the stock was down a whopping 16 percent it seems that most of it was because of guidance there was also some issues with

supply chain constraints logistics which is not a surprise here their guidance management said that they expect revenues to be between 10.2 billion and 10.4 for the this upcoming year that's an increase of about 15 percent in sales if we take the low end of their guidance and based on that shoe eat now trades at less than two times next year's sales so um you know it's uh i think it was an overall pretty good year weather i think it's a good good stock to invest in i'm not sure i kind of want to see how they'll do going forward definitely this year um they have pretty low margins but the kind of business they're in it's nothing alarming obviously you shouldn't compare them to a uh you know a sas business very different type of business but uh i think it was overall

pretty good it may be an opportunity for those who are looking to start a position in the business but for me it's one i'll keep an eye on but i'll stay on the sidelines for now just a comment here on ryan cohen he's he's still the ceo today right i believe yeah he is like uh we're talking about gamestop earlier he's like god amongst the reddit gamestock gamestonk gamblers this guy um and i think this is timely obviously because you're talking about chewy.com he found it and he's the ceo today can we can we confirm that no i don't think he is yeah oh he was the ceo now he's the now he's just the chairman of the board yeah now it's submits sign sigh oh sorry i'm probably butchering his name but but yeah. Okay. All right. So he exited Chewy, but he's a billionaire from Chewy for sure.

Okay. So he sits today on the GameStop. I keep calling it GameStop. He sits on GameStop's board and he bought a ton of stock before this mania happened. Because he has experience in retail. He saw the capabilities and the brand that they could potentially do some turnaround story. This guy's made a, he was already a billionaire. This guy's made a killing on this stock, dude.

If you go on Stratosphere, you type in GME, the GameStop ticker, you go to the insiders tab, and you can see that this man is still buying more GameStop shares. He owns 9 million shares. It says on the far right, it says what they're buying and total shares owned. This guy owns 9 million shares. So he's well over a billionaire now in this stock alone at today's price. Everything this guy touches turned to gold. He's obviously really smart, dude, hard worker. But my favorite part is that he is a damn savage, dude. I think about a lot about these guys. We were talking about Elon earlier, these rich CEOs, super successful, but when they're online or like just in their messaging, they don't talk with the corporate BS. They don't talk with like the censored wokeness

and people love it. Dude, this guy's like another one of those celebrity people who just everything he does touches the gold because he has this like following. This past weekend, he's been aggressively tweeting against Boston Consulting Group. Dude, this guy's a savage. 30,000 likes. The only thing more useful than overpriced consultants are the ones who hire them. Dude, this guy doesn't give a shit uh i love it and um yeah we need more people like ryan cohen this guy's killing it yeah yeah i'm i wonder

if the sec will tell him he can't tweet that much well at least he's tweeting against i'm assuming all these consulting groups are all uh all private but yeah no i don't know i just think i don't think it's affected elon's tweeting all that much i think he needs like i think he needs like board approval if he tweets something regarding tesla but aside from that i think he's got cap de blanche on doing whatever whatever the hell he wants so as long as it's some unregulated meme coin, it's fine. Exactly. Now moving on to some much better earnings. So Lululemon released their Q4 2021 and full year 2021 earnings. Note here that their Q4 ended January 31st, 2022. And it does include, of course, the holiday period.

And what a year for Lululemon. Revenues increased 42% to $6.3 billion. And we're talking about like, you know, it's not a small company anymore, and they still managed to increase revenues that much. Direct-to-consumer revenues increased 22%. DTC represented 44% of total revenues versus 52% in 2020. So that's not a surprise. When we talk about Aritzia, we saw the same thing, right?

We saw a big increase in 2020 and then 2021, it was still high, but kind of pulled down, pulled back a little bit as people started going a bit more in store and just wanting that in-person experience for clothing so not a surprise kind of lines up revenues increased 40 percent in north america and 53 internationally now i think the point that for me was of the biggest thing i wanted to see was their man sales increases like i wanted to see solid numbers there and because that's one of the big growth opportunities for lululemon that and their international expansion and man sales increased 61 to 1.54 billion yeah it's it's 25 of all their business now is man's sales.

Yeah, you know what? Just anecdotally, when I walk in there, I can see that. That is about the number that I would say of people who are in there. In terms of sales, that impresses me quite a bit. Yeah. Just based on shopping habits. It's really good, man. Yeah, considering, i can't remember when they started uh into the men's market i know it was several years ago but they've been really

pushing that as one of the growth levers for the company and clearly it's been working and it's working really well most of their sales clearly are still from women's clothing and, you know, well, for women's sales. But there's also some accessories and a little bit of other things. But that's kind of how their sales and merchandise are divided. Gross margins increase 170 basis point to 57.7%. And people wonder why I like Lululemon so much. This is one of the primary reasons here. When we talk about Aritzia, that was one of the downside where they had around 44%, if I remember correctly, just on memory.

And Lululemon is like pushing close to, you know, they're pretty close to 60% margins for clothing company. That's amazing. And it'll be interesting this year. I think the most important thing to watch for me will be their women's shoes to see how that grows. Because they just launched it. So they'll be selling women's shoes for most of the year. I think they launched it late March. So that'll be, I would say, about 85% of the year.

So it'd be a good indicator to see if it's really catching and if people and if women are actually embracing their new footwear line. And the last things I wanted to mention here, they have been returning capital to shareholder. shareholder they bought back 813 million worth of shares in 2021 and authorized another 1 billion worth of share buybacks obviously it's always up to that amount and they their free cash flow increased 73 percent to just shy of 1 billion for the year so blue lemon performing quite well their guidance is looking very good they're guiding for sales increasing between 20 and 22 percent for 2022 dude i look at this and i just go holy crap those numbers are are kind of nuts and then i look at us right now recording this podcast at the moment you and i are both wearing very over i don't know

i was gonna say it's not overpriced because i like paying for it we're both wearing lululemon men's shirts right now yeah and i don't know about you but i like we're doing our part simon like we we're doing our part man we are contributors i think a lot of people are have the same mentality when it comes to clothes not everyone i definitely know and i know their clothes are not cheap so obviously you know you have to be able to afford them but i when i buy clothes or equipment or whatever it is i don't mind paying a premium if one they're comfortable and two i know they'll last for a while. And that I can say 100% when it comes to Little Lemon clothes. They are comfortable and they last for years and they feel good.

When are these guys going to sponsor us? I don't know. Like straight up. It's like, dude, like we just like we seem somehow it makes its way into every single episode. Maybe because we're always wearing it. It's probably top of mind it's like own so much mind share when you're both we're both looking at someone wearing wearing you know it's that close because it's very obvious like on the shoulder the the design anyways one of the they need to pay they need to pay us they need to really

they need to smarten up all right let. Listen up, Lululemon. Thanks so much for listening, guys. We really appreciate you guys. We're trying to double our listenership off the 2021 base. I said to Simone, we got to do 150% of our 2021 base. And we've already hit that. So we got to step it up and we got to double that base. Now, how can you help? How can you get this podcast in the hands of more people? All you got to do is share with a friend, hit us up on Twitter, like even just on our website,

there's a contact list to show you sent it to a friend. We'll, we'll give you a shout out and like, and just, just share the, share the podcast and give it a rating. Giving it a rating really helps the algorithm. Uh, that's what I've noticed. Anyways, the, the feedback on data is really terrible for podcasts, but what we have noticed is that the rating system flies it up the organic discovery on the podcast players. And that really helps it get into more hands. More people can, you know, if you got value out of it, I know a lot of other people will as well. And there's no cost to them. So I really appreciate that. So go ahead and do that. If you haven't checked out stratosphereinvesting.com, it is 10 year financial statements, high quality data. You

get professional investing data and it's free. So go check it out. That's stratosphereinvesting.com. See you in a few days. Peace. 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.