The Canadian Investor - Our 2025 Bold Predictions

Episode Date: January 2, 2025

In this special new year episode, Simon, Dan, and Braden review their 2024 bold predictions and give some fresh bold predictions for the year ahead. From the future of Bitcoin, Canadian banks, and BCE’s dividend, to Shopify’s rise and the fate of the Canadian dollar, the trio shares their bold takes on what the new year could hold.  Tickers of stocks discussed: BCE.TO, SHOP.TO, RY.TO, BLK, BX, DKNG, HOOD, COIN, CME  Check out our portfolio by going to Jointci.com Our Website Canadian Investor Podcast Network Twitter: @cdn_investing Simon’s twitter: @Fiat_Iceberg Braden’s twitter: @BradoCapital Dan’s Twitter: @stocktrades_ca Want to learn more about Real Estate Investing? Check out the Canadian Real Estate Investor Podcast! Apple Podcast - The Canadian Real Estate Investor  Spotify - The Canadian Real Estate Investor  Web player - The Canadian Real Estate Investor Asset Allocation ETFs | BMO Global Asset Management Sign up for 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. The Canadian Investor Podcast. Happy holidays. It is our annual bold predictions episode looking at 2025. We have the three amigos again. It is myself, Simone, and Dan Kent here doing the 2025 Bold Predictions episode. First off, off the top, before Simone, you do a review of our swings and misses in 2024.

None of this is advice. These are fun predictions. Don't make any investment decisions on anything discussed on this podcast and certainly not on some form of bold speculation. These are meant to be fun and not necessarily where we are putting our own capital at risk. So have that in mind, listening to the show. Always do your own work and never borrow our conviction.

Mr. Belanger, how did we do last year? Let's get a summary. Yeah, so let's do it. So I'll start off with Dan. So Dan had two predictions here. So the first one was Canadian banks will break a long trend and continue to underperform in 2024. So you had, I think you had mentioned the real estate assets would negatively weigh on the banks or real estate loans. You mentioned that more on the index level. Obviously, there's different banks in Canada, but I don't think that came true because the banks actually perform very well, right, Dan? Yeah, they actually kill it. Dan meant the telcos. right Dan? Yeah, they actually killed it. Dan meant the telcos. That's what he meant.

Yeah, exactly. That's a typo. No, the banks, there was, you know, for a long time, once the banks had a year of underperformance, historically, you know, over the last 20 to 25 years, they've always outperformed the year after. And I kind of thought like, if there's any situation where that trend is going to be broken, it's probably, you know, in the situation we're at right now in the Canadian economy. And I didn't even think this was too bold when I said it, but they ended up absolutely killing it. And for the most part, it was like the complete opposite of what I thought. The Canadian segments of all the banks just absolutely killed it. Provision started coming down. Deposits, loans still pretty strong.

And I think there was actually four. I'm not sure exactly how it closed out over the latter half of December here, but I'm pretty sure four of the six Canadian banks are actually outperforming the S&P 500 this year. Pretty impressive. I mean, I have it for joint TCI subscribers here. It's the financials from the TSX-60, of course, and includes more than banks. So take this with a grain of salt. But total returns year to date, 32%. So it'll include things like insurance companies as well.

But pretty impressive for Canadian banks. Not too much more to uh to talk about that brayden anything you want to add before we go to the second bull prediction from no the only thing i'm adding is usually we do this with two guys and we're doing it on the fly here mr uh kent just bring that microphone a little closer to your uh to your mouth because he wants a lot louder for me yeah yeah all right who's next okay so i guess i'll just do dan's second bold prediction and then brayden maybe you read mine and dan can finish with reading yours so so for dan's second small caps will outperform large caps in large part

because of aggressive rate cuts so the russell 2000 will double the returns of the large caps in 2024 and that is incorrect miss yeah i think it ended up returning half of the s yeah i think that's what i i when i looked and that was about it i mean i think small cabs got hit pretty hard um uh earlier this week with uh with the fed you know the basically uh the pause or whatever you want to call it a slower slower um rate decrease in the fed's fund rate so um yeah not too much to add there anything else dan you want to add on this one just take the loss that was just a big loss yeah okay the one the one benefit is comment yeah no comment the one thing i will say is i own you know quite a few small caps that did pretty damn good this year so i'm still happy nice yeah and i will vouch for that i know he's

has a lot of small caps and i think there's a lot of potential good investment in small caps but i think you have to pick the companies you want to invest in the index i think was a bit more difficult in terms of just how broad it is and what it captures. It'll capture a lot of small caps that are not that great in terms of companies. It wouldn't be the Canadian Investor Podcast Bold Predictions without Simone having a Bitcoin prediction in there. You had JP Morgan will launch a Bitcoin ETF in 2024. Did every other asset manager except JP Morgan launch one? Pretty much. Yeah. I mean, I can't recall how many there are in terms of spot Bitcoin ETFs now.

I think there's about 10 in the US, if not more. There's been a couple more that have been added. The one thing that they are participating in it, but what they are doing is they are an authorized participant for BlackRock's Bitcoin Trust. So the Bitcoin ETF from BlackRock, that means that they are involved in the redemption and creation process of shares for the ETF. So simply put, it ensures that the ETF shares trade in line with their net asset value or NAV. But again, I think that's a loss. It was not what I was predicting. So we'll see, maybe in 2025. Yeah, and like for the listener's context,

there's no point in us calling bold predictions like mediumly lukewarm hot takes predictions with high batting average. Like that's not the point here. You had here Bank of Canada cuts the overnight rate by 150 bps in the year of 2024 and the tsx will have a 20 plus total return yeah i almost had that one i should have said more than 150 basis point because then i would have got it it was 175 and ended up being with the most the latest uh 50 basis point from the bank of canada however i consider that a win that's this is a this is a this is a hundred percent in the wind column in my okay and then uh you know as long as the tsx

cooperates for the next few days uh i'll be above 20 percent uh the returns there. So, yeah. So, that would be a win. No, yeah. This is puck in the net for sure. Okay. I got the last one. Simone, you put these together in terms of the summary. So, why don't you put this out here? Okay, Dan.

Did you want to do Braden's or want me to do it? Well, you could cover soft choice because I don't really know them that much. I don't know them that much either. Yeah. That was our reaction last year. uh soft choice which is more of a kind of traditional software kind of computer company yeah they sell hardware and services and services there you go so um you said they would get acquired in 2024 they were not acquired however the head has performed quite well when i did these notes maybe uh three four days ago it

was up 84 for 2024 so it's performed really well but you did i will give you that is to be fair you had more conviction that they would no longer be public in, I think, by the end of 2025. I think you had a longer timeframe, but of course it was for 2024 because of the bold prediction. So that one was wrong, but hey, if someone bought the stock, they did pretty well this year. Well, I have a weirdly good track record with predicting buyouts of certain TSX companies on the podcast. And I'm still betting on this, by the way. It didn't happen in the calendar year. I did some math. So in the last 12 months, they have returned $200 million to shareholders via mostly a special dividend. In March, they declared a $4 per common share dividend to be paid on April 12th.

By the way, at that time in March when this was announced, it was a $17 stock. So that is a huge special div. They're buying back a lot of the stock. There is some SBC, so the share count's kind of flat. But the pitch was, this company shouldn't be public, and it's better private for reasons X, Y, and Z. And that graph I'm showing you and the special dividend and the basic cash back to shareholders looks a lot like a private company vibe. So is that a yellow light? Maybe, I don't know. Maybe I'm just trying to get myself credit. Yeah. So correction, I guess they've been hit by the

little downturn we're seeing this week with the Fed announcement, but still 76% return, total return year to date. So my guess, yeah, and big part because of that dividend too. But hey, good job for those who listened to the podcast and bought it last year or this year because they've done pretty good. Yeah, that's a big chunky dividend on a $17 a share. I mean, it's had a hell of a year. $17, $17 a share. I mean, it's had a hell of a year. Yeah, exactly. And then the last one here, the U.S. market more than doubles the TSX in total returns. So not quite. I mean, the U.S. market, I will give you that, has performed better than the TSX, depending if you're looking at it on a unhedged CAD version or what, you know, there's all different kind of ETFs.

You can measure it. If it's hedged, it won't be as good. The returns, if it's unhedged in Canadian dollar, I think it's probably outpaced TSX by like 13, 14% just because the US dollar has performed so well. So that one is wrong too. I think I can speak for all three of us. I mean, I'm surprised how well the TSX has done compared to the S&P 500 this year. Yeah, ditto. I mean, this is almost correct on a NASDAQ basis.

Like the NASDAQ is up like 32% this year or something like that. But yeah, I mean, I think gold and financials obviously have driven a ton of the TSX. I think gold and financials, obviously, have driven a ton of the TSX. I mean, if energy wasn't so bad this year, I bet you it would be up there pretty close to the S&P. Yeah. I am surprised as well, though. Yeah. Energy may be doing better next year.

At least it sounds like Buffett's betting on it. I think he just disclosed that he bought more of Occidental, I think, was it? Yeah. Yeah, recently. So, we'll see. So those who hold the oil and gas stocks like me, maybe 2025 will be better. 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

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And if you are an index investor and haven't checked out their listings, I highly recommend it. I bet you'll be as pleasantly surprised as I was that BMO, the Canadian bank is delivering these amazing ETF products. Please check out the link in the description of today's episode for full disclaimers and more information. All right, let's get into 2025. Let's do Dan, Simone, Brayden. And the reason, Dan, get into 2025 let's do dan simone braden and the reason dan i'm picking you to go first is because we were just talking about tsx performance versus us performance and the cad usd conversion for anyone you know getting on a plane and going south is uh you know shaking in their boots the trip's going to be a lot more expensive so i

think i think this is a good one to start with today yeah i'm uh going down to arizona in february and i have already bought my u.s dollars so that shows you uh my overall outlook on the canadian dollar but i mean not really counting like i pretty much predict that the canadian dollar will hit multi-decade lows and you know i wouldn't really be counting the very brief stint the dollar you know plummeted during the pandemic because it recovered relatively quickly but i do believe the dollar will get very close to you know levels we seen in 2002 i was in probably like junior high at that time borderline like elementary school i mean this would mark the lowest point in, yeah, 23 years.

There's a few reasons I think this for one and one of the main ones, I mean, diverging monetary policy, obviously, between the US and Canada, it's causing a wide gap in the risk-free rates in either country and with the Fed cutting by 25 basis points. And although the Bank of Canada has kind of mentioned that the jumbo cuts might be over, I mean, it's not out of the question, you know, depending on the data that you could see another 50 basis point cut in January. I mean, it's far from, you know, guaranteed they're going to slow down. This would probably put more pressure on the Canadian dollar. And it's pretty easy, you know, if we see 25 basis points this month, and then 50 from Canada later on, I mean, it's not hard to see money flowing out

of the Canadian dollar and, and into US dollars. Obviously, weaker oil prices would be the second reason. I mean, we're in an economic recession. Oil is a huge part of our economy. Our dollar, you know, they went on a multi yearyear slide after 2014 when oil fell out, and it dropped quite a bit again, as I mentioned, when COVID hit. The third would not really just be a weakening Canadian dollar, but just the overall strength of the US dollar. So the US economy is outpacing the Canadian economy by a wide margin right now. And that is with, you know, Trump not in office yet. And a lot of his pro-America policies, I guess, you know, ones that are generally, you know, US dollar bullish

have not taken place yet. If he does go through with ramped up domestic production, tariffs on imported goods, the US dollar, not guaranteed, but should strengthen relative to the Canadian dollar. And it also goes without saying the weaker Canadian economy ultimately has an impact and, you know, the high levels of government spending, bond yields, they're really not following policy rate declines. We just seen, you know, the deficit, what was it 50% above what they had expected. So, I mean, I think all these situations are kind of the perfect cocktail for, you know, continually weakening Canadian dollar. Simone had wanted me to go 63 cents, which would be those lows that we see in like 2000.

Yeah, exactly. I mean, yeah, I'll go 63 cents, which like I, you know, I haven't really looked into this very much, but I would imagine that would be the biggest one year loss a currency in in quite some time to go from the what 69 and a half we are right now to 63 that'd be huge but I do think it could get there yeah and so the reason I'm showing the the DXY chart so for those not familiar the DXY is just a basket of currencies against the US dollar is that yes the Canadian dollar has been very weak compared to the US dollar but what this is showing the DXY is it's not only the Canadian dollar it's a lot like a lot of currencies around the world are actually quite weak against the US dollar so the DXY or the

dollar index essentially a basket of currency I've talked about it recently but if you missed that episode. So it's heavily weighted towards the euro at 58%, yen at 14%, the pound sterling at 12%, Canadian dollar at 9%, and then Swedish krona and Swiss franc at around 4% each. So this just shows for those listening is that it's significantly up essentially since September. So it's not just the Canadian dollar, especially since the Canadian dollar has a relatively small weighting in that basket. So that is something I wanted to show because, yes, I agree with Dan that it will likely, without being at that bull, it will likely be a bad year for the Canadian dollar, but I think it's probably a reflection more of the, the strength of the U S dollar than necessarily the weakness of the Canadian dollar by itself.

Yeah. Bullish Finchat. Yeah. Bullish, bullish revenue USD in the door. Canadian expenses. Bullish. Oh man.

Yeah. That's 63 cents. Yeah. It would be big. I'm like, I'm like looking. Yeah. That's 63 cents. Yeah. It would be big. I'm like looking at our margin profile at 63 cents. Yeah. And I like, I mean, at the end of the day, too, like we've said it, you know, all three of us for, you know, some time now, like I think it's important to have some exposure

to the U.S. dollar as a Canadian. And especially if you have most of your income generated in Canadian dollar. as a Canadian and especially if you have most of your income generating Canadian dollar. That's why I hold a lot of my cash in USD and it's been definitely helping my returns this year. Yeah, you do your returns for the year, last couple of years, holding US stocks, translated to CAD in terms of total gain. The numbers are pretty spicy. in terms of total gain it's yeah the numbers are pretty spicy well i mean back in in 2021 i used to own like xaw like a huge chunk of my portfolio and i took all of that and sold it and went to us when it was i think 82 cents so i mean 65 cents would be that'd be big i think it's it's definitely possible that would be a huge drop. Yeah. 63 cents with 65.

Hence the bold prediction. 65 is possible. 63 would be massive, massive drop. But we want to go on to number two. Yeah, let's go. Well, I'll go with my first bold prediction. Oh, yeah, that makes sense. And then Brayden, and then you can start your second one.

So for me, I guess, like you mentioned, Brayden, I have to do a Bitcoin prediction. It's almost a tradition here. This one is pretty bold as well. So I don't know if it'll come true. So the price, there's two components to it. The price of Bitcoin will hit at least $200,000 USD and will also correct 40% at some point next year.

Now, for this to be true, both of them have to happen. next year. Now for this to be true, both of them have to happen. Now I'm giving myself a little bit of leeway where, you know, it doesn't have to be one first and then the other one. So yes, it could correct early on in the year. Let's say it's at 100K and then drops to 60 and then reaches 200 by the end of the year. That would be fine. Or hits 200 and then drops 40%, that would be fine as well. It would be pretty wild, but I think the other reason I did it is just to show people how volatile Bitcoin can be. So as bold as it is, I don't think this is a zero probability thing. It can be, there can be some massive moves up,

but there can also be some massive moves down. 200K is just, it's a round number. That's why I choose that. It's, you know, it looks good. Yeah. There's no... Yeah, it's like when people ask, like, you know, why are people latching onto the Bitcoin 100K US?

It's like, because we're humans. Yeah, it's a psychological level. 100K is a number we can resonate with. Like, oh, it hit 97.2K. Like, that's not a headline. It's not a hundred. No, exactly. And so there there's some reasons for that i'll just go over them obviously trump being elected and they're constantly saying and appointing people that are pro bitcoin and pro crypto uh there's constant talk of a u.s bitcoin reserve whether that happens or not we we'll have to see. They said that they want to

keep the Bitcoin that they acquire through law enforcement, for example, instead of selling them. So we'll have to see what happens in 2025. But that would be clearly pretty bullish. There's also other US states and countries that have also said that they're looking into getting a Bitcoin reserve. Russia will be one of those countries as they look to diversify their assets to look at Bitcoin as a potential reserve. Whether it happens or not, we'll have to see. But these are all things that would increase demand for it. You'll also see in 2025, and this is kind of my bold prediction reasoning, more and more companies allocate part of their balance sheet

cash to Bitcoin. To be clear, I don't think there's going to be tons of companies that will do this, but you'll see more and more companies doing this. You'll also see institutions starting to change their investment policies. So for example, pension funds to allow the purchase of Bitcoin ETFs. The reason why this is important, because, you know, when you have institutions like this, a lot of them, they just can't purchase Bitcoin or Bitcoin ETF. So they have to change their investment policy. That takes some time. You'll see that happening, but that will help the bullish sentiment.

More investment advisors will start discussing Bitcoin ETF products with their client and suggesting a low single digit allocation. I know BlackRock recently came out saying that like one to two percent would be something that most investors should look at. Again, this is not investment advice. This is them saying that. Lastly, 2025 is going to be the calendar year after the Bitcoin halving. So it happened in April of this year. And during the calendar years of past halving, Bitcoin has performed very well. So there's only three instances. But again, in 2013, the year after the halving 2012, it went up 5,863%. In 2017, it went up around 1,285%. And in 2021, it went up around 60%.

So we'll have to see whether 2025 is like that. But that is, you know, one of the reasons I think it may reach 200,000. And for the 40% drawdown, I just think there's going to be some sort of unforeseen event that will happen in 2025 that will rock the markets. You'll see equity markets being down, but Bitcoin being as volatile as it is and people being levered as they are with Bitcoin. You'll see that move even bigger with Bitcoin because you'll see a lot of levered longs being liquidated, which will push the price even further and will create that 40% decline. So that's the reasoning behind it. I like the boldness. That's the point of the show. My comment on this is I believe this can only go one way. You said it can happen in either order. I don't think it's got to hit 200k first and then the i i don't see it going on 40 either yeah yeah we'll see i'm i'm trying to give myself a little more leeway to hit

it i think it's pretty um i think that's almost zero yeah the percent event anyways of it going down 40 and then hitting 200k i don't see that but hey we'll have to see that's why it's bold i think it would have more chance of happening the next like three years because Bitcoin has been famously like volatile and, you know, 20% corrections like it's like nothing for Bitcoin. So 40% happens a lot more frequently than people can imagine, even 50, 60%. But yeah, it would be pretty pretty amazing that it would happen next year and hey look it can happen in equity markets too oh yeah oh yeah and it has so people forget about

that yeah it's when you think of like how well it's done now it seems a lot easier that could it could be another double here rather than it correcting 40% now down to 60K and then having to go like 3.3X up to 200. So, I mean. Yeah, that would be wild. Yeah. 200K. Only fart coin. Yeah, exactly.

Or hawk to a coin and then plunge 90%. Rug pull coin. Yeah. So, Brayden, it's your turn. All right. Mine is called private markets go retail. So this is a little bit hard. This is one of those ones where I'm hesitant to bring as a bold prediction because it's hard to quantify. Like we'll be sitting here this time next year and going kind of, sort of, but I do think that for it to be right, the trend has to be obvious. Like we're in consensus. Yep. This has happened.

that for it to be right, the trend has to be obvious. Like we're in consensus. Yep, this has happened. We've seen players do this. And so it's private markets go after retail because incentives rule the world. So it's no secret that flows to private capital markets have seen tremendous growth. So some data from EY is 9.7 trillion in private markets to now over $25 trillion since 2012. So that covers private debt, hedge funds, private equity, venture, family offices, right? Private equity in particular during that time has grown from $1.9 trillion to to 5.3 trillion. Last week, BlackRock, which is mostly known for public equity, which I was today years old when I realized that BlackRock was spun out of Blackstone 30 years ago, by the way. I can't believe I didn't know that because everyone's like, oh, they're not the same company. You're thinking of the wrong company. No, they were the same company 30 years ago.

Anyways, that's one for the TikToker conspiracy theorist to go after. So BlackRock last week, or two weeks ago now, bought HPS, which is HPS Investment Partners is a private credit company. They also bought Global Infrastructure Partners in October. One's private credit, one's private equity. HPS Partners, they just bought for $12 billion. Why? Why is that? You can make way more money. That's it. You can charge a way higher management fee on what are called alts, alternatives, everything else, ex-publics. And ETF fees have gone lower and lower and lower, and there's been more and more competition. So it's not just the race to zero on fees. There's also just everyone and their dog spinning up ETFs. Look, I mean, there are way, way more US ETF listings now than US public stock listings. Oh, for sure. I mean, there are single stock ETFs, right? There's like double-

Single stock ETFs. There's like what, 2X levered long NVIDIA ETFs, which is just one stock. Yeah. Covered calls, 2X micro strategy. Yeah, yeah, yeah. Yeah, exactly. Vegan ETF. Don't forget about that one. And these products are freaking amazing. We've had Fidelity in 2024 sponsor the pod, BMO sponsoring the pod in 2025. We love telling the world about low cost index ETFs. For these big companies like BlackRock, here is the one chart to describe my trend here. So the compound, which is run by Josh Brown. So shout out to Josh Brown for posting this on LinkedIn last week. Here's a crazy chart, okay? The assets under management for BlackRock is 11.5 trillion.

Blackstone, the private equity company, is only 1.1 trillion. So 11 times the AUM for BlackRock compared to Blackstone. Blackstone has a larger market cap than BlackRock by $47 billion. So you got 10X the AUM and a smaller market cap. Why? Because you can charge way fatter fees on this type of AUM. So the prediction is in 2025, we're going to see from every major broker, advisor networks, robo advisors, every platform that touches retail, because BlackRock, call it 5 trillion of ETF touching retail and advisor networks and these platforms, they're going after the higher fees

because going down to compete on two basis points is not good business anymore. This is where the management fee profits are. It's going to go to alts. You're going to see the brokers, the Robin Hoods of the world. I think we saw it with Wealthsimple in Canada promoting private equity. So these trends are already in private credit. You're seeing now BlackRock that touches all these people just do these two acquisitions

in the last two months, going back to their days in the story of being part of Blackstone and private equity. That's the big trend right now with retail, calling it now. Okay. And that's bold yeah i didn't think uh didn't think you would go there for private uh you know private equity and private credits so uh no i don't think it's good for retail yeah yeah no no i mean i i didn't expect you to prediction it was more that but no i agree with you i think we i was pretty critical of wealth

simple mostly because they're what they're offering doesn't look all that great. And I think a lot of people, I think one of the big downsides with private equity is you end up being locked in for long periods of time on top of the high fees. And I think a lot of people tend to forget about that. of unhappy institutional investor in the last few years that could not get out of these investments because the exit strategy was no longer there. So whether it was going public, whether it was, you know, selling it to another buyer, whatever it was, they were having trouble exiting. So what ended up happening is they would roll it into another fund or extend the duration of the fund. So that is one of the risks that we've seen in the last few years. Retail, retail, and a combination of liquidity lockups and high management fees mixes like oil and water.

Terrible. To be fair with WellSimple, I guess they make it very obvious that that's the main risks of the fund i mean the way yeah but we seen them yeah they had well i think the private equity might have been 20 they they did this a while ago i think by a while i mean maybe like late 2023 but it might have been 2024 and then the private credit came out later but i mean yeah they've been on top of this and initially i think you had to have a hundred thousand dollars but now i think i'm i think you they even got rid of that i don't know i might be wrong on that but you don't need like that hundred thousand dollar hurdle that's the trend dan you're that's the trend the the 100k barrier going away that's the trend. It'll go to 10 and then eventually,

it'll be fucking fractional shares of alts. Yeah. Dude, this is my prediction right now. It's not a bad one. It's not a bad one. As do-it-yourself investors, we want to keep our fees low. That's why Simone and I have been using Questrade as

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Please check out the link in the description of today's episode for full disclaimers and more information. So I guess, Dan, do you want to do your second one? Yeah. The one thing I'll clarify with the private equity, you had to have $100,000 or more in total account value before they would open it up to you. Oh, okay. So I'm not exactly sure if that still stands. I seem to remember them reducing it, but I'm not 100% right on.

I'm not 100 right on i'm not 100 on that but my second prediction would be that shopify will overtake royal bank as as canada's largest company but keep its status so i mean a lot of people might not think this is bold but there is actually a long like multi there's a curse essentially curse of what there is a absolute curse of whatever company overtakes royal bank and it just it doesn't end up working very well for them moving forward but i think in 2025 i do believe shopify will do it and it will stick so there's two reasons i believe this i mean for one, Shopify has a ton of momentum right now, certainly picking up steam, market share growing. They're finally profitable. They're putting out pretty solid cash flow. But the other reason for this would be that Royal Bank is sitting on 15 plus year highs when it comes to valuation. I think at the time of recording this, I think

they're trading at close to 16x earnings and 10-year averages are around 12.5. So the company is quite a bit more expensive than it typically is. So I think that doesn't necessarily mean I think Royal Bank will go down, but I believe it could potentially have a flat year, potentially even a down year as well as it kind of grows into that valuation and traces back down to its historical averages so i do believe shopify will do this in 2025 that's kind of the bold prediction part of it but i think you know it's kind of inevitable that it will do it eventually um and again for this curse so it's pretty well known curse in the tsx world you know

if you overtake royal bank as Canada's largest company, you end up getting absolutely thrashed after doing so. Like, yeah. So I'll go through a few examples. So the first one would have been Nortel. They overtook Royal Bank. Oh boy. You know, we all know how long that ended,

how well that ended the stock went bankrupt 2009. But in 2008, BlackBerry became the largest company in the country, overpassed Royal Bank. Smartphones obviously dominated the market. Competitors came in, effectively torched the company. It fell from $244 a share to just $50 per share in less than two years. So it overtook Royal Bank. And less than two years later So it overtook Royal Bank and, you know, to less than two years later, it's down, you know, about 80%. So Suncor briefly surpassed Royal Bank during the financial crisis at the top of, you know, what was a bit of a commodity

super cycle during the, you know, pre-financial crisis. The company then fell from $73 a share to under $23 in a matter of three or four months after the financial crisis kicked in. And then the final situation, we have Shopify in 2020. And I mean, it's funny, if you Google Shopify Royal Bank curse, you can still find articles highlighting the fact that Shopify surpassed Royal Bank. And many of these analysts were wondering if the curse would be put to bed. Fast Royal Bank and many of these analysts were wondering if the curse would be put to bed, but it wasn't because Shopify would go to lose 75% of its value since overtaking it. Again, this time, I think it will be here to stay. The overtaking will also be driven by fundamentals rather than speculation. I think in a lot of the other instances like Nortel, BlackBerry, Suncor. These were all during pretty speculative markets.

You are forgetting one. And I'm wondering if either of you can remember. Another one that surpassed? Had a very similar fate. I had no idea. When, what time period would have been? 2014, I want to say. 2014, 2015 is my guess. No, I don't know. i don't know look it up after uh no i mean i feel

like it's energy related but well i know pharma it's pharma related oh okay it's on the tip of your tongue yeah bio veil was it back then or uh valiant pharmacy oh yeah yeah that's right yeah valiant pharmaceuticals past rbc in that time frame and that has been a disaster too that's another one it there's like a legitimate curse well i know there were there was another one that i didn't mention because they don't no longer trade but potash corporation before they merged with agrium there was one point where they exceeded as well and uh they yeah didn't work out too well afterwards but i mean the one crazy thing about this is royal bank like we're going back 30 years and it's always been royal bank at the top of the tsx for so long so like i took the largest companies in the u.s 30 years ago so we have you know exxon mobile coca-cola walmart and raytheon and walmart is the only company that's now in the top 15

in 2024 every other company is out whereas canada it's been royal bank like constantly thanks baby yeah that's why we love our it. It's the same composition, really. Yeah. Yeah. Yeah. And I guess the one thing I'll add here just to provide people with more context. So I don't think you mentioned the market caps for the two currently. Yeah. So $240 billion, I think, for Royal and $200 for Shopify.

Yeah. So we need about a 20% swing. Yeah. Yeah. Yeah. Both of them. Yeah. so we need about a 20 swing for it to happen okay okay well you know if those uh pre-con condos in toronto keep blowing up and they have a lot of exposure uh maybe they'll do the work for you the bold thing here

is it's sticking because i think think it's going to happen. But the fact if it sticks, that's the bold thing. Because nobody's been able to do it for 30 years. It's going to be some Toby scandal as soon as it happens. So how many days would you have to get it in 2025 for it to stick? You mean like how long Shopify stays above? Yeah, exactly. I actually think that Shopify will overtake it.

Just got to finish the year. Quite quickly in 2025, I do think. Just because I do think Royal Bank's gotten up there a bit. So I do think it'll happen pretty early, but then I think it'll stick throughout 2025 and into 2026. Okay. So let's say it has to finish a year high. It has to finish the year higher, yeah.

Or when we record our bold predictions next year. So a couple of weeks before the end of the year. Okay. Sounds good. So I'll go with my, Brayden, anything else to add before I go to my second one? No, go ahead. Let's do it. So let me refresh my mind on this one. No, no, I know. So BCE will cut its dividend by at least 66.67%. So two thirds currently pays a dividend of 3.99 CAD per share, which is yielding more than 11% as of this recording. So I think the market is definitely, you know, pricing that in. So my bold prediction, it'll be cut by two thirds or more. And, you know, I know I've been saying this for a while. I mean, I've been saying it for a better part than a year. So I think it's definitely a high probability you don't get a 11% dividend by accident. So to make it even more bold, I'll say that they'll cut their dividend by at least two thirds, but also they'll have

total returns of at least 15% in 2025. And it will show a lot of dividend focused investors that actually a lower dividend can give you better total returns. Yeah. I mean, the main thing with a lot of them is the fact that if they cut the dividend, the stock is going to bomb. But I think for the most part, it looks to me. I think it's going to rebound. I think it goes up. I was just about to ask you guys this. Does Bell stock go up with that announcement?

I believe so. I think so. Yeah. Yeah. As long as they mention that they'll use a big portion of the proceeds to tackle the debt obviously they would use a portion to also for the growth plan i know they're trying to obviously they're trying to expand in the u.s too so i think it'll be a mix of the both but as long as they use let's say half of the cut towards reducing debt i think investors will definitely reward them for doing so. They need to have a throw it all out quarter,

which is basically you announce all the bad news in one quarter. You revise the guidance, you cut the dividend, you tell investors straight, you shake up the team. It's like when a management team of a sports franchise blows it up. They need to have one of those quarters. Yeah, a rebuild. Yeah, exactly. And they need to have one of those quarters yeah a rebuild yeah exactly and they need to rebuild and to give people a bit more context if they do achieve 15 percent total returns in 2025 it would make it the best year for bc in uh over five years the move will would free up more than 600 million in cash every single quarter if they did it by at least two-thirds bc says that you know again that with the expansion the u.s i think that

would be a big move there bc currently pays more than 900 million dollar in dividend every single quarter it doesn't cover it with the free cash flow either. And some rough is showing that BC is paying approximately 4% on average for his interest in terms of interest payments on its overall debt of $40 billion. So that clearly will go up as they refinance debt next year. And then using, let's just say, on a per year basis, basis about 1.2 billion per year towards debt repayment would say that they would save approximately 48 million each year in interest payments alone so that's a lot of saving especially when it starts compounding in terms of saving so i think it's the right move to do of course for those relying on dividends from bc they won't like it. But to me, it is a no brainer

for them to do if they have a, you know, if management team there actually starts thinking a bit more longer term, this is what they have to do. But I've been pretty critical of this management team. I think I haven't seen such an incompetent management team in quite some time. It's like every single move, it's like one dumb move after the other. They can't seem to do the right thing. So we'll see whether they do it or not. But if they start looking at it more long term, this is a no-brainer for me. Yeah, I mean, they had the, what was it, the MLSE sale.

And then they said they were going to pay down debt. So the stock went up. And then they went and blew the money like a month later and actually issued more debt. And then the stock went down. So, I mean, if they cut the dividend, are they going to allocate it? You know, if they say they're going to allocate it to debt, I think you would see a lot of positive reaction. But then do they actually do that is the question. Yeah, that's that. just try to expand more they'll find a way to mess it up yeah they'll find a way to mess it up yeah i mean it's it's been uh we've been talking about this i believe

since i came on the podcast which is like late 2023 so it's been it's been a long, long time. I think it's inevitable that it gets cut as well. And now, just now, analysts are starting to advocate for a dividend cut. So you heard it here first on the podcast. We've been talking about it for a year now that they should be cutting the dividend. And I think some analysts are good, but the fact that now it's just starting to- It's Canada's Intel. Yeah. I think so. That's what I'm realizing exactly what it is.

Yeah, pretty much. Yeah. I don't know if they've issued their 2025 guidance, but if they do, I don't even know if they'll issue 2025 guidance, but if they do and free cash flow is going to decline again, that's going to be nasty. Yeah. I don't think they have. I they will um in the new year i think they usually do q1 in the new year yeah exactly and their cells are like they revise sales guidance and sales are actually declining this year and a big part of the

bold thesis for bce right earlier this year was people saying like oh population growth population growth people need cell phones, people need their services. Well, that went out way out the window with the announcements from the federal government this fall. So it's going to be a tough couple of years for BCE. Again, I think it's an iconic Canadian company. So I do hope they turn things around. I don't have a stake, but they'll have to do things differently. Yeah. It's one of those companies where you see the capital allocation decisions that have been in the last 12 months. And you're like, surely you guys thought, like, surely enough people were at the table where just like, are we sure about this? Right?

Yeah. Are we really, is this really the right play like how is there not been that like enough people saying something well yeah you surround yourself with yes people that's what happens right that's probably what it is yeah all right last up this is the last one right yeah that's the last one handed with a bang yeah all right let's talk about the degenerate economy okay i've never heard it called that before that's hilarious i'm going to the casino tonight so i like it this is very poker tonight yeah i am playing poker i want to i want to play some poker i mean my buddy's been talking about playing more hold them and i i've gotten a

bit of a love for poker right now i I, my, you know, YouTube, like if you like gain an interest in something, YouTube, like thinks that's the only thing you care about when you go on the homepage. Like now my algorithm is just like watching Phil Ivy highlights like over and over and over again. And I'm here for it, dude. I like it.

You could learn from the web from worse players than that. I'll just say that. Yeah. Him and Daniel Negroni, the Canadian, he's great, man. I, him and Daniel Negreanu, the Canadian, he's fucking great, man. I like those guys. Anyways, the degenerate economy,

coined by Howard Linzen, who is a venture investor. He's on my cap table. He sits on the Finchack cap table. His partner sits on my board. I think that in 2025, well, I'll spit out some numbers at the end here in terms of my prediction, but for some context, sports gambling, for example, is an industry that has gone absolutely gangbusters. I think it's. It's expected to reach 83.58

billion by 2029, sourced by R&M. Current growth rates, I'm actually seeing with some of these bigger players, this might even be a conservative number, to be honest, that 2029 number. that 2029 number so look everyone likes throwing the odd bet down like you know i i'm not the grinch here like like this is this is fine but everyone also knows someone who likes to throw the odd too many bets down right like yeah oh yeah and and this is an epidemic for young men. And the degenerate economy is net bad. It's like the anti-Charlie Munger basket of stocks, right? He's vocal about these types of businesses being bad for society. He was very vocal about it. We're going into a pretty lax administration, regulation-wise, with these types of businesses businesses and the degenerate economy today is alive and well uh let's just use the two sports company examples draft kings total revenue is up

255 since december 2021 growing at a 60 cagger flutter entertainment which owns FanDuel, since that same time frame, Sportsbook Revenue, which is the FanDuel segment of Flutter Entertainment, has grown 215%, compounding at 77.6% year over year. I think they own PokerStars too. Yeah, they do. Yeah, they have their segments show like different types of gaming. Sportsbook being FanDuel. I don't know if they have anything else tucked in there. I'm assuming that's most, if not all of the revenue. FanDuel is massive now.

Yeah. And the market's really consolidated into a lot of these bigger players, DraftKings and FanDuel. Of course, there's a lot of different players, but these are the ones that have been able to endure extremely high cost of acquisition costs for a really long time, which is a very hard thing to do. But you come out with a pretty big prize if you do it a la Uber, for example. So it's going to be hard to quantify, but let's just use a basket. I'm stealing from Howie, his basket, but I want it to be more selective. I'm going to say DraftKings, Flutter, Robinhood, Coinbase, and CME Markets, which is the options trading company. Basically, the casinos where the speculation happens as a basket outperforms QQQ by a wide margin.

happens as a basket outperforms QQQ by a wide margin. I'm not putting any money into it. I don't want to own these businesses, but I would not be surprised if a Trump 2025, the degenerate economy, the Philip Morris Zinn economy, goes gangbusters next year. You should put Dogecoin in there. Yeah, Doge, Funkcoin in there yeah like all these but i mean i think it's i love the the prediction um i think unfortunately i think what we've seen with the pandemic is when

everything was closed down right it really led people to look at the stock market to gamble for a lot of people and that's why we saw a lot of these like crappy companies or meme stocks completely run up. And then it bled into, you know, like altcoins or shitcoins, whatever you want to call them, meme coins. You also saw it like Dan did a good post recently calling out, you know, paid promotion for stock pumping from someone doing on youtube and brayden you remember like we would get emails all the time from junior miners yeah junior miners like you

know i think phase drive did that too like companies like trying to pay you to basically pitch a stock to your audience and they pay a lot like they pay like five digits for that stuff and we've always said no's because it's not ethical on the one hand. And on the other hand, it just completely destroys your, you know, your credibility as well. So but long ran to say that, unfortunately, it's something we've seen happen like since the pandemic started. And it's I don't know, it seems like it's starting to pick back up now in the back half of 2024 leading into into 2025 oh yeah and i think the big issue is a lot of these major sports companies like allowing people to do this i mean you look at like sports net i mean now over the

last few years like there's money lines broadcast yeah there's money line they literally broadcast the money lines like the uh prop bets like you know they give you the odds they tell you like it's just constant and i mean you know even uh oilers they have they put the play alberta like gambling sponsorships right on their jerseys i mean it's just even all the podcasts like i listen to a lot of hockey podcasts almost every single one of them has draft kings sponsoring the podcast and they go through and talk about like bets they're making and all that type of stuff and i mean it's just it's right in front of your face and i mean i can't believe they don't eventually severely you know regular regulatory

wise like they don't severely regret this in the future it's they've they've done such a good job with these types of things to be extremely addicting and like gambling being addicting is into humans is not a new thing i mean that's like you know since the dawn of of civilization but like when it's on a screen and the colors and like the vegas slot machine is becomes this thing that's just on your phone yeah like that is where it gets really dangerous and particularly for young men the studies show right this is this is a primarily young men issue when it comes to abuse like that's that is who it's most affected by like and back in the day right you had to go physically to like a sports book or the casino to actually place bet and that act of going some friction yeah for some

friction i mean if it's going my if it's minus 30 outside you're in canada you may not want to go and go yeah exactly so there was some friction and i guess the other thing we saw this year explode is polymarket yeah polymarket if we're talking about like betting perfect example simone perfect yeah exactly that one really uh really blew off and for those not familiar with polymarket it's using like um kind of blockchain and assigning a value to different, you know, tokens based on what the odds are. Like just to simplify it, that's how Polymarket works. And I mean, the U.S. election probably blew it right off. Like it's really, it really took off this year. And Robinhood's offering these kinds of uh bet on anything

i don't know what you call polymarketing bet bet on events i don't know what there's a name for it but you know what i mean yeah you can bet on anything like look it could be um you can probably go on there i'm gonna venture to say that you know bet on when a election will be triggered in canada oh yeah probably a bet for that will will trudeau resign yeah yes like yes or no that is like a prop you could throw on it's you know what it is when we were when i was growing up it was very socially acceptable to put on these crazy super bowl bets the super bowl was the one time a year where everyone said screw it i'm you know the Gatorade's gonna be orange i know it you know slant lock that shit in you know like uh the first uh point is gonna be scored by a tight end. Lock it in. That, with everything, is, you know, it's a Wednesday night game.

And that's the, you know, it's the Super Bowl bet. You know, the broadcast is talking about it. Everyone's doing it. You got your phone on one, checking your bets. And look, I have FanDuel on my phone. I have a Super Bowl bet. I took the eagles at 10 to 1 i'm not saying i'm a saint here what i'm saying is that there is obviously going to be abuse and the degenerate economy of extremely speculative garbage that people will put their money into, the house always wins. Oh, yes. AKA, these companies are going to have big, big profits.

You know, the DraftKings, the Flutters, the Hoods, the Coins, the CMEs. Yeah, and it's also probably a reflection of people trying to go for long shots to achieve whatever their financial goal is. So whether it's purchasing a house, whatever it might be, achieving financial independence, which is maybe a bit of reflection of where, you know, society is at right now, which is a little bit sad to say that, you know, we tend to invest with a long term horizon and diversify, have different, you know, assets in our portfolio. And the reality is a lot of younger people just want to make these bets because in their view, it's the only way that they can afford a down

payment for a house or whatever it is. And then they get into this destructive spiral. Exactly. That's it. Yeah. Yeah, absolutely. Good wrap up, guys. this was good so um just uh just to summarize so simone uh the bell dividend cut the bitcoin 200k we got canadian from dan canadian dollar multi-decade lows the bold 63 cents coming in shopify overtaking rbc you said what is that around it's 20 spread today today and finished the year there. Yeah, and finished the year there. I said, private markets go retail. Just follow the incentives.

This is gonna happen. And the degenerate economy, some of these companies where they benefit from people making extreme speculation are going to have monster, monster years. Thanks for listening to the podcast, folks. We massively appreciate you tuning in over the holidays. Send this to your friends.

We're here Mondays and Thursdays. The show goes on. We're going to hit episode 500 in 2025, which is pretty amazing. 500 in 2025, which is pretty amazing. Lots of beautiful sponsors coming onto the show so that we can keep doing this and keep running it. So we appreciate them. We appreciate you, and we will see you in the new year. Have a wonderful holidays to all. Canadian Investor Podcast should not be construed as investment or financial advice. The hosts and guests featured may own securities or assets discussed on this podcast. Always do your own due diligence or consult with a financial professional before making any financial or investment decisions.