The Canadian Investor - Silver Goes Parabolic, ASML Confirms the AI Boom, and UnitedHealth Gets Crushed

Episode Date: January 29, 2026

In this jam-packed news & earnings episode, Simon and Dan break down the Bank of Canada holding rates, the massive uncertainty around U.S. trade policy, and why macro headlines are driving markets more than usual. We also dig into silver’s parabolic run (and why Simon trimmed exposure), plus earnings and updates from ASML, RTX, and UnitedHealth—a perfect example of how political risk can overwhelm fundamentals. We also tease an extra earnings + news episode next week, and we’re planning to do it live on YouTube for the first time—subscribe so you don’t miss it. Tickers of Stocks Discussed: ASML, RTX, UNH, INTC, LMT, SLV, ZSL, PSLV Watch the full video on Our New Youtube Channel! 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 Fiscal.ai 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.

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Welcome to the Canadian investor podcast. My name is Simon Belanger. I'm back with Dan Kent. We are back for news. earnings today. Pretty jam-pack. We have some macro news, some interesting companies reporting, including ASML, United Health, and Raytheon or RTX technologies. Also be talking a little bit about what's happening with Silver. If you haven't been paying attention, it's gone to the moon. So we'll be talking about that. And then next week, things really start picking up, especially on the Canadian front too. So we are looking to do an extra earnings and news episodes. So stay tuned for that. And we'll try to do it on YouTube live, something we haven't done before. So make sure you subscribe to our YouTube channel. We'll probably do a test drive or something on Monday or Tuesday just to make

sure we know how it works, but it should be fun. Hopefully it's not a flop, but worst case, you'll be able to hear it on the podcast. So then let's get started. The first thing here, macro, the Bank of Canada, just this morning. So recording this on the 28th. always won a timestamp because there's so much stuff happening all the time now. So the Bank of Canada decision, they decided to hold rates at 2.25%. Despite holding rates, the bank is on higher alert. They've acknowledged that while the U.S. economy is performing as expected, actually performing better than expected.

Canada's economy is vulnerable to unpredictable U.S. trade policies and global tensions. Obviously, with Donald Trump, you really don't know where things are going to go. And the U.S. economy is outpacing expectation thanks to AI investments and consumer spending. U.S. tariffs continue to disrupt growth in Canada, and they are projecting the economy to grow by 1.1% and 1.5% in 2026 and 27, respectively. The Canadian economy, of course. They highlighted the review of the free trade agreement, so Kuzma, as a key source of uncertainty in those projections. And that was probably one of the bigger takeaways is how much uncertainty they have and they really don't want to get too far ahead of themselves. They said the Canadian economy is still in the process of adapting to U.S. protectionism.

And employment is up, but unemployment rate is stuck at a pretty high rate of 6.8. and few businesses are actually looking to hire workers right now. Inflation is behaving for now. They mentioned, like we had talked, their core measures are actually trending down, so that's something they like to see. And essentially, they're saying that tariffs are being offset by excess supply when it comes to inflation and to explain inflation to stay around their 2% target. He was asked about this statement he did in support of Jerome Powell.

So I don't, you must have seen that, right? the TIF basically did a statement with a bunch of other central bankers saying they were supporting Jerome Powell and the Fed independence. Oh, from like the investigation. Yeah, from the investigation. Yeah. So anyways, it was, it was interesting because obviously they tend to, he tends to not get into politics. And when he does, it's usually not very direct, right?

it's always kind of backhand comment about criticizing, for example, the Canadian government spending and things like that, but it's never direct. They try to stay in their lane as much as possible. And the quote, I'll finish on that. He said that obviously in the press conference. And I quote, the U.S. Federal Reserve is the biggest, most important bank in the world. We all need it to work well. And I think it's really important. I just wanted to finish on that because sometimes people will kind of disregard news from the U.S. or say that, you know, the U.S. takes too much importance, but it's still our largest trading partner. And Canada is probably influenced by more than most countries by the Federal Reserve. And I think it's just important to know that, yes,

I think when you're investing, you need to be aware of these big shifts, big changes, even if you focus on the businesses, because what may be happening at the Federal Reserve or, you're investing, with Trump, the White House, and what's happening on the trade front, you may end up seeing really good companies that are struggling because the trade environment is just changing before highs. And I think there's a lot of people sometimes that try to dismiss that and just say, I don't pay attention to the noise. But personally, I think you need to be aware of it, especially, I'm not saying not to do your due diligence on companies, but I think it's something else that you need to be aware of.

Definitely. Like even when we think of we'll go over it later, but like United Health, like operationally it hasn't really done all that bad, but there's been a lot of, you know, kind of goals by the administration to kind of, you know, make costs, you know, the government isn't willing to kind of pay any more for healthcare, for example. So that's like causing some big turmoil there. I mean, obviously we have Canada making kind of deals with China, which obviously is not going to be, you know, the U.S. is never going to take that very well. So you're going to get turmoil there because that was what, like 100% tariffs like immediately after that was announced.

And, um, I mean, I think the market is kind of shrugging a lot of this off because I think like for a very long time, he's kind of overshot in this regard and then kind of worked back to a reasonable level. So yeah, it's, I'm really not surprised that they held rates steady. Obviously, they're not going to. decrease them. I don't think they're really in a situation to be able to they're in a situation of wait and see right now. I think that's just a gist of it. Yeah. And it's hard to blame him. There is it's ever changing. There was another question that I'm

just remembering, but was asked about like all the changes geopolitically. And basically like, he was kind of looking for his words, but you could tell his reaction that was saying, well, essentially since January, there's a whole lot of things that happened just since the start of the year, right? And he didn't mention them specifically, but, you know, think about the Jerome Powell investigation, think about Van Nuisuela, you think about Greenland, you think about now the threat 100% on Canadian tariffs. A lot of stuff has happened in one month and probably more stuff than in most years. So I think they're prudent to wait. But let's move on here. Speaking of things that have happened since the beginning of the year, silver. Silver has just been, it's

it's gone parabolic. Like it's hard to, I don't know, do you have another word for silver right now? To the moon, I guess. Yeah, to the moon. Parabolic is a good word. Parabolic, exactly. So for those who are on Joint TCI, you'll see the graphic here, whether I'm doing six months, one year. It's just absolutely insane.

Silver is now up more than 275% in the last year, just shy of 200% in the last six. months and more than 40% in the last month alone. So the last time I talked about silver, I think it was one of the first recorded recordings we did after the holiday. The price was trading, I think, around a $75 in ounce, just to tell you how big of a move is. And that was not that long ago. So to see the price this high is pretty crazy. And on Monday, the price just went sky high. It went to $117. Now it's as we're recorded this. It's around $115. And if I asked someone who knew nothing about silver and said, hey, the price is trading at $117 right now, when do you think it last traded to $75? They'd probably say, you know, a year or two ago. Like, at least,

that's what most people, even if they don't have a whole lot of knowledge in the markets, that's probably what they would say. Well, like I just mentioned, It's been really, really crazy move. So what happened is, first, for those not familiar, gold and silver on the comics, so the commodities exchange in the U.S. does not trade on the weekend. So it closes at 5 p.m. Eastern on Friday and trading resumes at 6 p.m. on Sunday. So there's not really any reliable way of knowing where things will open, but there is one that can offer some insights here, and that's tether cold on the blockchain.

So it's a token that trades on the blockchains. It's tied to an ounce of gold. It's supposed to be bagged by that, but obviously we don't sometimes tether with the audits. It's not always been great. But the volume spiked on the weekend, and Goal was trading at around $5,000 and $60 on thereafter, closing below $5,000 on Friday. So gold hadn't reached 5K on Friday just yet, and actually gold is trading at what close to $5,300. now, so that's another discussion here.

And silver was trading just slightly above 100. And then in hindsight, of course, that volume spike on tethered gold. And I believe if you search it, it's X-A-U-T on that, you know, crypto token size if you want to see how it looks and the token. But, you know, in hindsight, clearly that was a sign of things to come. And on Monday, the price just exploded, started the day around $109 and then just kept going up. and ultimately peaking around 116, like I mentioned previously. It later fell back to $103.

It's been trading around $110 now for since then, yesterday and today, give or take a few dollars. Of course, right now it's $115. Trading, again, was wild on Monday. The most traded ETFs in the U.S. were ZS.L, the pro-shares ultra-short silver ETF, and SLV, the I-share Silver Trust ETF. So essentially you had people, traders, betting both sides.

So you had people betting that the price would just fall back with the ZSL and people going along on SLV. So it's really interesting. And even though I'm still bullish on silver long term for structural reason, mainly because of demand supply imbalance, geopolitical uncertainty, shortages on exchanges, lack of many pure play mines. If you think about it, there's not many mines that are really just pure silver. It tends to be a byproduct of mining other metals or minerals like copper,

like gold, you name it. Demand in elasticity with a lot of industrial uses as well. That means that some buyers, they'll buy silver at whatever the price is. You cannot swap it. There is no other alternatives. Some uses there are. Don't get me wrong, like copper for some uses will be a bit less conductive and fine for some uses. But in a lot of uses, you need silver and the fact that it doesn't corrode like copper does.

So these are all things that I think play in the favor of silver, but things also just don't go up in a straight line. And the amount of attention around silver and the intense amount of trading that I just mentioned with those two ETFs. And there's other ETFs like PSLV, like the Sprott, it's not an ETF, it's a trust, but the ESProt Silver Trust has seen some crazy volumes as well. It just feels a little bit like the meme stock era that we saw in 2021, right? Yeah, but I mean it's like a, it's a metal, like an actual physical metal, which is crazy to think. Like that, for those who are thinking like the ultra short, what does ultra mean? like that's 2x leverage. So like you're not only betting on it to go down.

You're averaging twice. Like pretty much what's that saying. Yeah. If it goes up, you get wrecked is pretty much what happens. And I mean, it's gone nothing but up. But I mean, I'm not really surprised that people are looking to short it. Like I don't know enough about any metal trading period to ever even take a side of this. I don't know if it's going to go back to $50.

ounce or to 250. That's kind of why I own, I just own Franco. And that's kind of it. But, I mean, just to give you an idea of the sentiment, like, I can't remember when it was. It was probably six months ago now. I made a YouTube video on Franco Nevada. It was like one of our lowest watch videos. People were like, you know, there was no interest in it. And now I'm just getting a ton of requests to do it because there's so many more eyeballs on Franco and just metal prices in general. And I even think something like Franco is up. What is it 100% over the last year? It's just been a crazy run. Yeah. No, it's been crazy. And obviously a lot of FOMO, a lot of like fear drives markets a whole lot, whether it's things going down or the fear of missing out. So a lot of that.

And to be clear, and I do own some physical silver. I also own silver ETFs and some silver mining stocks, but on Monday I trim my silver exposure for the ETFs and the physical silver combined. So I trimmed that by about 25%. So to me, it was just smart to take some profits off the table. Maybe it goes up. I mean, the average price I sold it, I think was around what it is now, maybe a bit lower, 112 roughly. But I'm still happy.

I definitely, you know, took some money off the table. And I learned my lesson of back in 2021 with my Bitcoin holdings. where I didn't take profits when I probably should have. And no matter how much conviction I have in something, it's just never a bad idea to just trim. Like I still have a decent amount of exposure. And in our upcoming Joint DCI Monthly update, I'll go over into a bit more detail why I sold,

but also what I did with the proceeds from selling my silver ETFs. And I guess the last thing is, I don't know if you saw on Twitter I posted about going to a nearby mall, a local mall and there's a gold shop. Yeah, and it's packed. It's packed. I've been there three times in the last week. It's been like completely packed.

And there's a store that sells like a kid stuff that I had to buy a couple of clothing item for my daughter that's next to it. And the lady obviously knew nothing about gold and silver. But I'm like, oh yeah, like I'm just mentioning like, yeah, there's a big lineup. She's like, oh yeah, before I open, there was like a lineup going past my store. So the lineup would even longer. it. Smart investing doesn't have to be complicated or time consuming. With BMO all-in-one ETFs, you get a complete diversified portfolio wrapped up in a single ticker. It's easy. Whether you're conservative investor or more aggressive, BMO has an all-in-one solution for you. And now,

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and maybe our home could do the same for someone else. Hosting our home on Airbnb would-led guests experience our neighborhood while giving us a little extra money to put toward a fun trip when I'm back on my feet. Plus, it's flexible. We decide exactly when it makes sense to host our home. Your home might be worth more than you think. Find out how much at Airbnb.ca slash host. Calling all DIY, do-it-yourself investors,

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And then once you link your brokerage account, you can get in-depth portfolio insights, track your dividends. And there's other stuff like learning duolingo style education lessons that are completely free. You can search up Blossom Social in the App Store and join the community today. I'm on there. I encourage you go on there and follow me, search me up, some of the YouTubers and influencers and podcasters that you might know, I bet you they're already on there. People are just on there talking, sharing their investment ideas and using the analytics tools. So go ahead, blossom social in the app store and I'll see you there.

The one thing, though, I'll caution people that might have silver that they're thinking of selling. if you have small amounts, you probably won't get anywhere near close to spot, especially from local coin shops or local dealers, because they're taking a lot of risk, right? They're giving you cash for the metal. And the price action has been so violent that they are likely not providing, you know, anywhere near close to that. Maybe they're giving you the equivalent of 90, 95 USD per ounce,

just because they can't afford the price to go down that quickly and give you spot because what happens if it goes down quickly and then they sell it to new buyers is they're taking a big loss. Whereas if you go with larger reseller, there's some online reputable options, you tend to need at least $5,000 worth, but they'll insure it. They'll also give you kind of locked in price and they'll pay for the shipping. and usually you'll get like a few to three percent, maybe four percent under spot. So you'll get a much better value.

But again, you need the larger quantity. So just some caution there. It's not because they're trying to rip you off. It's just because they have to protect their business. And the larger online ones, what they'll tend to do is they'll, they'll buy it from you. And then they'll short it at the same price to kind of offset their risk. And they just pocket the difference in terms of the discount they gave you. That was kind of what I was going to ask you is like who is paying.

like if you have physical silver, who is paying you that price? Because, I mean, it could be 20, 30% lower like the next week. But I mean, on the flip side, like people were probably saying that at $75 an ounce. And now it's. Yeah. Yeah. No, exactly. But the big institutions are well, like the big online reputable dealers, they will essentially,

they'll buy it from you at a price. Obviously, they give you four or five percent below spot, whatever it is. And then right away, they'll short the same amount to, essentially lock in their profits and protect their downside. But more local shops, they don't do that. They're not that and they don't have the amounts to do that. So I just wanted to mention this as a word of caution. But now we will go over to ASML and I guess you were right with TSMC. Sounds like AI is not. No. The bubble's not popping just yet. I mean, at least on this side of things, like the supply side, I guess. Like, yeah, it was a quarter that kind of confirmed that, you know, the,

the demand is not going anywhere. This one like this is weird. It opened. It was like upwards of eight or nine percent in the green. And now as I'm as we're talking about this. Yeah. What is it? Three percent in the red. So you're talking about like a 10 percent plus swing. I don't know exactly what happened. I couldn't find the conference call transcript by the time we recorded this. But did you check on truth social? Yeah. No, I haven't checked. Maybe maybe Trump truth did something about yeah. Something happened. I mean, it. And like, I guess the company is up 100% over the last six months. And I think it's like 33% over the last month.

So, I mean, flat on earnings day or like slightly down is you would mostly take this as a good thing. But the strange thing is it's like how much it went up and then how much it kind of fell back down. But in terms of the results, full year revenue came in 16% higher. But the most notable thing and probably what caused it to jump is bookings. So bookings came in at 13. 2 billion euros, which was more than double analyst expectations are pretty close to that. I think they were expecting like 6.5 billion. So I mean, the bookings are just through the roof right now. And the company had mentioned that client confidence is is shifting significantly.

So they mentioned that the AI demand is very real. Companies are starting to spend more, book more. And I mean, you obviously look at ASML's results. It's really not all that surprising. I don't really think, you know, there's no. indication that the current spending cycle is is anywhere near over. I think this quarter kind of proves it. They recognize revenue on the first EXE 5200B system sale. So I think this was purchased by Intel six months ago. Can you tell us what that means? I cannot. The newest machines. It is the newest. It is the newest like high level EUV machines. So they book because I can just picture our listeners being just like me, like, what the hell is that right now? So the newest most

advanced machines that they have. I mean, I've looked at a picture of it. But, yes. Did you understand what you were looking? No, no idea. But they're very expensive. I will tell you that much. They're pretty much double the cost of their previous EUV machines. I think it's something like, I might have the currencies mixed up, but it's, it's 380 million euro, or it might be 380 million US dollars. It's one of the two, whereas previously they were like 200, 250. So I'm pretty sure Intel bought this. I actually couldn't find any like concrete evidence on that either, but they bought it six months ago and it's being recognized now. So it's kind of a big step up machine that they're going to eventually obviously sell more of. And when we look to China,

revenue came in at 34% of total revenue in the fourth quarter. And at the start of the year, this was closer to half. So the company expects this to trend downwards to around 20% next year. And the total backlog sits at $39 billion euro at the end of 2025, which is about $3 billion higher. UV machines are starting to make up a larger portion of that backlog as well, trending above 65%. I would imagine this is due to lower reliance on China because China is not allowed to buy the EUVs. They can only get the DUVs because of the export restrictions. And I think one of the more impressive sides of the business is base management. So this would include things like maintenance or upgrades, things like that.

So since 2019, it's grown at a 20% compound annual growth rate. And just this year alone, it grew at 26%. So a lot of people kind of understand that ASML has, like in a way at this current time, a monopoly on the machines. But it also has kind of a monopoly on the servicing side. You just don't get some random person to come in there and service the machines or or upgrade the machines. They're very complex. So this is kind of a segment of the business that should grow in line with system sales.

And again, yeah, the system sales are much lumpier is the thing. Whereas, you know, the maintenance side of things will be more recurring higher margins, things like that. And if you want to show the sales, the unit sales, I know we had planned that, but they mentioned there. expansion plans to 2030 factor in around 600 DUV sales a year and 90 EUV sales a year. And if we look at the chart, they are currently sitting at around 330 DUV and 48 EUV. So you're pretty much looking at a doubling in terms of overall machines that they're going to sell through 2030. And they reiterated their 2026 guidance. So they expect gross margins 54 to 55% and revenue of 34 billion to 39 billion euro. So this would be on the low end, a mid single digit increase. And on the high end,

you're looking at nearly a 20% increase. But yeah, it was a big quarter for the company. I think, you know, a lot of people expected a big quarter. So I ran up into it. I'm going to have to dig into the call to figure out why it's swung like 11% intraday, because that's, that's, that's not random. I mean, something would have had to have been said or happened. Yeah, I mean,

it could, I mean, it could be some large institutional holder that just decided to exit the position. I mean, it's had quite the run up too. Yeah. So it could just be that that was as good as a quarter it is.

It just did not exceed the high expectation. Could just be something like that. I'm not quite sure. But sometimes that doesn't make sense. Yeah, because I. when I first bought this one, it was like two and a half percent of my portfolio. And like when it opened the day, it was the largest holding in my portfolio. It was crazy. It's been on a wicked run

over the last while. And yeah, I mean, this is bullish for pretty much the entire AI sector overall. Yeah, it's also, it's a position I have as well. Not as big, but, uh, creeping up to two percent, I guess silver and gold have been the shining star. No pun intended. my portfolio. Yeah. Great quarter. If you're a DIY investor ready to take control of your portfolio, BMO all-in-one ETFs simplify the process. Whether you're new to investing or looking to streamline your existing holdings, these all-in-one solutions are designed to help you invest smarter. With management fees on popular portfolios now reduced to 0.15%, you get professional diversification at a lower cost. Check out the asset allocation

ets at bemoetifs.com. I recently had to travel to Calgary for some medical treatments and I wanted it to feel like a home away from home while I was recovering. I found an apartment on Airbnb that made all the difference. While I was on demand, it helped that I could cook some homemade meal in a real kitchen and just sit in a comfortable living room or rest in bed. Having a space that actually felt like home

helped me focus on my recovery rather than the stress of the trip. It really got me thinking about our own place. That host had provided me with some much-needed comfort when I really needed it, and maybe our home could do the same for someone else. Hosting our home on Airbnb would-led guests experience our neighborhood while giving us a little extra money to put toward a fun trip when I'm back on my feet.

Plus, it's flexible, we decide exactly when it makes sense to host our home. Your home might be worth more than you think. Find out how much at Airbnb.ca slash host. Calling all DIY, do-it-yourself investors, Blossom is an essential app for you. It has been blowing up with now more than 50,000 Canadians plus and growing who are using the app. Every time I go on there, I am shocked. The engagement is amazing. This is a really vibrant community that they're building. And people share their portfolios, their trades, their investment ideas in real time.

And it's all built on the concept of transparency because brokerage accounts are linked. And then once you link your brokerage account, you can get in-depth portfolio insights, track your dividends. And there's other stuff like learning duolingo style education lessons that are completely free. You can search up Blossom Social in the app. App Store and join the community today. I'm on there. I encourage you go on there and follow me, search me up, some of the YouTubers and influencers and podcasters that you might know, I bet you they're already on there. People are just on there talking, sharing their investment ideas and using the analytics tools. So go ahead, blossom social in the app store and I'll see you there.

So let's move on here, our TX Technologies. So this is a name obviously that I think a lot of people might be familiar with if I say Raytheon. So they're formally known as that. It's a global aerospace and defense company domiciled in the U.S. Their revenues are almost equally split between their three segments. So they have three meg segments. I'll just want to give a quick overviews for those are not familiar. Pratt and Whitney probably a name that most people have heard of.

So they build engines for many of the world's most popular commercial and military aircraft. Collins Aerospace, a massive supplier of everything. from cockpit avionics to cabin interiors and Raytheon, which specializes in advanced defense system like Patriot missiles and sophisticated radar technologies. So over the last year, RTX is up 55%. So it's done quite well. Like a lot of defense contractors, you know, they've done very well. There's a few reasons for that.

I'll go over that too. Sales were up 12% for the quarter, as I'm showing here for Joint TCI. They've had growing cells. they've been growing at a really good clip here. Revenues have increased at about 10% per year since 2022, and it's been steadily up even beyond that. For the full year, free cash flow more than double to just shy of $8 billion, so they are generating a whole lot of cash flow.

And clearly there are some tailwind, but there are also some risk as well. So there should be some huge tailwinds for our TRX like that. many defense contractors in the years to come. Geopolitical risk are rising and countries are spending more on their military, which obviously will benefit a company like RTX or I know one that you own Lockheed Martin. Trump recently proposed to increase the defense budget by more than 50% to $1.5 trillion. And other countries are increasing their spend to, for example, Spain and Poland each sign $1.7 billion contract for military equipment in Q4 of 2025, which, with RTF.

And keep in mind to whether, like, whatever your thoughts are on Trump, if you think a little bit at what he's doing, one of the things, whether it's intended or not, he's definitely forcing countries to spend on their own military. Yeah. So, like I said, whether it's intended or not, clearly Europe will increase their spending because they have, you know, some concerns obviously about Russia, Canada. has now some concerns. I don't know if it's south of the border or north of the border

if you're thinking about Russia and the Arctic. Whatever the concerns are, Canada may also want to be less dependent on the U.S. I heard Stephen Harper actually who was, I think had an interview with CBC. I'm not quite sure, but he said that he recently talked to the Carney government and he basically said Canada has to look after itself, right? like and that includes spending more on the military where at the beginning of the new Trump administration, he probably would have said where Canada should have closer ties with the U.S., but now with everything that has happened is tone as change and to be able to also diversify,

you know, across other trading partners. So it just goes to reflect that I think you're going to see not just in the U.S. but globally more spend on defense. And air traffic continues to be strong globally, which will continue to help their non-military segment. One of the risk here is that the Trump administration could put some kind of profit caps in place for defense contractors because they've already issued an executive order

restricting stock buybacks and dividends for defense companies when these companies are not producing sufficiently enough. So Trump has railed on that, quite a bit. So you have to be careful because yes, as much as a tailwind there could be, this is one of the headwind where, you know, they may find themselves a bit in a spot where and Lockheed Martin would probably be in the same spot too where, you know, the U.S. says, okay, we'll give you more contracts, but you have to do this, this, and that if you want to get those contracts. Yeah, they're pretty much going to force them to reinvest money back into

the business versus, you know, paying it out as buybacks and dividends where like for a company like Lockheed, you know, they, they're more so like a, I don't want to say an income pair, but they're more shareholder friendly and Trump would effectively force them to, let's say, build new factories, reinvest capital back in that way, which shareholders might not like. I kind of like my bullish case for Lockheed was a very similar situation. Like, what did Trump say he wants spending to be like five percent or something, military budget for NATO countries?

And like, I don't even think right now it's 2%. Yeah. And I think one third of NATO countries don't even hit the 2% target. And he wanted to ramp that up. So like, I mean, it's definitely bullish for defense contractors. But then like, there's a lot of intervention, I guess you could say from like government, you know, or even even the situation with something like Lockheed with the or sorry. Yeah. Lockheed with the F-35s when Musk said that drones would replace them and like yeah and then

like Lockheed like a lot of these companies are exposed heavily to you know whatever the administration says right now clearly like what did Trump say he's going to double the military budget the 1.5 trillion 50 percent so yeah so more than 50 percent yeah so it was around one trillion and now it's it's going to be one sit to be at more than 1.5 trillion so we'll have to see but clearly I know it's probably what not what a lot of people want to hear and definitely not myself, especially when I think about my daughter. But at the end of the day, I know some people may not want to invest in defense company, and that's completely fine.

I totally understand why you would not be like that. And I used to be like that before, but my philosophy now is pretty simple. Look, I have to look after my family. And at the end of the day, I invest based on the world we live in, not on, what I hope the world is or would be. So that's the harsh reality of what we're looking at right now. So anyways, enough of being a bummer. Let's move on to another company that's been impacted by the Trump administration, United Health.

Let's go to the next company that shareholders, well, you know, the general population really hates. That's United Health. So it was a pretty like decent quarter from United. But the stock bomb, though, because Trump, it was like the next. night before. So United reported like yesterday at Open, I think it was, and like the night before Trump came out and said that he was effectively going to put a proposed cap on Medicare Advantage payments in 2027. So he said that the payments will increase by 0.09% while most analysts expected 4 to 5%. So for those who don't know quickly, I guess, like United kind of depends on the government

to pay them for, you know, medical expenses. So there's, you know, the government pays them for Medicare advantage. And they kind of rely on that spread. There's been a relatively predictable spread. The government gives them money and United kind of provides care for less money than the government gives them, you know. So that's kind of how they make money. And there's a lot of, you know, caps on those rates right now and medical expenses,

you know, the cost of doing care of went through the roof over the last while. there's a lot of pressure on their, what we call it, it's the medical ratio. So in regular insurance, you would have the combined ratio, which is the premiums collected versus, you know, claims paid. United would have the medical ratio, which is effectively, you know, the premiums they collect versus, you know, the amount of money they're paying out for care. When, you know, when you have a system that is for profit, this does create a massive amount of issues, like what Trump is doing. The main reason for this is like, United. it is just now going to pull out of areas that it feels it can't provide it can't make a profit on providing care so like you're going to get i mean

they've even said they're going to trim back so they expect to trim down another 2.3 to 2.8 million members so around 1.4 of them are being Medicare advantage covered so effectively like you have a a terrible system in the united states that relies on profits so now trump is going to cap the pain. It's giving United. So United just isn't going to cover these people anymore. So in that regard, it's kind of hard to feel bad for these insurers. But, you know, the failure is more of the system they've created down there rather than, you know, United itself. You just can't really expect the company to provide care when they're capping rates, when medical costs have gone up like four or five percent over the last year.

So they're kind of in a pretty rough position. The company is guiding for a 2 percent decline. line in revenue this year, likely as it just, you know, it's doing this because this is happening because it's just abandoning more plans to focus on more profitable ones. Earnings are expected to grow by 9%. I think earnings fell quite a bit over the last while. So you see 9% earnings growth, but we're still not even close to, you know, what they were previously.

And I think the market really won't care much about the 9% earnings growth this year because the cap, the nine basis point cap is on 2027. So that's going to be. where the real issues start to kind of surface. They do have a boatload. And just to give people, yeah, an idea. So it's in a 51% drawdown. And this, I guess, I should say like this quarter, this, the quarter itself didn't

cause much of a drawdown. It was the Trump comments the night before. Yeah. So that caused it to fall by, I think, 17.5% like just overnight. And then we were, it reported earnings. And I think it settled the day like down 19%. Yeah, 18. Yeah. It's, this is kind of another one that's like really in the spotlight for administration. Like for a very long time, this was going to be become like the first trillion dollar healthcare company. I think it was like a 700 billion dollar market cap. I think it's a high quality company. Like whether or not you, you know, agree with the system they have down there. I think in isolation, it's a very high quality company that's kind of being dragged down by a lot of political mess right now. And I kind of feel bad for like the, you know, obviously this is an investing podcast.

But I mean, all the people that are going to get coverage yank because of these types of caps. So yeah. Yeah. It's a decent quarter, but just a lot of political issues right now. Yeah. I mean, I think it's the world we live in, right? When I say you got to invest in the world we live in, I think that's it right now. You just have to be aware because if you go back and you look at just a price here for like,

five years ago or the last 10 years. So it's pretty stark. So you could say like if you'd never wanted to pay any attention to these kind of political developments and especially right now where it is having an impact on the markets, I would say it's probably a headline driven market, unfortunately. I mean, United Health, if you go back in the last 10 years, the last three years, it's pretty rough or last, let's say last year and a half, it's pretty rough. But before that, you were looking at a company that was just crushing the market. Yeah. It's crazy. Like you were looking at, yeah, it's absolutely insane, like how much of a difference it is. So it's just a reminder here. If you bought this company, you probably, let's just say if you bought it,

I'm looking in May of 2019. So if you had it up, Until the end of 2024, you probably like close to tripled your money. Yeah. And then you're up a little bit since. Yeah. Yeah. When you're talking about individual stocks, like things can change really, really quickly. And I mean, this isn't like.

But I think it's a good illustration, right? So I think it's just really important to, yes, to let your winners run, but you can't do it blindly as well. If the company is facing some serious headwinds, if you put the blinders on and you just ignore it and just say it's noise, this kind of stuff can happen. Oh, yeah, definitely. And I mean, it's like right now, I guess you could argue it's noise, but it's noise that definitely, you know, has a potential to have a material impact. Like whether or not he actually does put that flat cap on 2027 payments kind of remains to be seen. but if they do, you know, for a long time, United was kind of planning this, you know, well, actually, I don't want to say for a long time, but over the last year or two here,

they've been planning kind of, you know, we're going to get things in order now in 2027, 2028, it's going to be the growth here. I mean, Berkshire bought, you know, I can't even remember what it was, probably $5 billion of this one when it was at the bottom. And like, there was a plan to turn things around and in pretty much one day, like an aftermarket released by Trump pretty much crushed any idea. of that if it sticks in place. So yeah, individual stocks, they're difficult. They are difficult. Just, yeah, just be aware. I think that's, you know, just invest with your eyes wide open.

That's why sometimes it's just great having some index funds that you can set and forget or a mix of some companies and index funds. But just wanted to mention that because sometimes people, yeah, we, you know, I've been guilty of that. You invest for the long term and sometimes you just thing. These are forever companies and then something material changes that impacts the business model pretty significantly and the profitability of the companies. So I think that's a good way, good spot to end it at. You know, thank you everyone for listening. If you haven't done so already, if you can give us a five-star review on whichever platform you listen to, it does help people find us. And again, we're going to try and do a live YouTube episode next week.

So we'll have our two regular episodes and we'll do an extra earnings one just because there is a whole lot of content. So that's something we had been toying with for a little bit. So we'll give that a try. Hopefully a few of you have join in. Hopefully we have at least five people. That'd be good. So make sure you subscribe to our YouTube channel that you can subscribe to. There's a link in the comments below.

So thanks a lot for listening. Really appreciate your support. We'll be back next Monday for a regular episode. The Canadian Investor podcast should not be construed as investment or financial advice. The host 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.