The Canadian Investor - Stocks to Watch for the 2nd half of 2024

Episode Date: July 22, 2024

In this episode of the Canadian Investor Podcast, we dive into the intriguing story of the stock market in 2024, highlighting the performance disparity between US mega caps and the broader market. We explore how different weightings of the same companies can lead to varied outcomes and parlay this discussion into a mini-segment of stocks on our watchlist, presented by EQ Bank. From luxury European giants like LVMH and Christian Dior to innovative tech firms like Fortinet and Adyen, we cover a range of companies that are growing their revenues by over 10%, maintaining positive operating margins, and are currently down more than 10% over the past year. Simon goes over 10 stocks he sold in early 2020 and comparing their performance to his overall portfolio returns. Hear insights on why certain stocks were sold, the outcomes of those decisions, and how our investing approach has evolved over time.  Tickers of Stocks & ETF discussed: MNST, FTNT, CSGP, ULTA, ALGN, PYPL, DE, SBUX, ADYEY, EVVTY, DSTY, CHDRY, LVMH 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 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. Welcome into the show. My name is Brayden Dennis. As always, joined by the perspicacious Simon Belanger. You're going to have to tell me what that means because I have no idea.

What if I told you i don't know either having a long time ago you know what this is actually the best adjective for a podcaster you could possibly think of if if you're perspicacious you're you should be on a podcast having a ready insight into and understanding of things. Okay. Having a ready insight. So that means like you're just always quick draw with the facts and insights to be able to add to the conversation. I wouldn't say always, but I would say pretty good.

Pretty good. Yeah. Okay. So you're fairly perspicacious. good pretty good yeah okay so you're fairly perspicacious so this is a friday morning slash afternoon recording which is uncommon for us and you know given our show comes out on mondays let's you know we can kind of be timely on the hot topics here this morning there was widespread it actually happened late last night there was widespread outage from a CrowdStrike update that got pushed. Whatever software engineering intern just broke the world because that affected Windows software and a lot of services with Microsoft Azure across many of Microsoft's customers.

So it's really quite simple, you know, no windows, no Microsoft, no commerce gets done around this, this, the world. I think that people know now how ingrained that company is into worldwide commerce now. Yeah. I woke up to it and, you know, I wake up earlier than you do. So I woke up to that and I checked my phone just to get an update on the news. And it's like the whole world was breaking down because of that. You had like airports almost like shut down. Well, not shut down, but the flights were all canceled because they couldn't make it work across the world. Obviously, in North America, I don't know exactly where it's at.

It probably may be slightly better than Europe and Asia because, you know, typically there's not that many flights that early in the morning. By the time they fixed it, it was probably 6, 7 a.m. around that time. I know there's some implication. One thing that came to mind, and I'm not an expert on CrowdStrike, but you do wonder if there's going to be some lawsuits tied to this because there's going to be some companies that will lose a whole lot of money and they will have a lot of expenses related to that. And I don't know how the contracts are set up, but I'm pretty sure there's some busy lawyers today. Look at what kind of recourses that they have. Every indemnity clause is being looked at in every contract right now.

That's a very perspicacious idea you've come up with there. And now another thing too is semis this week. We'll do these two news topics and then we'll get into the juicy guts of the podcast today. I'm going to be talking about the equal weight S&P. And you're going to talk about a bunch of stocks that you've sold through the years and how they've done. So I'm excited to hear that. But semis this week, you wanted to talk about this really quick. The geopolitical overhang that has loomed for a long, long time, nothing's really changed in my view. It's just when you have things priced to perfection, last time I checked, this geopolitical overhang still has a risk on all these companies and

they're priced to perfection. It's just a recipe for stock volatility and some drawdowns for... It's ripe for drawdowns basically yeah yeah exactly and i i've been very vocal on that you've also been vocal in terms of being priced very highly to perfection like you just said and i've been saying this for over a year pretty much since nvidia started like just blowing results out of the water i think it was around the spring of 2023 when it really started on the whole AI boost. And one of the things I said, and, you know, ever since I've been very consistent on this is there's some real geopolitical risk when it comes to NVIDIA, because pretty much all of their chips are being produced in Taiwan by Taiwan semiconductors. But it's like

investors completely disregarded that, even for TSMC. It's as if people were not thinking that was a risk. And to me, look, it may not, you may have your opinion on the, you know, how big of a risk it is, that's fine. But nonetheless, it it's still a risk and I read so many articles about Nvidia, TSMC, ASML which I will touch a little more on because they've really been hit this week in terms of some news that came out but when you have all these pundits that going on mainstream media just pumping Nvidia and none of them are talking about these risks that to me was a big big warning sign that the hype may be too high

when you just focus on the upside and no mention of the potential risks and downside to these businesses. Look, I really hope that there's not going to be some sort of tipping point, but it feels like a pressure cooker with Taiwan. And, you or I have any foresight into what's going to happen with that situation, but it has been a pressure cooker for a long time. And the reality is, it's not just NVIDIA,

it's not just ASML, it's not just Taiwan's not just taiwan semiconductor it's basically every single industry is bottlenecked by a very very fragile choke point in the taiwan semiconductor corporation it just that's the way that we've built modern chip infrastructure and you know that's you and i were talking offline there's not many things that the u.s the two-party system agrees on you know especially now it just feels so divisive you know more more than ever right you just have this like brutal situation with u politics, there's no one that disagrees on the situation around China and the need for onshoring semiconductor infrastructure. Everyone can agree on that. Yeah.

Yeah, exactly. And so what happened with ASML, just to keep it short, is that Bloomberg reported that the Biden administration was looking at putting additional restrictions on tools that are essentially used to make these semiconductors or computer chips being shipped to China. So right now, ASML, obviously, so they make these machines. There's EUV, so extreme ultraviolet and DUV deep ultraviolet they are currently not allowed to ship the EUV machines the most advanced ones to China but they are allowed to ship the DUV ones currently and what's concerning here for if you're an ASML shareholder is that China in their latest quarter was 49% of their revenue despite the ban on EUV shipments.

And now the Biden administration is trying to essentially prevent them from or putting more restrictions on companies like ASML because they do get some of the technology and the parts in those machines from US companies. So they're trying to leverage that. We don't really know to what extent these restrictions would go. So I think it's a little bit in limbo right now. Obviously, there could be varying degrees of, you know, it could be real bad, like it could not be as bad. But the issue is that that news came out and ASML this year, their guidance was already not like that great. So the guidance remained unchanged.

Earnings were as expected, but they're essentially expecting revenues to be flat and that's with the assumption that China's not going to take a big hit so that's a big reason why it's lost a lot of value since I think it's down probably 15-20 percent this week around in that range and it's one of the reason I sold my position in March is just not that I didn't like the business. It still has a monopoly in EUV machines. They're the only ones who do those. But the uncertainty because of the geopolitics, geopolitical space and the tension between the US and China and the fact that the valuation when factoring those risks, I just didn't think it was warranted. And that's the reason I sold my position. ASML in the quarter shipped 92 DUV systems, tracking this here on FinChat, and eight extreme ultraviolet systems during the quarter. Now, those extreme ultraviolet machines are much, much higher revenue, much more complicated. Yeah, way more expensive.

Way, way more expensive. So this is not apples to apples whatsoever, but they're shipping a lot of DUV machines still. That's for sure. is looking to potentially, I don't know if weaponize is the right word, chips and AI. So for my company, for instance, with FinChat, we got a message from OpenAI saying, we cannot have any calls,

any API calls from IP addresses coming from mainland China. Really? That's interesting. Yeah. So we have had to completely cease operations of any of those customers being able to use the product, at least the co-pilot API product. Yeah. Which is kind of wild because how dangerous is that from a national security perspective? But I guess they are not differentiated. It's probably kind of a blanket kind of restriction. Yeah.

Look, I mean, they're building a intelligence arms race against other major powers in the world. And AI is a good place to start, right? Yeah. powers in the world and ai is a good place to start right yeah no it's i mean it's you you can't understand the logic behind it but i think the issue is kind of the blanket things that are being applied you know to me like just what you just told me i just don't really understand the logic behind that pertaining to your business specifically But I mean, that's often how regulations are, right? They tend to be broad base. You know, governments try their best, but they sometimes just don't have enough knowledge

or it's just easier to do something broad and not fully understand the consequences behind it. So I'm not surprised that's the case. But I think it's just a reminder to understand the risk of companies that you own, no matter how great the prospects may seem. I think we're seeing, at least with ASML, NVIDIA, TSMC, is that, you know, a lot of that risk was kind of just disregarded. And now I think it's a lot of people are facing reality that these risks were in fact real. And it could, you know, you said Biden and Trump kind of agreed those two administration on China. But from what I've read is Trump will probably, if he gets elected, be even harsher on China in terms of restrictions. So it's something to keep in mind. ASML may be a great play longer term, though, because I think they'll probably be facing some shorter term headwinds. But the reality is they still have a monopoly for UV so as their orders kind of adjust and shift

maybe around other place around the world and other countries that are friendlier to the US are starting to get companies to purchase these UV system it could definitely turn around but don't be surprised if there's kind of a sideway thing for asml over the next few years i think that's very possible or even downward pressure but longer term until there is a competitor i think there's still a bull case to be made even despite the fact that i don't own it and if the valuation gets cheap enough i'm not saying no so if the valuation is cheap enough whereas i can live with the risk you know i'm happy to uh buy it again if more foundry capacity needs to be built out worldwide we're going to sell some

more uv machines i am a shareholder a very small one and it i i kind of bottom ticked it and then it went straight up into the right. Parabolic. Yeah. So, you know, it's been like a workbench position for me because I haven't been able to just accumulate more shares at a reasonable price. I don't sell it, but, you know, so if this continues to get pushed down, you know, perfect. You know, that's what I'm looking for as someone looking to acquire more shares. what I'm looking for as someone looking to acquire more shares. As do-it-yourself investors, we want to keep our fees low. That's why Simone and I have been using Questrade as our online broker for so many years now. Questrade is Canada's number one rated online broker by MoneySense. And with them, you can buy all North American ETFs, not just a few select ones, all commission-free,

so that you can choose the ETFs that you want. And they charge no annual RRSP or TFSA account fees. They have an award-winning customer service team with real people that are ready to help if you have questions along the way. As a customer myself, I've been impressed with Questrade's customer service. Whenever I call or email, every support rep is very knowledgeable and they get exactly what I need done quickly.

Switch for free today and keep more of your money. Visit questrade.com for details. That is questrade.com. Here on the show, we talk about companies with strong two-sided networks make for the best products. I'm going to spend this coming February and March in an Airbnb in South Florida for a combination of work and vacation and realized, hey, my place could be a great Airbnb while I'm away. Since it's just going to be sitting empty, it could make some extra income. But there are still so many people who don't even think about hosting on Airbnb or think it's a lot of work to get started. But now it is easier than ever with Airbnb's new co-host network. You can hire a local quality co-host to take care of your home and guests. It's a win-win since you make some extra money hosting on Airbnb, but can still focus on enjoying

your time away. Find a co-host at airbnb.ca forward slash host. That is airbnb.ca forward slash host. host. That is airbnb.ca forward slash host. So not so long ago, self-directed investors caught wind of the power of low-cost index investing. Once just a secret for the personal finance gurus is now common knowledge for Canadians, and we are better for it. When BMO ETFs reached out to work with the podcast, I honestly was not prepared for what I was about to see because the lineup of ETFs has everything I was looking for. Low fees, an incredibly robust suite, and truly something for every investor. And here we are with this iconic Canadian brand in the asset management world, while folks online are regularly discussing and buying ETF tickers from asset managers in the US. Let's just look at ZEQT, for example,

the BMO All Equity ETF. One single ETF, you get globally diversified equities. So easy way for Canadians to get global stock exposure with one ticker. Keeps it simple yet incredibly low cost and effective. Very impressed with what BMO has built in their ETF business. And if you are an index investor and haven't checked out their listings, I highly recommend it. I bet you'll be as pleasantly surprised as I was that BMO, the Canadian bank is delivering these amazing ETF products. Please check out the link in the description of today's episode for full disclaimers and more information. All right, let's shift gears. My first segment of the day is about the equal weight S&P. If someone was to ask me, what is the story of the stock market in 2024?

For me, it's been the performance and outperformance of US mega caps against the rest of the market. And up until basically a few trading days ago, it's like I see some life out of the more value index RSP ticker, equal weighted one, ticker RSP. So the S&P 500 market cap weight, it's up around 27% using SPY and the S&P 500 is around 12% year to date. And these are this week notes. Same companies, different weightings. I mean, if you look at the S&P traditional market cap weighting, you got 7% Microsoft, 7% Apple, and I'm doing rounding here, 7% Nvidia, 4% Amazon, 2.5% Meta and Google, a little bit more if you include both Google tickers, Berkshire, Eli Lilly. By the way, I think Costco is like the ninth constituent in the QQQ now, by the way. Jamie Dimon is in there too. I mean, JP Morgan.

JP Dimon. JP Dimon. JP Diamond. JP Diamond. So it's quite a disparity. Same 500 companies, different weightings. And let's not kid ourselves. RSP, the S&P 500 Equal Weight ETF, it's a value index. Even though it's an equal weight on the 500, There's a lot of companies that I would say are industrious, not high multiple companies in there. And so I wanted to parlay this into a mini segment of stocks on my watch list presented by our friends at EQ Bank to spread the word that there are a

bunch of really awesome publicly traded businesses in that index or large caps around the world, not just a handful. So I'm going to go through a bunch of companies that I think are worth a look here, Simone. None of this is advice. Some of them I could find a bunch of ugly skeletons in the closet. That's kind of the whole point of investment research here. But at least there can be a helpful list of stones to turn over. Any thoughts here before I get into the list? No, no. I mean, I think you did a good overview in terms of, yeah, just the discrepancy between the two. It's pretty amazing. Every time I know the chart and every time I look at it, I just get amazed how big the gap is between the

equal weighted and the index. And I think it's just a reminder to people that, yes, I mean, just be aware that that's the case. We're not trying to scare you one way or the other. It's just, you know, it could continue a year, two, three, four, five years. But, you know, there's also some additional risk when you start having so much weighting into just a handful of names or let's just say 10, 15 names. Yeah. Like the S&P is a very effective trend following strategy. Exactly. Yeah.

Right. And so it's been a good strategy, but be aware of you own the strategy. Right. Like what you said, that's the most important part. It's been a good strategy. And it probably, you know, historically is the correct strategy moving forward. It's like S&P is the best trend following strategy ever made. It, you know, buys more of the stuff that's working and sells more of the stuff that's

not working. But trends can go up and down, right? I know like recently we kind of forget it can go down, but you know, it's a non-zero scenario, like non-zero probability that you get a lot of these, you know, index are definitely getting a lot of flows by defined contribution pension where, you know, indices are actually, you know, you automatically contribute every pay and it goes into there. But what happens if there's a bit more layoffs in the u.s and canada and then people start potentially drawing down on those or at least not making those

contributions because they're laid off they're no longer getting that paycheck then you could see a move downwards just based on that because the trend kind of reverts and then you have baby boomers right that are starting to draw on those savings as well. So I'm not saying this will happen, but these are all possible outcome going forward as well. The following companies have growing revenue on average of more than 10% on five years and three years. So there's been longer trend and more recent trend of consistent top line revenue growth. They all have positive operating margins. They're all down more than 10% in the last 12 months, and they're fairly large and quality industry leaders. So I took the big screener list of,

okay, growing the top line, positive operating margin, and the stock's down on the trailing 12 months. So that removes all that big mega cap stuff that's gone up bigly. And then I qualitatively selected and handpicked a couple of names that are large quality companies, industry leaders. All right, a couple of European names. Luxury has been getting smashed. I think this is probably the most attractive place of my segment here. Luxury is getting smashed. So LVMH, one of the world's largest companies, luxury good conglomerate, Christian Dior along the same lines. When is Arnaud just going to go buy them, I wonder. Dassault Systems, which is the European company well-known for their 3D modeling software called SolidWorks, massive business. Adyen. So Adyen is the Stripe type

equivalent competitor out of Europe that has, they facilitate payments of credit cards and business to business transactions. The payments company is finally catching a bit, a little bit after getting pummeled, but quite attractive when compared to the Stripe latest private valuation, which I think is 70 to 90 billion. The profitability and EBITDA margins of Adyen versus Stripe, it's unbelievable that they're doing the same thing. It's like unbelievable that they're doing the same thing. One is VC backed monopoly money out of Silicon Valley. And the other one is run very lean in Europe. It's very impressive.

Evolution Gaming. They just did another acquisition, I think, yesterday. But the gambling API company, maybe not the most ESG company for some folks, but looking pretty attractive here. All right. Now looking in the US, Monster Beverage and Celsius, but looking pretty attractive here. All right. Now looking in the US, Monster Beverage and Celsius, the two energy drink companies are getting smashed a bit. Fortinet, the cybersecurity company. CoStar, the real estate data company. Alta Beauty,

the makeup company. Align, the company well-known for Inalign, PayPal. You guys can make your own judgment on that one. I think they definitely have some issues for sure, but take that for what you will. John Deere and Starbucks. Lastly, in Canada, Brookfield Infrastructure, Lululemon. Well, they don't have the Canadian listing anymore, but who's counting? And Nutrien. So those are my three for that list in Canada. So overall, a lot of stalwarty growth companies and payments and luxury. That's how I would bucket these companies getting smashed a bit. Yeah, and what I was showing while you were chatting is actually,

and I'll share this again for joint TCIs, is Burberry talking about luxury. So listed in London, that thing is down. Yeah, it's down. Total returns down 66.3% over the last year. Press the drawdown chart. Yeah, drawdown. Go todown chart yeah drawdown that's the second one yeah yeah yeah it's not uh not the right direction i'll just say that but yeah it's

i mean it's had a rough go and that was the first thing and i was talking with dan on that too is luxury in general has been really hit hard i think if you look at Lululemon, I wouldn't say it's a luxury brand. It's more kind of the like more middle, I would say. It's not cheap. It's not luxury. It's a lifestyle brand, I would say a bit more. But again, I think they're being pulled down by Nike. And I think Nike's kind of in that same space as Lululemon. Different, obviously different offerings, but Nike has had a rough go in terms of sale.

And I think that's pulling down Lululemon because they're different offerings, but they are competitors at the same time. So I think despite Lululemon still doing well, that's been pulling them down recently. Burberry's drawdown reminds me a lot of Snapchat when they release earnings before everyone else. And Snapchat reports dogshit numbers and meta gets sold off. Like every quarter, it's like investors never learn. This happens every single quarter for as long as Snapchat's been public. That reminds me of Burberry and LVMH. LVMH gets sold off because Burberry does. Burberry is not luxury the way that LVMH is, take that opinion for what you will, but I do not think Burberry is nearly luxury like LVMH is. Now, it's interesting because ferrari which is certainly a luxury stock has not uh had a similar

fate as of late yeah i think you're talking though like to me it's they're both luxury but again i think it's more different kind of luxury right i think a lot of people can spare buying like for women like i think burberry make handbags and stuff like that. That's how well I know. Yeah, neither of us have a single clue. Yeah, exactly. I know that was very popular when I was speaking of Taiwan when I was in Taipei in 2007. I know Burberry was very popular there. But there's a difference between buying, let's say, I don't know how much it is, but let's say it's $500 handbag and buying a half a million dollar car whatever a Ferrari costs now a day right so I think there's still a lot of more aspirational luxury I would say or

aspirational people in terms of buying luxury that probably shouldn't be buying luxury but they can still you know afford and figure out how to either you put that bag on your credit card whatever whatever you do, but it's a bit harder to put that Ferrari on your credit card. It's such an important distinction between the line between premium and luxury versus true luxury. Yeah, exactly. Such an important distinction because the true luxury category, their customers don't face economic hardship ever.

No, exactly. I mean, they might a little bit, but not to the extent of those like kind of luxury. Ferrari doesn't make enough cars for it to matter. Like if they're only shipping 13,000 cars, that customer base is completely insulated. only shipping 13 000 cars that customer base is completely insulated say you know one billionaire becomes an 100 million air and they don't want to buy ferrari anymore another billionaire took their spot yeah no that's that's a good point but yeah i think that's that's more like the sense i get as you get yeah like let's just say extreme luxury and then kind of aspirational luxury you know i could buy a barbary bag i can guarantee you i cannot buy a ferrari so i don't know another couple years of that bitcoin run and you're uh

yeah i mean it's been i mean it's been crazy uh yeah just to watch bitcoin what's been done like um we'll probably have to talk about it on another show. I think a lot has to do with Trump and his change in heart and then who he nominated as a VP, who I think his disclosure shows that he does own some Bitcoin as well. So I think that's been good for the price right now. We'll have to see where it goes going forward. The rest of the year in the markets is going to be a theater. It's going to be crazy. Yeah.

It's going to be a theater. It's going to be crazy. Yeah. Just because now, obviously, well, I mean, obviously, like, we don't talk much about politics. But again, it has an impact on markets because now the markets are trying to position themselves on what they think the outcome will be of the elections and what whoever wins, depending if it's Trump or Biden. And then is it like a split congress like how is that working because obviously that impacts legislation too so you have like probability markets that are trying to to make bets on what they think might happen and at the end of the day obviously if trump wins it's way more bullish for bitcoin than biden administration which has been very harsh on cryptocurrency in general. So there's just so many moving parts. I mean, I just find it fascinating. That's kind of my view on it. Yeah.

As do-it-yourself investors, we want to keep our fees low. That's why Simone and I have been using Questrade as our online broker for so many years now. Questrade is Canada's number one rated online broker by MoneySense. And with them, you can buy all North American ETFs, not just a few select ones, all commission free, so that you can choose the ETFs that you want. And they charge no annual RRSP or TFSA account fees. They have an award-winning customer service team with real people that are ready to help if you have questions along the way. As a customer myself, I've been impressed

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

But now it is easier than ever with Airbnb's new co-host network. You can hire a local quality co-host to take care of your home and guests. It's a win-win since you make some extra money hosting on Airbnb, but can still focus on enjoying your time away. Find a co-host at airbnb.ca forward slash host.

That is airbnb.ca forward slash host. So not so long ago, self-directed investors caught wind of the power of low-cost index investing. Once just a secret for the personal finance gurus is now common knowledge for Canadians. And we are better for it. When BMO ETFs reached out to work with the podcast, I honestly was not prepared for what I was about to see because the lineup of ETFs has everything I was looking for. Low fees, an incredibly robust suite, and truly something for every investor. And here we are with this iconic Canadian brand in the asset management world, while folks online are regularly discussing and buying ETF tickers from asset managers in the US. Let's just look at ZEQT, for example, the BMO All Equity ETF, one single ETF, you get globally diversified equities.

So easy way for Canadians to get global stock exposure with one ticker. Keeps it simple yet incredibly low cost and effective. Very impressed with what BMO has built in their ETF business. And if you are an index investor and haven't checked out their listings, I highly recommend it. I bet you'll be as pleasantly surprised as I was that BMO, the Canadian bank is delivering these amazing ETF products. Please check out the link in the description of today's episode for full disclaimers and more information. Let's move to stocks that you have sold and how they have done over time i'm pumped to see this list here yeah i know i can see it on the document here but let's get into it some i actually like kind of forgot i held them because it's been so long because i kind of i went on questrade the broker i use and essentially i went and you can pull reports and you I switch my from TD over to

Questrade in late 2019 early 2020 so that's as far as I could go but I thought it would just be an interesting exercise to see you know did I do okay selling that did I make a good move and for the most part I think it's you know it's I've done pretty well selling these names. Some there's a couple of names, especially one I wish I would have kept. But the first one and feel free to interject, Brayden, if I if you have some comments on here as well. So the first one here that I have is Suncor Energy and I will share my screen here. So the first one is Suncor Energy. People will see that on Joint TCI the date I have sold but essentially ranging between January 2020 and March 13 2020. So basically right before the pandemic kind of started. So I sold Suncor Energy and the price, the total return since is 51%. In terms of the

reason why I sold Suncor Energy, at the time it was just, I wasn't sure I was still learning about oil and I figured I would learn a bit more and potentially choose some different names in the future. It's what I've done. Since I bought a couple years ago, I started in position in Canadian natural resources. And that's been quite a good play here. The second one is JD.com. Their total returns for this one has been minus 28% since although you'll remember Braden, JD.com had like a crazy run up right after the pandemic started. So that one, I mean, depending if my timing would have been good or not, if I sold, I probably could have made a profit. But long term investing for me, looking in hindsight, obviously was probably a good move. I'm not trying to time the market. And I had doubled my money on JD.com as well.

So I can't really complain there. The third one is Spin Master Corp. That one down 7% sin. It's a company I actually liked. I still kind of like, but I've learned the hard way that investing in toy companies, it's very, very difficult because they will kind of have been flow in terms of what kids are into, what kind of brands. They also have licensing agreement with like a big kind of content producers, for example, who gets a licensing agreement with Disney and stuff like that, that will impact what their revenue. So it's a very difficult business to be honest. And my learning from that is just probably not best, probably best

to not invest in toy companies. I see you nodding there. I don't have any experience investing in toy companies per se, but it's an almost identical business to mobile games, which are heavy upfront licensing costs for some asset if you're piggybacking on the top of, let's say, so I know a guy who sold his company for a lot of money and he had a mobile game company. And what they would do would be like, they'd go to family guy and be like, okay, we're going to make the family guy mobile game. That upfront cost would be like 10 million dollars for the licensing of the thing then they got to go build it out and then they got to go okay here we go now you can piggyback off the back of that but like you just said like what happens if the new

frozen is a flop exactly yeah you have like a lot of outside risks with these names and i find it like i think fashion investing in fashion is harder i think it's even harder to guess what kids are gonna like yeah exactly and the reasoning for me at the time i remember is just that i like some of their brands so like paw patrol for example which is still going strong but again it wasn't enough to to offset some of the other brands that didn't do as well in their portfolio. The third one here is BLX is the ticker. So it's Bank of Latin America. The reason why I had to invest in that one and my knowledge in banks was not as good as it is today. But the reason I had invested was more of a play on Latin America at the time. I can't remember if I had taken a profit or a loss. I think I may

have taken a small loss. But since then, it's been up 100%. So a clean double, I would say. Well, probably from about a week ago is when I took the data. So I think, you know, give or take a couple percent here. The next name, so the fifth on the list, one that Canadian investor will be very familiar with, Bank of Montreal. So that one, the total return since has been 38%. And that's around the time as well that I decided to shed most of my bank holdings. It's just, again, banks are extremely complex to understand. I just didn't love owning a lot of banks because of the risk associated with them. That's the reason why I decided to sell.

The other one I owned was TD. And I think I sold it a bit after that, if I remember correctly. But ever since then, total returns has 38%. So definitely, I think overall happy that I sold Bank of Montreal. Almost said Bank of America there. But that's the main reason. It's not a bad bank per se, but I haven't really held banks since I sold my TD position. I think it's the last one.

The next one is Shaw Communication. So people may wonder, like, why the hell did you buy Shaw Communication? The reason back then then I do remember it was a play on their acquisition of WinMobile that became Freedom Mobile and my thesis was mainly that they would be able to kind of erode the big three so tell us Bell Rogers and gain some market shares and that there could be some upside related to that this one would add 61% total returns in big part because they got purchased by rogers so that's kind of the big part of the returns if not it would have been kind of just

sideways ever since anything you want to add there before i finish the last four you didn't look into your crystal ball and know that they'd get bought out at a premium no no i did not so you should bring bring your crystal ball into the shop i got mine tuned up the other day, and it's working good. Yeah. The next one, this one, glad that I sold. So I bought Laurentian Bank again. So I kind of forgot about that one. That was another bank that I held.

But the main reason is that for people who are not aware, I can't remember exactly what happened, but it was 2018, I believe, or potentially 2017, where they had this big issue with mortgages that they issued without the proper documentation. And then they sold it to another financial institution, which pulled down the results for years. And at the time, I thought it may have been a bit overblown. But then when I, you know, I started the position, I held it for a while. And when I saw that these issues were not getting resolved and were actually getting worse, I decided to sell it. And the total returns for Laurentian Bank has been negative 13% since. So I think I'm pretty happy that I sold. The next one, Enbridge, well known for people. I've been

quite critical for Enbridge recently, just because I don't think their payout ratios and their dividends are very sustainable. They have large amounts of debt. But back then, it wasn't as high. There was also the line three, if I remember correctly, that was overhanging, that they were trying to replace, and it kept going to court, and the stock kept getting hit because of that. Whether they had, you know, good or bad decisions, they tended to be like decisions that didn't favor them. But I thought longer term, that Enbridge could do well, and that people were just focusing too much on it and not as much on their total assets, decided to sell mainly because of some of the concerns with the the financial health, so the debt metrics not improving as much as they would say.

So I decided to sell that. But I did make, I remember I made a decent profit on Enbridge. So my timing was kind of good. The last two names here, one that I talked recently with Dan on the earnings and use because we just did not have a lot of earnings and use. It was kind of that in-between quarter season, in-between financial results season. So I sold Molson Coors back in March of 2020.

The price ever since would have been a total return 7%. So again, I think that was a good move. I sold this one because they were trying to get into seltzers, different kind of option, and the revenues were just not kind of going in the direction that I wanted. So I think I sold after holding it for a few years. And then the last one that I wish I would have kept, last but not least, is Fairfax Financial Holdings.

I think a lot of people may be familiar with that. It's an insurance company, but they also invest in other companies. I think maybe a little bit similar. I know he's been kind of compared a little bit like the Warren Buffett of Canada. Take that with a grain of salt. But he does invest in companies as well. So one, you know, they have stake in BlackBerry. I think they're behind the Toys R Us reopening in Canada.

They've done quite well. So 199% since I sold that. The main reason I sold that was just because I started a position and I probably didn't understand the business as well as I did. It's quite complex to understand that business. And I just decided to sell based on that. Clearly, I probably should have learned more about it and kept it, but you win some, you lose some.

So those are the 10 companies that I sold, and I can definitely go through some more recent one on another podcast if people are interested in that. How many stocks do you own right now? Do you know? Offhand, maybe like 14 or 15 max, yeah. I'm going to look at your thing on... Yeah, and during that same period for those in 16. Okay. So during the same period for those interested, I actually

had 124% returns in my portfolio. So overall, I mean, they've all underperformed my portfolio with the exception of Fairfax. I'm actually realizing you have less. If I take out one, two, three, four, five, six, seven. Oh, you have actually hardly any. Yeah, it's all index funds. Yeah. Yeah. It's actually a lot less than I thought.

Cool. Yeah, I've kept it simplified to say a bit more. Yeah. You and I have both gone more simple through the years. You know what I was thinking before we started recording? I'll get to commentary on your sales here, but every time I think to myself, every investor goes through this.

Every investor who invests in individual equities thinks to themselves, one of these days I'm going to buy the index and go to the beach. I'm selling it. I'm drained in the swamp and I'm going to the beach. Every investor has that. For me, it's like quarterly. And then now we're in right now and next week is full on. Earnings season comes around and I'm like, I could never sit on the sidelines here. This is too fun. I like it. I enjoy it. I like keeping up with everything. It's what I do. And so we're right in the thick of earnings season now.

Yesterday was a big day. Next week, all the big techs and there's like over a thousand US stocks reporting or something nuts. Earnings season is too fun when you're an individual equities guy. I don't do much. I don't trade, but it's intellectually stimulating. Yeah, it's definitely fun. I mean, for me as well, doing the earnings and use with Dan, right? So you have to stay on top of a bunch of different companies. I actually find it maybe even harder to like be doing some deep dives in any individual companies where I'm trying to stay on top of so many of them that are reporting. But definitely, I mean, I've used more of an index approach, but you can make a case, especially right now with, you now with your first segment highlighted that

indices being so heavily weighted. I mean, you can make a case that if you pick stocks well over the next two, three, four, five years plus, that you will probably perform better than the index because the indices are so highly valued right now. I'm not saying that will be the case, but you can definitely make a solid case for that. When you look back at any of these names, are there any where you're like, okay, sure, maybe based on the performance, I shouldn't have sold. But that doesn't make it a mistake necessarily. If I look at this, maybe that money got deployed to do something much better, even for some of the winners like a Fairfax. Are there any where you look at and go, I need to revisit this name?

It's probably Fairfax, to be honest. Even with, you know, obviously the returns kind of show that it's good the rest i mean jd.com was an interesting business but then you got the china risk that i don't think i'm actually willing to uh to get into and then fairfax would be fairfax would probably be the one whether i would buy it or not i'm not sure but i would definitely be willing to learn more about the business yeah and molson and cores i mean you can't even buy this stuff in the uh the good old lcbo is it uh it's what yeah isn't it uh i thought the beer store was still open the beer store is still open you're right yeah and can't you buy like you can buy wine and i had the loblaws we have near here has beer as well but they're cleaned out so for those are they for those who are not familiar with what

we're talking about in ontario and people are in ontario i'll let us you know what we're talking about yeah but the lcbo is the dry summer baby yeah it's it is full-on prohibition the lcbo has gone into on a strike over fighting over the fact that the government is allowing grocery stores to now sell ready to drink cans like seltzers and stuff like this. And this is the big business in the LCBO these days is yes, of course, people still have to go to the LCBO and buy like bottles of two sixes of liquor and stuff like that. But young people in the world especially in the summer they're ready to drink cans are what dominate sales volume in in this in this place so um you can buy in the grocery stores but right now it's completely cleaned out like it looks like

zombie apocalypse in there in the alcohol section makes us look like a bunch of degenerates well and not in uh i think that's that's now i just realized not in ottawa because uh we're lucky we have uh the quebec side where srqs are open right so i know a lot of people that are just go on the quebec side and buy and so i think that has kept the shelves in ottawa relatively stocked for grocery stores because of that reason because i had family over a couple weeks ago right after the strike started and um i wanted some white claw and they're on the quebec side and they were coming over for barbecue and like oh like can you buy me some white clothes yeah i'll just uh you transfer you the money and that's what they did

so i i've i don't drink all that much it's not really a big impact for me but yeah it's definitely much easier in the region it's a little bit more inconvenient because you have to go across the bridges and they tend to be very busy but i guess it's one of the the advantages of living right on the the border i'm going to a buddy's birthday party tonight and we have like a group chat going. And I can't put them on blast or say any details. Just make some moonshine. Yeah, yeah, make some moonshine. We're like, what do we do?

Like I just went to all the grocery stores, nothing, cleaned out, can't get it. The beer store in my house is completely wiped. It's like full-on prohibition like what do we do like our you know like everyone's gonna start buying weed i guess you'll see it's gonna be a very different party but but we have a buddy who works at uh one of the big liquor companies and uh okay we have a backup so he's he's supplying but dude it's it's full-on prohibition yeah we're gonna turn into like a pass the blunt type party but you know i'm i said

that as a joke but as i was thinking about it like it'll be interesting what to see if sales are actually have picked up at like canopy and aurora and all the big players during this quarter as if especially if the strike go on goes on for longer like i would this thing i bet dispensaries are having increased traffic yeah yeah i would think that as well just because you know people are looking for a wait on wine or whatever it is it's the summer just relax and there's even like you know there's the edibles like drinks as well they're kind of seltzers as well. So people may kind of offer those, but it'll be now,

I'm kind of looking forward to their next earnings to see if there's actually an impact in what management has in terms of commentary. Yeah, they'll probably lie. They'll lie even though it's good. Yeah, yeah, yeah. They'll lie even if it's good. They'll Yeah. They'll lie even if it's good. They'll still make up some numbers about BioSteel.

I just had a question for you. And now I'm completely blanking. That's okay. Should that be the pod? We have a couple more segments here, but we've chewed up a lot of time. We'll save this for next time. I have a good segment here on stock-based compensation and buybacks done at the same time, which I think is a great little discussion for us. So tune in

next Monday and we'll go through that. And yeah, thanks for listening to the podcast, folks. We really appreciate you. And as I just mentioned, we're here every single Monday and Thursday. It's earning season, so make sure you're turning into the Thursday calls. I forgot something because Dan is on vacation for a couple of weeks, so we recorded episode 400 in advance, but we forgot to talk about it. So this is $3.99. So maybe just a little reminder that this is $399 and the next episode that you'll be listening to, we will be at episode 400. Wow. Glad I remembered. What are we going to do for 500?

I don't know. We'll have to think something good. Yeah, it's going to come up. Yeah. And like probably in the spring next year. Yeah. Like late spring. Yeah. Yeah. About a year from now. 25 weeks from now yeah i don't know i'll have to think about something yeah if you guys have

suggestion listening let us know you know so we have time to plan yeah maybe we should do something out west we have a fairly big listenership out there and we haven't done anything out west in a while or ever i'm saying in a while like we've done something before like we haven't done anything out west in a while or ever. I'm saying in a while, like we've done something before, like we haven't done anything. So that could be the first. Thanks for listening, folks. We'll see you in a few days. Take care. Appreciate you. If you want to support the show, you can go ahead and join tci.com. That's our Patreon monthly portfolio updates come out on the first Monday of each month. Unless it's holiday, call it a Tuesday. And all the research, numerical deep dives into every single company

on the platform. Simone sharing his little screen. That's all done on FinChat, FinChat.io. If you want 15% off exclusive for podcast listeners, use code TCI15. That is code TCI15 on thinchat.io. See you in a few days. Take care. Bye-bye. 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.