The Canadian Investor - Teladoc & Livongo merger, fraud and Canada’s best performing tech stocks

Episode Date: August 15, 2020

In this episode of The Canada Investor Podcast, Braden talks about some of the best performing tech stocks on the TSX since the beginning of the year. Simon then gives his thoughts on the Teladoc Health and Livongo Health merger. We finish the episode with a discussion on investing in China and Fraud. Tickers of stocks discussed : TDOC, LVGO, DCBO.TO, FD.V, REAL.TO, SHOP.TO, BLDP.TO, KXS.TO, ENGH.TO, MAXR.TO, DSG.TO--- Send in a voice message: https://anchor.fm/the-canadian-investor/messageSee 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

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I hope everyone is doing well. Brayden, how's it going? How are you handling that loss from the Leafs to play and not even making the playoffs? It's been a tough go, man. It's been a tough go, man. It's been a tough go. They had the most incredible comeback I've ever seen in the fourth game there with like three goals in three minutes and 28 seconds or something

with all the six guys, the same six guys on the ice when they pulled the goalie. seconds or something with all the six guys the same six guys on the ice when they pulled the goalie and even after that it's like they'll find a way to disappoint us they'll find a way but as you know i'm also a calgary flames fan and they beat the stars last night and uh looked really good so at least there's still some hope as a flames fan as well but man it is uh it is a tough time to be a least fan as always so uh but man i've been watching so much hockey did you see the outrageous quintuple overtime yesterday with columbus and the lightning uh no i mean obviously i kind of why i watch the highlights but i can just imagine my god like how bad those uh columbus beulah jacket players must feel after giving it all out like it

i mean good for them if they end up winning the series i don't know how you come back from that just all the the energy you you kind of expended during that game, right? Yeah, no kidding. With Cubs-Cero with 84, 85 saves. New NHL record. Seth Jones with 65 minutes. I was like, holy. I stopped watching the third overtime because I had to move on. But, oh, my God, what a game. Enough about hockey.

Oh, it's good that sports is back, though, man. Oh, my God. What a game. Enough about hockey. Oh, it's good that sports is back, though, man. Oh, yeah. Well, as a side note, I'm a Habs fan, so I'm having a great time. I feel like I'm free-rolling right now watching the Habs play, not thinking they would make the playoffs. You guys are on borrowed time even being in the playoffs, but, hey, got to give it to you. You guys are playing well, man.

It's good to see. So on that same note, talking hockey, talking Canada, there has been a pullback in tech stocks the last couple days. I don't know if you've been following that. Seems like there's some rotation to value right now that was somewhat expected with the crazy run-up in tech valuations. Some of it deserving for sure. There's been some really, really great results coming out.

Earnings season's coming to a close here. I can't remember the last earnings season where I actually read every report of a lot of some big names that were not in my portfolio. Like I always read earnings reports for every company in the portfolio, but it seemed like everything was on my radar. So what's happening in this coronavirus economy? So that was interesting to watch. I'm going to rifle through some of the best performing technology companies

on the Toronto Stock Exchange to potentially put on your watch list as, you know, there could be a pullback. A lot of these companies are really solid. So this is a screen for tech stocks on the TSX that have returned at least 30% and have 1 billion in market cap. Because I'm not going to just throw out some names and tickers for you to look at that went from a 26 million in market cap to 50 million in market cap you know it still might not be investable for you if you don't go to micro cap so 30 percent returns minimum and a billion in market cap in the tech sector so i saw a name here that i didn't even know about until i did this screen face drive

face drive when i heard the name of Face Drive, I thought it was the scene in The Other Guys when Will Ferrell presents his face back opportunity. I don't know if you know that movie. That is a great movie, by the way. Face Drive is up 780%. You heard that right. Year to date.

780%. They do ride sharing. Next best at a very low-key, 195% up on the air is Tachibo. And we got to get Claudio, the CEO on the podcast. He reached out on Twitter because he retweeted our episode we did about Tachibo. So go back and listen to that episode if you want a deep dive um that one's up 195 so good for them uh real matters the tech company in the appraisal space for real estate up 155 shopify up a whopping 154 which is incredible given their market cap now.

What a story out of Canada Shopify has been. Still don't own the stock, still kicking myself for missing it. So here we are. Ballard Power, which does fuel cells, is up over 100% and 106%. They do fuel cells. If you are an ESG investor investor you're looking for clean technology in your portfolio ballard is a leader right now in fuel cell um and fuel cell technology is really promising has so much application um with energy and with power it's's really interesting. So look up Ballard Power. That's B-A-L-L-A-R-D.

Kinaxis has been a really good performer on the TSX, up 92% year to date. Kinaxis does supply chain software as a service. Been a great performer. Maxar Tech, one I'm not as familiar with, a little smaller, up 68%, yeah, 68.91%. Maxar Tech does their new hardware for communication services. Enchouse Systems, whoop, whoop, up 54% year to date.

It's been a really, really good performer for my portfolio. And if you want a deep dive on Enchouse, go to the last episode. And then lastly up 32 is descarte systems uh discarded systems does logistics software as a service and it's been a great performer so there you have it just rifled through a couple companies to maybe consider you know thrown on the watch list of you know we do have technology companies here on the TSX that have been performing really well. So there's some names to think about.

Obviously do a deep dive. All of them trading at rich multiples, no doubt in my mind. But, you know, as there could be a pullback from tech, these are some companies maybe to consider putting on the list and if you want a full deep dive on enchouse well look no further than the last episode are you surprised simon um to see any of these names obviously shopify stealing every headline on the tsx lately uh no i mean i wasn't surprised for some of the names. Some of the

names I've never heard of, like the FaceDrive, never heard of them before. No, never. Up 780%. Yeah, which makes sense because I think it's on the TSX Venture. So it is, yeah. I typically don't look in the Venture stocks that often. But a lot of the names obviously they're familiar inch house uh shopify and a few other names i'm not surprised to see them there and overall i mean tech has been on a tear since uh what for the past three four months or beginning of the year so i'm not surprised that tech overall is doing well yeah doubt. So speaking of a technology play inside of healthcare, I know we all know on this podcast that you are a big fan of Teladoc Health. Can you break down the news coming out of Teladoc? Because this is big for shareholders of not only Teladoc, but the company they merged with.

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. Trade.com. 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 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. Yeah, yeah, definitely. So obviously, I've mentioned it quite a few times. I'm a shareholder of Teladoc. I recently trimmed my position like we had discussed. It was mostly not because I hated the company, just because I had too much concentration specifically in my TFSA.

So I'll mention at the end what I'm kind of thinking of doing. But for now, so Teladoc will be merging. Well, they'll be buying out Livongo Health. But I mean, it's more of a merge than anything else because they're going to be under the Teladoc umbrella. So just to give you guys a bit more information on what the merger entails, a bit more information on Livongo itself. So I did some digging.

I also listened to the conference call for the merger, which I strongly recommend that people listen to it if they're interested in starting a position into Teladoc or Livongo help. And a side note, thank you for whoever sent us the question. They asked me if I could give my take on Teladoc because obviously they knew that I'm a shareholder. So really the essence of the merger is to give people and the goal the ability of use real-time health data to create timely interactions and better care for patients. So really, it's going to be a digital, a virtual health care, but also a physical care delivery, because obviously there's some things you can't do remotely. There's going to

be, according to management of both companies, there's going to be synergies between both. to management of both companies. There's going to be synergies between both. Livongo, just to give you a better idea, so they really, their main area is chronic disease care. So they specialize in diabetes monitoring, weight management, behavioral management, and hypertension monitoring. So they really provide a database experience

and it's driven by AI and it's really data driven, which is a bit different from Teladoc where Teladoc, yes, it's a telemedicine platform, but a lot, it's a platform to help people get in touch with physician. So you can probably already start seeing why these two companies are looking to merge. They only have about 25% of their client base that are cross-platform, so in both platforms. So there's definitely a lot of opportunity for them to upsell clients of one platform to another. And what was interesting is the Livongo CEO on the conference call was saying that they actually get a lot of their customers that will call them for that already used Livongo for chronic care services and will

call Livongo asking oh I have this health problem which is not chronic and Livongo I mean they can't really help them because that's not their focus So you can really see right there how that could really be like a powerful driver for the new Teladoc entity. I'll talk a bit more about the actual details of the merger. So another thing that they mentioned is there's more than 147 million Americans. I'm not making a mistake here. 147 million Americans that live with a chronic condition and about 30, a third of all adults internationally that have a chronic condition. So roughly it's about 50% of Americans and 33% internationally. So there's really, there's a lot of money to be made in chronic care and there's a lot of efficiency that can be done. So their main goal is to provide better care to patients. And obviously, chronic care has a high cost for

patients and employers as well. So there's really some strong tailwinds and a lot of reasons why employers but also customers that may not be associated with an employer that would want to go with Livongo and Teladoc. So obviously the pandemic has just accelerated all of this and they don't see the tailwind ending anytime soon. And I would tend to agree with them because once people get to use something that's as convenient and efficient as the platform that Livongo and Teladoc are offering, why would you go back to the old way of doing things? If it saves you money, it's more efficient, you get better care as well. And then in terms of people that have access to Teladoc currently, there's about 70 million people that have access. it's not necessarily the people who've used it

But they do have access through their employers insurance plan For example and 30% of fortune 500 companies that currently use the services of Telda or Livongo So in terms of Livongo, they have very low debt right now Their revenues have been just exploded They've doubled from q1 and Q2 compared to last year in 2019. So they've more than doubled, actually. So just to give you guys an idea, in 2019, for six months was $72 million in revenue, $160 million for this year. And I don't think this will slow down all that much anytime soon.

They're still losing money, but they're very close to being cash flow positive. You guys know that I put a lot of importance on that. And overall, Livongo provides a more data-driven approach to health care and obviously specifically chronic conditions. conditions. So you can, I can really see how well this and logically how well the combined entity, how it will merge together. Teladoc on its hand, just a quick idea for its financials for the first six months of 2020 compared to 2019, the revenue increased $258 million to $421 million. Part of that is due to acquisitions, but they're still seeing some very quick, very fast organic growth. And they've actually been free cash flow positive for the first six months of 2020, which is great to see. So even though their earnings are in the negative, you see that these companies, the actual money coming in, Livongo is very close to being positive and teladoc is

positive in that metric and to me that's one of the most important things the agreements in terms of the merger agreement i've read so i went through the 8k form so if you guys know what the 8k is is whenever there's some unannounced material information that should be divulged to shareholders so you can always look at the agreement it's kind of boring to look at so i there's some unannounced material information that should be divulged to shareholders. So you can always look at the agreement. It's kind of boring to look at. So I went through it, didn't read the whole thing, but I went through it a little bit. So the agreement is Livongo shareholders get 0.592 shares of Teldoc for each share of Livongo plus $11.33 in cash. So it's really a stock deal with a little bit of cash. I couldn't find, I've read that some people were saying

that it's the price of Teladoc as of, I think, August 5th. I couldn't find that anywhere. So I don't know if it's dependent on whatever the price of Teladoc will be when the transaction is closed or they have a specific day. If you guys find that info, by all means, let me know. But for now, just assume that it's straight 0.592 shares of Teladoc plus 11.33 when the transaction closes. It's been approved by both boards, but it still has to be approved by shareholders. And the approximate revenue of both entities for 2020 will be $1.3 billion. But again, that's something I think that will increase very quickly.

The tailwinds are there. I really can't see people going back to the old way of doing things. So my personal opinion is I think if it's something that you're looking to invest in for the long term, and I stress long term, 5, 10, 15, 20 years in the future, you can definitely, you know, dollar cost average, whether you want to buy Teladoc or Livongo, that's really up to you. You can always make the calculation between both of you because sometimes when you have these agreements one stock they're supposed to kind of follow the same pattern once the agreement's been in place but depending if there's uncertainty about the deal going through or not sometimes you might see some discrepancy between the two so you just have to do the math and to see if it makes sense

or not personally i will probably buy some livongo shares just in case the deal doesn't go through because the more I'm reading about it, the more I actually like this company. So I'd like to have a stake in that company if the deal is voted down by shareholders of either Livongo or Teladoc. So that's kind of my take on it. I know, Brayden, like we had talked, you mentioned a lot of Livongo shareholders weren't too happy because they were seeing much faster revenue increase than Teladoc. I mean, I do understand that. But I think from the comments I've seen, a lot of those people are more short term investors. And for sure, in the next, you know, two, three, four years, it's possible that, you know, it might not provide great returns, but just the tailwinds and the fact that they're the market leaders now, they have all

these solutions that they'll have, obviously, if the merger goes through, they'll have all these services available under one platform, they'll be able to help people for a variety of different medical conditions, whether they're chronic or not. I mean, I really, I think the sky is the limit for these two companies and the new entity that will be created. So that's kind of, that's my take in a nutshell. You have any comments on that, Breda?

Yeah, it's funny, you know, shareholders of Livongo are going, well, why aren't you paying a premium to me as a shareholder? And they're forgetting the run-up that Livongo has had year-to-date, trading at well over 40 times sales. you would think that there's some sort of premium baked in there and that might be a fair price. I mean, they're not going to give you some outrageous premium to a stock already trading at over 40 times sales. So the deal seemed fair for sure to me. And this company is stronger together. This is a big blockbuster merge you know telehealth telemedicine is a unbelievably massive total addressable market and it won't be a winner takes all like that's how big it is but this company together um which weren't really competitors you mentioned 25 percent uh were similar had the same

crossover and customers because they did different things this company together is the makings of like a massive juggernaut in telehealth that is like a winner takes most scenario where you gotta start paying attention to the secular trend. And this is this is the leader right here. You know, the thing that listen to listening to the CEO of Teladoc speak, he's so optimistic about the growth trajectory, not only of Teladoc, but this company moving forward. about the growth trajectory, not only of Teladoc, but this company moving forward. He has like this, like, smile in his, in his explanation of describing it. And you really do think like, whoa, you know, this isn't just like, you know, COVID 2020 growth, like, it seems like this is this is definitely going to persist for a while how

long i don't know the growth is unbelievably strong so definitely a premium you're paying but you know one to keep on your watch list definitely if you don't already own a position uh you know simon you're gonna retire off into sunset being a bag holder of this thing so uh you know it's uh things look good for Teladoc moving forward. Things look good for telehealth moving forward as an industry, the total addressable market. If you were to look at all the verticals, like Livongo is a different vertical, you know.

Do you think, you know, as a shareholder, do you think Teladoc becomes this acquisition machine? It just makes so much sense for me to be one of many, many roll-ups coming into the future. It just makes complete sense to me. Traditionally, Teladoc has done a lot of acquisitions. It's a big merger. Don't get me wrong, but they do have a solid track record and their current CEO, I believe his first name is Jason, if I remember correctly. Jason Gorzik? Is that right?

Gorzik, yeah. I didn't want to. It could be Gorzik, who knows? Yeah, but as you said, he's very passionate and he's not it's not he's not been saying this stuff for the past six months he's been saying that since like four or five six years even further down i think since he took over as ceo of teledoc and he's really passionate about it and i that is one of the things that i do like and for me just adding to my position it's not that i wanted to sell my position before. It was the main driver for me for selling a little bit of Teladoc was that it wasn't all in my TFSA.

And I like my TFSA to be a bit more balanced. So definitely I'm looking to add either Teladoc or Livongo, but probably more Livongo to my RRSP. But yeah, it's probably going to still be an acquisition play going forward. I mean, I don't see any reason why it shouldn't again, but there's going to be tremendous organic growth too. That's my opinion on it. And it's well warranted. 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 money sense 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. 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 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. All right, moving on. in the app store and I'll see you there. All right, moving on. We've been getting questions about investing in, uh, you know, a broadly outside of North America, namely China. Investors have a reason to be hesitant. I think it's not, uh, without a good basis

of investing in China, given, uh, you know, some frauds we've seen. Luck in coffee, to say, you know, one that's been on the headlines. But also, like, not just in China, you know, Wirecard had this big fraud during this COVID environment. Whoops, there's $2 billion missing on the balance sheet. Sorry about that. So these things happen, right? And how do you avoid them? How do you trust it?

What's going on? And, you know, it's a fair question. So, Simon, I'm interested to know your take on investing in China. It's obviously a massive, massive market. And, you know, with the tensions going on right now between the US and China in terms of economic powerhouses, especially in the technology sector, it seems like the two companies will have this kind of own ecosystem of technology. That's just what I'm predicting. And that is a risk for many, many companies, even in America, if there were to be like NASDAQ stocks, if there were to be a ban on the other side from China's perspective, think of the implications of this WeChat thing if they weren't allowed to be on iPhones. With a huge, I think well over 20% of iPhone sales are in China.

WeChat, which is their messaging platform that every single person uses, wasn't allowed to be on an iPhone, that definitely affects Apple stock and definitely will be a huge hit to their iPhone revenue. So I'm interested to see what your take has been on not only this back and forth, on not only this back and forth, China and the US, but also just investing in China and that leap of faith, given you might not be as familiar with those businesses, you might not have intimately used them. And there has been a history of fraud. Yeah, so I mean, I do own some Chinese stock. I used to own JD own JD.com I sold that but I still own Tencent the way I see it well first of all before I get going on this is if you guys have not seen this this movie the China Hustle definitely watch it before you actually invest in China they uncovered a lot of frauds

that were going on in the early 2010s, about seven, eight years ago, that were companies that were, you know, doing fake revenues, just pumping their revenue 10 times of what they were actually were. And the problem with China is the government in place, right? So they, I mean, they protect their companies. There's no punishment for the most part for companies doing frauds that are listed in the US. So there's definitely increased risk. There's also the auditing that yes, the big auditing firms tend to have a presence over there, but they usually are hired by the companies. You can make a case that sometimes they'll be biased because if they say bad things, they might not be rehired

later on. So there's definitely some risk there. Even if it gets audited, you never know for sure when it's in China if those numbers are accurate. So that's something you have to be aware of when you're investing. I would say diversify, don't invest too heavily in one single Chinese company, make it a not too big portion of your portfolio if you're looking to invest. And just be aware of those risks. I mean, when you're investing, you know, fraud can happen. Like we're talking about China now, but fraud can happen in the U.S. If we think about Enron, for example, but there's countless other examples of the U.S., you know, some things that fraudulent operations. But, yeah, that's something you just need to be aware of when you're investing in China. And then obviously you have all the tensions with TikTok and all the digital plays that the U.S. is putting sanctions right now. So it's definitely interesting to say

the least, but be aware of the risk. Fraud can happen and you can avoid being hurt too much by that if you invest in China by making sure you're well diversified. Good point. The China Hustle is great, by the way. That's a Netflix one, I think, right? Yeah. Yeah, it's a Netflix one. Yeah, that's great. It's really alarming in that documentary

when they pull up boots on the ground research and they go to company X listed on like the NYSE or like over the counter. And it is not a real business reporting fake financial statements, just complete fabrications. And you definitely get a little hesitant about investing in a market where that can happen so often. So this goes down like, I'll give my take. I don't own any OTC Chinese stocks. I should have bought Tencent three years ago when I was gonna, but I didn't. That's a mistake. I see

you're a shareholder. And that company, I know, is profoundly massive in China. Like I was just talking about WeChat and WePay. Those are, those are 10 cent, right? You look at that and you go, this is a real business. If you don't understand what you own at all, well, that's just out of your circle of competence. And this is just like investing one on one, like know what you own. own. If you don't know the business well enough, and let alone you can't even like seeing is believing you've never even seen that business because they only operate in China, you are taking a leap of faith that requires, you know, some really knowing what your own, what you own, because if it's one of those cases where this company is really suffering and revenues are about to decline in a major way, and you're not going to find out until that quarterly report comes out

and it's too late, that's really crappy as a shareholder. So you've got to know what you own. And if it is completely out of your circle of competence, because geographically it is so far from what you own. And if it is completely out of your circle of competence, because geographically is so far from what you've experienced as potentially a customer knowing about the company, blah, blah, blah, blah, blah, then it's, uh, you're in for a rough ride as an investor, just long-term for the most part. So that's where I sit on that case. I think it's the only true risk and market cap correlation. In my mind, I don't think that there's this inherent risk

of owning smaller market capitalization companies. But when it comes to investing overseas in a market like China, there is that correlation for me because I don't know that company. I don't know that 2 billion in market cap company growing very fast in China that does only business in China. Completely out of my circle of competence. So that's where I stand on it. You got to know what you own. If there's a great company, that's, that's a Chinese stock or international stock, see se limited, which is, you know, a very, it's like 10 cent for the rest of it, like Southeast Asia. What an unbelievable performer that has been. They're doing e-commerce, they're doing gaming, e-commerce, they're doing gaming, they're doing payments, they're doing that whole ecosystem. Same as like a Mercado Libre does in South America, that just like absolute domination in so many sectors of tech. Then those companies, yeah, I can get behind it. I get it. Hundreds

and millions of active users, daily active users. That that's legit so that's where i stand um well do you own anything else other than uh than tencent and i mean i like c uh c limited yeah so i do like that one um alibaba jd.com if you're looking for an e-commerce play those are probably companies that would look at the I would personally stay a bit more in the big names aside from that an approach if you want exposure to China because don't don't get us wrong like there's still some really good companies in China it's just the transparency is not the same as it is in the US Canada and Western Europe so you really have to keep that in mind. And another approach is, you know, you take a portion of your portfolio and you just

dedicate an ETF that's low, low fees dedicated to China. That way, you get the upside associated with that overall market and you minimize the risk of owning a single company. Because when you guys watch that movie, The China Hustle, that's what's so sad about company because when you guys watch that movie the china hustle that's what's so sad about that movie is you have people that basically put their life savings into like just a few chinese companies and that's really what you want to avoid bring up a great point because i'm talking about like i have no exposure to china five percent of my portfolio is around 5% is actually in Vanguard's emerging markets, ticker VEE, which is over 50% China. Yeah, I was going to say it's heavily Chinese-weighted. It's heavily Chinese-weighted.

So there are other emerging markets in there, but I look at that as like my China ETF, even though there are other markets in there but i look at that as like my china etf even though there are other markets in there by allocation geographical allocation it's mostly china so yeah i mean uh there's multiple ways to go about doing that again you're gonna be buying these individual companies in u.s dollars on like otc like over the counter more than likely so something to consider i think we both are very aligned on that stick to the big names because you'll probably have more insights about them yeah and just one last thing not to harp too much on china but you mentioned the wire cards scandal in Germany. It just goes to show Germany is usually a pretty transparent country when it comes to publicly traded companies. And even Angela Merkel was really touting the benefits of Wirecard. And it was like national pride in Germany just to see, like you said, there was like $2 billion missing on the balance sheet.

So it just goes to show there can be fraud anywhere. So that's a risk you have to understand that it is there when you're investing. It probably is obviously more prevalent in China, but it can happen anywhere. It can happen in the US and can happen in Canada, can happen absolutely anywhere. It can.

Next week, Shopify comes out. By the way, we lied. We didn't have 100% quarter growth. It was actually 200%. Shopify? I'm kidding. I'm going to say, we made a mistake. We didn't have 100% revenue growth in one quarter.

It was actually 200%. I'm just, this company is just absolutely dominating right now. I think that's good for this episode, guys. Yeah. Go give us five stars on Apple podcast right now. I get so many emails.

We love what you guys are doing. Thank you so much for the podcast. How do I say thanks? Well, you can say thanks. Go to Apple Podcasts and give us a five-star review. Tell us what you think. That's all we ask. Thanks, guys. We appreciate it. We'll see you guys next week. Bye-bye. The Canadian investor is not to be taken as investment advice. Braden or Simone may own securities mentioned on this podcast. Always make sure to do your own research and due diligence before making investment decisions. Thanks for listening to this episode of The Canadian Investor. To get a list of the top Canadian dividend stocks right now and other valuable investing resources,

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