The Canadian Investor - The First Rule of Investing

Episode Date: July 31, 2023

In this episode, we go over the math behind investing to explain why avoiding losses on an investment should be an investor’s number one priority. Simon does a dive into Jamieson Wellness, the vitamin and mineral supplement company listed on the TSX. We finish the episode by going over how we are able to stay productive with competing priorities.  Symbols of stocks discussed: JWEL.TO 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 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  Sign up to Stratosphere for free 🚀 our platform for self-directed stock investing research. Register for EQ Bank, the seamless digital banking experience with better rates and no nonsense. Precedence research report on the growth of the Health and Wellness MarketSee 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 to the show. My name is Brayden Dennis. As always, joined by the very thoughtful and the very handsome Simon Belanger. Dude, this is a good episode. We got some fire. Are you bringing some fire? I got some heat coming.

Yeah, I think so so i mean uh doing a little i would say like a medium dive into a company we haven't really talked about before so that should be fun oh yeah i'm just seeing this because i yeah i'm catching up to okay i see what you're doing here i like i like this uh i like this idea we were talking about this when you're in uh in in Toronto the other day. Before we get into the show, subscribe to the podcast. We don't ask very often, and it really does go a long way. So if you're on your podcast player on Spotify, it's called Follow.

If you're on Apple Podcasts, press Subscribe. That way, the episodes come into your feed so that you don't have to look for the pod. It's just there. And it's a feature that is very useful when you're in a pinch. All right, so I will do my first topic and then you're going to do a medium-ish dive into a company. And then I'm going to bring something different at the end. So make sure you keep listening in at the end. I think that people will like it. All right, so I'll kick it off. So make sure you keep listening in at the end. I think that people will like it. All right. So I'll kick it off. So what do they say is the first rule of investing, Simone? What is the classic- Don't lose money. Don't lose money. That's right. The first rule of investment is don't lose money. And the second

rule of investment is don't forget the first rule. End quote, Mr. Warren Buffett, if you've ever heard of him. Now, this quote is very famous and for good reason. And I wanted to revisit it because the math behind this quote really tells the whole story. And it's cool to say, yeah, capital preservation, number one, most important thing, don't lose money, says Mr. Buff Dog. But I'm going to show you why that's true. And for investment professionals, they'll know this math well, but new DIY investors don't know this math well, and it causes them lots of pain, to say the least. So I think most of us are familiar with the concept of higher risk, higher return, right,

Simone? And yes, you've just thrown the graph on the screen for the beautiful subscribers of jointtci.com. And it really illustrates the math that I'm talking about here. But when people say high risk, high reward or high return, what that really means is that the investor should be rewarded with higher upside for the amount of risk being taken. But that doesn't necessarily imply that a high risk investment has a lot of upside. And in fact, those two things are not always correlated. It's more so that the investor should, in a vacuum, be rewarded for more risk being taken. And so in fact, mathematically, as you can see with this beautiful graph, it's a pretty good way to lose money and have poor

investment returns by taking a lot of unnecessary risk. Owning companies with binary outcomes, like speculative mining businesses, speculative early stage biotech, like taking the venture model to public markets know it's either 100 x's or zeros you have to place a lot of bets like the venture model does and that's why doing this in public markets is really really hard um and and usually misused so if you lose 10 of your money, Simone, you have to make 11% to break even. And math is really simple here. The easy one for people to understand is, Simone, if I have $100,000 and I lose 50%, how much do I have? You've got 50,000 if my elementary school math is good. That's right. All this takes is elementary school math. So you've lost, you've taken a 50% drawdown on your 100K and now you

have 50K left. Now to get my money back, I can't just gain 50%. I only get halfway there. I have to gain 100%, which is a clean double from 50 to get back to where I started. So it's not lose 50, gain 50 and back where I'm started. If you face a 70% drawdown, you need a 233% return to break even. If you lose 80%, 33% return to break even. If you lose 80%, you need a 400% return to break even. If you lose 90%, you need a 900% return because that is a 10X. 900% is a 10X. And to get back to 100 from 10, you need a 10X, which is a 900% return. And so where I'm going with this is taking a 30% haircut on a stock hurts a lot more, not only in the fields, but actually mathematically than gaining 30%. My apologies. That's the equivalent of a 43% return required to get your money back if you lose 30. So the takeaway here is skilled investors understand this math. New investors learn this the hard way. uh the the idea that high risk implies high expected returns

are not always correlated it's just that they should be rewarded with higher upside if they're taking on excess risk yeah and with high risk i know we've talked about that a bit in selling mindsets or, you know, the latest episode that we got out or maybe, yeah, two episodes ago. But when you buy something at like really nosebleed valuations, I think it's even if it's a good company, the upside oftentimes is just not really there. I mean, oftentimes, if you do want to have some decent return, you almost need to the company to execute flawlessly, which I think is almost impossible. When you think about it, no matter how good the company, there's things that even if they execute perfectly, there are things out of their control that will most likely happen and kind of, you know, put a wrench in their plan. I think that's just a good reminder for those really nosebleed valuations. And with those nosebleed valuations come extreme movements on quarterly results. Because when you are priced to perfection, as Simone just mentioned, the market expects perfection. Any weak guidance, any miss on rev earnings, the business could be doing fine. And you could be getting wrecked for multiple quarterly results because the implied expectations are perfection. And the world isn't built like that. People stumble. There are factors that come in

and out and that company could crush it long-term. But if it's price perfection and it stumbles at all, you're looking at pretty severe drawdowns even from just one quarterly print, right? Like one revenue miss, one soft guidance away from getting wrecked. No, exactly. 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. That is questtrade.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. That is Airbnb.ca forward slash host. them deep because I didn't have the chance to listen to a earnings call, but I still, you know, went pretty deep, I would say, in their statements or latest annual statement 2022. And before I continue, the name of the company is Jamieson Wellness, ticker JWEL.TO. So obviously it's on the TSX. And I mentioned previously, we had a bunch of questions during our TCI meetup,

and just some of them we were not able to get to. So I'll try my best for the ones I do remember to, you know, do a segment on the podcast in the upcoming weeks. And we had a question about, you know, the wellness space and the future growth for that from one of our, you know, women listeners. I can't remember her name, but, you know, she'll know who she is. And I decided to look at Jameson Wellness because it encompasses, you know, that wellness space.

And I've never really, I know a bit about them, but I never really looked at the name. And I think we may have talked once or twice about them. But, you know, I forget the last time we did, if we did, because after close to 300 episodes, it's easy to forget some of the things that we've talked about. Yeah, we're coming up on 300. That's right. Yeah, that's crazy. Yeah. So, you know, for those not familiar with Jameson Wellness, if you ever had over-the-counter vitamins or natural products before, you're probably familiar with them. Their products are in a lot of different retail stores. I know

Shoppers Drug Mart, at least in Ontario, they have their brands and I believe so with Loblaws as well. Their product lines, so they have about, they have six different product lines. So the first one, their main one is Jameson Wellness. One of the recent one, which was acquired in 2022, it's a California-based company, Utheory, which is a line of health, beauty, and wellness supplements. They have Progressive, which is another line of supplements. Iron Vegan, which is a line of plant-based protein powder and protein bars. And little side notes on that, I was looking for some vegan protein powder years ago because I just digested better than whey protein. I used to have more whey protein when I was younger. And I came across that one and it tasted so bad. They're sprouted um protein i don't know if they change a recipe but i had

one bag and i tried another brand that's how bad it was i don't know if it's all their products there the texture of the vegan protein compared to like high quality whey is so different well it also depends what kind of protein right right, they're using. I think some will use pea protein. I think some use soy and stuff like that. So, depending on the type of protein, it'll change. But I found a good one. It is not a Jameson Wellness product, but I figured I'd just mention that. They also have Smart Solution, which is a brand geared towards women's supplement.

And then Precision, which is a nutritional supplement line designed for athletes and bodybuilders. So for a lot of people might think they're just in Canada, but actually they have a presence in over 50 countries around the world. The CEO of the company is Mike Pilato. He became CEO in 2021 after joining the company in 2018 as the president of Specialty Brands. Now, in terms of growth and their market, I came across this very interesting research report from Precedence Research. I will add the link in the show notes because I'll be referring a little bit to their numbers here. And obviously, I always want to give credit where credit is due.

This is a Canadian slash Indian company that provides strategic market insights. And what their report shows is the TAM, also known as the total addressable market in 2022, and I'm talking globally here, for the health and wellness market was 5.2 trillion and is expected to grow at a compound annual growth rate of 5.5% and reach $9 trillion in 2032. Now, that's a very broad category. It includes a lot of subcategories, if you'd like. So, you know, people might be thinking like, holy crap, that is a big total addressable market. But as anytime you're talking about TAM, I would say their projections and sometimes even the current data, it's a bit hard to get an accurate number. So take that with a grain of salt.

747 billion in 2022. And we'll grow at a rate of just over 6% for the next 10 years to reach 1.3 trillion in 2032. So they have, they kind of have that split out into different sectors. For those that are joining on Join TCI, you'll be able to see what I'm talking about in the different sectors, But essentially for that whole kind of wellness and health. So they have it between personal care and beauty and anti-aging, nutrition and weight loss, physical activity, wellness, tourism, preventative and personal medicine, spa economy and others. So it is a very broad type of market, but I thought it was interesting just to give some context to people how potentially big that market could be. Now, Jameson, on their latest annual report, they said that the vitamin and mineral supplements, so VMS market, is worth roughly $40 billion in the U.S. and $30 billion or actually $30 billion plus in China. And those are two key markets that Jameson is looking to grow into.

One of the ways they'll do this is through acquisition. Some recent example was the Utheory acquisition I talked about. about, but also they purchased or they bought out one of their main Chinese distribution partner, which allowed them to shift the company to a company-owned distribution model in China. And these two acquisitions actually happened in 2022. Now, in terms of their revenue split, where it's coming from and how they're guiding revenue-wise, in 2021, they received 75% of their revenue from Canada, 11% in the US, and 14% from other regions, which makes me think that China is still a very small portion because they don't break it out specifically. In 2022, it was 69% in Canada, 18% in the US, 13% in other regions.

And for 2023, they're guiding for revenue growth in the range of 22% to 28% overall, 3% to 6% in Canada. In the US, I'm going to assume it's 11.5% to 19% because they don't single that out specifically, but they talk about U-theory, which is predominantly US. And then 65% to 75% growth in China. But like I mentioned, it's very hard to say because they don't kind of specify what China currently is. So it's in that other bucket. So it's probably a relatively small base here and the international growth to be between five and 20%. Anything you want to add before I continue? We have a new VMS acronym. Oh no, vitamin and mineral supplement.

What is it again? Vertical market software. That is a very common use of VMS. But vitamin and mineral supplement, dude, the US growth is certainly impressive. I wish they would just be a little bit more explicit. If they're going to call out these growth rate numbers to just give us absolutes. Yeah, exactly. I don't really understand. I'm not saying that they're hiding anything. anything but when they don't when when companies don't specifically break out those numbers it's easy for them to just draw on certain regions that are facing uh ups and downs and your power i

think just went out but i still have you live here on the show so we're just gonna assume it's a light bulb here live on the podcast the show goes on yeah i mean i think it's a light bulb i think the light bulb between i buy their supplements are the vitamins. Sorry, I don't know any of their other products, but I certainly know the Jameson branded vitamins. They're very common at basically every Canadian drugstore. Yeah, they have a lot of shelf space. Yeah, yeah. And that's that's definitely something i think their presence is very big in

canada um so i do hope people enjoy me in the dark i like my laptop is still charging so this is gonna be great we still got connection here so yeah still got it um so yeah it must be either that or my wife shut down the lights that lead downstairs Hope you like the dark, honey. Yeah, I'm in the doghouse. I don't know. Yeah, exactly. Okay. Well, I mean, I'll continue here after that little funny moment. So in terms of numbers, so the market cap is 1.2 billion. So still a very small company. The trailing 12 months revenues of 580 million. Revenues have grown 21% from 2021 to 2022 and 71% if we go back in the past five years. So it is impressive there. Gross margins have been remarkably steady at right around 36, 37% since 2018. Operating margins have been between 15 and 17% between that same five-year period.

But it has dipped to 14.2% on a trailing 12-month basis. So I don't know if that's just kind of a factor of the quarters when you look at the trailing 12 months, but something to definitely keep an eye on if this is a business you're thinking about or watching. Net income has doubled from 2018 to 2022. Earnings per share has increased as well, but at a slower pace because they've diluted the shares at about a 1.44% annual growth rate in actual share count. Free cash flow was $36 million last year, and they've been free cash

positive since 2014, which is great to see that's as far as I could see it with stratosphere so it could have been before that but let's just say at least for the last 10 years and free cash flow per share has grown pretty nicely over the years not a straight line but it was zero basically 90 cents a share last year. And it's basically overall, I mean, it is growing over time. I do have something, our joint TCI subscribers, they will be able to see it from Stratosphere. So it kind of goes, it's a slopey uptrend, I would say. And free cash flow per share for me, it's one of the best metric because it accounts for share dilution, but also free cash flow, which is really the cash that's coming in and out into the company. Any comments

there? I'm just looking at the metrics here. And the one thing that really gives me pause for concern is I look at this as a growing important market that you highlighted from a total addressable market and them having a very strong presence in some of their key areas already that they can build off of. And they're paying out so much, some years, almost all of the free cash flow to the dividend yeah like i'll touch on that for sure yeah and and that really gives me a lot of concern from the management and not being able to make hard decisions when there's this like this kind of huge opportunity in front of them uh with an important brand you know what i mean? It just rubs me the wrong way a

little bit. To me, this is a growth story. And if you want to pay a small dividend and reward shareholders and buy back some stock, sure, no problem. But to be paying out in 2022, or in 2021, almost exactly all of the free cash flow and sometimes more than the free cash flow going to this dividend. So that is something that I flag right away looking at the financials. Yeah. So I actually did a little table, as you can see about the dividend. Oh, I jumped the gun. Here it is. Yeah. You jumped the gun a little bit. So okay, I'll just kind of rearrange the sequence. No problem. I can, you know, I'm flexible. So, speaking of the dividend, so they pay a dividend that's 17

cents per share. It's a quarterly dividend. Annualized, it's 2.4%. It has increased quite well over the years. So, it's a grown compound, the CAGR at 16% since 2018. So from that standpoint, it looks pretty good. But to your point, the payout ratio is pretty high, I would say. So for those watching on Joint TCI, you'll see. So 2022, they had a payout ratio of of 72%, 2021, like you were mentioning, 97% or 96, 97%, 2020, 63%, 2019, 199%, and 2018, 77%. So if you average it out, they're actually paying more than their free cash flow. But if you take out the, you know, I'll give them the benefit of the doubt that 2019 was an anomaly. So if you take out 2019, it's still 77% of free cash flow that's being paid out. And like you mentioned, for a company that, you know, is looking to grow in the US and China, you know, probably grow by acquisition

as well. I'm not sure they should be paying all that much. Maybe it's as simple as just saying, okay, we're not increasing the dividend for a little bit. That's right. Yeah. I get that you don't want to cut it, but why do you have to cagger the dividend with EPS at 16%? They're both basically growing at the same rate, which just indicates we have no intention of not paying all cash back to shareholders via dividend. Yeah. Yeah, no, exactly. I totally agree. And to build on that is that, you know, the balance sheet is definitely where there are some significant red flags, in my opinion. So first of all, they have $60 million in cash on the

balance sheet that's down from $26 million in December. Clearly, you know, that's not the end of the world because they are a profitable business. They generate free cash flow. If they were not, then definitely there'd be some alarm bells going on here. Now they have 395 million debt, which is down from 405 million in December. But this is where it gets alarming. If you actually look at their financial statements, for those who are not really well aware or just starting when you see especially when you see debt because you'll see long-term debt you'll see a number but you don't know what the percentage what kind of debt is so oftentimes you'll have a note where you just

have to go to that note and then they'll give you more information and that's what I did and most of their debt is what I don't like to see right now is a revolving credit facility, meaning these are variable rates and their average interest rate in the first three months of 2023 was 6.1%. That's compared to 3% for the same three months the year before. They do have a portion that's fixed. What they did is they did an interest rate swap, which essentially is just essentially getting into a contract to lock in some variable to fix for a period of time. But that's coming up in 2024. And clearly by the double in interest rate that they're paying, you can see that that

could quickly become an issue for them. Yeah, I totally agree. I think that we're looking at the same things here. There's a bunch of yellow flags, I would say. To me, none of them are like, you know, cause quick concern. I'd really want to dig like deep, deep into the financials and see if I'm missing anything. Because at first glance, I don't see any alarm bells, but I see some definite yellow flags that I'd want to look at. Yeah, exactly. And I think to me, I would say it's probably more orange.

I'm probably a little more bearish. Well, it's not just a balance sheet, but it's the balance sheet and the dividend that they're doing. Yeah. You know, to me, if you're interested. Let me tell you, they're related. Yeah, exactly. And when you have that much debt, you know, why not, like, you know, ease off a little bit on the dividend. The capital allocation here is such a, I don't get it.

The capital allocation is very confusing on this business so far. If I was a shareholder, and I understand that a lot of people probably owning this stock, own it in big part for the dividend, but probably also for the secular trend of health and wellness. But if I was personally a shareholder here, I would actually welcome management to cut, actually just stop paying a dividend for a period of time. Or not raise it. Don't just keep raising it. At the very least.

Yeah. Or, you know, but I would even say cut the dividend, shore well set up financially, restart that dividend, pay a 35%, 40%, or even 50% of your free cash flow. Or a special div if you really want to. Yeah. Yeah. That's another option too. But anyways, I'll continue because this segment is going to take forever. Remember how I always say, I never want to own a stock where I feel as a 10,000 foot spectator. I'm at Wimbledon and I have the very last seat. I can hardly see. It's a blocked view. There's a tall guy standing in front of me and it's standing room only.

I'm in that position and I should never feel like I can do capital allocation better than the management team today. There's been a few that we've felt that way and here it feels that way. And it's not a feeling you want because you're not the insider. You're not the CEO. You're not the CFO. No. And I get the sense that it's not just them, right? But when you have dividend payers and we saw that with Intel, I'm not going to rehash that. You can go back to an old episode and, you know, see what Braden and I think on Intel

and, you know, their dividend policy to say the least. And what tends to happen is companies will just make the right decision, the hard decision early. Your stock might tank more early on, but I think long term, your share price and the business will be much better off. But unfortunately, a lot of these senior leaders or CEOs or in the boards, I find they're oftentimes very short term focus. Like, whoa, if we cut the dividend, what's going to do to our share price for the next year, for example? I don't think that's the best approach because oftentimes what happens is they cut it later on and just things just end up being worse for the company. Yeah, it's a long term owner operator incentiveoperator incentive structure versus a stock option-fueled CEO,

right? That's all it is. Yeah. And now in terms of valuation and returns, I wanted to have a look at that. So the P ratio is 24. So it's actually on the lower end of what it's been in the last five years. Same thing for the price of free cash flow of 42, which is not cheap. But again, it's on the lower end for this business.

And in terms of a total return basis, it's underperformed the company compared to the XIU.TO, which is the S&P TSX 60 and SPY, which is the S&P 500. So it has returned 26% over the last five years with the TSX 44% and the S&P 500 70%. So it's definitely trailed the market. Not, you know, not great. And obviously what's going to go, what's going to happen for doesn't necessarily mean that the pass is a reflection of what will happen. But I think we've highlighted some definitely some concerns, but there are some strong points about the business too. And to finish up on the risk,

which we touched on already a little bit, I think there are some significant risks for regulation competition and also potential shifts in consumer demand. You know, especially when you think about regulation, they mentioned in their annual report that the supplement space in married jurisdiction is not very regulated or not regulated at all. So there are some more and more jurisdictions that are looking to regulate those spaces, which would increase the compliance costs for them. to regulate those spaces, which would increase the compliance costs for them. There is also a lot of competition in the space through privately listed and publicly listed companies, although it tends to be a bit more kind of local competition.

And lastly, they have 40% of their revenue tied to only three customers. Unfortunately, and that kind of goes back to like the transparency aspect that you were talking about earlier with the breakdown in geography. They just say customer, I think it's customer one, two, and three. They don't specify which of the large customer they are, but one would assume- I can understand why they don't do that for competitive risks, right? Like they don't want their customers directly targeting to undercut their largest customer. That makes some sense to me. Yeah, no, that's fair. But you don't have to look that far though.

Like if you look in Canada, I'm going to go on a limb and say that Loblaws is one of the larger customers which owns Shoppers Drug Mart. So, you know, I'd be surprised if they're not number one because Canada is their largest, you know, revenue by geography. And, you know, Loblaws, I believe it's the largest grocery slash pharmacy chain in Canada, if I remember correctly. So, I mean, one plus one, right? I'm pretty sure. You're right. You don't have to do some calculus to triangulate that the largest customers probably love us. Yeah. So, I mean, overall, my takeaway is there's definitely some good in the business. Obviously, there's some secular trend. Even if the predictions from the report don't come true, I think it's safe to say that people, you know, care about their health and vitamins and supplements.

And I think that trend will most likely keep going forward. But the management, the dividend and the payout ratio, it just needs like one trigger event, one unforeseen, let's say black swan, but we all know black swan events can happen that can really put them into a tailspin because they really don't have much margin for error here, unfortunately, if anything happens. It feels like an unforced error with the capital allocation strategy here. And you hinted at many of those things. I'll leave you with this. I really want to like this business, but on a long enough time horizon, you attract the shareholders that you deserve. I really, truly believe that on a long enough

time horizon, the management and the company attracts the quality of shareholders that they deserve. And to me, they are attracting short-term, inexperienced shareholders. short-term inexperienced shareholders. That's how it feels to me at very quick glance. And I think that that's a long-term mistake. Yeah. I should send the RR team an email to ask him. Send them this segment, yeah.

Yeah. Can you clarify why you're doing this strategy when you should be focusing more on growth and paying down debt than not like you've been doing? I like the product. I think they have tremendous distribution here in Canada. They have their product line

is basically every single vitamin, every multi, you know, each niche of person to get. They have great shelf space and the largest distribution channels here. The US is growing. I think vitamins is a really good business. Revenue since 2014 has gone from less than 200 million to almost 600 million during that time. Very consistent, very steady, generates quite a lot of steady EBIT. What gives, right? Yeah, a lot of self-delight.

Yeah, yeah. It self-delight. Yeah, yeah. It looks great on the income statement. Yeah, exactly. Well, I mean, yeah, it's fortunate yet unfortunately. And I think if they make some smart decision in the next couple of years, it could actually be end up looking like a very, very good business, in my opinion, if they make some of those tweaks in the capital allocation strategy. But maybe the CEO is just playing that Tiff McClam video that rates will stay low forever. That's right. You know, on loop.

So he's still stuck in that mindset. He has it every morning. Yeah, exactly. Six percent. Oh, that's not true. He's telling me it's staying low forever. It's staying low forever. And then here's the video to prove it. 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 gonna 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. All right. Very good. Should we move to the last segment here? Yeah, let's do it. All right. This one's called how I get shit done. All right. That's what this segment is called. I wrote it on the plane last week uh this is a classic segment where stuff i really like to talk about and i think that that's important you guys can kind of hear it shine through uh and the fact that it didn't have internet on the plane uh you choose you choose which one maybe 50 50 what you didn't want to pay for the spotty internet they charge like 20 bucks or something i think i i don't know if flare die well i was on the

discount discount okay they probably do they just charge a lot and it sucks that's usually yeah you gotta yeah like you have to take out a mortgage on your house to afford it and you get one megabyte maybe. And if there's turbulence, you get half a megabyte. Yeah. Okay. No refunds. Don't even ask. This one's called how I get shit done and how I keep learning to become a better investor. And it's a little bit of a different segment here. And I'm going to do this in three parts. Okay. So the first one is how I get stuff done. Number two is how to find balance. And number three, how to solve problems. Okay. So first is how to get shit done. And this is not like, Hey, some fluffy mindset. This is like literally what I do every day. And you can choose to, you can choose

to take some of this, say, oh, I could do that. Or that's stupid. I'm not going to do that. Fair enough, whatever. Take some nuggets if you want. So I am a big list guy. Everything in my life is organized in lists. And I break each thing down into more and more lists. And I use something called for personal, I use something else for my company, but I use something called Trello, which is free for everyone listening to use. You can basically use like Kanban managing your personal life and your company if you want to use it at work, I used to use it. Even if my company didn't use one of these tools, I would use them. I would

make my own Trello board for my company. Now I use something called linear because it connects to GitHub, which is a little bit more helpful for tech companies, but linear Trello, These are just lists, list tools and Kanban tools to move things from huge projects to smaller tasks and track them to completion. Okay. And if I don't write things down in there, they don't get done. That's, that's just how it happens, right? If something's in there, it'll eventually get done then. Okay. Every single morning I wake up and I have a notebook. You can see it right here. Here's today's. I'm old school.

I write down every one of my meetings for the day and every single task that I need to get done. And if I feel like it, I'll prioritize which ones need to get done. And then I cross them off. I cross them off and it is so satisfying. I've been doing this for years and I never get sick of crossing it off physically with pen and paper. So each thing is broken down into a specific task because on the Trello board or on the linear board, there might be something that takes months to complete. But if every single day I can take some action to getting that done, it massively grows my business.

The Bill Gates quote I will leave you with is people massively overestimate what they can do in one year, but massively underestimate what they can do in 10. Any, any thoughts here? Anything you do in particular? Um, I need to use a Trillo,

but I use the, uh, the task manager with Apple. Oh, my, Oh, your lights are back hello yeah not sure if my wife got my text while you were like oh the lights went off i don't know if she played a game on me or not but um yeah i'm back um yeah so i at least i took a screenshot so i'll share it with people on twitter that the podcast go on even when the lights are off but now i'm with you i need the stuff to track um i like the task but i think i might start

using trillo for bigger projects and then use a task because i don't like writing stuff down like by hand so i you know use the task manager in apple for more kind of the daily stuff because you know i as people know, like the podcast is, you know, a business and we both share some of the work for the running the actual business. And there's stuff we need to do fairly regularly, but there's some one offs. And if I don't write it down, because sometimes I'll get, you know, we'll have an actionable email that comes in and I won't have time to do it for a couple of days. Well, if I don't put in my tasks to do, like chances are, I'll probably forget to do it.

So that's, I guess it's a similar way, but I'm definitely going to give Trello a try. I know you had sent it to me to try out. I have two rules when it comes to productivity and work, which is one, what gets tracked. I said, what gets measured improves. So what gets, what gets measured improves and what gets written down gets done because if it doesn't, dude, I got way too much stuff going on to just like, oh yeah, I need to do that. That's like, that's not going to happen. All right. Number two, how to find balance. I mentioned this little thing on the pod the other day, but I think it's important. You need three hobbies, one to make you fit, one to make you money and one to keep you creative. And usually for most people, that's just two hobbies like it can you know it's it's

rare that one is going to give you all three but usually you can have two things that achieve all three things to keep you fit to make you money and keep you creative usually money and creative as long as it's like you know somewhat creative and it makes you money. Those two can get kicked off. I'm going to say Mitch Marner hits that with all three right there. Creativeness, you know, money, and stays active. What, just by playing hockey? Yeah. And not shows up, and doesn't,

number four, doesn't show up in the playoffs? Is that? Well, I mean, I'm just saying because he's such a creative guy. That's why I took him as a, well, I didn't think I'd get some wounds from the Neo-Meister. I wasn't trying to do that. Number four, missing in action in the past. All right, number three, solve problems.

Okay, this is what I always give. So, I have interns basically like i have these interns from waterloo guelph queens like you know the universities and i usually have like three going on at any one time two or three and i always tell them right at the beginning this is the most important thing this is my only one piece of advice really for you to succeed here and to succeed beyond here, to climb corporate ladders or to build businesses is to solve problems. That's it. That's all you have to do is solve problems consistently and reliably. And that includes solving problems that you are not asked to solve. Some internal system at work that sucks, you're not tracking any of your task management.

Hey, I just gave you some tips from number one. Build something and present a solution no one asks for. That is how you exceed expectations. You improve everyone's life and you become a leader that can be relied upon as soon as you do solving problems that were not asked for. Because you are in a position doing your job or in your industry to recognize problems that can be solved, that maybe you can build a business

around or in your own company really solve that problem. You're in the position to see it better than anyone else. And you're in a position to come up with that solution before anyone even asks for it. Because chances are, everyone on your team has the exact same problem. For me originally, it was getting public company data on KPIs wasn't possible. And so you couldn't just search Netflix revenue numbers. Sorry, you could search for Netflix revenue numbers, but you couldn't just search their subscribers by region without pulling out 30 PDFs and aggregating it for the last 30 quarters or something. That just was so time consuming. And so we started working on it. And the last one here is forced learning. For me, it was starting this podcast with you. Every week, I'm forced to learn something new, explain a concept, and that solidifies it in my brain. Some ideas here, join a nonfiction book club,

start an investing club with your friends. We have a monthly meetup and there's gotta be a deliverable. Like there's a monthly stock pitch. Like you have to have something prepared or else it's not forced learning. You do this consistently and you learn a lot. How much have you and I learned from doing this pod?

It's unbelievable the amount of forced learning that we've given ourselves. Oh, yeah. I mean, just based on the questions we get, but curiosity as well. You're thinking about an interesting segment. There's just so many different ways to get inspired and look into a topic where you'll start learning. I mean, just today,

right? Today and a couple of days ago when I started researching Jameson Wellness, well, that report that I came across, I never knew that the global health market or wellness market was so big. And that's something, you know, as simple right there that I learned. But I totally agree with that. I mean, to me, obviously, you know, things change over time and people you like people. I mean, everyone wants to have a motivation in life, right, to have something to look forward to and a sense of accomplishment and these are just little things that can get you there um i mean for me obviously it gives you that extra like it's another thing that gives you purpose i know i have a daughter i have a wife i love too which by the way she is the culprit for the life situation i sent her this we found

out who did it yeah it's just like who oops my bad i think it's uh yeah because for people not fully sure it's uh i record my studios in our basement and there's basically one switch that basically triggers five different lights in the basement and it's as you come in and it's one of those master lights. Master lights, exactly. So that's why I went dark. You need a specific little label on that one. Yeah. Yeah.

Recording, do not. Every time you go near it. Yeah, but to get back to what you're doing, I think I totally agree with you. I think it's just good to have these things that force you to continue learning and doesn't have to be investing, right? You could be learning about other things, whether you're fascinated about AI in general, not specifically to investing or even, you know, let's say you're very hands on manual type of person who likes to build things, whether it's cars, whatever it is. Maybe you look into new types of technologies, you start learning about them and things like that.

That's why so many people start a blog. And I know it's become such a like kind of cliche thing here, you know, start a blog or, but there's tools like, you know, Substack, Beehive, these tools where you don't have to make your own website. You'll just have like yourawesomeblog.substack.com where it creates like an email newsletter and your blog in one. There's so many of these tools out there. I just mentioned a couple of them. And say like, I'm going to write a piece on X every week or every month or once a quarter, something you can actually stick to. And that kind of like forced curiosity, you'll be surprised how many stones over a long period of time it forces you to turn over and how many doors it opens. Because Adrian, my co-founder was writing a blog that me and maybe one other guy read. Uh, and it was brilliant. And I, and I said, can you start on Monday?

Basically because of his blog, we wouldn't even have known each other. He could have been anywhere around the world and he lives like, you know, one area code away from me. That was pure luck. But you'll be surprised how much forced luck you create by creating more opportunities for these types of things to collide. Yeah. Yeah. Love it. All right. So let's wrap it up. Good episode. Good stuff. We're here Mondays and Thursdays in the dark, in the light. Doesn't matter. We're here. we're here mondays and thursdays in the dark in the light doesn't matter we're here we're here powering through powering through or is there a pun there on the power yeah i don't know i kind of said it and then i realized there might be it afterwards

but yeah could have been worse if i lost power because i don't think we could have kept going at that point yeah no that would have been a little bit trickier. We appreciate you tuning in. We mentioned many times, joinCCI.com is the Patreon page. You get to see our faces for radio. You get to see our charts. And I don't think I've talked about this, but thecanadianinvestorpodcast.com, our website. And if you just Google Canadian Investor Podcast, our website will come up.

There is a tab at the top called show notes. And we turn in all of our show notes and the real estate show notes into blog posts with little videos at the top. Things that we think are interesting. And you can see exactly when we're talking about it and it's the YouTube link. So that is at thecanadianinvestorpodcast.com forward slash blog or if you click show notes at the top. All right, we appreciate you seeing a few days. Bye-bye. The Canadian Investor Podcast should not be taken as investment or financial advice. Brayden and Simone may own securities or assets mentioned on this podcast. Always make sure to do your own research and due diligence before making investment

or financial decisions.