The Canadian Investor - The Top Stories of 2024 for Canadian Investors

Episode Date: December 30, 2024

In this episode of The Canadian Investor Podcast, we explore the major investing stories of 2024 that reshaped financial markets. We begin with the Bank of Canada’s aggressive 175-basis-point rate cuts and their ripple effects across the economy. Next, we analyze the sharp decline of the Canadian dollar against the U.S. dollar, plunging to levels not seen in two decades. We also dive into Bitcoin’s extraordinary 2024, driven by spot ETF approvals, the halving, and unexpected political tailwinds. Additionally, we highlight gold’s resurgence, the wave of small-cap Canadian acquisitions, and the top-performing sectors in Canadian and U.S. markets this year. 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. Welcome back to the Canadian Investor Podcast. I'm here with Dan Kent. We are back, but we're not doing a regular news and earnings

because we're recording this in advance. We're recording this on Friday, December 13th. So you'll probably, you'll hear this during the holidays. Not quite sure which day yet. But keep that in mind when we start posting about returns and things like that. It may be slightly outdated when you hear this, but it is a year in review episode that we're doing. So I think it's still the content will still be very relevant, even if it's a couple of weeks in the future. So before we get started,

Dan, how are you doing? And we actually got some closure on terms of the Bank of Canada this week. Yeah, we got, I had predicted they would cut 50 basis points again. I mean, I think the data supported it. It's not looking too good for the Canadian dollar at this point. I mean, we'll talk about all that stuff in this episode, but it's definitely been a very interesting 2024 i mean stocks are up huge crypto's up huge canadian dollars down huge i mean crazy you have to be pretty uh you have to you you would have had to try pretty hard to be down this year. Let's just say. Yeah, you would have had to. Yeah, pretty safe to say you would have had to done very bad. Yeah, exactly. And so, you know, that's why I started with the Bank of Canada, because, of course, one

of the big stories this year is that the Bank of Canada finally reduced its interest rates. The BOC did its first rate cut of 25 basis point on June 5th, 2024, and they cut four more times afterwards. So you had 25 basis point in July, 25 in September, 50 in October, and then just a couple of days ago, 50 in December. So that brought the rate from 5% to 3.25%. Now, what's really what I think people tend to forget here is that, you know, it would be one thing if this happened, you know, started happening in January, February, but this essentially 175 basis point of cuts in six months. Yeah. Which is, is something else, because if you go back to the end of 2023, most economists and the big banks were, it was kind of all over the place. But if I remember correctly, I think the most aggressive ones were probably around 125 basis points, 150 for the really, really most aggressive.

But you had some banks that were looking more at 100 basis points. more than 100 basis points. And then you fast forwarded in like April, May, and you saw a lot of economists starting revising saying, oh, there might be like, you know, two, three, four cuts until the end of the year, because obviously close to half of the year had happened. And I'm pretty sure if you ask most economists back in May, if they thought it was realistic for the overnight rate to be 3.25% in December, I would go and wager that most of them would say, you're crazy, it's not going to happen, but here we are, right? Yeah, I mean, I remember, I think it was in the bold predictions at the start of the year, I said 200 basis points, I think, 200 or 250, I can't remember what I said,

but I mean, like halfway through the year, I thought there's absolutely no chance I'm even going to be coming close to that. But I mean, you get these two big jumbo cuts, which again, I think are actually justified. And I mean, we're sitting now at, you know, some pretty big rake. I would, I would argue that this has got to be the biggest news on the year in terms of uh you know canada as a whole just because of you know the whole mortgage situation here in canada as well i mean that was a main highlight for for numerous years i mean you have all these pandemic mortgages that are coming due and probably i would say on average in the next year or two here i mean i know a ton of people yeah 2025 26 are the two big years the two big years and i mean this has come at you know

a pretty key time so uh i would as i said i would say biggest news on the year for sure yeah exactly and i think it's a good reminder for people because uh that the bank of canada only controls the overnight rates so if you have variable loans clearly that's something that would impact you but But when it comes at the end of the day, like it's not, they don't have that big of an impact when you start looking at the Canada five-year bond. And I'm just pulling this over here for our joint TCI listeners. And it's, I mean, the yield here has been a bit all over the place since the beginning of the year. Now it's around 3% as we're recording today. But for people that are interested here,

so you'll be able to see that it went all over the place throughout the year. So you started the year probably around like 3.25 for the five-year. And Canada kind of peaked around 3.85. I'm looking at a graph here. So that peaked, you know, April, May, and then has been kind of coming down ever since. So it kind of lines up a little bit here with the Bank of Canada cutting rates. But if you just listen to what I'm saying,

it's at 3% now. It peaked around, let's just say, 380, roughly or so, 385. It still did not go down as much as the rates have gone down with the Bank of Canada. Not only that, you actually are seeing a little bit of a spike now in the last week or so. So it kind of dropped around 2.9 and now it's back at 3. So just a reminder here that yes, the Bank of Canada cutting probably has, I would say it has some impact, but it's not the main driver. The main driver here is what the bond market thinks. And of course,

what the bond market thinks in the US, especially with the US 10 year. So I think it's a good reminder because if people are refinancing their mortgages or it's coming up and they're looking at fixed rates, fixed rates have been relatively stable for the last four or five months i would say they've been kind of in this range around like depending if you're looking at you know an insured mortgage insurable mortgage or an uninsurable mortgage without going into too much detail you'll have different rates based on what type of mortgage it is. It's kind of stayed within like a 4% range, right? Like just to make it pretty general. So I think it's a good reminder. Obviously, variable rates have been going down pretty aggressively, but it's just a good reminder

here that the bond markets control these fixed mortgage rates. Yeah. I mean, we've had, what, 175 basis points in cuts. And I mean, I think fixed rate mortgages have maybe come down like 75 basis points. I mean, usually before the rate cut, you could see anywhere from 4.75% to 5.25%. And now they're, I think you can get 3.99% now. So yeah, they haven't come down even close to how much policy rates have declined. I mean, obviously, variable rate holders are the ones who receive the most relief at this point. I mean, depending on how big your mortgage is, I mean, 175 basis points can be like hundreds of dollars on a monthly basis. So it's good relief at that point. of dollars on a monthly basis. So it's good relief at that point, but it's going to be interesting to see how fixed rate mortgages move over the next year and whether bond yields start

coming down. Because as you said, they're continuing to go up right now. I mean, they've come down for the most of the year, but that short spike over the last week or so here we've seen is probably something that's going to keep fixed rates relatively stable at this point at least. Yeah. And I think it's also a good reminder that the housing market real estate is more than just interest rates. And I think a lot of people, including, you know, I think Royal LePage is very famous for being super bullish. Surprise surprise but you know with their predictions and they've been essentially i think it's phil's soper he's been wrong for the last two three years every year he thinks like the market's gonna rip and his uh revision on what happened is oftentimes

not super transparent either but having said that i i've seen his prediction it was always like oh as soon as the bank Canada starts cutting, it's the market's going to rip pretty much. I'm just, you know, obviously putting that in my own words here. But I think we've also seen that the markets, even though there was a small increase in volume in the fall, it was still well below historical averages. Prices increased a little bit on the year-over-year basis during the fall, but again, it was not seasonally adjusted. So we'll have to see whether the spring market actually picks up

following these rate cuts from the Bank of Canada. I hope not too many people did that, but I think some people ended up getting into the market and trying to buy now before prices go up, listening to these kind of forecasts. And what we're seeing is the market hasn't really taken off despite, you know, let's just forget about the December cut, but despite 125 basis point, if we look at prior to that and you would have thought, you know, listening to these industry experts and air quotes that

the markets would have started ripping. I mean, most of them were saying as soon as they cut for the first time, it would start happening. But I think the reality is, is prices have gone up so much during the pandemic. And yes, they've come down from the peak in most areas a little bit, but they haven't come down enough to make it, you know, allow a lot of people to actually qualify with the stress test when you factor in that interest rates, even, you know, the interest rates today at 175 basis point lower at 3.25. And when you look at variable mortgages, even despite that, you're still looking at much higher payments because the prices are still six eight months to the point where

you know people even if they qualify they might not be able to afford it just because of you know the overall cost of everything else i mean bill like wages haven't kept up wages haven't kept up so you know food's gone up uh utility bills have gone up cost of vehicles like the cost of absolutely everything you can think of has gone up gasoline things like that so i mean so phone bills phone bills i think they're going down yes yeah so sorry bc and clothing i think clothing is yeah i mean there's no guarantee that falling rates are going to fuel the housing market because people like even if rates you know go down another 100 basis points like i still think there's

a massive afford affordability crisis in this country that uh you know you may never see that covid type wall we're probably not going to see the you know covid housing market surge i mean i'm not going to say ever again but i mean if people are expecting activity like that i just don't think it's ever going to come back look it may pick up a bit in the spring. I really don't know. I'm not in the forecast, like in the business of making real estate forecasts. I'm not, you know, I probably would ask Dan Foch and Nick Hill from the Canadian Real Estate Investor Podcast to make those predictions. But I think at the end of the day, even if rates continue to go lower, you know, the Bank of Canada and let's say fixed rates even start going lower as well.

The reality is our unemployment rate has been going up. The job market is not looking great in Canada. So, you know, will that just nullify this, you know, these lower rates? It's very possible. Of course, I know there's the new regulations that are kicking in on December 15th. So they will have kicked in by the time you listen to this, where the federal government essentially, now if you want to purchase a home up to $1.5 million, previously it was up to $1 million, you can actually get it insured.

So you can get CMHC insured and your down payments requirements, instead of being 20% for anything over 1 million, now it's essentially going to be around like, depending on which price is going to probably be around like 7 to 10%, right, that you'll need in terms of minimum down payment, which makes a huge difference. But people still have to qualify for the mortgage and have the proper income to do that. So all these things kind of, you know, come into play. And of course, there's the 30-year amortization that's coming into play for first-time home buyers.

So there's just so many variables. I think it's just really hard to really have a feel of where the market will go next year. So I think, you know, I think it's a wait-and-see approach, but I think it's just, you know, think you know i think it's a wait and see approach but i think it's just you know i just want to restate this that lower rates does not necessarily mean that the housing market will start ripping yeah i mean it definitely you know helps i guess that the government has pretty much introduced everything to fuel demand but nothing really to help supply yeah mean, it's like, yeah, that's probably a topic for an entirely different podcast, but- Yeah. Don't get me started on those policies. 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.

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. 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. Let's just switch a little bit here before we go to the next takeaway for the year in review. Of course, lower rates do have an impact on investment. So there are certain sectors that will do better as rates are getting lower. I'm thinking here of like higher yielding dividend stocks are becoming more attractive because people are looking for yield. Whereas when you have rates at 5%, I mean, if you're not looking to take any capital risk, you can just get 5% and sleep well with GICs at night. Whereas now if you're looking for income, as rates starts getting lower, and let's say you do want to achieve that 4%, 5%, 6% yield, well, pretty much

your only options options at least in canada will be to start looking at dividend stocks so i think it could be a benefit for these type of companies who also tend to have higher amounts of debt i know i'm lumping them in a large category but typically the companies that are paying four five six seven percent uh dividends tend to be more mature businesses they will have to you know they tend to be more mature businesses. They will have to, you know, they tend to have a bit more debt. So something to keep in mind, lower rates will clearly help them if they are refinancing. But again, depending on when they took out that rate, that debt, it could mean that, yes, it's helping them a little bit. But the fixed rates are still

based on the spread with bond yields so it doesn't mean that it will go as low as what the bank of canada is doing of course if they're getting variable debt then yes the overnight rate will have a big impact on that but that brings me to an example that we've talked a lot is something like bce right so bce yes you can get close to i think 11 percent now yield but the reality is bc has a lot of debt to be refinanced in the in the upcoming year and most of that debt will be refinanced at higher interest rate and there's a big renewal wall coming up in the next couple years for companies that took out a lot of debt during the pandemic that will be refinancing that debt likely at higher rates than where they took debt.

So it will be, I guess it's maybe something more for our bold prediction episode that will be coming up, but I will be something to keep an eye on for 25 and 26, not only in Canada, but also in the US. Yeah. I mean, if you look to like companies like utilities are a prime example of, you know, when rates are high, are high, 5%, you might not feel the need to take any equity risk by holding a utility that's yielding that similar amount, right? Whereas now, if you look to a company like Fortis, they're up, I believe it's 20 some percent since they started aggressively cutting rates. So you can tell you know more money flooding back to there and i mean in terms of bce the one important thing would be also is you know yield is not total return i mean it's it you could have grabbed well i mean what would the yield have been at the start of

the year probably seven eight percent but i mean you're down 30 some percent so i mean the company's down 30 this year so i mean it's very important to uh obviously you know you're taking on equity risk at yeah you'll when you buy stocks i mean there's chance for uh your underlying principle to you know not be what it was when you initially bought so that's that's another added risk there as well but uh as you mentioned like a lot of those higher yielding dividend stocks they don't have very much floating rate debt. They lock in a lot of it. Like if you look at a company like Fortis, I believe they're like 3% or 4% in terms of floating rate debt.

So they don't get much immediate relief on, you know, previous debt. Whereas, you know, new financing will probably come in a bit cheaper. But as you mentioned, it all depends on, you know, bond rates, things like that as well. And when the debt was actually issued, right? I think that's one of the biggest things. Now, we'll move on here because another big story with lower rates from the Bank of Canada, obviously, there's been and we've seen that being exacerbated in the past, since a month and a half since Donald Trump has been elected as the president for the next four years. But the Canadian dollar is just getting completely hammered

compared to the US dollar. So do you want to start on that? And I'll probably chime in a little bit here. Yeah, so the interesting thing is, is the Canadian dollar, I don't know if you noticed it, but it actually spiked when they cut rates upwards. But now has, i don't know what that would be from yeah i think it was just uh with the commentary so essentially they were saying that they might not be kind of like they're still looking to cut rates but it may be a bit slower now so i think the

market kind of like the fact that, you know, I guess we'll have to see. But, you know, I think it's pretty safe to say now that like another 50 basis points is very, very unlikely that they probably will do either 25, maybe take a break for a meeting, then start cutting the next one. Like think it's just the pace will likely be slower. Most economists I've listened to, I've listened to David Rosenberg a couple times, read a few pieces of his too. Most economists expect the rates to keep going down.

Some are even predicting around 2%, but it's just the pace of the rates going down maybe a bit slower than some had predicted. 2% policy rate, not 2% more slower than some had predicted two percent policy rate not two two percent more declines okay uh two percent policy yeah yes that's correct so i mean we're right now we're just hovering on the canadian dollar breaking 70 cents effectively like it's at it's at 70.2 cents right now and this is you know this is some of the lowest points in currency exchange we've witnessed in you know a couple decades um the actual like the actual last time we got the dollar

this low was during the covid19 crash but i think that situation is is very different now in the dollar you know it was you know oil demand collapse things like that and it was also you know a flash crash pandemic type shutdown so i don't really look at that too, too much. But I mean, when we look at the dollar in terms of relative strength over the long term, I mean, we're looking back to, you know, 20 plus years. And I mean, the policy rate divergence when it comes to Canada and the US is one the Bank of Canada says isn't really all that big of a concern, but it is certainly reflected in the big pressure on the Canadian dollar at this point um now we're down again we're down to what 3.25 percent whereas

the u.s is still sitting you know 4.75 4.5 to 4.75 i think i believe is there is there lower and upper rates so i mean we're getting you know more than a percent here and i mean the main issue here is the u.s economy is strong enough where the fed doesn't really feel they need to cut rates while the canadian economy i personally think is in you know a world of hurt i mean we got restaurants and small businesses losing money i mean unemployment's at seven-year highs uh even though rates are coming down again we talked about it those fixed rate mortgages are not necessarily coming down at the same pace. So we're going to have, you know, I still know some people who are, you know, looking at 1.7, 1.8% fixed rate mortgages that are going to have to renew next year. So, I mean, even though rates have come down that much, I mean, they're still looking at 4% fixed rate mortgages. So, I mean, in turn, that's going to put some pressure on.

And I mean, there's also the fact that just the u.s dollar is in effect strengthening it's not exactly just the canadian dollar weakening although that's you know that is a major part into it but but the u.s dollar is also strengthening um relative to other other currencies and i think you can you can comment on that a bit because i remember you had some data on that but really it doesn't you know the wide divergence and just the overall economy doesn't really make canada an attractive place to park your capital and as a result it's as a result it's really not that surprising to see a bit of money flowing out of canadian dollars and the canadian dollar dropping it's lost over six percent of its value in 2024 i mean this is

a fairly big dip when it comes to a major currency. We've had plenty of dips like this 2018, 2022, that flash crash in 2020. But the difficulty is we've often seen a bit of a recovery after a poor year. But I mean, since the midpoint of 2021, which would have been like, you know, peak oil demand, like energy was going crazy coming out of the pandemic. That was when the dollar was i mean i believe it was at 83 cents or 84 cents it peaked near there i mean it's just been on a constant downward spiral and is one that i personally think will get worse i ended up exchanging a bunch of uh canadian dollars for u.s dollars back in 2021 I thought that, you know, the dollar was

was pretty attractive at those prices. And I'm still buying US dollars today, even though it's at, you know, it's just below, I believe the spreads, I buy it on EQ bank, and the spreads are, you know, they're below 70 cents now. So I mean, the main question here is how low does it go? I mean, although it helps, you know, some industries here in Canada, especially, you know, oil and gas producers, things like that, it does hurt, obviously, other industries that import from the United States. machinery, 15 billion in electronics. Those ultimately hit consumer wallets. Companies will need to pay more for these products. And in turn, I can even think of some grocery items like fruit, things like that. I mean, obviously, a lot of that is imported. That's going to hit directly the consumer because of the weakening dollar. And in the end, they can end up inflationary. And you can get to the point where falling policy rates

doesn't really increase consumer spending because people are still pinched pretty hard, even though we've gone down this much. And, you know, this is their main lever to, you know, encourage economic growth. And we're down 175 basis points now. We're not really seeing that. Yeah, you know, exactly.

And I mean, you know, you were talking a bit about the Fed and I'm showing here the Fed funds, the CME Fed watch tool. So essentially, the U.S. market is pricing in three rate cuts between now and the end of next year. So that's where the odds are at. So that would mean if it comes true, then they would not even equal the Bank of Canada's current overnight rate at the end of canada's current overnight rate at the end of next year yeah and that's even if the bank of canada does not cut at all for the

rest of this year yeah so i mean obviously this can change right forever like it kept uh you know when was it like the we kept like hearing like even back in 2023 there'd be like a rate cut towards the end of the year it never happened so these things can change and as the data comes in but it's just to show that yes the market is you know thinking that the bank of canada will be cutting a lot more than the the federal reserve in the u.s yeah i mean if you get three cuts from the u.s and you get three cuts from canada i mean canada will be at two and a half and and the states will be at you know 3.75 so that's that's pretty wide it doesn't i don't know it's it's hard to see i mean i'm not probably being pessimistic but it's hard to see any like material improvement uh in in this regard. I mean, the Canadian economy is struggling quite a bit.

Yeah, yeah. And look, I and I, I read this, or I think it was David Rosenberg, again, when I was reading a piece on, on him, you know, given this thoughts, I think it was him, it could have been someone else. And essentially, what he was saying is the bank of canada is probably being aggressive to to offset potential terrorists from the uh from the trump administration if the loonie is lower and they're probably using a weak canadian dollar to be able to stimulate exports making potential investments more attractive to for money coming from the states into canada of course there's the tax element that probably offsets that quite a little bit. But you know, it could be part of the plan is weakening the Canadian dollar to try and stimulate the economy. So that could be it. It's a fair point. I never

really thought about that. I thought the, you know, the counter or the effects of a lower loonie could be more damaging in terms of potentially reigniting inflation. But it looks like inflation, especially when you start stripping out a lot of the volatile components, which is what the Bank of Canada looks at, it really is like quite low right now. So they may be more concerned about deflationary pressure versus inflationary pressures. And that's likely why they're acting like they are right now with lower interest rates. But what you were mentioning earlier, so yes, it's not just the Canadian dollar. So I think we tend to focus, I guess rightfully so, we're Canadians,

so we tend to just look at ourselves with the US, right, the behemoth down south here. But it's most fiat currencies that are actually not doing all that well against the U.S. dollar. So there's something called the U.S. dollar index. And it's called the DXY. That's usually what people refer to it. So it's essentially a basket of currencies. So it's the euro. It has a 58% weighting.

Japanese at 14%. The sterling pound at 12%. Canadian dollar at 9%, and then the Swedish krona and Swiss franc at roughly 4% each of them. And that basket has declined over 4.5% year to date. So it's not just the Canadian dollar. Obviously, if you take the Canadian dollar, it's probably closer to 6-7% decline now year to date, but it doesn't have a huge weighting in that basket, granted. But I think it's just important to keep in mind that, yes, the Canadian dollar is definitely weaker, but it's not just us. And there's several reasons for that.

I think we've covered most of that, but the stronger economy in the US, the interest rate differential, uncertainty with trade policy and continued low commodity prices. I think these are all kind of the probably the primary four aspects that is leading to a lower Canadian dollar. Yeah. I mean, especially commodity prices, which obviously you can't expect to be good right now considering you know how weak you know demand is overall but i mean i'm still gonna keep buying u.s dollars even at at these levels because i do think it's gonna go gonna go lower but i mean there will have you and i alike you know my portfolio so you know i'm like mostly u.s treasury bills there eventually will be a point here where i might i might flip some us back into

canadian but it would have to get quite a bit lower than this yeah because at the end of the day too like you're getting higher yield on your usd right i think a lot of people just focus on the exchange rate and yes that's important but you know you're not getting uh you know four percent plus on your canadian dollars anymore but you are with your USD. So I think that is an additional factor that people tend to forget is you are getting like much nicer yield, which is a reason why the Canadian dollar is, you know, has seen some downward pressure. Because if you're going to park your money somewhere, you're going to park in the US, right? Like why would you in Canada if you're a foreign investor?

So I think something to follow. I mean, most experts, I think, say that there's going to be continued pressure on the Canadian dollar, at least for the foreseeable future. I guess we'll have to see, but we'll move on. We've talked enough about interest rates and Canadian dollars. So let's talk about the, you know, the gold and mining stocks that've done quite well over the last year yeah so gold has had you know one of its better years since well essentially when you know we were in full blown pandemic mode and there was a ton of uncertainty which is you know generally when gold does pretty well i mean many investors back in you know 2021 2022 believe kind of that you know the constant money printing would eventually be inflationary and thus owning gold would be

a pretty good hedge to that inflation but uh gold only increased around 24 percent in 2020 and generally for the next few years it would it would kind of trade flat killing that particular thesis or at least causing a lot of investors to stop focusing on it but we fast forward to 2024 gold is up you know 28 on the year and is actually set to outperform the sp500 in a year in which you know the sp500 has done very well i mean it's not obviously we have you know at the time we're we're filming this we have a few weeks left of trading so it's not a guarantee but it's going to be pretty close and i mean much like when oil does well oil producers tend to outperform the underlying commodity i mean gold producers you know they're kind of the same situation it's been you know an outstanding year to hold them so bmo's equal weight global gold etf which effectively takes

you know a global basket of gold producers. It's up more than 46% on the year, so it's nearly doubling the returns of the S&P 500 and pretty close to doubling the overall returns of gold. And the materials sector makes up 9% of the TSX. So, I mean, these gold miners are certainly what is driving a significant portion of the TSX, you know, very strong performance in 2024 which you'll speak on next but you know oil companies oil producers gold producers things

like that they are a big you know element of the TSX index and I mean when we look to one of Canada's largest gold producers in Agnico Eagle it's looking to close the year out nearly 70 in the green and is up over 80 since late february of 2024 so i mean why is gold performed so well i mean for one countries like russian china they're increasing their gold reserves pretty extensively because of all the you know geopolitical tensions i mean this is probably i'm you know certainly not an expert on this but i would imagine this is you know in order to reduce their dependence on the US dollar. I mean, gold tends to have an intrinsic value that doesn't really go through the volatile aspects of fiat currency would in these situations of high geo tensions. This isn't the only reason though. I mean, inflation concerns are certainly up there as

well. Donald Trump's policies are in general inflationary, especially the ones regarding tariffs. He does love to talk to talk and, you know, depending on how much he walks the walk in January, we're probably going to find out pretty soon. We could see inflation rise again. And generally during times like this, you know, gold tends to rise in value. And I mean, finally uh although inflation has generally decreased down to the two to three percent range services inflation remains relatively sticky both here and in the united states this makes it a bit you know difficult for policymakers to continue cutting rates despite you know how you know the economy needing it and i mean in general the more uncertain

times are the more logical it is to hold gold and the higher the price usually goes. I can't see many of the issues we're facing that are impacting gold going away anytime soon. And, you know, as a result, I would imagine it continues to go up. I mean, it's never a guarantee, but it's had one of its better years in quite some time, which is, you know, kind of fueling the TSX. Yeah, yeah. And I mean, look, I'm looking here in the past year, so not quite year-to-date, but it's up, yeah, 32%. So it's pretty phenomenal.

I think it's actually pretty close to the S&P 500 in terms of returns, which is pretty phenomenal. And it probably tells you a bit something about what the market is thinking where fiat currencies are going. So I think that's a good indicator. But yeah, it's been a good time to hold gold. I mean, I've held it now since pretty much the beginning of the year. I started in, I think, February, March. I've been adding ever since and not adding too much right now. I got it to the right portion of my portfolio. But yeah, it's been good to have that in my portfolio,

that's for sure. Yeah, and I mean, the one thing I guess I'll say about, you know, the producers have done quite well in 2024. And like I said, typically, you know, they'll outperform the underlying commodity. But also, you know, if you do see a drawdown in gold, they will typically draw down much more than the price of gold. You know, gold's up 30 some, 32%. The producers are up, you are up close to 50. But I mean, if gold falls 20%, you're going to see producers, there's very good chance they fall more than 20%. So that's something important to keep in mind as well. And it kind of works the same with oil as well. I mean, you typically see the stocks, they're more volatile than the underlying commodity.

Well, even more so if you're looking at junior miners, you get even more volatile than the underlying commodity well even more so if you're looking at junior miners oh yeah you get even more volatile i mean typically you know miners are referred as kind of leverage plays on gold so yeah they should increase more when gold is going up than gold and vice versa decline more when it's going down but again i think we have to be a bit careful in this environment just because you know a, a lot of people were saying, oh, like if prices keep going up of gold, they're just like kind of increasing their margins, making more money. But the reality is a lot of them have seen their costs go up to not as quickly, but it has put some pressure, I think, on these companies. these companies and you know from a personal perspective i mean i've talked about it before that's why i like owning franco nevada which is one of the top streamers in the field because you remove most of those costs so yeah so that's what i like i mean they end up making a whole lot of

bets and then some work some don't work out but it's a very solid business model and, you know, no debt. So you got to love that. Exactly. And I mean, no, you know, no exposure to equipment costs, fuel costs. Like, you know, it's a much more stable end of the business. You know, probably less reward, I guess, in a really big, you know, gold bull market, but probably one that's going to be not as volatile to the downside if we see it. 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. questtrade.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 or 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. 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. 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 now we'll move on. You were referencing the TSX. And the TSX, I mean, it has performed very well so far this year, especially if we start comparing it with the S&P 500. It has, I wouldn't say, it depends what benchmark you're using, right?

Or if you're using an ETF, it is really dependent on that. So I'm just going to share my screen here. So you can see when you compare XIU, which is the TSX 60 ETF, so the 60 largest stocks in the TSX. You compare it with VFV from Vanguard. That's S&P 500 listed in Canadian dollars, but not hedge. Then you can compare it to ZUE, which is a Canadian hedge BMO S&P 500 ETF, or the SPY, which is the US-listed, the SPDR S&P 500 ETF or the SPY, which is the US listed, the SPDR S&P 500. So probably the most famous S&P 500 ETF, I would say. So the returns kind of vary because obviously the reason it

varies is because of currency. So the SPY, you're looking at it just based on, you know, kind of, you know, with the local currency lens and that's it if you're doing the bmo uh hedge then it's hedge for the canadian dollar vfv of course it's in canadian dollars but it's not hedge it has benefited a whole lot from a strong u.s dollar so in terms of return vfv has crushed it it's almost 38 percent year-to-date total returns you have the spy so the one just local currency in the u.s 29 year-to-date and then you have xiu at 24.21 just in front of the hedge version from bmo so it's still pretty impressive that it's on par almost with the the hedge snp 500 and slightly below the um the spy so i'm still you know pretty impressed of the performance from the tsx i would not have expected that at the beginning

of the year that it would have done so well especially considering that if you start looking here at the mag 7 it's been quite the year for the mag 7 yeah and i think that's been another story this year is how well these companies have performed yeah i mean and if you if you think of like energies had i wouldn't say it's had a bad year but it hasn't had a good year i mean if you look to xeg which would be the effectively it's i shares energy etf that owns like the major players here in canada it's only up around 14 on the year because energy's generally struggled right now i i think if that you know wasn't having such a bad year i think you'd see the tsx outperforming uh the s&p 500 probably because um energy makes up obviously a huge portion of our index but uh i mean for the

most part the tsx is you know most of the the industries are actually you know firing on all cylinders especially like if you look to xiu like the tsx 60 etf we got you know even techno a bit of tech exposure in that regard in terms of you know shopify and constellation doing so well uh this year obviously they'd make up a bigger portion of the the 60 than they would the entire index but yeah it's been a pretty good year obviously you know it's still lagging the sp500 but um i mean definitely not some segments i mean materials financials even uh even industrials are they're keeping up quite well yeah exactly well that's what i pulled here on finchat.io so

for people on joint tci so you'll see so the top performer here 42 percent xit so the uh well the shopify technology yeah shopify and constellation etf they have that one the top performer financials at number two at 32 percent uh You have after that the materials at around 30%. You have following that and the industrial 22%. And I took some ETFs to try and get the performance turtle return. So it won't be perfect because the ZIN, which is the BMO equal weight industrial, it is equal weight. The other ones are market weight, market cap weighted. weighted but still i think it's a good idea yeah exactly and then you have xut which i'm having a little bit of issues with my utilities that has done still pretty well

at around 16 and then like you said just shy of 15 15%, we have the energy. So it's been, I didn't add all the sectors just because a lot of sectors like real estate, less than 3% of the S&P TSX. So I don't think it's going to, you know, unless it's doubling for a year, it's not going to have a major impact just because it's such a small weighting. And then if you start looking, like I was saying at the mag seven, it's even a small weighting and then if you start looking like i was saying at the mag 7 it's even more impressive to have the s and ptsx do this well because then if you start looking at the mag 7 you have nvidia that of course crushed it 177 it has continued i mean it has been more like sideways i would say fall. Yeah. So since the start of the fall, it's been like a little bit more sideways, but nonetheless, 177%.

You have Meta here. That's the number two, 79%. You have Tesla at 72%. Probably big thanks to Elon joining the Donald Trump team because it's been on the terror since the election. Amazon, 51%. joining the donald trump team because it's been on the terror since the election amazon 51 percent uh you have google 39 percent kind of surprising considering that uh i think they could see some major disruptions when it comes to search but you know still really good year for the mag 7 here and then rounding up the the 7 apple which baffles me because they're not growing

they're stalling but you know whatever people are plowing their money in there that's their own prerogative and then uh you're finishing off with microsoft which i did not expect that microsoft was the worst performing at 21 which is interesting so microsoft underperformed by about like nine percent the index yeah i know and it's almost like half the half the returns of nearly half the returns of google i mean google is definitely does have probably the most headwinds in terms of you know the potential disruption and also the the doj situation where they might force them to to sell. I think that would ultimately... Which is very weird, but... They collect so much data from Chrome. I guess so.

Yeah, it's like I could see it being an issue. I could also see it being dragged through the courts for years and years and years. I mean, obviously, they're going to try to avoid that. But yeah, it's... I mean, when you look at the returns of those top ones who make up the largest chunk of the S&P 500, I think, in history, they're driving a lot of the returns. And the TSX is, for the most part, keeping up.

I would actually imagine there's a possibility that, I haven't looked this up, but on a risk-adjusted basis, the TSX is probably offering more attractive returns than the S&P 500 this year. Again, that's just me guessing, but considering the low volatility stocks we got here, it's definitely a possibility. Yeah. Yeah. I mean, I wouldn't be surprised. I haven't looked at the PE recently, but I think valuations are more attractive in Canada in general. Just a lot of money flowing into the US. So for the S&P 500, obviously MAG7, a big reason for that. Those returns for people looking, you'll see communication services and technology are 40% and 24% respectively.

I bucket them in the same category because if you start looking here at communication services, you start seeing names like Netflix, Meta, Alphabet. So there's a lot of, you know, these are just categories that they put them in. So keep that in mind. Sectors, I think it's debatable. So I just put those kind of in the same bucket personally.

Some companies are, I think, associated more with communication services, but the big ones, there are some big ones in there. But then looking after that, it really comes down to financials. Again, very similar returns to the Canadian financials at 32%. And then consumer discretionary, surprisingly, at 31%. So this one is surprising me that it's doing better than consumer staple at like 14%, considering everything. it's doing better than consumer staple at like 14% considering everything. But those were the most, I would say, the best performing sectors that I get to round it up here. You have utilities at 23, 22 and a half, 23 here, and industrials. And these are not total returns. So they're probably slightly higher in that. But I think the one thing we can finish on for the s&p 500 is there is no red yeah all the sectors are in the green so that kind of comes to what we were

saying earlier is i really had to try hard this year to lose money yeah and i'm actually surprised that health care is in the green i mean it's bordering on red yeah it's like a lot of a lot of healthcare stocks have taken a beating this year well since the election right with rfk going to be leading that department i can't remember exactly what his role will be but he's been pretty critical of the pharmaceutical companies in the u.s. So we'll have to see. But I think that has been putting, especially in the last, since the election has been putting

some pressure on there. Do you want to, we'll transition here for a lot of small and medium cap acquisitions in Canada. So do you want to go over that? Yeah, so it was a pretty big year for, again, like acquisition activity on the TSX. I mean, especially when we look to the small and mid caps. I mean, this isn't something you would historically see.

And for the most part, a lot of the companies, they weren't acquired by other public companies. I'll go over a few, but they were acquired by venture capital firms. Some of them, I believe, actually, most of them US-based. So the first one to kick off the year like private equity sorry private equity yeah yeah yeah i'm like venture i'm not sure if uh they're buying park lawn but okay private equity yeah so yeah the first one to kick off the summer would probably be you know park lawn which is funeral home company it's one that i owned so they got taken private at 26.50 a share.

So that was a 62% premium to its share price prior to the announcement. And I do remember thinking when it happened that it was still too cheap. Park Lawn was a small cap that had struggled a bit as it utilized, you know, a ton of his business was funded through revolving lines of credit to buy new funeral homes. So obviously when interest rates went from zero to the highest we've seen in a very, very long time, the bottom line was hit pretty hard, but they got scooped up for a pretty decent premium. The next one we would have seen would have been Nuve, which is a popular Canadian payment processor that went public during the pandemic. It was taken private as well in a 6.3 billion dollar deal so nuve had really struggled in a post-pandemic environment but the company was

still generating you know 250 300 million dollars in free cash flow a year so i mean it's really not a terrible price and i'm not surprised that someone came in while valuations were a bit discounted and and scooped this one up i believe that was ryan was it ryan reynolds that was huge in in new yeah yeah i was gonna say get ryan reynolds to pump the stock a little bit then just sell it to private equity yeah he had a big ownership in that too um and yeah i think i think he's actually sticking with the company even though they're private i think he's like hanging around oh yeah i believe so uh i can't guarantee i private i think he's like hanging around oh yeah i believe so uh i can't guarantee i think i think he's gonna be okay yeah he's gonna do all right i think yeah

he's got a lot of hair some good looks you know uh it's hard to not be jealous but uh keep going yeah so the next one would have been heru dev tech i don't know if i'm pronouncing that right yeah so they were taking again, taken private by Platinum Equity Advisors for around $1.35 billion. So they were a small cap Canadian stock that focused on creating landing gear for airplanes, both commercial, like passenger and military. So those who actually bought the stock at the start of the year realized about 109% gains as it not only had a pretty strong 2024, but it was scooped up for, it was around a 27% premium to its trading price the day before the announcement. And then the, you know, out of the private equity deals, we can look to, you know, kind of the public to public deals. Sleep Country would have been the, one of the major ones.

They were acquired by fairfax financial holdings back in july that was for a 28 premium to its current share price fairfax is often called canada's berkshire it runs a very similar business it's an insurance company it uses you know some of its float to uh kind of buy you know deals like this uh the next one probably we actually uh so we're yeah as you know right we're moving we bought a home and we'll be a new home and we'll be moving um to the new place in about like at the end of january and uh looking for a new bed because we've had it ours for like five years and i have back problems so you know that's pretty important we went to sleep country canada

stay there for two minutes i mean the prices are oh they're crazy insane oh my god like so we found a good like um one to order online like that had really good reviews and kind of medium firm because that's what i i need for like 25 30 percent of the price so one of those online order ones and it was like three four or five grand for a bed like the the showroom and they were supposed to have like a black friday sale and i don't know they weren't like displaying it they were saying it online but not in store so they didn't give you anything that's i mean we just didn't see anything like on sale really so we like went there and we're like okay well i guess uh yeah and uh yeah the yeah and the salesman like looked like he had uh partied or had i don't know he

seemed like uh did not seem very clean and stuff so i was just a quick in and out i'll just say that oh i mean when i went to buy furniture at the brick there was like six of them they wouldn't leave me alone oh yeah they would not leave me alone they never do but i mean i've i've personally never been in sleep country uh we bought a casper like the ones that you buy in the box and you just open it up yeah i mean we've had that for it's got to be eight years now but i mean pretty good yeah they're pretty good sleep country is like they had they were a pretty good company i mean they had you know i think it was near 20 return on equity uh double digit returns on invested capital i think they had close to 20 operating margins like they were a they were a pretty good company oh i hope so selling mattresses for five yeah i hope your

i remember looking into them in it was i believe was like in 2021. And I went to their investor relations page and like it hadn't been updated since like 2018, 2019. Oh, okay. And I was like, this is kind of a warning sign for me. So I never really looked any further. But I mean, obviously, I can't remember the guy from Fairfax's name. Pram Watson? Yeah, yeah, yeah. Obviously, he finds value.

And I mean, Fairfax has also done very very well uh over the last while um after you know not doing so well for for quite a bit but yeah this was this was probably the second biggest one and then the biggest one would no doubt be national bank and canadian western it came with the highest premium as well so the company acquired company acquired canadian Western for approximately $5 billion. So just prior to the acquisition, Canadian Western had a $2.35 billion market cap. So you're looking at more than 100% premium. Technically, $2.35 billion is not a small cap, but I kind of throw it in there anyway. It's so close. National Bank's objective here,

obviously pretty easy to figure out. It plans to utilize the assets and institutions in western canada to kind of expand out of its major hub which would be quebec the deal does have to go through regulatory hurdles but i can't really can't really imagine it doesn't get done and then we had you know one there was actually only and this actually surprised me considering the price of gold. There was really only one major move in 2024, which would be Osisko Mining was acquired by Goldfields Limited for around $2.2 billion. So this was a 65% premium on top of Osisko's price. So Goldfields is a U.S. listed company,

but it's one that primarily invests in mines and reserves in international countries. I quickly looked at them. I don't think they had any Canadian exposure. So this was a pretty interesting acquisition as Osisko is primarily a Canadian operator. It has a bit of operations in the US as well. And yeah, again, I mean, I'm surprised there wasn't a lot more M&A activity. I mean, we've seen a lot in the oil and gas sector, but I mean, it might be to the point where it might be just valuation-based. You know, a lot of these gold miners have run up in price quite a bit,

whereas, you know, a lot of oil producers were discounted over the last while, and that's why you've seen a lot of activity in that space. But the other quick one would have just been Lundin Mining, who is primarily a copper producer. They made a joint move to acquire Filo Corporation. They were a small cap company that primarily operates mines, mineral properties in South America.

But yeah, a ton of... Yeah, I mean, I think there's been some deals, right? I know, I can't remember the company, but Franco Nevada, I know they got a royalty deal done with a large miner. They did that in the last quarter or two maximum. So there's definitely been some deal. But I guess like other sectors, I think you end up getting into the at least oil and gas. You're seeing M&A a bit more just because I think the well-capitalized, very profitable large players are seeing depressed prices.

So they're kind of going in and buying those up, offering a premium. So it's hard for shareholders of the acquiring company to refuse. But when you're looking at Canadian Naturals Resources, for example, if they're buying stakes, even if they pay a premium in their view, it's usually because even with a premium, it's quite undervalued so um that's uh that's what you're seeing so i wouldn't be surprised if there's a pullback we might see some more uh mergers and acquisition in that space too yeah and i think that was the exact same thing that kind of happened with all these you know small and mid-cap companies it's just you know valuations got cheap enough i mean in the case of park lawn it's it's pretty hard for shareholders to shut down a 62 premium over and above what the price is trading at like you never know if you

know the company's going to recover how high rates are going to you know how much rates are going to come down which would have provided relief obviously um but yeah that's that's a big premium and a lot of these companies i would feel were undervalued and and kind of you know that's just kind of the time when they often get scooped up. Yeah. Yeah. I probably hopefully Dax De Silva is not listening to this podcast because he's probably saying like, so why? Nobody wants to buy Lightspeed. Why is it being interested?

Exactly. No one wants Lightspeed. Yeah. We'll have to see. I mean, I think if they become profitable or close enough to profitability where private equity fund would kind of come in and see that look uh we'll make some cut if we buy this we can make some cuts and then it'll become profitable i think that would be the the way to you know potentially sell it but again i think it has to be close to that for private equity to really have an interest in it if they're

not profitable or close to it i think they're going to have to do the hard stuff before they get some attractive offers. Yeah, I mean, that was the one thing about all these companies is they were all profitable. They weren't, like Lightspeed has really struggled over the last while. I mean, they're turning it around now. I still hold onto them.

I was kind of hoping a big deal would come in when they came out and said they were looking to be sold but i mean obviously nothing's out there king is different yeah and if you're not profitable i'm sure they've probably had offers they just weren't they weren't good enough they were willing to take yeah yeah so i guess we'll finish here um i'd be remiss and if i didn't talk about bitcoin yeah because i think you can say it's the year of bitcoin because unless you've been living under a rock here bitcoin's returns have been nothing short of phenomenal i mean i did these notes a couple weeks ago but the price of bitcoin is not a couple weeks maybe a week or so ago and but the price of bitcoin is pretty much when i did

that these notes so it works pretty well so it's around 145% up a year to date and that is quite the turnaround if you go back to 2021 and 22 Bitcoin had peaked around $67,000 USD and when I'm talking about the prices here I will refer to the USD price back in November 2021 and the bottom in the fall of 2022 following the fall of FTX. Now there was more than just FTX that put pressure on Bitcoin so like other risk asset interest rates and reduced liquidity so higher interest rate and reduced liquidity really had a negative impact on the price of Bitcoin. There was a collapse in the Terra Luna which a lot of you don't need to you know if you're not familiar with the space that's fine but essentially it was a algorithmic stable coin that ended up de-pegging meaning that instead of being worth one dollar USD ended up being worth less and then there were a

lot of crypto lending platforms that actually had exposure to this. So a lot of them went under, there was a lot of fraud that was uncovered. And eventually it accelerated FTX demise because they started trying to make up for losses to use customer funds to fund Alameda Research, which was the hedge fund that was also controlled by Sam Bankman Freed or SBF. So that kind of started in the spring, I would say, of 2022 and then culminated with the peak of the bear market there would have been when FTX really collapsed in November of 22. Now, the collapse also led to increased government austerity.

I would even say hostility especially in the u.s against the crypto space so you had elizabeth warren she had her anti-crypto army which is kind of ironic whether you think about you know whatever you think about crypto and bitcoin the reality is she was teaming up with like the big banks like jamie diamond and all the u.s big ceos to kind of try and prove her points and i'm like yeah these ceos clearly you know are reluctant for you know cryptocurrencies to potentially disrupt them obviously they'll say it's bad and so it was always kind of using those oh it's only used by criminal but then when you look at the data provided by the un you see that trillions of dollars every year it's estimated or laundered with you know traditional money and traditional

money is mostly usd so it's uh it's just kind of funny and i find it you know when they start you know using this fear this fud um it's just um yeah it gets a bit old. But I mean, despite all of that, it has rebounded. And you didn't have to really search very hard at that time to find articles saying that Bitcoin was going to be either irrelevant or dead just in the few months following FTX collapse. I encourage people to actually Google that, look at articles of late 22, early 2023. That didn't last for too long because in early 2023 we saw the collapse of silicon valley bank and a couple of other banks as well so that ended up spurring a

bit of more interest in bitcoin as insurance against the financial system and bitcoin was up at 39 in 2022 now fast forward to this year and end of 2023 so there was more and more rumors or kind of talk about a spot bitcoin etf being approved by the sec especially since they had lost in court again grayscale which had the bitcoin trust and grayscale was looking to convert that trust to an etf and then towards the end of last year, you started hearing a lot of these ETF providers, including like a BlackRock, a Bitwise, Grayscale, just to name a few that were saying they were, you know, it sounded, it looked like the SEC was speeding up the approval process and what they had to do in the background to get those launch. And then on January 11, 2024, spot Bitcoin ETFs launch and really, it hasn't really much

looked back since. There's been, I mean, it's pretty phenomenal. So I will share this with our joint TCI viewers here and I'll explain what it is, but it's basically assets under management for Bitcoin ETFs since the launch. At the launch, there was, let's just say, roughly 28 billion in asset under management. Now clearly asset under management is a combination of additional flows, but also higher Bitcoin prices. And you fast forward to right now, you're looking here at the total asset under management

at around 115 billion. It is, I think it's one of the most, if not the most successful launch in a year for a kind of asset class for an ETF in the US. I think it's almost, it's getting pretty close. I don't have the exact number for like gold spot ETFs, but it's getting pretty close to the asset under management for that. So it's pretty phenomenal what happened on the spot Bitcoin ETF front. Yeah, I mean, especially you look at the assets under management, what would that be?

Almost 300% increase, but Bitcoin has only gone up 130% year to date. So I mean... Yeah, yeah, it's I think more than that. But yeah, 300, 400. 400, yeah. Yeah, so I mean, clearly there's money flowing in. And a lot of inflows. Yeah, it's, I mean, like you said, like back even in,

I bought, I think I bought in late 2022. And I mean, I quickly realized how volatile it was. I think it, what did it fall from 2022? I think I bought in like maybe mid 2022, but I was quickly down like 60 plus percent. Yeah. And I was like, oh man, what have I done? But I mean, I kind of signed up for it. Like I understood it would be that volatile. And I mean, you didn't have to hop on i find like x is one of the main areas where you can really judge the sentiment of crypto i mean once there's any you know 10 to 15 percent decline you know a lot of these uh financial x accounts will come out with like jokes about how it's you know store of value in quotations and stuff like that but then

they all they all tend to disappear when it's up, you know, 30%. But I mean, it's an asset. You definitely have to be prepared to eat, you know, 50% and just, you know, not panic effectively. Exactly. Yeah. And that's what we've, I mean, I've been pretty consistent on it. Look, I have pretty big allocation to Bitcoin. I won't lie. Like it's a pretty large portion of my portfolio. A lot of it is just because I've been in it for, you know, prior to the pandemic, right? Like I started pretty early putting just dollar cost averaging and over time I haven't sold. So it's done pretty well for me, but I've seen those ups and downs.

So I know what it is. And whoever is looking to start a position first, you know, do your homework. You know, read the white paper. There's some really good books out there. The Bitcoin layer, layered money, broken money. If you're looking more at understanding kind of the origins of money, how the, you know, historically money has worked. And yes, of course, there will be kind of a Bitcoin portion on those. But I think that's, you know, if you want to build conviction in the asset or at least

understanding a bit more, I think that's where you should start. And then if you, you know, once you've done your research and your work, if you want to, you know, start a position in it, like I've always said, is put an amount where you'd be comfortable with it going to zero. So are you comfortable with 2% or 5% of your portfolio going to zero? If it does, then, you know, if you're comfortable with that, then, you know, that's probably the right allocation for you. I can't say what it is for you. I think you have to make that own decision. But I think that's a good way to see it. That way, if it declines 50, 60, 70 percent, like I don't think it's going to zero.

But if it does decline massively, which it's been known to do historically, then you won't panic because you're OK. It won't wreck whatever plan, whether it's your retirement or you're saving up for something else. It won't wreck that plan if you do it with that mindset and you won't panic sell because yes bitcoin has been tremendous for my returns but i also did not panic sell so you know if i would have panicked sell i don't think i would be in the same position right now so i think that's um yeah that's usually how i see it but yeah for just to get back here in the year in review for bitcoin it kind of went went up pretty quickly early in the year and then had been trading sideways from a range from 50 to 70,000 up until the election of Trump. And essentially, it's a bit surprising that it was up until then because there was the Bitcoin halving that happened on April 19th.

And even despite that, it's still continued trading within $50,000 and $70,000, which just tells you the volatility because it's a pretty big range. But again, I'm saying it as if it's like, okay, it was just that, but it just goes to show the volatility. And for those not familiar, the halving means the reward giving to Bitcoin miners. So it's the reward they get to solve a complex mathematical puzzle or problem. And it's a big part of what makes Bitcoin secure. It also brings new Bitcoin into circulation until the maximum of 21 million is reached. And then Trump got elected and Bitcoin has been on a tear ever since.

So it's been it's essentially up close to 45 percent since he's been elected as the new president. Obviously, he hasn't taken to office yet. But Trump has been pretty openly supportive. He's changed his stance on it for this campaign. He's basically done a 180 being supportive. Of course, Trump being Trump, still very bullish on the U.S. dollar as well. But he did change his stance. His family has also been very bullish on the US dollar as well. But he did, you know, change his stance. His family has also been very bullish on it. So it's, it's definitely helped, I think the price, I think I

would be, you know, lying if I didn't think, you know, the Trump election didn't help here. Personally, I didn't think it really matter who got elected in the long run. I think Bitcoin will do well over 5, 10, 15 years just because the spending is unlikely to get into control despite the whole Doge department with Elon Musk and Vivek. So that's my view on it. Yes, it's a kind of short-term appreciation, but I think long-term it doesn't really change anything.

That's just my view. And I guess the last thing, I know it's easy to get into the price, right? We all get excited. We see price number go up. But what's really interesting this year is we've started seeing this year and last year some pretty prominent voices in the space.

So I'm thinking here, Larry Fink, even Ray Dalio has been open to now incorporating Bitcoin in a portfolio a small percentage and you're seeing more and more a lot of these critical voices that are now shifting to either fully embracing a bitcoin or you know being more open to the asset so i think that's been a big shift that's been happening over the not just this year but over the last couple years yeah i mean i would say myself included i mean i used to be a i used to be a huge skeptic of it i mean i i used to work with somebody who bought a bunch well actually he probably only bought like twenty thousand dollars worth in 2017 and he still owns it he's never sold it and i mean it's good

for oh i i don't know i haven't talked to him recently but i would imagine uh he's not working anymore but yeah it's uh yeah like at the time i was well 2017 so it would be 2017 it's probably like a 5x because that would have been near the peak of um that cycle no he he was like this would have been late 2016 early 2017 so i think okay i think bitcoin was like 1200 bucks yeah yeah yeah yeah so it's probably up like 10x i would say well more than that actually oh just 1200 yeah okay 100x okay well yeah yeah okay he's and i like at the time i was like, you are, I called him an idiot. I did.

But now I mean, I was laughing. Oh yeah. Oh, definitely. I heard from him for, for a long time. I heard from him. And then eventually, you know, in 2021, I still don't understand it much at all, but I just own it because I think there's potentially more risk in not owning it. If people, as I say, if people that are much smarter than me are right, I would rather own it than not own it. And again,

like you said, it's, you know, it's comfortable. I took 4% of my portfolio, which for me, I was completely comfortable with. That might be way too much for somebody else. It might be way too little for somebody else, but I mean ultimately yeah that's your own decision to make but uh it's had a it's had a heck of a year yeah no exactly and look i know for a lot of people it's still hard to wrap their head around then that's fine right like at the end of the day you invest for yourself um if you're not comfortable with putting money in that don't put it i think for me it's just a asymmetrical bet meaning that you, you know, if you put 1% or 2% of your money, for example, the way I view it is the worst that can happen is you lose that 1% to 2%. But the upside is actually, you know, could be 5%, 6%, 7%, 10x, whatever it is, right?

Like, I think that to me is the clearest mathematical play. If you even don't fully understand it, but have a decent understanding, even if you're skeptical, I think that's the way I think mathematically that can make a whole lot of sense is, okay, you know, things can go negative. You know, you can't have like, you know, negative 2% like in terms of holding, like it just goes to zero. Yeah. It can't go further than that.

So I think it's just, I think that's the way i see it and at the end of the day i think a lot of its values people tend to to look at it intrinsic value and i had a question on joint tci and i think to me the right way to look at it is the utility value behind it and i think when you start understanding the utility of bitcoin without going into too much detail but just the fact that it's decentralized it's not controlled by any one entity it's uh also has a kind of fixed supply cap uh you can make massive transaction like you can send uh you know 50 million worth of bitcoin within like the transaction will be done and settle within 30 minutes like everything will be done try settled within 30 minutes. Like everything will be done.

Try doing that with our traditional financial system. Good luck. It will take you more than 30 minutes. So there's a whole lot of utility around it. And I think that's kind of the biggest case in my view for Bitcoin. But anything else? I think that kind of wraps it up. We've gone a little longer but I think it's you know people will have time to listen to it during the

holidays in between digesting you know turkey or whatever Christmas or holiday meal that you like to have so you can take a little break go for a walk outside put the podcast on take a long walk if you want get

you know get those potatoes down a little bit yeah exactly it was a pretty good episode um happy holidays everybody i guess we'll see everyone in 2025 yeah yeah we'll have to get used to that yeah yeah yeah it always takes me like i don't know about you it takes me like three months usually to get used to the new year roughly i'm gonna put 2024 in until march probably yeah pretty much same for me so uh yeah thanks everyone for listening if you haven't done so you know leave us a comment uh positive review five star whether it's on spotify apple podcast whichever platform you listen to uh we really love. It also helps other people find us. And we will be back in the

new year with some fresh episodes. So looking forward to what 2025 has in store for us. Thanks again. 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.