The Canadian Investor - Top 10 Holdings for Canadians and Market Keeps Falling

Episode Date: May 9, 2022

In this release of the Canadian Investor Podcast, we cover the following topics: TD’s most recent update on top 10 holdings for Canadians How to handle a drawdown after starting to invest in a bull market Cloud computing provider market share Stock on our watchlist presented by EQ Bank Tickers of stocks discussed: CSU.TO, GOOG, AMZN, MSFT, LSPD.TO, NFLX, FB Check out our portfolio by going to Jointci.com Our Website Canadian Investor Podcast Twitter: @cdn_investing Simon’s twitter: @Fiat_Iceberg Braden’s twitter: @BradoCapital Blue Jays Sign up link 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. Check out the Yes We are Open Podcast from sponsor MonerisSee omnystudio.com/listener for privacy information.

Welcome back into the show. This is the Canadian Investor Podcast, made possible by our friends and show sponsor, EQ Bank, which helps Canadians make bank with high interest and no fees on everyday banking. We also love their savings and investment products like GICs, which offer some of the best rates on the market. I personally, and I know Simone as well, is using the GICs, which offer some of the best rates on the market. I personally, and I know Simone as well, is using the GICs on a regular basis to set money aside for personal income taxes in April of every year. Their GICs are perfect because the interest rate is guaranteed, and I know I won't be able to touch that money until I need it for tax time. Whether you're looking to set some money aside for a rainy day or a big purchase is

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your last chance to RSVP to our meetup. We are going as a group to the Jays game on June 18th. It is a three o'clock game. Jays versus Yankees at the Rogers Center should be a good one. Please RSVP today. If you're listening after, well, I'm sorry, but you have to RSVP before May 9th.

And so today included, go in there. It's a link to a Google form sign up is in the show notes, or you go to our Twitter for the podcast at CDN underscore investing, and it is the pin tweet. All right, that's out of the way. Jay's game. I'm pumped. Simon, how are we doing? We got a good episode today. We're going to talk about what Canadians are holding in their brokerages accounts. We're going to talk about what Canadians are holding in their brokerages accounts. We're going to talk about a really good question that we got from a listener on volatility. And then we're going to talk about stocks on our watch list. So it should be a good one, buddy.

Yeah, yeah, I think so. It'll be a fun one, switching it up like we always do. One earnings news, one a bit more concepts. we've been also inserting some listener questions. I think they're really useful recently, especially with the volatility. I know a lot of people are feeling it. So I think it's a good thing just when we have questions, especially when we think it'll be useful for a lot of people. We like to put those in. Yeah, no, I totally agree. And this one is timely in that many people may be swimming in the same situation. So it's good. All right. But before we do that, TD posts this thing that they update every month that shows what their users are holding in their brokerage accounts. Now I'm kind of just pinning

this as like what Canadians are holding in their brokerage account, but it is the TD direct investing brokerage data. I mean, it's got to be a pretty good proxy for the other brokerages here in Canada as just a guess. And so they post the asset classes. Okay. So by asset class, Canadian equities make up 53.6% of holdings. US equities make up 27%. So more than double, right? Actually, it's almost spot on. It's almost exactly double Canadian equities. Other unclassified, don't know what that means. 10% international equities at 4%. Cash at 3.5%, Canadian fixed income, like bonds, at only 1%. Only 1%. And global fixed income, so international bonds at less, 20 basis points, 0.2%. Surprising, and what I'm going to say here next kind of exemplifies this, the most widely held stocks on the platform are TD Bank. These are all tickers. Hopefully, I know all these.

TD Bank, Enbridge, Suncor, Bank of Nova Scotia, Royal Bank, Air Canada, Apple, Bell, Manulife, Air Canada, Apple, Bell, Manulife, and Telus. Those are the top 10. I don't even know what to say. Any hot takes on the asset class here, Mix, and the most widely held securities on the platform? No, nothing surprising. I think we know that Canadians love their banks and energy and their Canadian home bias. So I think that encompasses everything there and their dividend. There's only one name, I think, that does not pay a dividend. And I believe that's Air Canada. Yeah, looking at the list, that would be the only one. It's not just dividends.

We're talking about like 4% plus. Oh, I know. They're not. Well, Apple is pretty small. But aside from that. Not Apple. Yeah, definitely. I mean, we hear it all the time, right?

From our listeners in general is people love dividends in Canada. There tends to be a bit more of a Canadian home bias. And people, because they gravitate around dividends, they tend to gravitate around a lot of energy companies and banks. So it's all, you know, all of that in one list, I think reflects it really well. Yeah. I posted this on social as well before we recorded, just because I thought it was interesting. And a lot of people said, Hey, I get it. This is a lot of home bias is kind of a silly way to run a portfolio based on the stats. But if you look, Canadian banks have been dominating. And I'm like, yes, I'm with you and energy as of late, but not historically. I'm like, yes, you know what?

Canadian banks, you know, don't fix what's not broken. It's been a hell of a ride. They've been wonderful compounders and overall just really good stocks to own. And you got paid a nice juicy yield along the way. You know, I'm not commenting on that at all. It's more so around the Canadian home bias. You're like overweight Canada. Yeah, almost exactly double overweight Canada based on the asset class concentration. So that's interesting. So a few things come to mind. The home bias, banks, energy telcos, They love the dividends. And you're basically underweight businesses with global scale. Look at them, right? TD, mostly Canada. Mostly. I mean, they have a big retail banking presence in the US. I get it. Enbridge, again, mostly Canada, especially with the natural

gas distribution. Suncor, I mean, yeah, yeah global but i guess like that one's gonna you know bank of nova scotia canada royal bank again the banks they have their own things outside of royal bank is the most global one of all of them yeah that's right yeah and the asset management business is wonderful don't get me wrong air canada i think as the name suggests apple okay global that's kind of like the outlier here it It's the only non-TSX listed one. Bell, Canada, Manulife, Canada, Telus, Canada. So you're overweight Canada and underweight global growing high quality businesses. That's just kind of my general thoughts. Now, because I'm a nerd, I like data and I back-tested it. Do Do you think this and we haven't talked about this beforehand.

So you're on the spot here. Do you think those 10 stocks over the last 10 years have overperformed or underperformed the S&P 500? Well, that's a good question because the banks I know have performed quite well during that time frame because they were coming out of the financial crisis. So they were coming out of the financial crisis. So they were definitely depressed. I would say it probably slightly underperformed the S&P 500. It was pretty close up until recently. As you can imagine, what's been working is basically a list of those stocks. And the 10% equal weighted, the 10% allocation to Apple really helped.

Really, really helped. And so it actually outperformed it. But again, this is a lot of cherry picking. I don't know if it really means anything. It's more so like what's going to happen in the future. And if you look at that, typically what retail people are holding is stuff that's been working as of late. So I don't know

if you can really draw any real conclusion from that other than it is interesting that over the past 10 years, if you're overweight, these large caps in Canada, you did really well. As do-it-yourself investors, we want to keep our fees low. That's why Simone and I have been using Questrade as our online broker for so many years now. Questrade is Canada's number one rated online broker by MoneySense. And with them, you can buy all North American ETFs, not just a few select ones, all commission free so that you can choose the ETFs that you want. And they charge no annual RRSP or TFSA account fees. They have an award-winning customer service team

with real people that are ready to help if you have questions along the way. As a customer myself, I've been impressed with Questrade's customer service. Whenever I call or email, every support rep is very knowledgeable and they get exactly what I need done quickly. Switch for free today and keep more of your money.

Visit questrade.com for details. That is questrade.com. Here on the show, we talk about companies with strong two-sided networks make for the best products. I'm going to spend this coming February and March in an Airbnb in South Florida for a combination of work and vacation and realized, hey, my place could be a great Airbnb while I'm away. Since it's just going to be sitting empty, it could make some extra income. But there are still so many people who don't even think about hosting on Airbnb or think it's a lot of work to get started. But now it is easier than ever with Airbnb's new co-host network.

You can hire a local quality co-host to take care of your home and guests. It's a win-win since you make some extra money hosting on Airbnb, but can still focus on enjoying your time away. 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 move on to the question from Irving here. Yeah, question from Irving. Hi guys, I've listened to every episode and love this show. Well, thank you, Irving. We love hearing that kind of feedback. In May 2021, I decided to get into the stock market and put my life savings into it. Turns out my timing was terrible and almost every stock I invested in was near all-time highs. Of course, the ones I took the biggest stakes in are the ones that are most down,

such as Lightspeed netflix and facebook etc so i'm sure there's more that are in that growth category based on that i am now down 27 and looks like it will drop even further all i can think of is how it will take years just to get back to where i started why didn't i invest two years earlier when the market was more bullish and etc? I still have conviction, but feel like I did everything right and got burned anyways and will take forever to recover. Should I keep averaging and stay the course? So like I mentioned when we started the episode, I think this is a really good question because I really don't think Irving's the only one in this situation. First, obviously, you know, it really sucks being down 27%. No one likes to look at their portfolio and see those red numbers, especially when it starts getting double digits.

I've talked about it before. I know you have as well. Like we've both experienced some serious short-term drawdowns. I've experienced some pretty bad one, even on a monthly basis, where I have had like 15% drawdowns on my portfolio. And I think it's important to learn from past investing experience if you think there are things that you could have done differently and apply them in the future. But the reality is you can't change it. So there's no point of drooling on it.

So you have to learn from it. But at the same time, you know, you have to also move on. You're in this situation right now. Right now, I would just suggest that you review all the companies in your portfolio and decide if you have a strong conviction in those going forward. Forget about the price for a second. Really ask yourself if you see these companies growing and performing well over the next five plus years. And I think that's really important. Five plus years long term. After that, you can look at what their valuation is currently. This will help you determine whether to stand path, add to your position, or trim or sell some positions completely. The other thing I would suggest reviewing is your overall approach to see if you still have

conviction in your actual approach. Having conviction in individual businesses that you own is really important, don't get me wrong, but conviction in your overall approach is as important in my opinion. It really looks like you're heavy growth stocks. And I'm not saying this is a bad or a good thing. I mean, I own growth stocks. Brayden owns some. But being heavy in growth stocks will definitely mean more volatility in your portfolio. Is this something that you can handle?

Because it will most likely happen again. Well, I had an interesting tweet. Someone responded to me. His name is Anthony on Twitter. And he said that my tweet was relating to market volatility and mentioned that volatility didn't phase him out because he only holds blue chip dividend payers. And his main focus is the increasing dividend that he's receiving. So I'm not saying to do what Anthony is doing here, but adding some blue chip companies that pay a dividend, of course, hopefully a growing dividend to your portfolio with a decent weighting could help reduce some of the volatility

you're seeing. Personally, I do a bit more of a high bid approach. But before I go on, did you add anything to add on, Brayden? My one thing that I thought of that I actually didn't think of for some reason when I first read the question, but I'm thinking about it now, which is this is obviously unlucky. You cannot time the market. But I think that an actual mistake was performed. And this is why when my family members, for instance, moved away from paying mutual fund fees and going DIY to an index strategy or holding high quality growth stocks, not necessarily growth stocks, but companies that are growing in high quality, I always told them, again, this podcast is absolutely not financial advice, but I always told my, again, this podcast is absolutely not financial advice, but I always told my family members, do not do lump sum all in one week or all in one trading day.

You need to DCA it over a year or two if it's a lot of money. If we're talking about hundreds of thousands of dollars, millions of dollars, or whatever it is, if it's a significant amount of your net worth, like this was an Irving's question, you should dollar cost average it in over many quarters, maybe potentially even a year or two, because you want to avoid poor market time. You want to avoid getting unlucky because that's worse than kind of getting lucky and the bull market continues, I think anyways, based on the math of drawdowns. That's one thing to think about if you're doing a lump sum just in general, is be patient and DCA it over a longer time than, you know, a trading day or two.

Yeah, exactly. And we answered, you know, this question before, right, about lump sum investing and should, the more you could also reduce your potential return. So you have to really create that equilibrium that works for you. I think that's the most important here. And of course, this is not investment advice, but I think we're just giving people just some things to think about when they look at their own portfolio. out when they look at their own portfolio. And for me, in my portfolio, and you can see that at join tci.com or Patreon page, I do a hybrid approach. And I've been very upfront about that. So where my largest stock holdings are blue chip dividend stocks, and then I have some growth companies that are kind of sprinkled in there that are smaller portions of my portfolio. that are kind of sprinkled in there that are smaller portions of my portfolio.

So for example, Brookfield, and I'll just say Brookfield, I'm including BEP, BIP, and BAM, because I own all three. They represent by far my largest allocations in terms of individual stocks. And I was definitely happy about that when I saw the Teladoc news and the stock go down 40% and it got smashed after its earnings release but it really didn't hurt me all that much because my allocation was small enough and I have those blue chip stalwarts in my portfolio but overall my portfolio is still pretty volatile because I do have pretty big exposure to Bitcoin and like I've, I've had single months close to 15% drawdowns, but I have strong conviction in my holdings and my overall approach. So it really doesn't phase me.

I mean, I don't really flinch. I don't even feel stressed. I think it might be my temperament. Maybe I'm used to it. Maybe I've been investing for long enough. But again, I think my point here is just making sure that you have a strategy that works for you. Of course, we've talked about it before. Volatility is part of the game. There's ways to reduce volatility, but you have to keep in mind that sometimes that might also affect your long-term returns. your long-term returns. So you have to just make sure that you know how you react when there are significant drawdowns like that. And if you think you're susceptible of making a rash move or a panic move, then maybe you need to rethink your approach a little bit. Yeah, I totally agree with pretty much everything said. And I feel for you, Irving. I know many people are in this. Like I can tell you one thing for free. My portfolio lost a lot of money over the last month or two. Join the club, Brad.

We can all have a party together. All right. Quick intermission before kind of extending on this. extending on this, Yvonne's going to talk about some scenarios if you did start investing basically since 2020 when there's this like huge DIY investing boom. For a quick update on cloud computing, because you know I love this area, and now that we have Q1 results from the big dogs of cloud computing, Amazon with Amazon Web Services, Microsoft with Azure, Google or Alphabet, whatever you want to call it, with GCP, aka the Google Cloud Platform. So those are the three big players. Here is an update on market share as of Q1 of 2022.

2022. Amazon has 33% of the total market share. And this is including IaaS, PaaS, and hosted private cloud. So those are basically the main three. So Amazon has 33% of market share. Microsoft has 22% of market share and Google with 10%. The next 10 companies combined have a total of 21 so the next 21 are comparable to microsoft share and other ones all combined to make up the remaining 14 do you know like a few of the smaller players offhand well out in asia the big ones are tencent and baba yeah and so those would be included because this is global data and then some of the like older no i was just curious older more like legacy players yeah yeah they'll have a play on it and so sorry i didn't mean to put you on the spot i was just kind of no no no some of the smaller players i i wish this data went into detail i wonder if i bet you if i go into the

whole report and pay them 10 million dollars for their little research report, I could get it. But the main three players are probably going to continue to consolidate as well too. So all right. So now that we have those, some thoughts for me are AWS is still king based on market share, owning exactly one third of the total cloud infrastructure service market. And when I think about AWS and being in tech and, you know, having friends building new companies and being in that space, the most exciting companies and projects of tomorrow, like, the exciting projects now are being built on AWS. However, you know, the fastest growing in terms of revenue and market share is actually Azure. But that's only because of their supreme distribution advantages of kind of like, I want to say the legacy companies, but the businesses that exist today in the S&P 500 are largely using the Microsoft ecosystem. And so it's an easy decision for the CTO of public company, 50 billion in market cap, industrial business who,

you know, their business is glued together via Excel, Microsoft Excel. It's an easy decision for them to integrate with Azure and move their workloads off a private cloud to a public cloud via Azure. And this is why Azure is the fastest growing one right now. And if you're a Microsoft shareholder, I've done some quick math and got me thinking about it from this post that I saw, which was, you could probably see like with some pretty high conviction that Azure can deliver double digit revenue growth for Microsoft as a whole, even if the rest of the company doesn't grow, which, you know, it's pretty safe to say that it will, but that's the kind of scale that this thing is reaching. And so there's lots to like there. From Google,

it still doesn't seem to be turning a profit. And yes, it's growing. And it's grown from a really small base to 10% of the market share in just four years. So there's a lot to like there. But you look at the operating margins on Microsoft and Amazon, and I get it. They don't have the same scale and operating leverage yet. But I was expecting them to turn a profit. I was saying a few quarters ago that it's going to be returning, like, you know, actually reaching operating leverage in a quarter or a quarter or two. And here we are, and it's still not. So the story is a little bit more confusing as to what differentiates the platform, where their advantages, where their growth persists over the next while. The other two, I have a very clear thesis on, but Google, not so much, but it's growing nonetheless and very handsomely as well. So that's just kind of a quick update on

the three major cloud players. And there are other players, I suspect some consolidation in the future, but this is a place I think as an investor, you want to be at players i suspect some consolidation in the future but this is a place i think as an investor you want to be at least positioned in in some way or another and they're a lot cheaper today than they were three months ago so there's a lot to like from that perspective yeah yeah exactly i mean i can't really disagree with you my last last segment here will agree on the last name there i I don't want to reveal it and I already own the top two names. So yeah, I can't really disagree with that. That's where the world is going. So having some cloud exposure, I think it's important. As do-it-yourself investors,

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

rep is very knowledgeable and they get exactly what I need done quickly. Switch for free today and keep more of your money. Visit questrade.com for details. That is questrade.com. Here on the show, we talk about companies with strong two-sided networks make for the best products. I'm going to spend this coming February and March in an Airbnb in South Florida for a combination of work and vacation and realized, hey, my place could be a great Airbnb while I'm away. Since it's just going to be sitting empty, it could make some extra income. But there are still so many people

who don't even think about hosting on Airbnb or think it's a lot of work to get started. But now it is easier than ever with Airbnb's new co-host network. You can hire a local quality co-host to take care of your home and guests. It's a win-win since you make some extra money hosting on Airbnb, but can still focus on enjoying your time away. Find a co-host at airbnb.ca forward slash host. That is airbnb.ca forward slash host. Continuing with your segment here, if you are in a situation where you've invested, started going DIY since 2020. And, you know, the data's there. There were millions of brokerage accounts opened in 2020 alone, just that year. So there are people listening in this situation. Yeah. And I actually, I titled this segment. So you started investing in April

2020, dot, dot, dot. The reason I came up with that was actually one of my buddies, we were texting and he listened to the podcast a lot. You know, I met him. He works out at work. We used to work in person, but now we work remotely and we were talking about investing all the time. And then he was texting me. We were talking about how there are probably a lot of people who started investing between mid, late March of 2020 up to the end of last year. between mid late March of 2020 up to the end of last year and if you started investing during that time period all you would have known is overall prices just going up until recently almost like a not quite a straight line let's be honest but more often than not obviously you would look at your portfolio and you'd see green and let's visualize it a little bit with some examples

so if you started investing on June 1st 2020 so I wanted to go a few months out of April 2020 here are what your returns would have been up to December 31st 2021 so the end of last year the S&P TSX so if you invest in an index fund for the snptsx you would be up 34 percent snp 500 up 46 percent nasdaq up 52 percent now the return since the beginning of 2022 the snptsx is down 2.5 percent snp 500 is down 13.3%, and the NASDAQ is down 20.7%. Now, if we look at the whole period from June 1st, 2020 to May 2nd, 2022 is when I did these calculations. S&P TSX is up 30%, S&P 500 up 29%, and the NASDAq is up 26 percent now the returns since February 9 2020 are actually pretty good the reason I'm adding this data here is because this is when the market

actually peaked right before March of 2020 when it crashed so if you invested at the peak before the crash, you're still up 17% for the S&P TSX, S&P 500 up 24% and NASDAQ up 30%. So the reason I wanted to use all these different time frames is just to bring things in perspective a little bit. Short term, you could be the best stock picker in the world and you'll experience negative returns. You could arguably say that Buffett is the best in the world and go have a look at Berkshire's historical return and there have been several time periods where it was not good returns but Buffett is the definition of a long-term investor and that doesn't faze him. If anything he'll add to businesses he loves during the drawdown periods. Even if you bought at the peak in 2007

before the financial crisis, you would have had some phenomenal returns if you held on to your holding 7 plus years. And it's not hard to find periods throughout history where stocks do not perform well over short or even medium time horizons it will happen again drawdowns will happen again the number does not always go up it does not go up in a straight line we talked about that in other podcasts historically it has gone up long term but it's more of a roller coaster ride and whatever you own volatility will and i'll repeat that, it will happen. And that's something that's important to get comfortable with when you're investing. And it's especially important for those who start investing in that time period of kind of April 2020 up to the end of 2021,

because they may not realize that volatility is actually a real thing. And, you know, the stock market can have drawdowns. And Brayden, we talk all day long about volatility. And you might think you're going to handle it fine. But you never know how you'll react until you're actually living it. And you can listen to Brayden and I, and we don't panic. And you can listen to Brayden and I, and we don't panic. But until you actually live it, until you actually live a 10, 15, 20, 30% drawdown,

you don't really know how you'll react, but it's definitely part of investing. And I actually tweeted something that's prompted the reply from Anthony that I mentioned earlier. So my tweet was the following. Market volatility is nothing new. If it's stressing you out, close the app and go do something you love. Your account will still be there in a week, a month or a year from now. Braden, before I continue, what do you think about that tweet? I mean, it's a continued theme that, you know, this podcast has continued to be about which is you know volatility is obviously nothing new and yeah get off your stupid trading account just close the

freaking app do it on your laptop with intention the reality is is i think i've mentioned this before as someone who loves investing i didn't look at my portfolio for like five months. Yeah. You went backpacking, whatever, right? Yeah. Dude, I forgot about real life for a few months there. I came back and I was like, wow, some of the best stretch of performance ever. No tinkering, no nothing. You know, during that time, tinkering, no nothing. You know, during that time, only one quarter of results came out. You know, like businesses just don't change that often. And some of them do, but they don't change as much as mark to mark pricing will make you think that it does. Yeah, exactly. And the point with that tweet was that, look, Brayden and I, it's no secret we both love investing we wouldn't have started this

podcast and wouldn't be at episode 167 that we're currently recording if we didn't heck braden also has a startup that stratosphere so he heats investing for breakfast lunch and dinner but i also know he loves and dessert dessert and dessert these days and. But I also know he loves playing golf. And I'm going to go on a limb here that one of the reasons he loves to play golf is because it gives him a little break from thinking about investing. I'm just talking for you. Maybe I'm completely in left field. But for me, it's mountain biking. And it's really, you know, when I do that, you know what?

I don't even think about investing for that two, three hours. And it's really, you know, when I do that, you know what? I don't even think about investing for that two, three hours. And it's refreshing. And I think it's something just to keep in mind. If you have something that you love doing that can give you a break of just thinking about stocks, because if you constantly think about it, I think for a lot of people actually be a stressor. And it might actually make you do some irrational move of knee jerk reactions. And a lot of investing is just psychological and how you control your emotions. Well, you're right. Yes. I don't know if it's about stop thinking about investing, but like, I love how, when I go play golf, I don't look at my phone for four hours. I love that. I don't

even think to do it. Whereas if I'm at home, I'm like so freaking addicted to screens, man. It's like an actual problem. You know, I'm on my laptop. It doesn't feel bad because I'm like usually working, like doing something somewhat productive, but like, ah, it just feels so bad. Right. So, especially when you're on your phone all the time. Now the one pro about this market volatility is usually at the golf course, my buddies want to talk stocks. They have not wanted to talk about stocks so far this season. Any correlation to the market? I think so.

I mean, they don't seem to want to be talking about stocks on the course in 2022 so far. So if there's any pros, I'll take wins where i can find them yeah no i mean i mean mounted bike i guess it's a bit different if you don't pay like focused attention you'll end up with a broken arm so it's a little bit it's a little bit different yeah especially downhill i know my brother broke his collarbone like last year doing that and you're usually out of breath right so it's kind of hard to like have a deep stock conversation when you're gasping for air. Yeah, you won't have to be talking about stocks on your watch list presented by EQ Bank while you're mountain biking. Stocks on our watch list. Thank you so much, EQ Bank.

Wonderful supporter of the show. If you are looking to open the best bank account in Canada, to open the best bank account in Canada. That's EQ Bank. Go to eqbank.ca forward slash TCI. All right, I will tee off first here. I'm cheating a bit here because I got two and I own them both already. So I'm like double cheating here on the list, but very often the best ideas you may already own

and I see some value today in increasing position sizing. Okay. So you might've heard of this small little roll up of 40 billion in market cap, not so small constellation software, ticker CSU on the TSX. It seems silly. You know, I talk about it all the time. It's a huge part of my portfolio. It's never shows up in this segment, but there is a rare formation in the constellation right now with shares sub $2,000 CAD per share. I just checked there now, 2001, you missed your chance. Sorry, people, you missed your chance. No, just kidding. It's great value here. I know it's an expensive ticket for the share price, but that's because they do not do any goofy things like SBC,

share dilution, or stock splits. This gives you the ability to let Mark Leonard, Canada's best capital allocator by far, him and Bruce Flatt, let Mark Leonard deploy your money for you with no fees. The guy doesn't even pay himself any compensation. This is the guy you want in your corner, man. And so next up here is Moody's, ticker MCOMCO, the credit rating agency, is on a 22% drawdown. They reported results with weaker short-term guidance, talking about macro factors, credit risk, but keeping their medium-term guidance and reiterated that their growth drivers are still there. They're now reporting this Moody's Analytics, the SaaS offering platform, 33% operating margins, growing revenue at 23%. This company feels like a slam dunk all the time. But on this dry down, this is

a tap in for birdie, man. This is a tap in, a gimme putt, take it while you can. That is ticker MCO Moody's. I could go on and on about stocks that are trading at cheap valuations while everyone on TV tells you that stocks are the worst thing to own ever. That's when you buy stocks. All right. That's when you buy stocks is when people tell you not to. Yeah. And so I'm going to go a bit different direction here. So I decided to put a micro cap on my watch list. Of course, this is a joke. A micro cap. Well, I see one. You got the jokes today. I know I'm on fire today and it's the second recording. I'm not sure if I'm just delirious or on fire.

I think you're delusional at this point. So the company on my watch list, I know you'll love it. You're the number one fanboy, Google alphabet, obviously. But it's really hard to ignore the valuation here and the growth. So you're looking at a company growing its revenues at a compound annual growth rate of more than 20% a year. They recently authorized an additional $70 billion in stock buybacks. They generated $15 billion in free cash flow in their most recent quarter. Side note, looks like peanuts compared to Apple, but that's beside the point. It's a fraction compared to Apple, but going quite a bit faster. Apple, but that's beside the point.

It's a fraction compared to Apple, but going quite a bit faster. Growing quite a bit faster. They've bought back close to 2% worth of shares in the past year. They have a stranglehold on the search advertisement. They have YouTube, of course. And they are essentially part of a duopoly with Apple for the smartphone ecosystem. So they take that 30% cut, just like Apple. Apple for the smartphone ecosystem. So they take that 30% cut just like Apple. So for anyone, any business that wants to have an app, usually they have to go to two

players, Google and Apple, and they both take that 30%. But if you want the audience, you want the iOS and you want the Android. They're trading at about 2.5 times sales, 20p, which is the lowest it's been in five years and honestly i think probably ever i'm not even sure like i i don't know yeah yeah i think google has already always been in like you know the 40 50 60 territory but anyways i didn't have the data that went that long and they're trading 22 times free cash flow so for the p like i said i don't have all the data but i mean whatever metrics you're looking at if you're factoring in growth i think google is definitely growing at a very good pace it's starting to be very

attractive i know it's not the easiest thing to uh to buy in terms of share it's still trading what around like 2400 us around there yeah there's the cdr yeah i was gonna mention that yeah so that's an option so there's the cdrs from our friend at neo exchange that is available for people who would not necessarily have the money to fork a 24 50 share. A vacation. Yeah, exactly. To fork a vacation to invest in. And of course, there will be the stock split. So that's another option for people if they want to wait until the stock split.

Yeah. It's coming soon. It's coming soon. So that'll be another option. I think it's what, 20 to 1, if I remember correctly. That sounds right. Yes. Yeah.

So it'll definitely be more affordable on a single share basis. We won't go through the pizza analogy again, because that was a disaster last time we did that. But look at my Twitter account. I have a recent tweet on it that explains stock splits very well at fiat underscore iceberg. Well, there you have it. Our watch list we did. Mine were Constellation Software ticker CSU on the TSX and Moody's Corporation ticker MCO, US listing. And then yours is Goog or Google with an L on the end of Goog. Like anyone's, you know what I like about what you brought it up in the segment is because it's always nice bringing companies that no one's ever heard of, like Alphabet, to the segment. And so we appreciate that very much from you.

All right, that does it. You know, we really appreciate y'all listening. JoinTCI.com. Come join the community. Come support the show. Come get Brado off dirt and ramen ramen. And you know, hey, come join tci.com. Really appreciate it. Come see how much pain I'm in for Teladoc. Oh, yeah. Yeah. Come see Simone's Teladoc position. All right. Thanks so much for listening.

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