The Canadian Investor - What’s Driving the Drop in Tech Stocks and Bitcoin?

Episode Date: November 20, 2025

Simon and Dan break down Canada’s latest CPI print and why inflation data doesn’t always match what you see at the grocery store. They dig into the recent drawdown in risk assets, from Bitcoin and Ethereum to the high-growth and AI names that have gone from “can’t miss” to painful drawdowns. They also look at Berkshire’s new stake in Alphabet, what it might signal for big tech, and wrap up with another strong quarter from Loblaw and what it says about food inflation, pricing power, and defensive compounding in a choppy market. Tickers of stocks discussed: QQQ, MSFT, AMZN, META, GOOGL, BRK.B, UNH, NVDA, ORCL, ADBE, DUOL, HIMS, IONQ, RGTI, CELH, GSY.TO, L.TO, DOL.TO, HD Check out our portfolio by going to Jointci.com Our Website Our New Youtube Channel! 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 Asset Allocation ETFs | BMO Global Asset Management Sign up for Fiscal.ai 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.

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investors this has to be one of the biggest quarters i've seen from this company in quite some time Welcome back to the Canadian Investor podcast. I'm back here with Dan Kent. I'm Simon Belanger. We have a fun news and earnings episode, quite a bit wide-ranging. We'll start off with talking about CPI data for October that came out recently. We'll also talk about risk assets being hit pretty hard, whether it's Bitcoin, but also a lot of tech stocks, especially some in the AI space. And then we'll talk about the big news of Berkshire.

buying one of those tech names, not outright, but starting a stake in Alphabet or Google. And then we'll finish off with Loblaws. Always interesting to look at because it's the largest grocer in the country and gives us a good idea what they're seeing. And a good idea on food inflation as well in terms of their metrics. So pretty jam-pack. Are you ready to get started now? Oh, yeah. Let's get right into it.

Okay. So like I mentioned here, so we are looking at the CPI data for. October. Some interesting information when it came to the headline and maybe a little bit misleading people thinking it's better than expected. So headline CPI was 2.2% compared to 2.4% in September. The bad news is that the headline number came in higher than expectation, which was 2.1%. Another piece of bad news, believe it or not, I know then you'll be really affected by this, But guided tour were not mentioned as a downward contributor on the main summary page. So I know you'll be disappointed.

Probably a lot of our listeners will be disappointed because the first thing you look at when you want to get a pulse of where CPI is going is guided tours, right? Tours. Yeah. Yeah, I mean, I think they've been putting it on there the last few times because it makes it look a bit better, I guess. Exactly. I mean, I wonder really what they're doing now that they didn't list it. I mean, I don't know if you can.

think of a more like who cares element of CPI than guided tours, but yeah. Yeah, it's a bit more like reading the room, but I digress. I was being a little bit facetious here. Gasoline pushed CPI downwards quite a bit. That one was very interesting, probably not unexpected for a lot of people. I've noticed some prices that were a bit lower when it came to going at the pump here. So that was down 9.4% you over a year and just shy of 5% if you're looking versus September on a month over month basis. Food increased 3.4% year over a year but was surprisingly down 0.3%. And it's something I wanted to mention here because I saw a post on Twitter where the poster was saying, I don't know about you, but my food hasn't gone down compared to September. And you have to keep in mind and I

And I wanted to mention that because obviously they were implying that the government is providing wrong data and so on. And if you want to believe that, that's fine. But I think it's also, we have to keep in mind that the basket of food, these are all basket. First of all, does not necessarily reflect what you eat. Maybe you're a vegan, maybe you're vegetarian, maybe you eat a whole lot of meat, maybe you're a bit of everything, maybe you're pescatarian, doesn't matter. your food basket will likely be very different compared to what they use. So it's very possible that your personal food basket is higher. It's also possible it could be slightly lower depending on where the price pressures are actually coming.

Also, you're in Calgary. I'm in Ottawa. I remember last year when I went to Calgary and I did some groceries for my Airbnb and I was shocked at how high the price of berries was in Calgary compared to Ottawa. So there was going to be some regional differences. And I just wanted to mention that because sometimes people post stuff that will get 100,000, 200,000 impressions on Twitter because it's sensational or it really gets this chord of people who rightfully so are feeling the pinch. I mean, food is much higher than it was three, four, five years ago. I'm not disputing that.

I'm seeing it every day when I go shopping. But I just wanted to show that you have to keep. in mind, it is a basket, so it's not necessarily reflective of your own food consumption. Yeah, I mean, if you eat a lot of beef, like your, your food inflation is a hell of a lot higher than 3.4% because I think the price of beef has gone up like 50% over the last year. It's just crazy. But I find a lot of people think that like, you know, lower inflation also means like prices will go down, which isn't necessarily the case.

Like, you're never going to see. Yeah, it's a rate of increase as normalized, not. Like, you're never going to see, you might get short-term periods where food prices go down. But, like, overall, they're just trying to get a normal level of pricing increases. Prices are here to stay. They're never, like, you're not all of a sudden, like, next year, a loaf of bread is never going to be 20% cheaper. It's just, it's the way it is now. And they just need to kind of normalize the increases.

Yeah, exactly. Now, moving on here, services keep being one of the most sticky categories with an increase of 3.2% year over year and 0.7% month over month. Homeowners, you and I, Dan, were getting hit pretty hard as well. Homeowners are seeing property taxes rising on average by 5.6% year over year, as well as their insurance costs rising 6.8%. And car insurance premiums, if you're a driver, were also up 7.3%. So a lot of things that are continuing to increase,

For unfortunately, especially car insurance premium for a lot of people, this is a necessity, not something they can go without, especially if you're not in a major metropolitan area where public transit might not be as accessible or as good as something that is not easy. And I definitely encourage people to look at other option for insurance when their insurance comes due because oftentimes you can save a whole lot by looking at other insurance providers. get some better deal. And the last thing we'll look at here is core CPI. Just a reminder that this is typically the preferred measures of the Bank of Canada. However, they have been floating around that the markets and the media have been focusing too much on the preferred measure and they're likely going to be using a dashboard going forward, which is funny because they're the ones that have been pushing these measures. But nonetheless, so you're looking at CPI medium down from 3.1 to 2.9% and CPI trim down from 3.1 to 3.0%.

And median is simply getting the middle number, that percentage of price increase. And then trim is just taking the extremities out. So you take out the biggest declines, the biggest increases. And it's not a good sign that these are still staying pretty sticky. So we'll have to see whether they're trending up or down in the coming months and the next year or so, but my base case is that the more we start looking long term, the more I think we'll start looking at inflation that is around 3%. That's going to be more than that's exactly what I was going to say. Yeah. I mean, you just, I think people just need to get

comfortable with a new target inflation of probably 3% versus, you know, the two that we've been, we've had for for quite some time. Yeah, exactly. Want to buy a stock, but don't want to show. shell out hundreds or even thousands for a single share? With QuestTrade's new fractional shares, you can invest any dollar amount and build a diversified portfolio instantly. No delays, no trade fees, no excuses. Want to put $10 into a stock trading at $100? No problem. Questrade has you covered. They're the first broker in Canada to offer real-time commission-free trading for U.S. fractional shares in ETFs. It's simple.

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While I was there, I stayed in a home on Airbnb just a short walk from the Stampede grounds. After a full day making new connections with people just as passionate about investing as I am, and a late night at the rodeo, it was the perfect place to come back to and make a quick dinner and unwind in a quiet, comfortable space that felt like home. That trip got me thinking about my own place back in Ottawa. While I'm away, my home usually just sits empty, but instead, I thought I could be hosting it on Airbnb. Hosting is flexible so I can set the timing, and it could help me cover the cost of my next adventure

while someone else enjoys our beautiful neighborhood. Your home might be worth more than you think. Find out how much at Airbnb.ca slash host. Now, moving on to the fun topic over here. So Bitcoin, Bitcoin has been a rough little go for Bitcoin. I'm definitely feeling it. I have quite a bit of Bitcoin exposure. If you've been listening to the podcast for some time, you'll know that I have a pretty big

allocation to Bitcoin, which I've had for quite some time. So I think that's important to remember is that for me, it's been a wonderful investment and when our episode we did about our best investments, Bitcoin is still right up there for me, despite that drawdown. But a lot of people are definitely focused right now on the drawdown. If I look in the past month, and that's not from the peak, it's down around 20%. And I think from the peak, it's probably down around 30% now when it hit around 124K USD. Yeah, it's, I'm feeling it, not as much as you, clearly.

I'm a bit smaller allocation, but yeah, it's, I find, and actually I think you retweeted this or whatever, I find a lot of people, you know, like when Bitcoin goes down by 10 or 20%, you a lot of people out of the woodwork, but they kind of ignore like, you know, the 450 some percent run it's gone on over the last three years. Like, it's still been a very good asset over the last while. Actually, I think it's like the best performing asset over the last, you know, decade at least. But I mean, you have to be comfortable with the volatility. I mean, I think when I bought it back in 2021, I think I was underwater like 60% very quickly. But I mean, I'm glad I held on. Yeah. Yeah. Even if you.

bought it at the peak in 2021, you're still up probably around 35, 40%, which is, it's not the worst. The markets are up probably a bit more since, but it's just a reminder here. And it's funny how many people will take victory laps in the moment. Oh, yeah. I don't like doing those, and I know there's been one that I won't go into too much detail, but go easy. And I could take a victory lap from myself, but I will not. You know what I'm talking about then? Now, What is causing this for Bitcoin, and there is definitely some resemblance here. And first of all, the last thing I didn't mention is Bitcoin is actually down for the year now. So it's down about 4, 4.5% for the year.

Obviously, it's going to be very volatile. I'm measuring it in U.S. dollar just because it's the most constant measurement that's used for Bitcoin. But there's a few reasons for that, probably a combination of a whole lot of them. The first one is large liquidation, so billions in leverage long. positions wiped out over the past few days and weeks. And traders tend to be very leverage, much higher leverage rates than stock investors that would be on margin. So you have to keep in mind is when Bitcoin swings, especially downwards and people are along the asset and they're using leverage, they're using, they could be using like 10, 15, 20x leverage. So it doesn't

take much to get wiped out. That will always, at least so far, given Bitcoin's track record, that will exacerbate the selling pressure because you have a whole lot of force sellers. You're also seeing here ETF outflows and weak spot Bitcoin demand. So if you're looking here from the blog.co, they have some really interesting data. If you start looking, they have spot Bitcoin ETF flows. I encourage people to look at it. And just look at the chart to get a rough idea. And you see there's some strong outflows coming here. Just looking at November 13.

They had some outflows that were approaching a billion dollars when you combine all of the ETFs together. And that was one of the, or I think the worst day in the last three months. God, that's crazy. And I think like Ethereum is taking an even bigger pounding, is it not? Isn't it down like almost 40% I think? could be yeah it usually swings a bit more than bitcoin so i wasn't i wouldn't be surprised so i'm kind of happy i trimmed i have a small ethereum position i bought years and years ago and i trimmed it when it was close to the eyes a little bit so definitely definitely happy my timing

but again it could very well go back up in six months a year it's hard to see yeah and i think the the leverage in in crypto like you don't get you just get closed out right you don't it's not like a call where you where like your brokerage will give you you know a day or two to kind of put the money in the account. I assume I've never done it. So this is just my assumption. I could be totally wrong. I assume you still have a window to add additional funding to your account. Whether they give you a whole lot of time or not that I don't know. But I would assume I remember reading something on Reddit where the person was just there was issues with the platform and they just weren't able to put the extra collateral or the extra liquidity and U.S. dollars, for example, to cover the position

and then they got wiped out. So I'm going to go on that and say you still have the opportunity, but it's not as there's not as much regulation still yet for a lot of these platforms. So that could be part of it. And they're not as big as some of the traditional brokers. Yeah. I would imagine when you're 2x leverage like stocks and you get a margin call like it's a little you know there's going to be more urgency i guess if you're 10x leverage on crypto because yeah i mean yeah it's yeah so that's a lot of the sell-off as well i would imagine i think it just makes things worse right instead of being maybe a 20% sell off it's a 30% sell off or i'm just throwing numbers out there but just to give people an idea now there's low liquidity in the crypto markets or their

books across major exchanges are thin. So when there's increased selling, it puts even more pressure on the price because there's less buyers that are there. So more seller or less buyers, going to put some downward pressure. Macro risk off environment. And this will apply to some of the stocks that we'll be talking about is higher for longer rate expectations. We're seeing that now with the Fed that there's, I think, about 50-50 chance the last

time I looked for a rate cut in December. when it used to be close to 80, 90% before the previous rate cut. Signs of slowing economic growth is probably causing some investor to de-risk, although those signs have been there for a little bit of time. This is nothing new. Probably, yeah, definitely the last four or five, six months. And as much as I think long-term Bitcoin will do well, I place it in the hard asset category because it can't be created out of the thin air.

but the reality is that many investors still see it as a risk asset and trade it as such. So you have to keep that in mind and you have to remind yourself like why are you owning Bitcoin? Are you trying to make a quick buck or are you owning it because you believe in the asset and you believe it as a good store of long term, store of value on a long term basis? Because short term, if you're not, if you're putting too much of your eggs in that one basket, you'll get that your face ripped off. So you have to keep that in mind. And maybe on the macro front, and I don't know what you think about that,

but maybe you're starting to see now the lag effect of the tariffs that the U.S. put. Maybe you're starting to see that hurt households in the U.S. and spending in the economy, those effects that we thought would be coming sooner. Maybe now we're starting to see the effects of that. That could be another reason. Yeah, because you had, we don't go over it, but you had Home Depot report earnings a few days ago. And they've been pretty persistent in terms of their guidance, kind of maintaining the guidance and saying, like, activity is going to pick back up. But they ended up reducing guidance this recent quarter.

And they just said, like, they don't see the environment improving over at least the near term in terms of like home improvement, things like that. And they have mentioned, like, people just aren't selling their homes probably because, you know, a lot of them have maybe those pandemic rate mortgages, but I think another thing is, it's hard to sell when you have a 3% mortgage. Yeah, it's very hard to sell. But I think, yeah, I think there's a lot of cracks, I think, in the economy showing. I mean, even the GDP, I think they said it was the, the bulk of it was data center and AI, like outside of that, like there was next to no growth.

And I think consumers are pulling back massively. Yeah, yeah, exactly. And I think you're starting to see a bifurcation of spending, well, even more, I think it's been happening, but that case-shaped economy where the richer spending, but the bottom, 50%, if not more, or not spending it much. And I think you're probably seeing that a bit in Canada too as well. It's not specific to the U.S. And then that middle portion is getting squeezed and squeezed even more.

And it's not because someone is rich that they'll be buying more food. they may be spending more on food, like more expensive food, but they're still eating the same volume for the most part, right? So it's always something to keep in mind. And I guess for Bitcoin, too, the last thing is there's not been a lot of new bullish catalysts

out there. So the ETF hype, you know, I think that's pretty done. Like, obviously ETFs I think will do well, but the hype is calming down. There is not really too much on the regulatory front in terms of technological catalysts either to offset the selling pressure and the market, I guess, is waiting for the next big narrative for Bitcoin.

So I think it's just a combination of a whole lot of thing and probably also just liquidity being lower starting to get drain in the markets in general. Yeah. I have nothing more to say on the Bitcoin side of things, mostly on the stock side of things. Yeah, let's go to the fun side of things. So since the end of October, and obviously I did most of these numbers yesterday and we're recording on November 19th, of course, like take it with a little grain of salt if it's a percent or two off. But since the end of October, NASDAQ is down around 6 percent, but still up close to 17 percent for the year. And that's what I'm showing right now.

So you can see the QQQQQ, which is a NASDAQ proxy, the power shares. So that one is up 17% year to date, but if you're looking here at the last month, it's definitely it's down 2.5% and even more so if you look at the peak here of late October. The SMP 500, similar situation here, down about 4% in that time period, but up close to 13% for the year. Microsoft is down close to 9%, but still up double digits for the year. Amazon and meta are definitely the two that are struggling quite a bit. on the when I check yesterday was down 11% and almost even for the year just slightly up and meta is getting smashed here down more than 20% and flat for the year so before I get going and I guess

Google is definitely the outlier Google is doing very good here the outlier so you're seeing Google is up 50.6% for the year just massively outperforming and you'll talk about the news of Berkshire buying a stake into Alphabet, I think probably offsetting some of that selling pressure that we've seen in the last few days. So what are your thoughts on all of that before I keep going a little bit here? I mean, in terms of the like the market, I think you're seeing a lot of people talking like we were talking about this before. I think there's like two groups. There's some people who don't really think this is all that bad at all because again, the S&P is only down 4%. But then you have some people that are like getting absolutely hammered because

they're in kind of a lot of those high growth names like high valuation names that are I mean I think it would be an understatement to say they're coming down to earth like we did I can't even remember when we did that quantum episode but it was pretty much right at the top it I don't even know if it could have got more peaked than that like the so there's the Righetti computing that one quantum stock it's down 60% over the course of a month ion Q is down like 50 some percent. Like, you know, I don't want to like just individual companies. I'm not necessarily saying these are poor companies, but you're seeing a lot of companies like hymns that is down a ton. Duolingo is a very popular stock that's getting absolutely crushed. So it's all kind of like those higher growth area type companies, whereas like the index itself is really not seeing a ton of pressure. So I think it's like it's kind of a tail of of two types of investors.

On the flip side, like if you owned a lot of those high. growth names in 2025, you probably were absolutely crushing it leading up to, you know, the huge drawdowns in these names. But it just, it kind of goes to show how quickly those types of companies, you know, they say the markets will take the stairs up and the elevator down. Those are elevator up. Yeah. So definitely those high risk stocks. And I know we, we both had an interaction with someone that was very bullish on hymns, the stock on Twitter. And I think, that was the perfect explanation how the market was thinking at the super high valuation because you were saying how it was probably not the best decision for the company to be buying

back the stock when they were the stock was going down they're also struggling i can't remember your your exact tweet but probably not the best allocation of capital also when they're trying to grow rapidly to just buy back the stock looking at their stock dilution to they're probably trying to offset that and just creating a floor and some more demand for the stock. But this person responded to you and I just couldn't believe it. I thought it was a joke. They said, well, the valuation's fine. If you look at 2030, it's trading right now one-time sales. I couldn't believe it, but it just goes to show the kind of mental gymnastics people are doing, investors are doing for some of these names that are training at ridiculous valuations. And they're looking at,

15 years down the line and trying to justify today's prices by not realizing how much of pulled forward growth is actually in today's prices. And the fact that this person would even mention that with the amount of disruption that we've seen in the past five, six years, and Hymns is a telehealth provider, essentially. That's what it is. Yeah, subscription service based on telemedicine. And to think that any kind of assumptions for this kind of company, this, which could be, I can think of a lot of scenarios where it gets massively disrupted, whether it's with AI or something else down in the next couple of years, to think that five years down the line, the current valuation justify it. It just, to me, that was a perfect tweet to explain what investors are thinking when they're buying these insane valuations.

yeah i think like the the the tweet kind of came down because they they started a 250 million dollar share buyback which is like it's kind of odd to me it just looks kind of like a headline grabber to to try and stop the bleeding in the share price light speed did the exact same thing like the exact same thing they said they were going to buy back a bunch of shares and ultimately it just ended up they were doing everything in the headlines to kind of stop the the stock drain and just doesn't really makes sense for a company like hymns to be buying back shares. I mean, especially if you were talking about all this promising growth. So the one thing I guess I'll say, too, is like a decline in share price doesn't necessarily mean a cheap stock. I mean, a lot of these,

the quantum stocks, for example, we're trading at, you know, 1,200 times sales. So now they're at like 500. Are they cheap? Not necessarily. I mean, it's, there's a lot of this segment of the market, which again is why I say like it reminds me a lot of 2021, I would have been the beginning of 2021. I, when there was that fallout of a lot of those high growth, like high, highly covered stocks on say YouTube by a lot of influencers, Twitter, all that type of stuff. Like if you think of companies like du lingo hymns, let's say Celsius, I'm trying to think of another, you know, a few companies, but those are heavily covered stocks on social networks.

So they're very heavily retail owned, and they've just gotten wrecked as of late. And it just, it kind of goes to show like how quickly that side of the market can, can fall out. Corweave would be another one that's gotten absolutely thrashed over the last while. Yeah, exactly. And just like Bitcoin, there could be some a drain on liquidity right now that's causing some of the pullbacks we're seeing. And we've mentioned about the U.S. economy potentially going slowing down. You're also talking about margin debt that was. at record high. Sure, it's less leverage than you're seeing in the crypto space, but as you start

getting pullbacks like that, it could escalate the sell off because you have these accounts that have to sell because they're getting margin calls. There might be used to the market is realizing finally that there are some real risk, especially on the execution on the AI side. So you mentioned CoreWeave, you mentioned, well, we've talked about Oracle before. Oracle is another one that is seeing some big drawdowns here. It's actually trading at a lower price than it was before I got that huge bump because of those massive backlogs it announced. I think it was on September 9.

So it's actually gone, it's done a round trip versus that increase. And it also goes to show how much excess that there was at that point in mind, at that point in time. And another issue that may be impacted sentiment too is you're seeing Mag 7 companies starting to issue a bit more debt to fund in part those KAPX investments. And the premise was always that while it was fine, they were spending, they could easily cover it with their castle. But maybe it's also a sign that they realize how massive these investments will have

to be and they have to supplement that. And then you add in the fact that Open AI was floating out there, the idea of a U.S. bailout potentially for them. Remember that? And then David Sacks. You didn't see that? No. So they floated the idea.

And then David Sacks, who's the AI Tsar, the guy from the All In podcast, came out and said, like, yeah, the U.S. is not bailing out Open AI. There's enough money in that space that they would essentially, you know, another company would pick up the slack somewhere. So they basically shut it down and Open AI kind of backtracked. But usually you don't float those ideas out there. You kind of float them to see. Right? And then you backtrack, say, oh, no, no, everything is fine. But I thought that was interesting. And then, of course, if you look, there's a CNN fear in greed index. That's like almost as slow as it can be right now in terms of the fear. So clearly market sentiment as shifted. And I guess the last thing on AI and to keep in mind. And we've talked, you mentioned core weave. So core weave all essentially rents out compute, AI compute power to, I think, they have a big backlog, some of the big players in the AI space.

You can think of the names. It's very easy to know which ones. And one thing that's been a concern, not only for them, but also for the Mag 7, those that are spending a whole lot on GPUs, is are they depreciating those GPUs quickly enough? And that's an issue.

And people that might, they might wonder a little bit like, okay, why would that be an issue? If you're depreciating the GPU, use. So those processors from Nvidia, AMD, whichever company, regardless of who it is, if you're depreciating them over five years

when their actual life cycle is two to three years, you're inflating your profits. So at some point, you're going to have to take the head on that part. So there are some questions about, again,

we talked about go-ease, and I'm not trying to say it's similar. It's completely different, but you're talking about earnings quality here that could be impacted. And that's a bit of a concern when these companies are literally pulling the SNP 500 on an EPS basis up. And if their earnings quality might not be as good, sure, I'm sure they're still very profitable, even with longer depreciation. But I think you're getting those doubts in the market, which is starting to put some selling pressure. Yeah, on the core we've thing, and I guess I'll give credit to Daniel Prank, because he made the video, I think, a few days ago.

So he went, he looked over CoreWeave's earnings and they had, I think, $1.3 billion in revenue. And of course, everywhere on their, like, slide deck, it just talks about EBTA, like adjusted EBITA, everywhere. And if you look, like, you know. Let's remind people what EBITA stands for. So EBTA would be before interest taxes, depreciation and amortization. So for a lot of companies, it is useful, but you need to know when it's not useful at all. And a company like Corrieve speaks on how they have like 60% plus EBITA margins.

But then when you dig into the actual results, I think it was $1.3 billion in revenue or something like that. And the depreciation was like $650 million. And then the interest expenses were $300 plus million. So you're talking about like 75% of their revenue is going towards interest expenses and depreciation, which EBITA takes away. And like again, for something like a telecom, like say where the. they're depreciating, like, assets that last, you know, 20, 25 years over the long term, like depreciation is kind of less of an impact. But when you have a company like CoreWeave, which I don't really know the, the life cycle of, of the assets, I mean, they could be five years.

It could be 10 years. It could be two years. That's where depreciation, that starts to be a real cost because that's just going to roll over and start again when you need to replace all the assets. Exactly. So essentially you're, I think just. to wrap this up for to make sense for those who are not as familiar. What it means is the faster they're depreciating, the faster you'll have to replace them and spend on your of those assets. And in this case, they're GPUs. And it really comes and questions a profitability of some of these business models. And we mentioned it for Adobe, right? They have to spend on these GPUs as well. And they have all these backlog. But remember when they came out, we said exactly,

that. Backlog is now nice and dandy and maybe they're firm contracts, but they still have to execute. And those projected sales mean nothing if maybe they're not even profitable at the end of the day. So like what does it like, you know, who cares if you have $300 billion in revenue coming or whatever the figure was if you're losing money on it? It's not a very good business model. That's pretty much the element of it. Yeah. Like you can see all this like huge huge revenue growth. But I mean, if you're depreciating assets that fast, like, the end result is your, your, your bottom line is going to be razor thin. And, you know, obviously there's only so much you can speak on EBTA before people actually expect like bottom line profits from it. Because, yeah, it's, it's very easy for a company like Corwee, for example, where 75% you can exclude 75% of your income statement stuff like in EBTA and then kind of post like, you know, 60% plus margins. very, very, very misleading. Yeah. Want to buy a stock but don't want to shell out hundreds or even thousands for a single share?

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ETF. Earlier this year, I headed to Calgary for our Stampede podcast meetup. It was a blast. I got to connect with listeners, hear a few of their stock pitches, catch them rodeo events for the first time, enjoy the fair, and just soak up the energy of the city during the Stampede, all while

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more than you think. Find out how much at Airbnb.ca. slash host. So speaking of AI, the big news on the, was it on the weekend or last Friday, I can't remember, but the fact that Berkshire is buying or started a stake in Alphabet. So Google. I think it was on the weekend because I remember releasing stuff on the week. Yeah. Yeah. Yeah. Thinking of like the Monday open I was looking at. But yeah, I mean, it looks like this is probably going to be Buffett's last big investment at the helm. Although, I mean, I don't really know if he had much to do with this. I'm not exactly sure. He didn't really have much to do with Apple back in the day. So I don't know if he had much to do with Alphabet. But I mean, I'm sure if you were to have polled investors on what is last buy,

would have been, Alphabet would probably be nowhere near the top of the list, even though Alphabet is a quality company, don't get me wrong. It's just like, doesn't really give Berkshire vibes. Pretty sure this is probably a Todd and Ted moved, like, which would have been that, you know, they're the main investment managers at Berkshire. They are the ones who kind of pushed him for Apple and which, you know, despite Berkshire selling in large quantities is still their largest position by a mile and probably one of their best investments ever. The only, I guess on the flip side, though, like if you were to have asked me like which mag seven stock berkshire would probably buy it probably be alphabet you know they have dominant market share arguably the biggest moat out of all of them even though you know that

moat was challenged like even 18 months ago they were going to get white built by AI and they they're probably you know on the flip side going to be an industry leader in AI and it was a fairly small position around 4.3 billion so i think buffett what do they have 350 billion dollars in treasuries or something like that. So it doesn't really move the needle all that much, but it's something. Yeah, probably around there. No, it's their cash pile is something else. Yeah, I haven't looked, but I think I looked a couple of weeks ago and when they

released, I think the most recent earnings and yeah, it was around 350 billion. Yeah. So they made, I think their two biggest buys recently would have been Google now and then, and then United Health. I think they did United Health back in the summer. But even then, like those two. positions would only be around $6 billion on, you know, a $350 billion cash hord. So I mean, it kind of gives you an idea of how difficult it is to deploy that amount of money. They got a long

ways to go. But and I'm sure they're not going to be any rush here. But I do remember this probably would have been like six or seven years ago. But they like Buffett and Charlie Munger had like mentioned that they regretted missing out on alphabet big time like numerous times. I think in in 2019, Munger had actually mentioned he felt like a horse's, you know what, for not buying it earlier. So it's kind of funny they buy it now, now that it's like at absolute peaks. Although I would imagine they bought it probably three, four months ago now. I don't know when they actually took the position, but these tend to come out a bit later. Yeah.

Yeah, it could easily be a few weeks ago. So if not more, it's hard to know. I think they have a certain amount of time to disclose these kind of things. So I don't remember the exact amount of thing. But, yeah, their latest financial statement, they had $382 billion if we round up. So it's barely 1%. It's 1% in change of their total cash. So yes, it is noteworthy, but it's think about your own portfolio.

And is it a big change if you just start a position of like 1.1.25% roughly, whatever the exact percentages. So, yes, people notice, but it is a, a very small percentage of what they had in cash. Anything else you wanted to add before we move on to Loblaws? No, we'll do Loblaw and then wrap it up. So. Okay, go for it.

Yeah. I mean, kind of every time I think Loblaw eventually has to slow down, it kind of just puts up another outstanding quarter. Like, it's crazy. For the amount of love that like a consumer defensive stock like Dollarama gets, I don't think Lobla gets talked about nearly as much. And it's kind of kept pace in terms of, of returns. Both of the companies are up, I think, a little over 300% over the last

five years. So revenue came in at 4.6%. Earnings are up 12%. And the company has been growing earnings per share at a double-digit pace for quite some time now, despite mid-single-digit revenue growth for that same period of time. And one main contributor to this is no doubt been buybacks. They spent $1.3 billion so far in 2025. And they've retired more than 8.5% of the company shares since 2023. I think over the last 10 years, they've bought back nearly 30% of shares outstanding. So it's a buyback machine. And it's bought back at timely amounts as well. I won't go over that. But it spent a lot of money buying back shares when they were much, much lower than it is today. Another thing has probably been, you know, big investments into the

business with excess capital. So kind of boosting margins in that regard. La Blah has doubled its operating margin from 3.5 to 7% since 2018. And when you're talking about like the volume that LaBla does, that ultimately hits the bottom line at, you know, a pretty big pace. Food retail sales were up 4.8%. Same store sales up 2%. So pretty good balance of new store growth plus existing performance. They open 76 stores over the last year. So that's about a 2% bump to their overall store counts. And and the main thing here is a focused primarily. on no frills and maxi discount formats. Pharma sales were up 4% same store pharmacy sales and they were kind of driven by

prescription and convenience purchases and I mean if you think of they own shoppers drug martin you think about it like people are very rarely shopping for I mean they're not like grocery shopping in a place like shoppers but if they go to pick up their prescription and they kind of need an item or two that's kind of where shoppers shines. It's like it's kind of like a convenience store. So, yeah, you go in, yeah, it might be a little bit more money, but you're not going to run to the grocery store to pick up a tiny item. You just pay more e-commerce sales growth increased 18% year over year.

Same thing, grocery and pharmacy kind of drove that. And it's interesting because we talked about this prior. So gross margins expanded by 20 basis points. And they said they're doing this by leveraging pricing power and kind of forcing suppliers to keep prices in check. And I don't know if you remember that Folgers thing with Walbo. Oh, yeah. I remember.

Yeah, like Folgers raise prices and La Blah pretty much just said, no. Like, if you do that, we're going to just take your item right off the shelf. So they have like, yeah, and they did. And like the volume, you know, the exposure and the volume that a lot of these retailers get to Lobla, like that's a huge, I guess you could say, position for Lobla to be in. Like if you want to jack your prices, they'll just take your product off the shelves and sell something else. And I think that's kind of resulting in them keeping prices tighter. They said their food inflation was below CPI inflation. I believe that would have been last month.

It wouldn't have been this month because they reported earlier. But I mean, overall, I think from a consumer perspective, probably one of the most hated companies in the country, but pretty hard not to love it as a shareholder. It's crazy. No, exactly. Yeah. And I'm just looking at the store count. I guess they closed a bunch of the more expensive stores and now they're reopening

them, right? Yeah. Because it peaked probably a few core earlier in the year. And then now they're opening them back up. So they must be converting some of those, right? Well, and they took, they did like a kind of a trial on like a lot of like super discount stores that like had a very limited selection items. And I don't think it worked out very well and they ended up closing those down.

I don't know if that would reflect it because I don't know if they would have put those pilots in the store counts. But yeah, store counts generally are trending up. And then if you're looking, remember people can remember at the beginning of the episode a bit earlier when we're talking about returns this year for some of the. growth stocks. Well, I think the only one in the Mag 7 group that's, uh, no, maybe the Nvidia, I don't have it, but Google Nvidia are in front, but you're doing 28.7% total returns this year for Loblaws. So they're, you could be doing worse than holding this,

this company. It's pretty close to, and video is only 32%. So yeah, there you go. It's crazy. They just, a boring company and versus Nvidia and still, uh, still holding up pretty well. I mean, They, and in terms of exercising their, I guess their leverage on suppliers, I mean, it's not surprising because Loblaws would, even with their revenues, if you put them in the U.S., they'd be a large grocer in the U.S. They wouldn't be the larger. I think there's some bigger ones, but just to keep that in perspective, that they do have a whole lot. And they're leveraging their footprint because they are definitely pushing their home brand. like PC and no name products like you're seeing more and more and we don't we don't buy chips very often but that is one thing I found really stark the difference between the loblas one of the

loblaws brands whether it's no name or like PC whichever one and then you compare it with some of the lays or some of the other big chip brands and to me it's like it's a no brain I don't even look at the other ones now I buy the fault I almost go there and then I start comparing and it could be like a buck or two difference on an item that you know is four and a half five dollars if you buy the name brand versus their brand which is two bucks like it's it's more than 50% difference oftentimes and it's really like the quality is not that much different I I really sometimes it's better actually like sometimes the quality of like PC stuff is better but yeah they they can flex what

they got right now like they're just dominant And like you said, they'd be a huge grocer, even south of the border. So they're doing a very good job. They generate a ton of free cash flow and then, you know, they just dumped that back into the business where they buy back shares. They raise the dividend too. Like, I don't know if you can find a more shareholder friendly company in Canada, especially when we're talking large caps.

Is Galen still doing those stupid commercials? I have not seen them in a while. Yeah, yeah. I think they realize that was a bad idea. Yeah, if you have cable and let us know if you're still seeing those commercials. It was good. I remember they were still running when food inflation was like going up. And I was like, man, these, this marketing team like really needs to, yeah, read the room. I think they, they were summoning the big grocers, the parliament and stuff like that. And they're still like showing like his face. I'm like, wow, this is not some good marketing right now. No, it was not good. That's what I mean. It's like from a consumer perspective, nobody hates this company more. but from a shareholder perspective, it's hard not to love it.

Yeah, and obviously they're in the market of being profitable. It's still not big margins. Like, you can hate on loblas all you want, but the reality is these kind of business models are not high margins. Blah blah is a well-run business.

Again, whether you like them and not, and I can very much understand the hatred that some have, I know, when it's a basic need like food, obviously it hits some cords. And, of course, we're seeing food banks struggling across the country and more and more people using them.

So I completely understand that. But at the end of the day, this is the system we live in. And it's not like socialists or even communism in the past. There's been, it's not like we know like any better alternatives in my opinion. You can just read on what those other system usually cause. And there tends to be food shortage because. there's no incentive for those producers or grocers to have them on the shelves. So I think we have to also keep that in mind.

I'm not saying our system is perfect, but it's most likely the lesser of, uh, lesser evils, exactly. Yeah, that's all I got. I guess we'll, yeah, we'll call it an episode. I think it was a fun one. Hopefully people enjoy the, all of the episode, but I'm sure they enjoy the part of risk assets being down. I know there's a lot of people in those stocks.

I mean, my portfolio is feeling it. I'm still up, I think, around 10% for the year, but with my Bitcoin exposure, definitely filling it, but gold has been a saving grace for me. So it's definitely offset some of those losses. Yeah, it's, uh, you know, I didn't get as much on the run up, but not feeling it as bad on the, on the drawdowns here, especially in the high growth names. So I'm happy. We'll see where the year finishes off.

I know we needed 20% plus in the S&P 500 to go back to like dot com levels of consecutive of 20 plus percent returns. I don't know if we're going to get that now. We need quite a bit. Santa Claus could be coming. That is true. Who knows? Santa Claus rally could be there.

So we never know, but there's what, six weeks left to the year. Yeah. So it could always happen what roughly 10% of the year left. So things can happen. Yeah, things can still happen. But it is part of the course, right? We invest for the most part long term. Of course, I think you and I sometimes will do little trades here and there.

If we think there's some opportunities. But for the most part, we invest for the long term. And when you do that, you have to realize that there are going to be ups and downs. And you feel the downs way more than you do the ups. So I think it's just a reminder for that. We feel it. But if you have some extra cash, now's the time to maybe look at deploying it, depending if you have some stocks on your radar.

Last episode that I came out with on Monday gave some tips on how to save some money. I encourage people if you haven't listened to it. Listen to it. It's very simple, easy to apply. I even give an example that I was able to cut my internet bill by more than 50%. So if you want more money to invest, you're feeling the pinch. I recommend that. Maybe we'll try to do another kind of financial literacy month, you and I next week or something.

So something that we may come up with. But thanks again for listening. We appreciate all the support. We will be back on Monday. I'm not sure if Dan will be there. I think we may have an interview. not sure when we'll be releasing the interview. So it will be either Dan or an interview.

I don't think I'll be solo for this one. So thanks again for listening. The Canadian Investor Podcast should not be construed as investment or financial advice. The host and guest 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.