John O'Connell, CFA

We're burning off and will burn off more optimism. There are always uncertainties in the world, but optimism is high and so are valuations. A new US president is coming in and the US government carries a massive deficit of 6% of GDP, nearly twice of Canada's, while their interest rates are rising and potential trade wars. Meanwhile, Biden is further constricting the further transfer of chips to China--is this sound policy for America long term is a big question. Does this pile up on big companies like Nvidia and Apple, the latter of which does a lot of business in China and could face retaliatory measure by the Chinese government? Doesn't know, but possibly. Overall, investors are too optimistic as there are many risks around. Be cautious about most markets, including the U.S. The Russell 2000 is -10%, for example, so we are burning off excess, but there's more to come.

They're pushing AI and introducing a lot of services to customers. Good. He uses CRM software. They are increasing rates to customers by 9%. True, a lot of services are not necessary, so he's cancelled them for next year. Other companies will nip at CRM's heels as they roll out more AI. CRM is highly acquisitive. The high USD is hard on non-American customers.

He trimmed shares late last year and placed hedges in effect through March. The company got ahead of itself. The CEO in the last 2 conference calls pushed too hard AI, though they are a company can roll out AI enhancements to their Office 365 an cloud products. Also, they are vulnerable to European anti-trust moves. He himself won't buy it now, but you can buy it for the long term. He's up 60% on it over the last 2 years, so he's being prudent. It has burned off a lot of excess and sees it falling below $400 in a sloppy market. It will be capped at $450.

There are better tech stocks, like MSFT and Google. It's been restructuring for many, many years. They've acquired some prudent companies, but also carry many legacy assets that are obsolete in the current world.

They need to change the CEO. Investors are totally perplexed by BCE's purchase of a US company--the strategy makes no sense. Expects someone to step in and radically change things. BCE does have a good balance sheet and assets and are raising the dividend (too far). The US expansion will be costly to compete down there. They should cut or remove the dividend. Everyone is telling BCE: do something. There's a mismatch in what they pay investors and their internal capital requirements.

Trades at a reasonable valuation. Such a broad company. Their ad business continues to grow and they will remain competitive in data centres (they and Google have the best infrastructure in data centres). Prefers Amazon for its valuation and diversification.

Trades at a reasonable valuation. Such a broad company. Their ad business continues to grow and they will remain competitive in data centres (they and Google have the best infrastructure in data centres). Prefers Amazon for its valuation and diversification.

It could be a winner or loser. They have an installed user baser, but over 5 years you can't project their cash flow. Their moat is less deep than before It's too complicated to understand.

Fair to say that the US and China are in a technological war. The war the US restricts China's access to chips, then the more China will build its own chips. The US can have superior chips for a while, but when China catches up, look out. It will be a powerful competitor to the US. Chip-making is cyclical. The US blocking such access may have good intentions, but could harm the US long term.

He buys the homebuilders only a recession when they're beaten up, below book value and things are really bad. The bulls say that demographics and concerns over immigration fuel housing demand. However, it looks like interest rates will be higher for longer, so affordability becomes a major issue. The new president's policies could be inflationary.

In 2022, investors lost their minds when Mag 7 companies were spending huge to solidify their moats. AMZN continues to fine-tune their logistics network, Prime and ad (both growing well), while the data centre business is a no-brainer. Well-diversified. This CEO is taking Amazon to the next level.

He still likes it, despite fears that the new president will reduce inefficiencies and this will impact ACN. He disagrees. ACN is very well-run. One third of profits pay dividends, another third buys back stock and the rest buys new consulting companies. A good model they execute well.

Well run and uses AI a lot. It's an easy punching bag in the US for critics of the healthcare system. Health is always a political hot knife, but HC is the biggest employer in the US. Some disagree, but it's not in their interest to screw customers (by denying claims). He has been this all the way down.

GLP weight-loss drugs have hurt, and in some countries like India PEP has faced headwinds over their use of water, which is scarce is those places. 

Is a hodge-podge of consumer products, some medical business and an also-ran in businesses like hips and knees. This has always traded at a premium for being a well-run consumer package company that money managers can't get fired for owning. It's so big that it needs to be broken up.