Gordon Reid

We have to have confidence in our institutions, our banks. If you don't, you can leave. Something's changed over the last 100 years. We've all seen photos of long lines at the banks during the Great Depression, as people lined up to withdraw their money. Today, in the digital age, we can do it with our phones. That's what we saw last week with SVB, billions of dollars of deposits were withdrawn because of a lack of confidence. Regulators have to address that. The problem of 2023 in banking is liquidity.

Perhaps some. There are 5,000 banks in the US, while there are 34 in Canada. It was not a mistake to buy the bonds, it was a thought-out decision. One side of their business had started to lapse, and the managers decided to take risk. Instead of acting like a bank, they acted like a very large hedge fund. Banks have a function in society, and SVB went beyond the role of a bank. The mismatch of going long on mortgages and short on deposits didn't work their way. Deposits overwhelmed the bonds they could get rid of, they had to take losses on their bond portfolio, which led to a capital raise, leading to an issue of confidence, possible credit rating issue, and then a run on deposits. Where were the regulators while SVB was acting as it did? See his blog at goodreid.com.

Bit of a trap. Good valuation, 8x earnings. High dividend, close to 7%, which is alluring. Growth has stalled. Highly competitive space. Over time, dividend's safety has edged lower.

Lots of exciting areas, but a 21-22x PE, which is too rich in a very cyclical business.

Still likes it. Volatile, higher beta. Copper use in everyday lives is increasing, from automotive to green energy. Heavily dependent on health of economy. Copper goes as the economy goes. Cheap right now, very attractive. Be patient.

Traded off on recession worries, where projects on the books would be deferred, but this is temporary. Solid investment, less than 9x earnings, inexpensive. Consistent grower. Initiated first-ever dividend, shows confidence in future cashflow.

Gets credit as an innovator. Production levels are getting into the big leagues. Very expensive, though with a very profitable 11% net profit margin. Leader in battery tech. Bottom quartile on quality for the last 2 years.

Got nicked in the SVB banking crisis. Down, but not as much as many banks. Diverse deposit base, unlike SVB and Signature. 

His highest exposure to US regional banks, though total exposure is only about 2.5%. Believes it will come through OK, but it depends on crowd mentality, as that's what's driving things at the moment.

Stock price has come on, though perhaps not in the larger context. Gets credit for performance in 2023. Purging of really good assets to bolster cashflow. Trying to resurrect assets from the trash bin or close to it. Doing OK, but still a cashflow problem. Better choices elsewhere.

Not the value it was, but still good value. Growing rapidly. Asset light model was beneficial during pandemic. Estimated to earn $125 EPS in 2023. Notes that revenge travel won't go on forever. Well managed. 

Sold in January on valuation. Traded at 25% premium to the market, which was not sustainable.

Auto business grew 58% YOY in the latest quarter, and that's now 5% of total revenue and growing quickly. Everyone double-ordered inventory, so this has to abate. Then they'll get back to growth, which won't take long. Inexpensive growth stock. Reasonable multiple. He's being patient.

Looks at distressed situations and makes investments. $500B in assets. Fair pile of cash, about 22%, which is timely given the situation we're in. Trades at market multiple, 15x earnings. Bright people. Charging fees on increasing AUM is the name of the game.

Come off the last few months, primarily because of investments in bonds. Over the long term, rolling over bonds in a higher rate environment is a benefit. Solid holding. Pricing power on insurance side. Very well managed. 1.3x book, a good fair price.