Lyle Stein

He's been looking at bonds vs. stocks. What is the long-term total return as opposed to what's going to happen next month or quarter? He's really not optimistic on the bond market. He can't see making money at a 4.2% 10-year treasury yield, with loss potentials coming in.

Second factor is how do you actually control risk in a portfolio? He defines risk as not having what you expect when you need it. Geopolitical concerns are high, and inflation risks haven't disappeared. He wants to balance his portfolio with things that can do well in that type of environment.

Gold is a major component of his portfolio, at a roughly 10% weight. He has gold bullion through an ETF, royalty companies, operating companies, along with a holding in Sprott (an asset manager tied to the sector). He's covered the whole waterfront. What he's looking for is income from those names, as income can get you all kinds of things. Ongoing dividends, and growing dividends are even better.

He looks at oil and traditional metal stocks as ways to participate to protect your assets against a major global currency upset. He doesn't know what that will look like, but it could happen. USD could start to weaken. We've seen the influence on markets of the carriage trade unwinding in Japan over the last few days.

So he's diversified. He finds growth in the US such as industrials and consumer stocks. One of his areas of focus has been the natural gas transition. For example, everyone's realizing that having a Generac generator is a good thing when the power goes out.

80% of the North American market is owned by Generac. The market is about 6.5% penetrated. Every 1% increase in penetration increases revenues by about $6B to the industry, so you can do the math. Hurricanes and weather outages are what drive this company. Sees outages continuing as the grid deteriorates. 

An interesting play on grid deterioration, and people taking matters into their own hands when you can't trust the local power company.

Exposed to AI, the growth in data centres, particularly in a county in Virginia (they say it's home to 60-70% of all US internet traffic). They need server farms, and natural gas is the backup power. The local electrical power producer can't keep up with all the demand that everyone's buying NVDA for. Nice yield.

Goes back to the grid story. The grid is deteriorating. Copper is the biggest input into the wires necessary to feed our EVs and the like. The mine in Chile is now one of the fastest-growing large-cap copper plays out there. Likes it.

The mega-caps have done really well because they've done really well. Earnings have been growing. Whereas the rest of the market, the other 493, doesn't see much earnings growth. The Russell 2000, also, doesn't see much earnings growth and tend to have poor balance sheets.

The thought is that when the Fed starts cutting interest rates, the balance sheets of highly levered companies will fare better, the economy will do better, it's all good, let's go. Rotations happen, money flows in and money flows out. But when you're looking at 35% of the market sitting in these mega-cap stocks, it doesn't take much to move an individual stock or even the Russell 2000. 

So if you're going to play this, the best way to do it is to look for individual names that are good value and have a good balance sheet that will win for 2 reasons. One is that their fundamentals are good, so it's a good investment. Second, because money flow will go out of the Mag 7 fund and into the Russell 2000 fund, and the pure power of money moving in will take the stock higher.

He's very, very underweight the Canadian banking industry. Much prefers US banks in this environment. Canadian economy is going to underperform for a while, as we just don't have the oomph and the growth capacity that the US does. Plus, we have more of a housing issue. 

Banks had a 40-year run as interest rates fell. They sold credit, and credit's going to get touch as interest rates rise. So, being a seller of credit isn't quite as good as it used to be. With interest rates in Canada coming down, the spread opportunities just aren't what they were.

He always thinks in terms of a 3-5 year hold, so getting out and back in is a tough timing question. Unique opportunity to play in the Canadian resource market. At the front of the pipe, a huge advantage. Canadian oil stocks are, globally, cheap; nobody likes them. 

He wouldn't recommend selling any oil stocks because, even at $77 oil or nat gas at $2, it's low and that's why the stocks are down. The beauty about commodity stocks is that a low commodity price results in a higher commodity price sometime down the road.

Hold, and you'll be fine 3-5 years from now.

He's always been told to never make a time and a price prediction. Growth stock, Azure has been great. In the right places. Trades at a multiple that far exceeds its growth potential. 

Don't look for earnings in 2025-2025. Look out to 2026, and you don't see the big double-digit gains that the market's paying for. It's a bit scary, but especially if you're looking to cash out and make money 2 years from  now.

If you need the money in 2 years then, frankly, the stock market is not where you should be. Remember, risk is not having what you need when you expect it. You don't need the surprise.

Buy a 2-year GIC, earn your 5%. You'll have, with 100% certainty, the money you need in 2 years.

Pays you a very competitive income stream, yielding about 5%. Canadian dividend tax credit. Servicing energy industry, so it fits into the long-term themes. Expects some growth in dividends. The kind of play you want to make as part of the nat gas transition and less-green-for-longer transition.

AQN vs NPI Both companies have similar yields -- around 4.9%. He owns both. AQN-T is more US focused. NPI-T is more international. The dividend with AQN-T is paid in US dollars.

AQN vs NPI Both companies have similar yields -- around 4.9%. He owns both. AQN-T is more US focused. NPI-T is more international. The dividend with AQN-T is paid in US dollars.

CN vs CP The major difference is CN-R goes more North-South into the US. CP-T goes more across Canada. Both trade with similar yields. He does not own either. Both are good for a long term investment. It is splitting hairs deciding on which one to have.

CN vs CP The major difference is CN-R goes more North-South into the US. CP-T goes more across Canada. Both trade with similar yields. He does not own either. Both are good for a long term investment. It is splitting hairs deciding on which one to have.