Martin Cobb, ASIP

You have to be aware of them, but certainly don't try to predict them. It's incredible to think that if we went back a year ago and he told you that we'd see the Canadian economy flatline, CUSMA not be renewed, lingering conflict in the Middle East, affordability pressures, high unemployment, and yet the TSX would be up 30%.

The stock market's much better at telling you where the economy is heading, than the other way around. Strength in corporate profits is a much bigger driver of stock markets than the economy is.

Every day it seems as though it's semiconductors and the AI buildout, while the narrative on software has moved things in the other direction. Underneath that, financials have done very well around the world. Other parts of the market are starting to perk up.

Finding good stocks with good valuations is becoming much more idiosyncratic. It's harder work, as it's not obvious where the pockets of pessimism are. But with 10k stocks around the world, there's always something to uncover.

Stocks showing up on his radar are those whose price is depressed in the short term for whatever reason, but the long-term business is attractive.

Buy it, put it away for 10 years, do very well. Suffering from software outflows from large ETFs. Revenue still growing in teens, even better on EPS. Investing a lot in capacity (but they can afford it), which customers have signed onto for the next several years. Trades at 20x PE, yet nothing's really changed.

Great diversifier. Multiple's in low teens. Might get a few synergies from acquisition of KVUE. Classic steady Eddie. Dull and boring, but good to have in your portfolio. Decent dividend.

Being acquired by KMB. Multiple's in low teens. Classic steady Eddie. Dull and boring, but good to have in your portfolio. 

Mainly custodial services, long-term compounder. Makes $$ by growing assets under management, which have grown over time, but growth not great. SPDR ETF business, decent size and growing nicely. His issue is that its worth is based on market values, less on market activity, and market valuations are up there.

He's been trimming banks in US and Canada.

His team initiated a position last year and added to it in this last drawdown. Very little wrong with the business itself. It's struggling because US customers are struggling. Continues to open stores and grow same-store sales. Close to 20x PE, steady Eddie. 

Getting chips to talk to each other has been driving demand for products. Huge pricing power. A lot of that might be already baked into the share price, sold off sharply. Scale back your position.

A year ago, he struggled to find value. Ended up buying SVNLY, which had an attractive valuation. Everything else was expensive, and even more so today. Don't forget that banks are cyclical. The good times are here, and it doesn't get much better than this. Be mindful, risk/reward isn't attractive.

Similar argument for US banks on valuation, though he's slightly less concerned about them.

Be mindful of your overall bank exposure.

Same business it was a year ago. Capital markets and asset management doing well, retail doing OK. But it's up ~70% in 12 months or so. Trading close to 3x book value, 10-year average is 2x. A bit excessive. He's been trimming Canadian banks. Still the best-quality bank in Canada.

Shortage in memory chips isn't going away anytime soon. Analysts' projected profits for this year are 10x what revenues were 3 years ago. Has lost money 9 years of the last 25. Risk/reward on the eventual normalized demand is not that favourable, don't put new $$ in today.

If you already have exposure, scale back or even exit.

Valuations are excessive. On his radar.

Valuations are excessive. On his radar.