Chris White, CFA

Seeing a lot of fluctuations. What's really telling about markets right now is this stairstep pattern that's emerging.

We'll see a bad market headline, or something relating to Iran/US, and the market sells off while oil spikes. Eventually we get a piece of good news, and that sends the market higher. Each time that happens, the market move higher is a bit more resilient and the following pullback is a bit more shallow. That tells him that the market's climbing this wall of worry.

Last week on the ceasefire agreement news, we saw oil drop 10-15% on the day. We don't need to see the Strait opened, or a definitive agreement between the US and Iran. We can have some starts and stops. The market's pricing in an eventual resolution. 

Markets really move on the rate of change, and that's what we're seeing here.

He really looks at the VIX as the arbiter of truth. When it spikes above 30 (as it did 2 weeks ago), that's when he looks to allocate to growth stocks. They were likely hit hardest into that drawdown, and they'll likely perform the best in a bounce back.

When the VIX is between 20-30, investors would do well position defensively. It's a time of market indecisiveness, with forward returns being quite weak. You're looking at HALO names, energy, and consumer staples.

With the VIX below 20, investors can position between growth and defensive names (with a slight tilt towards growth). Returns from this point tend to do quite well, though not as well as when the VIX is above 30.

Investors can aim for a barbell approach between HALO (Hard Assets, Low Obsolescence) stocks that are non-AI and HALO stocks that are AI. That gives you upside potential through AI, as well as through defensive sectors that are not in AI.

Definitely thinks this is a long-term story. We have a lot of supply constraints, and the growth story is still very much intact.

The data centre buildout has a lot of parallels to the railroad buildout of 100 years ago. Of course, there will be some mini-booms and busts throughout the cycle.

Chart looks excellent, momentum is up and to the right. New highs today. Lots of volatility, especially around quarterly earnings. Recent earnings beat on EPS and revenue. Backlog grew 122% YOY.

At his firm, they prefer stocks that are making new highs with momentum in their favour. Usually that indicates that something right is happening at the company.

Likes GFL, trades at a discount to US peers. Great deal for SES. As usual, the acquirer’s stock is taking a hit. He’d be comfortable converting to GFL shares.GFL has tailwinds, and you’ll get buybacks and dividends. Nice, steady performer.

Some issues. Stock’s been largely flat over last year or more. Small dividend. Expansion plans into the US as a way to mitigate tariffs. Long-term tailwinds. Concerns on debt levels. Topline growth needs more juice. Need to be patient, add on strength. Yield is 4%.

Great company. Its sonar systems are like Google Maps for the ocean floor. Structural, secular tailwind of defence spending. In January alone, received $35M order for batteries -- their moat is that they operate really well under sea pressure. Premium valuation. Small cap, but excellent growth.

Cut dividend by 56%. Peak phone ownership is a headwind. Interesting story, not largely talked about, is its AI Fabric data centres. Like a sovereign Canadian AI play -- could create tailwinds. Other areas for better income.

Telecom space has certainly been under pressure. Discount plans have been offering deals, creating internal churn. Serious headwind of reaching peak phone purchases.

Among all the Big 6 banks, this would be his choice. Clean story, premium valuation (which is fine with him). Gold standard.

Turnaround story looks real. Traded at a discount for years, now catering to the middle class consumer. Possibly more near-term upside due to valuation.

Great compounder over the years. Small-mid cap. Nice network effect of recurring revenue on its commercial leasing. Profit margins expanding. Growth is there, solid momentum. After recent drawdown, seems to be basing and moving up.

Safe stock: generally pays a lower yield, has a cheap/modest valuation, lower levels of volatility.
Volatile stock: associated with a compounder, traditionally pay low/no dividend yield, high volatility, premium valuation.

The key factor is that many investors equate volatility with risk. But really, volatility can just be the engine of compounding. Some of the best-performing stocks over the last decade have all had a 50% drawdown at some point. That’s not always a reason to sell.

He did an analysis across 1000+ stocks. Stocks that have compounded the best over the last decade look nothing like what most investors are comfortable buying. Most want a good dividend yield, low volatility, cheap valuation. Actually, some of the best-performing names have high valuation, lots of volatility, and low/no yield. These names typically take FCF and reinvest it back into the business for future growth. Nascent companies often have lumpy earnings, but the long-term trajectory is intact.