COMMENT
Still opportunities, despite elevated PE levels?

Absolutely. Today we had pretty good jobs numbers out of the US and Canada. People want those rate cuts to happen sooner rather than later, but ultimately good news should be good news. If we're creating jobs, if the economy's doing OK, that should filter into stronger earnings for companies. We've had no rate cuts in the US and the US markets are up double digits. We had our first rate cut, as expected, in Canada. Probably more to come. 

At the end of the day what really determines strong stock prices, if you're a long-term investor, is earnings -- earnings per share, earnings that grow over the long term. Valuations are at high levels, very high levels for many companies, but this is what happens in a bull market. You can't always have your cake and eat it too, and in a lousy market you can get cheap valuations in an economy that's not doing well. You have to reconcile that in your mind.

Are you going to pay up for good quality companies? Do you believe in the next 5 years they'll be bigger and better? Even if you pay too much, if you pick the right companies, there's still an opportunity to do very, very well. 

COMMENT
US vs. Canada.

Canadian market has a different dynamic than the US, missing a lot of those hot sectors -- nothing to do with AI, and commodity prices are starting to come off again. Canada has better valuations but the businesses, quite frankly, are just not as good. We don't have the same type of quality companies that we can buy in the US.

COMMENT
Outlook for Canadian dividend payers, now that BOC has pivoted to a downward rate path.

One rate cut doesn't make them that much more attractive, but if the economists are right and we see 3 rate cuts this year, and 4 next year, and GICs will offer only 3-3.5%, that will definitely make the ENBs and TRPs of the world that much more attractive. He imagines that many people sitting on cash or in GICs or high-interest savings will look to add some of those names to their portfolios.

The only problem is that some of those businesses have gotten worse in the past 5 years. Balance sheets are in worse shape, perhaps there's more competition as in the telecom industry. Banking industry has a few great quality winners like RY and NA, but others are struggling and some with serious issues.

BUY
Lost leadership position in graphics market?

Hasn't lost market share in graphics. AI benefits haven't come through in earnings, so stock sold off, but they will eventually. Very reasonable valuation for a double-digit grower. He's actively buying on this pullback.

HOLD

Aerospace, market leader, tailwinds are very strong with more travel from a growing middle class. Lots of money from maintenance contracts. Valuation OK. Strong capital allocation for growth. Don't worry about the paltry dividend. Very strong management. Top quality business.

BUY

Global. Big partnership with LLY, making adhesives and labels for weight-loss drugs. Inexpensive. Balance sheet now perfect. People are waiting for acquisitions. Strong management. Long runway for growth.

BUY

Loves management team. 15% compounder going back 20+ years. Increases dividend every single year. Does he know where oil prices are going? No. Buy it here? Yes. Special dividend? Only if oil goes to $90-95 and stays; otherwise, will just maintain dividend and buy back stock.

DON'T BUY

Problem he has is that the growth isn't there. His goal is to buy companies that do better than the S&P 500 over the long term, and KO doesn't fit the bill. Great business, especially in EMs, now asset light. 

DON'T BUY

WSP and STN are the top 2 companies in Canada. Serial acquirers. Hasn't invested in this area since burned by SNC-Lavalin. He doesn't have the same conviction for disciplined acquisition prices, or the same conviction for high ROIC, as he does for other industries.

DON'T BUY

WSP and STN are the top 2 companies in Canada. Serial acquirers. Hasn't invested in this area since burned by SNC-Lavalin. He doesn't have the same conviction for disciplined acquisition prices, or the same conviction for high ROIC, as he does for other industries.

DON'T BUY

Industrial was a very hot space, but now we're over-supplied. Fundamentals of the real estate industry not good right now. One of the best-managed REITs, discount to NAV, potential takeout candidate. Cheap valuation, but you need patience.

DON'T BUY

Took on debt during pandemic, so now a much worse business. He'd rather own businesses hurt during pandemic, but are better today. Cruises makes sense for aging population. Cruising business is tough. He'd rather own a BKNG, ABNB, MAR or HLT.

BUY

He'd rather own businesses hurt during pandemic, but are better today. Cruising business is tough. He'd rather own a BKNG, ABNB, MAR or HLT.

BUY

He'd rather own businesses hurt during pandemic, but are better today. Cruising business is tough. He'd rather own a BKNG, ABNB, MAR or HLT.

BUY

He'd rather own businesses hurt during pandemic, but are better today. Cruising business is tough. He'd rather own a BKNG, ABNB, MAR or HLT.