COMMENT
US earnings season so far, on a very difficult day in the markets.

A difficult day. But if you look at the companies reporting up to the end of last week, almost 80% beat on EPS, and close to 60% beat on revenue expectations. Forward guidance, however, was really down for the second half of the year. Saw that especially in consumer discretionary and staples.

If you look at DEO, SBUX, CMG and Ford, they all guided down for the year. An example of weakness in the consumer; people are trading down, looking for value, and not buying discretionary items as much as they were.

COMMENT
Fed cuts, in light of disappointing US non-farm payroll numbers?

In the last 2 days, we've finally seen weakness in the labour markets. Up to Monday or Tuesday, everyone was expecting a soft landing with the Fed. Now, all of a sudden, the market's reversed the whole September cut and maybe we'll see that almost 2 or 3 cuts are baked in by the Fed by the end of the year.

COMMENT
AI stocks -- market's either unimpressed with revenue or concerned about spending.

Gen AI space, which is almost a Mag 7, had a great runup in the first quarter, and then flatlined through the second. Numbers reported were actually quite good in terms of the evolution of what we're going to see in data centre buildouts and MSFT benefiting from Copilot.

But the macro data is causing a real downturn.

WAIT

Superior retailer, steady and consistent revenue and bottom line growth for at least a decade. If you don't need cash tomorrow, it's always been a mistake to sell. Not huge growth (~6-8% topline, 11-12% bottom line), but growth nonetheless quarter after quarter. 

Historically trades around 30x earnings, a deserved premium. Announced subscription increase and stock took off along with the multiple at close to 50x. Lots of exuberance in the stock, be cautious. Wait for pullback to $700 level.

WAIT
Good time to start a position?

Historically, a good provider with key clients. Very good market share. Latest update caused huge issues, early days of knowing financial ramifications. Balance sheet and reputation affected. Be cautious.

DON'T BUY

Low-cost provider, and that will be key. Leader in China, but the market's been tough. Lots of rhetoric around tariffs, so lots of uncertainty about its ability to export to other markets. Be cautious.

Off his radar. He owns BMW instead, and follows TSLA.

DON'T BUY

Along with others, seeing muted sales in the EV space. Guided down for the year. Very cheap, ~6-7x earnings, will stay muted. Very little exuberance. Pure plays in the space have the advantage.

WEAK BUY
CCL vs. RCL

Up till Covid, well-positioned to take advantage of increased cruising. Had to offer new shares, which diluted shares and increased debt. Clawing their way back up from lows. Cruise industry is very positive for next 12 months. Down with overall market today.

RCL is in better shape and better managed.

BUY
RCL vs. CCL

Up till Covid, well-positioned to take advantage of increased cruising. Had to offer new shares, which diluted shares and increased debt. Clawing their way back up from lows. Cruise industry is very positive for next 12 months. Down with overall market today.

RCL is in better shape and better managed.

PARTIAL SELL

News just keeps getting better and better as to how obesity drugs can help other medical conditions. Cautious on it now, selling down as the position increased in the portfolio. Overhang is competitors coming in over next 3-5 years, and the dominant position today may not be so dominant.

PARTIAL SELL

He'd be cautious on it now, selling down as the position increased in a portfolio. Overhang is competitors coming in over next 3-5 years, and the dominant position today may not be so dominant.

DON'T BUY
Trades at 17x forward earnings.

Guided down in a very competitive space. Down 34% over 3 years. Consumers are slowing down, and this may significantly hurt volumes. 

BUY
BNS vs. TD

New CEO and a new plan. Rationalizing Latin American operations, hopefully that works; interest rates coming down should also help. Time will tell. He's equally bullish on both names, for different reasons.

BUY
TD vs. BNS

Added it a month or so ago. US money-laundering overhang, depressing the valuation to 8-9x from the gold standard in Canada of Royal Bank's 12-13x. Hoping for clarity in the fall of the monetary fine, which will clear the decks and provide room for multiple expansion.

Huge concern if they're told they can't purchase US assets for a time, but at least people will know where they stand. He's equally bullish on both names, for different reasons.

PAST TOP PICK
(A Top Pick Sep 15/23, Up 17%)

He exited around $170 as it got exuberant in the spring on improving margins. The thesis has played out. Still positive on it, but doesn't yet meet his portfolio requirement of a +20% return to the target price. 

Consumer is looking for savings, so he's neutral to fairly positive on the name at these levels.