RISKY

Very concentrated stock portfolio, leverage of 2:1. Pays out a lot in income. A bit of smoke and mirrors here, but not in a nefarious way. Twice as volatile in general as underlying markets. When things are good, they're really really good. And when things are bad, they're really really bad.

If you're OK with leverage, and you think markets are going to go higher, you'll probably have a good experience. Last 2-3 months, with all the downside market risk, have not been pleasurable.
 
The misleading part is to look just at the dividend, and say that's a great dividend. Don't be fooled; it's the leverage talking to you. There's also a risk with the preferred shares of absolutely losing your money. For sophisticated investors only.

COMMENT
Educational Segment.

What's Coming Next

He's at a cool conference in Florida. In the US, they're way ahead of Canada in terms of building portfolios with different asset classes. 

About a year ago, he was talking about moving his own personal portfolio into private equity and private credit. Take a look at VBAL, VGRO, VCNS. On a chart of the last year, you can see the ups and downs and swings in volatility. But today he had a meeting with Cliffwater Corporate Lending Fund, a fund provider that's much more steady-eddy, less volatile, but available only in the US. He's working on changing this access for Canadians.

He really likes the private market exposure, and how it lets you combine with public market exposure to ultimately smooth out the ride for investors. As society ages, more and more people won't be in their working years anymore but living off savings. Having a smoother ride in your portfolio, as a CPP would do, is really resonating with more and more investors.

If you want liquidity every day in your portfolio, then public markets will work for you. Typically, you won't see private credit and private equity with daily liquidity in an ETF format, though he has developed this type of investment at his own firm.

This will be the focus of the next 10 years of his career.

COMMENT
Trump

Before Covid, Trump presided over a fantastic economy and job growth with no inflation. But this term, Trump gets angry, lashing out and is so inconsistent that it frightens business owners until they don't know what to do; business thought they had a friend in the White House, but they have an enemy who seems upset with them. Trump expresses fury even at workers from various industries, many of whom voted for him and are worried about their jobs. Any sense that we see the Trump of term 1 will send stocks higher (last Friday), but the Trump creating uncertainty and it willing to let the market roll over sends stocks down (last Thursday). There doesn't need to be a transition period full of pain, but rather certainty in the process. If the market knows what Trump is planning, it will make investing a lot easier for businesses and investors. Without it, the market will have a hard time staying positive until the next beat down.

BUY

The CEO has gotten his act together and is outpacing peers, and he likes the new Predictions Markets Hub.

SELL

They entered a great deal (Walgreens to be taken private by Sycamore in $10 billion). If you own shares, sell and buy Costco.

BUY ON WEAKNESS

It rallied from October 2023 to December 2024, but has recently sold off. A few weeks ago, they reported a quarter that some didn't like due to weak guidance. Shares dropped 18% in one day and is now 40% off highs. The stock is too cheap now and oversold

BUY

A turnaround story with tremendous value. Are offering deals in a time when customer confidence is falling due to inflation and general economic paralysis.

BUY

They do a great job using AI to help customers write their tax returns. Their run isn't done and has a lot more room to run higher.

DON'T BUY

The merger with Skydance is a done deal. Move on. Look at Disney instead, which is cheap now.

BUY

Warren Buffett is buying Japanese banks. One mistake he has made is not recommending people to buy these banks.

DON'T BUY

Likes it, but this part of the economy is bleeding now. A tough call and is reluctant to endorse it. A fine company, but it's not the right moment.

COMMENT

On his outlook for growth he feels that part of the problem is that so many things are up in the air. The stock market as well as business and consumer sentiment are being swayed by one individual and this a pretty unusual situation. Trump has co-authored ten books and from this we know that he likes to anchor high and therefore starts with the maximum amount of demand. Then if he has to compromise he can consider himself having a win. The take-away from another book is that he likes to keep people guessing - knowledge is power so keep as much of that to yourself as possible. This is all part of his playbook. The guest thinks he is pretty serious about trade issues since he has been critical of international trade for 40 years.

DON'T BUY

It has had a big fumble and he doesn't know if they can recover. They took products off the shelf and competitors are in there and gaining market share.

COMMENT

The question was on Aritzia or Dollarama taking some of the space left by the bankruptcy of HBC and could Aritzia move back up to $70. The answer was inconclusive.

Unspecified

He likes snakes and ladders but there are no ladders here. There is uncertainty with tariffs but this is oversold with the general market. It claims to have paid down $400 million of debt and is ahead of the plan.