Time for a pulse check - Ask yourself “How well is Canada doing right now?” Let’s quantify this using the housing market. Try to guess how many provinces have had homes increase in price over the last 12 months.
The answer – most of them.
That’s right.
Canada is doing better than many realize.
For many in the golden horse shoe, it may feel as if the sky is falling. Housing stinks, condos are a mess, factories are closing up shop and moving south. Windsor has felt the brunt of tariffs with a 10% unemployment rate.
But venture out to Thunder Bay, Victoria or Quebec city – record lows in unemployment, and a housing market that’s chugging away.
This is our fragmented economy.
The bad news - the Bank of Canada can’t cut interest rates just for Ontario and BC. Fiscal policy is going to have to do the heavy lifting. I can’t say what that will look like, but there’s one certainty when it comes to government investment and public policy – It takes time. I have a hard time seeing a big turnaround by spring.
The good news - Canada has everything the world wants. Land, water, resources, energy, infrastructure, education, healthcare. The list goes on…and it looks like the Federal government is starting to do something about it.
For all the keeners who read the federal budget – you would have noticed a BIG change in tone from the Trudeau government compared to Carney’s. Starting on page 1.
See if you can spot the difference
2024 Budget – Fairness For Every Generation
2025 Budget – Canada Strong
It’s not just me, right?
The reality is, the federal budget is not going to make or break the economy. As investors, it helps us skate to where the puck is going.
- Here's what to know about Canada's landmark energy agreement with Alberta | CBC News
- Canada agrees to join EU initiative to surge defense spending | Reuters
Portfolio Update
- Our Balanced Model was +1.06% in November
- The Paper Portfolio is up to $1,163,401, +16.3% ytd
November was quite the month for markets. 2/3 of our portfolio had a move greater than 5%, for better or for worse.
All in all, we tracked well with our benchmark given our relative underweight to equities.
Gold bullion and gold miners
- Worked well all year, leaving the likes of Bitcoin and equity markets in the dust.
- We’ll continue holding gold until Central banks stop purchasing.
Kenvue up, HR down
- Cut from the same cloth, we added KVUE and HR as tactical trades.
- KVUE was acquired by Kimberley Clarke, sending the stock up +22% in November
- HR REIT on the other hand, issued a public statement that it had not been acquired, and the stock sold off -7%.
- In the end, we’ll never be perfect. But what we can do is add companies with a greater upside skew. This way our winners win more than our losers lose.
- We continue to hold both companies.
- KVUE still has more room to run, while HR is now trading at a -35% discount to NAV. We’ll get paid the 5% yields to wait.
This month, we’ll only be rebalancing our portfolio and bringing our decliners back up to target weights.
- We considered adding Keyera and Loblaws to the portfolio. If we decide to pull the trigger, we will send out a mid-month update.
As always, If you have any questions or comments – let me know!
Much love to you and yours,
Lucas