We await the Federal Reserve decision to lower interest rates by either a half percent or a quarter percent. I think it doesn’t matter either way as the bond market still dictates they have further to go down. By all accounts it looks like the US economy is slowing but is still strong. The whole AI build out with data centers is the big factor fueling the U.S. economy.

I will start with the U.S. portfolio and the recent adjustments.  We did have a nice pullback in August and the start of September and this allowed us to pick up some deals to capitalize on the AI build out. The need for power to run these future data centers is big and we are positioning for this growth with the addition of a nuclear company, as well as an industrial company that supplies electrical equipment.  We own a good amount of energies, especially natural gas which has been weak as of late, but the long term need for natural gas remains large especially in the power area where a natural gas power plant can be up and running a lot faster then a nuclear one. I am a little puzzled recently on the price of oil especially with all the turmoil in the world and the reduction of interest rates, which are all catalysts for oil.  I like the balance sheets of our energy companies and still feel this area is undervalued.  Throw in an election and this still amounts to  higher odds for upcoming volatility to come, however; long term I am still bullish on the U.S. economy.

In Canada we are slowing faster than the U.S. and we do not have the AI infrastructure build out to help our economy.  We have been buying interest sensitive areas like real estate investment trusts and adding to our financials.  I have been using some of the Canadian funds to invest in better opportunities south of the border.  I like the U.S. regional banks and U.S. small and mid-caps, and we have been buying both of these areas.  Cybersecurity has long term growth potential and here again we have been buying a cybersecurity position for this. It is currently a challenge to find great deals in Canada and hence the broadening of the portfolio to find good growth opportunities that do not currently exist in Canada. The energy sector has been weak in our portfolio but the long term potential is still large and I like the balance sheets of the companies we own and therefore remain confident in this sector.  Like the U.S. we may have some political uncertainty which could lead to some short term volatility which we can use to our advantage.

Have a great day and I look forward to providing more updates as the year comes to a close.