“And so we were told this is the golden age
And gold is the reason for the wars we wage
Though I want to be with you, be with you night and day
Nothing changes on New Year's Day”
- New Year’s Day, U2
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PORTFOLIO MANAGEMENT CONFERENCE JANUARY 2025 Part 1
Covered a lot in 2 ½ days. Lots of names we own were validated as top picks. Bullet points easier than full paragraphs and I am only hitting brief highlights. There is a lot so I will divide it into more than one part. Let’s focus on US today.
BCA Research Macro Outlook 2025
- Trump trade may not be as positive as expected.
- 2025 consensus is based on 15% earnings growth – where is this coming from?
- Labour market is not firing but also not hiring – is this a concern?
- Market thinks it is 2016 all over again but rates were much lower then
- Tax cuts will cause deficit so may be hard to pass
- Tariffs will be inflationary then disinflationary and will be a drag on growth
- Housing market in US is 3.5% of GDP but 10% of labour force is involved. This is US – guessing Canada is worse(?)
- China is in trouble due to their ineffective fiscal policy
- The time to load up on equities is when everyone is bearish which is not the case right now
Capital Economics World in 2025
- Tariffs will be a consumption tax paid by consumer
- Canada is cutting immigration more than the U.S.
- Debt in US is 100% of GDP and getting worse
- Fiscal concerns are building
- Increasing US / China rivalry. Loonie going lower?
US internet analyst
- As a company, you have to prove your value to raise price. Large caps dominate.
- Looking at apps that you use on your phone
- Brand and customer acquisition costs looked at closely
- People spend 90 mins a day on Tik Tok??
US software
- Just released outlook and a good 2025 expected
- Looking for dislocated stocks
- MSFT – AI exposure underappreciated
US banks
- Backdrop looks like 1994-1995 and banks did very well then. 2% GDP growth forecast
- Job market and new business start-ups healthy
- Onshoring is real which means manufacturing plant construction up
- Certain valuation measures elevated but not extreme and good tailwinds
- M and A accelerating
US industrials
- Set up favourable for multi-industry sector
- Risk on preferred over risk off
- 80% cyclical names and 20% defensive make up top picks
- Likes water sector, nuclear and ‘quality compounders’
US Consumers
- Stock picking for 2025 based on an elimination methodology
- Looking at companies compounding volume growth (top line)
- What economies present a macro risk also looked at
- RFK Jr a factor?
- Not chasing expensive names
- Looking at events like dates that insiders can sell as good buy points
Stay tuned for more!
Regards,
Todd Kennedy
