I will start this blog by stating that today’s writeup, while absolutely pertinent to the Canadian stock market and economy, contains a few of my personal opinions. Imagine that – me – outspoken! Never! (Ha!).
I’ve gained a reputation in contrarian investing (I even wrote a book on it recently here). In fact, I attempt to question many commonly held beliefs, and look beyond crowd-think. I’ve discussed these tools in both my book and during lectures for the MoneyShow and the CSTA. As a point of interest – one tool, should you be interested in developing a contrarians mindset, is to subscribe to Skeptic Magazine. I have for years. To be a contrarian sometimes means questioning the popular narrative – something that sounds great to ascribe to, but is always controversial when you do so. People unknowingly tend to seek refuge in the herd, while – knowingly or not – viewing those who walk away from the herd “potentially dangerous outsiders”. Its the way our brains work. Read Smart Money to learn more about that human predisposition. Its all about the Limbic system.
Case in point – my bullish stance on the markets last week, where I wrote a STRONG suggestion that the bottom had been put in (for the time being… see my EWT blog here). I suggested it was time to start buying. That was on January 24th when the SPX was bouncing around 4300. I reviewed my various reversal signals and contrarian indicators. I noted I was buying stocks with the cash we had raised in late December for our Platforms at ValueTrend. Of course, we now see in hindsight that my call was reasonable (SPX is 5% higher…so far). But – I was questioned by many people (the crowd) who were convinced the market crash had just begun. Such is the life of a contrarian.
So here I go again – I’m once again going to take on a controversial topic, because that’s what I do. I question the narrative. Todays blog is going to question some popular narratives. Its going to raise come hackles. Skip it if you can’t handle an opinion outside of the crowd. Oh – and I’m gonna pick on Justin Trudeau again. Don’t send me emails encouraging me to discontinue this type of topic. I won’t – and your email will be ignored. Unsubscribe if you don’t like my occasional rants. I’m not offended. Many subscribers enjoy my accurate market commentary enough to bear with my rants. Many even agree (imagine that!).
Disclaimer: this blog doesn’t necessarily represent the views of my employees. So hate me, if you like. Not them.
I recently watched an interview with Dan Kelly CEO of the CFIB (Canadian Federation of Independent Business). ValueTrend has been a member of this wonderful organization since 2008.. With the increasing pressures by government on small businesses, the CFIB has been an advocate for us little guys, and great resource. If you own a small business – no matter how small – I highly recommend joining. In the interview, Kelly noted CFIB’s research predicting an oncoming wave of approximately 180,000 small business closings in Canada! This, even if/ as / and when the economy re-opens after the recent Covid Wave. The problem is, according to Kelly, after a myriad of shutdowns and restrictions, many business owners cannot see a pathway to recovery.
According to the CFIB, Canada has seen the most # of days of lockdown of anywhere in the entire world!
As one small business owner explained to me, if you run a restaurant (he does) and:
- It gets closed by the government
- then re-opens,
- then closes again,
- then reopens again
After this ridiculous cycle – the original employees go and look for another more stable line of work. Can you blame them? Hence the difficulty these businesses are having. How can they be expected to retain employees, then lose them in a lockdown, rehire new employees, lose these new ones, then find new rehires AGAIN, then lose THOSE employees…over and over?
Canada leads the way… in a bad way
This country has seen 430 days of lockdowns and restrictions (CFIB statistics) for small businesses since the pandemic began in 2020. As noted above…This is more than anywhere in the world! We’re number one!…. Yay?
Further, the Canadian Government has pushed a number of mandates that have proven NOT to make a difference after a certain point of vaccine distribution. Lockdowns, masks, and mandatory vaccines and “passports” have been carried forward — despite Canada passing the BMJ Journal for medical professionals recommended saturation point of 60-80% (more emphasis was placed on vulnerable portions of the population and less-so on less vulnerable–but it averages out to 60-80%). This, after Canada reached an 84% vaccinated rate. As the world has discovered, you can still catch, AND spread Covid if you get vaccinated. Just ask Justin Trudeau, who has had the full double shot and booster regime. Yet he recently announced he has Covid! Thats right, he got Covid! While fully vaccinated and boosted! And because vaccines don’t prevent the spread, he is isolating. So mandatory vaccines and passports are because…why?
BTW–before I’m labeled as an anti- vac-er (this is a new word..I have not located the proper spelling of it). I got the Covid vaccines. They reduce the potential of death or serious repercussions in certain vulnerable individuals, although based on my health, I am not in that group. Still – I did it. I have no issues with the vaccine… It’s the enforced mandates and freedom restrictions – after an 84% Canadian voluntary vaccine adherence that I – and so many others – are concerned about. The vulnerable, and even the not so vulnerable, are pretty much covered now. Just like Justin is. And it hasn’t done much to stop guys like him getting it, and spreading it. Why is he isolating if vaccines stop the spread? From my understanding, its main benefit is to reduce your vulnerability should you get the disease. So – its great that the vulnerable are now covered. And its great that 85% of Canadians (including the less vulnerable) are covered bringing us up to the recommended saturation points.
Now that we are at that 84% level – its interesting to examine the effectiveness of other mandates. Cloth masks are now known as ineffective. Yet in Canada, don’t dare walk into a store (if its not locked down!) without one on – as useless as they are. Interestingly, many US states have removed forced masks, lockdowns, and employment vaccine mandates. Further, Biden lost a court case forcing companies with 100 employees to mandate vaccines. That, after having found that an 80% population vaccine rate is an effective and reasonable saturation level. Of note – the US states without the myriad of restrictions have not experienced materially differing fatality patterns from Canada or other states who have kept these mandates. The UK recently announced removing all of these mandates, including masks and vaccine passports, following the pattern of most of the southern states. Iceland too. More are on the path towards ending
Covid mandates. But not Canada.
So why am I writing about all of this “Freedom” stuff on a financial blog? Well, there is an absolute and direct link between short term AND long termed economic growth and these restrictions. As I noted above, ask any restaurant owner about retaining employees over the past year. Ask any retail operation, including grocers or your favorite furniture store, how these mandates have affected deliveries of products. Ask any consumer how this has effected the prices on their purchases!
A new survey by Angus Reid shows that most Canadians now want to end all Covid-related restrictions.
A study by international think-tank Plos Global noted how the relevant degree of lockdowns affected the GDP of various regions and countries across the world. The chart below summarizes their findings. In a nutshell, the higher the restrictions, the greater the negative impact on GDP. 100% lockdown areas like Canada see almost 10 times the impact on their GDP as do non-locked areas. Even as restrictions are lifted (eg – restaurants open at 50% capacity) you still look at a huge multiple of reduction in GDP vs non-locked down areas. Canada, being the most locked-down country since the pandemic began, will have current and lasting impacts by these overblown policies.
This will, of course, impact the public shares of companies impacted by supply chain issues (which are impacted by Covid restrictions) and earnings power. Further, if the CFIB is correct about 180,000 permanent business closures expected over the coming year – this impacts employment, and purchasing power by the Canadian population and the lost purchasing power of these many businesses. Look around you next time you visit any retail operation – be it a grocer or a coffee shop. Lights are on, paper towel is in the washroom, products are being sold, and employees are doing their thing. Now imagine 180,000 of these operations no longer buying the paper towel and coffee, and doing these things. Picture the impact of that loss. The chart above illustrates this on a less-human level. But it is numbers that affect us in the end.
As an investor, you need to be aware of the stocks that have been subject to these lockdowns. The implications are not just temporary on these companies. For example – is it any wonder that companies like Restaurant Brands (QSR-US) has been in a freefall since last fall? What will the lingering effects of the Canadian lockdowns have on their profits – given the high impact of Canadian earnings on their holdings such as Tim Hortons and Canadian franchised stores of Burger King, etc?
Enter the Truckers
Hats off to the Freedom Rally & Truckers Convoy. My two sons drive trucks, and I can relay to you that its a tough job, and they are rarely given the respect they deserve as essential workers in the supply chain crises. As our PM hides from yet another confrontation (Oh, right, he’s got Covid….he cannot speak) – Great Britain News joked that Trudeau and his staff don’t have the courtesy to meet with the Convoy leaders to discuss the issues because they have come down with the dreaded “Panty waste” variant of Covid. The USA has also taken notice of the disconnect between the elite Trudeau government and its citizens, calling Trudeau a “fearful despot” in this Fox commentary here.
The Trudeau government and the establishment has shown their fear of this movement through their disregard of the Freedom Convoy. Trudeau desperately attempts to demonize the convoy – all while hiding away, himself too fearful to discuss their concerns. Indeed, the majority of Canadians concerns. He fearfully (per the Fox newscast) attempts to focus on one or two fools who are bound to show up at these events, rather than on the vast majority of thousands of good, decent, patriotic Canadians who truly represent the convoy. In fact, he recently stated that he regularly attends rallies, but not those he disagrees with. This is leadership….to never hear and discuss the other side of an argument?
This truly is the outward expression of his real fear: a loss of control over the narrative.
As an aside – For a those who enjoy a good laugh, there is a song circulating called “The Cottage Coward” by Corby Kemp- thoroughly funny: Coward of The Cottage.
This so called fringe movement has seen thousands of truckers across the country move in a huge convoy. Millions of Canadian supporters, and in other nations, cheered them on as they travelled. Contributions to the cause flow in every day from ordinary people. Elon Musk, Joe Rogan, Jordan Peterson are just a few of the popular commentators giving kudos. This is no fringe movement. It is a large movement, working towards bringing Canada back to reality, and away from mandates that are well past their expiry date. And hopefully bringing our businesses back in line with the rest of the world – who are lifting mandates rapidly.
Hopefully this movement is the beginning of a move contributing to the recovery of economic, and mental health of Canada. In that way, Canadians can once again enjoy a country and a stock market that is True North, Strong and Free!
Well said Keith. The CBC and CTV (CDN News) only reflect the far left liberal view. I hope your message resonates. JT should be locked up.
I think that we have to take into account our dilapidated health care system (HCS). As you noted in an earlier blog post, we spend too much and don’t get enough from our HCS. So until this pandemic under control and/or fix our HCS, we have to use mandates and restrictions in order not to overwhelmed our HCS and causing other essential surgeries to be postponed. Not doing everything one can in reducing spread has an external cost that other people will pay in the form of pain and suffering. So yes, the on again, off again restrictions on small business should be removed but (good quality) masks and vaccine mandates should maintain.
Bravo!!! Kudos to speak out the truth (again) Keith!
I am surprised by the intensity of the trucker movement, as I had given up on Canada (never mind NZ and Oz).
But Canadians are impacting the entire world now and this just might be the epic moment of true change everywhere!
Many thanks and congratulations to them all!
– Canadian in California (stuck with Governor Nosense)
What I find funny is when farmers in India were protesting in 2020, Trudeau had an opinion. Because the trucker protest it does not fit his narrative, truckers are considered “fringe” people. The people of Quebec and the GTA wake up and quit electing this band of incompetent idiots!
good work on the “trucker trading” note. I agree with many of your conclusions & disagree with others. Fundamentally, I believe mandates of any kind are a very last resort & governments need to take pause before implementing any. I especially disagree with the trucker border vaccine mandate for three reasons: 1) long haul truckers spend over 90% of their time in the “sleeper” 2) they are pros, behave themselves & treat their customers with respect 3) there was a severe shortage of this work before COVID based on my experience in my business. And I know that truckers have very high vaccination rates. While I disagree with mandates, I also do NOT respect anyone who: doesn’t get vaccinated, doesn’t respect distance from others, doesn’t avoid crowds whenever possible, doesn’t wear a proper mask in a proper manner, etc. I think those people are idiots but they are also the sort that rebel against anyone telling them what to do so they don’t respond to mandates. I think they are the reason we still have 70 people dying per day in Ontario & why you can’t get other procedures done because we have lost thousands of health care workers who have quit because they are fed. So this is not a black & white issue. One can disagree with mandates but still be disgusted with people who don’t voluntarily do what some of the mandates. I knew from February 2020 that masks were going to be helpful & we implement that in our workplace well before any government pronouncement. Part of my family is Japanese & I watched how they manage infectious disease differently in a densely populated area since SARS in 2004 and how it has been helpful.
I really feel for the restaurants. We do curbside pickup from our favourite restaurants about 3 times per week .. about the same we would dine-in before COVID. We need to help these people out if we think their services/products are worth saving for our benefit in the future. Its up to each of us to patronize their business whether locked down or not, especially since they lost their profit from liquor sales.
On the financial front, I have been “investing” in the USD by converting my CAD because I agree that Canada has more severe financial problems ahead as a result of the lockdowns. The two opposing major forces now moving the exchange rate, in my judgement, will work out such that the impact of lockdowns will more than offset the impact of oil/material rallies..
Also remember that most of the lockdown days are a result of PROVINCIAL decisions, not federal. In Ontario, I don’t think there is any party that has offered a no-lock down alternative unfortunately. Apparently, like Australia, Canadian culture is nothing like the US in the respect that Canadians are prepared to sacrifice some degree of individual freedom for what they feel is a collective “good”. I am more than comfortable with that. Since I have little respect for the American way anymore since 2016. I used to go to the US all the time for vacation .. twice per year. Since 2016, I have stepped on US soil once for 12 hours because I had to for business or face losses. I didn’t spend a dime of my own money. Up until 2016, I was a lone wolf in my family because I so admired American passion for freedom, innovation, etc. Sadly, the intolerance for differences, the racism, the pure ignorance that I’ve seen has trumped what I admired. I see Canada becoming more like the US. If that differences closes more, I don’t see any point in Canada at all. We might as well join the US since there is no geographic barrier to do so. I hope the majority of Canadians will do the right thing for the “collective” and sacrifice individual “freedoms” voluntarily to protect others, but if they don’t, then we are essentially Americans like Elon Musk, Joe Rogan. Jordan Petersen has already decided that for himself which is fine. Many Canadians, though not yet a majority judging from elections, are more like Americans. I reject their view of “individual freedoms” being more important than what is best for the collective. One thing is clear though from the division: WE HAVE NO CHANCE OF DEALING WITH CLIMATE CHANGE! So lets hope the deniers are right and it is all fake. Because if its not fake, I suggest you don’t have children or grandchildren at this point.
Agree with your take Gary, though the move away from fossil fuels is going to be a long and painful transition. Dale
Well said Keith. These mandates and vax passports don’t seem to make any sense now that people with the vax are still getting covid. My place of work there is a crew of 20, 16 are vaxxed and 4 aren’t. Over last 6 weeks 15 of the 16 got covid and 3 of the 4 unvaxed got covid. Now that we’re all recovered we sat down and talked about our symptoms. Both groups had similar symptoms, similar severity and similar duration. Basically there was no difference between the vax, boosted and unvaxed. The commonality is we’re all under 50 and no one is overweight. The problem i see is both sides are running on fear. Pro-vax is scared of covid even though for most people survival rates are 99.9%. Anti-vax is scared of the vaccine even though extreme side affects are rare.
Good luck to everyone on their investments this year and be kind to one another.
I like data Shawn, and your comment is a nice little bit of data – small sample size–but still better than an emotional reaction, which is what JT relies on in most Canadians.
100% Bang on Keith. Well said!!
Wow, that was one of your best rants yet! We love it.
The strategy of the CBC to hide the story unfolding in Ottawa is truly a disgrace. It appears that all that money that got funnelled to journalists awhile ago is paying off for Justin.
Please keep the rants going and in particular this issue should not be allowed to die.
What? Are you implying that the $600MM bribe to “accepted” media is creating a bias towards reporting JT’s narrative by those media outlets??? Oh, please…Say it ain’t so!!!
I don’t understand the truckers problem. Get the vaccine and be done with it. Its purpose is to keep us all living.
Truckers don’t go through red lights just because it’s illegal it’s because it’s potentially lethal to themselves and others.
Its a fact that obesity kills more people even than smoking does. Smoking right up there as number 2 killer.
To protect the public healthcare system, and to afford shorter wait times to save more lives, I would love to see mandates for bodyfat % and complete illegalization of cigarettes’
But, apparently that would be a violation of a persons rights to not allow them to impose the costs and consequences of their fat smokers lifestyle upon society.
There are lots of things that we could mandate. But we don’t.
If these people ‘care’ about deaths and danger to others, let me share their hypocrisy.
According to the WHO (see link below), “5.1% of global burden of disease and injury” and “in age group 20-39 years old, approx 13.5% of total deaths” are attribute to ONE thing. This is 3 million deaths EACH and EVERY year, worldwide.
That ONE thing can easily be mandated away … since we know now that governments can literally lock us in our houses and control who buys and sells.
So, if these same people care about covid mandates this much, then I would expect them to stop consuming this ONE thing because you can kill and destroy families and communities by doing so. Because its not clear how each person can handle it or what they may do when they consume it.
I imagine that most reading this, really enjoy and find pleasure in this particular freedom.
I agree with most of what you replied with but I still believe for the effort it takes to get a vaccine is minimal.
Truckers could view their chosen vocation as an advantage in this environment. Like myself in retirement they can often isolate themselves and still do their jobs unlike millions of workers who are forced to work directly with the public unless they quit as many retail/restaurant employees have.
Anyway I enjoy your TA article s.
At the end of January, Justin Trudeau posted a message on Twitter in which he announced that he had tested positive for Covid-19.
Astoundingly, at the conclusion of his message Trudeau urged everyone to get the shots even though they failed to protect him from the disease. “Everyone, please get vaccinated and get boosted,” he insisted.
Trudeau’s message shows the depth of irrationality – bordering on insanity – to which many have fallen victim. On the surface he seems to have lost touch with reality and things like common sense, evidence and logic no longer gain any traction in his thinking.
Just to summarize the absurdity of the whole situation: Having been previously vaccinated, Trudeau gets additionally boostered and three weeks later contracts Covid-19.
To put it in a different way, shortly after getting his third shot, Canada’s Prime Minister falls ill with the very disease against which these “effective” injections were supposed to protect him.
But rather than repenting of his mistake, he goes on Twitter and advises the Canadian people to do the same.
Where is any logic in this? Has Covid affected Trudeau’s brain? Or was it the injections that somehow diminished his capacity for thought and reflection?
Or maybe there are hidden agendas afoot…Makes me wonder sometimes…
I support the freedom fighters (truck drivers) who are fighting for all of us…
Having read the above comments I’ll keep it brief. Very gutsy and very thorough! Kudos Keith
Jt’s in hiding of course, we aren’t missing anything while he’s fixing his hair at the cottage. Hope he stays there. I agree, He’s an idiot and it wouldn’t surprise me if the supporters of him that you mention are probably a bunch of whiney teachers anyway. We, the JT haters are the minority PITA people now- hey -that should mean we get whatever we want for free???… – everybody gets a rant thanks to you Keith but it never gets passed this blog because captain dipsh*t owns the media. As long as its a minority government we can survive I guess. not much we can do.
I get your comments in regards to covid, but it fuels stupidity for a lot of people too. There are too many people on the planet. Covid didn’t do its job and hospitals are miss-managed- so we’ll see what happens next
I am taking your course so lets get rich or die trying…
thank you i needed that
Absolutely LOVED todays Blog. And COWARD of the Cottage (hahaha) is making its rounds.
I find your point of view interesting and refreshing.
Looks like Canada has become a 3rd world country in many ways. The G7 is very polite.
I totally support the truckers, regardless of the inconvenience that the protests cause. Vaccine mandates for these people are ludicrous. It is only a government that enjoys its power more than its citizens’ well-being that does this.
Yes, Trudeau is truly a coward! What is bothering is how Canadians have been duped for so long by Trudeau’s fakes smiles, smarmy/condescending attitude, and continuous lies for so long! (3 elections!)
Everyone should type in “liar.com” and it will take you to Trudeau’s Wikipedia page! Hilarious!
I think its sad Keith that your rant does not adequately consider the large portion of the population that is vulnerable, whether by illness, age, or vocation (health care workers in particular) that make them vulnerable to severe illness, death, or indirectly due to undertreatment of other conditions.
Not everyone is a fit athlete or uneffected by environmental toxins or lifestyle choices.
As a trained scientist, I respect the role of accumululating and assessing the data to make large scale decisions.
It is a difficult position to be in as authorities are naturally reluctant to wind back restrictions/powers they have enjoyed. So that is a point we have to watch.
This protest movement is a bit premature, and way overplayed right now in my view.
Geoff–it has long been my contention that the vulnerable need to ensure they get vaccinated. Seeing that even people who are vaccinated are still catching and spreading Covid–its really important that vulnerable people protect themselves.