Force Fed Heaps of Humble Pie (guest: Jonathan Lansky)
Dec 1, 2023
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Guest Jonathan Lansky shares his old school stock picker approach and talks about his favorite investment names. They discuss the volatility of the market, the lessons learned from stock picking contests, and the importance of recognizing fear. The speaker reflects on their experience in the market and discusses potential trades and the growth of MDA in Canada. They also talk about the obsessive nature of market focus and the impact of market factors. The chapter explores taking advantage of low volatility, using option strategies, and analyzing gold breakout attempts. They discuss the performance of different market groups and the shift in leadership. The episode also touches on the pricing of stocks, casual conversations, and favorite beers.
Jonathan Lansky emphasizes the importance of bottom-up analysis and being cautious in the current market environment.
Dix Sporting Goods is well-positioned and trading at an attractive valuation according to Jonathan Lansky.
Jonathan Lansky sees the Athabasca Basin in Saskatchewan becoming a strategic asset for uranium mining.
Efficient management and committee-based decision-making have contributed to CN Rail's success, as noted by Jonathan Lansky.
Upcoming inflation and jobs data will provide insights into the market trajectory and economic recovery.
Central bank meetings, including Bank of Canada, Bank of England, and ECB, will provide guidance on monetary policy and economic outlooks in the next two weeks.
Deep dives
Investing in Jonathan Lansky's No Straight Lines investment letter
Jonathan Lansky, the author of the No Straight Lines investment letter, shares his stock picks, investment process, and insights into the humbling nature of investing. He emphasizes the importance of bottom-up analysis and the need to be cautious in the current market environment.
Analyzing the performance and prospects of Dix Sporting Goods
Dix Sporting Goods experienced a gap down in its stock price due to an inventory issue, but has since rebounded. The company has improved its financial metrics, including doubling its EBIT margins. Jonathan Lansky believes that despite concerns about consumer spending, Dix Sporting Goods is well-positioned, trading at an attractive valuation.
The opportunities and risks in the uranium market
Jonathan Lansky discusses the importance of a nuclear renaissance and the need for a secure uranium supply, particularly in North America. He believes that uranium mining in the Athabasca Basin in Saskatchewan will become a strategic asset. Lansky owns Sprott Physical Uranium Trust and NextGen Energy as potential investments in the uranium market.
The success and efficient management of CN Rail
CN Rail's efficient management, characterized by a committee-based decision-making process, has contributed to its success as a well-run company. Jonathan Lansky recognizes CN Rail's strong performance and the benefits of having multiple perspectives in decision-making.
Inflation numbers to watch
Next week's release of inflation numbers will be closely watched to gauge the trajectory of prices and potential impact on monetary policy decisions.
Jobs numbers in focus
Upcoming jobs data will provide insights into the strength of the labor market and its potential impact on economic recovery and policy decisions.
Central bank meetings on the horizon
The next two weeks will see several central bank meetings, including the Bank of Canada, Bank of England, and ECB, which will provide further guidance on monetary policy and economic outlooks.
Gold attempting breakout
Gold is attempting a breakout, with spot prices at all-time highs, signaling potential bullish momentum for the precious metal.
Crude oil facing resistance
Crude oil is facing resistance around the $80 level, with a potential move lower towards summer lows, before a potential bottoming formation may occur.
Natural gas volatility continues
Natural gas prices remain volatile due to oversupply concerns and ongoing exploration efforts, with potentially further downside risks for the commodity.
Global equity market trends
China's stock market continues to face selling pressure, while other emerging markets such as India and Brazil show strength and potential for new highs. The sustainability of these trends remains uncertain.
Updates on Uranium
Uranium prices are holding steady above $80, with potential for further upside based on bullish trends; however, short-term washout events cannot be ruled out.
Volatility in the asset markets
Overall, volatility remains low in asset markets, with options presenting attractive opportunities for protection or exposure, particularly in equity and commodity markets.
Dollar outlook and its impact
The US dollar is at an important juncture, potentially resuming its prior trend if certain key levels are breached; a stronger dollar could have implications for global markets and asset classes.
Podcast Episode Summary
The podcast episode discusses various topics including the performance of small cap stocks and the potential risks of buying into the 'Mag 7' (referring to popular tech stocks like Facebook, Amazon, etc.). The conversation revolves around the idea that money may be flowing out of the Mag 7 stocks into other areas. While the domination of these stocks is acknowledged, there are concerns about overvaluation and the potential for a market shift. It is highlighted that being crowded into one trade can lead to unexpected outcomes and that there may be a need for caution in investing in small caps. The episode also touches on the subject of bond trading, negotiation of prices with brokers, as well as technical analysis of futures contracts.
Observations on Bond Trading and Technical Analysis
The podcast episode covers an array of subjects related to bond trading and technical analysis. It acknowledges the challenges of negotiating prices with brokers and the potential advantages of using ETFs for bond exposure. The importance of paying attention to trend lines in technical analysis and the significance of using the right contracts for analysis are also discussed. The episode stresses the need for risk management and a balanced approach to investing, highlighting the importance of avoiding overpaying for growth. Overall, the episode offers insights into both the bond market and technical analysis techniques.
This week Patrick and Kevin welcome to the show, Author of No Straight Lines Investments letter, Jonathan Lansky. Kev and Jonathan have a great discussion around Jonathan’s old school stock picker approach and shares a bunch of different names that he likes, talks about his process, and why investing is one of the most humbling experiences.
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