Host James Connor welcomes Jonathan Wellum, CFA, CEO of Rocklinc Investment Partners, for a deep dive into the critical issues facing global markets today and what investors should do to survive these uncertain times. Jonathan explains why “the markets are on a knife’s edge,” why volatility is not going away anytime soon, and shares where he is finding value for his clients in these market conditions.
Worried about the markets? Schedule your free portfolio review with Wealthion’s endorsed financial advisors at https://www.wealthion.com
Jonathan Wellum 0:00 That the markets are on a knife's edge, and we need to be very careful about where we're investing and know why we're investing fundamentals that need to get straightened out eventually. I mean, just can't run zero interest rates forever. Be careful. Be attentive. Keep a little cash around. Look for value. Be be very, very don't. Be buying and chasing chasing stocks in this environment. James Connor 0:27 Hi and welcome to wealthion. I'm James Connor. Well, we saw a nice recovery in the global financial markets last week, after that big sell off the previous week, all because of the unwinding of that Japanese carry treat and weaker than expected unemployment numbers. We continue to see very weak numbers out of many discretionary companies like Disney and Airbnb, all of which are suggesting the consumer is under pressure, and after being up 20% on the year, the S&P is only up 12% does this volatility we are seeing in global markets mean we are at an inflection point in the economy. To help answer this question, my guest today is Jonathan Willem of rocklinc investment partners. And rocklink is a wealthy, UNendorsed financial advisor for Canadian investors. Jonathan, thank you very much for joining us today. How are things in Toronto? Jonathan Wellum 1:18 Good to be with you again. James, yeah, things are plotting along here in Toronto, a little bit cooler, and I can't believe we're getting closer to the end of the summertime. So think time's moving on, but lots of excitement in the markets to talk about. James Connor 1:31 Yeah, it's hard to believe we are in the middle of August, but here we go. So so much has happened since last time you and I spoke, the markets got pounded on the back of Japan lifting interest rates also a higher than expected unemployment number. And I want to start with Japan, and Japan lifted rates and the and this impacted the Japanese carry trade, and it sent reverberations throughout the global markets. Japan's nikkai was down 12% one single day, the biggest drop since 1987 and over the course of three days, it was actually down 20% which is quite hard to believe. But as an investor in North America, should we be concerned with what's happening in Japan, and should we be concerned with this Japanese carry trade? Jonathan Wellum 2:14 I think we should. We should be concerned, because they're really dealing with global markets and global capital flows, and quite a bit of the money that carry trade comes back into our own markets. In North America, it's big funds, hedge funds, playing the carry trade game. And so I do think that we need to be very attuned to that. And it does tell us that the markets are on a knife's edge, and we need to be very careful about where we're investing and know why we're investing in certain stocks and certain businesses in certain areas, wherever we are investing, we better have a pretty good handle on why and valuations and be pretty, pretty careful. And I think you, as you point out, they were raising interest rates in Japan, but that's because interest rates there have been virtually zero for decades. I mean, it's a very difficult situation in Japan. They've got virtually no growth in that place, and so they're trying to build some equilibrium there, and they're making some adjustments. So that plays to the issue of global issue, global challenges in that market and around the world. So the carry trade, yeah, it's very important, but it also tells us behind that trade there are fundamentals that need to get straightened out eventually. I mean, just can't run zero interest rates forever, and the Bank of Japan just can't keep buying up assets and printing yen. And so at some point they're going to they're going to be forced into some sustainable financial arrangements in Japan. And if that occurs, then, yeah, I think that carry trade goes away. Now, fortunately, a lot of people did unwind their carry trade, and according to the experts, probably about half of it has unwound. So that's probably a net good thing that we aren't going to have as much, but we won't be as vulnerable as we were in the past to that trade. But it's still it's still on, and I think you know it, we haven't seen the end of that yet. James Connor 3:56 And so as I mentioned, the S&P is up 12% of the year, give or take. So it's been under quite a bit of pressure from its highs that we saw earlier this summer. But as this unwinding process goes on, they're going to have to be selling down whatever assets they own. A lot of speculation. They own a lot of these high beta names like Nvidia and Apple and Microsoft, etc. But do you think we're going to see continued pressure in the S&P and the Nasdaq in the coming weeks, as this trade gets unwound. Jonathan Wellum 4:26 And I mean, even if the trade stays where it is right now, we don't have an addition to it and compounding of the problem, I think people do need to be focused on valuations. If anything, it's told us that there are certain stocks that have been the beneficiaries of large, large capital flows, whether it's because of indexing and ETFs and carry trades that you know The Magnificent Seven. And you know, there's more than just the Magnificent Seven. There's been a handful of companies that have been the beneficiaries of a lot of this capital, and they have pushed the market averages up. That's why we all. Always like to talk to our clients and say, look, look at some of the smaller cap area. Look at the Russell 2000 it gives you a much better indication of what's going on below the surface, if you will. Or if you extract the Magnificent Seven out of the S&P 500, you'll find out that those indexes haven't moved very much, and in some cases, there's a lot of stocks that are down. So I think again, it just warns us that valuations are stretched in certain areas. And if you're going into those areas now, be very, very cautious. And we can see the kind of volatility that can quickly erupt and all of a sudden, you know, we've got clients, phonies and saying, you know what's going on the market. They're seeing all of this, but as we tell them, like we don't have a lot of direct exposure to those Magnificent Seven, and we've got a lot of companies below the surface that are trading at pretty decent valuations, and they're not going to give you the wild ride. And so I think again, it just forces everybody go back to fundamentals. Fundamentals will eventually win the day. And if you're just trading on speculation or short term moves. Be very careful here. I think you know, the trading that we saw with Warren Buffett is a good indication that, you know, maybe we should watch some of these fundamentals. He's certainly watching them. James Connor 6:12 Yeah, and I want to bring up Warren Buffet and his raising of capital, but before we do that, I want to talk about the unemployment rate now. And we saw an uptick in July, it was 4.3% up from 4.1% the previous month, it bottomed at 3.5% in 2023 but are you concerned with this lift higher that we're seeing in the unemployment rate? Jonathan Wellum 6:35 Yes, we are. And again, I think you have to put it in the backdrop of a massive increase in interest rates, large, you know, increase of the cost of capital for people to fund homes, inflation, energy costs have gone up. All of these things are impacting the marketplace, and it's inevitable that that's going to eventually translate into pressure on businesses and businesses not having the same opportunity to employ as many people. They're going to start doing some kind start doing some cutbacks in terms of employment. So this is not a surprise. In fact, this is what the Fed's been trying to do, put a stranglehold on the economy, slow it down, bring inflation down. But of course, the problem with that is that it gets us closer to a recession, or certainly as much lower growth in the economy, and we're going to see that in businesses, and so we want to be very careful the kind of companies that we're buying, because there's certain businesses and industries that will be much more vulnerable to increasing unemployment and pressure on the consumer. James Connor 7:33 And do you think the number is going to continue to increase, like, is it going to move toward 5% before year end Jonathan Wellum 7:38 If they keep the rates fairly high, where they're where they're at now, given where inflation seems to be coming down, at least, you know the rate of change then, yeah, I think there will the pressure for the unemployment to go up, will continue to to edge higher. And so, yeah, we would expect that to continue to edge higher. I mean, we're not investing based upon any massive changes in that. We're just really trying to find companies that can weather a more, you know, tougher economic environment. You know, as I've also pointed out many times, and we've talked before, I mean, you've got so many of our governments running massive deficits. So, I mean, in the US, in some cases, every 120 130 days are up another trillion dollars they've added to the deficit. So these kind of things can't continue either. And so I think we just want to be cautious going forward. There's a lot of pressure on the economy, a lot of pressure on government spending too, that it's going to have to, at some point, be reined in, and that's not going to be a good thing either. James Connor 8:35 So the next Fed meeting is in September, and the probability of them cutting 25 basis points is approaching 100% and then there's also a high probability of them cutting 50 basis points. Do you think they're going to cut in September? And if so, by how much? Jonathan Wellum 8:51 I'm always hesitant to make a lot of you know, short term pronouncing, but our feeling is, if we just listen to the Fed itself, and they've been, you know, they've been signaling this for some time, I'd be more inclined to see a 25 basis point cut, but they could do 50. I mean, that's not out of the question. They might want to just do 50 and then stand back until after the election and get that out of the way and then suggest that they're not, they're not political. It's hard to say. I mean, there was another fed governor. Was one of the Fed governors I was just reading this morning saying that, you know, she's not inclined to drop the rates at all in September. So there's a real war going on here. And I think investors need to be prepared that the Fed might be slower than they think and might be behind the curve. Some people would argue right now that the Fed's a little behind the curve so, but they seem to be signaling at least a 25 basis point cut, and the economy is getting softer, and they're going to have to be very careful with how they approach this, where you know the signals are certainly, I think, giving them enough freedom and flexibility to drop at least 25 James Connor 9:53 Yes. And as you mentioned, there is a big concern that if they do cut, they're going to cut too early, and inflation might take. Up again. What are your thoughts on that? Jonathan Wellum 10:02 Well, I think at this point, it's probably the arguments, probably more geared to the fact that they might, you know, they might be behind, rather than than too fast. So I don't think that's really the issue. I mean, what's what's been prompting inflation, as we know, is just government spending and spending and spending. So you've got the fiscal situation really out of control. And then, of course, the monetary conditions, the Fed's trying to, you know, to rein in inflation. But then you you know, so you got this war going on between monetary policy and fiscal policy and but I think at the end of the day, the rates going up and inflation that's been caused just pinch the consumer so much that the pressure is going to be to drop rates, even if inflation still is a little bit higher than they want, I think there's a lot of pressure to cut rates because there's so much debt out there, and they're concerned about the financing of the debt. We're seeing that now even in the states and the mortgage mortgage numbers and the housing market, we've already seen that in Canada. We're ahead of the curve on on that, that situation in our country. James Connor 11:00 So let's talk about the consumer. Now, given that the consumer represents 70% of GDP, so whatever they do has a massive impact on the economy, we've had weak numbers out of many companies, including Amazon, Nike, McDonald, Starbucks, Airbnb, massive drop last week, but they're all suggesting that the consumer is pulling back. They're not spending money, especially when it comes to anything discretionary. What are your thoughts on this and and how much pressure Do you think the consumer is feeling? Jonathan Wellum 11:30 I think the consumers got a lot of pressure. We talked, I mean, just talking to our own clients here in Canada, but looking at, you know, so the real people we talk to real people, you talk about the pressure that's that they're experiencing. And then you look at the numbers on the companies, and it all reinforces one thing, that you can't double interest rates. In fact, more than double interest rates. You can't have 25, 3040, 50% inflation on all core food items. You can't put the gas prices up. Insurance costs. I mean, it's just shocking how much insurance costs have gone up for virtually everything, your homes, for your autos and so forth. And wages have not kept pace for most people, and so they're feeling the pinch. The money that the government's handed out during covid is long gone. And if you look at the credit card companies and the indebtedness people are now adding to the credit balances. So there's no question that the average consumer is under pressure, and that's going to be felt in businesses that are discretionary. The Airbnb ones very interesting, because that's really a highly discretionary area where it's very quick, you know, you just don't go anywhere. You're not going to rent, rent a home. But again, we've Amazon. Amazon is probably one of the lowest cost places you can go and do some shopping, but they're also seeing those trends, and that's, you know, they're a massive barometer, if you will, of the of the broader consumer. And when they're saying things are a little tight for consumers, and they're seeing people, you know, seeing those, those shifts in the spending patterns, you gotta listen, though, that's probably the much better barometer than any of the government data that you're receiving. So James Connor 13:02 as we mentioned earlier, you're a big follower of Warren Buffet in his style of investing, and he's been raising cash in the last few weeks. He sold down positions in Bank of America and also apple. He's now sitting on a record amount of capital, $277 billion which is kind of mind blowing. But what are your takeaways from this? And I know you can't really speak for him, but what do you think he's seeing? What's he concerned about? Jonathan Wellum 13:27 Yeah, you have to, you know, you really watch Buffett's actions. I mean, his words are important, and he is a tremendous teacher and instructor of investing over the years. If you're, you know, you read books written by him, or if you attend his annual meetings, he's very, very thoughtful, and he's very expressive of his investment philosophy. Most importantly, they'll watch what he does, and these often he'll be saying one thing, and he might be doing something a little bit different, especially in the short run, while he's positioning himself, because he didn't become one of the wealthiest men in the world and create a company that's worth almost a trillion dollars by investing without being incredibly shrewd and so, yeah, so when Warren Buffett is building up that kind of level of cash on his balance sheet, it tells us, I think, the broader market, be careful, that Buffett is clearly lining up for opportunities, and opportunities for him means a down market or pressure in the market, a lot of volatility, where he can swoop in and buy up, buy up, buy up companies, or positions in companies. And so I think the selling down of Apple, I mean, Apple in particular, it was a massive position. He still owns around 89 $90 billion in Apple, so it's still one of his largest positions. But he's sold down a lot, which means he's going to be paying tax buffet. Even though he talks about tax fairness and all of that, he does not like to pay taxes if he doesn't have to. He's all about shareholder value, and so for him to make some of those decisions and to pay the tax, I think it tells us that he he thinks his. To have cash. The optionality of cash to be able to make a quick investment decision is going to be important for him, I suspect also, I mean, he's 90 he'll be 94 on the 30th of August. He was born the same month and years my father. So I can keep track of him a little bit easier, but he'll be 94 and I think that knowing buffet being as competitive as he is in terms of creating wealth. My guess is that he really wants to do one, one massive transaction, another big one before he leaves this world. And I think he sees the opportunity with the markets being expensive and a lot of vulnerabilities out there, why not have some cash? It's getting 5% line it up, and if something, if it goes his way, I think he'll be, he'll be the first one to pull the trigger, and it could be a major transaction for the fellow so I think it tells a broader market, be careful, be attentive, keep a little cash around. Look for value. Be be very, very Don't. Don't be buying and chasing, chasing stocks in this environment. James Connor 16:01 And just to clarify, we don't know why he sold it. Maybe he sold it just to get his weighting down, and not because of something as he sees to be negative, right? Jonathan Wellum 16:12 Absolutely. And it's still a large position. I mean, it's still probably about 10% of the value of his of his business. So, you know, I'm just doing back with the envelope numbers in my mind, but so it's still a substantial position. And he, you know, he's, he probably made five, six times his money. He went back in 2016 so it's been an incredible investment for him apple, and he still speaks very highly of it. And he had, you know, he had talked about reducing some of it, but still maintaining a large position over time. So none of this is out of keeping with, you know, Buffett's approach and his discipline. But I think the the other reality is that he hasn't been making a lot of investments for now, for about a year and a half or so. So he hasn't been building up cash and and, you know, he could, he could see something on the horizon, a large transaction. You think of what he could buy with that money should be amazing sized business, especially if you were prepared to put a little leverage on not a lot, but just a little leverage. I mean, he could pick up an asset that's, you know, four or $500 billion I mean, it's just his capacity to spend and to buy and to make investments is shocking. It's really something to watch. James Connor 17:19 this is a nice segue into rock link, your firm. And for those viewers who might not be familiar with rock link, why don't we just discuss your investment approach and and what your investment style is like? Jonathan Wellum 17:31 I mean, I got involved back in the investment industry back in 1990 and as you pointed out, Warren Buffett is some someone that I admire, and the individual I worked with for 19 years, Michael Lee chin, over at the ASE funds, one of the first things he said to me, Jonathan, is learn everything you can about Buffett, that investing ultimately is about buying great businesses and holding them for reasonable periods of time so you can defer taxes and compound tax deferred. And he said, most people are trading too much and they don't focus enough on limited number of businesses. So that's something that is stuck with me and being ingrained in my DNA. And so that's what we do at rocklink. We we look for a handful of companies. When I say handful, 2025, tops. So we don't look at the indexes, we don't look at, you know, sort of ETFs and so forth. We're going to look at a handful of businesses, and we generally will cover off five to six different industries, because it is important, even when you're concentrating, to have reasonable diversification, because things can happen in any one industry. As you know, James, it's you can be surprised even by the best companies. And then we do a lot of due diligence. We talk to the companies, we run the numbers, we value these businesses, and then we build positions in a limited number of companies, and we think that's the best way to manage risk, because then you know the companies well, and you're also being very attuned to valuations, and that's the best way to actually perform well, because you can really zero in on companies that we think can grow at faster rates in The overall economy. And so, yeah, that's the way we approach it. Some people call it sort of value investing. You know, when we look at the companies, we're typically looking at free cash flow valuations, present value of free cash flow going forward. But also, there's some businesses where net asset value is very important. Looking at the asset value, especially if you're looking at some of the royalty companies or real estate companies, infrastructure businesses, is going to be a combination of cash flow plus, you know, the asset value of the business. And I think what I would really warn people in our at this current moment in time, look at the balance sheet, balance sheet, balance sheet, balance sheet, make sure these companies are well funded, well structured debt. If they do have debt and and they have access to capital markets, and they've got that going out a number of years, they've been able to take advantage of the low rates over the last number of years, because that's one thing that can really come back and hurt a company if their balance sheet is stressed, and we go into a slow period, sales come down, they can't cut their expenses enough, and all of a sudden. And they start bleeding, and they have a highly leveraged situation, the equity value can disappear so quickly. So really watch the balance sheets. When you've got so much debt out there and companies are vulnerable. And if you can find companies with great balance sheets and great operators, then a tough market, a volatile market like we saw even last week, can really surface some great values, and it can also provide great management teams with opportunities to expand their business and buy competitors out. And so that's what we kind of look for when we're investing, and we do all that and customize that for clients based upon their needs. So again, they come in and not every so it will find a client's age and risk appetite and so forth, and then build portfolios around that for them. James Connor 20:43 So you mentioned you have a very selective or concentrated portfolio with 20 to 25 names. What would be the breakdown between Canada and the US just in terms of investments? Jonathan Wellum 20:58 Yeah, I mean, I think the Canadian names, as we've talked about before, the majority of our Canadian names, they might be about 35% Canadian, and the rest would be US or European, mostly us, because the US has got such depth and breadth, and most of them are great global companies. But even the US, even the Canadian companies we buy, are typically Canadian base, but have significant US operations and even global operations. So I often will use the example of a of a Brookfield corporation, or something like that, which we own, the parent company, the top, top of the heap there, Brookfield court. I mean, that has assets all over the world, and yet, you know, it's a Canadian based company, so to speak. And so that's, that's an example, or even some of the financial the the royalty companies, you know, we own some wheat and precious metals, for example. Well, that has royalties all around the world, and it's US dollar denominated, because it's really pricing mostly silver and gold royalties. And so, yeah. So we have the, you know, exposure in Canada, but we find that most of our our businesses are making money in many different jurisdictions around the world. Which is what we prefer. We prefer that diversification in the business model itself. James Connor 22:10 where are you allocating capital now? And I know every client is different depending on age and risk tolerance and many other factors, but what sectors are you investing in? And maybe you can go through some names. Jonathan Wellum 22:20 yeah. So I just mentioned infrastructure. So we have the Brookfield Corporation. We like hard assets, particularly if they're non regulated. So you can get involved in a lot of infrastructure, utility type businesses, but if they're heavily regulated, that's a concern for growth, and making adjustments to the cost of capital is tough. So we like say, Brookfield Corp. We also own a couple of their subsidiaries, Brookfield infrastructure and Brookfield renewable, which we think are very well run. They also pay great dividends. And they're not expensive. I mean, they've been, they've been impacted by the massive rise in interest rates. So the pricing of those companies, we think, is actually they're quite they're quite inexpensive at this point and they continue to grow at we just had their earnings 1011, 12% growth in those businesses. So they're really good at recycling and growing their assets in the precious metals. We, as I mentioned, we own some of the royalty companies. So we have precious metals, Cisco royalty, some Franco Nevada. Again, we like those companies because they're really investment bankers to the miners, but they get all the upside of gold and silver, and some have copper and nickel and a few other base metals mixed in there. So we like those businesses, and some of those companies, again, are not ridiculously expensive. You know, some are a little bit a little dearer than others, and and then in non bank financials, we have a number of non bank financials. And in there I put a company that is sort of a non Bank Financial, slash insurance, trishura, we like to Sure, which does a lot of insurance brokerage, again, a spin out of a spin out of the Brookfield assets. We also have Burford capital, which we added just, we just been picking away and adding recently, that's a non bank. Financial provides financing for litigation, a really intriguing area, and very undervalued in terms of that business model. And then we have some consumer, consumer staples, some church and Dwight, really boring Arm and Hammer and Trojan condoms and just basic things that people buy. And real good leader in terms of value orientation. And yeah, so there's, there's some examples of some of the businesses that we don't technology. Also, we have to have this money in technology. And so we own a number of tech companies, including Roper, which is in software, Autodesk, Adobe, we we've owned Amazon. We still own Amazon. We like Amazon. We bought a lot, especially when it got when it got hammered back in 2022 early 2023 we were shocked that it dropped about 40% and then quickly went back up 80% but we like that business model. And yeah, so technology's another. Area that we constantly are trying to look for, because technology really has become basic infrastructure, essential businesses. You can't get rid of them. They have tremendous moats around them, and that's what we really like. And they're also huge free cash flow generators. James Connor 25:13 Now I'm surprised you didn't mention banks, Canadian banks, or US banks. Do you have any exposure there? Jonathan Wellum 25:18 We don't have any? Well, I shouldn't say we don't have any. We have virtually no exposure. We have some clients that have come in with large capital gains, and they have some bank stocks, but we don't have it as a fundamental position in terms of our 2025 stocks currently, that's not because we think the banks are just going to blow up or a problem. We just think that going forward with the level of debt and mortgage debt out there, and problems in a number, you know, commercial real estate and so forth, that they're just going to have a tough time over the next number of years, and we would prefer to not have any exposure there. We just don't see a lot of upside, a lot of growth. And potentially, yeah, we could, we could see some problems if the proverbial stuff hits the fan. That's not what. That's not our base case. But we really don't see a tremendous amount of upside. I think as the banks, you know, start to report, I think they'll, they'll be reporting mediocre and average numbers, and if they're making money, it'll just be on trading, but on their basic loan books, I think they'll just, they'll be there'll be some pressure, there'll be some there'll be some tension there. And for us, we just don't need to be there. We're not, we're not investing off the index. James Connor 26:30 Yes, it will be interesting to see what kind of commentary they have to say about the Canadian consumer and also loan loss provisions, because those loan loss provisions have been moving up here in the last few quarters. Jonathan Wellum 26:42 Yes, and you know, we watched the amortization periods. And you know the amortization periods for a while actually were really sneaking up to 35 years in some some of the banks, not all of them, had about 18 to 20% of the loan book had amortization periods up to 35 years. In Canada for some of the new buyers, we saw Canada, our Christy Friedland, our fearless finance minister, came out with this push for 30 year amortization, which, again, just straps people with a tremendous amount of interest costs. And that's not really the solution. The solution is to get inflation down and build more homes and get rid of regulations and free up the market, but just adding more more amateur, you know, adding to the amortization period, adding more more interest to people's costs, is not a long term solution. I think that you know that makes the banks and financial institutions actually more vulnerable, not not safer. James Connor 27:35 you made mention the fact that you do have exposure to gold through royalty companies. What about do you have any direct ownership in physical gold, or any gold miners? Jonathan Wellum 27:44 We do have a little bit in gold miners. Our largest holding in the gold miners is egg Nico Eagle, and they have also done very well this year, and that's because the management of the company, I think, is very astute. They're very careful, careful allocators. Sean Boyd's done an excellent job over many, many years. They also have tremendous minds in reasonably safe jurisdictions. Include Canada is a reasonably safe jurisdiction, depending on what government we have, but, but so, so we do have there. We also have a little bit in a couple of the silver miners, because some of our investors do like to have a little silver exposure directly, and I'm fine with that. But we typically buy, you know, the silver crest. We will, we'll buy some of the best silver companies, but they can give investors a lot of juice. And so, yeah, so we have a little bit to the in terms of miners, and we have a little bit physical, but if we're going to buy physical, we have some investors who want to buy physical. Many of them will do that on their own, and, you know, go and buy it directly. Or we'll use one. Typically, we'll use one of the spot physical trust, because we, we like those, those trusts. They're all backed by physical gold. There's no derivatives, and so they're getting what, what they're actually purchasing. So we like the spot physical trust, whether it's silver or gold. And we think those are, those are one way of going also, but those would be smaller positions are, the lion's share of our exposure to silver and gold would be through the royalty companies. James Connor 29:08 So Jonathan, the first half of the year was exceptional in terms of returns in the markets, but the second half, there seems to be a lot of increasing volatility. Okay, we have still uncertainty about the US economy and whether or not it's going into recession. We have uncertainty about the Fed and whether or not they're going to cut rates. We have the US election coming up. There's a lot of uncertainties, right? And that's leading to all this volatility in the markets. But what advice are you giving to your investors on how to proceed going forward? Jonathan Wellum 29:38 Focus on the companies and on the businesses, focus on your investments. Know what you own, know why you own them, and know what price you're prepared to own them at, and what price you get out of them at. And so I think it's really double down on your knowledge and and where you're investing there. You know again, overall, the market is not inexpensive, and there are many. Any challenges ahead that shouldn't keep you from investing, but it should focus your attention on buying good quality at good prices, reasonable prices, and that's what we're telling our investors to simply move through the volatile period last week. It was just last week. It's amazing how fast things are moving in the marketplace. That was, again, our message. We weren't not overly concerned. In one sense, you're always watching the market. You can't say you're not concerned when you see the VIX go up 140% in one day and things like that. But what you're what gives us solace and strength is the businesses that we own are largely irreplaceable businesses. These are essential franchises. They are amazing companies. They have powerful balance sheets, and they're trading at what we believe is reasonable valuations. Yes, they can come down, but we shouldn't. They shouldn't be coming down, you know, anywhere, anywhere near as much as you know, some of the some high flying companies or companies that are just, you know, storied companies and not backed by tremendous assets and balance sheets. And that's what we constantly tell our investors that you have to be prepared for volatility. If you are, if you, you know, are not prepared for a 40 to 50% drawdown in your stocks, you really should not be buying stocks. You know, if you need that money in six months, a year or even two years to buy a house, be very careful. You should not be buying, you know, volatile securities, and so again, as part of part of that is just wisdom and asset allocation and knowing what you own. That's really what we're trying to emphasize to our investors constantly. But the thing is, if you go through a period where the market goes up, as you know, James, and it continue to continues to go up, and all the averages are going up, people just get lulled into into complacency so quickly, even though they tell themselves they'll never do it again. They'll never, they'll never behave like they did in 2000 they'll never behave like they did in 2008 and soon as they, you know, the market gets choppy. You're on, you know, on the phone with people, and they want to pull everything out immediately. And you're just like, like you're back, you're back to square one again. And so our message constantly is the same, be careful. Know what you own. Have proper asset allocation. Make sure that if you're going to need the money in the next little while, you're not putting it into high risk. You know securities, or you know our securities are going to be volatile and and be patient and don't just have a knee jerk reaction. I think it's buffet that says if you're taking your cues from the market, if that's if that's where you're taking, your cues on how you're going to act, you're going to get yourself into a lot of trouble. You must master the market. Don't let the market master you. James Connor 32:31 Well. Jonathan, always great insights. And as we wrap up, if someone would like to learn more about you and your firm. Rocklinc, where can they go? Jonathan Wellum 32:38 Our website is terrific. So, uh, rocklinc.com and that's link with at C, so, r, O, C, K, L, I, N, c.com, if you do put info in front of that info@rocklinc.com that'll come right to a couple of our key guys here, and we respond to you and our phone number 905-631-5462, which is link, depending if you have that on your, your dial, on your, on your, what your what you're inputting, your numbers on and and any of the extensions, you'll get a hold of one of our professionals, and we would love to talk to you. And as as, I think, as you emphasize with wealthion, there's no charge. We're more than glad to look at your financial situation. No pressure. Come on in. We'll, we'll, we'll go through your, you know, your existing investments, give you our opinion on them, and where, what we will do in terms of investing. And we, we welcome anybody who wants to have a chat and come in. Please, by all means, reach out to us. We'd love to hear from you. James Connor 33:36 Well, once again, Jonathan, thank you. Jonathan Wellum 33:38 Thank you very much. James. James Connor 33:40 Well, I hope you enjoyed that discussion with Jonathan. Will. I'm going to give you some insights on what to expect in the financial markets in the coming days and weeks. We all need help when it comes to planning and preparing for our financial future. And if you have a financial advisor and you're happy with him or her, then great, stick with them. But if you don't, or maybe you want a second opinion, consider having a discussion with a wealthion endorsed financial advisor@wealthion.com it's a free service that wealthion offers to all of its viewers. You can find out more@wealthion.com thank you very much for joining us today, and I look forward to seeing you again soon.
