Hello and welcome to The Download. I'm your host, Dave Richardson. And it is time to do a checkup on our favorite country and yours, Canada, with our good friend Scott Lysakowski, who is the head of Canadian Equity at Phillips Hager & North Asset Management in Vancouver. Scott, how are you doing?

Good, Dave. Thanks for having me. Good to see you again and good to hear your voice.

Always great to catch up with you. As usual, I know you're working those long hours that you do, and I do too. But I'm particularly excited about this weekend, and I know you are as well, because the Masters is on TV. And I basically catch up for a whole year of poor sleep with my Sunday afternoon Masters nap. It's the best of the year every year. Are you planning on getting in front of the TV for a little bit this weekend?

Definitely been following it. I always think this is the sweet spot of the sports calendar. You got the March Madness, the college basketball, and then you go right into the Masters. Especially out here in Vancouver, spring is in full swing here. Cherry blossoms are in full bloom and the magnolia trees. I lived here for 15 years now — or coming up on 15 years —, and I still cannot get over how spring-like spring is here. There's an actual spring here in Vancouver, and actually, you could smell it. You're out walking around, you can smell the blossoms in the air. And not only that — that's what it's like in the city — but there was 14 centimeters of new snow in the alpine overnight. So this weekend will be some Masters. We're going to get one of the last few days of skiing in and then take in some of the Masters. So I couldn't think of a better time of the year here, Dave.

Well, I think this is the last time I'm going to have you on in the spring because I just get jealous when I talk to you. I've been meandering across the country myself, and I think this is one of the things, as we get into talking about Canada and Canadian equities — Canadian economy, all issues Canada. In the last two weeks, I've been up and down, north and south, Alberta. I've been everywhere in Saskatchewan. And then this morning, I was doing a big speech for a huge group of realtors here in Toronto. And just the conversations you have with people, they're different wherever you go in the industry that they're in. So we're talking about oil and gas and commodity prices, and agriculture, when we're in Saskatchewan. And by the way, it's not just oil and gas and agriculture. They're doing some amazing things in Southern Saskatchewan around carbon capture. And again, just helping that energy transition right across the oil industry in Alberta as well. I'm sure we'll get into that because we usually do in our conversations. And then you get to Toronto and it's all about interest rates and housing. So it's an interesting place. But we always like to catch up on some of the market stats before we go deep. And what are we looking at in the first quarter? Anything interesting happened in the first quarter, statistically, around the markets that you're looking at?

Yeah, if you're looking at the first quarter, year to date, aside from what's happened in the last week or so — and we'll get to that in a minute — markets have been quite strong. At least up until the last week or so, the idea of a soft landing seemed to be permeating through markets. If you look at equity markets broadly and just look at the sectors that were leading the charge and performing the best, you had amongst them energy, industrials, financials. Of course, you've got technology in there and the more broader communication sector, if you're looking at the S&P 500. But seeing some participation from some of those more cyclical sectors, if you would have told me that, that those are the best performing sectors year to date, I would say, wow, Canada must be doing really well. When you look at it from a headline perspective, Canada is doing okay when you're thinking about up 5 or 6% year to date, but still lagging the big S&P 500. So still can't quite get the leadership spot when we're looking at equity markets. That said, of Canada, there are some good things to be said. We talked about the equal weighted versus market cap weighted. The equal weighted S&P is around where the TSX has been year to date. It is keeping pace with more of the equal weighted. We have seen a significant increase in breadth, not only in the US, where we saw the equal weighted S&P catch up to the S&P 500 or at least close that gap. We're starting to see more markets make new highs. Even Canada made a new high at the end of March, which is an interesting stat. That eclipsed the April 2022 high. So that was 470 days in between new highs for the market, which is the sixth longest period in history. So it has taken some time, but Canada has started to participate. And probably most notably it has been in the resource sectors and in the resource stocks. Not all resource stocks are participating in the same way, but we've seen strength, whether you're looking at oil, gold, copper. You're seeing a lot of strength in commodity prices, which you could argue is, I'm not sure if it's causing it directly, but at least leading to some of this persistent inflation narrative that's crept back into the market over the last couple of weeks, which has created clearly some move up in interest rates and causing some market volatility as we speak.

Yeah, it's been an interesting year so far. And again, we talked actually quite a bit on the last podcast. So a reference for anyone who's listening, this is one of the reasons why it's good to subscribe or follow, depending on where you download your podcast, and then you'll get all of the different episodes that we've done. And the last time Scott was on, earlier this year, we did talk about that disparity. We talked with Stu and some of the other guests who are on regularly about this idea of this small group of stocks, whether it's just the Magnificent Seven, as it's been called in the US, or it's a somewhat broader 10, 12, 20 stocks. Nevertheless, these are big technology companies that have some activity in artificial intelligence, and they've gone up a lot. The rest of the market, when you go to the S&P 493 or 480, the other ones have done well, but just not as well. And then the discussion Scott and I had last time was, well, why don't we have a Magnificent Seven here in Canada? And Scott proposed some interesting ideas around that. So that's worth a listen. But again, if we take that equal weight, which strips out the added value of those stocks that are running really hot, then Canada and the US look pretty similar in terms of performance thus far this year, which has not really been the case for much of the last decade when the US just overall has outperformed Canada, along with the US dollar outperforming the Canadian dollar. So you get a double whammy if you invest in the US; you get that currency appreciation as well. Do you think this ever turns around? Are we at one of those points where you would expect to see the Canadian market start to provide some better returns relative to the US and the dollar perk up a bit?

Yeah, I hope this is not a strategy, but this is something we've been hoping for to close that gap. And some of these — I'll quote a few metrics, but I'll have to caveat these — have persisted for, as you mentioned, close to a decade. I'd say first is the value proposition. Here's some more stats for you. Currently, the TSX is trading at a five multiple point discount on a price to earnings basis to the US. Typically, when we get into that five or greater multiple point discount, the one-year forward returns are quite favorable, relatively speaking. I think the stat package I was looking at that included this was going back to 1990, so 30-plus years. The forward relative returns of Canada versus the US, Canada outperforms by 8%. But we've been in a discounted valuation for some time now, and we have not seen that 8% relative forward returns, but potentially it's on the come. The other thing I would say in terms of Canada, just adding to that value proposition, is that the dividend yield on the TSX is over 3%. It was roughly 3.5%. So right off the hop, you get 3.5%. When you think about that yield relative to other things, say a 10-year Canada bond, which is roughly the same — you get a dividend yield of 3.5% versus a 10-year bond of 3.5% — that dividend yield is expected to grow over time, along with matching the earnings growth of the TSX over time. So you get 3.5% plus some growth. So that's pretty attractive. If you thought about the earnings yield relative to a government of Canada bond. The TSX currently trades at roughly 15 times earnings. That's an earnings yield of about 6.5%. If you back away the 10-year bond of about 3.5%, you're getting an extra 300 basis points or 3% extra. That's called our equity risk premium. You're taking more risk by moving into equities from bonds, but you're getting compensated by it. Over time, that's probably fairly valued, and you could even argue the longer-term average is closer to 200. There's a little bit of valuation cushion. When you compare that spread to the US, doing the same math, the earnings yield spread of the S&P 500 over a US 10-year bond, it's quite small. It's probably less than 100 basis points right now. Additionally, the dividend yield on the S&P 500 is probably about 1%. It would be certainly less than 2%. It's one in change. Even just from the starting point is a pretty good entry. The tricky thing, as I always say in Canada, is that because of the cyclical nature of the earnings, you have to believe into a longer-term view. You can't say, I'm going to buy this here, and Scott says, by the end of the year, I should get 8% more in Canada. That's not what I'm saying. I'm saying as an entry point, this is fairly attractive, relatively speaking. If you thought about the earnings growth of the TSX, it could be lumpy. I'm not an economist, and I don't even know if even the best economist can predict whether we'll have a soft landing or not. If we do have some economic volatility, or slow down, or dare I say recession at this point, the earnings for the TSX will not be strong. But if we thought over the next one to even two years, looking on beyond the next 6-12 months, I think the current forecast for earnings growth for the TSX are 7% this year and 12 or 13% next year. I don't know exactly how it's going to come, but if you thought about 5% to 10% earnings growth per year over the next two years, that's a pretty interesting proposition for a longer-term investor. I’m not able to predict the future on any time frame, and certainly on a shorter term time frame, but I do think this value proposition that's presenting itself just in the TSX as a standalone relative to some other options, fixed income, what have you, and versus other equity markets, particularly in the US, the value proposition is quite interesting when you're thinking about an upfront yield, a longer-term earnings growth, which would lead to dividend growth over time. You just have to be able to stomach some volatility, which is what we're seeing this week. And so perhaps volatility could create some opportunity for you to add to your exposure in the coming weeks or months.

Yeah. I always say this to investors when we're doing presentations. And again, this is never about being precise. We talk a lot about with Stu Kedwell on Stu’s days, the number of times he's actually caught the exact bottom of the market or sold at the exact top of the market; that's not what we're trying to do here. We're looking to try and find value over time or undervalued assets. If I buy something at a lower value, I'm ultimately going to get the benefit of it. I always tell the story in my presentations: if you live in Canada, when's the best time to buy winter clothing? Well, it's not in October or November because it's all the new clothing and it's out there and it's at full price. You want to buy new winter clothing right about now because it's a 70-80% off. If you live in Canada and a lot of other parts of the world, hey, it's going to be January again at some point in the future, and you're going to need that new winter coat. Now's the time to buy. Again, you don't see the value of it through the summer and through the fall, but eventually, boom, you get that value. I say that with a strong memory of 2011. And walking around in 2011, for years, at that point, it had been over a decade when Canada had outperformed the US, because of the US emerging out of the global financial crisis. A lot of forecasters and analysts were saying, this is an excellent time to be looking at the US. You might want to be overweight in the US because from a relative valuation standpoint, the US is more attractive than Canada. I was running into so many Canadian investors at the time saying, I don't think I ever want to invest in the US again. I'm just going to stay here in Canada. The US is done, the US is dead. Sure enough, that was exactly the turning point in early 2011 when you went from a decade of Canadian outperformance to a decade of US outperformance. And again, you start to look at some of these metrics, and it's not just Canada. It's pretty much every other market around the world when you compare it to the US, and then it's particularly concerning when the US gets this concentrated. You got to start to think that at some point it reverses, and you want to make sure that you're diversified well enough to take advantage of that. Now, Canadians tend to have, in a lot of cases, lots of Canadian exposure, but it's certainly not a time you want to abandon Canada right now just because of what's happening south of the border.

Yeah, I agree. It's interesting. I mentioned that stat of how long it took for Canada to make a new high. Then very quickly, if you think around mid-March, just around the time that Canada was making that new high. We actually had some breadth. We're starting to see more and more participation. Canada has its own narrowness issues. When that breadth was taking hold in other markets, it was happening in Canada as well. That helps move indices. The whole market takes it up to new highs. I think around that mid-March time frame, Canada was north of 7% above. The TSX was north of 7% above its 200-day moving average. We've talked about technical analysis, but that would be a fairly stretched metric, in the top quartile of most stretched in history. What's interesting to note is that in the near term, if you're looking at when things are as stretched as that, if it's one month or three months, the one-month and three-month returns are not great. They're not necessarily positive. You could have some volatility. But what's interesting is the 6-12 month forward returns from that period are actually amongst the strongest, which is maybe a little bit counterintuitive to listeners because they're saying, well, if the market's gone up a lot and it feels stretched, then a year from now, it's got to be down. That's not entirely true. It's the breadth and the participation that actually creates the momentum for a longer-term period of growth. I often talk about the volatility that we face today. It could be for whatever reason. The market was heavily discounting a soft landing, and now they're thinking about, well, inflation is more persistent. Central banks aren't going to be able to cut rates as fast or as significantly as they were before. We're going to have this high interest rate environment. You see the bond market react to that. That obviously has some follow-through effects to equity markets. I always say, I got a little sticky note on my screen that just says: volatility creates opportunity. My job as a professional investor is to say, okay, my longer-term value proposition is attractive, and my shorter-term volatility — or the market going down, equity is going down, stock is going down — is actually creating this opportunity for me to take advantage of that. We try not to get too rattled. Up until a couple of weeks ago, a soft landing was fairly heavily discounted in a number of sectors, and we're starting to see it show up in financials. We started seeing it show up in energy and industrials. This is actually great because a soft landing is good for us because the economy ticks on and the equity markets keep going strongly. But in the back of your mind, you get a little bit worried. You're like, well, now a soft landing has to happen. This idea of, I can't predict the future, but we prepare ourselves by thinking in scenarios. If a soft landing existed or was going to happen, we think stocks will trade at these prices. You could do it top-down as the market as a whole or bottom-up, stock-by-stock. Then you say, if the market was thinking about a recession, this is our downside. We're always just measuring our upside versus our downside. Strangely and perversely — hopefully people are happy to hear it — but this bit of volatility we're seeing this week — and even today, I see quite a bit of red on my screen — this sets up to come back and take advantage of the sell-off and look for whether it's individual stocks or even just increasing exposure to the equity markets as a whole because of that longer-term value proposition. Of course, in Canada, there's a little bit more dependence on this economic outcome, because if we were to go into a recession — and I'm not to predict whether we will or not — but if we were, there is some downside, and I would say some reasonably significant downside, especially after the move we had. If we are to discount a recession, whether one happens or not, if we discount one or discount what is even close to being a recession, there's probably 10 to 15% downside in equity markets. However, I would be using that as a very attractive entry point to buy into this longer-term value proposition that we see in Canada. It's certainly would present itself in other equity markets as well.

It was interesting to talk to Stu, as we were covering this off as well. But it seemed through the first quarter of the year, yields that had come down in the last two months of last year, they came down about 1 to 1.25% in different parts of the yield curve. Then they've been rolling higher since then. As you say, two weeks as we finish the quarter, and yields are 50 basis points higher than they were coming into 2024, you'd expect certain stocks that are sensitive to interest rate movements that they would have struggled and have a tough time. But those stocks have actually been some of the best stocks because what people are focused on. Instead of focusing on interest rates as we have been for much of the last two years, they start to focus on this soft landing. Soft landing, then a year out, we're going to see companies making more money. So we'll take the stock prices up and yield will come down and interest rates will come down. So a perfect scenario. And it just seems like the last couple of weeks when now you look up and you say, oh, right, now yields are up three quarters of 1% from where they bottomed out in December. Maybe that's going to have an effect on growth. Then you start to see the market, wow, maybe this just doesn't play out as perfectly as we might have thought. That's this volatility we're seeing.

Like I said, I can't predict the future. I don't think anybody can. At least I gave up on it a long time ago. If you think back to the end of October. So, the TSX is probably up 15% from the end of October. The end of October, we had close to 5% bond yields in the US on a 10-year bond. That's six months ago. A lot happens in six months, but there's been no clear answer of recession or not, or soft landing or not. It's just this market. Markets are very complex and they're very efficient and they're very dynamic and nonlinear, and they're always thinking ahead and always looking and discounting different scenarios coming back and forth. But they can be quite myopic and singular. At the end of October, it was 5% bond yields, inflation, recession, all those risks. Six months later, it was soft landing and rate cuts, and everything's fine. That's a 15% move for the TSX and an even greater move for the S&P 500. We just oscillate back and forth between these scenarios. At some point, we'll look in the rearview mirror and say, oh, yeah, I guess we did have a recession, or, oh, wow, we averted one. We won't know until we're past it. That's actually what I like about my job in the stock market is that I don't have to be able to predict the future. We just have to understand what are the scenarios that could potentially get discounted. If the stock market is heavily discounting, it actually has to be worse. If we think back to that October time frame, 5% bond yields, a lot of worry about persistent inflation and interest rates being high, and that's going to cause a recession. Well, that wasn't perfectly priced in, but that was heavily discounted. To be bearish at that moment, it would have had to be worse. Then, you fast forward to where we were a couple of weeks ago, where you had the soft-landing scenario being priced in, and you say, well, even if this was going to happen, it would have to be even better than what the market was thinking. Like I said, I don't know the answer to that. We live in this scenario analysis world and risk-reward. That's why I say that if people are quite negative, that's going to reflect itself in asset prices, whether it's stocks, bonds, commodities, etc. That's actually going to create a very attractive opportunity. Not to say because I know there isn't going to be a recession. What I am certain of is the market will contemplate there not being a recession at some point in the future, and we'll get to harvest the returns that we captured in that attractive risk-reward proposition. We're only a week or so into this. I'm not predicting a very severe correction, but we're going to oscillate between these two outcomes for some time. As investors, we need to be flexible with our thinking and looking to take advantage of the opportunities that get presented to ourselves.

Yeah, and a couple of things to keep in mind, because I know you love your market stats, but you know when we have a start of the year, a first quarter that looks like this, with the number of new highs that we had through the first quarter, the level of returns that we've had, then that typically results much more often than not in a positive year. So then when you start to say, well, you start to think of the year as 12 months as your analysis that maybe in your term, there's some volatility, But then from your stats, 6 to 12 months out from there, it actually looks pretty good. That lines up with that. And then, as you know, the US election year, out of the four years of the presidential cycle, tends to be the best year of performance. It's set up for a pretty decent year. But again, make sure you're getting good value for what you're buying. Make sure you're buying quality. Make sure that you are not taking too many big moves, that you're trying to dollar cost average into the market to take advantage of this volatility in the near term. And as you say, we keep saying the same word: opportunity, opportunity, opportunity. Make sure you're viewing that volatility as an opportunity to find those stocks or those areas that you want to be investing in, because this sets up pretty well for that. So, Scott, I just want to... Sorry, you wanted to add something there.

No, you made me think about the seasonal patterns. You're quoting all these cycles, and I try not to get too deep into these seasonal patterns. You've heard the saying «sell in May and go away». Statistically, you could show it, but there's a lot of anomalies around that. The one stat that I saw, this April to October time period on average is probably one of the lowest returning six-month periods in the calendar for the TSX. However, if you have the six-month periods from April to October, following strong starts to January to April, it's actually a much better proposition. Still not the greatest six-month period for the year, but to your point, if you start the year strong, it makes a lot of sense that you would have a correction or a reset at some point. But typically, again, that lines up with the new high statistics and the breadth statistics and the spread above the 200-day moving average. Yes, you could see some choppiness in the near term, but over the long, the 6–12-month time frame, which I think most investors have, at least that type of time frame, if not, hopefully longer, you'll like to see better periods. I don't say sell in May and go away. I say stay tuned in May and start adding. It doesn't rhyme, but something along that. The folks in marketing can come up with something better than that. But it's not sell in May and go away. It's actually pay attention in May and look for opportunities to add.

Yeah, if your last name is Lysakowski, you're always challenged because nothing rhymes with your last name, and you just struggle your whole life with finding rhymes for the most important things in your life.

We'll workshop it, Dave.

We'll workshop it. Now, we've run a bit long because we've added a lot of things in here. I did want to ask, 200-day moving average. Maybe a quick definition of how you calculate a 200-day moving average? Or any moving average. It could be 50-day, 200-day. But let's do the 200-day just so people know exactly what you're talking about.

Yeah, of course. Let's do a little technical analysis teach in here. It's just the average price, whether it's a stock or an index or a commodity has traded at over the last 200 days. Don't ask me what the significance is of 200 days. It's roughly a year. There's about 240 or 250 trading days in a year. It's roughly a year, but it’s 200. Some different technicians have different ways of thinking about it, but you'll probably hear the 200-day moving average. The way I always think about it, it's the average price paid for that instrument over the last year, roughly. If you think about it, if a stock is well above its 200-day moving average, it means the average price paid by people who have bought that stock over the last year is a lot lower. The people who have bought it in the last year have made a lot of money. That's a good thing. It's probably gone up for a very good reason. There's probably some real driver. It's not hocus-pocus. There's some reason why it's gone up. However, somebody who bought it a year ago has made a lot of money, so they might be inclined to reduce some of their exposure, take some profit off the table. That's usually if something gets really stretched. Conversely, if you think about it — and you always talk about the price moving above and below as a significant event. Let's say that stock that now gets well above, it starts to come down, or usually it's the moving average that starts to rise and fall. If a stock goes down below its 200-day moving average, now the people that have bought that stock are losing money. Nobody likes to lose money. That's a negative signal. I could go on for hours about technical analysis. It's one of my favorite tools in our toolkit that we use. But that's the basic premise. It's the average price over the last 200 days. If it gets really extended, it means somebody's made a lot of money and you're likely to see some reversion. Although, generally speaking, I would view it as a positive if a stock is above its rising 200-day moving average. That's generally good.

We've got 50-day moving averages and 100 and 150 and 18, and people use all different kinds of measures. One day we should actually do just an episode on technical analysis because I think it's a really interesting thing for people to just take a look at as they're using it. It's really for the professionals, but for people to take a look at. Let's just finish because I promised all the people that I was meeting in Alberta and Southern Saskatchewan that I would talk about the commodity super cycle. I think what a lot of people think of in those areas is oil. I saw your presentation a year ago when you said that once we get into one of these periods where you have rising commodity prices, mainly because of underinvestment in the previous decade in finding new oil, finding new copper, finding new whatever, when we're talking about the commodity space, you tend to go in an extended period of rising prices as the investment in that area picks up and catches up to the deficiency in supply. So where do you think we're at in terms of that? Because we've certainly seen strength really right across the commodity space. And is that something you think is going to continue? And then I guess that ultimately does benefit Canada, right?

It should, yes. We've talked about commodity cycles on the podcast before. Is it a super cycle or not? I gave up on that, mostly because I think it's really hard to predict. The one thing I would say, and I think I'd mentioned it last time I was on or one of the previous times, is that commodity cycles tend to be long in nature. I talk about the capital cycle. It takes a long time to put the money in and build the asset and get the production out and get your money back and earn a return. We've talked about that. I almost want to say that all commodity cycles or super cycles are just really long. The market loses interest in long term cycles and really gets focused on more shorter-term things. If you're thinking about a commodity cycle being a decade long in duration — could be even longer — you could have a number of economic cycles within that decade long commodity cycle. You'd see some volatility in commodities and commodity stocks because they are economically sensitive. I would say in terms of this commodity cycle, we're probably in the fairly early stages. We are just working our way out of all the different phases. The current phase we're in is we're probably moving out of the underinvestment phase and into what I call the scarcity phase. People say, why is gold up over the last six months or three months? There's a number of reasons that would drive things like gold or whatever in the short term, — US dollar, etc. But the big driver of commodity prices is supply and demand. We had coming out of the previous commodity cycle where we built up too much supply. We have excess supply that crushed prices and then led to a period of weak commodity prices and then underinvestment. We're moving out of that phase and into the phase where you're seeing demand. Even though demand for certain commodities is stronger than others, demand is growing. You could have your thoughts about the economy, but demand has grown, economic demand has grown over the last 5-10 years since we were overbuilt. We're working through that excess supply. What commodity markets do is they send a signal. The signal they send is in price. Hey, we're running out of stuff. You need to produce more of it. Here's a high price to put cash flow in your business and incent you to go find more of it. That’s essentially what the commodity markets are saying. We've seen that over the last, probably 12 months, coming out of the COVID low. Certainly this year, today, we've seen strong commodity prices, and then over the last 12 to 24 months. But the one thing we haven't seen is the response. Now, we have on the margin seeing new investment in copper mines, and you're seeing oil companies talk a little bit more positively about their prospects for production growth. But we're talking about low single-digit production growth, so very, very small. I like to measure it in the CapEx, the number of dollars, the amount of money that's being spent on new stuff. Building new commodity production is nowhere near where it was at the peak. There's a long way to go here. There's a number of reasons why some commodity companies might be hesitant to add — and that's probably a whole other podcast — but we haven't seen that signal. I usually say: cycles repeat or they don't repeat, but they rhyme. Some of the signposts we look for to say, oh, this is the end. We're not seeing anything close to that. I would sometimes refer to as the animal spirits. Lots of M&A activity, undiscipline behavior from the companies themselves. We're really not seeing that. We're seeing there has been some M&A, but we're not seeing big, bold moves on capital. If anything, some of these companies are probably the best prospective investments today as they have been ever. To your friends in Alberta, thinking about the Canadian energy companies, we've alleviated a lot of the headwinds that were facing the industry, whether it's lack of pipeline capacity, high-cost structure, bad balance sheets. The recent strength in energy prices over the last 12 to 24 months has put these companies in great shape. Lots of free cash flow generation. They got their balance sheets in great shape. They're starting to return some of that free cash flow to shareholders, dividend share buybacks. And they're being very disciplined of how they spend their money. You're not seeing that money going back into the ground. They're taking a very serious stance on emissions, whether people want to believe it or not. A lot of these companies, the big oil sands companies, are committed to becoming a net-zero producer of oil. We have a highly controversial pipeline in Canada that is likely to be flowing oil within the next month. A lot of these concerns, headwinds that were facing this industry have now been alleviated. These companies are in fantastic financial shape, generating a lot of free cash flow and have an outlet for their products. That's a fairly interesting investment proposition. Now, of course, the stock market has caught wind of that, and the stocks have done quite well. I think energy stocks are up 20 to 30%, year to date. There's not a secret out there, but they're actually quite in good shape today. We haven't seen, like I said, the bad behavior yet. I'm sure we will, but we haven't even seen anything close to it. There's probably some room to run in this commodity cycle. You just have to be mindful of an economic cycle in the short term within a broader economic cycle; that’s just a dynamic that you need to wrap your head around.

Yeah. Then what's important that you mentioned is they're thinking long term because we're going to go through a transition. We're going to go through an energy transition. And these companies, if they want to have a long-term future, are going to have to be a part of that transition. What was really interesting when I was down in Southern Saskatchewan, down in Estevan, is there's always excitement about oil and gas and what that's brought to the region. You always have the agriculture, but the oil and gas piece in the back and reserves and fracking. But just as much excitement around the billions of dollars that are being poured in for carbon capture. So you're still getting that oil production, but you're also doing something on the environmental side to battle against climate change. And both can generate good jobs and a strong economy in exactly the same area. So that was what was fascinating. Plus, they're awesome people. And I don't think enough people go down to Southern Saskatchewan. More people should go. Or maybe I have to apologize in advance if more people do go, but it's a fantastic place. Just make sure your gas tank is full because there's not a lot of gas stations around. Anyways, Scott, that was fantastic. We always end up running long because you're always so interesting, and we thank you for that. And enjoy the Masters this weekend. Enjoy the baseball season that's just kicking off, and hopefully we'll connect soon.

All right, Dave. Hopefully, we'll see you in Vancouver soon.

Three weeks. See you then.

Maybe we'll get to a baseball game.

Oh, I'd love that. And definitely a coffee.

All right, Dave. Thank you.