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April 24, 2025
Sam LaBell, our portfolio manager, was on BNN Bloomberg discussing his portfolio strategy during the current market volatility caused by tariffs.
“I agree with the gold thesis,” Sam said. “We run a very simple model to explain year-over-year gold prices. They are trade-weighted U.S. dollar, S&P 500 returns and the direction of interest rates on the 10-year yield. Effectively, all three are favourable to gold.” He also discussed where he thinks the ceiling for the gold price will be and the outlook for gold demand.
He also discusses his favoured gold producers, which have low operating and geographic risk. They are Newmont Corp. (NYSE: NEM, TSX: NGT) and Agnico Eagle Mines Ltd. (NYSE, TSX: AEM), and on the streaming side, Wheaton Precious Metals Corp. (NYSE, TSX: WPM).
“The producers are in the sweet part of the cycle where they’ve got their development projects now up and running. They are starting to build volumes, and their cash flows are going through the roof, so they are deleveraging. Newmont is a great example. It just reported and had record first-quarter cash flow. They’re already paid down debt. They’ve already high-graded their assets by selling off assets. So, where does the cash go? Back into share buybacks.”
Sam also discussed sectors and names he has lowered his exposure to, such as Air Canada (TSX: AC) and TFI International Inc. (NYSE, TSX: TFII), due to economic weakness and tariff uncertainty. “These are companies that are struggling through a little bit of uncertainty.”
He also discusses Canadian banks and auto parts suppliers.
“We’re not jumping back in on autos yet,” he said.