Today on the show, we sit down with long-time contrarian investor Hugo Lavallee as he discusses a wide range of topics including commodities, equities, how he’s managing his climate leadership  fund plus his contrarian style of investing in today’s current market environment. Hugo comments on commodities and says he’s treating all commodities equally. But he notes he owns more metals than energy. Canadian oil looks better on a relative basis, but unfortunately the world is shrinking so to him it’s easier to be positive on metals specifically copper. He says we need demand to come back on the commodities side, but if we get that cyclical rebound in demand, we will need to pay more attention to commodities. Hugo talks about infrastructure spending and how it’s a super bullish trend right now. He touches on telco and says it’s a battleground for stocks right now. For him, he views it has having two ponds – one pond where you can grow your earnings 10% a year, and the other is where you think companies can grow their earnings 15 to 20% a year. Hugo would rather dip into that pond. He explains how he looks at stocks and which companies to invest in. He’s always following great businesses. Then something happens to that company. Typically, what happens is margins get crushed, and they are under earning. Then he uses the luxury of time, which a lot of competitors are not afforded. He adds it’s very difficult to have the vision that things will get better over the span of, say, two years. But it’s that specific set up that he feels differentiates him from others and is what he’s looking at all the time.

Recorded on June 4, 2024.

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