Canadian Natural Resources is drawing attention after its shares reached record highs, while investors also weigh the broader implications of Middle East tensions and rising oil prices.
BNN Bloomberg spoke with Martin Cobb, senior vice-president of equities at Lorne Steinberg Wealth Management, about why today’s oil environment differs from the 1970s, his view on technology names such as Broadcom, and where he sees long-term opportunities for investors.
Key Takeaways
- Cobb says today’s oil environment is very different from the 1970s because Western economies — particularly the U.S. — are far less dependent on foreign oil supplies.
- Canadian Natural Resources remains attractive due to strong capital discipline, low production costs and the ability to generate significant cash flow even at moderate oil prices.
- Cobb is cautious on Broadcom despite strong earnings growth, warning that extremely high spending from AI hyperscalers may not be sustainable over the long term.
- Visa remains well positioned thanks to its dominant payment network infrastructure, which processes tens of thousands of transactions per second and is difficult for competitors to replicate.
- Canadian Apartment REIT could benefit over the long term as weak condo demand reduces construction today, potentially tightening apartment supply in coming years.
Read the full transcript below:
ANDREW: Okay, let’s get over to a keen student of history, Martin Cobb, senior vice-president at Lorne Steinberg Wealth Management. Martin, thanks very much indeed for joining us today.
MARTIN: Good morning, Andrew.
ANDREW: There was talk yesterday. People said, “Well, look back to the 1973 Arab oil embargo.” That was murder for the stock market. It caused inflation to rise. Is there any comparison between now and then?
MARTIN: That’s a good comparison. And the answer would be no. The energy dependency of Western economies back in the 1970s was much, much greater than it is today, particularly with the U.S. The U.S. is much more self-sufficient — not totally self-sufficient — but much more self-sufficient in terms of oil production, being the largest producer today. So I wouldn’t draw many parallels between what happened in the 1970s, twice, and what is happening today.
ANDREW: And of course, back then the Arab nations, or the big oil producers, united to restrict oil supply, but they don’t seem inclined to do anything like that on political grounds anymore.
MARTIN: Yeah. I mean, it’s hard for them to do because there is a surplus of oil today. We’re not in a tight oil market — maybe getting tighter over the next few weeks. Time will tell how this whole Middle East conflict pans out. But they really don’t have the power they used to have, given the increased efficiency of the U.S. on its own and also the fact there’s plenty of production in other parts of the world — Brazil, parts of Africa as well — now contributing. So we’re not in the 1970s. We’re not going back there. But there may still be a period of sustained higher oil prices.
ANDREW: Let’s have a look at Canadian Natural Resources. Maybe you could put up a 10- or 20-year chart. I mean, that stock — we almost now need to start using logarithmic charts for some of these companies because this one is just going vertical. Record highs today.
MARTIN: Yeah, I’m a mathematician, so I love my logarithmic charts — much more representative than a linear chart. Yeah, we own Canadian Natural Resources. And we’ve liked it for a number of reasons. Its capital discipline, first and foremost. It’s a low-cost producer. Again, we like that in the tough times. And here we are today looking back at the last three months of 2025 — the oil price back then, we don’t really care about that anymore. That’s ancient history. But it’s also well positioned, with good production growth. We like what they do in terms of capital discipline. They will be a major beneficiary of higher oil prices. But even at oil prices in the 60s and 70s, they can generate huge cash flows. We like the stock for the long term.
ANDREW: Let’s switch back to technology. Broadcom. What’s your view there? Because there have been worries over some parts of their business, including software. It’s so important to them, but their device sales are doing just fine, it seems.
MARTIN: Yeah, they’re increasingly a hardware company. They used to be much more software. They bought VMware. They owned Symantec. But those businesses are almost at the margin now. The problem I have with Broadcom — and it’s maybe my Templeton days — I kind of like to understand what a business should earn through a cycle. And we’re definitely in a cycle, although some people suggest there’s no such thing as a semiconductor cycle anymore. They’re extremely well positioned and they’re making bucket loads of money. But five years ago they made $8 billion of operating profit. This year they’re anticipated to make $88 billion of operating profit. A lot has changed over the last half decade. My concern is with our customers’ spend, which we all know is very heightened today, coming from the likes of the hyperscalers and OpenAI. I just worry it’s a little bit too much. Even a slowdown in that growth rate will lead to pressure on revenues and a drop in margins for the likes of Broadcom and Nvidia. The risk-reward, to me, is just not that attractive.
ANDREW: You like the look of Visa. Now, I know that you’re a big reader. I imagine you did at least have a look at that Citrini Research piece on Substack warning — it was really a dystopian science fiction article — speculating on what might happen when white-collar jobs are slashed across the economy because of AI. They touched on Visa and said it could be bypassed by AI agents simply sending money to each other instead of going through gatekeepers like Visa. But you do think this company has a moat, as they say?
MARTIN: Well, I’ll take you back to PayPal coming along. It was going to undermine Visa or Mastercard, and ultimately it sat on their rails. Visa is a very fancy telecoms network. It’s not a financial company. They have no credit risk. They have really no relationship — some relationship, but very little — with the customer or the merchant. They provide the ability to process a transaction, authorize a transaction, in milliseconds. And they can do something like 60,000 transactions a second on their global network. There are always competitors — Stripe and Plaid or others — that are basically coming into this market. But they are a very efficient telecoms network. No one is building that. So unless you can get onto the rails and do something very different, it’s hard to see how they will be undermined. We’ve had these arguments before, as I say, with the likes of PayPal. A better, more efficient way of settling transactions — certainly. But ultimately it has to be communicated somehow. And Visa and Mastercard are the way to communicate it.
ANDREW: And then, of course, we know that the widespread fraud in cryptocurrencies and the lack of trust in anything you see on the internet right now — people may feel more comfortable dealing with boring old Visa for the foreseeable future.
MARTIN: Yeah. We don’t really talk about crypto, but it’s manna from heaven for money launderers or criminal organizations. And while you can debate the merits of cryptocurrencies or blockchain — which I think is a really interesting technology, distributed ledger and so on — the fact is trust in financial transactions remains paramount. I do think blockchain technology’s ability to undermine the custodian bank or the intermediary has some really interesting uses. But ultimately, when I’m sending money, I want to make sure it gets there and is not interfered with on the way.
ANDREW: And just give us your thoughts on Canadian Apartment REIT before we let you go, Martin. This is a stock, or a REIT, you like the look of.
MARTIN: It’s a bit contrarian, isn’t it? You were talking earlier about home prices in Canada. This too shall pass. At the moment, no one wants to buy a condo, so construction starts in cities like Toronto and Vancouver are collapsing. Today the market is heavily oversupplied and probably will be for the next year or two. But because of the lack of construction, three, four or five years from now I suspect we’ll be in the opposite conditions where apartments might be quite rare. In that case Canadian Apartment REIT is very well positioned to benefit from that. They will see some pain, but ultimately, trading today at 0.7 times book value — maybe a 25 per cent discount to NAV — with long-term growth in apartments and rents, they’re very well positioned to take advantage of that.
ANDREW: Thank you very much, Martin. Always great talking to you. Thanks very much indeed.
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This BNN Bloomberg summary and transcript of the March 5, 2026 interview with Martin Cobb are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.
