Gordon Reid, President & CEO, Goodreid Investment Counsel
Focus: U.S. equities
Top Picks: Bank of America, Liquidia, Nvidia
MARKET OUTLOOK:
Financial markets are nervous.
Uncertainty surrounding geo-political events (Venezuela, followed by Iran), economic upheaval (U.S. Supreme Court tariff ruling, inflationary pressure, U.S. Federal Reserve changes), and market angst (private credit scares, AI uncertainty), have combined to cause high levels of anxiety.
As a rule, geo-political uncertainty usually resolves to the upside, simply because the event cools or ends and the market knows more. We need more clarity on the other issues to know whether the next stages are more worrisome for markets or simply the noise of the day.
Here’s what we know.
The U.S. economy is strong, with many reasons for optimism.
Corporate earnings are expected to grow by a double-digit percentage again this year. While inflation has fallen from the post pandemic period, it has some worrisome features. The input cost component of wholesale prices is pushing higher, and services inflation is stubbornly elevated.
Finally, higher oil prices are causing some panic at the gas pump. AI is happening, all you need to do is dig into the advanced tactics of the U.S. incursion into Iran to see that.
With it will come some nasty side effects, such as labour disruptions, but past experiences with technological disruption illustrate that markets have a way of filling voids.
An example is that one hundred years ago 40 per cent of jobs were agriculturally based, while today that number is one per cent, yet today we are at full employment.
Goodreid’s advice is to stay committed to equities, spread risk by diversifying, and continue to emphasize quality in your stock selection process.
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TOP PICKS:
Bank of America (BAC NYSE)
Money centre banks are in a sweet spot but worries about Private Credit is leading to some nervousness.
The economy is strong, leading to expectations of accelerating loan growth. Interest rates are falling gently, but more importantly for bank earnings, the yield curve is steepening, giving hope of an expansion of net interest margins.
Finally, the regulatory environment has turned favourably for deal making and capital markets should be strong.
Liquidia (LDQA NASD)
Liquidia is a commercial-stage biotechnology company whose drug treats rare cardiopulmonary diseases, specifically Pulmonary Arterial Hypertension (PAH), and PAH associated with Interstitial Lung Disease (PH-ILD).
Goodreid purchased shares in Liquidia after exiting our very successful investment in Liquidia’s competitor, United Therapeutics (UTHR), believing the former offers a superior product and is more attractively valued than United Therapeutics.
Nvidia (NVDA NASD)
Nvidia’s dominance in the AI chip continues to hold up well, as evidenced by the rapid ascension of earnings estimates for their current and subsequent fiscal periods.
The stock price has been range bound for 8 months reflecting industry fears of the sustainability of the rate of growth of spending on data centres.
Valuation concerns have abated as fundamentals power on, but the concerns of industry growth rates and competitive dominance remain. Time will tell, but an asymmetric resolution to the upside is likely.
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| BAC NYSE | Y | N | Y |
| LDQA NASD | N | Y | Y |
| NVDA NASD | Y | N | Y |
PAST PICKS: MARCH 18, 2025
Citigroup (C NYSE)
Then: US$70.22
Now: US$108.05
Return: 54%
Total Return: 57%
General Motors (GM NYSE)
Then: US$48.67
Now: US$75.84
Return: 56%
Total Return: 57%
StoneX Group (SNEX NASD) (had a three-for-two stock split)
Then: US$113.51
Now: US$108.19
Return: 43%
Total Return: 43%
Total Return Average: 52%
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| C NYSE | Y | N | Y |
| GM NYSE | Y | N | Y |
| SNEX NASD | N | Y | Y |
