The M&E Dispatch // 059
Penguins (Seriously. Tariffs on penguins.), Portfolios, and the Canadian Fork in the Road
Penguins (Seriously. Tariffs on penguins.), Portfolios, and the Canadian Fork in the Road
April 04, 2025 | Listen Online | Read Online
The M&E Dispatch // 059
Penguins (Seriously. Tariffs on penguins.), Portfolios, and the Canadian Fork in the Road
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Hello Everyone,
Markets tanked yesterday, and not gently. U.S. stocks slid into correction territory, the TSX had its worst day since 2020, and investors across the board hit the brakes. The trigger? Sweeping new U.S. tariffs—including one targeting a penguin-inhabited island with no people. Yes, really.
When penguins become pawns in a trade war, you know global policy has gone off the deep end. In a move straight out of a political farce, U.S. President Donald Trump’s sweeping new tariffs didn’t just hit economic rivals – they even slapped duties on an uninhabited island populated solely by penguins. (Yes, really. The volcanic Heard and McDonald Islands, with no human residents, now face a 10% U.S. tariff for the sin of being in an Australian Antarctic territory.) This bizarre footnote to tariff history has become a symbol of the chaos now unsettling investors worldwide.
The absurdity is symbolic. When global trade decisions start looking like April Fools' jokes, investor trust evaporates. And when trust disappears, capital moves—or freezes.
What Happened:
- Wall Street corrected. Tech tanked. Confidence wobbled.
- Canada’s TSX slid nearly 4%. Gold and copper dipped. Oil softened.
- Safe havens rallied. Loblaw (groceries) was one of the few gainers.
So now Canadian investors face a choice: support Canadian industries, or follow Warren Buffett’s cash-hoarding lead?
Option 1: Rally Behind Canadian Equities
There’s also a patriotic angle. Seeing global supply lines fray, Canadian policymakers could double down on domestic infrastructure and resource projects. Political appetite may grow for “Made in Canada” solutions – from critical minerals mining to pipelines and ports – to reduce reliance on erratic foreign partners. If that happens, sectors like mining (especially battery metals) and energy infrastructure could enjoy increased government support, faster permits, or public-private investments.
Some investors are positioning for this “in-country boom” scenario, rotating capital into Canadian steelmakers, construction giants and engineering firms, expecting that nation-building could become the theme of the day. After all, if ever there was a moment for Canada to play the stability card and attract capital as the sane, reliable alternative, this might be it. The investor sentiment in this camp borders on optimistic defiance: rather than join a global sell-off, they’re rallying around the Maple Leaf, betting that Canadian companies will weather the trade war storm and emerge stronger in the reshuffled deck of global commerce.
- Canada = relative safe haven. No new tariffs (yet), and USMCA still holds.
- Valuations just got attractive. Energy, mining, and infrastructure plays are on sale.
- Domestic push coming? Expect more calls for made-in-Canada supply chains and critical mineral independence.
- Contrarians are circling. They’re betting that Canada’s stability wins out in a fractured global trade landscape.
Option 2: Follow Buffett, Sit on Cash
Not everyone is reaching for its checkbook amid the chaos. Another cohort of investors – call them the “Buffett brigade” – is taking a page from the Sage of Omaha’s playbook by hoarding cash and waiting patiently on the sidelines. If the first group sees opportunity, this group sees uncertainty and is battening down the hatches. Here’s why a lot of money is sitting out (for now):
- Buffett's $300B cash pile looks smarter by the day.
- Flight to safety underway. Short-term bonds, cash, and GICs offering risk-free yields.
- Uncertainty reigns. If policy is this erratic, better to wait than guess.
- Institutions are cautious. Many are trimming risk, hoarding dry powder, and watching from the sidelines.
The Real Estate Wildcard
No discussion of Canadian investment trends would be complete without addressing the nation’s favorite asset class – real estate. With stocks on a wild ride and trade turmoil dominating headlines, could Canadian housing become an unexpected beneficiary? It might sound odd, but some investors – especially high-net-worth individuals and families – are eyeing bricks and mortar as a refuge from the storm.
- Bricks over clicks? Some investors are shifting into real estate as a tangible safe haven.
- If rates drop, real estate could surge again—just as stocks wobble.
- But caution: a real recession could cool housing too.
Final Thought
When a penguin island makes the tariff list, you know the script has gone sideways. Absurd policy erodes trust—and without trust, investment dries up. The challenge now isn’t just navigating markets—it’s figuring out whether the absurdity is temporary or the new normal.
Canadian investors are at a fork in the road. Rally behind homegrown stability? Or wait, watch, and follow the cash kings? Either way, buckle up.
// The Dirt
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On an unrelated note, it seems the pool pump decided that it’s not going to fire up this spring after an extended winter.
Something, something, poor maintenance, something… Going to spend the weekend in the sun Red Green’ing a solution.
Remember, I'm pulling for you. We're all in this together.
Red Green
Have a good weekend all,
- Lee
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