David Mau

[music] >> Hello I'm Greg Bonnell and welcome to MoneyTalk Live brought to you by TD Direct Investing. Every day will be joined by guests from across TD many of whom you will only see here. We will take you through its moving the markets and answer your questions about investing. Coming up and today show. Will discuss the changing dynamics for the market for electric vehicles. With TD Asset Management's David Mau. MoneyTalk's Anthony Okolie will give us a preview of what to expect from tomorrow's federal budget and turn tomorrow's WebBroker education segment, Hiren Amin shows us how to protect quarters of the platform. Here's how you can get in touch of us. Just email MoneyTalk Live NT.com or fellow the viewer response box under the video player on WebBroker. Before our guest of the day let's get you an update on the markets. First trading day of the week. I want to check out the TSX Composite Index, modestly in positive territory a little shy of 50 points about 1/4 of a percent. As the market sort of calms down in terms of its fears with the US regional banks we are actually seeing some money move out and getting a bit of affirming in the price of West Texas intermediate. American benchmark crude. I want to check on Genova's energy right now to the tune of almost 2 1/2%. 2184 share. The weakness we are seeing in Goldbach below $2000, amid all those concerns last week, we are seeing some money coming out of the miners including Barrick… Modest two points to the upside. The NASDAQ, seeing some solid pressure in the tech names. Checkingand as some of those concerns of the US banking sector sort of ease heading into this week we are seeing a rally with some of the regional names. Some of the big Wall Street names as well including Bank of America. Up more than 4%. And that's a market update. For many automakers, electric vehicles are the future but research and development to get there comes a cause. The latest reminder that in recent days before we announced that EV division lost $2 billion in 2022 alone and is likely to lose another 3 billion this year. Joining us now is David Mau Portfolio Manager at TD Asset Management. Great to have you might've a show. >> Good to be here. >> Was a big piece of news. Interesting as Ford breaks out there different segments. We are sort of seeing the cost of getting to the EV future. What he think of it? >> I think it's actually great for the market. Great for investors. Deciding to go ahead and break out their separate divisions. It gives investors a lot more visibility into how the EV division itself is doing. It gives investors you know, a good way to measure the progress that fortis can make over the next few years. You already mentioned that the EV segment for Ford lost $2 billion last year. In 2021, they actually lost $1 billion. So the losses are growing and they will lose an expected $3 billion this year. What that translates to right now is that Ford is hurting and -40% profit margin on every single car. Every single electric vehicle that they sell. They are targeting to go from -40% margins to positive 8% margin by about 2026. So we will call it ? no, 3 to 3 to 4 years right now. They expect to be able to scale up and find the efficiencies and become basically a better producer of electric vehicles where they can turn that negative margin into a positive margin. Obviously the market is going to continue to grow. The demand for EV's will continue to grow. So you know, that's their projections for right now. I think for pretty much every automaker out there except for Tesla, you should expect there electric vehicles to lose money for the first few years. Even Tesla itself, becoming a public company, I want to say in 2010. They lost money every year for the first 10 or 11 years of their existence as a public company. Just in the last two or three years Tesla has started to term profits. I think investors know this and the market understands this. So what is going to be important is how, I guess, profit margins and the quality of these EV's that are being produced by other car companies evolve over the next few years. >> When I think about the equation there, simple obviously. Until you find that scale, that production allows the production cost come down. Losing money. Is it trying to sell these cars at an attractive price point for the market and taking that loss? Or are you trying to gain some share? >> That's exactly it. You know, just put some numbers out there for you, in terms of the actual overall market, last year and 2022, electric vehicle sales were about 8 to 10% sales penetration so that means one out of every 10 cars sold last year was an electric vehicle. Not too long ago, I want to say three or four years ago, it was 2%. So the market is growing rapidly just over the last few years. By 2028, we are talking about five years from now, we are expecting 30 to 35% of all new cars to be electric vehicles. So that means one and three new cars sold in five years is going to be an electric vehicle. So the market is really going to grow quite rapidly. >> When you think of the market growing rapidly in the different players fighting for a shares even at the end of last year, definitely the then end of this year you get Tesla bringing down prices to try to maintain that part of the market and the share that they are to have. How tough as I can be for some of the bigger competitors? The plan of the profitability when it comes to electric vehicles and then the leader of the group, the superstar cutting prices. >> That's actually right. Tesla is the cost leader in the electrical vehicles these days. They've got a very wide lead and Tesla has been cutting prices of the last few months putting on where you are in the world. The price cuts differ depending on the model you are looking at. Here in Canada, the Tesla model three which is the lower and model of the Tesla lineup, the starting price went from C$60,000-C$55,000. That's almost a 10% drop in price and so what Tesla is doing, like you said is they want to attract more customers by lowering prices and putting out a good product. So what this does to other automakers is that it definitely does pressure them on the profitability front. And on the market share front. So Ford is going to probably have to look at prices. We have seen especially in China, BMW, Mercedes, looking at reducing prices and not just on electric vehicles. On their eternal rather internal combustion as well on the vehicles. As the market matures for electric vehicles, people are considering for 40 or $50,000, buying an electric vehicle. That's the future. I will save on gas, I will save on maintenance or I can buy a 40 or $50,000 internal combustion engine which I know is going to be phased out over time. So Tesla and the EV makers in general are going for that target audience who are kind of on the fence but they will eventually migrate over to these. >> You mention China. An interesting market for electric vehicles. We think from our North American perspective of names like Tesla, Ford trying to get in on the game, BMW. Some makers perhaps not getting a lot of attention in the West but are comparative competitive to China. Production influence or production presence is the word I'm looking for. How does that market play out? >> China is actually one of the most oversaturated car markets in terms of automakers in the world. By some estimates, China has about 300 EV makers. That's just way too many. There is a wide range of models that they sell. Something you can buy for about five or $6000 all the way up to something comparable to a Tesla. But there is just too many of them. The quality of the product is not great. They don't have the scale. They don't have the reach. So there's going to be a ton of small car companies in China the go out of business. Most of these companies we've never heard of it will never hear about. But that industry has got to consolidate. And I think, you know, the reason that these companies exist in the first place is because the Chinese government over the last few years has provided a lot of subsidies and incentives for him for people to enter the EV market for companies that enter the EV market. Any part of their strategy was to get as many companies as you can to start EV cars. The strong ones will survive and the rest will eventually just disappear. That's fine because of strong ones, they are going to be the flagship brands for China. Not just for China domestic consumers. Those brands are going to have a target of exporting the cars to the rest of the world. >> All final thought on this space, all of these global players trying to get competitive with electric vehicle space, pretty ambitious target as to how much will be electric in just a couple of years. What about everything it takes to go to sign onto an electric vehicle? We try to bring costs down but competing for copper, all the other metals and minerals that go into these vehicles? >> What we see are many of the materials prices after, rising quite rapidly over the last couple of years starting to come down a bit. That's what is allowing companies like Tesla or the other companies to start to think about cutting costs. And they have been able to scale up better. There are certain, I guess, materials that are still going to be scarce but for the most part, battery prices have come down. Technology has improved. An overall, you can see these companies getting to more profitability quicker as prices compress on the raw materials. >> A very interesting couple of years for the electric vehicles. Great start to the show. We will get to your questions about industrial stocks with David Mau in just a moment's time. A reminder of course that you can get in touch with us any time by emailing MoneyTalk Live a Tina, Philip that your response box under the video player on WebBroker. Now let's get you updated on some of the top stories in the world of business and take a look at how the markets are trading. Shares of first citizens Bank are in the spotlight today that up to the US lender purchased some $72 billion worth of Silicon Valley banks deposits and loan assets. And a discount more than $16 billion. American regulators took control of Silicon Valley's banks deposits earlier this month following the bank's failure. Cameco is expecting a refund from the Canada revenue agency. To the tune of some $300 million. The uranium producer is been working through a long-standing dispute with the tax agency. Centred around a foreign subsidiary of the company. Adding its broader dispute with the CRA remains ongoing. Apple CEO Tim Cook has apparently met with Chinese officials to discuss supply chain issues. The details were released by China's Ministry of commerce and the meeting follows lockdowns in China that impacted Apple's production in that country. There have been reports in recent months that Apple was working to ship some production to other countries, including India. Here's how the main benchmarks indexing Canada's trading. A bit of a pullback in the price of gold… Pushing around some of the big names, south of the board of the S&P 500, but in a mixed day on Wall Street. Some of the tech stocks are under pressure with an Aztec down. The S&P 500 just modestly in positive territory right now. We are back now with David Mau taking your questions of industrial stocks. Let's get to them. Our first one, can we get your guests view on what the prospects are for CP after that KCS merger? CP Rail in Kansas City south. >> Yes. The regulatory regulator in the US actually proved that CP and KCS merger a couple of weeks ago. Maybe one or two weeks ago. >> It feels like two weeks but it also feels like two years ago. >> Yeah. What's interesting is the stock actually popped 7% on the day that the announcement came out. So the market investors are actually quite excited about the merger. And what this means is right now, the regulatory uncertainty out of the way and CP now has to do is execute on their target's. That is basically, you know, what they told investors what they're looking for out of this merger is to convert, basically take share from long-haul trucking. So convert some shippers out there who are shipping their freight on highways. With trucks to, instead of using trucks to now use rail. And that's going to make sense for some shippers because trucks take a lot longer. It's more expensive. Now that CP is going to offer a network that reaches from Canada into the US and into Mexico, it will make sense for some shippers to go from trucking to railway. The other two things is that CP now has an opportunity to take a share from its competitors in the realm of rail industry. Because of the reach of the network. Thirdly, CP also has some cost issues that they want to achieve. When I look at, you know, the management team that's running CP right now, and it's going to be running the combined business, the CEO a guy by the name of Keith Creel, a strong record and strong history of being a really good railway operator. The team that he has with him there has shown over the years that the target that they set out they have been able to achieve. And this is reflected in the stock price. Over the last 10 years, CP has, the shareholder return for CP has in stock. It is been the highest out of all the large North American rails. >> This is, as you said is a very large railway. Canada, United States and Mexico. You see there's a lot of opportunities there for CP. What about some of the challenges? Is there still work to be done to make sure everything starts to work seamlessly? >> Of course. Any time you try to integrate to companies in the side there will be issues around immigration and other things that come up. But it should ideally be quite simple because you are basically just connecting railway lines. I'm sure issues will come up but with the management team that is in place there, I don't think there is going to be anything that they can't handle. >> Interesting stuff. Let's get to another question now from the audience. Plenty coming in for David. Here is an interesting one. As the post pandemic travel boom continued for the airlines? This idea of revenge travelling? Are we still revenge travelling? >> Yeah the numbers would say that the leisure travel, number of people going on vacations and things like that is still very strong. 2022 was a great year. When you look at the numbers for the airlines, revenues are actually at or above pre-COVID levels now. Which is interesting because actual earnings, profits are still quite a bit below pre-COVID and that's because costs have gone up a lot. Whether it's labour costs or you know, the cost of jet fuel. All those things have increased. So even though, the top line, the 2019… Profitability is still way down. But like I said, leisure travel is still strong. Looking like it's softening a bit is the outlook for business travel. Which is not really surprising given that a lot of companies now are starting to prepare or think about a potential recession. That might not be too far away. So many companies are starting to maybe restrict travel a little bit more or the past where they would send somebody on a one-day trip which requires a flight in the mornin and a flight home in the evening, they are asking their employees to, instead of coming back the same day, why you stay for another two or three days and do more meetings, meet more clients before you come back. That's another way of cutting down the expense of business travel instead of saying to take five or 10 trips a month, you do maybe two or three trips a month. But each trip is longer. > Having a challenge will that be for the industry? To what degree before the pandemic did that business travel make up a portion of the business overall? Where you are drawing your revenues from? >> Is going to be impactful because business travel, the business class has seats, business and first class seats, they usually generate prior to COVID it was kind of 80% of overall profits. Where is economy only made up 20%. So losing that business traveller who is paying more for that seat or booking a flight later where generally you have to pay a higher price and or booking a flight for say tomorrow, you are going to pay much more than you would if you booked it three months ago. So that kind of business, business class travel, it's definitely going to have a pretty big negative impact on profit. >> If those seats are empty and first class, I'm more than happy to take it for them. >> You'll take care of them. [laughing] >> I'll take one for the team. What about FedEx? >>… There fiscal quarter last week, they are on a different fiscal calendar. So they don't match up with the calendar. But anyway they were reported the fiscal calendar last week and revenues were down about 6%. Overall package delivery volumes were also down, somewhere in the single digits. But you know, that being said, the results actually came and way better than what the market was expecting. In fact, it was so good that FedEx actually increased their EPS forecast or their earnings-per-share guidance for this year by about 10%. So that is actually quite meaningful. And the reason they are able to do this is because they have been very, very good on cost control. So they have been, you know, even though volumes of come down, they've been able to raise prices. They've been able to cut costs through headcount reductions, buying fewer planes now, they have cut out some Sunday service depending on some regions. And they are doing more automation in their warehouses. In their distribution Centre's. So you put all that together, even though topline is down, earnings are down, it still materially better than what the market was expecting given this weakening environment for package delivery. You know, it's not surprising that package delivery has started to slow. Obviously during the COVID pandemic, that was the peak for e-commerce and online ordering and things like that. Over the last one year to 18 months, businesses of started to open, travel is returned, people are spending less shopping online and more going out to eat at restaurants or taking vacations. So it's not a surprise to anyone that the volume is actually come down a bit. >> Is the biggest challenge from going forward despite the fact that they're showing cost discipline, is an economic downturn that is deeper than we help and it becomes a hard recession? >> Yeah. That certainly is a risk. But if you look at FedEx target, they are going to cut about $4 billion of costs over the next few years. If you just took that number as it is, right now, that's good to be 52 may be 100% upside in earnings if they can get that 4 billion cost out. So you know, even though the economy might be tough and we might be headed in for a rough year with a recession, FedEx operation is doing very well. >> As always at home make sure you do your own research before you make any investment decisions. We will get back to your questions with David Mau on industrial stocks in just a moment's time. A reminder that can get in touch with us at any moment's time just email moneytalklive@td.com. Now let's get to our educational segment of the day. During periods of market volatility you may consider using protective orders to try to limit your risk. Joining us now with more is Hiren Amin, Senior Client Education Instructor with TD Direct Investing. So here and we've established that during market volatility, asset prices rise or fall in sudden large and unprintable ways. What order types are available to investors to manage their trades? > Yes. Thanks for having me back. This is where I like to think of the markets is being rowdy. A lot of noise happening. You have trading volumes that are usually higher, you of large swings in prices and you're gonna see choppy performances from day-to-day. No of course for any investment investors bullish and a lot of us may sit in that seat where we have our portfolios, that can make us jittery. When the market is declining, especially in the bearish market that we seem to have, you can have an investor who wants to exit out the position as soon as possible. So obviously one way to do it is to invest consider using a plain old vanilla market order. That simply means an investor, when they cement this order, they want to get out of the position ASAP and they're not really too concerned about the price where they get out. They just want to be out of that position. Now, the problem and what may could happen is often at these times, because of the volatility stocks there is a gap down event and you can actually come that much lower than where to get out of that position. That is where a stoploss order may come in favour for an investor. With the stoploss order, think of this order as being an alarm clock on a market order essentially. So the order is essentially dormant or sleeping until the alarm goes off. And so on the stop order, you are setting the trigger price which is going to be your alarm pretty much. As soon as the alarm goes off, you hit the trigger price, it wakes the order up and it gets sent over is a market order. Now, the one advantage of having this order is it frees the investor from having, being glued to their screen because you can actually set this up knowing that if the market drops to a certain level on my position, then I want to set this order up to get me out of that position there. So that is one thing you can consider doing with these choppy times there. >> Let's talk about how an investor would enter stoploss order using WebBroker. >> Let's step into WebBroker. When you're setting up a stoploss order, traders can basically have certain conditions where they can based on dollar value were based off of a percentage. Of course if you are more technically minded, you can look at the charts and look at those key support levels. The broad market TSX Composite Index, we can see on this chart, for example, if I want to protect myself and say that I'm interested in having this in my portfolio, as long as it doesn't drop below this key threshold, a key support level here. Around the $20 mark. The order, we are going to hit cell on our stock profile pages. This will bring up our ticket. Of course you enter the continuity that you have in your portfolio. Then in the price tag, we are going to go down to stop. You can see there are two choices given here. Remember this is that alarm clock that sets the orders and market orders. This is where the alarm piece is. What is the exact timing you want to send for? In other words the price. We want to set it. One thing I should mention is you know, once the order triggers and the stock gets down to 28, it wakes the order up and sends a market order. At that point is when the order is executed. One thing to keep in mind with most investors as this is not the execution price. This is merely the price of which the order becomes active from being dormant. Now, with that being said of course, we talked about not having a price guarantee. If an investor wants to choose a stop limit order, choosing first of all that alarm clock price. We want to set it to 28. Then the order gets activated. This now tells an investor hey, I want to be able to get an absolute minimum of this to have my stock. Maybe a 2790 for example. Sent as a limit order to say to get me 27 and 90 are better and that's what I'm willing to accept. The one downside to keep in mind is it's a big event, after woken up at 28 you may not be able to get the same price available at 2750 or even lower. That's just one thing to keep in mind. There you have those orders Greg on protecting yourself and others. >> Good stuff as always. Thanks for that. >> My pleasure great. >> Hiren Amin, Senior Client Education Instructor with TD Direct Investing. Make sure to check out the lowering sector WebBroker for upcoming master classes and webinars. On a programming note, we will be taking your questions about the WebBroker platform tomorrow on the show. Bryan Rogers, Senior Client Education Instructor with TD Direct Investing will be our guest. Before we get back to your questions, a reminder of how you get in touch with us. Do you have a question about investing or what's driving the markets? Our guests are easy eager to hear what's on your mind so send us your questions. There are two ways you can get in touch with us. You can send us an email at any time at moneytalklive@td.com or you can use the question box right below the screen wait right here in WebBroker. Just writing your question and hit send. We will see if one of our guests can get to the answer right here at MoneyTalk Live. > We are back now with David Mau taking your questions but industrial stocks. One coming in and let's get to them. Which mining companies will benefit most from EV produced vehicles? >> A lot goes into these cars right? >> Yeah definitely. A lot of important points to go in. In terms of mining companies, we think copper has a good runway so copper the related companies. That's because copper, you know, not only goes in the battery but there is a ton of wiring that goes into an electric vehicle. Not there for a traditional normal combustion vehicle. What actually goes into a car right now… The amount of wiring, obviously being the motor is a battery. And the battery is going to have wiring to connect every thing else. So, we think copper has good potential. There are a few other things the copper stands out to us as having a good long runway. >> Some people ask about the heavy use of copper and if there will be enough to meet these ambitious goals that we talked about off the top? Ford saying "never don't worry and a couple of years everybody will be driving TVs." > There are not a lot of new compromises going in right now. Even if someone were to decide "you know, working to build a new mine. It's gonna take 1015 years" to get that up and running. So, we expect the copper price to get support from all this demand and exactly to your point, it's not clear that the supply is going to be there or enough supply for everyone. So that's going to put upward pressure on prices as well. That's why we think copper is one of the commodities that has really good outlook from here. >> A lot of interest from the audience about TVs especially at the top of the show. This question about the Canadian parts makers. Can they benefit from EV production? I guess we think of in terms of building parts in terms of building internal combustion agents. … >> Magna is not so specifically exposed to electric vehicles but magna is exposed to a growing market in general. For magna, whether it goes on to an electric vehicle or a gas engine vehicle, so it's not specific to EV's. But, as the overall market grows, that's great for magna. So if TVs could help growth in of client and combustion engines the that's can be good news for magna. The other thing is magna is also a assembler. Right? Other than producing car parts, they also assemble entire vehicles for OEMs. So the magnetic can win some of these contracts for some of these EV's. That will be great news for them as well. >> That's a good point. Doris adore no matter what is driving the car forward. Let's get to another question now. Back to the rails. Given the derailments we've seen recently, is there a risk of increased regulations coming back into the sector? >> Yeah the risk is certainly there. I think the one thing understand, maybe not everyone kind of gets this is in the rail industry, derailments happen all the time. It's a regular occurrence. It's a normal course of business… The reason we've heard more. >> It depends what's on the train. >> The big Norfolk Southern derailment last month was carrying hazardous materials and had a big impact on the environment at a big impact on the people who lived in the town there were this derailment happening. It's generally not great for the rail companies because that means higher costs and probably slower times. So if railroads have to implement new safety protocols, it's probably going to slow down. How quickly they can run the network, it will result in higher expenses. But I don't think that the regulators going to just come and blanket the entire industry with new protocols and regulations. They probably keep it too, like you said, freight or cargo that is environmentally sensitive. So, you know, we might see some higher regulation and some higher expenses but I don't think it's going to impact across the board. >> Years ago I was running a news desk at the wire service in one of the younger people decided to scream out that there was a train derailment. I said what is on the train? He said what does it mean what does it matter? And I said it matters if it's carrying ping-pong balls or nuclear reactors. Racks… It's gonna take some cleanup but it doesn't have any kind of impact. >> We will get back to your questions with David Mau interest moments time I remind her to do your own research before making any investment decisions and a reminder that you can get in touch with us anytime. Do you have a question about investing was driving the markets? Our guests are eager to hear what's on your mind to send us your questions! There are two ways to get in touch with us. You can send us an email at moneytalklive@td.com or you can use the question box right below the screen here on WebBroker. Just write in your question and hit send. We will see if one of our guests can get you the answer right here at MoneyTalk Live. >> The federal Liberals are set to unveil their 2023 budget on Tuesday. Tomorrow coming up quick. Of course this coming amidst the slowing of a Canadian economy. Our Anthony Okolie joins us with an outlook on the federal deficit, the impact of government bond issues and of course the budget. In> Thanks Greg. To expecting the government to projected 37 billion that's to 1.2 percentage of 20 air through 2020. That is high versus the 30 real director… The reason for that is in the fourth quarter we saw a weaker GDP print. Also the federal government also announced some recent spending for hunting funding healthcare. TD Securities is also including about two to $3 million in measures into their projections. Now, they also expect to see a downward revision of 0.3% points to 2024 GDP forecasts. As a result, they are looking for an increase between eight to $10 billion per and deficits or the 2024 through 2026 year with a slight deficit expected for the fiscal 2027, 2028 year. Now of course, given the larger deficit projections, TD Securities also expects to see a slight uptick in the issue of Canadian T-bills in fiscal 2023, 2024. They expect to see about $207 billion in new T-bill issues. That is slightly higher than the 200 billion we saw in last year. TD Securities is also looking for a larger bond issuance by the federal government. About $185 billion for this fiscal year versus 181 billion previously. Now, the extra bond issue of course would be focused in greater bonds. Seven year duration. Bonds again, with a slight shift away from a longer duration bonds. TD Securities also believes that a longer-term goal for the government is to eventually shift all the way back to 85% of bonds being issued in the two, three, five year generations. Something not possible in the foreseeable future. Of course given a large refinancing of the federal government. >> Speaking of bonds, the inflation for protected bond, back in November of last year, of course inflation is all we ever talk about. Any chance I can get revived? >> That's interesting that they got rid of that given inflation is been red hot. These returns provide protection from inflation with cash flows the key pace with rising cost of living. The federal government said the reason they cancel that program is because their demand was poor. Up until 2020, investors were not overly concerned with inflation. Things have changed. TD Securities said there's a slim chance that the government brings back the real return bond program given the uproar in financial markets after it was cancelled. Of course we will be watching closely tomorrow when they come out with their full budget and full coverage of the budget. The Deputy Chief Economist at TD Economics Nicole Ewing, director of of estate planning, TD Wealth will be giving their reaction to the budget tomorrow. >> We all look forward to that. Thanks Anthony. >> My pleasure. >> MoneyTalk Live's Anthony Okolie. Quick check on the markets and let's check your home with the TSX Composite Index. Right now about 77 points to the upside a little half little Shive half percent. We talk became coat yesterday in line for $300 million in tax return. Those shares about 1/2%. Cameco about a long-standing dispute with the CRA and their subsidiaries. They are expecting a return with 300 million. Gold is retreating with some of the concerns about the banking sector starting to ease. We are seeing some of the mining names under pressure today. Holding its own… That's a pretty modest $0.44 a share. South of the border, things have been a bit mixed. Let's check on the S&P 500, that brought her read the US market. Right now modestly up to the tune of eight points, about 1/5 of a percent. NASDAQ was in negative territory at the start of the show. Let's see how it's carrying right now: still some pressure. 56 points in the downside about half percent. Tesla though, talking about them earlier the show, a bit of a bid today. Right now, just a bit of a breaking of even. A bit of the ties off the session up a little more than half a percent. >> We are back now with David Mau from TD Asset Management taking your questions about industrial stocks. What area is in industrial sector does your guest think has the most growth potential? This person already seems to have the defence sector on their radar… So what beyond that in the industrials? >> I think, you know, in the industrials sector, there are companies that have a good upside from here are companies that are involved in things like automation. Especially factory automation. As you know, a lot of manufacturers and companies around the world are looking for ways to reduce costs and possibly reduce the number of employees they have. Labour is one of the biggest costs for any company. So, the more things get automated, the better it is for these companies. So companies and build robots or design software, something like a Honeywell our Japanese company that makes robots… Those types of businesses have a lot of potential. And I think the other area that has a lot of potential or companies that are involved in the renewable energy space. Energy efficiency in general. Because if you think about, we've been talking a lot of electric vehicles. If you think about the electrical architecture or infrastructure that is in place right now, in most urban areas, at least, safe for office buildings or a condo building, apartment building, the infrastructure, the electrical infrastructure and those buildings can't support the number of charging stations that will be necessary as the electric vehicle market grows right? So if you think about a condo in downtown Toronto, it might have two or 300 apartments. Maybe 100 to 200 parking spaces. That building can really only support may be five or 10 charging stations. Not the 50 to 100 EV charging stations that will be required over the next few years. So companies that build that infrastructure and design that architecture, I think have pretty good potential. So an example of that name would be Eatons in the US, or a company called Schneider which is a French company. The do these kinds of things. Before we let >> Before we let you go, any final thoughts with investors thinking about the industrial space? We've touched on so many things including automakers, the rails, plane makers, what should we be mindful of this year if we are worried about a bit of softening in the economy? >> Within the industrial sector, there are companies that are very cyclical. There are some companies that are less cyclical that have some kind of defensive tilt to them. For example, that would be some of the waste companies that are part of the industrial complex. The reason waste companies are defensive is because their contracts get reset every year or every other year based on CPI. So basically based on inflation. If inflation is high, interest rates are high, that means the economy is probably struggling a little bit but for waste companies, they reprice each contracted a higher price every year. So, as rates go up, revenues for waste companies also go up. So you think about, in that context, where you want to be in terms of how cyclical you want your holdings to be. Because industrials, generally a very cyclical sector, with an industrial's their pockets where you can get good defence and good, you know, stocks to ride out volatility. >> That's interesting. My simple answer is we always create waste with the economy good or bad but there's a good and deeper answer there as well. David grey tabby on the show. >> Thanks for having me. >> Our thanks to David Mau, portfolio asset management at TD. Stay tuned tomorrow, Bryan Rogers Senior Client Education Instructor at TD Direct Investing will be our guest take your questions about the WebBroker platform. A reminder that you get a head start with your questions by emailing moneytalklive@td.com. That's all the time we have for the show today. Thanks for watching and we will see you tomorrow. [music]