Part two of our conversation with John O’Connell and Don Ritchie of Davis Rea Investment Counsel.
A lot of investors have been piling into MAGMA stocks amid the simmering banking crisis in the U.S. on the idea that Microsoft, Apple, Google, Meta and Amazon are safe to hide out in while the economy and profits slow.
But if the economy is heading into a recession and profits follow, are these investors merely herding at the top of a sinking ship that’s not fully under water yet?
Is Microsoft, for example, immune to having to report the reality of revenue and earnings that are slowing from much higher levels last year?
The upcoming earnings season will go a long way in finding out.
O’Connell and Ritchie offer their views and also discuss their expectations for regional banks, why the current turmoil is not like 2008, and why a particular regional bank should be a huge winner from consolidation in the sector and the one Canadian bank that should buy it.