Market Call: Brian Madden's outlook on North American Equities (April 8, 2026)

Key Concepts

• Active Management: A strategy involving constant monitoring, "culling" underperforming assets, and opportunistic buying during market dips.
• Dividend Growers: A portfolio mandate focused on companies with a history of increasing dividends.
• Momentum Mandate: An investment strategy focused on assets showing strong price trends.
• Fiat Currency: Government-issued currency not backed by a physical commodity; the speaker views gold as a hedge against these.
• Combined Ratio: A key metric in the insurance industry; a lower ratio indicates higher profitability.
• Hyperscalers: Large cloud computing companies (e.g., Amazon, Google, Microsoft) that drive demand for data centers and power.
• Pressure Pumping/Fracking: Specialized oilfield services used to extract oil and gas from shale formations.

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1. Investment Philosophy and Market Outlook

Brian Madden, CIO at First Avenue Investment Counsel, emphasizes a "planning-led" approach. Portfolios are constructed to be "all-weather," incorporating cash, fixed income, real estate, and private equity to remain resilient against geopolitical shocks.

• Strategy: The firm avoids "knee-jerk" reactions to headlines. Instead, they practice routine portfolio maintenance—trimming winners that have become outsized positions and buying on weakness.
• Perspective on Volatility: Madden argues that investors should act from a place of "calm, cool, collected" logic, viewing market sell-offs as opportunities rather than threats.

2. Sector Analysis and Specific Holdings

• Gold: Viewed as a long-term anchor position. Madden notes that central banks have been buying gold to diversify away from U.S. Treasuries, fearing the "weaponization" of the SWIFT payment system.
• Banking: Madden considers the "Big Six" Canadian banks to be "buy and hold compounders" due to their oligopolistic nature and strong governance. He specifically highlighted National Bank as a legitimate member of the "Big Six" following its acquisition of Canadian Western Bank.
• Copper: While acknowledging the "copper is the new oil" narrative, Madden remains cautious. He notes that copper is not as scarce as some suggest, though he admits the long lead times for new mine permits create supply constraints.
• Housing/Construction: Madden strongly disagrees with the "buy and hold" thesis for U.S. homebuilders like Lennar (LEN), labeling them as highly cyclical "tactical trades" rather than long-term investments.
• Telecommunications: He warns against the sector, noting that companies like Telus face "negative sum" price wars and volume headwinds. He cautioned that high dividend yields in this sector can be a "yellow flag" for potential cuts.

3. Analysis of Past Picks

• Alimentation Couche-Tard: A long-term hold. Madden praises the new management team and their ability to deploy capital for acquisitions while improving in-store margins.
• Vistra: An electric utility holding. Madden views this as a "second derivative" play on the AI boom, as hyperscalers require "always-on" power from Vistra’s nuclear assets.
• KKR: Despite a recent drawdown, Madden maintains conviction, arguing the stock was "thrown out with the bathwater" due to unfounded fears regarding private credit exposure.
• Allied Properties: A failed thesis. Madden admitted to "egg on his face" regarding this investment, citing the dividend cut and dilutive share offering as reasons for selling the position.

4. New Top Picks

Madden provided three specific recommendations for investors looking to buy on recent market dips:

1. Trican Well Service: Canada’s largest pressure pumper. Madden likes their modernized equipment fleet and the strategic acquisition of Ironhorse Energy Services.
   • Valuation: Trades at 10–11x earnings with a 3% yield.
2. Booking Holdings: A global online travel agency. Madden dismisses the fear that AI will disrupt their business model, noting their 25-year history of compounding at 29%.
   • Note: The stock recently underwent a 25-for-1 split.
3. WSP Global: An engineering and construction firm. Madden argues that specialized engineering talent remains essential for building complex infrastructure like nuclear reactors and data centers, despite AI advancements.
   • Backlog: $17 billion, representing 1.2x trailing revenues.

5. Notable Quotes

• "When you invest, you should always do it from a place of calm, cool, collected ice in the vein."
• "Gold is doing what it's done for millennia. It's serving as a store of value, as an inflation hedge, as a geopolitical risk hedge."
• "When you see a dividend yield that looks like it's too good to be true, your spidey senses should tingle."

Synthesis

The core takeaway from the session is that active management requires discipline and a focus on long-term secular trends (like AI-driven power demand or central bank gold accumulation) rather than short-term market noise. Madden advocates for high-quality, cash-generative businesses while maintaining a strict "sell" discipline when the investment thesis—such as the recovery of office real estate—is fundamentally broken.