"Tough" Times Ahead As Tariff War Drags Markets Into Uncertainty | Jonathan Wellum

**Jonathan Wellum** (0:00)
From our perspective, yeah, we think it's going to be tough slugging, and that's just largely because a couple of things. Number one, you're coming from a high base already. Stocks are not cheap. Second, you are going through some big changes in how governments run, government spending, rolling over of debt, and then you've got this tariff situation and the uncertainty that that's creating in the marketplace. So you put all that together, our view is, yeah, our noses are down, we're working hard, we're really trying to ferret out good companies, and we've identified companies we would love to own if they fall in another 20 or 30 percent. And we think that's quite possible, especially in some of the tech sector.

**Adam Taggart** (0:42)
Welcome to Thoughtful Money. I'm Thoughtful Money Founder and your host, Adam Taggart. Today, we're joined by Jonathan Wellum, Founder and CEO of Rocklinc Investment Partners. This is Thoughtful Money's endorsed financial advisory firm up in Canada. I thought it would be great to have Jonathan join us. One, because we like to have him regularly on the show. He's a great mind, and obviously, we like to bring in a Canadian perspective for our Canadian viewers, of which we have many here at Thoughtful Money. But also, it's very timely, right? Given the tariffs, the revised trade negotiations between our countries, and the fact that tomorrow is liberation day, as Trump calls it. I'm sure it's probably called something different in Canada. I'm sure they've got different choice words for it. But really would like to get a sense, kind of a boots on the ground sense from Jonathan, what's going on in Canada, get the Canadian point of view on these increased trade frictions between America and the rest of the world. So Jonathan, thanks so much for joining us.

**Jonathan Wellum** (1:44)
Good to be with you here, Adam, and from the 51st state. So maybe we'll be part of the US. We'll see.

**Adam Taggart** (1:51)
All right. I know you say that tongue in cheek before you get played by all the Canadians in the comment section here. Well, look, Jonathan, I got a lot of questions for you about what's going on. Like I said, this is very topical. You're also a very topical guest because we've got very volatile markets right now, as we expected going into the year. Would love to hear how you and your team at Rocklinc are navigating those for your clients. But also I know that a sector that you have a substantial stake in at Rocklinc is the precious metals sector, and that sector is really catching fire of late, and would love to get your thoughts on that too. But why don't we start with the discussion at hand? I guess first, let's go high level. What is your current assessment of the global economy and financial markets?

**Jonathan Wellum** (2:41)
Yeah, I think if I were to summarize it, I'd say a pressure cooker. I think it's really a pressure cooker from our perspective as we look out there in the world. So we are very careful, conservative. We think that there's just a lot of pressures in the world which are going to make it harder for the capital markets to make a lot of progress this year. And we basically have had that view now for some time coming into this year. And that's because when we look around the world, we look over in Europe, you see that there's very little growth. You see that could continue to follow a lot of green policies and energy costs are high and so forth. The US tariff situation, again, the uncertainty in regards to that, to the extent that the US benefits from the tariff, that has to come at a cost of other nations. I think Europe is vulnerable when it comes to some of the tariff challenges that Donald Trump is introducing. The US pulling military support out of Europe. I mean, now Europe is going to have to look after themselves a little bit more, similar to the pressure we see here also in Canada. That's going to cost money, the demographic challenges there, and so on. So I think when we look at the European situation, very slow growth, if anything, they really haven't grown much for some time, very similar to the Canadian situation, largely driven by high taxation, regulations, bad policies.
China is, as many of your guests come on and talk about, we don't focus a lot on China, but there's a tremendous amount of challenges there, debt problems, massive misallocation of capital over the last number of years because of a communist regime and not a free market. The tariffs also putting pressure on China, not a huge amount, but again, just slowing things, making things a little bit more, creating more friction. The demographic collapse in China also is something that they can't get away from. Japan, the same thing, not a lot of growth down there. Again, a lot of trade frictions, exporters, that's going to be impacted again by some of these tariffs that Trump is putting on. And so we look around the world, we don't really see a lot of enthusiasm in terms of economic growth and dynamics. And so it really gets for us when we look at the US, which is of course, south of our border there and very important country, and now run by Donald Trump, which obviously is causing some friction up here in Canada. But when we look at the policies that Donald Trump is putting into place, and I said this also on previous programs, they're very sound policies by and large. They're very bombastic in how he introduces them sometimes, and his personality, I think it's in the way, but lower taxes, lower regulations, bringing capital back to your country, trying to re-industrialize, reverse a lot of the policies of the last 40 years that were driven by the World Trade Organization and a lot of outsourcing to countries with cheaper labor and so on. All of that, I think, will bode well for the US economy over time. Clearly, though, for the next little while, there's going to be big adjustments, even with Doge. I mean, Doge, I think, is brilliant. I mean, every government in the world needs Doge because of the corruption, the waste and fraud that goes on in government spending, but that is going to result in jobs being lost, a slowdown in some of the government spending, which is great long term because you don't want government spending to be driving the economies. But again, it's going to put pressure. And I think, again, all of these things will slow down growth. And we're going to have to realign some of the growth that's taking place in our economy. Up here in Canada, it's been very difficult. I mean, we've had virtually no economic growth on a per capita basis over the last nine years. We've had policies that are dreadful. Our liberal government, again, more taxation, carbon taxes, high regulation, chasing capital out of our resource sector, just heavy handed policies right across the board. And now we've got friction with the United States. And so, yeah, we're really feeling it up here. And I think there's no question we could go in. We could quite likely go into a recession. And so, again, when I put all of that together, that's what gives me a more cautious approach from a macro perspective. But again, we zero in on companies. So what we do is we look at that macro, and then we zero down on companies and say, can we find businesses that can navigate these challenges, can continue to grow and deliver the results? And can we buy them at reasonable prices? And that's really what we're focusing on. Although, as we've talked about before, we are carrying about 25 to 30% cash in our portfolios, which is a little bit on the higher side. And that's because we do want powder dry so that we can move quickly and be opportunistic in terms of the marketplace. So that's just a quick and dirty overview, a quick overview of sort of the global situation and some of the challenges that we're facing.