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The AI trade is showing signs of cracking.

Rising interest rates, concerns about massive data centre spending, and questions about future returns are putting pressure on some of the market's biggest winners. Is your portfolio prepared if the AI boom loses momentum?

In this episode of the Long Term Investing Podcast, Barry Schwartz, President & CIO of Baskin Wealth Management, and Ernest Wong, Head of Research & Portfolio Manager, discuss why

diversification matters more than ever and why they're sticking with their strategy of owning high-quality, profitable businesses rather than chasing the hottest stocks. They explain the risks of an increasingly AI-concentrated S&P 500, why rising borrowing costs could spell trouble for companies like

CoreWeave (CRWV), and what separates speculative AI investments from companies that

can fund their own growth.

They also take a closer look at Taiwan Semiconductor (TSM), which is benefiting from explosive demand for AI chips, and explain why its disciplined approach to spending makes it an attractive long-term investment. Plus, with fast-food stocks struggling under the weight of inflation and a stretched consumer, Barry and Ernest discuss the challenges facing McDonald's (MCD) and why they continue to see opportunity in Domino's

Pizza (DPZ), despite its recent struggles.

With markets shifting and investors questioning what's next for AI, Barry and Ernest explain why fundamentals, cash flow and patience—not short-term performance—remain the keys to building long-term wealth.

Learn more about Baskin Wealth Management at baskinwealth.com.

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What do you do when a stock you own drops 26% in a single day? For long-term investors, moments like these can be the ultimate test of conviction.

In this episode of the Long Term Investing Podcast, Barry Schwartz, President and Chief Investment Officer at Baskin Wealth Management, and Ernest Wong, Head of Research and Portfolio Manager, break down the sudden plunge in Fair Isaac (FICO), what changed for the business, and why they’re resisting the urge to make a knee-jerk decision. They discuss how to determine whether a falling stock represents a broken investment thesis—or simply a new challenge for a strong business. They also look back at lessons from Netflix (NFLX), TFI International (TFII.TO) and Moody’s (MCO), where sharp selloffs didn’t necessarily tell investors what would happen to the businesses over the long term.

Barry and Ernest also tackle rising interest rates in Canada and the U.S., why chasing higher yields in U.S. fixed income can introduce unexpected currency risk for Canadian investors, and why they prefer keeping bond maturities relatively short.

Finally, they make the case for Costco (COST). From cheaper gas and growing membership benefits to e-commerce, delivery and new stores, Barry and Ernest explain why they believe Costco’s flywheel continues to strengthen—and why they think the company deserves its premium valuation.



Plus, why sometimes the hardest—and smartest—thing a long-term investor can do is nothing.

Timestamps

00:00 Intro

00:54 The three topics: FICO, interest rates, and Costco

02:48 FICO’s 26% drop: what happened?

03:41 Why investors shouldn’t react too quickly

04:34 Netflix and TFI: lessons from sharp selloffs

06:33 How US agency mortgages work

07:33 Credit scores and mortgage pricing

08:27 FICO vs. VantageScore: what’s changing?

11:10 Why mortgage lenders may favor VantageScore

11:56 The risk of weaker underwriting

13:22 How much FICO market share is priced in?

14:22 FICO’s other revenue streams and FICO 10T

15:28 FICO’s profitability and cash flow

16:25 Moody’s: a regulatory-fear comparison

17:54 Diversification and managing stock risk

18:34 FICO’s growth outlook over the next 3–5 years

20:25 Interest rates, inflation, and fixed income

22:29 The currency risk of chasing US bond yields

24:30 Why short-duration bonds can help in rising-rate markets

25:57 Costco’s earnings and business strength

27:07 Costco gas and membership value

28:42 Costco’s membership flywheel

29:02 Store growth and expansion potential

30:06 Why Costco can gain share in volatile times

31:05 Costco same-day delivery

32:31 Is delivery incremental or cannibalistic?

33:44 Why Costco commands a premium valuation

35:53 Closing thoughts

Links

www.baskinwealth.com

info@baskinwealth.com

DISCLAIMERS

This podcast is for informational purposes only and any forecast on the economy, markets or individual securities should not be viewed as investment advice, a recommendation or an offer or solicitation to buy or sell any securities. Clients of Baskin Wealth Management and the speakers on this podcast may own shares of the companies discussed. Information on this podcast is current as of the time of production and is subject to change. If you have any questions or would like to subscribe to these podcasts, visit our website at baskinwealth.com.

Meta has spent billions betting on artificial intelligence. Now, investors may finally be getting a glimpse of what that investment could become.

In this episode of the Long-Term Investing Podcast, Barry Schwartz, President and Chief Investment Officer, and Ernest Wong, Head of Research and Portfolio Manager at Baskin Wealth Management take a closer look at Meta’s new AI assistant, Muse, and the rise of agentic AI—technology that doesn’t just answer questions, but can actually complete tasks for you, from booking a restaurant to shopping for insurance or cancelling unwanted subscriptions. The bigger question is whether AI agents could eventually change how we shop, search and interact with the internet.

That could have major implications beyond Meta. Barry and Ernest discuss why Amazon is pushing back against Muse, the value of controlling customer purchasing data, and how Google and Apple could respond as Big Tech competes to become the AI agent consumers rely on. Could AI agents become a new gateway to online commerce—and what would that mean for some of the biggest companies in the market?

They also look at what Muse could mean for the investment case for Meta. After spending heavily on both the metaverse and AI infrastructure, Meta now has a product generating excitement among users. Barry

explains why he remains optimistic about the company’s long-term opportunity and why Meta continues to be a holding in the portfolio.

Plus, what can investors learn from baseball? Barry and Ernest use Vladimir Guerrero Jr.’s massive long-term contract and Moneyball to explore an important investing lesson: past success matters, but ultimately

investors are paying for the returns a company can generate in the future. They explain why they look for strong businesses where management is properly incentivized, capital is allocated intelligently and the market may be distracted by the wrong narrative.

Is agentic AI the beginning of a new internet—or another technology investors are getting too excited about too soon?

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