In short: A mailbag question he answers on management first: "I met the new management, new CEO, new CFO. I was extremely impressed. The CEO comes from a background of big US companies. He knows what he's doing. Basically, he's reviewing every aspect of the business to make everything better. And you can't do everything at once, but every week he's looking at different things." That sets the timing honestly: "I'm not sure if the earnings are going to grow in the next two years, but probably stable, but making the business a lot better. So actually I like it. So we own some. It's not a big position yet because I'm not sure it's ready to take off soon because of all these restructuring and changes, but now I really believe it's really really well managed and it's almost a monopoly. So it's a good business to own long term." On the cyclical fear: "people travel more and more. There's more pilots every year… and it's a law for these people to train. So not worried about that." Plus a second engine — "there's also a military side of their business which is not that big, but Europe wants to spend more money, Canada wants to spend more money. So that side of business also looks pretty promising."
CAE builds and operates flight simulators and trains pilots. Tardif calls it "almost a monopoly," which is the reason to own it at all: airlines have very few alternatives, and pilot training is not optional — it is legally mandated and repeated throughout a career.
The stock has done poorly and there is new leadership. He met both the new CEO and CFO and was "extremely impressed" — the CEO came from large US companies and is working through every part of the business methodically, "every week looking at different things." That is a positive, but it also sets the timetable honestly: fixing a business one piece at a time takes years, and he expects earnings to be roughly flat rather than growing for the next two.
Hence the sizing, which is the genuinely instructive part. He owns it, but deliberately small — "it's not a big position yet because I'm not sure it's ready to take off soon." Conviction in a business and conviction in its timing are separate decisions, and he sizes to the weaker of the two. On the fear that airline cost pressure limits the turnaround, he is dismissive: pilot numbers grow every year worldwide and training is compulsory. The defence side, though small today, benefits from European and Canadian military spending.
29:23So I'm not sure if the earnings are going to grow in the next two years, but probably stable, but making the business a lot better. So actually I like it. So we own some. It's not a big position yet because I'm not sure it's ready to take off soon because of all these restructuring and changes, but now I really believe it's really really well managed and it's almost a monopoly.
In short: Admires the technology (he crashed one of their Dorval flight simulators) but "it's not been a definition cheap stock" — a quality Canadian name crowded into by managers "running too much money" who are forced to own it. Second worry: a question mark over the US business as jet-contract politics and deliberate US "uncertainty" put Canadian defence suppliers at risk of retaliation.
CAE builds flight simulators and trains pilots — Morrison has flown (and crashed) one of their machines near Montreal and rates the technology. But he's never been able to buy it, for a structural reason worth generalising: once a Canadian company is recognised as high quality, a small group of very large domestic funds crowds into it and effectively has to own it, so it rarely becomes "definition cheap."
There's also a live risk he flags. A meaningful part of CAE's business is American, and Canada–US relations are being deliberately kept uncertain; if Canada buys its fighter jets elsewhere, Canadian defence suppliers could be penalised in retaliation. Good company, wrong price, real political overhang.
29:31I think they've struggled because it hasn't been definition cheap. and then there's a question mark about what happens to their US business right so as our prime minister is flying around trying to do jet deals with others it's you mentioned the word uncertainty I went to a dinner with the US ambassador and I lost count at I needed a calculator to count how many times the US ambassador used the word uncertainty they're obviously trying to diabolically create
In short: "One of the more interesting stories on Bay Street" — worth buying here; new CEO candid about past failures, the cyclical civil-sim side is the drag but the defense arm can grow as Canada lifts defense spending.
CAE is a Canadian company that makes flight simulators and training for airlines and militaries. Its civil (airline) side has been cyclical and disappointing — that's the part that's dragged the stock down.
But its defense business can actually grow as Canada and allies ramp up military spending, and a new CEO (from defense-maker Northrop Grumman) has been refreshingly honest about past mistakes. Harris thinks it's "worth buying here" — buy on the dips and accept that the civil side stays cyclical.
26:01that kind of support with Blackberry, right? Let's talk about a Quebecing company which is CAE. Shares have been struggling. Is it worth buying here? I think this is one of the more interesting stories on Bay Street right now, right? Um it has underperformed, but it's got that defense part of its business. It's got its civil part of its business. It's got new CEO, right,
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Verbatim excerpts from the public transcripts (auto-pulled at each mention's timestamp, lightly cleaned). Timestamps link into the video; "source page" opens that commentator's full analysis at this row. Click a mention's header line to expand it (one open at a time). For personal study — not investment advice.