Have you ever heard the words “it’s priced in,” referring to the market or an investment pricing in some sort of potential negative event? The TSX is trading at 13x earnings estimates, historically low for this index, clearly pricing in some uncertainty or potential recession ahead. The S&P is trading at 19.7, which is historically high, implying the U.S. may not be pricing in much chance of a slowdown. Truth be told, in our years of investing, it’s never completely priced in. Even the low-valuation markets will likely feel some pain if a recession does come. But likely less pain compared to those markets that are not pricing in any potential bad news.

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