Monthly Commentaries

Monthly Commentaries / November 30, 2020

The Consensus Value Rotation

This month’s comment begins with another excerpt from Howard Marks, suggesting future market returns will be depressed as a result of low interest rates. While agreeing with Marks in principle, we are also aware that high quality companies have been commanding much higher valuations – a subset of the low interest rate environment. That has […]

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Monthly Commentaries / November 15, 2020

November 2020 Commentary

“…the low interest rates represent the dominant characteristic of the current financial environment, creating the dominant consideration for investors: the lowest prospective returns in history.” Howard Marks, October 2020 Despite this year’s extreme volatility, the past ten years have been an extraordinary time to be an equity investor. Following the last financial crisis, investors have […]

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Monthly Commentaries / October 31, 2020

Small Cap Allocations

In a recent consultant conversation, I wondered why Canadian investors had shied away from small cap strategies over the past half-decade. Three reasons, I was informed: the general move away from public markets led institutional investors to private equity investments over public small caps; performance of small cap strategies relative to large caps; and, the […]

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Monthly Commentaries / August 31, 2020

Specific Market Risk

Listening to the “experts” on the TV or, heaven help us, reading their opinions in the newspaper, one might believe that the current uptrend in the markets is overdone. Or perhaps there might be an economic reversal to the April low. Or, even better yet, that there is a possible retrenchment of market prices to […]

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Monthly Commentaries / July 31, 2020

What’s it worth?

True, there are those who don’t really try to answer that question. For example, some momentum strategies have a valuation overlay, though most do not. And there are times when the relative performance derby causes fundamentally-oriented investors to toss their valuation discipline out the window. “As long as the music is playing,” as one infamous […]

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Monthly Commentaries / May 31, 2020

All things must pass

As many of you know, our key message to clients and allocators is that investing begins, and ends, with people – whether our team, our clients, or the management we engage with on a regular basis that run the companies we invest in. As we move through the COVID-19 pandemic, each of these key groups […]

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Monthly Commentaries / April 30, 2020

The Pandemic Lockdown

The devastating blow of the pandemic lockdown continues to unfold on the global economy, causing a near-stop to travel, migration, and gatherings. For those of us who continue to work while our physical workplaces are closed, to say we’re “working from home” is not quite accurate: we are confined to our homes due to a […]

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Monthly Commentaries / February 29, 2020

Goodhart’s Law

Our February comment was released following a difficult final ten days of the month – not that it relates to the current events. The events are, as it’s said, what they are. The market already understands that virtually everything in China is shut down. Autos sales have plummeted, 99% of nightclubs closed, 70% of restaurants […]

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Monthly Commentaries / January 31, 2020

Appealing to Interests

This month our CIO, Linda Lebrun, outlines why we believe management ownership of corporate stock best aligns them with shareholders. Simply put – we human beings are self-centered and respond well to incentives that appeal to our self-interest. One is simply more inclined to be more attentive if the incentive structure appeals. Linda’s note speaks […]

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Monthly Commentaries / November 30, 2019

The Narrative

This month we speak to the narratives that pervade the investment ecosystem. Skimming through Damodaran’s “tribes” (storytellers and number crunchers) humorously reminds one of Twain’s “lies, damned lies, and statistics”. Yet the narrative plays an important part in a manager’s communication with clients and potential clients; after all, written commentary with supporting statistics can be […]

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Monthly Commentaries / October 31, 2019

Oils Not Well

In a stunning announcement November 1st, Pengrowth Energy Corp. announced its sale to Cona Resources Ltd. for five cents a share and assumption of company debt. Once a $7.2 billion oil and gas exploration company, Pengrowth Energy has lost almost 99.6% of their equity value in the past six years. Over the past twelve months […]

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Monthly Commentaries / August 31, 2019

Time to Slow Down

The four most dangerous words in investing are “this time it’s different” according to John Templeton. At stock market tops, investors invariably use this rationale to justify their emotion-driven decisions. Howard Marks recent memo This Time Its Different is another must-read for the current environment. Particularly his reference on “perpetual prosperity from quantitative easing”.  While […]

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