Monthly Commentaries

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 […]

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 […]

The CFA standard notes “Members and Candidates have a duty of loyalty to their clients and must act with reasonable care and exercise prudent judgment.” How does that fit with investing client monies in cannabis stocks or bitcoin. Or some of the high flyer tech names like Shopify or Lightspeed which, at this writing, have […]

Over the past few years the Canadian investment industry has hollowed out, with far too many independent investment firms being acquired. These firms have either concentrated too heavily on a declining global asset class (Canada), or failed to build a successful succession/exit strategy for the original builders of the business. Or perhaps its simply the […]

In an interview last week, the great Charlie Munger said “more damage to the world comes from the cognitive glitches than does from malevolence.” Arthur Conan Doyle’s Sherlock Holmes noted “If you eliminate the impossible, whatever remains, however improbable, must be the truth.” And of course, Ockham’s Razor suggests that, all other things being equal, […]

Accepting that investing is really hard, true investing – which we define as the allocation of capital to either entrepreneurs or company management requiring funds to exploit an opportunity to generate profits – in Canada is a monumental task. “No matter how great the talent or effort, some things just take time: You can’t produce […]

“In the business world, the rearview mirror is always clearer than the windshield.” Warren Buffett With the recent acquisitions of Goldcorp by Newmont Mining and Solium Capital by Morgan Stanley, two more Canadian businesses have disappeared. Goldcorp joins a long list of Canadian miners to be scooped up by foreign acquirers over the past 15 […]

“Let others believe markets can never be beat. Abstention on the part of those who won’t venture in creates opportunities for those who will.” Howard Marks from The Most Important Thing Snakes and Ladders is a classic children’s game, played between two or more players on a gameboard having numbered, gridded squares. A number of […]

We tend to believe October was a revaluation exercise; simply put, as interest rates rise so do discount rates reducing the valuation of future cash flows. While the downturn has been sharp, liquidity tightening remains benign and market/economic fundamentals remain strong. However, as we write this note, the markets are showing an upswing. Whether it […]

While the equity investing landscape has admittedly turned more volatile in the past six months, we continue to believe most investors are so entrenched in “climbing a wall of worry” that they are missing a much more compelling story, as alluded to by Mr. Buckland. All this to say, for boutique equity investors like Laurus, […]

We have contended for some time that clients are best served owning small cap investments equally proportionate to traditional large cap investments. Investors, on the other hand, tend to perceive small cap investing as a volatile group, based on the actions of both a poorly constructed index and a group of poorly designed products. This […]

What investment style will be best suited to markets where returns are limited? This month we suggest that business culture and it’s ability to strengthen intellectual resources plays just as important a role in the sustainability of a client’s risk-adjusted return. “The strongest assumption behind the law [of active management] is that the manager will […]