It’s a Marathon Not a Sprint
As 2023 dawned, the consensus of economist forecasts pointed to an elevated risk of recession sometime during the year. After all, central bank interest rates had risen dramatically from virtually zero in early 2022 to 4.25% in Canada and 4.5% in the U.S. by the end of 2022. Consumer price inflation peaked in June 2022 […]
The Love Letter – July 2020
It’s 2020, but the outlook isn’t 20/20 It’s been four and a half months since the World Health Organization declared COVID-19 a global pandemic. It seems that the world has both stood still and evolved considerably during these past few months. As in the aftermath of a terrible storm, we are slowly emerging from our […]
The Love Letter – June 2020
Strong body armour enhances dividend sustainability for Canadian banks Heading into a pivotal earnings week, the Canadian bank subsector of the S&P/TSX Composite Index had declined 24% since the beginning of the year, vastly underperforming the overall Canadian stock market’s year-to-date decline of 11% (to May 22). Lower net interest margins, higher expected loan losses, […]
The Love Letter – May 2020
The road trip is cancelled, but the roadmap is intact Normally at this time of year, Himalaya and one or more of his sons set out on a 3,500km roundtrip journey to Omaha, Nebraska to attend the annual general meeting of Berkshire Hathaway (this year’s meeting is being held Saturday May 2). Due to COVID-19, […]
The Love Letter – April 2020
The risk and opportunity of investing in Canadian banks A foreigner visiting a Canadian city for the first time could tell a lot about us by standing at any major intersection. Tim Horton’s would occupy one corner, on the second could be a Shoppers Drug Mart or gas station or LCBO, and the remaining two […]
The Love Letter – March 2020
Fear and Greed: The human emotions that drive market extremes For the week ending February 28, the S&P/TSX Composite Index declined 8.9% and the S&P500 Index declined 11.5%, marking the worst one-week performance since the 2008 financial crisis. It’s noteworthy that these same markets had just set new all-time highs the week before. While […]
The Love Letter – January 2020
Investing like a pension fund Canada’s six largest pension funds collectively manage $1.3 trillion on behalf of their beneficiaries, representing 62% of the $2.1 trillion total pension fund assets in the country (based on reports from the Pension Investment Association of Canada). To provide context, the total estimated value of Canada’s equity and bond markets […]
The Love Letter – November 2019
Real estate: perennially out of the limelight, but consistent outperformer Over the course of a year, we attend dozens of presentations put on by institutional strategists, economists, and portfolio managers. These sessions are valuable as they add to our body of knowledge and help to compare our own market views with other market participants. A […]
The Love Letter – Sept 2019
Let’s make a deal Viewers of Let’s Make a Deal, the TV game show of yesteryear, will remember the intrigue as the two final contestants had to choose among three doors before the set of prizes was revealed one by one. Occasionally, host Monty Hall would give contestants the option to change their selection after […]
The Love Letter – Aug 2019
As an economic inflection point nears, we expect volatility to remain high If you’re seeing or hearing the word “recession” more often in recent weeks, you’re not alone. The body of evidence of an impending economic slowdown is starting to grow. After a robust start to the year, the recent spike in volatility can be […]