Market Commentary

January 2020 Update

Let joy be in your journey, not some distant goal. – Tim Cook, Apple CEO

Markets

For the most part our companies had a great start to 2020. Our energy companies in the Growth Portfolio gave back some of the recent gains on corona virus fears, which was offset partially by very strong performance from our gold companies. With continuing easy money policies on both sides of the border and another round of good company earnings expected, our first quarter is setting up to be a good one. Of note for the Growth Portfolio, Canadian natural gas inventories now sit around a record low, while energy consumption shows no signs of abating. All the ingredients are here for a significant change in investor sentiment, with the potential to re-rate the energy stocks much higher. Across all Portfolios, the improvements I made in our quantitative systems last year have been working very well, and I’m encouraged by the results. There is a lot of ground to cover still, and I’m looking forward to surpassing our previous bests.

Financial Planning

When was the last time you reviewed your Will and Power of Attorney? Did you know that most Wills become out of date only three years after they’re initially written? Assets change, liabilities change, and responsibilities change – that’s life. This month please do yourself a favour, your executors a favour and your beneficiaries a favour by ensuring your Will and POA reflect your wishes as you still intend them. If you need a referral to get things updated please be in touch.

Recommended reading

The insightful Howard Marks on how to judge the quality of decision-making https://www.oaktreecapital.com/insights/howard-marks-memos

A short video covering the upside case for Canadian energy https://www.youtube.com/watch?v=JzoVQGxY55U

A deep dive into why value stocks got so cheap https://www.researchaffiliates.com/en_us/publications/articles/reports-of-values-death-may-be-greatly-exaggerated.html

An explanation on why “bad” investments worked so well this decade https://mailchi.mp/verdadcap/right-for-the-right-reasons?e=2b9731f7fb

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