Cardinal Update – March 2021
THE BANKING BOUNCE-BACK – Since the first vaccination approval was announced by Pfizer-BioNTech on November 9, 2020, the Canadian banks and U.S. banks held in the Cardinal portfolios have tracked an average return of ~27% and ~50% as compared to the total returns of the S&P/TSX at ~12% and the S&P500 at only ~8%.
What has led to the banks’ comeback and what drivers keep us confident in the space? The most apparent driver of the strong returns from the sector is the vaccination news itself which signals a hopeful beginning of the end to the current COVID-19 health crisis. With an end to the pandemic comes expectations of renewed economic growth of which banks are historically strong participants in the early cycle recovery through lending growth and capital markets activity.
Click here to read more: Cardinal Update – March 2021
DM Monthly Report – Feb 2021
The Stock Market is Dangerously Expensive – OR IS IT? – The market’s almost unrelenting ascent from its spring 2020 low has raised concern that stock prices have become precariously disconnected from fundamentals and are being buoyed primarily by the tsunami of liquidity unleashed by fiscal and monetary authorities. To be sure, the S&P 500 has rarely been as expensive as it is right now when judged by the commonly referenced price/earnings ratio; if cash flow is used as the yardstick, though, equity valuation doesn’t appear to be particularly stretched against where it’s tended to reside over the past 30 years.
Click here to read more: DM Monthly Report – Feb 2021
Cardinal Update – Feb 2021
Hindsight is 20/20 – A Lookback at an Unprecedented Year – Unprecedented was a term often used in 2020, and it’s hard to find a better word to describe the year. 2020 started out ordinary enough with many economies humming along, and the U.S. Presidential election was seen as the mostly likely event that could unsettle markets. Instead, we found ourselves facing down a global pandemic the likes of which the world had not seen since the Spanish Flu in 1918.
On March 11, the WHO declared a global pandemic just days after Italy went into a nationwide shutdown. Many countries soon followed suit with Canada closing the land border with the U.S. on March 18 and several provinces declaring states of emergencies.
Click here to read more: Cardinal Update – February 2021
DM Portfolio Commentary – Q4 2020
A year like no other – Last summer, life – or at least a marker for life – was discovered on Venus. Evidence that we may be sharing our solar system with other animate organisms would have probably been a headline grabber in any other year, but in 2020 the pandemic bound news cycle was simply too intense and congested to leave room for much else. Without warning, our collective thoughts, actions, and discourse were singularly consumed in a way that has not likely happened since the Second World War.
Setting aside the health and social consequences of the events of the past 10 months, the economic
impact has been profound.
Click here to read more: DM-Portfolio-Commentary-Q4-20
