DM Market Update
HEALTH AND MARKET CRISES ACCELERATE – Just days ago, we issued our March comment outlining our thoughts on COVID-19 and its likely effect on in-vestment portfolios. Like virtually everyone at the time, we vastly underestimated the ability of the virus to cross seas, proliferate, and wreak havoc on our economy and markets. The reckoning has been swift, with in-dices staging their most rapid decline in history and measures of internal market stress reaching and, in some cases, exceeding levels marked during the 2008/09 financial crisis. This has left little room to gather one’s thoughts, let alone reorient portfolios holdings or adjust allocations.
Click here to read more: DM-Market-Update-Mar-20
Cardinal Update – Feb 2020
Is Inflation Coming out of Hibernation? We have been in a relatively benign inflationary environment for many years now where the Bank of Canada has, for the most part, kept inflation contained within its 1-3% target range.
Last year, inflation spent most of the year very close to the midpoint of that range. The first quarter of 2019 was the low point of the year with the headline CPI posting readings in January and February of 1.4% and 1.5%, respectively. It then rebounded and spent the rest of the year around 2%. Currently, inflation is sitting at 2.2% and does not appear to be an issue, but what would happen to our portfolios should things change and inflation starts to rise?
Click here to read more: Cardinal Update – February 2020
DM Monthly Report – Feb 2020
MANAGER OF THE DECADE? DM’s equity management process lists four events which will prompt a full position review, with liquidation of the holding in question a possible outcome. One of these triggers is a change in corporate management and, in early 2014, Microsoft presented us with such an inflection point.
Leading up to that time, investors had grown weary of the company’s direction, believing that its executive team had fallen a step behind the rapidly evolving tech space, while allowing a dysfunctional corporate culture to manifest in which business silos competed ruthlessly with one another and teams actively avoided collaboration.
Click here to read more: DM-Monthly-Report-Feb-20
DM Monthly Report – Jan 2020
MORE THOUGHTS ON THE DECADES PAST AND FUTURE – In our Q4-19 portfolio commentary, we facetiously claimed to know exactly what the coming decade would bring (actually, we were imagining it was January 1990 instead of 2020 and that we were about to invest with the benefit of perfect geopolitical and economic foresight). Our aim was to emphasize that, even though compelling predictions for the next 10 years are now abundant and illuminated by vivid descriptions of current conditions, stock performance often bears little correlation to what our rational minds perceive to be the most important factors.
Another common cognitive bias that influences investor behavior is the belief that an extended period of growth is most likely to be followed by reciprocal weakness.
Click here to read more: DM-Monthly-Report-Jan-20
