Cardinal Update – Dec 2019
Yield vs Growth and the New Global Income Portfolio – We have launched a new portfolio for clients who are more focused on income generation: the Global Income Portfolio.
Rest assured, our approach to this new portfolio does not drift away from our tried-and-true investment philosophy. All companies that Cardinal invests in, regardless of the portfolio, must pay a dividend. From here, the stock selection process is not as simple as it may seem. For a higher dividend yielding portfolio such as this one, you might expect our process to start by sorting a list of dividend paying companies and simply buy the highest yielding ones. We take a much more meticulous approach.
First, we are keenly focused on the quality of the dividends above all else. This means conducting in-depth research to understand how the dividend is funded. Does the company predictably generate cash flows in excess of what it needs to maintain its competitive position? Has this competitive position resulted in growing free cash flow or profitability and will it reliably extend into the future?
Click here to read more: Cardinal Update – December 2019
DM Monthly Report – Dec 2019
WHAT IF THERE’S A THIRD WAY? The recent federal election might have been the most divisive in our history, with the political map almost perfectly cleaved at the Manitoba/Ontario border. No topic separated attitudes more than the fate of our energy as-sets, with one side dug in for jobs and revenue, and the other counting these benefits as insignificant relative to our collective responsibility for the environment. What if these positions aren’t mutually exclusive, though? What if the case for Canadian energy development and the best intermediate course for the global environment were one and the same? The chart below shows world oil consumption over the past decade, which will soon pass 100m barrels/day for the first time:
Click here to read more: DM-Monthly-Report-Dec-19
Cardinal Update – Nov 2019
Artificial Intelligence – Predictions are the process of filling in missing information. It uses information you have (data) to generate information you don’t have. For example, A.I. is being used in radiology. It is trained with millions of old images and diagnostics. It is then given a new patient scan and gives a prediction as to whether cancer is present or not. Tests are conducted to confirm the prediction and this data is fed back into the A.I. to improve the prediction ability. This is superior to human ability due to the sheer amount of data an A.I. has accessed.
In terms of our portfolio’s exposure to A.I., under the framework of “cheap predictions” the answer is literally every company in the future will have exposure to A.I. in some way or form.
Click here to read more: Cardinal Update – November 2019
Cardinal Quarterly – Oct 2019
Market Outlook – Stock markets across the globe have continued to climb a wall of worry, with most major indices near record highs despite consistent fears that a downturn is imminent. We still believe that investors will be rewarded far more for optimism than pessimism. Given headline grabbing risks such as the China trade war, a number of military hotspots like Iran where tensions are escalating, and now the threat of Presidential impeachment, being optimistic is not easy.
Click here to read more: Cardinal Quarterly – October 2019
