DM Monthly Newsletter – Jan 2017

IN EQUITY MANAGEMENT, SIZE CAN MATTER – Investment management is one of the new businesses in which size can be a detriment. Manufacturers with great scale are able to undercut competition on project bids, huge retailers can secure lower prices from product makers by buying in volume, and large pharma companies often maintain their edge by snapping up smaller competitors with successful or promising innovations. In managing portfolios, though, being big can be a significant hindrance to performance, especially in Canada where our equity markets lack the liquidity of large exchangers. In opening a portfolio position, a manager must not only be sure that the required number of shares can be purchased without flooding the market and driving up price, he or she must think about the possible future exit point and whether there are typically enough shares traded to absorb the holding in a timely fashion.

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Cardinal Update – December 2016

OPEC – On November 30, the members of the Organization of Petroleum Exporting Countries (OPEC) met and agreed on a production cut for the first time since 2008. It marks a 180 degree change from November 2014 when, faced with an oversupply, the cartel decided not to cut production. That 2014 meeting sealed the fate of the oil price recession as the Saudi’s put the cartel before the horse, targeting market share, rather than the price.

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DM Monthly Newsletter – Nov 2016

U.S. ELECTION REVIEW – This is why we shun the forecast game that fuels the financial media and in which so many managers are willing to partake! If asked for predictions, we would have been 0 for 2 on the US election, never having fathomed a Donald Trump presidency and certainly not guessing that stocks would be up at the market’s open. In light of the unexpected landscape that greeted us this morning, here are some of the points that will inform our thinking going forward:

• Clearly, that market is placing significant weight on the “pro-growth” aspects of the president elect’s platform….
• Within DM portfolios, there isn’t  yet a stark delineation between “winning” and “losing” groups….
• Bond yields have risen….

Click here to read more:  dm-monthly-report-nov-16

Q3 Portfolio Commentary

Relatively speaking… – The third quarter wasn’t supposed to go this way. July opened with stocks still reeling from Britain’s wholly unexpected decision to part ways with the EU and the feeling was widespread that this episode would mark a definitive tipping point in the market’s path. As it happened, though, equity benchmarks defied expectations, with the S&P 500 and TSX gaining about 4% and 5%, respectively, over the three month interval.

Click here to read more: dm-portfolio-commentary-q3-16