LATEST INSIGHTS
Thoughts, insights and opinions from our team of investment experts.
Too Great Expectations
Our expectations are already lowered for general market returns. When expectations are this high, our fear of losing overcomes any fear of missing out. We still see a high probability of an economic downturn and remain defensively positioned for that reason as well, and we continue to hold some cash and hedges that should protect our portfolios when everybody else’s expectations are lowered.
A Grand Illusion?
Only time will tell whether today’s lofty index valuation levels represent a grand illusion relative to prevailing and forthcoming economic underpinnings. Either way, our macro and micro analysis suggest that investors are simply too optimistic about stocks generally, boosting overall risks. Market declines may be closer than they appear.
Steering Clear of the Dear
As value investors we gravitate to undervalued securities—those that are inexpensive relative to our fair market value (FMV) assessments, because they are out of favour or underestimated. Similarly, we steer clear of those that are popular and dear.
We look to avoid overly popular companies that are priced too high, susceptible to decline, and result in misery.
A Constant Battle
Successful investment strategies are dependent on a robust infrastructure. Outperformance is the accumulation of many small edges, so every component of the investment process is critical, and must be continuously analyzed for areas of improvement.