Summary Market recap – Bumpy quarter Market cycle – It’s the economy again Consumer – You shall not pass! Credit conundrum Portfolio positioning Q3 2019 hedge fund letters, conferences and more I. Market recap – Bumpy quarter Heading into the third quarter, market concerns were centered around the ongoing uncertainty of the trade war between the United [...]


Stay The Course Or Be Tactical

One of the more popular charts that the ‘financial marketing machine’ often uses to convince investors to remain invested and not make rash decisions during periods of market volatility is the ‘what if you miss the best 10 days’ chart. We certainly are in total agreement with the sentiment [...]


Correction Time

Note: while most of this was written on Friday before the Monday plunge, we have made a few adjustments including the removal of the question mark from the title. Q2 hedge fund letters, conference, scoops etc Equity markets had enjoyed a strong two-month rally, lifting the S&P 500 to a new [...]


Did Alternatives Get An F In 2018?

Alternatives are sexy. This wide-ranging asset class, which includes hedge funds, structured products, private equity or anything that is materially different to traditional equities or bonds, has an air of exclusivity. Managers in the space range from the reclusive to those who host their own news conferences. The television [...]


Performance Chasing

“Past performance is no guarantee of future results,” or a similar iteration, is likely the most common phrase found among investment disclaimers. To say this phrase falls on deaf ears would be an understatement, and we are pretty sure it is just about everyone’s fault. One of the easiest [...]


More Than A Whisper

The past few weeks have seen the whisper of a near-term recession grow into something arguably much louder than a whisper. The U.S. 10-year bond yield has been declining for much of the past year from over 3.0% to 2.06% as of Friday morning (June 7) after a soft [...]


Sometimes It Pays To Be Good: The Next Wave Of ESG Investing

Investors unfamiliar with Environmental, Social and Governance (ESG) investing principles might express skepticism or perhaps worry about how such an approach might affect the performance of their investments. Many institutional portfolio managers around the globe now view ESG not as its own investing style, but as an alpha-generating supplement [...]


Equities Vs. Bonds: Who Is Right?

Since the start of 2019, the S&P 500 is up by an impressive 13.9%, including dividends. At the same time, bonds – as measured by a total bond market ETF – are up 6.2%. In other words, yields – which started falling during the fourth-quarter equity market correction, have [...]


Margin Watch

Equity markets can be fickle. The fourth quarter of 2018 saw a double-digit correction driven by concerns over how quickly global economic growth was slowing. While partially justified, it appeared to be an overreaction to the downside. Since 2019, we have enjoyed a huge bounce back, partly due to [...]


Active Vs. passive

The active vs. passive debate has been raging for years now and there’s no denying the data of recent years certainly favours passive. Based off the annual SPIVA report from S&P, 2018 was no different. Only 36% of large cap U.S. equity funds managed to best the S&P 500. [...]


All That Glitters

Unlike some attractive investments, gold tends to shine the brightest during times of market turmoil. Our macro view places us in the late stage of the market cycle and we expect bouts of volatility to be more common and violent. This week we’re talking gold and why we recommend [...]


Two Canaries

It’s pretty amazing to see the TSX Composite now at just 4% below its all time high. A far cry from the oversold level of December 24 when the index was 17% off. The pattern is almost identical for the S&P 500, briefly touching 20% below its high and [...]


Value Of Advice

Now that the markets have bounced back and investor nerves are calmed, we can finally write about something less market / economic centric. Given the big market drop in Q4 and the big recovery in January, we wanted to emphasize the importance of staying invested and how going down [...]


Predictably Unpredictable

Earnings With just over 100 companies reported so far in the U.S. and the bulk of the Canadian earnings season just around the corner, we thought it fitting to have a look at how the season is progressing and what it’s all about. Earnings are the beating heart of valuation [...]


How Cheap It Is

Just a heads up: we will soon be publishing our Market Outlook for 2019 and beyond, entitled “Punch bowl hangover”. In the report, we provide a recap of 2018, a bull vs bear comparison for 2019, our baseline scenario, how we are positioned and a refresh on the Canadian [...]


Whatever You Do, Don’t Look Now!

What a week for the markets. As fears that the world’s two largest economies would continue to escalate their trade war subsided, we began our week thinking the worst was behind us. Our expectations were shattered on Tuesday when the S&P 500 took a nose dive, falling as much [...]


There Is Value Out There

On January 1 of this year, the S&P 500 had just completed 2017 which enjoyed record operating earnings of $124.50. With just one quarter to go, if current estimates hold for the final quarter, the S&P 500 will set another record of $157.70 in earnings for 2018, an increase [...]


Market Cycle: Good But Getting Skinny

Market cycles don’t die of old age, and that is good news as this cycle can only be described as being “rather mature”. Just a reminder, we do not view the market cycle in terms of bull and bear markets for a specific index (otherwise one could argue the Canadian [...]


As Facts Change, So Do Our Views

We have been long-time proponents of rising rates, that equity portfolios should be tilted heavily toward cyclical yield and limit exposure to interest rate sensitive companies. Cyclical yield companies are more sensitive to economic activity, meaning if yields are moving higher due to better economic data, they react more [...]

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