Cutting Through the Noise
October 29, 2011
“Creep.” The dictionary defines it as a "slow and stealthy movement." To me, it’s something you don’t notice while it’s happening, but later when you do, you go "Wow!" If you think about our lifestyle, we've slowly moved to a place where jeans are...
Read MoreOctober 28, 2011
Oracle, which is a holding in the Equity Fund, announced a takeover bid for RightNow Technologies this week. In the past, Oracle has proven to be an effective and disciplined acquirer, but there is talk on this one that they paid too much – over 5 times sales...
Read MoreOctober 24, 2011
I came across a talk by China-based professor Michael Pettis on Paul Kedrosky’s ‘Infectious Greed’ blog. For those who are interested in China and where it’s headed, I highly recommend these 38 minutes. It’s heavy duty economics, but the points are...
Read MoreOctober 21, 2011
In the economic discourse of today, the camp that says we’re going into the tank has lots of ammunition. You don’t have to go past the front page of the newspaper to know we’ve got issues. For those arguing that we’ll be OK, or at least not have a severe...
Read MoreOctober 18, 2011
China, India and the other emerging economies will grow considerably faster than the developed world over the next ten years. That statement appears to be as close to an economic certainty as anything we can say today. Does it follow then that any...
Read MoreOctober 15, 2011
I’ve written in the past about the tension between the investment profession and the investment business. As asset managers, we need to find a balance between managing portfolios to achieve the best return for our clients, and making a profit for...
Read MoreOctober 7, 2011
We write a lot in this space about investor sentiment. Art Phillips, the founder of Phillips, Hager & North, taught me to pay attention to the mood of other investors. Like every tool, sentiment is not a failsafe indicator, nor is it a precise timing tool. It is, however...
Read MoreOctober 3, 2011
Dan Hallett published a piece today about mutual fund fees and how they compare to the U.S. It puts some meat on a topic that so far has been laden with hyperbole. Management expense ratios (MERs) are a lot higher in Canada, but as Dan points...
Read MoreOctober 1, 2011
“In calmer moments, investors recognize their inability to know what the future holds. In moments of extreme panic or enthusiasm, however, they become remarkably bold in their predictions: They act as though uncertainty has vanished and the...
Read MoreSeptember 28, 2011
Below is an internal email from Chris Stephenson today. It wasn’t meant for public consumption (it’s an email, not a blog), but Chris is OK with me doing this. With David’s experience with the [un-named fund company] rip-off, the Globe article about $1,305...
Read MoreSeptember 26, 2011
"The risks are the usual: what you don’t know; what you’re not thinking about; probably the biggest risk is what you are 100% sure about.” Bruce Berkowitz, Fairholme Capital Management, in a speech at Columbia University earlier this year...
Read MoreSeptember 22, 2011
The CBC woke me up this morning with rain warnings (Is summer really over?), big stock market declines and the voice of Finance Minister Jim Flaherty. The rain and markets didn’t get me too worked up, but I found the minister’s attempt at optimism...
Read MoreSeptember 21, 2011
I was talking with a client last week about portfolio re-balancing and the challenges of volatile markets. I often tell the story of Bob Hager’s shaking hand to illustrate how hard it is to do the right thing when markets are down, but his story is just as good at bringing the...
Read MoreSeptember 17, 2011
“Isn’t it funny when you walk into an investment firm and see the financial advisers watching CNBC. It gives me the same feeling of confidence I would have if I walked into the Mayo Clinic and the doctors were watching General Hospital.” This little...
Read MoreSeptember 13, 2011
‘skin in the game’ … ‘eating our own cooking’ … ‘co-investment’ … ‘manager-client alignment’ … These are all phrases we use to describe our commitment to clients and the desire to have our interests closely aligned to theirs. This alignment takes many...
Read MoreSeptember 3, 2011
I got turned on to finance while stumbling through my MBA at the University of Western Ontario. I suddenly found myself reading Report on Business right after the Sports section (go figure). When it came to finding a job, I got lucky. There weren't many...
Read MoreAugust 26, 2011
It was announced this week that Vanguard will start in Canada with 6 ETFs. In response to the news, blogger Michael James expressed disappointment that the 2 foreign equity funds would be hedged back into Canadian dollars. I wholeheartedly agree with his view.
Read MoreAugust 21, 2011
In light of the recent weakness and volatility in the stock market, both statements are particularly poignant. It’s easy to agree with the logic and simplicity of Warren Buffett, but not so easy to behave like him. My former partner's shaking hand reinforces...
Read MoreAugust 15, 2011
I came across a commentary in the Financial Times this week on the downgrade of U.S. government debt by the rating agency Standard and Poor’s. I highlight it because there’s a hate-on for the U.S. and we know all its warts. In arguing that S&P got it wrong...
Read MoreAugust 10, 2011
What are the stock market declines telling us (other than we’re temporarily poorer)? Are they signaling the end of the world as we know it or, as a veteran value manager suggested to me yesterday, are we entering “opportunity-laden times?” In my view...
Read MoreAugust 6, 2011
“Hey Tom, how was your holiday? The weather’s been great – skiing conditions must have been calm?” “Oh Ralphie, it was amazing. Two weeks of Crystal Lake at its best. I’m totally decompressed. But what about you man? You’re looking pretty ragged...
Read MoreAugust 5, 2011
The Grip, which is our tool for expressing our overall portfolio strategy, was a new feature in the June Quarterly Report, but the cautious stance it signaled was not. Since January, we’ve recommended that clients be positioned conservatively and where...
Read MoreJuly 23, 2011
I recently spoke at a conference about the future of the wealth management industry. It was a good audience, but a bad gig. No matter what I said, I was sure to be wrong about some things. As Yogi Berra said, "It1s tough to make predictions, especially...
Read MoreJuly 18, 2011
My last Globe column (Of Cash and Quality Stocks) prompted a reader to ask, “Do you believe Canadian Banks will be able to grow their dividends at a healthy clip going forward? Is the growth of the Canadian Banks over?” In the past, I've underestimated...
Read MoreJuly 14, 2011
In a post last week, Larry Swedroe wrote about one of our favourite topics – the behavioral gap. I’m referring of course to investor behavior, not child rearing or post-Stanley Cup rioting. In an investment context, the term refers to the gap in returns between mutual funds and the investors that buy them. In study after study...
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