Monthly Market Commentary

The Problems with Predictions

January 2017

In our most recent letter to unitholders we discussed the reasons why we passed on investing in Samsung SDI Co Ltd (006400-KRX), an electronics and battery manufacturer. The bulk of our concerns rested with the unpredictability of how one of the company’s key markets, sales of organic...

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Top 10 Risks

December 2016

The end of the calendar year represents an apt time to reflect upon the past 12 months and also to anticipate what could be in store for the coming months and years. We’re hard-pressed to think of a single year since the financial crisis that generated as many astounding headlines as what we...

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Political Risks Facing Canadian Banks

November 2016

Since last December when we wrote about what could cause a Canadian Perfect Storm, we have had a great deal of positive feedback from readers who felt that not enough has been written about the risks that Canadian investors now face. So we decided to take another stab at it this month by discussing...

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Cash is not Trash

October 2016

Last month we discussed how loose monetary policy has led to inflated asset prices in bonds and stocks, making it harder to buy securities at reasonable prices. In this environment we are prepared to hold more cash than usual. We don’t believe that cash is simply a security that offers a low...

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The Hunt for Income & Inflated Asset Prices

September 2016

In a bid to stimulate economic growth and inflation, many of the world’s central banks have implemented monetary policy that has never been tried before. The two headline-grabbing policies have been near-zero interest rates and quantitative easing (purchases of longer-duration bonds by the...

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Why We Shun Gold Stocks

August 2016

The S&P/TSX Composite Index has been one of the world’s best-performing indices so far in 2016. On a price basis, the TSX Composite is up 11% year-to-date; this compares to the FTSE 100 up 6%, the S&P 500 up 5%, and the Nikkei 225 down 14%1. Strong performance from commodities has...

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Sovereign Bond Yields: How Low Can They Go?

July 2016

When we look at sovereign bond yields, we can’t help but get Chubby Checker’s 1962 hit single ‘Limbo Rock’ stuck in our heads. For those of you who don’t remember that little ditty, an excerpt follows: Jack be limbo, Jack be quick Jack go unda limbo stick All around...

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Canadian Manufacturing Stuck in Neutral

June 2016

Manufacturing is vital to Canada. In 2015 it accounted for 11% of the country’s $1.99 trillion economy and provided Canadians with 1.7 million jobs. In the years leading up to the financial crisis, loonie weakness versus the U.S. dollar provided a big boost to the Canadian manufacturing...

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Canadian Bank Analysis

May 2016

Canadian bank stocks, after years of strong performance following the financial crisis, stumbled in 2015. Figure 1 shows that each of the Big Six banks finished the calendar year at a lower level than where they started it. Exposure to the distressed oil industry was the driving force behind this...

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