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'Twas the week before Christmas

December 17, 2021
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‘Twas the week before Christmas
So let's have some fun
Mawer recaps the main themes
Of 2021.

New vaccines created hope
Recovery, nigh?
Equity markets thought so,
Prices went to the sky.

But we weren’t out of the woods
Variants did loom
Uneven distribution
Caused feelings of gloom.

China triggered some headwinds
Raising a spectre
Regulatory crackdowns
On the tech sector.

Evergrande’s debt problem
May yet cause a shock
The ripple effects
Could affect plenty o’ stock!

Boats, trains, and trucks
Did sit in long queues
Resulting in bottlenecks
Buyers sang the blues.

At the start of the year
Central banks did say
Inflation’s just transitory
It might all go away.

Now they at last changed their tone
And signalled rate hikes,
Tapered asset purchases
To fend off the spikes.

The risk in the future
Inflation stays high
A sharp central bank response
— hard to diversify.

But it’s never that clear
Nor that 70s show
Stagflation isn’t likely—
Although you never can know.

Mercurial headlines
Inflation does make
Except for September
Returns didn’t break.

And so markets stayed bullish
Company earnings kept strong
But as we go to next year
Will they still sing that song?

Well, as long-term investors
We seek companies
With competitive advantages
To weather rough seas.

Whether it’s pricing power,
Revenues recurring,
Our portfolios comprised
Of companies enduring.

We avoid the meme stocks
The Dogecoins, Gamestops,
Most everything Musk tweets—
The flips and the flops.

The temptation is to react
Take a bet…to do
But trust this old famous phrase
“Don’t panic!” (it’s true).

You’re not going to see something
No one else could decrypt
Be aware, play the plan;
Prepare, don’t predict.

While we can’t foretell the future,
We know this is true—
We wish you a prosperous
2022!


This blog and its contents, including references to specific securities,  are for informational purposes only. Information relating to investment approaches or individual investments should not be construed as advice or endorsement. Any views expressed in this blog were prepared based upon the information available at the time and are subject to change. All information is subject to possible correction. In no event shall Mawer Investment Management Ltd. be liable for any damages arising out of, or in any way connected with, the use or inability to use this blog appropriately.

References to specific securities are presented for informational purposes only, and should not be considered recommendations to buy or sell any security, neither is it implied that they have been or will be profitable.