The Art of Boring™ was created for curious and passionate investors. We share strategies, frameworks, and insights to help readers and listeners make better investment decisions. Our aim? To provide some bottom-up, long-term investing signal to cut through the short-term noise.
A few weeks ago, I was introduced to Google’s Toothbrush Test. Contrary to the images that the name inspires, this test does not involve sticking a web-enabled toothbrush into your mouth to collect data on your molars. Instead, it relates to how Google allocates capital.
This past week, one of my colleagues shared a learning at our weekly research meeting. Christian and his wife, Siggi, were on vacation when Siggi unfortunately dropped her iPhone into the bath.
Imagine you spent 4% of your life waiting in line. Given that there are 8,765 hours in a year, this would imply that you spent 350 hours each year staring at the backs of people’s heads.
The restaurant industry is tough. Virtually anyone with decent cooking skills and a modest amount of capital can open one; the barriers to entry are quite low. Restaurateurs must also face an unpredictable customer base, as well as significant competition and substitutes.
History is ripe with hucksters. Investors were reminded of this again this month when stock market darling Gowex declared bankruptcy.
A few weeks ago, I was introduced to Google’s Toothbrush Test. Contrary to the images that the name inspires, this test does not involve sticking a web-enabled toothbrush into your mouth to collect data on your molars. Instead, it relates to how Google allocates capital.
This past week, one of my colleagues shared a learning at our weekly research meeting. Christian and his wife, Siggi, were on vacation when Siggi unfortunately dropped her iPhone into the bath.
Imagine you spent 4% of your life waiting in line. Given that there are 8,765 hours in a year, this would imply that you spent 350 hours each year staring at the backs of people’s heads.
The restaurant industry is tough. Virtually anyone with decent cooking skills and a modest amount of capital can open one; the barriers to entry are quite low. Restaurateurs must also face an unpredictable customer base, as well as significant competition and substitutes.
History is ripe with hucksters. Investors were reminded of this again this month when stock market darling Gowex declared bankruptcy.
The waters of the market are choppy and unpredictable. Investors, like sailors, must grapple with incomplete information, unexpected shifts, and the ever-present possibility of being wildly off course. The currents—momentum—can be powerful. PE multiples, EV-to-EBITDA ratios, earnings expectations, leading economic indicators, discounted cash flow models… all dead reckoning.
This article will illustrate several ideations and tools investors can incorporate into their processes to navigate the choppy, mercurial waters of long-term investing.
‘Twas the week before Christmas, so let's have some fun. Mawer recaps the main themes of 2024.
High yield spreads continue to tighten. As risk premiums fall, and economic and political conditions appear positive for corporates in general, it is tempting to reach for yield in credit markets. As Howard Marks of Oaktree points out, the all-in yield (benchmark yield plus risk premium) on high yield is 7.0% and who doesn’t love a 7.0% return? What could possibly go wrong?
When this piece was being written, Boeing had not filed their US$25 billion shelf prospectus and the company was a downgrade candidate to high yield (HY) at both Moody's and S&P which would qualify them as a "Fallen Angel". The term “Fallen Angel” is often paired with its opposite, a “Rising Star”. We decided it would be interesting to highlight the importance and impact that a Fallen Angel has on both the IG market, and, more importantly, the HY or "Junk" bond market.
While speculators fuss over the cacophony of political campaigns and election forecasts, savvy investors recognize that the true impact of elections on financial markets is mostly short-term noise irrelevant to long-term financial strategies.
Private credit assets have surged to $2-3 trillion USD over the past decade, but investors might benefit from shifting some focus back to public credit, which offers attractive returns, transparency, and liquidity. While both credit types share common features, the current strong tilt towards private credit may overlook the strategic advantages of a well-diversified public credit allocation.
Current profit levels for fast-growing companies might not necessarily be representative of their true earnings power or “latent earnings power.” When it comes to large businesses, we believe this concept may be underappreciated because they are generally assumed to be operating closer to a mature, steady state.
The U.S. equity market is the largest and deepest in the world. As such, it has been analyzed in many ways to determine the optimal means of gaining exposure.
A company’s pricing strategy can help reveal insights into how a company's business model works, its sensitivity to elevated inflation, and why certain pricing strategies work better than others in different operating and economic environments.
There's something highly worthwhile in seeing a company's operations with our own eyes.
We need to understand where we are in the debt super cycle to inform our investment decision making.
Recent AI breakthroughs are underscoring the power of the centaur model—humans + machines—creating something more potent than either model operating independently.
In our view, market participants systematically underestimate the importance of vulnerabilities while correspondingly overestimating the importance of triggers. Why?
The waters of the market are choppy and unpredictable. Investors, like sailors, must grapple with incomplete information, unexpected shifts, and the ever-present possibility of being wildly off course. The currents—momentum—can be powerful. PE multiples, EV-to-EBITDA ratios, earnings expectations, leading economic indicators, discounted cash flow models… all dead reckoning.
This article will illustrate several ideations and tools investors can incorporate into their processes to navigate the choppy, mercurial waters of long-term investing.
‘Twas the week before Christmas, so let's have some fun. Mawer recaps the main themes of 2024.
High yield spreads continue to tighten. As risk premiums fall, and economic and political conditions appear positive for corporates in general, it is tempting to reach for yield in credit markets. As Howard Marks of Oaktree points out, the all-in yield (benchmark yield plus risk premium) on high yield is 7.0% and who doesn’t love a 7.0% return? What could possibly go wrong?
When this piece was being written, Boeing had not filed their US$25 billion shelf prospectus and the company was a downgrade candidate to high yield (HY) at both Moody's and S&P which would qualify them as a "Fallen Angel". The term “Fallen Angel” is often paired with its opposite, a “Rising Star”. We decided it would be interesting to highlight the importance and impact that a Fallen Angel has on both the IG market, and, more importantly, the HY or "Junk" bond market.
While speculators fuss over the cacophony of political campaigns and election forecasts, savvy investors recognize that the true impact of elections on financial markets is mostly short-term noise irrelevant to long-term financial strategies.
Private credit assets have surged to $2-3 trillion USD over the past decade, but investors might benefit from shifting some focus back to public credit, which offers attractive returns, transparency, and liquidity. While both credit types share common features, the current strong tilt towards private credit may overlook the strategic advantages of a well-diversified public credit allocation.
Current profit levels for fast-growing companies might not necessarily be representative of their true earnings power or “latent earnings power.” When it comes to large businesses, we believe this concept may be underappreciated because they are generally assumed to be operating closer to a mature, steady state.
The U.S. equity market is the largest and deepest in the world. As such, it has been analyzed in many ways to determine the optimal means of gaining exposure.
A company’s pricing strategy can help reveal insights into how a company's business model works, its sensitivity to elevated inflation, and why certain pricing strategies work better than others in different operating and economic environments.
There's something highly worthwhile in seeing a company's operations with our own eyes.
We need to understand where we are in the debt super cycle to inform our investment decision making.
Recent AI breakthroughs are underscoring the power of the centaur model—humans + machines—creating something more potent than either model operating independently.
In our view, market participants systematically underestimate the importance of vulnerabilities while correspondingly overestimating the importance of triggers. Why?
We discuss 2024's economic landscape and what to expect in 2025, with Crista Caughlin, lead portfolio manager of the Mawer Canadian bond strategy. Crista highlights U.S. and Canadian growth trends, central bank rate adjustments, housing market dynamics, equity and fixed-income performance, and political uncertainties. She also discusses Mawer’s asset allocation strategy, balancing risks with opportunities amidst shifting fiscal policies, trade tensions, and global economic developments heading into 2025.
We discuss the Canadian equity market with Mark Rutherford, co-manager of Mawer’s Canadian equity strategy. Mark highlights the key drivers behind Canadian equities' strong 2024 performance, highlighting standout sectors like technology, financials, energy midstream, and gold. He also examines challenges in telecommunications and real estate, discusses risks from slower economic growth, inflation, and higher mortgage rates, and emphasizes strategic portfolio adjustments.
Equity Analyst Ian Turnbull joins the Art of Boring podcast to discuss Mawer’s EAFE large cap portfolio and tackle the question: why invest outside the U.S. at all? Ian takes us through quick two-minute drills on five of the portfolio’s key holdings. He highlights the portfolio's diversification benefits, AI's transformative potential in healthcare R&D, while acknowledging the challenges posed by regulatory hurdles, and more.
We discuss the U.S. mid-cap landscape with Jeff Mo, manager of the U.S. mid cap equity strategy at Mawer. Jeff touches on risk management, emphasizing disciplined adherence to investment philosophy and the benefits of balancing risk and return through natural contradictions, like pairing discretionary consumer-focused SharkNinja with countercyclical firms such as FTI Consulting. Additional topics include preemptive risk management, maintaining an all-weather portfolio, and leveraging a robust inventory process to adapt.
We discuss key trends and positioning in credit markets with Brian Carney, lead portfolio manager of the Mawer global credit opportunities strategy. We touch on the year’s strong performance driven by tighter spreads, higher yields, and emerging risks such as low risk premiums and the U.S. election. Topics include corporate issuance, fallen angels, and public-private credit convergence. Emphasizing capital preservation, Brian highlights portfolio positioning in high-quality, short-duration securities, such as North American bank bonds, while avoiding high-yield exposure.
We discuss the global equity strategy with Christian Deckart, chief investment officer and portfolio manager at Mawer. Christian stresses managing absolute risk over relative risk for better long-term outcomes and details Mawer’s approach to risk management, focusing on decision-making, portfolio risks, and external factors such as government debt and rising rates. He also discusses adapting to AI trends, preferring companies leveraging AI applications over infrastructure investments. He emphasizes maintaining focus on fundamentals amid evolving global and technological landscapes.
We discuss market insights with two representatives from the trading desk: Rita Tien, who trades the Americas from Toronto, and Peter Dmytruk, who trades Asia from Singapore. Rita and Peter highlight the complexities of trading, emphasizing the importance of regional differences, the role of the trading desk in executing investment decisions, and more.
In this episode, Mawer portfolio managers and analysts discuss what they fundamentally look for in a bank as an investment. Specifically, how they view banks and the industry trends, as well as local dynamics, and ultimately what makes each of these businesses both unique and attractive.
Peter Lampert, lead portfolio manager of the International Equity Strategy, discusses the recent Chinese stimulus and its effects on emerging markets. He highlights key long-term risks in China, including weak sentiment, regulatory challenges, and geopolitical tensions, while emphasizing the potential of companies like Tencent and Tencent Music. The conversation also covers Turkey's Bim, a discount retailer thriving amid economic uncertainty. Peter explains how the portfolio's success stems from stock selection, especially with stealth performers like Vietnam’s FPT and Taiwan’s IGS, and the importance of balancing macro risks with company-specific growth potential.
In this episode, Steven Visscher, lead manager of the balanced strategies, discusses the impact of rising interest rates and inflation on the balanced portfolio in recent years, Mawer’s disciplined and collaborative approach to portfolio construction, and the importance of having a long-term perspective. He spoke about recent changes and additions to the balanced portfolio and provided an update on the performance of the balanced portfolio thus far in 2024.
Portfolio Manager Crista Caughlin discusses the economy and factors that drove markets in the third quarter of 2024.
Peter Lampert, lead portfolio manager of the International Equity Strategy, provides insights on the team’s investment process, the state of the portfolio, and the main drivers that are currently having an outsized impact on performance, namely, semiconductors, obesity medicines, and defense companies. He details his team’s rigorous approach to evaluating management teams from both a quantitative and qualitative standpoint, providing an in-depth example of Hitachi. The conversation concludes with a brief discussion of the current macro environment.
Grayson Witcher, the lead manager of the U.S. Equity Strategy, discusses the key drivers currently impacting the U.S. economy, including inflation, interest rates, artificial intelligence, and the upcoming presidential election. He emphasizes the importance of diversification and avoiding sharp edges—particularly during an election year.
We discuss 2024's economic landscape and what to expect in 2025, with Crista Caughlin, lead portfolio manager of the Mawer Canadian bond strategy. Crista highlights U.S. and Canadian growth trends, central bank rate adjustments, housing market dynamics, equity and fixed-income performance, and political uncertainties. She also discusses Mawer’s asset allocation strategy, balancing risks with opportunities amidst shifting fiscal policies, trade tensions, and global economic developments heading into 2025.
We discuss the Canadian equity market with Mark Rutherford, co-manager of Mawer’s Canadian equity strategy. Mark highlights the key drivers behind Canadian equities' strong 2024 performance, highlighting standout sectors like technology, financials, energy midstream, and gold. He also examines challenges in telecommunications and real estate, discusses risks from slower economic growth, inflation, and higher mortgage rates, and emphasizes strategic portfolio adjustments.
Equity Analyst Ian Turnbull joins the Art of Boring podcast to discuss Mawer’s EAFE large cap portfolio and tackle the question: why invest outside the U.S. at all? Ian takes us through quick two-minute drills on five of the portfolio’s key holdings. He highlights the portfolio's diversification benefits, AI's transformative potential in healthcare R&D, while acknowledging the challenges posed by regulatory hurdles, and more.
We discuss the U.S. mid-cap landscape with Jeff Mo, manager of the U.S. mid cap equity strategy at Mawer. Jeff touches on risk management, emphasizing disciplined adherence to investment philosophy and the benefits of balancing risk and return through natural contradictions, like pairing discretionary consumer-focused SharkNinja with countercyclical firms such as FTI Consulting. Additional topics include preemptive risk management, maintaining an all-weather portfolio, and leveraging a robust inventory process to adapt.
We discuss key trends and positioning in credit markets with Brian Carney, lead portfolio manager of the Mawer global credit opportunities strategy. We touch on the year’s strong performance driven by tighter spreads, higher yields, and emerging risks such as low risk premiums and the U.S. election. Topics include corporate issuance, fallen angels, and public-private credit convergence. Emphasizing capital preservation, Brian highlights portfolio positioning in high-quality, short-duration securities, such as North American bank bonds, while avoiding high-yield exposure.
We discuss the global equity strategy with Christian Deckart, chief investment officer and portfolio manager at Mawer. Christian stresses managing absolute risk over relative risk for better long-term outcomes and details Mawer’s approach to risk management, focusing on decision-making, portfolio risks, and external factors such as government debt and rising rates. He also discusses adapting to AI trends, preferring companies leveraging AI applications over infrastructure investments. He emphasizes maintaining focus on fundamentals amid evolving global and technological landscapes.
We discuss market insights with two representatives from the trading desk: Rita Tien, who trades the Americas from Toronto, and Peter Dmytruk, who trades Asia from Singapore. Rita and Peter highlight the complexities of trading, emphasizing the importance of regional differences, the role of the trading desk in executing investment decisions, and more.
In this episode, Mawer portfolio managers and analysts discuss what they fundamentally look for in a bank as an investment. Specifically, how they view banks and the industry trends, as well as local dynamics, and ultimately what makes each of these businesses both unique and attractive.
Peter Lampert, lead portfolio manager of the International Equity Strategy, discusses the recent Chinese stimulus and its effects on emerging markets. He highlights key long-term risks in China, including weak sentiment, regulatory challenges, and geopolitical tensions, while emphasizing the potential of companies like Tencent and Tencent Music. The conversation also covers Turkey's Bim, a discount retailer thriving amid economic uncertainty. Peter explains how the portfolio's success stems from stock selection, especially with stealth performers like Vietnam’s FPT and Taiwan’s IGS, and the importance of balancing macro risks with company-specific growth potential.
In this episode, Steven Visscher, lead manager of the balanced strategies, discusses the impact of rising interest rates and inflation on the balanced portfolio in recent years, Mawer’s disciplined and collaborative approach to portfolio construction, and the importance of having a long-term perspective. He spoke about recent changes and additions to the balanced portfolio and provided an update on the performance of the balanced portfolio thus far in 2024.
Portfolio Manager Crista Caughlin discusses the economy and factors that drove markets in the third quarter of 2024.
Peter Lampert, lead portfolio manager of the International Equity Strategy, provides insights on the team’s investment process, the state of the portfolio, and the main drivers that are currently having an outsized impact on performance, namely, semiconductors, obesity medicines, and defense companies. He details his team’s rigorous approach to evaluating management teams from both a quantitative and qualitative standpoint, providing an in-depth example of Hitachi. The conversation concludes with a brief discussion of the current macro environment.
Grayson Witcher, the lead manager of the U.S. Equity Strategy, discusses the key drivers currently impacting the U.S. economy, including inflation, interest rates, artificial intelligence, and the upcoming presidential election. He emphasizes the importance of diversification and avoiding sharp edges—particularly during an election year.
