It has been five years since the beginning of a freeze in credit markets which led to a global financial markets “meltdown” and the start of the “Great Recession”. Since then, economies and equity markets around the world have staged a steady recovery, much to the relief of investors everywhere.
Over the past five years, macro-economic and volatile political environments have dominated media headlines, always with a short term focus. As professional investors, our job is to look beyond the current “headlines” and concentrate on investment opportunities for the long term. This is not always easy.
These days, the media is currently focused on the partial shutdown of US government operations, as the US government continues to demonstrate its remarkable dysfunction in dealing with its own fiscal matters. Does this mean we should sell all of our US equities? No. Does it mean that the US economy, the world’s largest and most important, is about to slide back into recession? We don’t think so. What we see is an economy steadily on the mend, featuring successful US based multinational companies continuing to grow both their top and bottom lines. 3M has been a great example of this.
According to the media, Europe and its Euro currency were in a fatal nosedive over the last couple of years, from which there would be no recovery. While the situation was indeed serious, it has not proven to be fatal. Economies throughout the larger, stronger countries of Europe (Germany, France and the UK) have all returned to positive economic growth. Although tepid, we expect this trend to further improve. Meanwhile, there are some strong companies in that part of the world that have provided strong returns to their shareholders throughout this period of crisis. Nestle is one of our favorite illustrations of this.
Back home in Canada, our own media have focused on the chronicling of Blackberry’s rapid deterioration. We looked at this company about three years ago, and decided to “take a pass”. While the story of this sadly mismanaged and misgoverned company is interesting, it means that little attention is paid to the several winners amongst us. When was the last time you saw a positive headline on Enbridge or the Canadian National Railway? These superbly well run companies continue to deliver steady returns to their shareholders, but are not of much interest to our media.
While we certainly cannot ignore the macro environment that we live and work in, and the hyper media attention that these events attract, our job is to look beyond them. We will continue to seek investments for our clients that generate steady returns with as little volatility as possible.
Third Quarter 2013
It has been five years since the beginning of a freeze in credit markets which led to a global financial markets “meltdown” and the start of the “Great Recession”. Since then, economies and equity markets around the world have staged a steady recovery, much to the relief of investors everywhere.
Over the past five years, macro-economic and volatile political environments have dominated media headlines, always with a short term focus. As professional investors, our job is to look beyond the current “headlines” and concentrate on investment opportunities for the long term. This is not always easy.
These days, the media is currently focused on the partial shutdown of US government operations, as the US government continues to demonstrate its remarkable dysfunction in dealing with its own fiscal matters. Does this mean we should sell all of our US equities? No. Does it mean that the US economy, the world’s largest and most important, is about to slide back into recession? We don’t think so. What we see is an economy steadily on the mend, featuring successful US based multinational companies continuing to grow both their top and bottom lines. 3M has been a great example of this.
According to the media, Europe and its Euro currency were in a fatal nosedive over the last couple of years, from which there would be no recovery. While the situation was indeed serious, it has not proven to be fatal. Economies throughout the larger, stronger countries of Europe (Germany, France and the UK) have all returned to positive economic growth. Although tepid, we expect this trend to further improve. Meanwhile, there are some strong companies in that part of the world that have provided strong returns to their shareholders throughout this period of crisis. Nestle is one of our favorite illustrations of this.
Back home in Canada, our own media have focused on the chronicling of Blackberry’s rapid deterioration. We looked at this company about three years ago, and decided to “take a pass”. While the story of this sadly mismanaged and misgoverned company is interesting, it means that little attention is paid to the several winners amongst us. When was the last time you saw a positive headline on Enbridge or the Canadian National Railway? These superbly well run companies continue to deliver steady returns to their shareholders, but are not of much interest to our media.
While we certainly cannot ignore the macro environment that we live and work in, and the hyper media attention that these events attract, our job is to look beyond them. We will continue to seek investments for our clients that generate steady returns with as little volatility as possible.