This is the second of three podcasts where David sits down with our heads of equity, credit and private equity investment teams to look back on 2018 and to what 2019 may bring.
Subtitle: “It’s more about temperament when markets get crazy.”
In this episode, David Barr and Felix Narhi discuss the equity key themes from 2018. Volatility was a big factor in the markets and consequently, in how they managed the Pender Value Fund and their other equity portfolios. They talk about strategies from market cycles which Felix has nicknamed “needle in the haystack investing” and “tide goes out investing”. They highlight a few stock picks from the last year as well as looking ahead to what 2019 may bring.
*Any reference to stocks/ stock prices are as of the date of recording, December 21st 2018.
|01:47||David opens the podcast and acknowledges these are challenging times but that we aim to look for the upside, especially during market volatility.|
|03:48||Felix looks at current investor behavior in terms of a sports match – watching the game on the field (business fundamentals) may not always be an accurate reflection of the scores on the scoreboard (share price).|
|07:54||Take-outs are a source of reasonable success over the years and David references our approach to valuations, highlighting a current portfolio holding, Freshii*.|
|11:50||Market cycles – is it time to hunt the “needle in the haystack” or has the “tide gone out”?|
|14:55||Upgrading the portfolio into quality businesses and finding “new ideas” are actually old ideas – what is back in the portfolio and what names have gone out.|
|20:50||David talks about small cap opportunities in Canada in 2018. The impact of cannabis and especially how management teams respond to the stress test of current markets.|
|26:00||Felix looks into his crystal ball as the conversation turns to 2019 and the year ahead.|
|29:32||With interesting times in markets, how can we focus on being better investors? Felix and David give their book recommendations for some extra knowledge.|