Public and Private Credit: Where investors should focus

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.

The Power of Latent Earnings

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.   

A Case for Investing in U.S. Mid Caps

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.

Pricing Strategies: Upside Capture Versus Downside Protection

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. 

Getting Out There: Investing in Firsthand Knowledge

There's something highly worthwhile in seeing a company's operations with our own eyes.

Rising Debt and its Potential Consequences: Canada’s New Normal?

We need to understand where we are in the debt super cycle to inform our investment decision making.

Artificial Intelligence: The Return of The Centaurs

Recent AI breakthroughs are underscoring the power of the centaur model—humans + machines—creating something more potent than either model operating independently.

The Case for Non-Predictive Decision Making

In our view, market participants systematically underestimate the importance of vulnerabilities while correspondingly overestimating the importance of triggers. Why?

Inflation’s One-Two Punch

It’s inflation’s second punch that can deliver a blow that investors may not be expecting.

‘Twas the week before Christmas

'Twas the week before Christmas, thus time to review—the economic story of 2022.

Beware the linearity bias

We tend to think of our world in linear terms, where the output of a system is proportional and directly correlated to its inputs.

The quality conundrum

The conundrum for investors these days is the trade-off between the value of quality and price to pay for it. 

Be aware, but don’t despair!

History doesn’t repeat itself, but it often rhymes.

~Mark Twain

The U.S. Equity Landscape: Inflation, Artificial Intelligence, and Elections | EP166

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.

Skyscrapers and Storefronts: Insights on the Commercial Real Estate Market in 2024 | EP165

Mawer credit analyst Curtis Elkington provides a comprehensive overview of the $50 trillion global commercial real estate market. He covers the current headwinds facing various property sectors, such as pandemic-induced challenges in the office sector and touches on the surprising resilience of the retail segment. Elkington sheds light on the complexities of the commercial mortgage-backed securities market and details the credit analysis process his team uses to evaluate potential investments with examples.

Recession Fears and Credit Spreads: A Comprehensive Fixed Income Update | EP164

Crista Caughlin, lead Portfolio Manager of the Canadian Bond Strategy, and Brian Carney, lead Portfolio Manager of the Global Credit Opportunities Strategy, provide their thoughts on recent economic data releases, a shift in central bank language, and recent market volatility.

Navigating the Canadian Equity Landscape: Dispersion, Energy Transition, and Opportunities | EP163

In this episode of the podcast, Mark Rutherford, Co-Manager of the Canadian large-cap equity strategy, discusses the current investment landscape in Canada, highlighting the wide dispersion in sector performance, the impact of central bank policies, and the long-term theme of the global energy transition. He also provides insights into insurance and banking sector performance and shares examples of specific portfolio holdings within the Canadian equity strategy.

Marbles and Billiards: Navigating the Highs and Lows in Global Equity | EP162

Portfolio Manager Manar Hassan-Agha discusses how the Global Equity Team navigates an exuberant market environment while staying true to Mawer’s disciplined investment approach. He delves into the potential impacts of emerging trends, namely artificial intelligence (AI), and provides examples of the team’s measured approach to evaluating the hype and sustainability of these trends. 

Quarterly Update | Q2 2024 | EP161

Portfolio Manager Crista Caughlin discusses the economy and factors that drove markets in the second quarter of 2024.

Navigating the U.S. Mid-Cap Landscape: Resilience Amid Uncertainty | EP160

In this episode, Portfolio Manager Jeff Mo makes the case for investing in U.S. mid-cap equities, highlighting the country’s strong business environment, large domestic market, and GDP growth. He discusses current market trends, including artificial intelligence, and his team’s risk management evaluation, especially with a pivotal U.S. election looming on the horizon.  

From Buy to Bye: Sell Discipline and Overcoming Behavioral Biases | EP159

Portfolio Manager Jeff Mo discusses common behavioral biases that can hinder clear sell decisions, and the tools, such as checklists and trigger points, that can help slow down emotional thinking.

Watts Up? The Challenges and Opportunities of Powering AI | EP158

We explore the growing electricity demands of data centers driven by artificial intelligence (AI) with Chris Silvestre, Analyst on the U.S. Equity Team. He shares insights from a recent research trip to data centers in Northern Virginia, discussing challenges related to land availability, energy generation and transmission, and the substantial power needs for developing large language models.

Navigating Global Small Caps in an AI-Transformative World | EP157

Portfolio Manager Karan Phadke discusses his views on the global markets and the performance of the global small-cap portfolio. He illustrates how businesses are adapting to and utilizing artificial intelligence (AI). 

U.S. equity: Capitalizing on innovation and protecting against pitfalls | EP156

Portfolio Manager Colin Wong shares strategic insights on disruptive technologies and recent adjustments in the U.S. equity portfolio. He provides actionable insights on benefitting from innovation without betting the farm on a single theme.

Fishing in Less Crowded Ponds: Identifying opportunities in Emerging Markets | EP155

Portfolio Manager Wen Cheong debunks the perceived challenges of investing in the emerging market space, highlighting his team’s concentrated approach and candour. He details how his focus on best-in-class management and passion for identifying attractive valuations has powered returns.

A deep dive into the psychological approach to finding opportunity | EP154

Building on his conversation in Episode 153, Portfolio Manager Samir Taghiyev takes a deep dive into the mental models and frameworks that Mawer uses to evaluate company management teams, particularly within the small-cap space.