What do you think is happening?

For an audio version of this posting, please just click below to play it. . After four years without a market correction of any consequence, many people have become acclimatized to a stable and rising series of account statements.  As a side note, I believe the regulatory requirement for such frequent statements is in part […]

More about investment market “corrections”

To make it clear how integral market corrections/fluctuations/downturns/whatchamacallits are to the process of earning the superior long term returns that accrue to the owners of the great businesses of the world, consider the statistics below that are frequently quoted in the media and which I read once more this month in a circular from Fidelity […]

What is a “market correction”?

Unlike some projections of future values, investment markets do not proceed forward in a straight line, but rather feature fluctuations on every time scale.  Fluctuations are due to the constant reassessment of investors about the future value of each investment based on the constant flow of new information.  These fluctuations are a normal and healthy […]

Unpopular investing

The investment philosophy expressed by Sir John Templeton is at once simple but very difficult to follow.  The mutual fund managers I recommend and that manage money for you mostly follow a discipline similar to Sir John’s.  Notice how much he emphasizes the importance of using your reasoning and independent judgement as opposed to following […]

Ivy Quarterly Review

Occasionally an investment manager writes so well and with such insight that I want to share it with clients.  This is the case with the current Mackenzie Ivy Quarterly Review, in which the Ivy managers discuss their broad views about the current state of the world economy and investment markets.  Among other things, they discuss […]

Self-destructive investor behavior continues

Emotions can wreak havoc on an investor’s ability to build long-term wealth. This phenomenon is well illustrated each year when the research company Dalbar Inc. releases its study of investor behavior.  While this is a study of American market data, I have seen similar results for Canada and as always, people are people whether they live […]

Some perspective from the Cundill team

Dear Investor: It’s painful in the markets, but bargain-priced stocks beckon. Sincerely, James Morton ————————————————————————————- The Cundill Funds are a group of funds within the Mackenzie family of funds.  Many of you own the Cundill Value Fund, their flagship global equity fund.  Cundill team member James Morton specializes in emerging markets and turnaround situations and […]

Europe – a tale of two halves

I was listening to a fund manager discuss the current situation in Europe and he pointed out how different is the reality in Europe from the perceptions held by many people.  The fact is that in the more developed European countries, corporations are often in excellent shape.  While their head office may be based in […]

Equity mutual fund investors cost themselves $106B

Evidently many so-called investors have not realized it, but the U.S. equity market has approximately doubled since the panic lows of March 2009.  I say they are so-called investors because they evidently do not understand the difference between investing and speculating.  Investing consists of making careful, patient, long-term, strategic decisions to invest in assets whose […]

How to improve your returns

If you think most people are rational investors, think again. Financial services market research firm DALBAR has surveyed individual households for more than 20 years and created their Quantitative Analysis of Investor Behavior (QAIB). This measures the returns of the S&P 500 Index against the returns of the individual investor. Here are two surprising facts: The […]

Why should you invest globally?

1. Greater diversification The Canadian stock market has three dominant sectors that make up 78% of the entire index: energy, materials and financials.  Energy and materials are really all about natural resources. The global stock market is much more balanced, with greater representation in areas such as consumer staples, health care, information technology and comsumer discretionary. […]

What do we know about the current market mood?

As the title of this article indicates, my intention is to distinguish the market mood from several important facts.  The emotions of market participants is subject to change every moment of every day, causing them to change their outlook on the future value of businesses.  If people worry about the future, their appraisal of the […]

Irrational investors, rational conclusions

  There was an interesting article in the National Post written by Peter Hodson, about how investors think the stock market is irrational.  He points out that the average investor behaves in a way contrary to their financial health by buying and selling at the wrong times.  He also points out that if there is […]

Why on earth would you buy that?

At a recent presentation by one of the Mackenzie Cundill fund managers, he described how he had been attracted to the US banking sector in recent months.  He described it as “a bad industry in a bad country at a bad time”.  At least, that’s what the headlines read and what many commentators think.  His […]

Globalization: how great companies do not depend on domestic markets

Every day the news carries articles about the weak performance of the United States economy compared to the emerging markets of the world.  Worried that the bad news will continue ad-infinitum, many investors thus shy away from investing in companies based in the USA.  What they are missing is that the USA is also home to […]

Buy American. I am. – Warren Buffett

October 16, 2008  New York Times The financial world is a mess, both in the United States and abroad. Its problems, moreover, have been leaking into the general economy, and the leaks are now turning into a gusher.  Read the full article here.