In the months since the initial coronavirus outbreak, we saw the economy and markets teeter on the brink of collapse, only to recover quickly. I recently sat down with my colleague and Investment Strategist, Talley Leger, to discuss the sustainability of this recent recovery.
Comments Off on The two-sided recovery: A conversation about the markets and economyWhen I was in high school, we read Henry James’ “The Europeans” in our English Literature class. A major theme in the novel is the contrast between Europeans and Americans, with Americans in the “New World” somewhat ironically portrayed as conservative, traditional and more focused on money, while Europeans are portrayed as less traditional, more progressive and more emotional. I have thought about that book a lot in the past week.
Comments Off on EU passes stimulus package while U.S. lawmakers continue to negotiate
We were joined recently by clients for a discussion about global investment opportunities, in the context of technically overbought conditions in US stocks. In this blog, we share our views regarding where we see risks and opportunities in international stocks.
Comments Off on Answers to pressing questions from investors
Picking up from last month’s blog post, let’s continue our look at locked-in plans. Similar to Registered Retirement Savings Plans (RRSPs) and Registered Retirement Income Funds (RRIFs), locked-in plans also consist of pre-retirement plans and post-retirement plans. In addition, specific rules relate to unlocking amounts from these plans.
Comments Off on Locked-in plans: Types of plans and unlocking options
As coronavirus cases grow in the U.S., more fiscal stimulus appears to be on the way, which I believe is movement in the right direction. Ultimately, I expect the U.S. to fall into a pattern where, every month or two, Congress must pass a new stimulus package to keep the economy going, especially if the curve is not successfully bent.
Comments Off on As U.S. virus cases grow, so does the case for ‘big government’
During a recent webinar, I was asked whether we have enough real data to see what forward P/E multiples look like, or whether the market is just ‘guessing.’ This is an interesting question that highlights a very important point when it comes to valuing businesses. It highlights the danger of using forward multiples to evaluate long term intrinsic value1. Significant business disruption, either as a result of the current pandemic or an abrupt downturn leading to a recession (think Global Financial Crisis) can significantly impact forward P/Es. However, these events do not have the same impact on the intrinsic value of a high-quality business. The key distinction is that forward P/Es rely on one year of earnings while a company’s intrinsic value is a function of all of its future cash flows.
Comments Off on When valuing businesses, cash flows matter more than forward multiples
