Brandon Snow's blog

Risk vs. reward: comments on corporate bonds

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I wanted to share a few charts that have me thinking more about the risk in corporate bonds. We have spoken about the lack of return potential, relative to risk, within high-yield bonds for a number of years. But a few charts shared by our team recently show these concerns extending into investment grade (IG).


Illuminations from Japan – back in the saddle after a great trip

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Over the next few weeks we want to offer an assessment of the country, companies and market through a Cambridge lens. Over the course of these blogs I hope you gain a better understanding of how we navigate the globe while staying true to our process and philosophy.

Waking up on the other side (of the world)

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This week, Steve, Greg and I are in Japan researching and meeting with management teams of various companies. The first thing I thought about when I woke up this morning was that my kids would be off to school. I wondered whether they would be eating oatmeal, cereal or pancakes for breakfast. Then I realized that with the time difference, my kids would be sound asleep right now.

Our trader's insight on volatility

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Given the abnormally low amounts of volatility of late, we thought it would be appropriate to have our trader, Tyler Hildebrand, provide some insight:

Many people fear volatility, but at Cambridge we believe it presents openings, or as we call them dislocations. A dislocation happens when a market, political or other event causes a separation between the underlying value of a company and the price the market is willing to pay for a stock.

A few interesting charts

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With asset valuations high these days, it makes it increasingly difficult to find returns without taking on more risk. I wanted to provide a few charts that have helped our framework for navigating this market. I hope they can help you in your process as well.

1)  How would the prices of different sovereign bonds respond to a 1% increase in yield? (Pennies--and in many cases a bill!--in front of a steamroller.):

Cambridge Canadian Equity Corporate Class: not chasing the herd

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Cambridge Canadian Equity Corporate Class started the year with a barbell approach – lots of cash (nearly 25%), but cyclical beta as well. As we have always promised, first and foremost, we continue to be positioned to protect the downside considering our concerns about earnings, trading volumes and the slowing of China.  However, we respect the fact that clients still want to see positive numbers which we have delivered without taking undue risk chasing returns

Mind the GAAP: how to avoid mistakes

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Many times in the history of the markets we have seen street darlings fall from grace – with the bubble being burst explained by fraud, speculation, mass hysteria or all three. We all know emotionally, it’s easy to get caught in a company’s “story”. When everyone seems to be making money and a stock is only going one direction it’s tough for many to sit on the sidelines.


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