Here is a brief update on recent changes to our Canadian equity and the Canadian asset allocation funds:
Brandon Snow's blog
I wanted to share the following charts from Deutsche Bank:
As you can see on the left, the U.S. has made quite a bit of progress overall deleveraging since the financial crisis. in fact, if you add up all debt (including households, businesses, financial institutions and government), total debt to GDP has fallen by 30 points (from 370% to 340%).
Here are some quick comments while I'm out of the office:
Three members of our team have been in Orlando this week attending the Raymond James Institutional Investor Conference. Between the three of us, we have seen dozens of companies over the last two days, and there is more to come on Wednesday.
Overall, the tone of the conference is positive with noted bullishness from the transportation companies. While we have exposure to the rails, trucking companies are becoming interesting. (Watch for a blog on this in the future.)
Some comments from Bob Swanson, our portfolio manager who provides guidance to the team on asset allocation and macroeconomic trends:
We recently met with the management of one of our larger small-cap holdings, DHX Media, to discuss its results and current business trends. From an operational perspective, the company is delivering on the integration of Cookie Jar Entertainment, which it acquired last fall, and has in fact increased its target for synergies. On top of this, it appears that the pendulum is swinging back to content being king with the proliferation of video services (Amazing, iTunes, Netflix, etcetera). We expect this will create many business opportunities for DHX.
The market has been incredibly strong so far this year and we have posted good returns in our funds. While market timing is nearly impossible from an index perspective (you have to be right twice – not just getting out at the right time, but also getting back in), when you follow a specific group of names from a bottom-up perspective, you can add value by trading around positions.
Ever since the Office of the Superintendent of Financial Institutions began supervising the Canada Mortgage and Housing Corp. last spring, we have seen a tightening of credit in the housing sector in Canada.
We have seen a step down in U.S. indexes today for no good reason of which we are aware. There are about 10 explanations for the move, but the fact of the matter is there has been a strong rally in the markets for the year-to-date and they currently lack a catalyst. We raised cash about a week ago in case of a pullback, and we are ready to put money to work if there is further weakness.