Stephen Groff's blog
We live in a highly dynamic world where technological forces only continue to accelerate the rate of change. This has important implications for both society at large as well as how we analyze and select investments for our clients. While it is nice to discuss examples of businesses where we spotted an important inflection point and everything worked out exactly as we hoped, today we will do the opposite and review a recent case where industry drivers have changed (and gone against us).
In this edition of the bi-weekly blog, I am joined by Authi Seevaratnam, our energy analyst, who brings a unique perspective to an important sector to Canadians.
I’m glad you got a look into his process for making sure we are managing downside risks in the oil and gas space, while keeping an eye out for the right opportunities.
Have a great weekend.
The past few weeks have been very busy for the Cambridge team. After significantly increasing the size of our team over the past two years, we had outgrown our old office space. We have relocated to a new, larger open concept area which we are enjoying and it also allows us space for future growth. The open concept has the PMs working out on the floor with the analysts. This helps to encourage idea generation and facilitates communication amongst all of our Cambridge team members.
Our supporters know we are bottom-up stock pickers and as a result our portfolios can often look very different than well-known indices or peers. One material difference which leads to a lot of questions is why we don’t hold any Canadian banks in our portfolios. We thought it would be helpful to lay out a few of the reasons and give some insight as to why we have historically found more attractive opportunities south of the border (U.S. financials had been some of our largest positions in a number of funds until recently.)
We hope you all had a relaxing break over Christmas and New Year’s. We took the quiet time of year to recharge and spend time with family, but are happy to be back and have hit the ground running. There is a lot to do.
What a difference a few months and a U.S. presidential election make. In August, we wrote about the enormous amount of money flowing into “low volatility” ETFs and the associated risks they carried. Bond yields were very low or negative and investors were seeking yield generating investments that were perceived as safe.
Ian and I recently returned from a five day, six city trip across three European countries. It was a good opportunity to catch up with management teams and to see firsthand the facilities of some existing and prospective portfolio companies.
We are sometimes asked, “What value do you get from visiting companies on their home turf instead of at conferences or through conference calls?” The answer is that we view the act of going to meet them very worthwhile for a number of reasons: