Insights
These concise papers provide a detailed look at the factors that contribute to the investment decisions we make at Sionna.
When Quality Stumbles
January 2024
‘Quality’ as a distinct category or style of investing is relatively new, growing in popularity during the early part of the century and gaining a strong foothold amongst the investment world post the global financial crisis. What perhaps has been lost on many investors though is the fact that, like all assets, quality needs to be underpriced to outperform in the long run. Valuations matter!
Energy Transition Opportunities: North American LNG
October 2023
By the middle of this decade, we will likely be into the next phase of potentially lower global carbon emissions with the continued replacement of higher emission energy (coal) with lower emission options (natural gas). We will likely see North America solidified as a global cleaner energy exporter and energy independence also may occur within this timeframe. We believe there are plenty of investment opportunities within the energy space that will help the world reach this next phase, but patience is required.
A New Type of Trap
July 2023
As value investors, we are often asked (sometimes more often than we would like!) how our investment process avoids the well-known value trap. So, at the 2023 Value Investor Conference held in London, when Ben Inker of GMO spoke about a little-known concept – that of growth traps – he confirmed our long-held suspicion that growth stock disappointments can be bigger threats to investor portfolios than the oft discussed value trap. His analysis piqued our interest.
Fish Don’t Know They’re in Water; Do Today’s Investors Know a Regime Shift has Occurred?
January 2023
Lessons from history suggest investors should rebalance their excess allocation to growth down to an underweight, or at least a balance with value. Many investors who do not recognize a "regime change" has occurred in the market, largely appear to be discounting growth's underperformance as temporary. Some are justifying inaction with comments that the revaluation has largely occurred, thus it is too late to switch. But as we all know, the early bird often gets the worm (and the most excess returns).
Are we there yet?
October 2022
The year 2022 is shaping up to be one that many investors would like to forget, given the volatility and negative performance of equity and fixed income markets. With the declines witnessed to date, many investors are asking, “Are we there yet?”.
Regime Change
July 2022
Recent actions in the global financial and economic landscape suggest that a regime change may be upon us. Today’s change centers around inflation and interest rates but could also be extended to wider issues such as deglobalization and decarbonization. The focus of this piece will be on regime change as it pertains to financial markets.
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