Why are the Markets so Volatile?
We believe that we are in year eleven of a sideways or range bound market. Range bound markets are characterized by volatility and historically have lasted a minimum of 15 years.
published August 2011
posted in Soundbites
published August 2011
posted in Media
Sionna’s Gold-to-Decent-Suit Ratio Suggests Gold Overvalued (Financial Post)
Value mutual fund managers Sionna Investment Managers says the old rule of thumb that an ounce of gold should buy a good man's suit suggests gold is currently overvalued by about 50%.
published July 2011
posted in Insights
Back to Normal?
As keen students of financial history, we have spent time over the years trying to gain a better understanding of what drives markets over longer periods of time and have identified several fundamental factors that tend to result in market outperformance.
published June 2011
posted in Media
Learn to Love 6% (Financial Post)
Canada is now one of the most expensive developed stock markets in the world, lagging only Denmark and Hong Kong, warns award-winning value mutual fund manager Kim Shannon.
published May 2011
posted in Soundbites
Recent Developments in Barrick Gold
On April 25, 2011 the world’s largest gold producer, Barrick Gold (market value $44B), announced their intention to buy the copper producer Equinox Minerals for $7.3B.
published April 2011
posted in Insights
Relative Value in Resources
Canada has long been associated with commodities, and our stock market is no different. Half of the value of the S&P/TSX Composite Index is derived from cyclical stocks in the resource sectors, energy and materials.
published April 2011
posted in Media
Canadian Equities Roundtable: Part 1 (Morningstar)
When measured by market capitalization, resources companies now make up slightly more than half of Canada's equity market, and to a large degree have overshadowed other sectors. In this week's Canadian equities roundtable, we asked our panel of value managers to look beyond the rocks, trees and oilfields for attractively priced non-resources stocks. The panelists were, Kim Shannon, president and CEO of Toronto-based Sionna Investment Managers Inc, Mark Thomson, managing director and head of research at the value manager Beutel Goodman & Co. Ltd. and Ian Hardacre, vice-president and head of Canadian equities at Invesco Trimark Ltd. They spoke with Morningstar columnist Sonita Horvitch, whose three-part series continues on Wednesday and Thursday.
published January 2011
posted in Insights
High Correlation In Equity Markets
Correlations between most equity sectors and individual stocks are all well above historical norms. In the short term, this is reducing the benefits that have typically come from individual stock selection and causing returns for all investors to be connected.
published January 2011
posted in Media
Invest Like a Legend: Kim Shannon (Globe and Mail)
"How I would invest a $100,000 windfall: I love giving 500-year-old investment advice from a German banker called Jacob Fugger the Rich: Keep one-quarter each in stocks, bonds, real estate and gold coins. Gold coins were the currency of his day. In modern-day terms, he's talking about T-bills. What he's telling you is to dynamically rebalance-sell asset-mix winners and buy asset-mix losers. All sorts of studies show the more you dynamically rebalance, the better your long-term returns. It sounds easy, but it's incredibly difficult to do."
published October 2010
posted in Insights
Not All ROEs Are Equal
Return on equity (ROE) is one of the metrics commonly used for assessing the profitability of a company. A business that can sustainably generate higher returns for every dollar of capital employed is a more valuable business than one that generates less.