Art of Boring Mawer Investment Management Ltd.

Some of the main challenges facing the continent, what we gleaned from visiting over 45 companies, and ESG considerations that are front of mind for major European investment firms.

Highlights:
Our thoughts on the prevailing macro concerns—e.g., inflation energy crisis “Collective corporate memory” and why the history of Europe is an important and unique context—particularly seen from a bottom-up perspective (e.g., Kuehne+Nagel, Lonza, Givaudan, SGS, Reckitt, Anglo American, Roche) Differentiation and operational effectiveness—what makes our European holdings competitive (e.g., Anglo American, Kuehne+Nagel) Germany’s longer-term energy outlook and potential implications for energy transition and infrastructure in Europe (e.g., Iberdrola, Shell, Equinor) ESG conference takeaways—the importance (and difficulty) of parsing and aggregating unstructured data, particularly for social considerations, and how we incorporate this into our investment process

A review of last quarter, the major themes and takeaways from 2022, and what’s on the horizon for the new year.

Highlights:
How we did—and what factors impacted relative performance Why 2022 was difficult for Balanced investors Discount rates have gone up…where are valuations at? Inflation expectations, interest rates, labour markets, earnings, and economic growth—what’s being monitored in 2023 Asset mix update

What investors can learn from the s-curves of technologies both old and new.

Highlights
How S-curves relate to TAM (total addressable market)—and what piqued our interest about them in the first place Types of S-curves Where different technologies fall into an S-curve: E.g., cars, refrigerators, landlines, TVs, Kindles, USB ports, and biologic drugs Are S-curves getting steeper?

What we think about the newly proposed tax on share buybacks in Canada, a balanced take on the energy theme, and where we’ve trimmed, exited, and added in the portfolio.
 
Highlights:
Which sectors may be most affected by the buyback tax Holdings that showed strong fundamentals throughout this year’s volatility—e.g., Canadian Natural Resources, Suncor, Loblaws, Dollarama, and more Canadian real estate recap—e.g., Choice Properties and Granite REIT How we approach assessing big C-suite changes (CN Rail, Suncor, Bank of Nova Scotia) Major themes the team is thinking about for 2023

How do investors figure out what a company is worth? (Especially in a higher inflationary and interest rate environment?)
 
Highlights
Why doing a qualitative assessment of each company is our first filter How we try to determine valuations without missing the actual fundamentals (e.g., Trisura and Kinsale) and why valuation is only one input in the investment decision-making process When DCF modelling can actually help us better understand the drivers of the business—e.g., Colliers—and also some of its pitfalls Choosing the right discount rate—why it’s more art than science and how we try to ensure consistency across the platform

A deep dive—right to the atomic level—of how semiconductors work and the potential implications for the industry when Moore’s Law comes to an end.
 
Highlights
The transistor—a brief history What is a semiconductor? Why are they special? (Hint: atomic-level, laser precision manufacturing) HSMC, ASML, Amazon, KLA, Samsung—what the end of Moore’s Law might mean for various businesses in the semiconductor value chain Potential impacts to global productivity Will Rob continue to be underwhelmed by iPhone upgrades?