Art of Boring Mawer Investment Management Ltd.

Building on his conversation in Episode 153, Portfolio Manager Samir Taghiyev takes a deep dive into the mental models and frameworks that Mawer uses to evaluate company management teams, particularly within the small-cap space. Using both personal and financial examples, he illustrates the benefit of exploration and exploitation, striking a balance between focus and curiosity, and identifying opportunities on the S curve of the corporate lifecycle.

Key points from this episode:
Company management can be evaluated by determining if they are growing revenues while controlling costs and risks. This can be combined with other frameworks to create a comprehensive picture. The exploration vs. exploitation framework can be used to evaluate how well management balances focus with curiosity. There are four phases in the S curve of the corporate lifecycle—startup, growth, maturity, and decline. Mawer focuses on companies in the middle two phases, with Trisura and TerraVest provided as examples. Incrementalism is very important when it comes to exploration vs. exploitation because it strikes a key balance between spending to de-risk and learning. Companies can either drive growth organically, often through the introduction of new products, or inorganically through acquisitions. Using the “look back” and “trust but verify” processes, the small-cap team leverages their historical notes and third-party information to improve their verification of management claims. Host: Kevin Minas, CFA, Institutional Portfolio Manager
Guest: Samir Taghiyev, CFA, Portfolio Manager
For more details and full transcript visit: https://www.mawer.com/the-art-of-boring/

This episode is available for download anywhere you get your podcasts.
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Founded in 1974, Mawer Investment Management Ltd. (pronounced "more") is a privately owned independent investment firm managing assets for institutional and individual investors. Mawer employs over 250 people in Canada, U.S., and Singapore. Visit Mawer at https://www.mawer.com.
Follow us on social:
Twitter - https://www.twitter.com/Mawer_Invest
LinkedIn - https://www.linkedin.com/company/mawer-investment-management/ 

Portfolio Manager Samir Taghiyev discusses the current landscape of the Canadian small-cap space through the lens of the “Mr. Market” narrative and crowd-driven sentiments. Using Converge Technology Solutions as an example, Taghiyev sheds light on his team’s due diligence process and how they find opportunities by tuning out the noise.
Key points from this episode:
The mood of the markets can change very quickly, highlighting the importance of due diligence Investors should be aware of market narratives but not get caught up in them Diligence on business, management, and valuation is key to finding opportunities created by delayed market reactions Small caps may see more exaggerated dynamics due to retail investor involvement Host: Kevin Minas, CFA, Institutional Portfolio Manager
Guest: Samir Taghiyev, CFA, Portfolio Manager

For more details and full transcript visit: https://www.mawer.com/the-art-of-boring/podcast/moody-mr-market-finding-opportunities-in-the-canadian-small-cap-space-amid-changing-market-psychology-ep153

This episode is available for download anywhere you get your podcasts.
--
Founded in 1974, Mawer Investment Management Ltd. (pronounced "more") is a privately owned independent investment firm managing assets for institutional and individual investors. Mawer employs over 250 people in Canada, U.S., and Singapore. Visit Mawer at https://www.mawer.com.
Follow us on social:
Twitter - https://www.twitter.com/Mawer_Invest
LinkedIn - https://www.linkedin.com/company/mawer-investment-management/ 

As markets continue on a dynamic trend, fixed income portfolio manager Crista Caughlin discusses the economy and factors that drove markets in the first quarter of 2024. In addition, the reemergence of a more typical correlation pattern between stocks and bonds, getting central banks off the sidelines, and the concern that markets may be being too complacent.

Key points from this episode:
Global growth improving, inflation moderating, and earnings relatively strong In Canada, growth has improved although consumption remains weak when compared to the U.S. Moving with caution: strong data has begun to cause central banks to be cautious around timing of interest rate cuts—they want to be confident higher inflation is in the rear view mirror Strong equity markets—a continuation of the 2023 technology-focused businesses doing particularly well, especially if they have a tie in to AI or semiconductors Too much complacency? We may not have seen the full impact of higher interest rates, and you can see that in some areas we are seeing continued pressure (e.g., real estate, mortgage arrears, loan delinquencies) Host: Kevin Minas, CFA, Institutional Portfolio Manager
Guests: Crista Caughlin, CFA, Mawer Portfolio Manager
For more details and full transcript visit: https://www.mawer.com/the-art-of-boring/podcast/quarterly-update-q1-2024-ep152
This episode is available for download anywhere you get your podcasts.
--
Founded in 1974, Mawer is a privately owned independent investment firm managing assets for institutional and individual investors. Mawer employs over 250 people in Canada, U.S., and Singapore. Visit Mawer at https://www.mawer.com.
Follow us on social:
Twitter -  / mawer_invest
LinkedIn -   / mawer-investment-management

Portfolio Manager Manar Hassan-Agha discusses the importance of position sizing in investing and how factors like behavioural biases, market structures, and optimal betting strategies under the Kelly Criterion can impact returns at varying position weights. The conversation explores limitations in precisely calculating probabilities and edges for stock investments and how frameworks and checklists can be used dynamically to thoughtfully consider odds, edges, and optimal sizing for investment decisions. This discussion highlights the various personas or strategies that investors can adopt in dealing with both the winners and losers in their portfolios. Many of the concepts discussed in this episode are the research and works of others. Manar talks through how we think about applying their lessons dynamically and from a first-principles basis to the day-to-day management of portfolios at Mawer.

Key points from this episode:
Lessen the emotional impact of a large loss on a single position with position sizing Use the Kelly Criterion to determine the optimal size of a bet, taking unpredictability into account Resist the instinct to embrace either nihilism or precision in investment decision-making Tailor position-sizing approaches to your own investment style and risk tolerance

Portfolio Manager Peter Lampert breaks down the decision to re-open the strategy to new institutional investors and the key inputs that determine the strategy’s capacity. In addition, “a tale of two acquisitions”: one head scratching, the other improving the investment thesis of the holding.

Key Points From This Episode:
Breaking down the decision to re-open the strategy to new institutional investors How the team determines the strategy’s capacity A puzzling acquisition by KDDI and a potential value creating acquisition by Novo Nordisk Evaluating the implications of rising interest rates on real estate investments The balance needed to sift through the hype around AI while still being open to opportunities Host: Rob Campbell, CFA, Institutional Portfolio Manager
Guest: Peter Lampert, CFA, Mawer Portfolio Manager

For more details and full transcript visit: [episode link]
This episode is available for download anywhere you get your podcasts.

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Founded in 1974, Mawer is a privately owned independent investment firm managing assets for institutional and individual investors. Mawer employs over 250 people in Canada, U.S., and Singapore. Visit Mawer at https://www.mawer.com.
Follow us on social:
Twitter - https://www.twitter.com/mawer_invest
LinkedIn - https://www.linkedin.com/company/mawer-investment-management/

In this episode, host Rob Campbell and 11 colleagues on the research team engage in a comprehensive post-mortem analysis, sharing candid reflections on their decision-making processes over the past year. This episode underscores the significance of learning from both successes and mistakes, highlighting the value of vulnerability and introspection within the investment team at Mawer.

A Few Highlights:
•  Investing before comfort in competitive markets is necessary for returns
•   Less complexity in investment strategies often results in more alpha
•  Significant market changes can take longer to affect companies than expected
•  Large acquisitions are risky; patience in evaluation is key
•  Leaning harder on inductive evidence and numbers for decision-making
•  Understanding the importance of parent companies in investment decisions
•  Finding a balance in analysis depth to retain key insights without becoming lost in the details

Host: Rob Campbell, CFA, Institutional Portfolio Manager
Guests:
Christian Deckart  CFA, PhD, Mawer Deputy CIO, Portfolio Manager
Mark Rutherford  CFA, Mawer Portfolio Manager
Grayson Witcher  CFA, AB, Mawer Portfolio Manager
John Wilson  CFA, Mawer Portfolio Manager
Samir Taghiyev  CFA, Mawer Portfolio Manager
David Ragan  CFA, Mawer Portfolio Manager
Siying Li  CFA, Mawer Equity Analyst
Jeff Mo  CFA, Mawer Portfolio Manager
Curtis Elkington  CFA, Mawer Credit Analyst
Peter Lieu  CFA, Mawer Portfolio Manager
Asim Hussain  CFA, Mawer Equity Analyst

For more details and full transcript visit: [episode link]
This episode is available for download anywhere you get your podcasts.

--
Founded in 1974, Mawer is a privately owned independent investment firm managing assets for institutional and individual investors. Mawer employs over 250 people in Canada, U.S., and Singapore. Visit Mawer at https://www.mawer.com.
Follow us on social:
Twitter - https://www.twitter.com/Mawer_Invest
LinkedIn - https://www.linkedin.com/company/mawer-investment-management/