IN THE KNOW
In The Know is a monthly communication piece created and developed by The Advisory team at Davis Rea. The goal is to keep our clients (and ourselves) informed, entertained and up to speed on the markets, sectors, culture and people that shape, define and drive our business.
The Life of a Thanksgiving Turkey
John
O'Connell
October 3, 2024
Just like all turkeys don’t get eaten every Thanksgiving, so too it is also true that the general direction of the economy over time is UP! While the number of people without work has grown to 4.2% of those who want to work, 95.8% are working! What’s more, those working are seeing their incomes rise at a rate GREATER than their cost of living. Those retired or who have savings invested have seen their wealth rise. Personal spending is at record highs. Little wonder that corporate profits and margins are at record highs. Farmer ‘Fed’ is providing food to a growing economy by lowering interest rates. It’s just too good out there! Someone get me a sedative, I’m too fired up!
Read moreLibby Wildman on Estate Planning
Libby
Wildman
September 26, 2024
This fall 2024, MAiDHouse was pleased to present this webinar hosted by our very own Libby Wildman. Libby is known for her empathy and expertise, and is a sought-after advisor, author, and keynote speaker. In this recorded webinar, she offers her guidance on financial and estate planning, exploring how philanthropic giving can not only touch your heart, inspire your family and also reduce your taxes.
Read moreInverted Investment Thinking #1
John
O'Connell
August 5, 2024
In the past week Amazon, Google and Microsoft have announced record profits, even AFTER having spent vast pots of money on ‘chips and stuff’. As a result of this tomfoolery, all the stocks have fallen in excess of 10%. In a day. The vicious culprit? Wild CEOs gone mad—uncontrolled spending. It’s captivating content in the middle of summer; these idiots are building the infrastructure of the future! The Club’s choir, the ‘Excel Masters’, having parsed the past 90 day’s activities, and now brilliantly, and in unison, are thinking about the next 90 days, and are once again indignant and petrified. The most profitable companies in the world are all being dumb—again!
Read moreJuly - Q2 Chairman's Letter
John
O'Connell
July 8, 2024
The world needs bears. We should not rejoice in the fall of the bear. Bears play an important part in our ecosystem. They spread the seeds and nitrogen in the forest and streams where they hunt salmon, they spread the deer far and wide stopping overindulgence in any one area.Stock market bears spread the seeds and nutrients that have blessed us with these results we enjoy today. Bears likewise stop overindulging bulls, something we should be mindful of today.I poke the bear in jest, not out of a lack of respect. I poke the bear because frankly there are too many bulls and from what I know of bulls, they like to do things that are not always pleasant. Too many bulls in the ring can be dangerous too.
Read moreMay 2024 - Dear Mr. Smith
Our CEO, John O'Connell read a research note this morning that he immediately knew our client, 'Mr. Smith', would enjoy. ‘Mr. Smith’ is an avid follower of markets, and often asks John for his opinion on current events, particularly when they are interpreted with a pessimistic lens by the popular financial media. John hadn't heard from ‘Mr. Smith’ recently, and this morning ‘Mr. Smith’ was on John's mind as he read a research report about consumers cracking under the pressure of high interest rates. John very much enjoys speaking to ‘Mr. Smith’ and, looking for an opportunity to catch up with him, sent him the following email along with the attached commentary from Ed Yardeni - a highly-respected US economist.
Read moreApril Q1 Chairman's Letter
John
O'Connell
April 8, 2024
When you know what is coming, prepare. When you do not know what's coming, position. When the future is uncertain, you can position. No one knows what is going to happen with the economy or the stock market, but you can position yourself against potential disappointment by carrying extra cash. Cash pays attractively these days. We feel the fund is well positioned for turbulence.
Read moreFebruary 2024 - All the World's a Stage
John
O'Connell
February 21, 2024
We are big believers in facts as the basis for investment. Facts are generally and remarkably easy to find and understand. So, lets address some facts about being “Magnificent” and other observations presently driving the IIC crazy.
Read moreJanuary 2024 - Breaking Bad
John
O'Connell
January 1, 2024
We are thrilled that 2023 was a year that produced strong results. Were we lucky or were we wise? Short periods of time like a year do not provide enough data to make a strong argument one way or the other, but we played the odds. With valuations so depressed, being aggressively optimistic was likely a safe course of action. We pounced.
Read moreI remember when... Reminiscences of a Baby Boomer.
John
O'Connell
November 6, 2023
I was born the last years of the Baby Boomer generation. I started my professional career when the first millennials were just being hatched. Today, the investment landscape is mostly millennials who never even thought about money or the cost of it until 2006 when they first started giving it away for free.
Read moreIntroducing Davis Rea 2.0
John
O'Connell
September 14, 2023
I am connecting with you all this morning to announce a very exciting new chapter for Davis Rea. When you visit www.davisrea.com you will see a new brand direction for the firm as well as some additions to our leadership team. This new look of the firm came as a result of reflection. Since I acquired Davis Rea in 2010, we have spent a great deal of time thinking about the future and building the team. As part of that planning process, I made the decision to bring in Don Ritchie as President of Davis Rea. Don is not only one of the most respected people in finance in North America - but one of the best minds in the business. In the coming days and weeks many of you will get to meet and get to know Don. I am delighted that he agreed to come on board and will be adding exceptional value to our client offering.
Read moreManager Who Called New Bull Market Still Bullish
Got questions? We've got answers from two seasoned pros who love the game and spend their working days absorbing information and thinking about ways to protect client capital and about which large cap businesses can thrive in any kind of market.
Read moreChairman’s letter Q2 2023
John
O'Connell
July 1, 2023
Yes, there are problems in the world that are dreadful and complicated. We are constantly reminded of the political and economic challenges, and for investors, there are countless voices vying for our attention-warning of peril.
Read moreThe Glass is Half-Full for the Companies We Own
Glass half-full, glass half-empty. Those are generally the two most prominent types of investors. But who has done the work, assessed the data and made informed decisions about the companies they've invested in?
Read moreChairman’s Letter Q1 2023: Thinking Generationally — The Age of Change
John
O'Connell
April 1, 2023
The following article was mostly written by Brian Arthur of McKinsey in 2017. I have added content and edited it heavily to update its story to today’s realities and to add context to our investing thinking. It smartly describes the disruption that is rippling through the world today at an ever-increasing pace.
Read moreHow Rich Companies Get Richer When the Going Gets Tough
John
O'Connell
February 25, 2023
Sometimes it is helpful to think of companies like teams competing against each other. There are big, strong, elite teams and there are wannabes. Recessions are viewed as bad by investors because profitability is impaired. Investors become pessimistic about the future.
Read moreChairman’s Letter, Q4 2022
John
O'Connell
January 1, 2023
The 2023 economic outlook for the US is locked in. The Federal Reserve’s goal is to push the rate of inflation back down to 2% over the next few years. It will do this by keeping money expensive enough and for long enough to restrain economic activity.
Read moreChairman’s Letter Q3 2022
John
O'Connell
October 1, 2022
There is a new war being waged that has not been waged in most investors’ lives. It comes as a shock to many, but the warning signs were there. For the past 14 years governments around the world have directed that money be thrown at every problem that the global community could conjure
Read moreChairmans letter Q2 2022: THE BINGO HALL
John
O'Connell
July 1, 2022
Successful investors make the bulk of their money when they buy — usually when the majority are losing their minds worrying about BREAKING NEWS and PLUNGING STOCK MARKET headlines.
Read moreClean up - Aisle 5
John
O'Connell
March 27, 2022
My last missive declared that the market was “a traffic accident waiting to happen”. Well, voila. Everyone seems to have stepped into something unpleasant.
Read moreChairman’s letter Q1 2022
John
O'Connell
March 1, 2022
The past 90 days have been one of immense turmoil. War, inflation, rapidly rising interest rates, forecasts of economic recession, rumors of tax hikes, and soon companies are to announce quarterly earnings and the going is expected to be far tougher than the easy comparable numbers from last year's COVID recovery.
Read moreSpecial Report
John
O'Connell
February 20, 2022
Recently, I was reading an article written by a professor of finance who had done a detailed study of “How Novelty and Narratives Drive the Stock Market: Black Swans, Animal Spirits and Scapegoats”.
Read moreChairman’s Letter Q4 2021
John
O'Connell
January 1, 2022
If you were told that in January of 2020 the world would be beset by a global pandemic where 275 million people would be infected and more than 5 million (20% in the USA) would die, would you have sold all your stocks?
Read moreChairman’s Letter Q4 2020
John
O'Connell
January 1, 2022
Recently, we wrote that if confronted with the need to forecast the future, but that future is impossible to know with certainty, it is best to acknowledge you cannot know the answer, rather than fool yourself into thinking that you have the answer.
Read moreChairman’s Letter Q3 2021: Speculator or Investor?
John
O'Connell
October 1, 2021
The following words were written by Edwin LeFevre in 1923 when he penned the oft-quoted Reminiscences of a Stock Operator. They are as true today as they were then:
Read moreChairman’s Letter Q2 2021: Expectations Are Safer Than Forecasts
John
O'Connell
July 1, 2021
It’s been about 18 months since our worlds were turned upside down. If anyone had prophesied your portfolio valuation on this day 18 months ago you likely would have considered the forecast foolhardy. Yet, here we are.
Read moreChairman’s Letter Q1 2021: Goldilocks & The Three Bears
John
O'Connell
April 1, 2021
Investors continue to sing an opportunistic tune as evidenced by the continuation of positive results reported on your statement. Generally, equity investors are heartened by continued robust earnings growth, powered by a rapidly recovering economy, fueled by massive dollops of money
Read moreChairman’s Letter Q3 2020
John
O'Connell
October 1, 2020
The U.S. election is soon to be past tense. The betting odds have Biden as President and a substantial change of control of the Senate in favour of the Democrats. A year ago, this would have been seen as a market negative outcome.
Read moreChairman’s Letter Q2 2020
John
O'Connell
July 1, 2020
Well that feels better! Portfolios have shown a sharp snap-back as quickly as they plummeted in the early days of the Pandemic. While we are thankful that the reports attached are much improved from the first quarter, we want to assure you that our eye is still very much on the risks and rewards that are always prevalent when investing.
Read moreChairman’s Letter Q1 2020
John
O'Connell
April 1, 2020
Investing reality today is formed by two fundamental views: the scientific community and the social science community (popularly known as business). The first group considers facts and the second considers forecasts.
Read moreChairman’s Letter Q4 2019: The Roaring Twenties Starts With the Year of the Rat
John
O'Connell
January 1, 2020
Globally, all central banks are easing interest rates and pumping money into their banking sectors. This is always bullish for stock prices. Everyone agrees that the economic cycle is long in the tooth.
Read moreChairman’s Letter Q3 2019
John
O'Connell
October 1, 2019
As the relentless barrage of news about Trump, the trade war, the election, impeachment, and interest rate policy captivate national and investor attention it’s easy to feel like the investing landscape is fraught with risk. What are the biggest risks and what's worth focusing on?
Read moreChairman’s Letter Q2 2019
John
O'Connell
July 1, 2019
The scare from the spectacular 2018 stock market sell-off has completely dissipated and investors are a happier lot—at least those who stuck to their long-term plan. The worry about rising interest rates has turned toward worry about when interest rates will fall.
Read moreChairman’s Letter Q1 2019: Money Is Like Soap
John
O'Connell
April 1, 2019
For all the talk about robots and index funds taking over the investment landscape, and investors flocking to robo advisors, markets continue to gyrate wildly and most investors relying on these cheap solutions experience results that don’t live up to what is promised.
Read more
