Growth stocks are very volatile and tend to lose a lot of value in downturns. This gives them a large speculative component because while large amounts of money can be made by buying and selling at the right time, this is hard to do. Holding on too long will result in poor returns."
- Benjamin Graham
Smart use of capital is an important company attribute that value manager Kim Shannon looks for in building her stock portfolios. "We actually think that the topic of capital allocation is right on the money," says Shannon, president and chief investment officer of Toronto-based Sionna Investment Managers Inc.
It (Value investing) is conservative, it is fundamental. And not speculative. And low and behold because you’re not doing what everybody else is doing in Bay Street, in Wall Street, you have a very good chance for success.”
- Charles Brandes
Sionna often speaks about the importance of prudent capital allocation in the art of investing. Accordingly, we strive to partner with management teams that carefully evaluate their investment alternatives and efficiently allocate capital toward high-return opportunities.
Oil prices have fallen significantly over the last few months due to a myriad of concerns. The magnitude of the current price drop has not been seen since the credit crisis of 2008/09. There are many reasons in the short term for this significant decline in price.
If you’ve bought any stocks this year, you’ve probably noticed that it’s a bit of an odd time to be an investor. For most of 2014, Canada’s market did well—between January and September our main market index, the S&P/TSX Composite, was up by nearly 15%. But it’s been another story since then.
Among investors, there has been a perennial debate between those who adhere to Value, and those guided by Growth. As staunch believers in the former, we have opined on the topic several times in the past.
Kim Shannon
President & CIO
In the world of finance, risk is often defined as beta or standard deviation, both of which measure the volatility of the price of a stock.
There is a lot of talk these days about the fate of Canadian oil. Specifically, there is much discussion surrounding two questions - does the U.S. still need Canadian oil and even if Americans need Canadian oil, is it stranded?