Höre Art of Boring

In this episode, we discuss the defense industry's evolution with equity analyst Joshua Samuel. He highlights the historical underinvestment in European defense, the recent increase in defense spending, particularly Germany's program, and the strategic importance of land systems. The conversation highlights how the current geopolitical environment has transformed defense from an underperforming sector to an investment opportunity, though valuations for companies like Rheinmetall now reflect much of this potential. Key Takeaways: * Historical Underinvestment: European military spending dropped dramatically from 2.75% of GDP during the Cold War to approximately 1.3% over the last decade. This resulted in significant inventory reduction (77% fewer tanks, 57% fewer aircraft) and industry consolidation. * Germany's Leadership: Germany's substantial defense spending package has garnered attention, though not all European countries have the same fiscal capacity to increase military budgets at the same rate. * Supply Chain Constraints: Decades of underinvestment created production bottlenecks that can't be solved quickly. Companies like Rheinmetall, which maintained investment during lean periods, are well-positioned with superior production technology and cost structures. * Investment Perspective: European defense companies offer potentially higher growth opportunities than U.S. counterparts due to the lower baseline of European defense spending and greater headroom for increases. Companies with established platforms typically present lower investment risk than those developing new technologies. * Strategic Autonomy: With the U.S. potentially reducing its global security role, European nations are recognizing the need for self-sufficiency in defense capabilities to protect their interests and sovereignty. Host: Rob Campbell, CFA, Mawer Director, Institutional Portfolio Manager Guest: Joshua Samuel, CFA, Mawer Equity Analyst   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:   LinkedIn - https://www.linkedin.com/company/mawer-investment-management/   Instagram - https://www.instagram.com/mawerinvestmentmanagement/

In this episode, portfolio manager, Peter Lampert discusses international equities and the impact of tariffs on portfolio management. He provides insights into how his team has been preparing for potential tariffs since Trump's campaign, explaining that most of their international portfolio companies have limited export exposure to the U.S. and instead operate primarily in domestic markets across various regions. He highlights their strategic decision to exit positions that are heavily dependent on global trade, while maintaining confidence in businesses with resilient management teams capable of navigating economic uncertainty. He also shares personal strategies for maintaining a clear head during market volatility and points out some underappreciated silver linings amid tariff concerns.   Key points from this episode: * How the international equity team prepared for tariff risks during Trump's campaign, viewing market reactions in February as too benign given potential economic impacts. * Many companies in their international portfolio have minimal direct exposure to U.S. tariffs, with many operating domestic U.S. businesses or serving their local markets, like Compass (UK-based catering company with 60% US revenue). * The importance of emotional discipline, especially during market volatility, and having a team structure that promotes rational decision-making. * Potential silver linings that may have been overlooked by markets, including Europe's increased investment in defense and infrastructure, and China's opportunity to shift toward more domestic consumption.   Host: Rob Campbell, CFA, Mawer Institutional Portfolio Manager Guest: Peter Lampert, CFA, Mawer Portfolio Manager   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: LinkedIn - https://www.linkedin.com/company/mawer-investment-management/ [https://www.linkedin.com/company/mawer-investment-management/] Instagram - https://www.instagram.com/mawerinvestmentmanagement/ [https://www.instagram.com/mawerinvestmentmanagement/]

In this Quarterly episode, Crista Caughlin, lead portfolio manager for Canadian bonds, and Jeff Mo, lead portfolio manager for U.S. midcaps, discuss market performance through Q1 2025 and the significant volatility that followed in early Q2—particularly after "Liberation Day" when the Trump administration imposed sweeping tariffs, followed by retaliation from other countries, and then a partial pause. The discussion explores how these trade tensions have created uncertainty affecting business confidence, consumer spending, and investment decisions. Crista explains that the growth outlook has worsened due to this uncertainty, regardless of whether tariffs ultimately reach 10%, 25% or are delayed. Both emphasize the team’s investment approach during this volatility relies on maintaining a disciplined process, avoiding "hero trades," and carefully modeling potential impacts on individual companies. Key points from this episode: * The Trump administration initiated significant trade tensions in early Q2 2025 with "Liberation Day" and the imposition of sweeping tariffs, followed by retaliatory actions from other countries, causing major market volatility before some tariffs were paused on April 9th (except those on China, which remain at 125%). * Even before the full implementation of tariffs, business confidence and consumer spending were negatively impacted by uncertainty, with examples of furloughed workers, delayed investments, and cautious spending behaviors from both the private sector and government employees. * Central banks are in a difficult "wait and see" position regarding interest rates as they cannot fully overcome the effects of a trade war but will try to help economies adjust while monitoring whether tariff-induced inflation becomes structurally embedded. * The asset mix committee has maintained a neutral position in equities throughout the volatility, with a slight shift from U.S. equities toward international markets (particularly Europe) to benefit from potential structural tailwinds. * The investment team emphasizes maintaining adherence to a disciplined process during market turbulence. Host: Kevin Minas, CFA, MBA, CAIA, Institutional Portfolio Manager Guests:  Crista Caughlin, CFA, Portfolio Manager Jeff Mo, CFA, Portfolio Manager   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 [https://www.mawer.com].   Follow us on social:  LinkedIn - https://www.linkedin.com/company/mawer-investment-management/ [https://www.linkedin.com/company/mawer-investment-management/]  Instagram - https://www.instagram.com/mawerinvestmentmanagement/ [https://www.instagram.com/mawerinvestmentmanagement/]

Mawer President and portfolio manager, Jim Hall, discusses the current market environment and the team's approach to risk management. The conversation covers what triggered the vast volatility and uncertainty seen in markets, potential scenarios to come, and what the team at Mawer is doing about it. He emphasizes the importance of staying calm, being prepared, and diversifying portfolios to manage risks.   Host: Andrew Johnson, CFA, Institutional Portfolio Manager  Guest: Jim Hall, CFA, MBA, President, Portfolio Manager   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 [https://www.mawer.com].   Follow us on social:  LinkedIn - https://www.linkedin.com/company/mawer-investment-management/ [https://www.linkedin.com/company/mawer-investment-management/]  Instagram - https://www.instagram.com/mawerinvestmentmanagement/ [https://www.instagram.com/mawerinvestmentmanagement/]

In this episode, U.S. mid cap equity portfolio manager, Jeff Mo, discusses the market's sharp sell-off following President Trump's announcement of widespread tariffs on nearly all U.S. trading partners. He provides both short and long-term perspectives on potential economic impacts, including reduced business investment and consumer spending, while explaining that Mawer's investment approach during this volatility remains focused on preparation as opposed to prediction.   Key Takeaways: * "Liberation Day" Tariffs - Trump administration announced widespread tariffs (10-40%) on most trading partners, surprising markets with their scope and scale. * Market & Economic Response - S&P 500 dropped nearly 5% in one day with bond yields falling; concerns about negative impacts on global growth, business investment, and supply chains * Consumer Sentiment Impact - Potential weakening of consumer spending due to market losses ("wealth effect") and general uncertainty affecting household financial decisions * Investment Strategy in Volatility - Mawer's investment approach focuses on preparation over prediction, maintaining a portfolio of quality companies while making only marginal adjustments during market turbulence Host: Andrew Johnson, CFA, Mawer Institutional Portfolio Manager Guest: Jeff Mo, CFA, Mawer Portfolio Manager   For more details and full transcript visit: https://mawer.com/the-art-of-boring/podcast [https://mawer.com/the-art-of-boring/podcast] 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 [https://www.mawer.com].   Follow us on social: LinkedIn -  https://www.instagram.com/mawerinvestmentmanagement/ [https://www.instagram.com/mawerinvestmentmanagement/] Instagram - https://www.instagram.com/mawerinvestmentmanagement/ [https://www.instagram.com/mawerinvestmentmanagement/]