Why management teams matter, energy companies rarely meet our investment criteria, and JPMorgan and State Street differ from many regional banks.

Highlights

• Potential implications of the recent advancements in generative AI
• U.S. regional banking challenges and our exposure
• Why we don't currently own any energy sector companies in the portfolio
• A look at two holdings—one "old" and one new—Verisk and BorgWarner
• Our observations on broader earnings results

Why genuine knowledge building and the ability to learn effectively in investing is difficult, and how we try to work around those challenges.

Highlights:

• Context setting: What does "epistemology" mean, and why did we get excited about it in relation to investing?
• What is knowledge? How do you create it?
• • The two founding blocks: Inductive and deductive reasoning
  • A contrast in knowledge approaches and evolutions—e.g., the airline industry vs. astrology
• The resonance behind the learning, trying to "win by not losing"
• How we aim to build knowledge by "closing the loop" on inductive learning:
• • Journaling, timestamping, governance (and the Mawer Lab)
  • Forecasting tournaments and "adjacent games"
  • Also: Learning isn't cost free
• Drawing from the wisdom of crowds—what conditions help foster learning within an organization?
• ChatGPT and AI: Potential implications for the learning process in investing

The major themes of the quarter, where we are in the interest rate hike cycle, and our thoughts on the recent banking crisis.

Highlights:

• The slow-moving impacts of central bank policy on inflation
• Our banking exposure
• Why it's important for investors not to fear recessions
• Asset mix update

This episode, we discuss our seven-point management assessment framework (with examples), our risk management approach, and overall thoughts on energy.

Highlights:

• Why it's difficult to find energy companies with sustainable competitive advantages—and where we see some opportunities—e.g., Parex Resources and International Petroleum Corporation
• Another way to look at geographic diversification? Revenue profiles in the portfolio (e.g., Jamieson Wellness Inc.)
• Diving into our Management Assessment Framework (MAF) and how we use it to determine if a management team is effective—E.g., Uni-Select and Element Fleet
• Visiting each floor of "The Mawer Risk Elevator"—and why the decision-making environment is the foundational level
• How rising interest rates can impact wealth creation

Digging into last year's performance drivers, the current opportunity set, and benefits of resuming boots-on-the-ground research.

Highlights:

• A review of the market and our strategy's performance in 2022 and three key learnings
• Why we exited Kakao, and some of the new additions to the portfolio: Salik, Vesta
• Risks we're monitoring—and managing: China-U.S. tensions over Taiwan and geographic exposure in the portfolio
• The power of pricing power (see: TSMC) and types of ESG considerations that we look for in our investments (Petro Rio)
• How a shared investment philosophy and process makes for better decision making—e.g., Lonza, Hikma

The nuanced impacts of inflation to companies' balance sheets that investors might be missing.

Highlights:

• How inflation can present major challenges to businesses
• Why investors need to look more closely at maintenance capital expenditures and depreciation expenditures—e.g., Dollar General
• A return to accounting basics and monitoring inventory balances—e.g., Johnson & Johnson

Chief Investment Officer Paul Moroz shares takeaways from the Research team's annual post-mortem discussions.

Highlights:

• The cyclical—and long-term—aspect to investment learnings
• Why interest rake hikes were a big factor and topic of conversation
• "Fishtailing" and the difficulties of trying to right-size information
• How emotional intelligence makes for better decision making
• "Simplify, clarify, focus" and offsetting the toll of complexity in processes

Portfolio Manager Crista Caughlin walks listeners through the tumultuous bond market experiences of 2022 and outlines three main economic scenarios the team is monitoring for 2023.

Highlights:

• Are reports of the 60/40 portfolio's death greatly exaggerated?
• 2022 recap: What happened in bond markets?
• How can the yield curve un-invert?
• Key takeaways from researching Canadian household debt levels
• Adjustments to the portfolio: What changes have we made?

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