In this episode, global equity portfolio manager Paul Moroz examines how investors can navigate a market increasingly shaped by conflict, shifting narratives, and wider ranges of possible outcomes. He begins with the recent escalation in the Middle East and the market's relatively measured response, then considers the second-order effects that can matter just as much as the initial shock. The conversation also explores how recent AI-driven swings in software have revealed a market increasingly influenced by thematic flows and short-term sentiment, rather than the more measured process of weighing business fundamentals. Throughout, Paul returns to a central idea: good portfolio management is rarely about one big call, but about making many small, disciplined decisions within a diversified portfolio.

Highlights:

• Why the market's reaction to the recent escalation in the Middle East has remained relatively measured so far

• John Deere as a second-order effects case study: how rising oil and fertilizer costs can affect customer economics, margins, and capital allocation

• Thematic trading and the gap between price and intrinsic value: the Centrini AI thought piece in February triggered a broad software sell-off, showing how quickly disruption narratives—not fundamentals—can dominate market pricing

• Capital intensity isn't the enemy—poor returns are. Microsoft and Amazon are pouring billions into AI infrastructure, but a key question is whether bundling compute with distribution advantages will deliver attractive returns on that capital.
• Why Paul believes the market's "voting machine" is increasingly overwhelming the "weighing machine." Markets vote on sentiment every day but building real businesses (and real wealth) takes years of focusing on fundamentals while tuning out the noise.

Host:

Rob Campbell, CFA Institutional Portfolio Manager

Guest:

Paul Moroz, CFA Portfolio Manager

This episode is available for download anywhere you get your podcasts.

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