The Weekly Brief

Earnings season is critically important even in the best of times, and especially so in periods like now where there is great uncertainty about the future trajectory of the economy and financial markets. So what should investors be looking out for this earnings season?

This year, we’ll be running a series of episodes on what we think are underappreciated narratives, ideas which should be mainstream in modern economic and investment thinking but which are rarely talked about. Underappreciated ideas can offer interesting long-term investment opportunities and so are important to think about.

Could 2023 end up being defined as having started with pessimistic market sentiment (reflected in lower asset valuations) which then met a reality that was better than expected... the polar opposite of 2022?

In our last episode of the year, we explain our investment outlook for 2023. We think next year will see continued volatility, potentially with further bouts of selling in markets. We could even see recession in some parts of the world. But, we also think 2023 could be a once in a decade opportunity for investors.

Avoiding certain risks is fundamental to successful long-term investing, just as much as investing in the right assets is core to investment success. What you don’t buy, is just as important as what you do buy. This year has taught that lesson in a harsh way to many fund managers and retail investors alike.

We’re now close to 12 months into this current bear market cycle, arguably longer if you count the start of this cycle as when technology stocks started to correct (remember that was all the way back in mid-2021). This is probably a good point to reflect on the current bear market cycle and try to put it into perspective. 

This week we offer an update on our thoughts around market valuations, risks, and most importantly, areas of speculation in financial markets which we still think look like bubbles.

Human health and wellbeing is undoubtedly one of the most important of the investment trends we research at Dominion. There really is nothing more important than the health and happiness of our friends, family, and fellow humans around the world.

Understanding the supply chain into a major investment theme can open up a much broader set of investment opportunities to play the same theme but in a smarter way.

It’s important for long term investors to remember that you do not need an investment trend to necessarily be driven by a revolutionary new technology or, in the case of last week’s episode, literal change in the earth’s climate. Sometimes it can be the application of existing technologies in new and innovative ways that can create a significant enough change in the world to match our strict criteria for long-term investing.