In this episode, we discuss the early months of the new U.S. administration with Grayson Witcher, lead portfolio manager for the U.S. equity strategy at Mawer. Grayson touches on the impact of tariffs, including the practical and unpredictable aspects of tariffs and how they influence decision-making. Grayson also shares insights on the potential long-term effects of the AI boom and highlights recent portfolio adjustments in response to evolving market dynamics.

 

Key Takeaways:

• The market initially surged post-election but has since reversed, with the S&P 500 dropping below election day levels. Policy shifts have hit sectors like pharma, defense, and life sciences. Volatility is rising, inflation concerns persist, and consumer caution is growing. [00:01:34]
• The current investment approach focuses on avoiding industries most exposed to tariffs, such as autos, agriculture, and luxury exports. Short-term risks include inflation and declining consumer confidence, while long-term consequences are harder to predict. Tariffs may push foreign competitors to innovate and expand globally. [00:07:01]
• When thinking about the impact of AI on the market, the U.S. equity team focuses on identifying at-risk industries and long-term beneficiaries. Instead of betting on specific AI technologies, they invest in broader themes. [00:15:45]
• While the portfolio remains largely stable, they have made minor changes due to advances in AI and current market volatility, exiting companies due to the anticipated impact AI will have on them. [00:17:33]

As global tensions rise and deglobalization trends continue, demand for enhanced border security and cargo inspection is increasing. A recent portfolio addition is OSI Systems, a security screening company specializing in cargo, airport, and venue security. [00:21:25]

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.

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