REDWOOD BLOG | March 21, 2017

Market efficiency

by Chris Kerlow, CFA “Is that a $20 dollar bill lying on the ground?” asks the student “No it can’t be”, answers the professor. “If it were, someone would have picked it up by now.” – Caption from Howard Marks’ The Most Important Thing The efficient market hypothesis (EMH) was developed in Chicago during the […]

REDWOOD BLOG | March 7, 2017

Pactive® Investing

2016 was a terrible year for the performance of active stock pickers. According to Bank of America Merrill Lynch, 81% of US Large Cap active funds underperformed their benchmark1. Although we doubt that stock pickers will continue to underperform quite as badly as they did last year, investors seem to be waking up to the […]

REDWOOD BLOG | March 6, 2017

Canadian Banks Deliver

by Gareth Watson, CFA Over the past two weeks Canadian banks reported their fiscal first quarter earnings which covered results from the months of November to January. All banks beat expectations, and some beat them handily. We observed the following from the bank results: Loan loss provisions remained steady for the most part and in […]

REDWOOD BLOG | March 3, 2017

A Primer on Canadian Preferred Shares

CLICK HERE TO DOWNLOAD What are preferred shares? Preferred shares are hybrid securities – they have characteristics of both equities and fixed income. Like equities, preferred shares in Canada trade on an exchange, pay out distributions in the form of dividends, and appear on the equity side of the balance sheet. However, like bonds, preferreds […]

REDWOOD BLOG | February 27, 2017

Do Share Prices Overreact to Earnings?

By Craig Basinger, CFA and Derek Benedet, CMT Behavioural Finance combines behavioural and cognitive psychology theory with conventional economics and finance. Essentially it attempts to account or add the “human” element into understanding how the markets behave. While still a relative new area, it has garnered a great amount of attention. The most common aspects […]

REDWOOD BLOG | February 21, 2017


by Craig Basinger, CFA and Derek Benedet, CMT The S&P 500 is now trading at 17.7x consensus estimated earnings for the next 12 months. That is the highest valuation for the S&P since 2002, over 14 years ago. But should we care? In this edition of the weekly we will slice and dice market valuations […]

REDWOOD BLOG | February 14, 2017

2,901 Days

Craig Basinger, CFA Or if you prefer, 414 weeks or 7.97 years. That’s how long ago the market bottomed and a new market cycle was born. As with all Early Bulls, it was on shaky ground but confidence slowly improved thanks to rising markets, improving economic data and better company fundamentals. While we would not […]

REDWOOD BLOG | February 6, 2017

Policy “Trumps” Cycle

by Derek Benedet, CMT In this edition, we are providing an abbreviated synopsis of our Richardson GMP Market Outlook Quarterly which was published a few weeks ago. The full report is available on the Richardson GMP home page (here) 2016 – An American Classic Looking back, the last year had many similarities to classic American […]

REDWOOD BLOG | January 30, 2017

Self-destruction and resurrection

by Derek Benedet, CMT And it never failed that during the dry years the people forgot about the rich years, and during the wet years they lost all memory of the dry years.  – John Steinbeck, East of Eden This quote reminded me of the endless boom / bust cycle in the energy complex. It’s […]

REDWOOD BLOG | January 25, 2017

Investment Outlook 2017

by Reams Asset Management 2016 showed the peril and futility inherent in economic forecasting. Global interest rates confounded innumerable years of historical data with sovereign rates of many developed nations at negative levels, an entirely unprecedented event. Unorthodox central bank policy accelerated once more, with increased equity and fixed income market interference failing to generate […]