Manager’s Q4 Commentary – Felix Narhi

Written on . Posted in Commentaries, Pender Strategic Growth and Income Fund, Pender US All Cap Equity Fund, Pender Value Fund

“Since 1871, the market has spent 40% of all years either rising or falling more than 20%. Roaring booms and crushing busts are perfectly normal.” – Morgan Housel

Last year was a banner year in the US markets. Following the election of Trump, the S&P500 bolted out of the gates on initial optimism for deregulation across many sectors and ended the year with investors cheering huge US corporate tax cuts. In what has become a familiar refrain, a handful of mega cap internet and technology stocks continued their momentum.

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The Underappreciated Value of a Long-Term Orientation

Written on . Posted in Investment Insights

“I ask everybody not to think in two to three-year time frames, but to think in five to seven-year time frames.” – Jeff Bezos

Amazon is a remarkable enterprise that was built in part on an unwavering long-term orientation. Founder Jeff Bezos doesn’t care about quarterly earnings because he knows the near-term earnings simply reflect the actions and initiatives Amazon took years ago. He is always thinking about the direction of Amazon five to seven years out, rather than what is happening today. Such a perspective is highly unusual in the corporate world, but far more likely in founder-run firms. It is also important in the investment world. Thinking long term impacts how you plan and where you allot energy, time, money and resources. While we try to navigate the near-term twists and turns of the market, we keep three long-term considerations front of mind.

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Blog Post: More on the disruptive forces of technological change

Written on . Posted in Pender Blog

It is important to keep in mind that one of Charles Darwin’s great insights on evolution also applies to capitalism: “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change.” It’s better to be a disruptor than the disruptee, or at least be quick to adapt when major shifts occur.

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Blog Post: Taking advantage of business, sector and market cycles

Written on . Posted in Pender Blog

“It’s déjà vu all over again.” – Yogi Berra

We often own stakes in companies which can be characterized as boring, operating in “meat and potatoes” industries that have faced cyclical headwinds. Some major current Pender holdings in this category include Liberty Global and Liberty Latin America (large international TV and broadband companies), Platform Specialty Products (specialty chemicals), and Colfax (diversified industrials). None of these holdings were purchased at anywhere near the peaks of their respective cycles, but the subsequent downturns in some cases turned out to be much deeper and longer lasting than we anticipated.

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Pender Corporate Bond Fund – Manager’s Commentary – February 2018

Written on . Posted in Commentaries, Insights & Ideas, Pender Corporate Bond Fund

The Pender Corporate Bond Fund returned 0.5% in February, not a large gain but, within the context of generally weak market conditions, an acceptable result. 

Strong performers for the Fund in February included our position in the distressed General Obligation bonds of Puerto Rico which rallied on investors’ more positive view as the island’s recovery and debt restructuring efforts showed progress. Our position in Rite Aid 2023 bonds rallied over 10% on the news of that company’s merger with Albertson’s, an event that triggers a work-out of this issue at (or above) 101% of face value. In addition, our position in the 2019 convertible notes of Synchronoss Technologies rose strongly on news of a credit-positive equity financing, combined with that company’s progress in addressing corporate reporting issues. Our interest in post-petition claims of Samson Resources also rallied on expectations of higher recovery from legal claims.

The gains above were offset to a degree by some weakness in investment grade credit and certain closed-end funds.

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