PenderFund

When to Consider Buying Megacaps

Written on . Posted in Investment Strategy, Pender Blog

Recently asked questions from the field: Does the recent drop of Facebook offer us an opportunity to add a megacap name to our portfolios? If Washington decides to increase regulations on technology companies, would that impact megatech enough to provide entry points?

Here are some thoughts on Pender’s investment strategy as it relates to our analysis of megacaps.

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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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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’s Holiday Reading List 2017

Written on . Posted in Book Reviews, Pender Blog

David Barr

Edward O. Thorp (Author), Nassim Nicholas Taleb (Foreword)
Investing is a probabilistic endeavour and that drew me to this book about Edward Thorp. Thorp is a mathematician and former MIT professor who devised a method for counting cards that could “beat the dealer” at Blackjack. Understanding probabilities and betting aggressively when the odds are in your favour proved to be successful in Blackjack, but knowing when the odds are in your favour is also a key aspect of our investment strategy. Thorp’s curiosity drove him to create a quantitative hedge fund that delivered market-beating returns over the decades. I’m looking forward to learning more about the approach that made him successful across the disciplines.

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Pender Book Review: Shoe Dog: A Memoir by the Creator of Nike

Written on . Posted in Book Reviews, Pender Blog

Building a business is hard. This is the reality for many CEOs. Just look at some of the most successful companies today. Facebook was confronted with questions on its ability to monetize its network post IPO, and was temporarily in the doghouse. Amazon was constantly questioned on its business model but is now firing on all cylinders and a stock market darling. During the financial crisis of 2008-09, no one was going to spend $5 on a latte, so Starbucks was punished. These are all companies that we admire and look to for insight into building a business, and they all have one thing in common. They are all founder-led.

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