Category: Small Cap Growth Commentaries

Quarter Summary: Equity markets experienced significant declines in the second quarter of 2022.  The dynamics driving this were largely a continuation of the shocks that began in the 1st quarter. The invasion of Ukraine by Russia stretches into its 5th month and is a major source of commodity inflation worldwide (particularly grain and energy feedstocks).…

Don’t fight the Fed.  Small capitalization growth stocks experienced a rough start to 2022 as market participants internalized higher discount rates and slowing economic growth as it became clear that the Federal Reserve would begin to move more aggressively to combat the continued evidence of persistent inflation. Credit markets saw a rapid move upward in…

Persistent, not transitory.  In Q4, that descriptor could be applied to several key areas: COVID-19 (and its variants), logistical bottlenecks, lower labor participation . . . and as a result, it also applied to one of the most important variables the market has been monitoring, inflation.  While inflation can, and has been, allowed to run…

The third quarter saw equity markets grow increasingly cautious with a shift toward “quality” and away from unprofitable and/or consumer discretionary exposure.  Small capitalization Health Care was the worst performing sector, largely due to the high percentage of non-profitable companies in this area.  This development is not wholly unexpected at this stage of the recovery…

The spring of 2021 in the United States was filled with hope and excitement as both consumers and the markets began to plan for a life beyond COVID-19.  Vaccination rates ramped quickly in urban areas & among the most vulnerable populations, while a second round of stimulus money further shored up consumer balance sheets and…

By any measure, 2020 was an extraordinary year.  In fact, it felt like three years – or at least three distinct market phases – in one.  First there was the COVID-19 shock induced recession (market decline), quickly followed by massive monetary and fiscal stimulus enacted as a bridge to re-opening (steady market repair), and finally…

While the path remains volatile, the market continued its march toward recovery in the quarter.  And the same dynamics again won out in the end: growth beat value, large beat small.  However, when you peel back the covers you can see that some of the constituents behind the strength varied this time around.  With Consumer…

Q2 was certainly a more enjoyable form of volatility for investors than Q1, but to say the first half of 2020 has been “unusual times” would be an understatement.  The shock of the pandemic, the historic magnitude of monetary and fiscal response, the major disruptions to daily behavioral patterns, the ups and downs of battling…

There is no sugar coating it: it was a terrible start to the year for equity markets. We entered 2020 looking forward to stable, low interest rates, a tight U.S. labor market, and an improving global economic environment. A good backdrop for our holdings that are investing in expanding opportunities such as the digitalization of…

  “We are what we repeatedly do.  Excellence then, is not an act, but a habit.”  – Aristotle The U.S. equity markets ended the year on a strong note. This result was not easy nor achieved in a straight line, rather it was the capstone to a volatile two-year period that both tested the resilience…

  After a strong start to the year, we anticipated that choppy markets would likely follow and in that regard, unfortunately, the third quarter of 2019 delivered. Deteriorating trade and global manufacturing took its toll during the Q2 earnings with outlooks for the remainder of the year impacted. Our portfolio was positioned for this with…

  “Success is not final, failure is not fatal: it is the courage to continue that counts.” ― Winston S. Churchill The U.S. equity market returned to its volatile ways in the second quarter of 2019, a result of the ongoing late cycle expectations tug-of-war between slowing economic growth and long term interest rates.  In…

  “The secret of life, though, is to fall seven times and to get up eight times.”  ― Paulo Coelho, The Alchemist The U.S. equity market experienced a significant rebound in the first quarter of 2019, recovering the vast majority of the decline seen in the fourth quarter of 2018.  This volatility has been the result of…

   “Endurance is not just the ability to bear a hard thing, but to turn it into glory.”  – William Barclay   The U.S. equity market experienced a significant correction in the fourth quarter of 2018. As each month progressed there was a growing concern that the current period of economic expansion will come to…

 “One ought never turn one’s back on a threatened danger and try to run away from it. If you do that, you will double the danger.”  – Winston Churchill “Times and Conditions change so rapidly that we must keep our aim constantly focused on the future.”    -Walt Disney      What do Amazon, Square and Salesforce.com…

“It is always wise to look ahead, but difficult to look further than you can see.”    -Winston Churchill Ten years into this economic cycle and Growth investing continues to flourish.  We get asked frequently how long this could last.  We struggle to give an answer with an exact timeline but encourage all our clients to…

“What we obtain too cheap, we esteem too lightly; it is in dearness only that gives everything value.” -Thomas Paine The current trading environment is not boring to say the least.  We have weekly trade war/tariff noise between the United States/China/Europe.  The Federal Reserve seems intent on continuing its tightening path.  The yield curve is…