The Benefits of Independent Thinking
Relying solely on Bay Street research, news media and company investor reports can put investors in a compromised and limited information loop. Often, this information loop identifies and highlights things that are saleable. Their recommendations can be based on things that are in vogue or have done well recently. Securities that are extremely popular with many people on Bay Street usually sell at a premium price and rarely represent good value. One doesn’t have to look farther than to the mania surrounding Research In Motion and Potash in June of 2008, when their stocks were trading at $150 and $246, respectively. Then there was Valeant Pharmaceutical that traded at $241 a share in late May of 2015 and fell to a low two years later in May 2017 to $9.71.
Most mutual fund managers are chasing the 60 largest capitalization stocks in Canada. Of the more than 5,400 total recommendations on 805 Canadian-listed stocks in May 2017, a measly 225 or 4% had sell ratings.
We at Verus Financial said goodbye to the “buy, hold, and prosper” mentality over a decade ago. It’s hard to add value when all the research analysts in Canada combined are recommending buying or holding 96% of all companies that they follow.
Intelligent investing is about uncovering what’s true, real, well-founded and genuine: Verus. In our investment process, we spend a great deal of time on our proprietary research. At Verus Financial, we believe our final research product and our ability to read and react to the pulse of the markets will continue to allow us to successfully deliver superior results in bull and bear markets. We also expect to accomplish this without increasing risk, in spite of the ever-changing economic backdrop and expected market volatility that has risen dramatically over the last few years. This is achieved by judicious manager selection and flexible asset allocation.
Our investment philosophy and strategy ensures that we successfully execute our value proposition of providing exceptional results for our clients and the finest service that far exceeds their expectations.