Whatever it takes, Whenever it takes it

An Opinion piece by Joseph Pochdyniak, CFA: 


June and July are traditionally sleeper months on Bay and Wall Street with most analyst and portfolio managers taking time off to visit with friends and family, and most clients going away for vacations of their own. While the MacNicol team values the importance of friends, family and the opportunity to recharge our minds, our old – fashioned values don’t mean we are woefully behind the times when it comes to technology.

Whether from offices in Toronto, Atlanta, the West Coast or on a dock in Muskoka…our client centric firm stands behind our mandate to safeguard client capital and exceed expectations. Keeping close tabs on financial markets is one of the ways we do that. So close has our 24-month long investigation into Europe been that with the exception of a few investments transferred to us from clients of other Managers, we are materially underweight the space.

To be sure, closely monitoring financial markets is one ingredient in safeguarding client capital but so is our dedicated investment process that has stood the test of time as it begins the swan song of its 18th year. As quoted on the ECB accounts of 2019:

“The balance of risks remained tilted to the downside, despite the downward revision to the growth projections, largely on account of persistent sources of uncertainty relating to the international environment. These uncertainties could weaken or delay the recovery in external demand beyond what was already reflected in the June projections and further weigh on investment and consumption. Trade tensions had re-escalated, uncertainty about Brexit was extended in time and fragilities in emerging market economies remained, despite signs of stabilisation in some of them.”

The article also states:

“These measures were appropriate in the current economic environment and would provide the necessary monetary accommodation for inflation to move towards levels that were below, but close to, 2% over the medium term. Looking ahead, the Governing Council needed to be determined to act in case of adverse contingencies. It should stand ready to ease the monetary policy stance further by adjusting all of its instruments, as appropriate, to achieve the ECB’s price stability objective. Possible measures could include extending forward guidance further, restarting net asset purchases and decreasing policy rates.”

We are also not surprised at all by the ECB’s recent June meeting minutes, which more than anything else, tell a story of an economy “unable to leave home”. But the MacNicol Investment Team is surprised that more investors aren’t concerned about how a truly global economic slowdown could be borne of Europe’s doldrums as much as (and potentially more than) trade tiffs. At MacNicol we certainly aren’t taking any chances with client capital. Our underweight to Europe, and our underweight to many things, are therefore no accident.


If you like us believe this is Europe’s Chiama alla ribalta then give us a call today or click www.macnicolasset.com for more.



ECB., https://www.ecb.europa.eu/press/accounts/2019/html/ecb.mg190711~16eb146254.en.html