“Reports of my death have been greatly exaggerated.” (Mark Twain)
Mark Twain coined this phrase over a century ago, but it could easily be applied to value investing today. Value has outperformed growth since 1975, but given the unprecedented underperformance of value over the past decade, we wouldn’t blame investors for doubting this fact. This article provides some context to this discussion and suggests why a bit more patience is required.
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I have often thought and mentioned to clients that as we have not had a long and drawn out market decline for some time (financial crisis of 2008-2009 was the last period) we should expect some kind of cyclic downturn in the coming years. This is not a prediction, just an observation based on historical market cycles. Our friend Nick Murray has written a great article on how the financial press is positioning this and something you need to be wary off. Well worth reading if you have any concern.
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The Federal government tax proposals to small business corporations are being met with opposition – despite small businesses employing more individuals than large corporations in Canada – these same small business owners will be hit with higher taxes if these new proposals become law – along with the increase in CPP contributions over the next few years and in Ontario the higher minimum wage, small businesses will be in for some tough years.
Nine in Ten business and financial professionals oppose Morneau’s tax proposal – link to article
If you want to read how these changes might impact some small businesses, here are a few newspaper op-eds that have run recently: