By: Michael Hakes, CFA, MBA

Rethinking Disruption in Payments

Is fintech disruption truly a threat to Mastercard or could it ultimately reinforce its position?

Recent headlines have created a narrative that the payments landscape is on the verge of being reshaped by artificial intelligence, digital currencies, and regulatory pressure. The concern is that new payment rails will bypass traditional networks and erode the economics of companies like Mastercard. While this argument appears logical at first glance, it overlooks what Mastercard actually does and why its role becomes more important as the system evolves.

Mastercard does not manufacture a product that can be easily replaced. It operates a global infrastructure that enables secure and trusted transactions across millions of merchants, financial institutions, and consumers. As commerce becomes more digital and increasingly automated, the need for that infrastructure grows rather than declines. Read

By: Jamie Murray, CFA

Investors fear artificial intelligence could disrupt the technology sector. The evidence suggests it may strengthen it.

AI is wonderful. AI made this comic (after several re-prompts). However, the pace of improvement the technology is driving is beginning to worry investors. Artificial intelligence has quickly become one of the most powerful technological forces shaping the global economy. Its rapid advancement has delivered meaningful productivity gains and enormous wealth creation. Yet the same progress that excites technologists is beginning to unsettle investors.

As my colleague wrote last week, in his piece about the commoditization of white-collar work, markets tend to react negatively to uncertainty. When a new technology appears capable of reshaping entire industries, the first reaction is often fear that existing business models could become obsolete. Artificial intelligence is now triggering exactly that kind of response.

In recent months investors have begun asking a difficult question. Will AI simply improve productivity, or will it fundamentally disrupt the technology companies that built today’s digital economy?

That distinction matters greatly for markets. Read

By: Mike Hakes, CFA, MBA

Over the past few years, many economists and central banks have come to believe that interest rates will remain higher for longer. The thinking is straightforward. Global trade is becoming less efficient. Governments are spending heavily. Supply chains are being rebuilt closer to home. All of these forces tend to push costs higher, which can lead to persistent inflation.

This view has become widely accepted in financial markets. Many investors now assume that the era of very low interest rates is behind us.

This assessment presents a different view.

While current policies and global events may support higher inflation in the short term, a powerful structural force is moving in the opposite direction. Advances in artificial intelligence are beginning to reduce the cost of knowledge-based work across the economy. Over time, this could slow inflation and eventually push interest rates lower again.

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By: Bruce Murray, CFA

Investment Spotlight: Alamos Gold and the Case for Growing Production and cash flow

Gold prices have climbed sharply over the past two years, and while daily headlines often focus on tariffs, trade disputes and political tensions, the forces supporting gold today run deeper.

Across much of the Western world, governments are running larger deficits while defense spending rises meaningfully. NATO countries are expanding military budgets, while fiscal policy in the United States, Canada and Europe continues to support elevated government borrowing. At the same time, significant investment is being directed toward building AI infrastructure, another capital-intensive effort requiring large-scale funding.

Long term, AI-driven productivity gains should prove deflationary. In the near term, however, this combination of government spending, infrastructure investment and supply chain disruption creates inflationary pressure that is likely to persist over the next several years.

Add to this the impact of sanctions on Russian energy supplies and continued geopolitical uncertainty, and the case for sustained strength in gold prices becomes clearer. In that environment, gold producers capable of increasing production while managing costs effectively stand to benefit. One such company worth examining is Alamos Gold.

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By: Jamie Murray, CFA 

The forestry sector is notorious for its boom/bust volatility, with 2025 proving to be no exception. Sinking lumber prices, tariffs and trade disputes, as well as an anemic homebuilding outlook in North America have driven the sector to multi-year lows. However, we believe there is an attractive opportunity in Doman Building Materials. The company offers a compelling counter-narrative: a steady, dividend-paying logistics play that is insulated from the violent swings of commodity prices. 

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By: Bruce Murray, CFA 

We continue to get reports from across the industrial sector that supply chain issues are still restraining production to below pre-pandemic levels. Recent news like the Nexperia chip shortage and NY aluminum plant fire are reflective of these reports. The automotive industry is the largest in the industrial sector, accounting for 3.5% of the US GDP. Thus, we decided to take to look at available statistics for the industry.
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By: Jamie Murray, CFA 

In an era defined by digital commerce, Aritzia is proving that the in-store experience is more critical than ever. The brand is making a significant investment in experiential retail with the launch of massive, beautifully designed flagship stores that act as powerful brand billboards. This deep dive into Aritzia’s expansion sets out how this physical retail strategy is central to its success, creating an immersive environment that drives brand loyalty, captures high-value customers, and creates a halo effect that boosts its online sales and supports its ambitious plans for international growth. 

Flagships on the rise 

We recently had the opportunity to visit Aritzia’s new Flagship Boutiques in New York City. Aritzia has a strong presence in New York City, with four locations in Manhattan (its first NYC store opened in 2012). The two flagship stores commenced operations in late 2024 and represented the strategic relocation of established boutiques within their respective areas. A third Flagship is slated to open in the Flatiron District this fall. Read

By: Michael Hakes, CFA, MBA 

The current market, with a few technology giants driving U.S. equities to record highs and the excitement surrounding Artificial Intelligence (AI), has led many to question whether we are seeing a repeat of past irrational exuberance, or if this rally is built on a solid foundation. In our view, a financial bubble is defined by rapidly rising asset prices, extreme valuations disconnected from profits and increased systemic risk. The central thesis of this analysis is that the current bull market is being primarily propelled by an extraordinary expansion in corporate earnings and cash flow rather than a widespread investment in unprofitable ventures.  

Today’s market’s leaders, which now account for 40% of the index’s market capitalization, possess immense financial strength and are funding innovation sustainably through their own cash flow, establishing a crucial anchor to value. The engine of this growth is clearly the “Magnificent 7” ,which in 2023 were responsible for the entirety of the S&P 500’s net earnings growth; without them, aggregate earnings would have been negative. This highlights that the market’s strength is not from broad-based speculation, but a concentrated surge in the profitability of a select few dominant enterprises. This two-tiered market indicates that the primary vulnerability of today’s market is a downturn in a few key names rather than the systemic froth of a speculative bubble.  Read

By: Bruce Murray, CFA

Canadian banks have rallied to the highest multiples since 2011. At that time, our Canadian banks were viewed as a safe bet as much of the rest of the world faced the hangover from a global financial crisis triggered by excessive real estate pricing and lending in the U.S. housing market. Canada, which avoided the 2008 crisis, may now face the consequences of overvalued housing here at home. Banks have traditionally commanded lower P/E multiples due to the substantial leverage inherent in borrowing and lending large sums.  Given the leverage built into global banking systems, when things go wrong, they can unravel quickly, with equity capital disappearing within weeks, as happened in 2008.
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By: Bruce Murray, CFA

The markets have had an impressive year to date despite the panic associated with “Liberation Day” and the massive tariffs imposed on so many of the USA’s trading partners. While fear of economic collapse mounted, it has thus far not materialized. Delays in implementing the tariffs and corporate stockpiling have kept the economy moving along. As you are aware, here at The Murray Wealth Group, we wrote about the panic selling in the late spring a buying opportunity.
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Following the announcement of tariffs earlier this year, the Canadian economy has slowed, as some export businesses were forced to pass higher costs on to U.S. buyers. News reports have highlighted auto plant closures and layoffs at steel and aluminum fabricators.
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The stock market is a wonderful place to grow your wealth if you are investing for the long term. However, it can be a very vicious place in times of increased economic uncertainty with the world reacting to the USA’s tariff announcements and consumers boycotting American products and vacations. The U.S. consumer is also reacting to the uncertainty and concern over growing inflation by reducing spending.  It is fair to say that the corporate sector has put capital spending on hold. Thus far, Trump’s bark is more fearful than his bite. Canada was threatened with tariffs that would have set industry back decades, but when the actual policy was released, it left access to the U.S. market largely unchanged. While tariffs on steel, aluminum and completed automobiles remain, I suspect these will be repealed as well. Read

Investor Update: U.S. Tariffs and Global Trade Tensions
Written by President, Jamie Murray, CFA.

Yesterday, the Trump Administration enacted an executive order imposing tariffs ranging from 10% to 54% on imports from most countries. Canada and Mexico were spared in this latest round, continuing to trade tariff-free under USMCA for most goods — though steel and aluminum remain exceptions. Equity markets responded sharply, posting their worst single-day performance since the early days of the COVID-19 pandemic. In light of this, we wanted to share our perspective with investors.
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We own units of Northwest Healthcare Properties REIT (NWH) in our Income Growth Fund. NWH is a globally diversified healthcare real estate investment trust (REIT) focused on owning and managing a portfolio of healthcare facilities such as medical office buildings (MOBs) and hospitals. The REIT has operations in Canada, the United States, Brazil, Australia/New Zealand and Europe (it recently divested its operation in the United Kingdom). Read

This month, MWG Senior Portfolio Manager, Michael Hakes is featured in Stockpick.com’s Investor Club Series! Read

September started off as a very volatile month. Markets closed lower every day in the first week of the month, with the S&P 500 displaying its worst first week of September performance since 1953, only to bounce back (surging 4%) and recover almost all of its lost ground for its best weekly performance of the year the following week. Read

We recently increased our investment in Uber to 3% in our Global Equity Growth Fund. On the surface, Uber looks expensive, trading at 75 times the US$0.96 in earnings per share the company generated in the past 12 months. However, we believe Uber is at the inflection point where its global scale, dominant market position and utility-like demand could create a half trillion-dollar company in a decade (from $150B market cap today). Figure 1 (below) highlights Uber’s projected free cash flow growth, per Morgan Stanley estimates. After several money losing years, the company has crossed the profitability threshold and appears to have a sustainable business model to build on this early success. Its long-term success rests in maintaining its leadership in public mobility as its markets mature and autonomous vehicle technology develops further.

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This month, we are taking a break from our usual discussion of individual stocks. What better time than now, during a new paradigm (Gen AI), economic uncertainty, political uncertainty and climate change to talk about market timing? Read

Qualcomm was founded in the mid-1980s and emerged as the leading cellphone technology company with its branded “Snapdragon” line of communication chips in the 1990s. Its CDMA (code-division-multiple-access) technology, patented in 1986, became the standard for leading cellphone networks. Cell phone manufacturers such as Apple and Samsung became Qualcomm’s major customers. Ericsson’s competing TDMA (time-division-multiple access) technology fell by the wayside as it could not match CDMA’s network capacity. CDMA can carry a massive volume of wireless data and differentiate by assigning a code to each call or data user, simultaneously allowing large numbers of network users. TDMA assigns network time to each user thus restricting volumes. Qualcomm’s fortunes moved forward with each leap (generation) of cellphone technology. The rally in the stock price from 2020 to 2022, as seen in Figure 1, was reflective of the rollout of 5G technology, which you likely have in your cellphone if it was purchased in 2020 or later. Read

The three broad drivers of long-term growth in earnings per share (EPS) for any company are 1) revenue growth, 2) margin trajectory, and 3) capital management. This is not to dismiss qualitative factors like management strength, corporate governance or insider ownership but factors like these need to translate into EPS growth for a stock to outperform. We will examine Aritzia on these three vectors.

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We recently added Kingfisher to the Income Growth Fund at a 2% weight and 5% Yield. Read

 Thirty years ago, we were witnessing the adaptation of the internet in the early stages of acceptance as a tool to enhance work and leisure. This led to a plethora of ideas as to what this new technology could do! All it took was an idea and the ability to code and you too could change the way the world worked. By the year 2000, we were at the peak of the dot-com bubble. Like a horse race, Yahoo, based upon “search” software developed in Waterloo by OpenText, surged to the lead, only to be overtaken by a better idea, Google. For a while, @AOL.com was the hottest email host to have, but it then crashed and burned as internet service providers offered complementary addresses as part of their service. Everything was moving online, and providers were going public. By the spring of 2000, it became clear that many of these ideas were not commercial and even the good ones were overvalued. Shareholder enthusiasm quickly plunged into despair. Read

3i Group plc is a U.K. private equity company with investments in 39 mid-market companies across the consumer, healthcare, and industrial technology sectors. The company has been shaped from the top by CEO Simon Borrows, who we credit with much of its success over the past decade. When he took on the top role in 2012, the company was struggling with poorly performing investments, bloated management, and high debt. In short order, 3i cut 40% of its headcount, shrank its investment portfolio by 100 companies to 30-40 and worked with its underperforming investments to improve their results. The outcome is evident in 3i’s share price performance with the value rising 10-fold in that time. Unlike traditional private equity firms that raise third party capital and manage on behalf of limited partners/outside investors, 3i invests its own capital (the main exception being 3i’s Infrastructure fund, which is structured as a traditional fund). It targets companies with holding periods of about five years and a goal of doubling its money, equating to a 15% return per annum. Read

As we begin 2024, it’s prime time to strategize and ensure you’re making the most of available tax-saving opportunities. Read

Whitecap Resources dollar cost averaging into its inventory.

Dollar cost averaging (DCA) is a simple investment strategy first coined by Benjamin Graham in his book The Intelligent Investor. A DCA strategy calls for investing an equal dollar amount every period, which helps diversify the purchase price (or book value) of an investment. It reduces the effect of market timing and ensures new purchases are made throughout the investment cycle. It has been shown to be an effective strategy for generating steady long-term returns when used consistently. Read