Filters are better than forecasts: Manager

Rules of thumb beat relying on randomness and luck, and guided Mawer to global small cap success

Michael Ryval 5 March, 2020 | 1:10AM

Lighthouse

Investing is an exercise in calculating a host of factors to determine the attractiveness of companies. And while it may appear to be more rational to indulge in long-term forecasts, it may be more productive to use filters, such as rules of thumb, to conclude whether a stock is a viable choice, says Karan Phadke, an equity analyst at Calgary-based Mawer Investment Management Ltd.

“One of the biggest things is the role that luck and randomness plays, especially in driving exceptional long-term outcomes,” says Phadke, a member of the team that manages the five-star $3 billion Mawer Global Small Cap Fund A.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Bravida Holding AB73.55 SEK0.00
Fielmann AG55.60 EUR0.00
Mawer Global Small Cap A14.71 CAD1.66

About Author

Michael Ryval