In this episode, Erika Pagel and Sid Ahl are joined by Brown Advisory’s David Schuster, portfolio manager of the firm’s Small Cap Fundamental Value strategy, for a discussion about the surprising resilience of capital markets in the face of a challenging economic environment.
The economy shakes, but the market shrugs. The team discusses how the market is currently climbing an especially daunting wall of worry, and how investors are shrugging off multiple examples of geopolitical and financial concerns around the world.
When macro conditions are uncertain, a banker’s approach to valuation can help. David, a former investment banker, has always brought a banker’s mentality to valuing smaller companies by breaking down their assets and operations into components that can be more accurately assessed. He offers examples to show how this approach can be especially helpful when markets are behaving in surprising ways.
Other topics: The team also discusses how small caps are currently valued at historically low levels and what might cause their fortunes to turn; how bearish sentiment around the state of the U.S. consumer may open up investment opportunities; and how the work-at-home movement continues to impact the commercial real estate market.
As always, we welcome your thoughts, feedback and questions.
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2023 Asset Allocation Perspectives and Outlook
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