Randall is CEO and Portfolio Manager of Generation PMCA Corp., a firm he co-founded in 1999 shortly after founding its affiliate broker dealer, Generation IACP Inc., for which he is also CEO and a portfolio manager.
Randall graduated with a bachelor’s degree in commerce from the University of Toronto in 1989, and his career has spanned investment banking, investment analysis and portfolio management.
Randall was named one of Canada’s ‘Stock Market Superstars’ in Bob Thompson’s Stock Market Superstars: Secrets of Canada’s Top Stock Pickers (Insomniac Press, 2008). Randall’s perspectives have appeared in leading media outlets such as the Financial Post, BNN Bloomberg, The Globe and Mail, Motley Fool, and ValueWalk. He has made numerous presentations at leading industry conferences such as the Value Investing Congress and MOI Global.
LATEST FROM RANDALL ABRAMSON, CFA
Our glass is typically half full. Lately, the contents have been evaporating. What would fill it again? Either a substantial market decline lowering valuations, or a sudden reduction in core inflation levels along with a commensurate decline in interest rates. Neither are likely to occur in the short term. Though valuations have compressed from their highs, further deterioration is expected as the economic backdrop worsens.
Most believe we are destined for a recession, if not already in one. Between the negative sentiment and the stock price valuation reset that needed to take place, it’s not surprising that the markets have meaningfully softened. While the economy is clearly slowing, we do not foresee an imminent recession.
Our recent mantra has been “Sell the rallies” not “Buy the dips” because we’ve been expecting much more than a dip. That’s not to say that we’ve been expecting a recessionary-based bear market—prolonged and pronounced negative returns while underlying values are falling. We’ve been anticipating a correction, albeit maybe a substantial one, since prices started falling from levels that were above our estimate of fair market value (FMV).
We sleep well at night knowing that we are partially hedged and that our holdings are growing, high-quality companies that, unlike the overall market, trade at substantial discounts to our estimates of FMV. We remain concerned about several factors, primarily high market valuations, which could trigger a market decline and reestablish a wall of worry.