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Jerome Hass, portfolio manager, Lightwater Partners FOCUS: Canadian Mid-Caps & Long-Short Strategies Market outlook: A pressing issue in the business press these days is what will happen to the price of oil? While thought-provoking from an economic and a political perspective, we do not view speculation on the direction of oil as a key tenet of successful investing. Our success is predicated on being early on misunderstood and underfollowed companies, rather than catching momentum in a commodity play. As a matter of policy, we do not invest directly in resource names. This has had the effect of taking out considerable amount of volatility from the portfolio. From a macroeconomic perspective, our views and investments are also somewhat unrelated. We do not use leverage; in fact, we hold large cash weightings most of the time. Our volatility is further dampened by our offsetting short book. The combined effect is a portfolio focused on alpha, or stock specific returns. In aggregate, our “bottom-up” approach results in a portfolio with low relative volatility and low correlation to the Index, desirable properties over the long run. Top Picks DirectCash Payments (DCI.TO) Pair Trade: Allegiant Travel Company (ALGT.O)/*Short* WestJet (WJA.TO) NXT Energy Solutions (SFD.TO)
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