Show Notes
Global equity portfolio manager, Paul Moroz, speaks to a wide range of market topics, including what higher discount rates mean for equity valuations and the subtle shifts you might not see in the headlines but that absolutely matter. Stay tuned for the second half, where Paul discusses Millennium Prize math problems, humility, podcast proliferation, and entropy—for those seeking useful mental models for portfolio construction, the payoff is worthwhile.
Key Highlights: Bond yields set the discount rate for every asset, and the 10-year U.S. Treasury is above 5%. A 1% rise in the discount rate implies roughly a 15% decline in equities, yet markets are near highs. NVIDIA at 13 times next year's earnings suggests multiples compressed while earnings carried prices. Positioning has moved toward rate beneficiaries and away from consumer discretionary. A portfolio should work like a rope, with many independent strands so no single one carries the load. Most of what an investor sees is noise; the work is putting energy into the part that matters.
0:00 - Introduction: Rising Bond Yields and Record Highs 1:11 - Why Equity Markets Keep Climbing the Wall of Worry 3:30 - Are Corporate Earnings Just AI? 4:45 - Bond Yields, Discount Rates and the 10-Year Treasury 7:55 - The Equity Duration Math: 1% in Rates, 15% in Stocks 9:32 - NVIDIA at 13 Times Earnings: Growing Into Valuations 11:19 - How Higher Rates Changed the Portfolio 13:38 - Building a Portfolio Like a Rope 16:06 - Humility as an Investment Process 18:45 - ChatGPT Solves a Millennium Prize Problem 23:00 - Entropy Explained: Perfume, Lawns, and Chaos 24:49 - Podcast Proliferation and the Nash Equilibrium 27:40 - Knowledge Adds, Wisdom Subtracts 29:10 - Outro and Subscribe
Host: Rob Campbell, CFA, Mawer Institutional Portfolio Manager Guest: Paul Moroz, CFA, Mawer Portfolio Manager
This episode is available for download anywhere you get your podcasts.
Founded in 1974, Mawer Investment Management Ltd. (pronounced "more") is a privately owned independent investment firm managing assets for institutional and individual investors. Mawer employs over 250 people in Canada, U.S., and Singapore.
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