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Picking a winner for the Big Game

Get your Buffalo wings ready: it’s time for the biggest game in professional football. This weekend, the famous football championship celebrates 50 years in the making, featuring two top-ranked teams – the Carolina Panthers and the Denver Broncos.

Many contrasts are being drawn between these competitors, including the ages of their quarterbacks (Cam Newton is 26 while Peyton Manning is 39) and the strengths of each team (Carolina has the best offense in the league while Denver has the best defense).

The playing field is anything but predictable in the world of professional sports. How do you predict which team will win, given the fact that the outright favorite has only won twice in the past eight championship match-ups?

The playing field is anything but predictable in the world of professional sports.

The markets are facing the same kind of uncertainty. Between the economic slowdown in China, U.S. monetary policy diverging from the rest of the world and a volatile global stock market, it’s hard to know where to place your money. But we believe that there are advantages to stepping away from all of the macroeconomic worries and taking a slightly different view of the situation.

While the global economy may be in a state of flux, there are many positive developments occurring at the company level that make for compelling investments. In order to identify and capitalize on them though, it takes in-depth company research (including on-site visits with company management), extensive knowledge about the region and industry in which the company is located and a forward-thinking perspective that considers all of the factors that might affect the competitive landscape.

We believe this bottom-up perspective can be invaluable during times of market turmoil. While falling markets are seldom met with enthusiasm, they can also be the source of undervalued investment opportunities that can ultimately generate excess portfolio returns. By uncovering these diamonds in the rough when they’re relatively affordable, investors should be in a strong position once the market cycle changes and markets begin to recover.

But investors shouldn’t be lulled into thinking that this is an easy proposition. The search for value takes time, and winners may come from surprising places. It’s similar to last year’s big game when the New England Patriots faced the Seattle Seahawks. At the end of the game, it seemed certain that the Seahawks would triumph as they stood at the one-yard line, ready to make a game-winning touchdown.

With 20 seconds left in the game, everything changed as a relatively unknown Patriots player named Malcolm Butler stepped up to intercept Seahawks quarterback Russell Wilson’s pass in the end zone, sealing the victory for the Patriots. Most football fans wouldn’t have expected such a performance coming from Butler, who just several years earlier was working at a fast food restaurant and was undrafted in 2014 before joining the Patriots as a rookie free agent. In a spectacular turn of events, his first career interception earned him a championship ring.

Our research teams meet with hundreds of companies every year to find the unsung heroes within their industries – those that may be overlooked by mainstream analysts or popular benchmark indexes. We are dedicated to our actively managed approach, which stems from a philosophy that holding high-quality companies over a longer time horizon will lead to strong returns for our clients.

It’s hard to foresee a time when the doom and gloom of the current market environment will dissipate, and when we will again see a full range of possibilities for global stocks. Until then, we will continue to play to our strengths: adding value for clients by selecting stocks we believe are reasonably priced and have the opportunity to become the next leader within their respective industries.

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