Monthly Message

The Wutherich & Co. Composite was up 3.6% in April. This compares with the S&P 500 (US$) up 0.4%, the DJIA (US$) up 0.6%, the NASDAQ (US$) down 1.9%, the S&P/TSX up 3.7%, while the BMO Small Cap Index was up 10.1%.
Resources again! Energy and Materials stocks are driving the Canadian market, especially the small caps. While we have exposure here, we have far less than the overall Canadian market. Investors are mining returns in the same veins where they lost them in the first place. Our portfolio is far broader. Most resource stocks depend on factors completely outside of their control which makes predicting their results very difficult. While we do look at many names in the space, we prefer to spend our time and money on companies where management decisions largely determine results. Many of these companies have the ability to grow for many years to come, in good times and bad, regardless of what commodity prices are doing.
Hence, we have a large weighting in Canadian Industrials, a grab bag of different and unrelated companies. Many of these are special situations that offer unique opportunities for growth for years, if not decades. Because many of these companies do not fit the mold of large, well-recognized sectors, they frequently get ignored and mispriced, giving us the opportunity to buy them cheaply.

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