As the market continues to adjust to a regime of higher-for-longer interest rates and heightened geopolitical friction, Mackenzie Investments' Portfolio Manager and Team Lead of the Mackenzie Cundill Value Team Richard Wong sees it not as a threat—but as fertile ground.
Speaking with Rajan Bansi, Head of Portfolio Construction and Mackenzie Private Wealth, Wong lays out a disciplined yet opportunistic vision for global value investing in an environment where volatility is high, valuations are dislocated, and many investors remain risk-averse.
“Uncertainty is when you get prices really cheap. And when you buy things really cheap, that’s when you get great returns. And that’s what we’re doing at Cundill right now,” Wong explains.
Below, we unpack the full context of this wide-ranging and insightful discussion1,2, covering everything from macro shifts and European tailwinds to surprising bets in tech and the rigorous sell discipline that underpins Cundill’s strategy.
The Tailwind of Higher Rates: A Rebirth for Value
The conversation opens with a foundational question: what does the current macro backdrop mean for value versus growth?
Wong begins by contrasting today’s interest rate environment with the post-2008, near-zero rate regime that dominated for over a decade. “That really favored growth strategies,” he notes. “But if you look at history prior to 2008... value strategies tend to outperform because the discount rate is positive and valuation mattered.”
Now, he argues, the market is returning to historical norms—where fundamentals, cash flows, and intrinsic value matter again. “Interest rate is positive, inflation is sticky. All of a sudden, valuation strategies work because valuation does matter,” he says. “Present earnings matter a lot more than earnings 20 years from now.”
Volatility Creates Opportunity—If You’re Ready to Act
The early months of 2025 have been marked by uncertainty around trade and tariffs, spiking volatility, and widespread pullbacks across sectors. For Wong, that chaos is translating into opportunity.
“When the market was fearful, we were actually quite greedy,” he says. “We went on a shopping spree of sorts... April 6, April 7—they were busy days for us.”
Wong points out that “Liberation Day” (the day President Trump announced exaggerated tariff rates) caused a spike in risk aversion, triggered by policy noise. That led to large, indiscriminate selloffs in the markets. For valuation-focused managers like Cundill, that kind of panic selling is a gift.
“We don’t know where the market’s going to go. We just know valuation,” he says. “If we can buy [great businesses] at a discount... and they have solid catalysts, then we’re very happy to own them for the long run.”
Where the Deals Are: Europe, Cyclicals, and… Tech?
When asked which sectors and regions offered the most compelling opportunities, Wong points to beaten-down areas of the market—especially those misunderstood or overlooked by peers.
“We did some shopping in European cyclicals,” Wong says. He emphasizes the recent shift in Germany’s fiscal posture, citing the government’s half-trillion-euro stimulus announcement as a potential game-changer. “Later this year, you're going to see the unveiling of stimulus plans... many stocks [are] really well positioned to benefit,” he notes.
One clear example? Siemens. “People don’t know this, [but] Siemens is the largest industrial software company in the world,” Wong says. “We continue to really like it.” Alstom, a French train manufacturer, also made the list, alongside Daimler Trucks.
Yet the most surprising part of the discussion is where Cundill is also finding value: technology.
“I’m able to buy AI tech stocks at cheaper valuations than banks and energy,” Wong says with a chuckle. “You can’t get any better than that.”
He identified hardware (servers, storage, memory), networking infrastructure, and traditional semiconductors as three sub-sectors offering unusually attractive valuations. “Storage memory… networking… some of these are trading at 7 to 8 times PE,” he emphasizes. “To us, that’s insane prices.”
Europe’s Moment? Why the Market May Be Turning
Beyond sector-specific ideas, Wong sees a more structural opportunity in Europe. After a decade of underperformance, the combination of fiscal stimulus, proximity to China, and reaccelerating base growth could turn the tide.
“Europe has come a long way. The baseline economic growth... has been improving,” he notes. “Germany had, for years and years, not allowed the government to run the deficit at all. And now they’re saying they take that constraint away.”
With potential tailwinds from both domestic stimulus and improved trade with Asia, Wong sees Europe as primed for revaluation. “If U.S. growth slows a little bit and European growth picks up… I think you could definitely see significant improvement in valuation for European securities,” he says. Cundill is overweight Germany, France, and the UK, with holdings in over 10 countries.
The Discipline Behind the Hunt: Holding and Selling
Despite the excitement about market dislocations, Wong stresses that Cundill’s process is grounded in discipline. The team typically holds stocks for 3–5 years, guided by two pillars: valuation and catalysts.
“If the valuation is still compelling... and the catalyst is still valid, then we want to own the stock,” he says.
Selling decisions, by contrast, are a mirror image: stretched valuation, broken thesis, or a better idea elsewhere. Wong gave the example of SNC-Lavalin, a long-term holding whose turnaround is still paying off. He contrasts that with Credit Suisse, which the team exited within six months due to compliance and risk issues. “Regardless of how cheap it was, the catalyst was totally broken. So we exited—and it was a good thing.”
Concentration with Conviction
Wong describes the Cundill Global Portfolio as a “focused but diverse” strategy, holding around 60 names across 9 sectors and 10 countries. “Average position size is 1.8% to 2%, with high-conviction names going to 3.5% or 4%,” he says.
That level of concentration ensures ideas matter, while still maintaining enough diversification to manage idiosyncratic risk. “60 is a good number,” Wong adds. “It lowers volatility but makes sure that the best ideas have enough weight.”
What Makes a Value Stock? It’s All About Price
In closing, Bansi asked whether Wong would ever consider buying former growth darlings like the “MAG 7” stocks. His answer reinforced a core truth:
“If I can buy [a stock] at 20%, 30%, 40% below [its] intrinsic value, that’s a value stock,” Wong said. “The label that the market puts on different things—‘growth,’ ‘value’—those are just labels. Ultimately, it’s about what are you paying for earnings, what are you paying for cash flow.”
Final Word: Value’s Time to Shine
After a decade in the shadow of growth, Wong sees the current era as a return to rationality—and a prime moment for disciplined value investors.
“The last few years, value is starting to deliver good, competitive returns,” Wong said. “We’re very excited... Those stocks that we bought in April—they’re all up about 15% already.”
With volatility high and prices dislocated, Wong’s team is preparing for the next opportunity. “I’m almost happy if the market turns around and retests its lows again—because then I can do more shopping.”
Footnote:
1 Mackenzie Investments. "Searching for Value in Volatile Markets | The Invested." 3 May. 2025, mackenzieinvestments.podbean.com/e/searching-for-value-in-volatile-markets.
2 “Mackenzie Investments’ Podcasts." Home, 2 May. 2025, www.mackenzieinvestments.com/en/institute/insights/mackenzie-investments-podcasts.
