Memory, Part 3: Cyclicality, Leveraged EFTs, and Pricing Uncertainty | EP 225
Release Date: 08/12/2026
Memory, Part 3: Cyclicality, Leveraged EFTs, and Pricing Uncertainty | EP 225
Art of Boring
How do you value a memory semiconductor stock like SK Hynix when no one can predict DRAM prices? Equity analyst Shan Rui Yeo walks through the team’s Monte Carlo valuation framework: a discounted cash flow run through thousands of scenarios that prices the business on a distribution of returns rather than a single forecast. He also explains how two-times leveraged single-stock ETFs have been amplifying SK Hynix’s daily price swings, why regulators and Korean brokers are responding to retail leverage, and why flow-driven volatility can be a gift for long-term investors. The through-line:...
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Memory, Part 2: The Risks from China, Technological Change, and Overcapacity | EP 224
Art of Boring
Memory has been one of the strongest corners of the semiconductor industry, and strong returns invite hard questions. In the second part of this series, equity analyst Shan Rui Yeo examines the main risks to the memory thesis: rising competition from China's CXMT and YMTC, the technologies that could reduce AI's appetite for memory, and the wave of capacity investment that could eventually tip the industry back into oversupply. He weighs each risk against the constraints holding it back, from equipment export controls to limited EUV supply, and notes that memory companies already trade at...
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Memory, Part 1: From Boom-Bust Commodity to AI Bottleneck | EP 223
Art of Boring
One of the defining market stories of the past 12 months has not been AI chips that compute, but the chips that remember. Equity analyst Shan Rui Yeo explains how memory works, from DRAM and NAND to high bandwidth memory, and how an industry that destroyed wealth for four decades became disciplined after consolidating to three players in 2013. He then walks through what changed: AI inference has made memory the key bottleneck, memory content is climbing with each new generation of GPUs, and new supply takes three to four years to build. With prices up sharply and customers signing long-term...
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Investing in the Build Canada Theme | EP 222
Art of Boring
Canada has spent a generation underinvesting in the infrastructure and resources that underpin its economy, and that may be starting to change. Canadian small cap equity analyst Dominic Drzazga examines the Build Canada theme: what it actually means beyond the headlines, and what has shifted since the federal election. He walks through the legislative groundwork, from the Building Canada Act to a fast-tracked pipeline of named projects, and explains why the clearest near-term opportunities potentially sit in the middle of the value chain rather than with the eventual asset owners. Above all,...
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Quarterly Update | Q2 2026 | EP 221
Art of Boring
Canadian equities gained in the second quarter of 2026 even as the economy tripped the technical definition of a recession and an oil shock sent crude toward $120 before it fell back. Institutional portfolio manager Kevin Minas and investment counsellor Stu Morrow review the quarter, from the gap between the Canadian market and the Canadian economy to the case for holding commodity exposure as geopolitical risk becomes a recurring feature rather than a one-off. They also discuss what a narrow, AI-led rally means for a diversified portfolio, record hyperscaler bond issuance in Canada, and how...
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Emerging Markets: Different Hats, Better Decisions, and Learning Faster | EP 220
Art of Boring
Investment teams increasingly build and rely on their own AI tools, but the payoff depends on how deliberately a team reinvests the time that AI frees up. Emerging markets portfolio manager Wen Quan Cheong walks through how his team puts believability-weighted decision making into daily practice, and where AI has genuinely enhanced the process. He closes with a tour of the emerging-market themes he is watching most closely, from reshoring and clean-room capacity to physical AI, low-earth-orbit satellites, and businesses winning simply by putting the customer first. Above all, he returns to the...
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Global Equity: The Odyssey, the AI Trade, and Concentration Risk | EP 219
Art of Boring
AI portfolio construction in global equity markets (memory semiconductors, mega IPOs, and how to manage concentration risk) is the focus of this conversation with Mawer’s global equity portfolio manager Paul Moroz. Drawing on Homer's Odyssey, he explains the discipline the team applies when navigating themes that are moving quickly: from trimming SK Hynix systematically as the position grew, to sizing up what a wave of large IPOs means for cost of capital, to the central trade-off between underexposure and overconcentration in the AI complex. He also puts numbers around the portfolio's AI...
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Looking Under the Hood: Canadian Equity Concentration and Diversification | EP 218
Art of Boring
Canada’s stock market has set repeated record highs in 2026, even as the domestic economy feels soft. Canadian equity portfolio manager Mark Rutherford explains the gap between the two, and why a large weight in financials can represent more diversification rather than less. He walks through how the team rotated within the sector as the banks re-rated, and the discipline behind trimming a gold position that had run. As indexes themselves have grown more concentrated, the conversation lands on a simple idea: knowing what you own matters more than ever. Key takeaways • The...
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Balanced Portfolios: A Market Tug of War and the Discipline to Stay Neutral | EP 217
Art of Boring
In this episode, portfolio manager Steven Visscher covers how Mawer's balanced portfolios navigated 2025 and how they are positioned in 2026. With a war-driven energy shock on one side and an AI investment boom on the other, the market is pulling in two directions at once. Steven walks through what that means for asset mix, where the team is seeing signs of investor complacency, and why cracks in private credit could soon create a meaningful opportunity. Key Takeaways: Two forces are competing for market direction in 2026: a war-driven energy shock from the conflict in Iran...
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U.S. Mid-Cap: The Physical Economy Comeback, Capital Intensity, and Portfolio Positioning | EP 216
Art of Boring
In this episode, Jeff Mo, U.S. mid-cap portfolio manager, explores a fundamental shift in how economies may grow over the next decade. He makes the case that after 25 years of intangible, internet-driven expansion, growth may increasingly depend on building physical things again: data centers, electrical infrastructure, factories, defense systems, satellites. Jeff walks through the forces driving this transition, from AI's voracious appetite for capital to geopolitical tensions reshaping supply chains and defense spending. The conversation examines how these macro themes connect to bottom-up...
info_outlineHow do you value a memory semiconductor stock like SK Hynix when no one can predict DRAM prices? Equity analyst Shan Rui Yeo walks through the team’s Monte Carlo valuation framework: a discounted cash flow run through thousands of scenarios that prices the business on a distribution of returns rather than a single forecast. He also explains how two-times leveraged single-stock ETFs have been amplifying SK Hynix’s daily price swings, why regulators and Korean brokers are responding to retail leverage, and why flow-driven volatility can be a gift for long-term investors. The through-line: memory can be cyclical, structurally growing, and wealth-creating all at once.
0:00 - Introduction & Disclaimer
0:21 - How Do You Value a Memory Stock Amid Huge Uncertainty?
0:54 - Monte Carlo Valuation: Pricing SK Hynix on a Distribution of Outcomes
5:27 - Day-to-Day Volatility: Fundamentals or Flows?
6:17 - How 2x Leveraged Single-Stock ETFs Amplify SK Hynix Price Swings
9:40 - What Investors Underappreciate About the Memory Industry
10:21 - Closing Thoughts & Subscribe
Key Takeaways
- Key uncertain variables (DRAM prices, supply response, China risk) are modelled as ranges and run through thousands of scenarios; the output is a distribution of returns, treated stochastically.
- SK Hynix scenarios: bull (prices hold through the decade), realistic (decline from 2028 as supply arrives), bear (accelerated decline on over-investment and Chinese supply).
- The test is being paid adequately across the whole distribution, not picking the right scenario; the distribution centred around 12% with positive skew.
- New data points (LTAs signed, capacity expansion) update the distributions; position sizing follows the shape, and the team trimmed as the shares ran.
- Two-times leveraged ETFs rebalance by buying after rises and selling after falls, amplifying 10 to 15% daily moves in SK Hynix.
- Flow-driven volatility widens the gap between price and value, which long-term investors can use.
- Memory can be cyclical, structurally growing, and wealth-creating at the same time.
Host: Rob Campbell, CFA, Institutional Portfolio Manager
Guest: Shan Rui Yeo, CFA, Equity Analyst
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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