A year end conversation with Ron Shamgar and Robert Swift, moderated by Darren Katz
As 2025 draws to a close, I decided to approach our final newsletter with a different idea. Instead of another macro roundup or performance commentary, I invited our two investment leads, Ron Shamgar and Robert Swift, to reflect on the lessons that mattered most this year. Not the headlines. Not the noise. The lessons. The ones that will genuinely make us better investors in 2026.
The three of us sat down and unpacked twelve insights that kept resurfacing through the year. They came from market dislocations, reporting seasons, geopolitical flare ups, interest rate resets, and even the quiet periods in between. Some lessons challenged us. Some reinforced the TAMIM process. All of them will guide our thinking going forward.
What follows is our conversation, lightly edited, but deliberately kept candid.
Lesson 1
Fear Creates Opportunity More Reliably Than Confidence
Darren: Let us start with something that seemed to recur all year. When markets became anxious, expected returns quietly improved. Why is this lesson so persistent?
Ron: Investors tend to forget how often fear misprices assets. Every panic this year created opportunity. Not a single exception. Small and mid caps in particular became deeply discounted at moments when sentiment was most fragile. That is usually when the best forward returns emerge.
Robert: I agree. Markets try to price all possible negatives ahead of time. In practice they overdo it. Fear compresses valuations far more quickly than fundamentals deteriorate. If you can stay calm, you get rewarded for thinking independently.
“When fear reaches its loudest point, expected returns quietly improve.”
Lesson 2
Valuations Still Matter, Even In A Momentum Year
Darren: We saw momentum dominate parts of the market, especially tech and anything with a growth narrative. Yet valuation discipline paid off. Why?
Robert: Momentum is intoxicating, but the most powerful force in markets remains valuation mathematics. A good business bought too expensively will still disappoint. The inverse is also true. A company that grows earnings while derating will confuse many investors unless they understand valuations deeply.
Ron: For small caps the lesson was even sharper. You needed to buy where pessimism was already priced in. That buffer matters in environments where interest rate expectations swing rapidly.
Lesson 3
Balance Sheets Are Optionality Machines
Darren: We spent a lot of time in due diligence this year looking at balance sheets, refinancing profiles, and cash buffers. What did 2025 teach us here?
Ron: Companies with strong balance sheets played offence while weaker ones played defence. The difference was enormous. A robust balance sheet gives management time to execute, flexibility to invest, and room to absorb shocks.
Robert: Debt magnifies narratives. When rates rose, companies with high leverage became story stocks for all the wrong reasons. This year reinforced that leverage is not just a financial ratio. It affects behaviour, incentives, and strategic decisions.
“A company with cash earns time. A company without it earns excuses.”
Lesson 4
Inflation Fears Last Longer Than Inflation
Darren: Inflation cooled materially through the year, only moving up towards year end, many investors kept behaving as though the inflation threat was there through the year. What does this tell us?
Robert: Inflation is a psychological event as much as an economic one. Even after the data clearly slowed, the emotional echo took months longer to fade. Investors fought the last war well into the middle of the year.
Ron: And during that period, companies with genuine pricing power stood out. When inflation rolls over, pricing discipline becomes the differentiator between a story and a business.
Lesson 5
The Best Companies Reinvent Rather Than React
Darren: Throughout the year, during investor days and reporting updates, we observed companies taking very different approaches to uncertainty. What did we learn?
Ron: The standout performers did not retreat. They re-invested. The ones that adapted their offering, refined their cost structures, or built new revenue channels gained ground while others stood still.
Robert: Exactly. Markets tend to reward forward looking decision making, even when near term results are soft. Slowing environments are often when long term winners pull ahead.
Lesson 6
Small Caps Lead Turns, Not Follow Them
Darren: At several points this year, small and mid caps rallied strongly even while investors remained cautious. What causes this divergence?
Ron: Mispricing. Small caps get punished more aggressively in downturns and therefore recover earlier when sentiment stabilises. The opportunity is always largest when pessimism is deepest.
Robert: This has been true for decades. Investors chase safety until the moment they realise they have overpaid for it. At that moment, small caps begin their leadership phase.
Lesson 7
Geopolitical Headlines Are Not Portfolio Strategy Inputs
Darren: Many investors responded emotionally to geopolitical events, but very few of these actually changed valuations. How should we think about geopolitics?
Robert: Geopolitics is fascinating but often irrelevant to cash flows. Unless an event changes supply, demand, capital costs, or regulation, it is noise. The problem is that it feels dramatic, so investors overreact.
Ron: When evaluating impact, we asked only one question each time. Does this change the economics of the business? If not, move on.
Lesson 8
Cash Flow Is The Only Truth Serum
Darren: Reporting season provided a huge amount of data. What cut through the noise most effectively?
Ron: Free cash flow. Not adjusted earnings, not revenue, not EBITDA tricks. True cash generation. In an uncertain world, cash is king because it proves the story.
Robert: Investors finally rediscovered the difference between accounting optimism and economic reality. Cash flow is the ultimate sorting mechanism.
“In a world full of narratives, cash flow is the only truth serum.”
Lesson 9
Markets Dislike Uncertainty, But They Reward Credible Change
Darren: Markets shifted quickly when the Federal Reserve reset its rate path. What is the key lesson here?
Robert: Markets do not need perfect clarity. They need credible direction. Once the Fed made its trajectory clearer, valuations adjusted immediately.
Ron: And that created opportunity. Rate resets change discount rates, which change valuations, which re open opportunity sets across sectors.
Lesson 10
Quality Compounds Quietly While The World Shouts Loudly
Darren: Volatility returned several times this year, yet high quality companies barely flinched. Why?
Ron: Because quality is structural. Companies with durable competitive positioning have earnings that do not fluctuate wildly. They compound in the background, often unnoticed.
Robert: Investors chase excitement, but the silent compounders are the ones that build wealth. October and November made this incredibly clear.
Lesson 11
Patience Remains The Last True Investment Edge
Darren: In an age of constant information and instant reaction, why is patience more valuable than ever?
Ron: Because almost no one practices it. Multiple holdings that were overlooked for months suddenly rerated as the market noticed improvements we had been tracking for ages.
Robert: Patience is a competitive advantage in a world of short attention spans. It allows the thesis to mature. It reduces portfolio churn. It compounds returns.
“In investing, impatience costs far more than mistakes.”
Lesson 12
Staying Invested Through Complexity Beats Timing Simplicity
Darren: If we had to compress the entire year into a single final lesson, what would it be?
Ron: Stay invested through complexity. Most recoveries happen when investors are least prepared for them. This year showed again that markets turn quietly, not loudly.
Robert: Investors waste a lot of time waiting for simplicity. Yet markets rarely offer simple narratives. The lesson is to stay allocated, stay thoughtful, and let fundamentals do the heavy lifting.
The Tamim Takeaway
If 2025 taught us anything, it is that discipline continues to outperform noise. Quality continues to beat speculation. Valuations matter. Balance sheets matter. Cash flow matters. And patience remains the most undervalued asset in the market.
This was a year filled with contradictions, volatility, and emotional narratives. Yet through all of it, investors who stayed anchored to fundamentals were rewarded. These twelve lessons will shape our investment approach in 2026 and reinforce the framework we use every day.
As always, thank you for your trust, your engagement, and your partnership. We look forward to navigating another year of opportunity, challenge, and discovery together.
Warm regards, Darren Katz Managing Director TAMIM Asset Management
This week’s TAMIM Reading List explores shifting power, pressure points and unexpected disruptions across markets, culture and society. We begin with a detailed look at Hudson River Trading, the quiet high-speed firm minting billions in the shadows of Jane Street and Citadel. The dollar-store industry comes under scrutiny for overcharging the very customers it claims to help, while the art world faces a reckoning as insiders warn that “everything is not fine.” Among the ultra-wealthy, a new kind of status signal is emerging, one that luxury brands like Dior and Versace can’t sell. Netflix’s $72 billion Hollywood gamble marks a major turning point for entertainment economics. We also cover the aftermath of a 7.5 magnitude earthquake in northern Japan, and the Red Bull Formula 1 team is shaken as a major figure steps away after 20 years. Across the board, these stories reveal markets and institutions recalibrating under pressure.
This week’s TAMIM Reading List explores how power, perception and pressure shape everything from technology to public policy. We begin with the DOGE succession turmoil unfolding after Elon Musk’s departure, revealing how influence shifts when leadership falters. An analysis of the Louvre heist shows how human psychology can be quietly exploited, offering insights that carry into emerging AI behaviour. We highlight the 25 most important ideas of the 21st century, as selected by leading thinkers. Australia’s housing affordability crisis deepens, with only 501 suburbs now under $500k. Hong Kong investigates corruption behind its deadliest fire in decades, while Canberra prepares a major Defence overhaul to address delays and cost blowouts. Across the week’s stories, one theme stands out: systems under strain expose where power truly lies.
Every December, as markets thin out and inboxes quieten, I perform a ritual that has become one of the most important parts of my investing year. I build my Christmas reading list. Not a list of holiday-fluff beach reads, and certainly not regurgitated investing clichés, but a curated set of books that challenge the way I think.
For me, reading is not an optional extra. It is part of the craft. In a world overflowing with information and starving for insight, deep reading is one of the few remaining sources of genuine edge. Great investors read to upgrade their mental software, not to confirm what they already believe, but to interrogate it. And the Christmas break, when the noise temporarily fades, is the perfect time to take on the kind of long-form thinking that actually shifts the needle.
Over the years, I have learned that markets reward those who understand human nature, incentives, behavioural biases, business models, and complexity. They reward the investor who can step back and see second-order effects, who can distinguish narrative from signal, who can recognise when the market is wrong and have the temperament to act on it. None of these skills come from scrolling social media. They come from sustained engagement with great thinking.
This year’s list reflects exactly that. Serious, contemporary, non-beginner books that expand the aperture of an investor’s mind. Some focus on markets directly; others focus on the psychology, decision-making, and structural thinking required to succeed in markets. All of them matter.
Below is the full list I’ll be taking away with me this holiday period and why each one earns its place.
The Rebel Allocator; Jacob Taylor
At first glance, this book looks like a business novel. But beneath the narrative structure lies one of the best modern texts on capital allocation. We often talk about capital allocation as if it’s a spreadsheet function. In reality, it is the art of judgment, discipline, and incentives. Taylor explores the difference between businesses that simply operate and those that compound capital relentlessly over time.
The most important lesson is this: great companies are built by leaders who understand opportunity cost. They know what to say yes to, but more importantly, they know what to say no to. As investors, identifying those management teams is half the game. This book sharpens that instinct.
The Intelligence Trap; David Robson
Markets punish hubris. They punish overconfidence. They punish cleverness masquerading as insight. Robson’s book is a masterclass in the cognitive blind spots that even highly intelligent people routinely fall into.
For investors, this book is almost a mirror. It forces you to confront the uncomfortable truth: intelligence and good judgment are not the same thing. Robson explores why experts get trapped by their own mental rigidity and how to build cognitive flexibility, the trait that sits at the core of second-level thinking.
In markets where consensus narratives dominate, the investor who can step outside their own thinking patterns gains a profound advantage.
The Man Who Solved the Market; Gregory Zuckerman
Jim Simons’ story is well known, but Zuckerman’s telling captures the essence of what Renaissance Technologies actually accomplished. Not just outsized returns, but a new model of investing built on discipline, iteration, feedback loops, and the willingness to challenge every assumption.
For discretionary investors, the lesson isn’t to become quants. The lesson is to appreciate structure, process, relentless improvement, and the humility to test rather than assume. Renaissance succeeded because its culture rewarded learning over ego. That principle applies in any investment strategy.
What Works on Wall Street; Jim O’Shaughnessy
The latest edition of this book is a data-rich examination of what actually works in markets over long periods. It’s not about passive indexing. It is active investing with structure and evidence.
Modern markets are noisy. Narratives dominate. Social media amplifies bold claims. Backtests are misused. This book cuts through all of that by grounding investment ideas in decades of real-world data. It reinforces the power of rules-based thinking while acknowledging behavioural realities.
If you want a framework for assessing whether an investment idea has empirical legs or is just a story, this is essential reading.
Richer, Wiser, Happier; William Green
This is not an investing handbook. It is a psychological and philosophical study of the world’s wisest investors, not just how they allocate capital, but how they live, think, absorb uncertainty, and manage themselves.
The central insight is that temperament overrides tactics. You can know every valuation model under the sun, but if you cannot manage your emotions, stay patient, or recognise your own biases, you will never outperform.
Green’s interviews with investors like Gayner, Pabrai, Templeton, and Simons offer a rare behind-the-veil view of how elite performers see the world.
For any investor aiming for longevity, this is required reading.
The Power Law; Sebastian Mallaby
Although this book focuses on venture capital, its lessons extend far beyond Silicon Valley. Mallaby unpacks one of the most important ideas in modern markets: the power law distribution.
A small number of extreme winners account for the vast majority of returns. The same pattern appears in start-ups, public markets, innovation cycles, and even economic productivity.
Understanding this distribution shapes how we think about portfolio construction, asymmetric payoffs, risk-taking, and optionality. Recognising what could be a 10x or 20x outcome and not selling too early is as important as good stock selection.
More Money Than God; Sebastian Mallaby
Mallaby’s earlier work explores the rise of the hedge fund industry; macro, quant, event-driven, and long/short pioneers who broke the mould of conventional investing. Each chapter is a study in contrarian thinking.
From Soros’s reflexivity to Druckenmiller’s intuition to Steinhardt’s intensity, Mallaby shows what it means to operate at the highest levels of active management.
The lesson for modern investors is that edge comes from perspective. These investors saw what others missed because they thought differently, not because they had better access or bigger teams.
Quit: The Power of Knowing When to Walk Away; Annie Duke
One of the hardest skills in investing is not buying. It is quitting. Cutting losses early, exiting when the thesis breaks, reallocating when the opportunity set shifts, these are the decisions that define long-term returns.
Duke, a former poker champion, explains why humans struggle to quit even when evidence tells us we should. She breaks down sunk-cost bias, identity attachment, escalation of commitment, and the psychological difficulty of abandoning a position you’ve championed.
This is not a book about poker. It is a book about capital preservation, opportunity cost, and emotional discipline, the heart of great investing.
The Art of Doing Science and Engineering; Richard Hamming
Every investor should read at least one book each year that has nothing directly to do with investing. This is mine.
Hamming’s work is a study in how serious thinkers approach complex problems. He explores how to identify important questions, build mental models, test assumptions, and avoid intellectual stagnation. These are the meta-skills of great investors. The ability to think clearly is the ultimate edge.
Why These Books Matter for Investors Today
Markets today are characterised by noise, volatility, narrative dominance, and short-termism. The biggest challenge isn’t finding information. It’s separating insight from distraction.
Deep reading helps investors:
slow down the mind
build second-order thinking
see patterns others overlook
improve self-awareness and emotional regulation
challenge their own assumptions
identify genuine opportunities amid chaos
Reading is a form of mental strength training. You don’t see the improvement immediately, but the compounding effect is enormous. Just as the best athletes maintain rituals that sharpen their bodies and minds, great investors maintain rituals that sharpen their thinking. Reading is one of them. This list is not about entertainment. It is about preparation. Preparation for uncertainty, complexity, and inflection points, exactly the conditions where exceptional returns are made. As I pack these books into my carry-on (okay maybe into the big suitcase), I know I’m not packing pages. I’m packing next year’s insights.
TAMIM Takeaway
Great investing isn’t just about analysing companies. It’s about analysing yourself. Your thinking, your biases, your process, your blind spots. This reading list is designed to upgrade the mental operating system that drives every investment decision you make. If you want better returns next year, start by upgrading the way you think this year.
Investors adore narratives that offer emotional comfort. “AI will save us”, “recession is cancelled”, “central banks have everything under control”, and other fairytales that make market commentators feel clever. The inconvenient truth is that markets rarely deliver the outcomes that dominate headlines. Instead, the real drivers of return tend to come from slow, structural shifts that most people ignore because they lack the excitement of the latest bubble.
Three such shifts are now underway. Energy investment is rising again after a decade of starvation. Japanese financial conditions are normalising after thirty years of distortion. And the global manufacturing base that will power the AI boom is moving into a more rational, more profitable phase. None of this fits neatly into the noise that occupies most financial media, but all of it matters if you want to make money rather than simply participate in debates about the Federal Reserve or the ten stocks that dominate the Nasdaq.
Today we examine three companies that exemplify these turning cycles: Schlumberger in global energy services, Mizuho Financial Group in Japanese banking, and Jabil in advanced manufacturing for AI and infrastructure. They are large, liquid, profitable, and still reasonably valued. More importantly, they are priced for the world that existed five years ago, not the world that is emerging now.
Investing is not about predicting the next headline. It is about positioning yourself where capital is starting to flow, not where it has already arrived. The following companies sit precisely at that inflection point.
Schlumberger: The Unfashionable Energy Giant That Never Went Away
You would not know it from the behaviour of climate aspirants on social media, but the world still relies on oil and gas for the vast majority of its energy needs. Not because we lack the technology for alternatives, but because reality does not bend to ideology. It takes decades to transform energy systems. Politicians and some asset managers may pretend otherwise, but companies like Schlumberger operate in the real world, where physics and engineering still matter.
Schlumberger, the largest technology and services provider to the energy sector, has been quietly compounding value as the world wakes up to its multi year underinvestment in supply. The company’s revenue profile tells the story. Over the past several years, growth has been steady and broad based, with EBITDA margins expanding into the mid twenties. This is notable given that the sector still trades as if we are permanently returning to 2020 conditions.
Financial conservatism has been a strength. Schlumberger generates high returns on capital, maintains disciplined debt management, and continues to invest in digital and automation technologies that make production cheaper and more efficient. It is fashionable to believe that the future belongs exclusively to wind turbines and rooftop solar. But the companies actually enabling the global economy to function are the ones who keep energy secure while the transition plods along far more slowly than idealists expected.
Valuation remains reasonable. Earnings for next year imply a mid teens price to cash flow multiple and a dividend yield comfortably above three percent. Investors who still view the sector through the lens of a single bad year are missing the structural reality. Countries are scrambling to secure long term energy supplies. Offshore drilling is returning as a growth engine. National oil companies are ramping capex. The service cycle, which lags commodity prices by one or two years, is firmly in recovery.
Schlumberger is not the perfect stock. Few are. But as a levered play on a multi year need for more reliable energy supply, it remains compelling. The best opportunities often arise when the public narrative is stuck in a fantasy while the underlying economics grind forward.
Mizuho Financial Group: Japan Finally Wakes Up From Its Monetary Coma
Japan has spent three decades fighting the laws of economic gravity. When you peg interest rates at zero for long enough, you destroy the natural functioning of credit markets. When you buy most of your own government bond market through your central bank, you distort pricing to the point where investors stop bothering to look. And when you artificially depress risk free rates for generations, you punish savers, banks, insurers, and pension funds.
Eventually, however, even the Bank of Japan must acknowledge reality. Inflation has reappeared. Wages are rising. Corporate governance reforms are accelerating. And perhaps most importantly for investors, the yield curve is beginning to steepen. This environment is oxygen for the megabanks.
Mizuho Financial Group is one of the key beneficiaries. It is large, liquid, conservatively managed, and uniquely positioned for rising net interest margins. After years of depressed profitability, earnings have surged. Revenue grew nearly twenty five percent in the latest financial year, while net income expanded at an even faster pace. The capital position is robust, with a tier one ratio above sixteen percent. Japanese banks, long dismissed as yield traps, are suddenly becoming income generating assets again.
The market has been slow to adjust to this new environment. Most global investors still associate Japanese banks with the stagnation era. They have not updated their mental models to reflect the fact that Japan is now one of the few developed countries with genuine monetary normalisation ahead rather than behind. The repricing of the banking sector is only in its early stages.
Mizuho trades at just over one times book value. For a bank with rising margins, improving credit quality, and strong capital, this is hardly demanding. The investor psychology that labelled the sector uninvestable for decades has not yet caught up with the numbers. While everyone debates American technology stocks, the most interesting monetary shift in the developed world is happening in Tokyo.
Investors should pay attention. Structural change, not headlines, drives long term returns.
Jabil: The Quiet Architect of the AI Industrial Build Out
It is extraordinary how quickly investors have convinced themselves that artificial intelligence will eliminate the business cycle and usher in a permanent era of growth. The hype machines of Silicon Valley have always been powerful, but they appear to have reached a new level of narrative engineering. What is often ignored is the unglamorous machinery required to turn AI from a concept into a commercially scaled reality: optical components, precision sensors, networking equipment, industrial controllers, power regulation systems, thermal management, and manufacturing at enormous volumes.
Jabil is one of the companies doing the actual work. Unlike the promotional darlings of the Nasdaq, Jabil does not spend its time producing glossy slide decks about the future of consciousness. It builds things. The company is one of the world’s leading contract manufacturers in high complexity electronics, serving data centres, cloud infrastructure, industrial robotics, medical devices, and advanced communications systems.
Revenue has been stable and rising. Margins have held firm. The balance sheet is disciplined, and earnings are set to expand materially over the next two years as new capacity comes online for hyperscalers, network operators, and industrial automation clients. Institutional ownership is extremely high, which tells you where the serious money sits compared with the tourists who chase momentum.
Valuation is attractive relative to the growth profile. Jabil trades on under twenty times next year’s earnings despite being a direct beneficiary of the physical build out behind AI. While markets obsess about the software layer, the real economic value is often captured by companies like Jabil who enable the hardware, logistics, and engineering required to scale these systems.
It is worth remembering that in every technological revolution, the early winners are usually the tool and equipment providers. They capture value while the platform companies fight one another in a series of expensive, low return arms races. Many investors appear to have forgotten this. Jabil has not.
The Common Thread: Capital Is Quietly Rotating Back to Reality
Schlumberger, Mizuho, and Jabil operate in very different industries. Yet they share three attributes that matter greatly for long term investors.
First, they sit in sectors where capital investment is rising after years of deprioritisation. Whether it is global energy, Japanese credit markets, or industrial manufacturing for AI infrastructure, these are industries coming off long periods of underinvestment.
Second, they exhibit improving financial quality at reasonable valuations. Earnings are growing, margins are expanding or stable, and balance sheets are not overstretched. This is unusual in a market where many popular companies trade on heroic assumptions about the future.
Third, they reflect the gradual return of economic realism. Energy demand is not vanishing. Monetary policy is normalising in places long thought incapable of change. And the hardware backbone of AI requires years of disciplined engineering rather than marketing slogans.
Investors who anchor their thinking to last decade’s narrative risk missing this shift. Capital is moving back to industries with tangible assets, real cash flow, and genuine demand. The world is quietly repricing.
TAMIM Takeaway
Do not confuse popularity with opportunity. The best returns often come from sectors investors have ignored for too long. Energy services, Japanese banking, and industrial technology may lack the glamour of the Nasdaq, but they possess something far more valuable: improving fundamentals at reasonable prices.
When cycles turn, they tend to run for years. Schlumberger, Mizuho, and Jabil each represent a structural rotation that is still in its early stages. The market will catch on eventually. Better to be positioned before the crowd arrives.
Disclaimer: Schlumberger (NYSE.SLB), Mizuho Financial Group (TYO: MFG), and Jabil (NYSE: JBL) are held in TAMIM Portfolios as at date of article publication. Holdings can change substantially at any given time.
You would not know it from the behaviour of climate aspirants on social media, but the world still relies on oil and gas for the vast majority of its energy needs. Not because we lack the technology for alternatives, but because reality does not bend to ideology. It takes decades to transform energy systems. Politicians and some asset managers may pretend otherwise, but companies like Schlumberger operate in the real world, where physics and engineering still matter.
Japan has spent three decades fighting the laws of economic gravity. When you peg interest rates at zero for long enough, you destroy the natural functioning of credit markets. When you buy most of your own government bond market through your central bank, you distort pricing to the point where investors stop bothering to look. And when you artificially depress risk free rates for generations, you punish savers, banks, insurers, and pension funds.
It is extraordinary how quickly investors have convinced themselves that artificial intelligence will eliminate the business cycle and usher in a permanent era of growth. The hype machines of Silicon Valley have always been powerful, but they appear to have reached a new level of narrative engineering. What is often ignored is the unglamorous machinery required to turn AI from a concept into a commercially scaled reality: optical components, precision sensors, networking equipment, industrial controllers, power regulation systems, thermal management, and manufacturing at enormous volumes.