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