The market isn’t just rotating—it’s being rewritten. In this episode of In the Money with Amber Kanwar, Paul Moroz, Portfolio Manager at Mawer Investment Management which has more than $65 billion in AUM, explains why we’ve entered an era of “change investing,” where the biggest opportunities—and risks—come from rapid shifts in technology, competitive advantage, and capital intensity.
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Three stocks that fit with Mawer’s “Be Boring, Make Money” philosophy
1. TSMC (Taiwan Semiconductor Manufacturing Company)
Paul Moroz highlights TSMC as a top portfolio holding and a foundational compounder for the current investment era, describing it as a stock where “all roads lead to TSMC.”
- Unparalleled Manufacturing Mastery: TSMC executes thousands of complex steps and processes with seamless precision that competitors struggle to replicate. The dinner party analogy captures it perfectly: everything arrives hot and on time, while others end up with cold potatoes. This operational edge is extremely difficult to build or catch.
- Embedded Ecosystem Advantage: As demand for advanced chips accelerates, TSMC’s integration across the semiconductor supply chain has strengthened its moat. Key equipment like EUV machines is fully booked, making it nearly impossible for new entrants to scale effectively in high-end production.
- Long-Term Secular Tailwinds: With chips becoming even more pervasive in the future, TSMC offers years of compounding potential in the current investment climate. It stands alongside historic compounders like Exxon, Apple, or Microsoft in its era-defining role.
2. Amazon (AMZN)
Paul emphasizes Amazon’s exceptional culture as the decisive factor, enabling superior capital deployment and innovation over long horizons.
- Powerful Long-Term Culture: Jeff Bezos’ foundational focus on long-term thinking, cash flow, and return on invested capital remains deeply embedded. This culture allows Amazon to navigate capital-intensive opportunities like AWS and infrastructure buildout more effectively than peers.
- Proven Ability to Invent New Value: Management consistently creates opportunities that investors cannot fully foresee today. What drives significant value ten years from now will likely be inventions and expansions originating from this same innovative culture.
- Expanding Logistics Moat: Amazon is leveraging its efficient delivery network into third-party parcel and logistics services. This move builds on proven execution in its core business and creates additional revenue streams while disrupting traditional players.
3. Bunzl (BNZL.L)
Paul presents Bunzl as a boring but high-quality business that earns its cost of capital, providing stability and balance in a portfolio alongside higher-growth names.
- Essential, Non-Cyclical Distribution: Bunzl supplies critical but non-core items (straws, napkins, cups, cleaning supplies) to businesses like coffee shops and beyond. These products are necessary indefinitely, creating a stable, long-duration business model that is largely insulated from economic cycles.
- Attractive Valuation with Compounding Potential: Trading at approximately 13 times earnings after a pullback, Bunzl offers a solid entry point. It demonstrates reliable growth and delivers returns by consistently earning its cost of capital over extended periods.
- Portfolio Diversification Role: In a market dominated by AI enthusiasm, Bunzl represents the other side of the coin — a physical, enduring business that adds ballast. Pairing it with higher-multiple growth stocks like TSMC creates valuable allocation flexibility across market environments.
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