Halliburton: Tough Year Ahead

Company Performance - Halliburton's stock has been underperforming in recent months due to deteriorating financials, attributed to weak oil and gas demand growth and operator discipline [1] Investment Strategy - Narweena, an asset manager led by Richard Durant, focuses on identifying market dislocations caused by misunderstandings of long-term business prospects, aiming for excess risk-adjusted returns through secular growth opportunities in markets with entry barriers [1] - The investment approach emphasizes company and industry fundamentals to uncover unique insights, with a high risk appetite and long-term horizon targeting deeply undervalued stocks, particularly in smaller cap markets [1] Economic Trends - An aging population with low growth and stagnating productivity is expected to create new investment opportunities, contrasting with past trends [1] - Many industries may experience stagnation or secular decline, which could paradoxically enhance business performance due to reduced competition, while others may face rising costs and diseconomies of scale [1] - The economy is increasingly influenced by asset-light businesses, leading to a declining need for infrastructure investments, resulting in a large capital pool chasing limited investment opportunities, thus driving up asset prices and compressing risk premia over time [1]