Why a $2.7 Billion Fund is Buying Netflix and Selling Adobe

In the ever-evolving landscape of investment, making the right choices can feel daunting, especially when market trends fluctuate wildly. Money manager Barry Schwartz offers insights that could guide investors looking for stability in uncertain times. His perspective emphasizes the importance of maintaining a long-term investment strategy, even when immediate returns may not seem favorable.

Schwartz, the president and chief investment officer of Baskin Wealth Management, highlights the need for patience and discipline. With over $2.7 billion in assets under management, his firm is well-positioned to navigate the complexities of the current market. He notes that while sectors like artificial intelligence and gold have attracted significant attention, there are still solid investment opportunities within traditional, profitable companies. This article delves into Schwartz's investment philosophy, his current stock picks, and the rationale behind selling Adobe.

Investment Strategy: Staying the Course in Volatile Markets

Barry Schwartz urges investors to remain committed to high-quality, profitable companies despite the volatility in recent markets. This phase can be particularly testing for both seasoned investors and their clients, but Schwartz insists that market dynamics are always in flux.

In his view, the recent surge in popularity of certain sectors has overshadowed many reliable stocks. He encourages investors to look for opportunities in undervalued companies that have strong fundamentals. These businesses, while currently out of favor, have the potential for significant growth in the upcoming years. Schwartz states:

• “A lot of damage has been done based on a lot of ‘what-if’ questions.”
• “This is a time for investors to take a look at some great businesses that have been beaten up.”

By focusing on companies with solid operational metrics and the potential for improvement, investors can position themselves for future gains. Schwartz believes that maintaining a disciplined investment approach is crucial, even in challenging times.

Current Market Trends: The Rise of AI and Gold

The rapid rise of artificial intelligence has captured the market's imagination, with many investors flocking to tech firms that promise to leverage this technology for growth. Similarly, the gold sector has seen renewed interest as a hedge against inflation and economic uncertainty. Schwartz recognizes these trends but cautions against losing sight of well-established companies.

He suggests that the current market may have created buying opportunities for traditional stocks that are often overlooked. By capitalizing on these opportunities, investors can enhance their portfolios with companies that have a history of performance and resilience.

A Closer Look at Stock Picks: What's on Schwartz's Radar?

Barry Schwartz is not just talking the talk; he's putting his money where his mouth is. Several stocks currently hold prominent places in his portfolio, which he believes have strong growth potential in the coming years.

• Taiwan Semiconductor Manufacturing Co.: Schwartz purchased this stock in the low $200 range, seeing it as a beneficiary of the AI boom due to its dominant market position. Unlike investing in individual chipmakers, investing in Taiwan Semiconductor provides a more stable bet on the sector's future growth.
• Netflix Inc.: Schwartz has been accumulating shares in Netflix, believing that despite the rise of AI-generated content, there remains a strong demand for Netflix's original programming and intellectual property. He points out that acquisitions, like Warner Bros., could further solidify Netflix's market position.
• Waste Connections Inc.: This company has been a long-term holding for Schwartz, demonstrating resilience in the waste management industry. As a business that deals with basic human needs, it is expected to thrive irrespective of technological advancements.

These stocks reflect Schwartz's strategy of investing in companies with strong fundamentals and growth potential, rather than getting swept away by the latest market fads.

Recent Portfolio Adjustments: The Case for Selling Adobe

In a notable shift, Schwartz decided to sell his position in Adobe Systems Inc. This decision was driven by concerns over the company's vulnerability to AI advancements, particularly given its focus on enterprise software. He recognized that while Adobe had performed well historically, the landscape had shifted dramatically.

By reallocating funds from Adobe into Constellation Software Inc., Schwartz aims to enhance his portfolio's diversification. He believes that Constellation's greater resilience and strong balance sheet make it a more attractive investment in the current environment. Schwartz's approach highlights the importance of adapting to market changes and making strategic decisions to optimize portfolio performance.

Performance Metrics: Evaluating Baskin Wealth Management

As of the end of December 2025, Schwartz's maximum-growth portfolio reported a modest return of 0.5%. This performance reflects the challenges posed by currency fluctuations, particularly the rising Canadian dollar against the U.S. dollar. Despite this, the portfolio has demonstrated an impressive three-year annualized return of 18.4%, along with a five-year annualized return of 10.6%.

These metrics underline the importance of a long-term investment horizon. Investors often face short-term challenges, but Schwartz's focus remains on achieving sustainable growth over the years.

Looking Ahead: What to Expect from the Market

Investors should remain vigilant and prepared for ongoing market fluctuations. Schwartz emphasizes that while certain sectors may dominate headlines, the fundamentals of individual companies should guide investment decisions.

To navigate the uncertainties of the market, he advises investors to consider the following:

• Focus on companies with strong operational metrics.
• Look for undervalued stocks that have been overlooked.
• Maintain a long-term perspective, even in volatile markets.

By following this approach, investors can position themselves for success, regardless of the prevailing market trends.