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Welcome back everyone.

Two weeks ago I wrote that Thursday was a warning, not the flush. The flush coincidentally came with a face and a situationally ironic name.

Leopold Aschenbrenner and his Situational Awareness fund.

Market Update📈📉

The AI trade compressed for five straight weeks, names down 40, 50, 60 percent from their highs in a straight line. Meta was down 10 percent on the year at the lows, Microsoft down 20, Amazon and Google flat while the Nasdaq held up 13. The proximate cause was sitting in plain sight: the Nasdaq topped the day of Kevin Warsh’s first FOMC meeting. Long-term inflation expectations barely moved, but real rates, the way markets price long-duration assets, jumped about fifty basis points. Warsh is a balance-sheet hawk. He wants the Fed out of the mortgage and long-Treasury market, less forward guidance, and real price discovery. The longest-duration trade in the market, the AI buildout, paid the toll first. Meanwhile, for the first time in a year, the index’s built-in AI hedge failed: the capex payers got punished and the capex receivers didn’t rally enough to catch the tape.

Then came the capitulation event. Situational Awareness, one of the most followed AI-concentrated funds in the world, blew up. Roughly $46 billion of equity levered about three times, north of $125 billion of gross exposure, concentrated in exactly the photonics, memory, and GPU capex-receiver names that had been cut in half. When your book drops 50 percent on three turns of leverage, the banks don’t wait. Ken Griffin flew back from Monaco for a day, bought the public equity book for somewhere between $20 and $30 billion depending on who’s reporting, and flew back to his vacation. One of the largest hedge fund bailouts in history, done between dinner reservations.

Forced selling from a leveraged whale is the kind of thing that marks bottoms, and so far it has. The capex receivers have rebounded hard. Microsoft went from down 20 on the year to up five. Meta recovered. Amazon just became the fifth $3 trillion company on earth after an incredible AWS quarter. And in the great rotation tell, Apple, which spent a year as the safe haven for people who wanted tech without AI, gave the crown of world’s most valuable company back to Nvidia.

Here’s why I think the rebound has fundamentals under it rather than just short covering. GPU rental prices have doubled in the past year.

If these were bad investments being depreciated into a glut, the rental market would be telling you. Instead the infrastructure is in such demand that the hyperscalers are demonstrably under-earning on the assets they already own. Microsoft and Amazon’s quarters showed real return on the cloud investment, and the frontier labs are doubling revenue every six months. We’ve never watched businesses go from startup to a hundred billion of annualized revenue this fast. The market is having a genuinely hard time valuing it, and the next test comes when OpenAI and Anthropic hit the public markets, likely around year-end.

The market is once again believing the spend is justified.

Volatile bottoms don’t mean the volatility is over. But the burden of proof has flipped back onto the bears.

No influencers allowed

A basket store on Nantucket hung a sign that says “No influencers,” and Mel and I spent longer on it than we planned, because it’s secretly a markets story. Scarcity is the oldest luxury strategy there is. Rolex runs it, Hermes runs it, Porsche runs it, and now an expensive basket shop is running it against the very people who normally manufacture demand. When access gets democratized, exclusivity becomes the product. You’re seeing the same physics in collectibles, where a PSA-10 grade takes a $500 Charizard to $45,000. Authentication, uniqueness, and real-life experience are becoming the scarce assets in an economy of infinite reproduction. It’s why I keep a long-term bucket in portfolios for real-world experiences, the Four Seasons and airline-travel end of the consumer. It’ll never be as sexy as the picks-and-shovels trade. It also never has a Situational Awareness moment.

The West, and the rest

Mel’s framework this episode is the one I’d ask you to sit with. The left/right spectrum you grew up with, mostly an economic argument about markets versus intervention, is dead as a map. The axis that actually predicts where politicians land in 2026 is this: do you believe Western civilization is worth defending and improving, or do you believe it needs to be dismantled for something presumed better? Data centers, pipelines, billionaires, even the Billy Bishop airport fight all sort cleanly along that line, and almost none of it sorts along the old one.

Her sharpest point was about the scarcity loop. An abundance mindset says the pie grows; when someone else wins, that’s evidence you can too. What a chunk of our politics runs on instead is a grift cycle: make people fearful there isn’t enough to go around, pass policies that ensure there isn’t, offer the state as the solution, collect the votes, repeat. After enough cycles, people stop believing the private sector can deliver anything, which makes the state more necessary, which makes the pie smaller. Scarcity is a policy choice. So is the exit.

WestJet, and the party that walked away

The WestJet strike resolved into a tentative deal, but the political tell stuck with me. The Trudeau Liberals spent a decade courting unions. This Liberal government watched 4,400 flight attendants shut down summer travel over unpaid ground work and had essentially nothing to say. Not intervention, not support, just indifference. Mel’s distinction matters here: the old Liberal enthusiasm was mostly for public sector unions, which grow the state, and about 30 percent of employed Canadians now belong to a union of some kind. When public sector compensation stops involving trade-offs entirely, you get what she called a hostage situation rather than a negotiation, and the public’s sympathy erodes. Ask the postal workers. The deeper irony is the one we keep hammering: the biggest thing happening for blue-collar wages in this country right now is the data-center and megaproject buildout, and the party that historically claimed those workers is ambivalent about both the projects and, apparently, the picket lines. The workers have moved. The parties haven’t caught up.

Alberta, it’s time to build 🏗️

This week I published the longest thing I’ve written this year, and it’s the piece I most want you to read and share. It makes the case that Alberta is about to run the last great cycle of the old energy economy and the first great cycle of the new one, simultaneously.

The short version. On July 2, the Prime Minister and the Premier stood together and announced a million-barrel pipeline to the coast. Six days later Meta committed $13 billion to a one-gigawatt data center in Sturgeon County, its largest anywhere outside the United States. The pipeline is the biggest version of Alberta’s hundred-year-old model: pull energy out of the ground and ship it somewhere else to become valuable. The data center is the first serious version of a new model, where the gas stays home and gets refined into the most valuable commodity on earth right now. A data center is a token refinery. It converts BTUs into intelligence and sells it globally at software margins.

The piece walks through the gas math (every gigawatt of gas-fired data center load is roughly 0.16 bcf a day of new, flat, creditworthy, in-basin demand, the structurally better customer AECO has waited decades for), why one campus becomes five (hyperscalers copy each other’s site audits, and Alberta just passed Meta’s), the TSMC-Phoenix precedent ($12 billion became $265 billion and forty follow-on projects), the Strathcona County tax lesson (industrial assessment is why Sherwood Park pays 30 to 45 percent less property tax than comparable cities, while Edmonton households just absorbed a 29 percent increase in four years), and who actually gets paid: the electricians, pipefitters, module yards, brokers, lawyers, and accountants of Edmonton, St. Albert, Sherwood Park, and Fort Saskatchewan. The commodity gets the headlines. The infrastructure gets the early returns. The services get the multiples.

It closes on the Abundance argument, because central Alberta is now the closest thing North America has to a live test of Klein and Thompson’s thesis that scarcity is self-inflicted. Greenlight went from announcement to a $4.6 billion final investment decision with a four-year build. In most US markets, the interconnection queue alone takes longer. Our advantage isn’t capital. It’s the willingness to say yes quickly, and it’s measured in one number: months from application to token.

Share it with your MLA, your favourite councillor, and the smartest skeptic you know.

Podcast & YouTube Recommendations🎙

• Four of the sharpest minds in geopolitics predicting how the world ends

• A must listen from RenMac and their special guest - Stephen Moran

• One of the best interviews on Consumer Trends with the CEO of Doordash Tony Xu

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Welcome back everyone.

Market Update📈📉

For most of the past year the index has carried an almost built-in AI hedge. When hyperscalers raised capex, the companies receiving the money rallied, because the spending became their revenue. When hyperscalers hinted at spending less, their own stocks rallied on better free cash flow and more room for buybacks. One side could get hurt, but the other side caught enough of the money to stop the index from falling far. That arrangement made SPX remarkably hard to push down, and it’s why all the violence underneath kept disappearing at the index level.

Thursday was the first time that hedge failed.

Alphabet reported good operating numbers and raised 2026 capex guidance again, to $195-205B. Free cash flow came in at negative $5.9B for the quarter, and the stock fell 7%. The payer got punished, and the recipients didn’t rally enough to replace it. The old reflex of buying anything that might receive a dollar of hyperscaler capex was nowhere near as reliable. The largest index weights fell, and the hedge on the other side was too narrow to hold the whole thing up. Nasdaq dropped 2% while Brent pushed through $100 and the 10-year traded above 4.7%.

Alphabet wasn’t the first warning, just the first one big enough to matter at the index level. Over the prior two weeks, ASML, TSM, Texas Instruments, MaxLinear, Intel and BE Semiconductor all traded lower despite beats or raised guidance. Intel reported a blowout quarter Thursday night and the market yawned. Markets don’t top on bad news. They top on good news, when people stop paying attention to it.

Friday bought time without fixing anything. Reports of possible US-Iran talks knocked Brent back down, yields eased, and SPX finished flat. Nasdaq still closed down 1%, so the market didn’t rediscover its love for AI. Macro pressure simply eased. Even the support looked defensive rather than bullish: Apple outperformed by nearly 5%, and names like AT&T had their best week relative to the market in decades. My read: Thursday was a warning, not the flush itself.

Where the money is going

Money is never destroyed in a momentum unwind. It flows somewhere else.

Right now the tell is real yields, which are breaking out globally: the US, France, the UK, Bunds, JGBs. The price of money is rising, and investors are rotating out of long duration, the stocks priced to perfection and to grow forever, into financials, energy, REITs, insurance, and select healthcare.

It rhymes with the pre-GFC regime, when fundamental compensation for risk actually started to matter again.

The macro backdrop explains why.

Kevin Warsh’s Fed is facing three inflation drivers at once: relentless AI-driven demand for equipment and electricity, a reignited tariff regime, and a re-emerging energy shock out of Iran, with shipping lanes blocked, the SPR largely depleted, and Brent above $100. I think the market is underappreciating the risk of a hike as soon as this week. I don’t expect one, because Warsh still appears to view the energy shock as transitory. Which, again, is a dangerous word.

Semis are deeply oversold and violent bounces are coming. The momentum playbook says you sell into them.

Dimon is playing a different game than you are…

The headline of the week was “Jamie Dimon says don’t buy stocks,” and most investors read that as sell everything. Listen to the actual interview and he said “I don’t like prices today,” which is not the same statement. CEOs steward capital on time horizons that have nothing to do with yours. The last time Dimon made headlines like this was 2022, before the Fed hiked 500 basis points, and he wasn’t calling a top then either. He was describing risks to a bank that will outlive him. Meanwhile JPMorgan just broke out of an eighteen-month base to all-time highs. Your portfolio doesn’t care about headlines, and neither does he. Follow your own process.

Data centers are the new pipelines

At home, Canada has said almost nothing on AI policy while the two superpowers set the rules. Mel’s reframe on the podcast stuck with me: Carney isn’t silent by accident. He has no political incentive to touch it. He doesn’t win that argument with investors, and he doesn’t win it with the public. So the conversation doesn’t happen, and the comment sections under every Edmonton data-center headline supply their own answers. I’m having the same reset conversation at men’s league golf and in client meetings: intelligent, well-meaning people convinced these buildings are the devil. We did the same thing with pipelines for 35 years. Bad communication became bad policy, and the economy paid for it.

The tariff file makes the stakes plain. CUSMA didn’t get renewed, so the agreement now faces annual reviews instead. Trump’s threatened 50% tariff on certain Canadian goods hits BC (13.7% of its US exports), Quebec (10.8%) and Ontario (9%) hardest, per Trevor Tombe’s estimates. Alberta: about 1%. The likely next step is pressure on Alberta to tariff energy exports, the only lever that actually bothers Washington. Expect that to go over poorly in a province that has spent 25 years giving more to Confederation than it gets back.

The saving grace: natural gas

Here’s the positive note I’ll close on. US electricity demand is rising far faster than supply, natural gas production can’t keep up, and the political will to build nuclear at scale isn’t there. Sometime before 2030, I think the Americans won’t ask for Canadian natural gas. They’ll demand it, pipeline and all. Alberta has quietly built the blueprint: infrastructure ready for data centers, abundant gas, and a likely surplus this year with oil trading nowhere near the $56 the province modeled. The US spent 20 years as an energy exporter. That era is ending, and we’re the obvious solution next door.

New episodes every two weeks. Keep learning, keep earning, and keep investing.

Podcast & YouTube Recommendations🎙

• One of my favorite podcast episodes from ILTB:

• We’re not the biggest All-In fans but i really liked this perspective from Friedberg

• A great listen if you’re interested in better understanding datacenter + Frontier Lab economics

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Alberta is so back.

Stampede wrapped, and while the rest of us were nursing a ten-day social hangover, Alberta quietly had the best economic week it’s had in a long time.

Four announcements, potentially more than a hundred billion dollars of investment if they all land.

For the first time in my adult life, this province is about to build the entire stack: pull energy out of the ground, use it to make something the world wants, sell that, and tax it right here.

Let me start with the one that matters most, because it’s the one people are complaining about.

The data center comes to the energy

On Wednesday last week, Meta announced a thirteen-billion-dollar data center in Sturgeon County, about an hour northeast of Edmonton. Its first in Canada, its thirty-third globally, and its largest anywhere outside the United States.

Put one gigawatt in perspective. The entire city of Edmonton, every house, every hospital, every rink, runs on about 1.4 gigawatts. This one campus, roughly the size of 33 CFL fields, will pull close to two-thirds of what the whole city next door uses.

The incoming script:

Community meetings… angry residents…

“Big Tech is going to spike my power bill.”

Giant new load shows up, prices go up, Econ 101. Except the data mostly says the opposite, and it’s worth understanding why.

A power grid is a fixed-cost machine. You pay for the transmission lines, the substations, the transformers whether electrons flow through them or not. Across a full day, most grids run at maybe 55 to 60 percent of capacity. A data center runs at 90 to 95 percent, around the clock, every day. It’s the customer who buys a seat on every single flight instead of leaving half the plane empty. Fill those seats and the cost per seat falls for everyone.

EPRI, about the most sober outfit in the industry, found that for every 10 percent bump in data center capacity in a state, residential rates fell about 0.4 percent, and in the states that grew capacity fastest, bills came down around 6 percent.

Then there’s the fiscal side, which is the fun part. Loudoun County, Virginia, is the densest cluster of data centers on Earth. They sit on about 4 percent of the commercial land and throw off 38 percent of the county’s general-fund revenue. Loudoun has cut its residential property tax rate every year for a decade, from $1.145 down to $0.805 per hundred dollars of value. A 2026 analysis found that without the data centers, that rate would nearly double, roughly $5,800 a year for a typical homeowner. If you live in the Edmonton region, you already understand this intuitively.

It’s the same reason Strathcona County homeowners pay less: the refineries carry the bill. Server racks are about to do the same thing for Sturgeon County.

Here’s what Mel rightly kept flagging.

The legitimate criticism of US data centers is cost allocation. When a hyperscaler plugs into an existing grid and the utility builds new generation to serve it and socializes that cost across everyone’s bill, ratepayers really can get hurt before the benefits show up.

Alberta solved that.

The province lets data centers generate their own power, and it structured the tax so that if you draw from the grid you pay more, and if you bring your own generation you pay less. Meta isn’t showing up to drink from the existing pool. Pembina, Morgan Stanley Infrastructure Partners, and Kineticor are building the Greenlight Electricity Centre right next door: 932 megawatts of new gas-fired power, $4.6 billion, permitted to double. New load, new supply, financed by the customer.

The subsidy fight poisoning these projects in Ohio and Georgia basically doesn’t exist here.

And the talent piece is the part outsiders miss.

I’ve heard genuine horror stories about how hard these things are to build in the US, because the electrical systems are brutally complex and the skilled trades are stretched thin. Albertans are unusually good at exactly this. Drive north to Grande Prairie, Fort McMurray, Cold Lake, or walk the refineries around Edmonton, and you’re looking at some of the most complex energy systems on the planet, built and run by people who do this for a living.

Meta figured out it can build a state-of-the-art closed-loop, liquid-cooled facility here, with more consistent power, for something like half what it costs in Texas. If they can do it for thirteen to twenty billion instead of double that, I can genuinely see a path where they build ten of these.

So how do you actually make money on it?

A friend asked me the obvious question: how do we invest in this?

And the intuitive answer, “just buy Meta,” is probably the wrong one locally.

Everybody races to the hyperscaler at the top of the stack.

The value you can actually reach shows up at the bottom. The electrical contractors who wire these things. The land developers. And above all, the power. Meta and the next nine tenants can’t always build their own generation, which means power purchase agreements, which means the companies that can sell them electricity, whether that’s natural gas, wind, or solar, just found a twenty-year, investment-grade customer.

Watch the merchant power names and the midstream players like Pembina, who just found a growth vertical that has nothing to do with pipeline-egress politics. And it’s not a coincidence any of this landed in the lowest-taxed province in the country.

The pipelines:

Two pipelines hit the table this week.

The big one is the West Coast oil line. On July 2 Alberta submitted it to the federal Major Projects Office, and the news that mattered was a private proponent: Pembina, taking a 10 percent economic interest with the option to go higher.

It’s a million-barrel-a-day line from the Edmonton area to the BC coast, and it lays on the Trans Mountain corridor for most of its length(85-90%).

Notably, it’s a southern route, not the shorter northern one that would sit closer to Asia and take bigger tankers, because the northern tanker ban is not going away. Carney has said as much. We should hear by October 1 whether Ottawa lists it as a project of national interest, with shovels possibly in the ground by late 2027. All of it plays out against an Alberta referendum on October 19.

The second line, a proposed Alberta-to-Ontario route announced July 6, is still at the ideation stage. I wouldn’t put a number on its odds. It reads less like a construction plan and more like a signal: provinces cooperating, “build in Canada, stay in Canada,” which is a pointed message from a UCP government that critics love to call separatist.

Talk to politicians and the public and everything sounds fantastic. Talk to the people who actually allocate capital to mega-projects, and the needle has barely moved.

Because the fundamentals haven’t changed. The tanker ban is still there. The C-69 consultation uncertainty is still there. The carbon tax is still there. What changed is that we have a Prime Minister personally willing to champion a project. And that’s the risk hiding inside the good news. When one individual, through his own leadership, is making the exceptions and pushing the project through, you still don’t have a framework. You have a man. If Mark Carney weren’t Prime Minister, Canada would not be in a structurally better position than it was under Trudeau, because the institutions that would give an allocator certainty still don’t exist. It rhymes, uncomfortably, with investing in a jurisdiction where the rules depend on who’s in the chair rather than what’s written down.

It’s good news. It’s real.

But you can’t run a resource economy on catching a few project interests once a decade because the right person happened to be in office. The work of locking in durable investment certainty is still ahead of us.

The tape, and the geopolitics underneath it

The market gave us a perfect illustration of where AI is in its cycle. Meta launched “Meta Compute,” selling its excess AI capacity against AWS, Azure, and Google, and the stock popped more than five percent. But the same headline gutted the picks-and-shovels names underneath it: Coherent, Wolfspeed, Modine, Teradyne, Micron all red. After two years of pricing AI infrastructure as permanently scarce, the biggest buyer just admitted it has enough spare capacity to become a seller. That cracks the scarcity premium. You saw the same rotation when a report that DeepSeek is building its own inference chip knocked Nvidia while AMD ripped almost eight percent. Money isn’t leaving AI. It’s changing seats inside it. And it’s all sitting on a hawkish Warsh-led Fed with inflation at a three-year high and the ten-year at 4.55%, which keeps punishing the highest-duration corner of the market.

That inflation is partly energy, and energy is where the geopolitics bites. The US-Iran ceasefire collapsed this week after Iran struck commercial tankers in the Strait of Hormuz, and that risk premium is what’s keeping oil in the seventies even on soft demand. Mel’s frame on the wider picture is the right one: two things can be true. The US under Trump is an unpredictable and at times unreliable partner, and we still don’t actually have the option of walking away from that relationship. CUSMA certainty isn’t there, and part of why is a foreign policy that seems built around avoiding Washington at any cost. Carney in Saudi Arabia this week, the first Canadian PM to visit since 2000, signing thirteen agreements worth about a billion dollars, is the same instinct. Not objectively wrong. The Saudis want minerals and we have them, plus the oil. But if the motivation is “anybody but the US,” that’s not obviously a long-term win for Canada. Diversifying because you’re building strength is smart. Diversifying to spite your biggest customer is something else.

Pull it together and the theme of the whole show is this. For twenty years our problem was that we produced energy nobody would let us ship. Now the demand is coming to us, the capital is coming to us, and even the Saudis are coming to us. The only thing still standing in our way is whether we can actually build, and whether we’ll turn one good week into a framework instead of a fluke.

See you in two weeks.

West Coast oil pipeline (submitted to the Major Projects Office, July 2)

• Alberta.ca — West Coast Oil Pipeline

• Major Projects Office (Canada.ca) — West Coast Oil Pipeline project page

• CBC — Alberta pitches southern route, price tag of $35B or more

• BOE Report — West coast pipeline, private partner, oilsands production (Key facts: ~1 MMb/d, Edmonton region → southern BC coast; southern route (tanker-ban avoidance); $35.2B–$43.7B; Pembina 10% economic interest, option to +10%; Gazette listing decision by Oct 1, 2026; FID Q1’28–Q4’29; shovels as early as 2027.)

East–West pipeline (Alberta → Ontario, July 6)

• Alberta.ca — East-west pipeline announcement (Ideation stage; framed as cooperative federalism / “build in Canada.”)

Policy backdrop (the “framework vs. one man” point)

• Canada.ca — Building a stronger economy: sovereignty, exports, emissions (One Canadian Economy) (Context for Bill C-5 / Major Projects Office; the tanker ban (C-48) and C-69 uncertainty that still constrain investor certainty.)

⚡ The data-center-economics case (for the monologue)

• EPRI research — Data centers pushed average U.S. residential rates down, 2015–2024 (+10% DC capacity → −0.4% residential rates; fastest-growth states → ~−6%.)

• Loudoun County, VA (official) — Data Centers: Tax Revenues and the County Budget

• Progress Chamber — Data centers cut Loudoun property taxes ~$5,800/yr (DCs on ~4% of commercial land → 38% of general-fund revenue; rate cut from $1.145 to $0.805 over a decade.)

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com

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Two weeks ago I sat in this chair and told you to stop arguing about whether AI is a bubble and watch two things instead: the bond market, and the war in the Middle East. We got our answer for both.

So let’s grade the tape - starting with the one that should humble every expert who opened their mouth this spring, including me.

The humble pie nobody’s eating

For four months we had a shooting war with Iran. For 90% of it, the Strait of Hormuz was effectively closed. A fifth of the world’s oil moves through that strait, and in the eyes of basically every energy analyst alive it’s the single most important piece of infrastructure in the global economy…

And every single person in the energy market had the identical opinion. Oil’s going to a hundred and twenty, maybe a hundred and fifty. Inflation shocks everything. Batten down the hatches, the Nasdaq sells off twenty-five percent.

It was unanimous.

None of it happened.

This past week tankers started transiting the strait again, Iran is winding down the closure, they’ve signed onto a memorandum of understanding — and instead of oil staying high, it collapsed back to roughly five to seven percent above where it sat before the first missile flew. WTI is down in the seventies. After all of that. A war, a closed chokepoint, a quarter of the year with twenty-plus percent of global energy trade taken offline — and crude is basically flat on the year.

Nobody is doing the postmortem. Nobody is eating the pie.

So let me eat mine, because being wrong in public is the only honest way to get better. I was sure energy stayed higher for longer. I was wrong.

Why?

Three reasons:

One — China drew down its own inventories instead of panic-buying. They had far more in reserve than anyone modeled, which tells you how little we actually know about how other countries operate.

Two — China could flex its demand down. Their build-out of EVs, electrified transit, and solar has quietly made oil far more elastic than the textbooks assume; the idea that price has to stay high for long is now genuinely in question.

Three — dark transits. There is a whole shadow logistics system moving barrels outside the view of the people who price this stuff, and it’s bigger than anyone admits. Put those three together and you have the only real explanation for why every commentator got it wrong.

The part that matters for your portfolio: a meaningful chunk of that Chinese demand reduction in transport is going to be permanent. That’s not a wartime blip you get back. That’s a structural dent in the long oil story. Separate Alberta’s very real cyclical windfall from the secular demand picture — they are not the same trade.

Warsh changing the feds math while everyone watched the war

Kevin Warsh ran his first meeting as Fed chair, and he is a more hawkish animal than Powell — which is gloriously ironic, because he’s exactly who Trump pushed for. Two things came out of that meeting.

First, he told the market he doesn’t love dot plots and isn’t going to telegraph the next three moves. Markets hate uncertainty, and they let him know it.

Second, and bigger: he made clear he’s not cutting this year. The market repriced instantly — from pricing a possible December cut to roughly two-thirds odds of a rate hike in September. That is a massive move in the discount rate sitting under every equity attached to the USD.

That happened Thursday. Everyone went on vacation. We came back to two red days, the Nasdaq and S&P each down one to two percent, and a market that had been up ten, twelve, thirteen percent on the year handed back a third of it to sit around seven or eight.

A Canadian wrinkle I can’t ignore. A Fed that’s cleared out 2026 cuts and is flirting with hikes bleeds straight into us. I was poking through realtor.ca data for fun, and inventory is climbing across the country — including here in Alberta, in Calgary and Edmonton, the fastest-growing part of the country. This housing market cannot handle rate increases. Ontario and BC certainly can’t. Which brings us to the thing that genuinely annoyed me this week.

The condo bailout, and the courage we don’t have

On June 18, Mark Carney and BC Premier David Eby cut a deal. There are thousands of finished condos in BC sitting empty — over two thousand units — as demand cooled with slower population growth, and the developers who built them are staring at insolvency. So Ottawa and the province are co-funding a package north of three billion dollars, roughly split between them, to buy those condos at their list prices and convert them into affordable housing.

Mel’s take was sharp, and I think it’s the right starting point. Why are we intervening at all?

When demand falls, price is supposed to fall with it. That’s the whole mechanism. Let the market clear these units at a lower number, and if government wants affordable housing, take the money and build it.

Instead we’re rescuing a sector at list price. Her deeper point cut harder: this is preservation, not progress. An outsized share of Canada’s economy is real estate and everything stapled to it, the wealthy and the older cohort are heavily invested in keeping those values up, and protecting them is politically expedient. We have a brilliant economist running the country who surely understands supply and demand — but apparently those laws get suspended for the one golden-goose industry nobody wants to touch. She called it a failure of political courage, and the line that stuck with me: be the one who decides, or stop pretending you can’t.

I pushed back, because I’m more sympathetic to the occasional bailout than she is, and here’s why. Force a fire sale and you don’t just punish wealthy developers — you wipe out the contractors, electricians, drywallers, and painters underneath them who only get paid if these projects get made whole. Let the majors fail and you send a signal that Canada isn’t investable, that cap rates need to double, and that contagion can run from condos into the entire commercial and industrial real estate complex. Central bankers — and Carney is still one at heart — look at this through 2008 and 2009 and refuse to risk a run. I understand that instinct.

But Mel’s rebuttal landed. If we care this much about the jobs in this sector, why don’t we extend that same care to the natural resources workers we’ve ignored for a decade — workers who, conveniently, don’t swing ridings in the GTA and Vancouver?

A central banker’s job is to read the room and pull the levers available. A leader’s job is to change the board. Carney is one of the few people on earth who could actually change the board, and he’s choosing to defend the old one.

Europe 2031, and the choice in front of Canada

Europe just moved to block US big tech — Microsoft, Amazon, the hyperscalers — from selling software into government agencies, a de facto rejection of American influence dressed up as driving homegrown innovation. And it’s framed perfectly by a piece making the rounds called Europe 2031.

It’s a fiction story of two characters living out a a five-year scenario. Its written by serious EU AI-policy people as a warning.

The setup: January 2025, DeepSeek’s R1 drops, Nvidia falls twenty-odd percent, memory names down thirty, photonics down forty to fifty, and Europe takes a victory lap — see, AI is solved and cheap, we don’t need America’s hundred-billion-dollar data centers, we’ll buy intelligence on the discount rack.

Then the gap doesn’t close. It explodes.

By the end of the story the US runs seventeen times Europe’s compute and hosts eighty percent of the world’s AI capacity, because Europe bet that compute was a commodity and that “sovereignty” would make it stronger. It made it weaker. The instinct to reject the technology became the cause of its irrelevance.

The piece names Canada explicitly, and this is the part that scared me a little. It lists the middle powers who actually hold leverage, the ones sitting on real bottlenecks. The Netherlands has ASML, the only company on earth that builds the ~$350M EUV machines that print every advanced chip; no EUV, no GPU, no CPU, no memory.

Germany has robotics. France and Norway have AI talent. The UK has finance. Japan controls the chemicals the whole data-center build-out depends on. South Korea has the memory - Hynix, Samsung, Micron’s footprint. And Canada has the energy, the critical minerals, world-class AI labs like Amii right here in Edmonton, and the geographic luck of sitting directly on top of the largest consumption engine on the planet.

We do not have to become Europe. We could be something better — a blend of what makes the US and Europe each work. But the warning in the piece is that we share Europe’s exact disease: we’d rather study a hard problem to death than pour the concrete. The investment lesson is blunt: if you allocate capital into jurisdictions that reject progress on principle, your return on invested capital will be atrocious.

Policy is not background noise. It’s the thing that decides whether you get ten-percent compounding or a low-growth trap. Mel framed the whole posture as a luxury belief - like the person who’s gone to the gym for ten years and decides they’re just naturally healthy, forgetting it was the daily reps.

And right on cue: a hundred billion dollars of proof

If you want evidence the gap in Europe 2031 is real and not science fiction, look at what dropped this weekend. The two leading American AI labs, OpenAI and Anthropic, now have combined annualized revenue north of $100 billion. Sit with that.

The Anthropic line alone is the wildest chart in business right now: roughly $1 billion of ARR in January 2025 to about $30 billion by April 2026, when it passed OpenAI in revenue for the first time - and climbing into the high-forties since.

OpenAI is doing about two billion dollars a month and filed confidentially to go public earlier in June. Eighteen months ago most people couldn’t name either company. Today they jointly clear nine figures of recurring revenue.

That is the whole Europe 2031 thesis in a single data point. While one continent debates whether to permit American software, the American model layer is compounding revenue faster than any software business in history. This is what “the cat is out of the box” looks like on an income statement. AI is here, it’s reshaping the economy in good ways and bad, and the value is pooling exactly where the compute, the capital, and the willingness to build already live. If you’re a Canadian allocator and that doesn’t reframe how you think about ROIC and where the next decade of returns gets made, I don’t know what will.

SpaceX, and giving Elon his flowers

Which brings me to where I wanted to land: SpaceX. Last episode we talked about the wealth it was about to create. It priced at $135, raised an extra fifteen percent to pull in close to $85.5 billion — an absurd sum — popped nineteen percent on day one, and closed around $163, the level that actually matters off an IPO. It ran to $225 the day Elon briefly became the world’s first trillionaire. Today it trades around $150 to $154. That round-trip, top to bottom, is a pretty honest tell about where this market is right now.

But the number I keep coming back to isn’t the price. It’s the people. I don’t have enough fingers to count the individuals I personally know who’ve been made wealthy by that one company — and nothing remotely like that wealth-creation engine exists in our country.

Now, longtime listeners know I was the original Elon hater. I despised the way he’d stretch the truth on earnings calls. Brock asked Mel if I’d forgotten that. I haven’t forgotten — I just understand it differently now. He weaponizes belief. He convinces brilliant people that something outlandish is achievable, and in doing so makes it more likely to actually happen. That’s how you get a SpaceX prospectus claiming a $28 trillion total addressable market and nobody laughs. Pair that with a genuine ability to take on big, hairy engineering problems — build the first successful new American car company in a century, land rockets and reuse them, fly a constellation that beams down cheap internet, all under the banner of colonizing Mars — and you get something rare.

Here’s the real gift. For the first twelve years of my career, all we did was optimize bits — myopic little efficiency tweaks to software after the iPhone ate the world. We forgot how to build atoms. I read Where Is My Flying Car? and that’s the whole indictment: we stopped building real things. Elon dragged the culture back to building. And now stocks that haven’t worked since the 1990s are leading the market, because the whole economy remembered how to attempt big, crazy, physical things again. There’s a humanoid robot in my five-to-ten-year future folding my laundry. That should be astonishing, and it’s downstream of one guy convincing everyone the impossible was just a schedule.

So I wanted to give him his flowers. Tune out the political noise, watch what he builds, and we’d all be better off. Mel put the bow on it: being a hater is lame. Have your debates, fine — but if you’ve never tried to build anything, even a community garden, you don’t get a seat in the conversation about the people who do. The next phase of this economy needs people with skin in the game. Get yours.

Positive-sum mentality. We’d all be better off with more of it.

See you in two weeks - when we finally take on the social media question.

Podcast & YouTube Recommendations🎙

• Did China Match Claude? - Not really.

• Maverick Capital on Opportunities in AI

• The Bond King Talks About the New Fed

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com

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For three years the only question anyone asked me was whether AI is a bubble. Is it real, who wins, what inning are we in. I’ve been saying inning three or four the whole time, and I’ll say it again. But it’s the wrong question, and last Friday’s tape is the reason why.

Here’s the better one. Where is the money actually flowing inside all of this, and what happens to every high-flying name if the bond market becomes the story?

The jobs report nobody wanted

Last Friday the US printed a jobs report that was too good. Stronger hiring, plus upward revisions to the prior two months that pushed the three-month average to its highest since early 2024. Job openings reversed from shrinking to growing.

That’s a hot economy.

For two and a half years the market has priced one thing: rate cuts.

Money was going to get cheaper. Friday said the opposite. When the cost of money goes up, the multiple you’ll pay for long-duration, high-beta, fast-money stuff comes down, and that’s exactly what AI momentum names are.

The compensation you demand for risk has to rise with the risk-free rate. So the two-year Treasury broke out to a fresh twelve-month high, the ten-year sits at 4.57%, and stocks sold off hard. Down two and a half percent on Friday, with more bleeding into this week as we await todays inflation data.

All of it is happening with a Fed in the middle of a leadership change, a President running a war in the Middle East, an inflation mandate he hasn’t delivered on, and a midterm cycle bearing down. That’s a lot of headwind in one frame.

Sit with how stark the shift is. The market spent two years rewarding one kind of positioning, and the regime just flipped under everyone’s feet.

There’s a Canadian wrinkle I can’t ignore. If the data stays hot and the Fed can’t cut, the Bank of Canada can’t comfortably cut either, and we are not in the same economic shape. The US is running hot. Europe is choking on input costs. Most of Canada outside the export-heavy West already looks like it’s in a recession. The exception is Alberta, where oil above eighty dollars has handed us the leverage we’ve wanted for a long time. I’ll be honest. As an Albertan, I haven’t had this much fun investing in eighteen months. That’s an uncomfortable thing to say when a lot of the country is hurting, but it’s true, and that divergence is going to define the next year.

The math says don’t buy stocks. The history says buy the right ones.

Now look under the hood. The ten-year yields 4.57%. The S&P’s earnings yield is 4.56%. Those are the same number. On the classic risk-adjusted math, why would you own stocks at all? You’re not being paid to.

This is where everyone needs to understand one piece of research, because it reframes the whole thing. Hendrik Bessembinder studied 64,000 global stocks over thirty years, a window that includes the dot-com bust, the financial crisis, and four recessions. Every bad thing that’s happened in my lifetime is in the data. What he found is that one to two percent of stocks generated all the net wealth created above Treasury bills. The other 98 or 99 percent, added together, netted out to roughly the return on T-bills. Somewhere between 55 and 57 percent of stocks actually underperformed T-bills over three decades.

Bring that down to the S&P 500 and the point gets sharp. Out of five hundred names, maybe ten or twelve do the real work. If you don’t own them, you didn’t just lag. You got wrecked for all the risk you took. And the cruel part is those names are usually the controversial, hard-to-hold ones. The last few years it was easy. Apple, Microsoft, Amazon, Alphabet, Meta, Tesla, Walmart. The next thirty years won’t be the same companies. But I’d bet my house the shape is identical. One or two percent of the names deliver the entire prize. If you won’t invest into where the paradigm is going, you miss it. Full stop.

The IPO supercycle, and the lie about it draining the market

And the paradigm is going public. Over the next six to nine months we get Anthropic, OpenAI, Anduril, and Stripe, the biggest private payment processor on earth. SpaceX prices this week. Google just raised eighty billion in equity anchored by Berkshire. The greatest entrepreneurs of the last fifteen years are all reaching for liquidity at once. So much for “sell in May and go away.” The people who make their living raising capital can’t go anywhere this summer.

The question every client asks me: won’t all these IPOs suck the money out of the market and trigger a correction? It’s the intuitive fear, and it’s wrong.

Here’s why. The largest pools of capital on the planet, the Fidelitys and T. Rowe Prices and Manulifes and Sun Lifes, mostly have no mandate to own private companies. Where they can, it’s capped around 15 percent. They were locked out of Anthropic, locked out of SpaceX, locked out of the best compounders of the decade. Once these names are public, those funds have to allocate. That’s where the bid comes from. The global equity market is north of a hundred trillion dollars. It can absorb four hundred billion in new equity without blinking. If there’s a problem, it’s a short one.

Think about what that liquidity does on the other side. Ask which Canadian city has minted the most millionaires recently and the answer is Ottawa, because of Shopify. The stock went from a sub-billion valuation to the second most valuable company in the country and turned a generation of early employees and investors into a tech hub’s worth of capital. Now run that forward across the zip codes where SpaceX, Anthropic, OpenAI, and Anduril live. That’s the American flywheel. Liquidity creates wealth, wealth funds the next wave of founders, and the cycle compounds.

SpaceX: the $1.8 trillion magic trick

Which brings me to SpaceX, where I’ll disclose up front that my firm, RBC, is one of the underwriters. They’re raising roughly $75 billion at a $1.77 trillion valuation, $135 a share, listing on the Nasdaq this week under SPCX. That raise is triple the size of Alibaba, the previous record. It’s the largest IPO in history, and it came in double-subscribed. Finding the capital was never the problem.

Is $1.8 trillion outrageous? Of course. But read the prospectus and it gets funny. SpaceX claims a $28.5 trillion total addressable market, the largest TAM in human history. And that number is the whole tell about how Musk works.

There are three businesses stapled into one ticker. Rockets, Starlink connectivity, and xAI-plus-X, and yes, X is Twitter. The Twitter business is a dumpster fire. xAI, for all practical purposes, is a dumpster fire. Before Musk merged them in about six months ago, the core was profitable. Fold xAI and X back in and you get a negative-cash-flow company posting a $4.9 billion loss on $18.7 billion of revenue. So why do it? Because rockets and Starlink are only about six to ten percent of that headline TAM. The other ninety-plus percent is “AI,” and the valuation of AI right now is, conveniently, infinity.

Here’s the part where I’ve changed my mind on the man more than once. Musk’s actual superpower isn’t engineering. It’s that he never forgets his first job as a steward of capital is to make his investors money. He bought Twitter for $25 billion when Biden’s regime more or less forced his hand, pulled his closest friends in to fund it, and three years later that albatross gets merged into the hottest IPO ever. His backers get their liquidity through SpaceX. Along the way he built Colossus, the biggest data-center and chip-manufacturing project in the US, and used it to expand his story from a $2 trillion space-and-connectivity TAM to $28.5 trillion. That’s not signaling. That’s the discipline of putting returns first, and he’s the best in the world at it.

Mel’s frame on this is the one I want people to sit with. For fifteen years a chunk of society convinced itself that if we just clicked our heels and thought about capitalism differently, we could rewrite the rules. We can’t. The person who makes the gold makes the rules, and the rules of free markets outlast whatever Overton window the politics of the moment is trying to drag around. Being a hater is not an investment strategy.

The cleanest proof is Ontario Teachers’. In 2019 the pension put $300 million into SpaceX. That stake is now worth about $16 billion, call it a 5,200% return in seven years. That single gain is more than half the size of Alberta’s entire Heritage Savings Trust Fund. And the point of it isn’t to make anyone rich. It’s to fund stable, defined-benefit pensions for hundreds of thousands of Ontario teachers for decades. Meanwhile the Premier of that same province, Doug Ford, canceled a Starlink contract on principle. Intention and impact are not the same thing. When fiduciary duty gets hijacked by vibes, the people who lose are the teachers and nurses on the other end of the cheque. Have your politics. Vote your conscience. Just don’t confuse a boycott with a strategy.

Canada’s AI “strategy,” and the data-center problem nobody wants to name

About ten days ago Carney’s government tabled its national AI plan, “AI for All.” Six pillars running from protecting democracy to scaling Canadian champions to building global partnerships, wrapped around a $2 billion sovereign-compute commitment and headline promises of $200 billion in GDP and 250,000 jobs. The pillars are fine. They’re all good things to want.

The number is so small relative to the ambition that it reads as a signal more than a strategy, and Mel’s take is the right one. You can’t take a press release to the bank. This is a government with a track record of announcing important things and not executing them at the speed business actually moves. And here’s the line that matters. You do not have an AI strategy if you don’t have a data-center strategy. No data centers means no compute, which means no champions, full stop. That requires energy policy, environmental and infrastructure policy, and a corporate-tax regime that actually rewards the behavior that builds the next Shopify. Right now data centers are becoming the new pipelines in this country, the thing we’d rather argue about than build.

The deeper issue is incentives. As Munger said, show me the incentive and I’ll show you the outcome. When the government is the venture capitalist of last resort, the cheques come with handcuffs, performative conditions, and a capital stack that doesn’t serve shareholders. So you get founders who either pass or get hobbled. Mel and I land in the same place. Smaller hand, less winner-picking, less regulation, and let the dollars we save go to the healthcare, education, and social services we actually want the state running. Government doesn’t need to be good at picking winners. It needs to build the conditions where the private sector can.

Apple’s quiet bet: skip the CapEx war, own the trust

Apple held its WWDC keynote yesterday, and it matters because I’d bet 95 percent of the people reading this operate their lives on iOS.

Apple is the most valuable consumer company on earth and it has badly fumbled the AI ball. It promised “Siri AI” in 2024 and didn’t ship it. Vaporware, which used to be Microsoft’s reputation, not Apple’s. That broke a twenty-year track record of delivery, and it’s been a headwind on the stock for two years. Yesterday they rebranded it “Siri AI” again, showed working demos this time, and pointed it at iOS 27.

Second time looks like the charm.

But the investment case isn’t about whether Siri is best in class. It’s that Apple is the one mega-cap not betting the balance sheet on AI capex. While Meta spends $145 billion this year, Apple is effectively renting compute, leaning on Nvidia chips running in Google’s data centers, and paying Google roughly a billion a year to use Gemini under the hood. They’re happy to be second, third, sixth to the party as long as they ship something better.

That posture is a hedge. If all this capex goes sideways, Apple didn’t pour the money in.

This is also where Anthropic was right and OpenAI was wrong. OpenAI built its name as consumer-first AI, but consumers don’t want to be productive. Step outside your own head if you’re an entrepreneur reading this. Most people on their phones are leaned back, watching YouTube, scrolling, taking a break. They are not going to pay $150 a month for a tree of agents, and they’re using AI the same way they used Google search. OpenAI’s refusal to build an ads product left it stuck. Anthropic went enterprise, where the only things that matter are efficiency and return on invested capital, and built the best harness AI has produced so far in Cowork. That enterprise demand is what lets it underwrite the data-center deals it’s signed with AWS, Google Cloud, and the Colossus buildout.

Apple sits on the consumer layer OpenAI couldn’t monetize. The difference is Apple understands services and the trust that comes with the walled garden. There’s a status-symbol shift hiding in here too. In twenty years the flex isn’t a Rolex, it’s the compute sitting in your home office. I bought a new Mac Studio precisely because I need the horsepower to keep up, and every dollar of that, plus the App Store, Apple Music, and the storefronts, accrues right back to Apple. It rhymes with 2014, when Buffett bought Apple at nine-to-eleven times earnings and made hundreds of billions as services ramped on top of the hardware.

The real edge might be jurisdictional, and it’s the part getting the least attention. Apple has kept its footing with regulators and is positioned to keep operating in the EU and in China, where most of Big Tech has made itself an enemy. New Siri AI features won’t hit those markets at launch, but Apple is one of the very few Western companies that can function there at all. So long as Apple keeps building hardware people trust and doesn’t sleep through a genuine platform shift, the diffusion of consumer AI runs straight through the iPhone. They’ve broken our trust exactly once, on AI, and I think that one comes good.

The through-line

Bonds took the wheel, a hundred billion dollars of founders are about to ring the bell, and the market is plenty big enough to pay for the party. The work isn’t deciding whether AI is a bubble. It’s owning the one or two percent that will carry the whole thing, and refusing to let your politics pick your portfolio.

See you in two weeks.

Podcast & YouTube Recommendations🎙

• Inside The Private Market Boom

• Alex Sacerdote on investing in tech cycles

• NVDA is STILL CHEAP?!

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com

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Welcome Back.

Three meetings shaped the last two weeks.

Each one looks like a different story. Each one is actually the same story.

The first was Donald Trump inside the Zhongnanhai - the inner compound of the Chinese leadership. Only three other sitting U.S. presidents have ever been invited in. The second was Mark Carney and Danielle Smith shaking hands on the West Coast pipeline framework, with an October 1 target to designate it a project of national significance and a stated goal of 8 million barrels a day of export capacity by 2030. The third didn’t happen in any one room - it happened in courthouses across Texas, Florida, Oklahoma, Ohio, and Alberta, where county after county is now ruling against the build-out of AI data centers.

That third story is the one most people are missing.

Data centers are unquestionably the most politically cancerous infrastructure that has ever been positioned in the history of North America.

73% of voters — left and right, U.S. and Canada — do not want them in their backyard. The AI capex cycle has become, almost overnight, the most hated topic in domestic politics. And that creates a problem the hyperscalers do not know how to solve.

It also creates an opportunity for the one jurisdiction on this continent that has spent forty years figuring out how to build hated-but-necessary infrastructure: Alberta.

I’m not calling a market top. I want to be clear about that. This is not a 2000 or 2007 setup. But the character of the market is changing. Long rates are breaking out in the U.S. and in Canada, Powell is out and the new Fed chair was sworn in last week, energy is leading, AI names are ripping (Micron just touched a trillion in market cap), and we are about to absorb four of the largest IPOs in human history. Cerebras already priced at $150B. The stock traded to $350 before selling off to the $270s. SpaceX is filing at $1.75T-$2.0T. That single IPO is roughly 75–80% of the entire market cap of the TSX.

When that much private money gets vacuumed into a few mega-listings, it pulls capital out of every other corner of the market to find price.

Expect volatility through the summer.

Where Mel Sharpened It

Mel pushed back on a few of my reads in ways that mattered.

On the Trump–Xi summit: my instinct was to read Trump’s deferential posture as a tactical concession. Mel reframed it through a Foreign Affairs lens - what she called the new G2 world. It is not a Cold War redux of mutually-assured destruction. It is a mutual recognition that neither the U.S. nor China is going to displace the other, and that the two powers are now finding ways to use each other inside defined domains rather than trying to win.

That distinction matters for Canadian foreign policy. If the U.S. is comfortable with a working G2, the question of how Carney’s posture on China (EVs, canola, capital flows) will be received in Washington is suddenly more open than it looked six months ago.

She also pushed me on a question I underweight: where is the line between Trump the person and Trump the president? With most leaders that distinction is invisible. With this one it is unusually visible — and getting that read right is what separates analysts who take him literally but not seriously from analysts who do the opposite.

The most useful frame Mel offered was on the data-center backlash itself. She introduced Maslow’s hierarchy as the right lens. We make the mistake of treating policy choices as binary… yes/no on the ballot, when they are actually continuums of trade-offs. Canadians have had the luxury of not having to make those trade-offs ourselves, which has produced a generation of luxury beliefs about energy that don’t survive contact with the actual physics of running a modern economy.

Caring more about the environment than economics is a position you can only afford when someone else is producing the energy you’re using.

The Macro Read: AI’s New Constraint Is Permission, Not Compute

For two years the binding constraint on the AI cycle has been compute and power. That is changing fast.

Gavin Baker had the cleanest line on it: TSMC could produce $2 trillion in chips this year if they didn’t care about the longevity of their business. There is that much demand. Instead they will produce about 20% of that — roughly $400B — because they are pacing themselves. The chip side of the constraint is being managed by one disciplined Taiwanese foundry.

The newer constraint is permission. Data centers need cool climate, cheap power, abundant land, and a community that will actually let them build. The hyperscalers spent two decades building wherever they wanted because latency didn’t matter much and the physical footprint was small.

That world is gone.

Latency now matters. Bandwidth now matters. Megawatts per square foot has gone vertical. So the build-out is colliding with NIMBY politics in every county in North America right as the cycle needs to accelerate.

We would have a bubble if we could actually get the infrastructure built. We can’t. We have a governor on this runaway wagon, and it is the most healthy thing that could possibly happen to this cycle.

The CEOs running the leading AI labs are not equipped for this fight. Dario Amodei keeps telling everyone the world is going to end and that only he can save it. Sam Altman is, charitably, not lovable. Elon Musk is the most polarizing human being on earth outside of Trump. Alex Karp can’t sit still in a chair. These are not people who win school-board fights in Lubbock or Strathcona County.

The AI CEOs of the leading labs have all failed at the political game. It’s over. Game over. They need to find a new path forward.

That path forward is going to be checks in mailboxes. A municipality is not going to be moved by a one-time $50M payment to a county budget. It will be moved by a $10,000 annual check to 14,000 households for 20 years. That is the math the hyperscalers are about to learn.

Which brings us to Alberta.

The Policy Read: Alberta Is the Most Investable Place on the Continent

Alberta is uniquely positioned for this opportunity for reasons that compound on each other. Northern, cool climate. Cheap energy. Stranded molecules that can be moved behind-the-meter into power generation rather than flared. The only deregulated electricity market in Canada, which means private generators can build and sign power purchase agreements directly with data-center operators - something you cannot do in a system where the government owns the generation. We have engineering talent that knows how to build large, complex, hated infrastructure on time and on budget. We have been doing this for forty years.

The data-center boom is the same political problem as the pipeline - and we are the only province that has spent a generation getting good at solving it.

On the MOU itself, Mel did the heavy lifting again:

• The Carney–Smith agreement on the industrial carbon price gave industry clarity but not competitiveness. Those are two different things. Clarity is necessary. It is not sufficient.

• Brownfield projects will be fine. The economics of greenfield investment - new pipelines, new facilities, the marginal barrel - are still not competitive with comparable jurisdictions elsewhere in the world.

• The pipeline is contingent on Pathways. Pathways is contingent on the pipeline. Someone has to move first.

• Alberta will submit its proposal to the Major Projects Office on July 1. Designation as a project of national significance is targeted for October 1. Separation referendum is October 19.

If you’re the federal government, and you are about to designate a project of national significance two and a half weeks before a separation referendum, you are going to ensure that project is still inside our nation when the dust settles.

Mel was unambiguous on the referendum. She is a federalist. She is voting to stay. And her argument — which I agree with — is that separation does not solve the infrastructure problem. It almost certainly makes it worse. If your primary reason for wanting to separate is that you can’t get a pipeline built, leaving Canada does not get the pipeline built. The path forward is to use the leverage we have inside the federation.

Her closing line was the cleanest framing of the whole episode, and it’s the one I keep coming back to:

Alberta is not in a parent–child relationship with Ottawa. If we stomp our feet and don’t get what we want, we become the actors the rest of the country accuses us of being. This is good for Alberta. This is good for Canada. It should be done on merit. - Mel

What I’m Watching

• The IPO calendar. SpaceX filing at $1.75T is the largest IPO in history. Expect a capital vacuum that pulls money out of mid-caps and small-caps across the index. Use the volatility to add, don’t chase.

• Long rates. The 30-year is breaking out in both the U.S. and Canada. New Fed chair just sworn in. The bond market is the variable that resolves the next regime.

• Alberta data-center build. Watch for the first behind-the-meter announcement from a hyperscaler in Grande Prairie, Edmonton, or Calgary. That is the leading indicator of the regional capex cycle turning on.

• MOU sequencing. July 1 (Alberta submits to MPO) → October 1 (designation target) → October 19 (separation referendum). These three dates compress an enormous amount of political capital into a 16-week window.

• AI infrastructure earnings. Stay long the picks-and-shovels - memory, power semis, optical/photonics, transformers. Sell-side estimates still drag the real demand curve.

Podcast & YouTube Recommendations🎙

• Dan Loeb - ILTB

• Meb Faber and Tom Lee Talk Macro

• A Beautiful Tribecca Apartment

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com

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Every twenty or thirty years a new general-purpose technology shows up and quietly rewrites the entire economic order. Steam. Electricity. The PC. The internet. Mobile.

Every single time, the same pattern plays out. One group adopts early and compounds. Another group waits, calls it a fad, tells themselves their experience makes them immune.

By the time the second group looks up from their chosen ignorance, the gap is already too wide to close.

We are sitting inside that window right now. Most people can’t see it.

The line I keep coming back to, and the title of today’s show, is this:

“I don’t use AI” is the new “I don’t use computers.”

In every previous shift, you had a decade or four to catch up. With AI, the gap between early and late adopters is closer to eighteen months. The moat you spent twenty years building gets crossed in a year and a half if you stop defending it.

Mel pushed me on this on the show.

Her question: “is it really that people don’t want to adopt, or is it that they don’t feel they can?” is the right one.

The honest answer is: it’s intimidating, it’s expensive at the leading edge ($30–$250/month per seat, and tens of millions a year if you’re plugging models into an enterprise), and most people don’t yet have a good mental model for what these tools actually do.

But the cost of not engaging is now structural. AI is a motorcycle for the mind in the same way the personal computer was a bicycle. Output expectations are going up everywhere, quality, speed, polish, and the people sitting on the sidelines aren’t holding still. They’re falling behind a curve that is accelerating.

If you take the stance “AI isn’t for me” and frame it as a values statement - that’s actually a career strategy. And it’s a bad one.

The Bull Market Nobody Believes In

The S&P 500, the Nasdaq, the Dow, the TSX, even Chinese equities (the CSI 300 just printed a fresh four-year high) are all hitting new highs at the same time.

Most people don’t realize that. Most people are still telling you it’s a bubble.

Real bubbles are built on euphoria. Right now, AAII bearishness has run hot for ten of the last eleven weeks. Consumer sentiment is near all-time lows. Half of American and Canadian adults think now is a bad time to invest.

That’s not mania. That sounds like disbelief to me...

George Soros’s framing is the one I keep returning to: when he saw a bubble forming, he ran in to buy it. Reflexivity.

Bubbles are powerful trends, and being short them is one of the most expensive seats in the market. Even if this were a bubble (it isn’t), the data says you’d want to own more, not less.

The two truths that can be true at the same time are these:

A technology can be revolutionary. The equities tied to it can still go to zero. Both. Together. Always both.

Cisco at the March 2000 peak: 201× P/E, $555B market cap, briefly the largest company in the world. Revenue kept growing for years afterward. The stock did not.

Today’s setup is genuinely different. Top 10 names are ~40% of the S&P (vs. ~27% at the dot-com peak), but the multiple premium is narrower — 31× for the top 10 vs. 21× for the rest, vs. 43× / 21× in 2000. Multiples less extreme. Concentration more extreme. Different mix, same family of risk.

The other thing that’s different: the data centers are lit up. In 1999 the fiber was dark and the rail cars were empty. Today the hyperscalers cannot buy enough capacity. The picks-and-shovels names are sold out into 2027. Power semis broke a five-year base. Memory pricing is up ~90% in a single quarter. Payback periods on these builds are now under three years.

This is not a bubble looking for a pin. This is a real capital cycle, and we’re closer to the middle of it than the end.

The risk is not that the music stops. The risk is that you capitulate, either out of the trade because you’re tired of being right, or into the trade at the top because the FOMO finally gets you. That’s the Druckenmiller story in 2000: shorted internet, took the loss, covered with discipline, then bought $6B of tech hours from the absolute top because his juniors were printing 3% a day and the social pressure of underperforming his own kids was unbearable. Six weeks later he was down $3B. His own line, years later: “I didn’t learn anything. I already knew I wasn’t supposed to do that.”

The most dangerous moment in a bubble is when staying disciplined feels stupid.

The Alberta Trade — A Once-in-a-Generation Setup

The other big thread from our podcast on monday was Alberta. Mel did the heavy lifting walking through what’s actually happening with Carney, Premier Smith, the November 2025 MOU, the Major Projects Office, and the Pathways CCUS condition.

Here’s the punchline you should walk away with:

The math has changed. U.S. shale plateaued in November 2025. The UAE has fractured away from OPEC+. There is a structural global inventory deficit of ~1.5 billion barrels. Energy demand isn’t plateauing the way the IEA and the EIA modeled…

Why?

Data centers have rewritten the demand curve. We’re heading higher: 150, 160, possibly 200 million barrels a day on the long-run forecast.

Canada has, in spades, exactly what the world is going to need: hydrocarbons, LNG, hydro, uranium, critical minerals, and the geographic position to deliver them. The Western Hemisphere is structurally long this regime.

The thing standing in the way is policy clarity. As Mel walked through, you have three concentric circles that all need to overlap:

• federal government,

• provincial government, and

• industry.

Industry will pull the trigger on egress west the moment they can underwrite a 25% return on invested capital. They have no obligation to drill more for national security reasons — that is not their job, and it doesn’t happen anywhere else in the world.

Where I disagree slightly with Mel, and where she pushed back on me, is on who has more political risk in this negotiation. My read was Smith. Mel’s read was Carney. She’s right. Smith wins politically either way: if Carney blocks the pipeline, that’s a generational gift to a Conservative provincial government heading into the polls. Carney is the one who has to spend political capital and depart from prevailing Laurentian orthodoxy. He has the upside and the downside.

If Carney is serious about economic independence from the United States, which is the entire framing of the elbows-up project, there is a literal silver-bullet sitting in front of him. We just have to build.

Energy companies pay twice — corporate taxes and royalties. Bitumen royalties alone were ~$17B on a $60–70B Alberta budget in ‘24–’25. That’s more than RBC, CIBC, Scotiabank, and Manulife pay in taxes combined. That’s the money that pays for hospitals, social services, education, housing. If we want better health care, more teachers, and more infrastructure, we need to sell more of what we do best. End of story.

Podcast & YouTube Recommendations🎙

• Eric Nuttal talks about 200$ Oil

• The economics and math behind operating and building LLMs

• Buffett Breaks His Silence

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By 2027, Bernie Sanders and his cabal of pessimists are going to be in the streets protesting AI. Blaming it for everything…

That's the political tape we're walking into.

The reason isn't ideology. It's economics.

We are watching the most consequential technology transition since the industrial revolution play out in real time, and the early returns look exactly like the early returns of the last one: capital is winning, productivity is exploding, and the wages of the people doing the displaced work are flat to down.

The week the catalysts all printed in one direction

Before we get to the politics, let’s grade the tape, because the tape is what makes the rest of the argument unavoidable.

TSMC’s Q1 2026 call was the cleanest piece of corporate communication I’ve read this quarter. They raised full-year 2026 revenue guidance to better than 30% year-over-year. Gross margin printed a new high of 66.2% — well above the 56%+ long-term guide. Capex is now tracking the high end of the $52–56 billion range, and management said explicitly that revenue growth will outpace capex growth. That’s a margin-expansion story sitting on top of a unit-volume story. They almost never travel together. They are travelling together right now.

ASML revised 2026 revenue up to €36–40 billion (from €34–39 billion) and flagged an EUV supply shortage in 2027. Anthropic’s annualized revenue went from over $9 billion at the end of 2025 to over $30 billion by April 2026. That’s a tripling of ARR in three months. I have spent enough time around early-stage capex cycles to know what they look like, and that is what they look like.

The single most important sentence said on a corporate call this quarter came from TSMC CEO C.C. Wei. I’m going to put it here in full because if you only remember one thing from this newsletter, it should be this:

“The shift from generative AI and the query mode to agentic AI and command and action mode is leading to another step-up in the amount of tokens being consumed.”

Read it twice. Generative AI was a query layer — a person typing a prompt and reading an answer. Agentic AI is a labor layer — a system doing the work end-to-end. The token math compounds, it doesn’t add. And the entity that consumes those tokens isn’t a curious knowledge worker on a free tier. It’s the workflow that used to belong to that worker.

The mix shift inside TSMC tells the same story without the press release language. In the fourth quarter of 2019, high-performance computing was 29% of TSMC’s revenue and smartphones were 53%. Today HPC is 61% and smartphones are 26%. The positions have completely flipped in five years. Advanced nodes — 7nm or below, where TSMC is a de facto monopoly — are now roughly three-quarters of revenue.

I keep coming back to this: 2026 revenue estimates for TSMC are up roughly 25% since September 2025, and the stock is up roughly 60% over that window. That’s a multiple holding while estimates run up. That is the signature of the market pricing more upside, not less. The bubble signal would be one of MSFT, GOOG, META, or AMZN guiding capex down on this week’s prints.

UPDATE; All 4 hyperscalers beat and guided up last night.

The Canadian canary nobody is talking about

If you want a concrete data point that this is no longer a Silicon Valley story, look at Rogers. Last week Rogers Communications cut its 2026 capex plan by roughly 30%, from up-to-$3.5 billion down to $2.5–2.7 billion, and offered voluntary departure packages to about 10,000 employees. That is not a hyperscaler. That is a regulated Canadian incumbent. If a slow-growth telecom is willing to take a 30% capex axe and put 10,000 buyout offers on the table, the cultural permission to use AI to compress headcount is no longer a coastal phenomenon. It’s a TSX-60 phenomenon.

The signal isn’t Rogers specifically. The signal is the speed of cultural adoption. Six months ago, a Canadian incumbent doing this would be a one-off. Today it reads as a template. I am watching BCE and Telus closely for the next two prints, and I am watching the Big Six banks even more closely. The first big bank to publicly acknowledge it is the one to own as a stock and to fear as an employee.

What I think happens next

I want to be clear that I am not a doomer. I am see justification in the AI capex thesis, and can already see the productivity gains that come with it. The world ends up richer on the other side of this. That has been true of every previous technology transition, and there is no reason to think it won’t be true here.

But the transition is the part that’s going to be politically and culturally disorienting. Productivity gains and wage compression can — and during Engels’ Pause, did — coexist for decades. The political response to “the country is much richer in aggregate but my paycheck is flat and my kid can’t get an entry-level analyst job” is not going to be measured. It is going to be Bernie Sanders in the streets, and it is going to be sooner than people think.

The 2027 timing isn’t a guess pulled out of the air. It’s the lag I’d expect between visible displacement and the political reaction to it.

Productivity is already ticking up.

Layoff announcements are already climbing. E

ntry-level wage growth has already stalled. That is the smoke. The fire is the next two years.

The picks-and-shovels remains the story. The foundation models are accelerating and monetizing. The AI-power complements are becoming more cemented, because the agentic layer is, at the end of the day, an electricity load. And budget for political volatility - because in a world where capital is winning this hard, this fast, the politics catch up.

They always do.

Podcast & YouTube Recommendations🎙

• Dwarkesh and Reiner Pope Teach Us Ai:

• Kill Them With Kindness:

Best Links of The Week🔮

• Labour productivity in non-conventional oil extraction is nearly $580 per hour; approximately ten times the rest of the economy Trevor Tombe, University of Calgary

• According to a December 2025 C.D. Howe Institute study, just ONE natural resources project has been approved under the new federal Impact Assessment Act

• saw this new interview with Ben Uyeda on About Art. Ben is an architect-turned multidisciplinary maker/artist/hotelier. He created Reset Hotel, where we stayed in Joshua Tree recently, and I got to spend a little time with him while we were there. A quote really stood out to me:

“The difference between creativity and taste. The culture we’re in right now is mistaking having great taste for being creative. People are mistaking consumption with production, and I think creativity is always about production.“

It’s second nature for me to curate lots of great design ideas and products at this point. It’s what I constantly do online.

It’s much, much harder, and probably much more valuable, to build great things.

• Rogers Communications Inc. is offering voluntary departure packages to about 10,000 employees in its workforce as the telecom giant moves to cut costs amid slowing industry growth. - BNN

• Engles Pause and Employment - Fabricated Knowledge

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Machiavelli, often considered the father of modern political philosophy, focused heavily on what he called the “effectual truth”—the reality of what actually works, rather than what we wish would happen in an ideal world. He believed that maintaining prosperity requires a clear-eyed understanding of power and a ruthless grasp of human nature.

Right now, global markets, international security, and our own domestic economy are forcing us to take off the rose-colored glasses. Here is the effectual truth of what is driving the macro landscape this week.

1. The Geopolitical Contest of Economic Pain

The Strait of Hormuz has been largely closed since late February, pushing WTI crude above $100 a barrel and U.S. gas to $4 a gallon. While the market surged this morning on hints of de-escalation, the broader strategic lesson is alarming.

We are witnessing a shift away from conventional military deterrence toward a “contest of economic pain.” Adversaries are proving they do not need a world-class navy to inflict catastrophic damage on the West; they simply need the ability to choke off vital global commerce.

This is the exact blueprint China is studying for Taiwan. The risk isn’t necessarily a D-Day style amphibious invasion, but a gray-zone “quarantine”—a customs dispute that forces the global economy to capitulate without a single shot fired. The West urgently needs a strategy of structured ambiguity and an acknowledgment of Economic Mutually Assured Destruction, because right now, we are entirely unprepared for the economic fallout of our own deterrence.

2. The AI Pivot: From Hardware to Agents

In the markets, we’ve seen a violent rotation out of AI infrastructure names (like Micron, LITE, Coherent, and Ciena). This sell-off was triggered by Google’s new TurboQuant algorithm, which promises 6x memory compression. The debate tearing through the market right now is whether this massive leap in efficiency will kill hardware demand, or if it will trigger the “Jevons Paradox” - where increased efficiency actually drives wider adoption and consumption.

While the hardware side re-rates, the software side is accelerating. AI “agents” are moving rapidly from pilots into live production. The true promise of tools like Claude is the automation of the “coordination tax” and the staggering amount of friction, documentation, and internal repackaging required to get anything done in a large organization. AI-native startups are going to move with terrifying speed, while massive incumbents will have to drag their workforce into the AI era.

3. Canada’s Stagnation: Falling Behind Alabama

Bringing the focus back home, a jarring statistic has been dominating Canadian business circles: Canada’s GDP per capita has now fallen behind the state of Alabama. Over the last decade, our real GDP per capita grew by just 0.4% annually, dropping us below the OECD average for the first time in recorded history.

How did we get here?

• The Productivity Trap: A massive surge in temporary residents and cheap labor entirely disincentivized Canadian businesses from making the capital and technological investments necessary to improve productivity.

• The Fiscal Mirage: Government spending has ballooned from 38% of GDP to 45% over the last decade. Because GDP includes government spending, this deficit-financed public sector expansion has masked a severe depression in the private sector.

• The Brain Drain: The wealth gap at the top is driving our best talent away. Roughly 40% of Canada’s potential top 1% earners have emigrated to the U.S. seeking competitive compensation.

But as investors, we navigate the world as it is, not as we wish it to be.

My thoughts on the Iran conflict:

Iran’s main suppliers are the same people facing untenable, existential risk from Hormuz being closed for an extended period.

There are break points here where tens of millions or more die from starvation, cold, etc. Which people from all countries tend to be less than chill about.

Yes, the US has global rivals who would like to “beat” American over time, but nobody is trying to have a destabilized Asian continent.

How we have done what we just did (geopolitical equivalent to the Michael Jackson window baby approach to parenting) probably solidifies our handoff of the global mantle of leadership, which has profound long-term implications.

But there is a very immediate “we absolutely cannot f*g have this” situation on the ground for the exact players who allow Iran to exist.

Hard to bear hug Iran while US and Israel are in “just kill everyone” mode. But whenever US and Israel are satisfied with the purge level, Iran will get bear hugged out of Hormuz. Or returned to the stone age courtesy of Huawei firmware.

Hormuz being closed for Developed markets is a material threat to standards of living. For much of the world, it would be death on an unimaginable scale. The press has misframed the stakes. Governments (and more proximate markets) understand the actual risk profile here, which is why they’ve traded so weak vs US

It’s going to take 5 to taco. None of which include Iran.

Oil is down 1% with market up ~4%.

Lots of work to do.

Below you’ll find all the best stuff I have been reading and watching.

Podcast & YouTube Recommendations🎙

• A Great episode that frames the current moment in markets from the Compound and DataTrek:

• A great conversation about Taiwan and Iran:

• Jamie Dimon talks about his legacy and the future of banking:

• Zeihan on how to break Iran:

Best Links of The Week🔮

• Ian Bremmer on the state of Iranian de-escalation - X

• Josh Wolf talks about the alternative approaches to Ai - Thread on X

• Getting on the right side of the ice. A great framming of software in today market. - Thread on X

• A fantastic presentation on the future of SAAS from Redpoint. - Redpoint Partners

• “Artificial intelligence drove chess toward perfect play, leading to more draws at top tournaments. Now grandmasters are winning by making less optimal moves... - Blomberg

• “Whatever the final outcome for Anthropic from its feud with the Department of Defense, the attention it has generated — coupled with the company’s funny Super Bowl ads taking aim at OpenAI and the surging popularity of Claude Code — has made Anthropic more popular with consumers than ever. -TechCrunch

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Welcome back to the pod, everyone.

Todays episode covers the following 4 topics:

• Canadian Jobs, Liberal majority and the Mark Carney performance review.

• Market structure and positioning

• War in Iran

• Open Ai Shifts focus to the enterprise as LLMs prove they aren’t just a commodity.

Market Update📈📉

Asset prices don’t make their biggest moves because of fundamentals. They move because of positioning. ]

Right now, if you are reading the headlines, you are missing the underlying mechanics of what is actually happening in the market.

We are looking at the first week of net outflows from equity ETFs since last April. But it’s not just selling. Volume in short ETFs just surged to new all-time highs. Participants aren’t just taking chips off the table; they are actively, aggressively betting against stocks at a historic pace. Add to that the fact that the VIX positioning has totally reset—the crowded trade of asset managers betting on lower volatility has been cleared out. A

nd sitting right underneath all of this is the US Dollar Index, testing that massive, psychological 100 level.

When positioning gets this one-sided, the risk completely shifts. It’s no longer about how much lower stocks can go. It’s about how catastrophically wrong these participants are going to be if prices start moving higher. If this market starts to go higher, all of those record shorts aren’t just wrong; they become fuel for a violent squeeze.

But what lights the match?

Political Tug of War:

You have to look at the geopolitical chessboard, and specifically, you have to look past the mainstream narrative that the Middle East is just a “distraction.”

There is a pervasive, intellectually lazy argument out there right now comparing America’s involvement in the Middle East to the decline of the British Empire.

This idea that the USA is overextending itself in the “periphery” while China eats the future.

It is a brilliant piece of reasoning, steeped in history, and it is completely, fundamentally wrong.

Iran is not the periphery. Iran controls access to the Strait of Hormuz. It is at a nuclear breakout point, and it is the primary force multiplier for both Russia and China. A nuclear Iran is structurally a China-friendly Middle East, especially when China’s plans to price oil in yuan rely on those exact Gulf relations.

So, when we see a targeted strike on Kharg Island, taking out military structures while leaving the oil infrastructure intact, that isn’t a distraction. That is a calculated play to force Iran to relent without sending oil to $200 a barrel and suffocating the global economy.

It is a stark reminder that deterrence breaks the moment allies start doing the math on American passivity.

Open Ai shifts to focus on the enterprise:

This kind of forced reality check isn’t just happening in geopolitics; it’s happening in tech, too. Look at OpenAI. We are watching a massive strategy shift in real-time as they pivot away from consumer side-quests to focus strictly on the enterprise.

Why?

Because in a compute-constrained environment, hosting a billion free users is a financial black hole. Consumer habits are glacial, but enterprise customers will switch workflows overnight if the ROI makes sense.

OpenAI is realizing they can’t fight a two-front war. If they don’t lock down the enterprise market against Anthropic, they lose their valuation premium.

Meanwhile, incumbents like Alphabet and Meta are perfectly positioned to swallow the consumer AI market because they already have the infrastructure to monetize it through ads. AI is hitting its capital cycle reality phase.

The easy money is gone, and the focus is shifting to who can actually generate cash flow.

The crowd is leaning entirely to one side of the boat.

Will it tip over?

Podcast & YouTube Recommendations🎙

• Bill Gurley on the importance of personal agency:

• Senra Interviews a human encyclopedia: Marc Andreessen

• The most important conversation on the Ai Infrastructure landscape:

Best Links of The Week🔮

• Thomasz Tunguz is concerned about memory and power shortages.

• The emergence of Ai Agents inside the enterprise - Article from X

• Fareed Zakaria makes the case for the USA becoming the next British Empire - Link from X

• Jeff Currie from Goldman Sachs talks to the set up in Oil Markets - Link from X

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"The world has always been ending - and yet here we are." - Morgan HouselUS and Israeli strikes killed Iran's Supreme Leader. Oil spiked 40% in 10 days. The Strait of Hormuz - the chokepoint for roughly 20% of global oil supply - is in chaos. Flights grounded. Shipping rerouted. Headlines screaming.And the question I keep hearing is: "Should I be doing something?"Here's the only question we should be asking..."Did your financial goals, time horizon, or need for liquidity change this week?"If the answer is no... then neither should your portfolio.Korea. Vietnam. The Gulf War. 9/11. Iraq. Every one of those events felt like the one that would change everything. The reality is, it didn't change much for long-term investors.But here's what IS worth watching. Especially if you're Canadian:When the Middle East burns, capital doesn't disappear. It relocates.Upstream energy investment is already pivoting toward lower geopolitical risk - and that means North America. Canada, the US, and Guyana. Our oil sands don't sit on the wrong side of a naval chokepoint.Canadian energy names aren't just a hedge right now. For some portfolios, this conflict is quietly working in your favour.The sectors to watch: energy and consumer staples up. Airlines and chemicals under pressure. Technology remains a mixed picture: lower cyclical risk helps, but higher rates and data center financing costs are a real headwind.The investors who get hurt in moments like this aren't the ones who stayed put.They're the ones who confused scary headlines with permanent loss of capital and sold.Don't be that investor."I'm finished!" - Daniel Plainview

Podcast & YouTube Recommendations🎙

• Tyler Cowan puts the entire world into perspective:

• Hard lessons with Stan Druckenmiller:

• A great view into the impacts of global shocks:

Best Links of The Week🔮

• Matthew Ball’s annual report covers the state of the gaming industry, why gaming is losing the attention war, and the five areas of revenue growth for 2026. - Matts Amazing Year in Review

• Jefferies published an update on the global secondary market, which broke volume records in 2025 ($240 billion). - Jefferies Report

• Silicon Valley Bank’s published their 26th annual report on the State of the U.S. Wine Industry, which it says is stabilizing after revenue declined by 2% in 2025. -SVB Report

• Ai causing cuts to software employment is just beginning - Tweet from Balaji

• The shale revolution emboldened Trump. The shale revolution enabled this war. The shale revolution enabled the closure of the Hormuz Strait. - Tweet From Anas

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Panic in the stock market rarely comes from crazy ideas. It usually comes from taking a perfectly logical premise, drawing a straight line into the future, and entirely forgetting that human beings are involved.

Over the weekend, a bearish report by Citrini Research went viral, sending shares of IBM, DoorDash, and Visa plummeting. The thesis was terrifyingly simple: Artificial Intelligence is going to collapse the cost of software to zero. AI agents, powered by what is now being called “vibe coding,” will ruthlessly hunt for the lowest fees, bypassing middlemen instantaneously. In this telling, the entire rent-extraction layer of the U.S. economy goes to zero overnight.

It’s a compelling story. Fear always is.

To figure out how to navigate this as investors and entrepreneurs, we have to pull apart exactly what this doomer narrative got right, and the massive, glaring blind spot it missed.

Market Update📈📉

The tape is currently trying to find its identity—it is a trend market, but we are lacking momentum. Here are the key themes we are tracking:

• The Software vs. Hardware Divergence: We have been talking about the AI bifurcation, and the technicals are confirming it. Software stocks have been showing weakness on the charts since last summer, while semiconductor names have largely consolidated and held up well. The market narrative is finally catching up to the price action. We get earnings from both Nvidia and Salesforce on Wednesday, which will be a major tell for this divergence.

• 4% of GitHub public commits are being authored by Claude Code right now. At the current trajectory, we believe that Claude Code will be 20%+ of all daily commits by the end of 2026. While you blinked, AI consumed all of software development.

• Private Credit Warning Signs: While public credit spreads look fine, the charts for publicly traded private equity firms are looking weak. Because equity is the thinnest slice of the capital structure, they are highly sensitive to underlying balance sheet health. Private equity and private credit are key vulnerabilities to monitor closely.

• The Consumer Disconnect: Real GDP looks okay, but if you look under the hood, real incomes (net of transfer payments) are basically flat. Current growth is being driven by consumers drawing down their savings. That is not sustainable long-term without the labor market stepping up to drive incomes higher.

• Housing & Rates: Mortgage rates have fallen back to 2022 lows, but housing demand isn’t surging the way you would expect. In fact, if rates keep dropping, it might actually unlock existing resale inventory, creating much stiffer competition for the homebuilders who have been the only game in town.

The Giant Pachinko Machine

The reason the market spooked is because the foundation of the fear is entirely real. Software creation has fundamentally changed.

As Naval Ravikant recently pointed out, we have moved past classical computing. You no longer have to meticulously write highly structured, precise code. AI programming is more like a giant pachinko machine: you pour massive datasets into a structure you’ve tuned, and the system searches for a program that works.

This means English is now the hottest programming language in the world. As Naval put it: “Vibe coding is the new product management.” You simply describe an application to an egoless, tireless AI, give it feedback by voice, and it builds the scaffolding, the libraries, and the test harnesses.

If your business model is acting as a simple digital tollbooth, you are in trouble. We are entering a Glengarry Glen Ross economy for digital goods. Because anyone can spin up an app, the market will hollow out the middle. The number one app will take all the scale, and a million hyper-niche apps will fill the long tail.

But that is where the truth ends, and the static thinking begins.

The DoorDash Delusion

The greatest flaw in financial forecasting is treating the economy like a physics equation, assuming every variable stays the same while you introduce a massive new technology.

This is where the doomer report falls apart, a point brilliantly deconstructed by analyst Ben Thompson. The narrative looks at a company like DoorDash and assumes it is just a digital button that preys on hungry, lazy humans. If you view it that way, of course an AI agent will destroy it by searching twenty alternative apps for a cheaper fee. Habitual app loyalty doesn’t exist for a machine.

But this view ignores the dynamic, messy reality of what these businesses actually do. DoorDash isn’t just an app on a home screen. It is a massive, three-sided logistical network that coordinates physical human beings, driving physical cars, to pick up physical food from physical restaurants.

The lethal flaw in the doomer mindset is a total lack of belief in human choice, dynamism, and markets. It assumes businesses will just sit still while AI eats their margins. It forgets that incumbent platforms have exclusive data, pre-existing physical infrastructure, and network effects that grant them structural cost advantages. You cannot vibe-code a physical logistics network into existence over a weekend.

The Mud and the Metal

When you spend your days analyzing durable capital—or managing the gritty reality of deploying mobile boilers and Haglunds out into the frozen fields of Alberta—you quickly realize that a line of code is only as valuable as the real-world action it triggers.

You cannot prompt-engineer a barrel of oil out of the ground.

The physical world has constraints. It has friction, weather, and capital cycles. The more abundant and frictionless the digital world becomes, the more valuable the scarce, constrained physical world becomes.

The Motorcycle for the Mind

If you view AI as a competitor for a static job, you will be terrified. But that is the wrong mental model.

Steve Jobs famously called the computer a “bicycle for the mind”—a tool that makes human locomotion vastly more efficient. Naval Ravikant recently updated this for the modern era: AI is a “motorcycle for the mind.” It has an engine. It is breathtakingly powerful. But it still requires a human to ride it, steer it, hit the accelerator, and apply the brakes. AI is not alive. It has no desires. It does not live in mortal fear of being turned off. Because it lacks its own internal compass, it fundamentally lacks what makes an entrepreneur an entrepreneur: extreme agency.

Because most things we want in business and investing are zero-sum games, freely available AI algorithms will eventually cancel each other out. If every seller has an AI optimizing their pitch, every buyer will have an AI filtering it out. When the algorithms cancel each other out, the remaining alpha goes entirely to the human with the most creativity, judgment, and agency.

Action Cures Anxiety: The Playbook

So, what do we do when markets panic and headlines turn dark?

• Anchor to the Physical and the Personal: The digital layer is getting commoditized. The premium is shifting to physical constraints and deep human trust. At Thiessen Shackleton Wealth Management, the conversations that actually matter aren’t about the algorithmic efficiency of a portfolio. They are about fear, greed, legacy, and trust. AI can optimize a spreadsheet in milliseconds, but it cannot look a client in the eye and give them the confidence to stay the course during a market correction. You cannot vibe-code trust.

• Become the Rider: The AI era is a golden age for those with agency. You now have a magic wand. If you want to build a tool, test a thesis, or understand a complex market structure, you have the ultimate, patient tutor that can meet you exactly at the edge of your knowledge.

• Look Under the Hood: AI anxiety comes from a lack of understanding. The solution to anxiety is always action. You don’t need to know how to build a neural network, but you should fire up the best models, ask them questions, and figure out where they excel and where they hallucinate.

The future will be weird. The middle will get hollowed out. But the world is not static. It will be built by humans with extreme agency, solving physical problems, and adapting exactly as we always have.

Stay the course,

We’re not AI doomers. “Pessimists sound smart. Optimists make money.”

Dispersion is not noise. It’s the opportunity.

Podcast & YouTube Recommendations🎙

• Ezra Klein with a really great interview

• Secretary Marco Rubio spoke at the Munich Security Conference about the future of the U.S.–Europe alliance.

• A unique mental framework to think about Ai from the Naval Podcast

Best Links of The Week🔮

• 2028: Intelligence Crisis - Citrini Research

• How Does OpenAi Compete? - Bennedict Evans

• Xbox Replaces Head of Gaming - WSJ

• The Long-term Reality of Hyperscalers: The Good, The Bad, and The Ugly Scenarios - MBI Deep Dives

• While AI is tech, not all tech is AI, and tech-heavy indices fall short of capturing the full spectrum of AI beneficiaries. - UBS

• Tim Opler’s latest biopharma market update covers industry sentiment, M&A activity, capital markets & more. - Stifel

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Most people treat their health like an old car: they ignore the bumps and bruises until the smoke starts pouring out of the hood. In our post modern world of aesthetic refinement and high-performance business, we’re seeing a radical shift in how people treat their health.

The Repair model is dying; the Optimization model is taking over.

I recently sat down with Raj Dhillon, a 20+ yr veteran of rehabilitative medicine and the co-owner of Pivotal Physio, to discuss why the physiotherapy industry is currently at the heart of the massive shift in how we value human capital.

• Pivotal Physio & The ARC Concept: Pivotal Physiotherapy Official Site (Edmonton)

Pivotal Physio & The ARC Evolution

In Edmonton, Raj and his team at Pivotal Physio aren’t just running clinics; they’re building a blueprint for the future of health. With strategic hubs across Northgate, Fort Saskatchewan, and the Brewery District (High Performance Centre), they’ve scaled beyond the traditional “one room, one therapist” model.

The real game-changer is their ARC (Athletic Development & Recovery Centre). Located inside Evolve Strength Downtown, ARC represents the “merger” of the gym and the clinic.

• The Concept: Why wait for an injury to see a specialist? ARC treats the “weekend warrior” and the professional athlete with the same proactive rigor.

• The Services: It blends high-level clinical expertise (IMS, pelvic health, concussion management) with elite recovery tech like NormaTec compression and hydrotherapy contrast tubs.

This isn’t just about fixing a sore back; it’s about TAM Expansion. By moving into the lifestyle and performance space, Raj has effectively turned patients into long-term members.

How We View The Opportunity: A $400+ Billion Market

The numbers backing this shift are staggering. The global Preventative Healthcare market is no longer a niche for the ultra-wealthy - it’s a massive, institutional asset class.

Some Canadian Context:

In Canada, the economic case for preventative health is even more urgent.

• The Economic Burden: Chronic illness costs the Canadian economy roughly $236.3 billion per year in lost productivity and healthcare expenses.

• Research suggests that increasing access to physiotherapy could reduce the financial burden of just three major conditions (osteoarthritis, back pain, and heart disease) by an additional $144 million annually.

• Workforce Gap: Demand for these services is expected to grow 70% by 2033, yet we currently face a massive supply shortage. This scarcity creates a moat for established players like Pivotal who can retain and train top-tier talent.

Reformed Millennials Thesis: Why Health is the New Tech

If you’ve been a long term listener and reader, you know our philosophy is that leverage is everything. Traditional healthcare offers little leverage—it is a one-to-one exchange of reactionary service.

Preventative Health provides “Maintenance Alpha”:

• Consolidation: What we are seeing across the market is a number of Private Equity Roll-ups in the physio space, mirroring the consolidation seen in dental and vet clinics over the last decade.

• Predictable Revenue: By shifting to a recurring maintenance model (like ARC), clinics move away from lumpy, injury-dependent income toward stable, subscription-like cash flows.

• The ROI of Uptime: For a business owner, a 10% increase in physical uptime (mental clarity, energy, lack of chronic pain) is the highest-returning investment on the balance sheet.

Bottom Line: The line between healthcare and performance has permanently blurred. Raj Dhillon and Pivotal are proving that the future belongs to those who view the human body not as a liability to be managed, but as an asset to be optimized.

Sources:

• Market Size & CAGR ($412.59B): Mordor Intelligence: Preventive Healthcare Technologies and Services Market Size & Share Report (2026-2031)

• Consumer Segment Growth (13.6%): Business Research Insights: Preventive Healthcare Market Analysis 2026-2035

• Annual Economic Burden ($236.3B): Canadian Physiotherapy Association (CPA): Pre-Budget 2026 Submission

• Chronic Disease & Productivity Costs ($190B / $122B): Sun Life: Chronic Disease in the Workplace Report

• Physiotherapy ROI & Savings ($144M): CPA Impact Studies: Deloitte Economic Impact of Physiotherapy in Canada

• Workforce Demand Growth (70%): Canadian Occupational Projection System (COPS): Physiotherapists (2024-2033)

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If you only looked at your crypto or software stocks this week, you probably think the sky is falling. But if you zoom out, the Dow just hit 50,000 and Europe is at all-time highs.

This isn't a market crash, it's a changing of the guard.

• The Market Regime: From “US Tech Dominance” to “Global Industrial/Breadth.”

• The Tech Regime: From “SaaS Middle Game” to “AI Endgame” (Atoms & Energy).

• The Geopolitical Regime: From “Alliances” to “Transactionalism” (Trump/Carney).

The speed of technological releases is mind numbing. It seems every week I am learning and adapting portfolios and my mental model of how all this new technology will defuse into the world.

It’s terrifying and exciting.

Market Update📈📉

For decades, the U.S. dollar has functioned as a safe haven.

When investors get nervous, capital flows into dollars. When fear rises, demand for safety rises with it. The dollar benefits.

So what does it mean when the dollar is making multiyear lows in the middle of a broadening bull market?

Maybe it’s not about debasement. Maybe it’s not about the end of fiat currency. Maybe it’s much simpler than that.

In an environment where investors are embracing risk across sectors, countries, and asset classes, who needs the ultimate safe haven?

Instead of asking what a weaker dollar is doing to stocks, maybe we should be asking what stocks, and risk assets around the world, are doing to the dollar.

Emerging Markets Hit All-Time Highs

The move to new all-time highs is not happening in isolation. It reflects rotation.

Capital is moving away from crowded mega-cap U.S. technology stocks and into other risk assets.

Participation is expanding. Leadership is changing. That’s what healthy bull markets do.

This is not a China trade and it’s not a dollar collapse trade.

In our opinion, it’s a risk appetite and global rotation story. This is what money moving toward opportunity looks like.

When emerging-market currencies are breaking out and emerging-market equities are printing fresh all-time highs, that’s not fear. That’s demand.

The USD is not falling apart it’s just not needed in this current moment.

Because in a broad, expanding bull market, investors do not hide.

They hunt.

Podcast & YouTube Recommendations🎙

• Patel on the MAD pod

• OpenClaw Eliminates Apps

• Elon having beers with Stripe and Dwarkesh

Best Links of The Week🔮

• Brent Beshore on the human competitive advantage - Twitter/X

• Sinofsky on the death of software… Nah but kinda - Twitter/X

• One of the best interviews i’ve listened to between Ben Thompson and Benedict Evans on SAAS - Stratechery

• “Mexico's decision to halt oil shipments to Cuba has delivered a fresh blow to the fuel-starved country, with the island logging its first month without oil imports in a decade. Oil imports to the island reached zero in January for the first time since 2015... due to a US naval blockade and threat to impose tariffs. Cuba is facing shortages of everything, from cooking gas, to water and electricity, with multi-hour lines at gas stations and at least two large beach resorts shutting down due to gasoline shortages.” Source: Bloomberg

• Home automation is swiftly moving into wellness-focused applications, as our friend Joe Mattera of Mattera AV Designs writes in a recent blog post. Computer controlled lighting through the day can combat Seasonal Affective Disorder and help keep you “in the zone” as you work in your home office. Automated heating and cooling, linked to motion sensors, can save real money and alleviate financial anxiety. Security systems increase peace of mind. Frankly, we always thought home automation was a “nice to have”, but after reading this it feels more like an essential for any home. Read Joe’s full take here.

• “OpenAI CEO Sam Altman told employees that ChatGPT is “back to exceeding 10% monthly growth,” according to an internal Slack message viewed by CNBC. The company is aiming to launch a new model within ChatGPT this week, Altman said. More than 800 million people use OpenAI’s chatbot, ChatGPT, weekly, but the company is facing increasingly stiff competition... On Monday, OpenAI will officially begin testing ads within ChatGPT.” Source: CNBC

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In a healthy bull market, you don't usually see people rushing to buy toothpaste and condom stocks. But right now, Consumer Staples are crushing the S&P 500, and Financials are breaking down. The "tape" is guilty until proven innocent—and Mark Carney just gave us the verdict on Canada's future, too.

Market Update📈📉

The “Guilty” Tape

The burden of proof has shifted. In a healthy bull market, you don’t usually see investors flocking to “boring” stocks like toothpaste and toilet paper. But that is exactly what is happening right now.

• Consumer Staples (XLP) are up 6.5% year-to-date, crushing the S&P 500 (+1.5%).

• Financials are lagging badly. When you look at the ratio of Financials vs. Consumer Staples, we just broke below key support levels from October.

Why it matters: Markets don’t usually let “defensive” sectors lead unless smart money is worried about what comes next. As we said on the show: “In a market like this, the tape is guilty until proven innocent.”

One more thing on the Dollar (USD): Don’t fear the strong dollar; respect it. The historical link between the USD and Energy is holding. If Energy is about to outperform (and the charts say it is), a strengthening dollar isn’t a headwind—it’s part of the regime shift. The crowded “short dollar / long metals” trade is looking very vulnerable.

The USMCA “Sunset” Review

With the July 1, 2026 deadline approaching, here is your cheat sheet on the most important trade deal in North America.

1. How the Renewal Works (The “Sunset Clause”)

This isn’t a standard renegotiation. It is a mandatory check-in written into the deal to prevent it from becoming stale.

• The Date: July 1, 2026 (The 6th Anniversary).

• The Goal: All three nations (USA, Canada, Mexico) must confirm in writing they want to extend the deal for another 16 years (to 2042).

• The Risk: If they don’t agree, the deal doesn’t die instantly. It enters a “year-to-year” purgatory where they must meet annually to fix issues. If nothing is fixed by 2036, the deal terminates. Business hates uncertainty, so a non-renewal in July could spook the markets.

2. What They Want (The Friction Points)

🇺🇸 The United States (The Enforcer)

• China Backdoors: The U.S. is obsessed with preventing China from using Canada/Mexico as a side door to sneak goods into America tariff-free. Expect them to demand tighter “Rules of Origin,” especially for EVs and car parts.

• Dairy Access: A classic grievance. They want the access to the Canadian dairy market they were promised, arguing Canada is using administrative loopholes to block them.

• Labor Rights: Continued pressure on Mexico to ensure cheap labor isn’t undercutting American wages.

🇨🇦 Canada (The Defender)

• Stability Above All: Canada’s economy relies on this deal. The #1 goal is to get that 16-year extension signed quickly to keep investment flowing.

• Supply Management: We will shield our dairy and poultry farmers at all costs, likely trading other concessions to keep the Supply Management system alive.

• Softwood Lumber: We will try to use this leverage to finally fix the timber tariff dispute, though it’s technically outside the USMCA.

The Bottom Line: This July isn’t just a rubber stamp. With Carney’s “Rupture” speech setting the tone, Canada is trying to pivot to new partners while desperately trying to keep the American door open. It’s a balancing act that will define our economy for the next decade.

Podcast & YouTube Recommendations🎙

Carney Speaks to Davos:

Elon:

Best Links of The Week🔮

• “OpenAI is reportedly asking a high price to advertise on ChatGPT, around $60 per 1,000 views, or triple what ads on Meta’s platform usually cost, according to The Information. Despite the higher price, OpenAI won’t be offering advertisers the same level of detailed information that Google and Meta do, such as whether users took any action in response to seeing an ad on ChatGPT, like making a purchase. Early advertisers on ChatGPT will only get “high-level” data on how their ads perform, like total ad views or total clicks.” Source: The Verge

• “The Trump administration is proposing a .09% average payment increase for Medicare Advantage plans in 2027, significantly below Wall Street’s roughly 4% to 6% expectations. The proposal also includes eliminating payments tied to diagnoses from insurer medical chart reviews not linked to specific medical visits, reducing the 2027 payment rate by 1.53 percentage points. Overall payments are projected to increase by 2.54% for 2027, combining the proposed rate changes with an additional 2.45% from underlying billing trends.” Source: WSJ

• “Nvidia invested an additional $2 billion in CoreWeave, a cloud computing firm and key customer, to speed up an effort to add more than 5 gigawatts of AI computing capacity by 2030. As part of the collaboration, CoreWeave will be among the first to deploy forthcoming Nvidia products, including storage systems and a new central processing unit, or CPU, called Vera. The investment has sparked concerns about circular financing deals that have lifted valuations of AI companies and fueled concerns about a bubble.” Source: Bloomberg

• “Elon Musk’s rocket maker SpaceX is lining up four Wall Street investment banks for leading roles on a blockbuster initial public offering, which is likely to be the world’s largest ever new listing. SpaceX executives have held meetings with bankers from Bank of America, Goldman Sachs, JPMorgan Chase and Morgan Stanley in recent weeks as the company prepares for an IPO as soon as this year.” Source: FT

• “European Union lawmakers are expected to vote on ratifying the bloc’s trade deal with the US after President Donald Trump walked back his latest threat to impose tariffs on European allies. The trade deal’s ratification process was suspended due to Trump’s “coercive” threats, but was restarted after he said he wouldn’t impose the levies. European Parliament President Roberta Metsola said the reversal was enough to justify voting on the measure, which could have a preliminary vote in the coming days.” Source: Bloomberg

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2026 Predictions📈📉

Todays newsletter is for forward guidance and optimism. Since my conversation with Mel last week, Ive had some time to build a list of predictions I have for the coming year.

• Alberta Votes on their separation referendum and its not even close. While the rhetoric and fiscal considerations of the vote will become a hot issue in the province, the vote ends in a lopsided victory for nay.

• We are moving from an era of “Who has the fastest processor?” to an era of “Who has the fastest and biggest memory pipes?” The Memory Wall is the newest mainstream focus as data management and data commute>compute as a result of inference growth, becomes more important.

• By summer of 2026 it will be as though the digital world is going through some kind of fast evolution, with some parts of it emitting a huge amount of heat and light and moving with counter-intuitive speed relative to everything else. Great fortunes will be won and lost here, and the powerful engines of our silicon creation will be put to work, further accelerating this economy and further changing things.

And yet it will all feel somewhat ghostly, even to practitioners that work at its center. There will be signatures of it in our physical reality - datacenters, supply chain issues for compute and power, the funky AI billboards of San Francisco, offices for startups with bizarre names - but the vast amount of true activity will be occurring both in the digital world, and in the new spaces being built and configured by AI systems for trading with one another - agents, websites meant only for consumption by other AI systems, great and mostly invisible seas of tokens being used for thinking and exchanging information between the silicon minds.

• In 2026 we will stop asking Ai to be our copilots and we will begin finding ways to complete our busy work while we sleep. We are still in the waterwheel phase of AI, bolting chatbots onto workflows designed for humans.

• Reemergence of software as a trade idea. Markets will care less about the picks and shovels of the data center build out and start fixating on the ROI of the capital deployed. Think AI Agents and efficiencies. This prediction is a bet on the data owners and platform managers in 2026.

• 2026 is the year of Basic Robotics and Amazon leads the MAG 7 in % performance for the first time in half a decade. The collision of AI and robotics is the Champagne and cocaine cocktail that will fuel Amazon’s retail margin expansion, catalyzing a 2x increase in the gross merchandise value of its largest business (retail) by 2033, without adding any human workers. Just as Ford’s assembly line slashed automotive production time by 88%, Amazon’s robotics investments have reduced the time from click to ship by 78%. The rest of the Mag 7 capitalizes on the elevation of information (bits) over objects (atoms), while Amazon is leveraging bits to move atoms faster and cheaper.

• JPM joins the Trillion Dollar Club and becomes the first financial inside the magnificent 7. Additionally, financials lead the market, along with software and industrials in 2026.

• Podcasts finish off Late Night TV - The Late Show with Stephen Colbert employs 200 people, costs $100 million, and makes $60 million. When Colbert shifts to podcasting, he’ll take eight people with him and make just $20 million, but it’ll only cost $5 million to produce. The means of production are being arbitraged. There will be outrage from the creative community, who believe they’re too precious to face disruption.

• The Degen Economy Grows and continues to eat Las Vegases lunch. HOOD, COIN, Pollymarket, WealthSimple etc. I predict/believe that prediction markets, 24/7/365 stock markets, tokenization and the international retail investor are a Cambrian explosion of growth for financial markets. While the volatility in these stocks and markets are severe, they have survived the internet bubble, the great financial crisis, COVID and a rising rate environment. The survivors get smarter, and the onramps kept coming. The players in the market are growing.

• Narrative Economy becomes the predominant investment theme. You might be wondering, What is the ‘narrative economy’? It is an economy that sits on top of ‘technology’ and the ‘degenerate economy’.

The ‘narrative economy’ emerged full throttle in 2024. Storytelling always mattered in public markets and because of technology, ZIRP and politics/policy we now have Memestocks and Memecoins that are ‘storytelling’ first entities. These sit on top of the ‘degenerate economy‘ thats work ~$2 plus trillion (Bitcoin, Solana, HOOD , Fan Duel, Draft Kings, Coinbase).

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Welcome back!

This week were talking politics and pipelines. Keep reading below for our thoughts. Or tune into the podcast for a deep dive.

Pipeline MOU Update📈📉

The “Alberta-Ottawa Pipeline MOU” signals a fundamental shift in the Canadian economy from energy confrontation to energy collaboration. By linking the approval of a major infrastructure project (the pipeline) directly to decarbonization efforts (Pathways Alliance CCUS), the agreement effectively creates a “Grand Bargain” that integrates the resource economy with federal climate goals.

• Economic Certainty: The suspension of the Clean Electricity Regulations and the removal of the federal oil and gas emissions cap (replaced by TIER management) removes the regulatory “ceiling” that was stifling investment. This implies a return of foreign and domestic capital to Western Canada, as the fear of stranded assets diminishes.

• Integration of Power and Resources: The MOU explicitly links oil production with “data centres,” “nuclear strategy,” and “interties.” This implies that the Western Canadian economy will shift from purely extracting resources to becoming a complex energy hub, where bitumen production funds and fuels a transition toward nuclear energy and high-demand tech infrastructure (AI/Data centers).

• Indigenous Economic Reconciliation: With the Alberta Indigenous Opportunities Corporation (AIOC) backstopping ownership, this deal implies a massive transfer of wealth and equity to Indigenous communities, moving beyond impact benefits agreements to genuine co-ownership of multi-billion dollar infrastructure.

2. Egress Growth and Economics

The most significant economic implication is the Resolution of the Egress Crisis.

• Volume Increase: The MOU outlines a new 1 million barrel per day (bpd) pipeline to the Northwest B.C. coast. Combined with the existing Trans Mountain Expansion (TMX), this creates massive excess capacity.

• Price Differential Collapse: Historically, Western Canadian Select (WCS) traded at a steep discount to WTI because landlocked oil had nowhere to go.

• Impact: With 1 million bpd of new capacity to the Pacific, Canadian producers can bypass the US Midwest bottleneck entirely and sell directly to Asian markets at world prices (Brent/Dubai pricing).

• This effectively eliminates the “differential risk,” potentially adding $10-$15 CAD per barrel to the bottom line of every barrel produced in Alberta.

3. Impact on Oil Companies’ Economics

The economics for the Pathways Alliance members (CNRL, Cenovus, ConocoPhillips, Imperial, MEG, Suncor) will undergo a structural shift.

Capital Expenditure (CaPex) Changes

The MOU creates a “forced” but incentivized capital spending cycle. The logic is explicit: “No Pathways; no pipeline.”

• Immediate CaPex Spike (2026-2030): The six companies listed must now immediately fund and construct the massive Carbon Capture, Utilization, and Storage (CCUS) trunkline and capture facilities. They can no longer “wait and see.”

• Pipeline Financing: The notes state the pipeline is “Private sector financed.” This implies that these companies (likely forming a consortium) will also have to allocate billions toward the pipeline construction, likely front-loading costs in exchange for long-term shipping rights.

• Offsetting Factors: The extension of federal investment tax credits (ITCs) and the Alberta Carbon Capture Incentive Program (ACCIP) will absorb a significant portion (likely 50%+) of the CCUS CaPex, softening the blow to balance sheets.

Profitability Outlook

While CaPex will rise, the long-term profitability outlook is exceedingly bullish for these specific companies:

• Revenue Quality: By accessing the Pacific coast, they will realize higher prices per barrel. The revenue gain from narrowing the differential will likely eclipse the cost of the new carbon taxes.

• TIER Impact: The companies face higher operating costs due to the TIER price increasing to $130/tonne by April 2026. However, because they are building CCUS, they will generate massive “carbon credits” under this system. If they successfully lower emissions, the high carbon price turns from a penalty into a revenue stream (selling credits to other emitters).

• Production Unlocked: The concession of “No federal oil and gas emissions cap” allows these companies to increase production volumes, provided they manage the carbon intensity via CCUS.

Summary of Impacts on Specific Companies

CompanyImpact Analysis

CNRL & Cenovus

As the largest producers with significant heavy oil exposure, they stand to gain the most from the egress (pipeline) narrowing the WCS differential. They have the balance sheets to fund the required infrastructure.

Suncor & Imperial

With strong downstream (refining) assets, the pipeline allows them to export more crude to high-demand Asian markets. Imperial’s relationship with ExxonMobil (majority owner) may help leverage global technical expertise for the CCUS build-out.

MEG Energy

As a pure-play oil sands producer, MEG is highly sensitive to differentials. This deal is a “company maker” for them, drastically reducing their discount risk, though financing their share of the CaPex will be heavier relative to their size compared to CNRL.

Market Risk: The notes mention “Market Risk” regarding a private proponent. If these companies hesitate to fund the pipeline, the deal collapses (”No Pathways; no pipeline”). Therefore, investors should expect a near-term reduction in dividends/buybacks as cash is diverted to these mega-projects, with a promise of significantly higher, stable returns post-2030.

Podcast & YouTube Recommendations🎙

• Owning the next decade of ai apps: with Box CEO Aaron Levie

• BC Premier on the pipeline

• Michael Ovitz the founder of CAA:

Best Links of The Week🔮

• “A late November rally propelled stocks near record highs, with investor optimism over a potential Federal Reserve interest-rate cut in December helping reverse the effects of an earlier midmonth market slump. The S&P 500 rose 0.5% on Friday, pushing it near a record set in late October and helping the index eke out a 0.1% monthly gain. The Dow Jones Industrial Average advanced 0.6% on the day, finishing the month with a 0.3% gain. The tech-heavy Nasdaq, however, registered its first monthly loss since March, falling 1.5% after a choppy period spurred by fears of an artificial-intelligence bubble. The index added about 0.7% Friday.” Source: WSJ

• “Consumers spent record amounts online on Black Friday, but it is less clear how traditional retail stores did on the official kickoff of the peak holiday shopping season, with one tracking company showing a slight increase in foot traffic and another showing the big drop. Adobe, which studies Adobe Analytics date culled from over 1 trillion visits to U.S. retail sites, reported that U.S. ecommerce sales reached a record $11.8 billion online on Black Friday, up 9.1% year-over-year. That exceeded Adobe’s forecast of 8.3% ecommerce growth on Black Friday.” Source: Forbes

• “OpenAI’s huge early lead in the race to dominate artificial intelligence is under the greatest pressure since ChatGPT’s launch, as rivals Google and Anthropic gain ground in the cutting-edge technology. Three years on from the debut of its popular chatbot, the $500bn start-up is grappling with the reality of soaring data centre costs, the technical challenges of remaining at the frontier of AI and the constant battle to retain key talent. It is also facing a resurgent Google, with the release last week of Gemini 3, Google’s latest large language model, which is considered to have leapfrogged OpenAI’s GPT-5 and achieved gains from the model training process that have eluded OpenAI in recent months.” Source: FT

• “OPEC+ countries agreed to maintain group-wide oil output quotas for 2026 in a meeting on Sunday, and also agreed on a mechanism to assess members’ maximum oil production capacity, OPEC said in a statement. Eight OPEC+ countries, holding a separate meeting on Sunday, also have an agreement in principle to maintain a pause in their output hikes for the first quarter of 2026.” Source: CNBC

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Market Update📈📉

Quick Hits:

• Asset Class Reversal: We are witnessing a historical anomaly. Gold (+54%) is currently the best-performing major asset of 2025, while Bitcoin (-1%) sits as the worst. This is the direct inverse of 2013 and a dynamic we haven’t seen before in a calendar year.

• S&P 500 Technicals: The S&P 500 closed below its 50-day moving average for the first time since April 30, officially ending the 5th longest uptrend since 1950.

• Institutional Signal: despite Bitcoin’s price lag, institutional adoption is heating up. Harvard’s endowment reported in its Q3 13F filings that the iShares Bitcoin ETF (IBIT) is now its largest position and biggest increase—a significant stamp of approval from the endowment world.

The AI “Non-Bubble” and Gemini 3

The narrative regarding Artificial Intelligence has shifted fundamentally over the last few weeks. We are moving from a phase of “inevitable euphoria” to a phase of “verification.”

1. The “Non-Bubble” Disappointment Ironically, both AI bulls and bears are disappointed. Bulls wanted a parabolic, “melt-up” bubble (think 1997-1999) to maximize short-term gains. Bears wanted a bubble so it would burst. Instead, we are in a “non-bubble”: valuations are reasonable (NVDA ~20x), margins are rich, and we are early in the supercycle.

2. The Catalyst: “Sam’s Splurge” (SS) The turning point was Sam Altman’s $1.4T infrastructure plan. Instead of fueling excitement, this massive capital requirement opened “Pandora’s Box,” shifting investor sentiment from blind optimism to scrutiny.

• Credit Risk: The sheer scale of the plan (nearly the size of the private credit market) forced lenders to reprice AI-linked risk. We saw this immediately in widening CDS spreads for Oracle and Coreweave.

• Government & Feasibility: The plan invited government scrutiny regarding energy grids, water usage, and land rights. It dragged long-term risks (post-2028) into the present day.

• Too Big to Fail: The market realized that OpenAI is no longer just a startup; it is a systemic risk. If they fail to execute on $1.4T, they drag the ecosystem down with them.

3. The Market Reaction: BSS vs. ASS We are moving from BSS (Before Sam’s Splurge) to ASS (After Sam’s Splurge).

• Profitability over Narrative: As uncertainty rises, the market is favoring profitability. Companies with tangible earnings (Memory/DRAM) are outperforming, while pure narrative stocks (Nuclear, Quantum) are rolling over.

• The “Giddy” Phase is Over: The straight-line ascent is likely done. We are entering a healthier, more mature phase where stock-picking, fundamentals, and idiosyncrasies matter more than sector-wide hype.

Bottom Line: The AI trade isn’t broken; it is simply growing up.

This is supported by todays release of Gemini 3:

The long-awaited Gemini 3 finally launched yesterday, and the entire industry seemed to have been holding its breath for it. Based on the benchmarks released so far, the model largely meets the high expectations that had built up beforehand. It resets records across multiple mainstream leaderboards, especially in long-horizon reasoning, native multimodal alignment, and cross-modality inference. On many benchmarks the performance gap over competitors is not small, rekindling optimism that large models may genuinely break through long-chain task complexity and real-world application depth. These capabilities are precisely where the next stage of AI deployment will happen—far beyond simple chat or text generation.

What’s interesting is that Gemini 3’s improvement doesn’t come from fancy RL tricks or alignment methods, but almost entirely from stronger pre-training. Multiple sources, including Google employees, confirmed this point: this round of progress is, quite literally, “built on brute-force compute.”

Podcast & YouTube Recommendations🎙

• Plain English with a fun episode on Ai and Work:

• The BG2 Podcast Mentioned in the podcast:

Best Links of The Week🔮

• Warren Buffetts final letter to shareholders. Enjoy Retirement GOAT - Berkshire

• Felix Stocker has a nice essay on mining and society. Which sounds like the topic of the one humanities class a geological engineering major would grudgingly sit through, but which is actually a pretty pivotal question: many modern conveniences—especially including the batteries, windmills, electric motors, and solar panels we use to reduce our reliance on emissions-heavy sources—require inputs that necessarily have to be dug up out of the ground, often in an environmentally-destructive way. When there’s a debate over a mine, it’s not so much big business versus the environment as it is environmentalism versus climate change and energy security

• Mark Humphries in Generative Historyhas a fascinating piece on Gemini decoding centuries-old handwritten records in a very human-like way, by using context clues in the document to infer missing information. In a sense, the LLM’s transcription was more than 100% correct, because it identified and fixed an ambiguity in the historical record (even expert human readers will occasionally miss something like this). One of the unique axes on which models perform well is that they don’t get bored the way a person would, and are willing to check their work to make sure it’s logically consistent even when the task is just to transcribe text.

• And on a similar note, this Dwarkesh Patel and Dylan Patel interview with Satya Nadella has an interesting side note on legibility: Nadella notes that AI makes it easier to move information from an Excel file into a real database, and that means it’s easier to join across different datasets. Cheap determinism is a complement to more flexible but uncertain LLMs. Future historians will have a much easier time trawling through historical data, at least as long as someone pays to store it.

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Budget Update📈📉

Welcome back.

It was a busy week in Canadian political news. We had multiple floor crossings and a brand new Canadian budget to review. Why does this matter?

The Canadian budget reveals the priorities, trade offs, and a growing deficit that continues to shape future policy in our country.

A great infographic from Canoe financial:

Revenue. Where it comes from?

• The federal government expects to collect about $507 billion in revenue in 2025 to 2026. The three biggest contributors are:

Personal income tax

• The largest funding source by far, at roughly $238 billion. Canadians themselves are the primary engine of the budget, contributing almost half of every dollar the government spends.

Corporate income tax

• Businesses contribute $97 billion, the second largest source.

Goods and Services Tax (GST)

• Consumption drives $54 billion through the GST.

Other revenue sources include excise taxes, employment insurance premiums, enterprise Crown corporations, and investment returns. But taken together, the story remains simple: personal and corporate income taxes fund most federal spending.When revenues fall short of planned spending, the gap is filled with borrowing. In Budget 2025, that gap is large.Spending. Where the money goes.

• Planned spending totals about $585 billion including actuarial losses, with a focus on three major areas:

Individual Supports:$144 billion in major transfers to persons

• Old Age Security and Guaranteed Income Supplement: $83 billion

• Employment Insurance benefits: $30 billion

• Canada Child Benefit: $30 billion

These programs represent direct cash support to households. They are predictable, indexed, and politically durable.Support for provinces and municipalities:$111 billion through transfers

• Canada Health Transfer: $57 billion

• Canada Social Transfer: $19 billion

• Equalization and territorial financing: $29 billion

Health care remains the single biggest provincial transfer. Growth in this category continues to exceed revenue growth.Direct program spending and operations:$266 billion on programs and government operations

• Indigenous reconciliation and services: $44 billion

• Infrastructure and housing initiatives: $27 billion

• Climate and natural resource programs: $18 billion

• International assistance: $20 billion

• Defence and security: $60 billion combined

This is where most new policy announcements appear. Key initiatives:

• Housing and infrastructure to address affordability pressures

• Defence modernization and procurement cycles

• Indigenous reconciliation funding commitments

• Climate related and natural resource transition programs

These areas are increasingly multi year and structural, not one time line items.The deficit.Even with more than half a trillion in revenue, expenses are rising faster.

• Deficit before actuarial losses: about $73 billion

• Net actuarial adjustments: about $5 billion

• Final projected deficit: $78 billion

Borrowing fills the gap and adds to debt servicing costs. Public debt charges are now $56 billion, making interest the fifth largest line item in the entire budget. Higher rates are translating into higher carrying costs on federal debt.

For our thoughts on this - tune into the pod.

Podcast & YouTube Recommendations🎙

• Daniel Yergin on Energys Transition:

• Invest Like The Best:

Best Links of The Week🔮

• Boaz Barak on the counterintuitive economics of AI. This is a very good piece, that thinks clearly about bottlenecks: if we automate lots of labor, and that makes us richer, that makes the remaining labor much more valuable. But AI messes up the classic growth equation, because it’s a case where capital is increasingly fungible with labor. We’ll need a whole new formula to even describe what growth looks like in an AI-heavy economy.

• Richard Dewey et. al. trained a model to play a simplified version of liar’s poker via self-play, and then pitted it against experienced human player. They also had it play against LLMs (one interesting note there is that the LLMs tend to play cautiously; they speculate that part of what’s happening is that so much poker advice for beginners suggests folding more often, and that’s carrying over to this domain). Liar’s poker turns out to be a surprisingly complicated game with a vast number end states, so playing it means doing a tiny bit of deterministic reasoning and accumulating an arsenal of nested heuristics—which is a good description of a lot of machine learning.

• “For months, a small company in San Francisco has been pursuing a secretive project: the birth of a genetically engineered baby. Backed by OpenAI chief executive Sam Altman and his husband, along with Coinbase co-founder and CEO Brian Armstrong, the startup—called Preventive—has been quietly preparing what would amount to a biological first. They are working toward creating a child born from an embryo edited to prevent a hereditary disease. In recent months, executives at the company privately said a couple with a genetic disease had been identified who was interested in participating.” Source: WSJ

• Perplexity to pay Snap 400mm to integrate their AI model into their search - ““The deal gives Perplexity exposure to more than 940 million Snapchat users, who will get answers from its AI engine when they ask questions to the company’s My AI chatbot.”

“The new feature will be integrated into the app’s interface early next year. Snap said it will start recording revenue from this deal in 2026.”Source: Techcrunch

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Quick note on podcast cadence: This coming Friday we will have a special podcast release talking about the Canadian Budget. Tune in on LinkedIn if you want to hear our views.

Markets

Good, some bad, and a little bit of ugly

We’re getting a lot of emails and calls about whether were due for a bear market.

And It’s always important to bring back the conversation to time horizon.

Some folks are short term swing traders... Most are long-term investors. Many find themselves somewhere in between.

What I want to remind everyone of today is that the longer your timeframe is, the more important asset trends become. And one thing we know for sure, asset prices trend.

Right now, the most bullish data on the board is that long-term trends remain firmly intact across stock markets around the world — not just in the U.S. and Canada.

This is the good: The S&P500, Dow Jones Industrial Average, Nasdaq100, TSX and Russell 2000 Small-cap Indexes all finished October with their highest monthly closes on record.

Europe, Japan, China, Latin America, and London all went out at new highs for the cycle as well.

This isn’t just a U.S. technology bull market.

Consolidation continuation:

Back in early October, we talked about what this market correction should feel like — and the traffic jam analogy still fits perfectly.

This is the bad part of the current environment: There’s simply more supply than demand for stocks at these levels. And much of that can be explained by a historical equity run up from the April lows.

In other words, there are still plenty of investors looking to sell into strength, no matter how strong the longer-term trend remains.

The best visual of this came to my inbox curtsy of Trend Labs:

This chart of the small-cap index remains the cleanest visual of overhead supply in today’s market — and it’s also one of the most important gauges of market breadth.

If the Russell 2000 is in an uptrend, you probably don’t have a breadth problem.

The percentage of stocks on the NYSE that are above their 200-day moving average (in other words, in uptrends), peaked back on September 11th.

Whats happening with market leadership?

The good news is that the worst part about this market can easily be corrected with one day of action, AND it falls within the context of a strong uptrend.

So even the ugly here needs to be viewed within the context of the current cycle.

This is a chart of the First Trust Nasdaq-100 Equal-Weighted Index Fund (QQEW) failing to hold on to its breakout from last week.

Momentum is also putting in a bearish divergence, which doesn’t help the situation:

This index gives each of the 100 stocks an equal weighting, rather than the larger companies representing a larger percentage of the overall index, like the market-cap weighted Nasdaq-100 (QQQ).

The longer the equal-weight Nasdaq-100 (QQEW) is below 144, the longer this correction will last. Same with the Russell 2000 Index (IWM).

It doesn’t mean the market is going to crash, or that we’re beginning some kind of epic bear market. It’s just the same ongoing correction that we’ve been talking about for over a month.

Recap:

It’s a bull market, at the end of the day.

So even though this post is mostly about the bad, the ugly, and the wave of selling pressure we’ve seen in recent weeks, the bigger picture remains the same: We’re still in a powerful uptrend, and there’s little to no evidence that it’s over.

Sector rotation is the lifeblood of a bull market. We know this — and we keep seeing it.

Healthcare was the worst sector. Then it became the best.

Energy was the worst, and now it’s heating up again.

What will come of Q4?

Podcast & YouTube Recommendations🎙

• Gavin Baker on Ai, technology business models

• It’s still so early! A16Z Founding partners talk about the current state of Ai:

Best Links of The Week🔮

• “Google is about to release Gemini 3 and my smart friends tell me it is expected to be better than the de facto leader in AI coding - Claude from Anthropic. That means that the top two AI coding products by far will have both been trained using TPUs (Google’s chip), not GPU’s (Nvidia). On top of the data they own from Android, YouTube, Gmail, Maps etc…I think the world is realizing that Google may have an edge” Here comes Google - Howard Lindzon

• “Advanced Micro Devices, the main contender to Nvidia in the artificial intelligence chip market, failed to impress investors with its revenue forecast after an eye-popping rally sent expectations soaring. Fourth-quarter revenue will be roughly $9.6 billion, the company said in a statement Tuesday. Though analysts had estimated $9.2 billion on average, some projections ranged as high as $9.9 billion. Investors have bet heavily on AMD following blockbuster agreements with OpenAI and Oracle, which plan to use the company’s chips in their build-out of artificial intelligence computing. The hope is that AMD can finally crack Nvidia’s dominance in the AI processor market.” Source: Bloomberg

• “WhatsApp announced on Tuesday that it’s launching an Apple Watch companion app. For the first time, WhatsApp users will be able to use their Apple Watch to get call notifications, read full messages, and record and send voice messages.” Source: TechCrunch

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TLDR: Listen on Apple, Spotify, or Google Podcasts.

Market Update📈📉

Welcome back.

The indexes barely sneezed last week, and the high-momentum flyers from quantum computing, nuclear, space, drones, rare earth metals, robots, crypto, and AI pulled back 10-40%. The price action in momentum stocks is often a precursor of what might happen in the general market. Timing it is the tricky part as sector rotations could continue to keep the indexes near their all-time highs.

The market is currently in a range-bound, choppy mode. In such an environment, breakouts don’t work for more than a day or two and often lead to a reversal. Breakdowns don’t last too long either, as the dips near support levels are getting bought. The market is digesting its recent gains and looking for new catalysts. They are right around the corner.

The new earnings season has just begun. Morgan Stanley crushed estimates and gapped up. Then, lending troubles in select regional banks brought down the entire financial sector, and Morgan Stanley gave back its gap. American Express also reported strong results, gapped up, and finished strongly.

It is a scalper’s tape for nimble traders for the time being, where trading less and focusing on earnings movers makes sense until the next clear swing move.

Pocket Lobbyist Insights:

Budget Prime Minister Mark Carney gave a speech in advance of the forthcoming November 4 federal budget outlining his government’s priorities.

Auto alarms: Tariff wars continue–internally with Stellantis and GM decisions to move operations to the U.S., as well as externally with President Trump saying he has “terminated” trade talks with Canada after anti-tariff ads were taken out by Ontario Premier Doug Ford.

Foreign policy: Carney is travelling to South Korea for the APEC summit next week and might meet with President Xi, though that meeting is yet to be confirmed publicly. President Trump will be there and is meeting with Xi.

Crime crackdown: Bail reform through Bail and Sentencing Reform Act introduces over 80 clauses of targeted changes to the bail and sentencing framework in the Criminal Code.

Podcast & YouTube Recommendations🎙

• Historical Cycles: History shows these massive transformations happen in ~80-year cycles. Each cycle involves “watching an old system being essentially dismantled... at the same time as we’re taking off on these new technologies to build the next systems”

• The U.S.’s Self-Inflicted Challenge - Chinese Rare earths leverage and the shocking comparables across multiple industries in Canada:

China’s announcements last week should have the same effect on the U.S.: we need to always act with the understanding that (1) we have a critical dependency on China that is particularly important to our tech industry and (2) that China is willing to leverage that dependency.

Best Links of The Week🔮

• “The six largest U.S. banks collectively earned nearly $41 billion in the third quarter, a 19% increase from the previous year. Bankers express unease about the future despite strong third-quarter profits, healthy consumer spending and low debt delinquencies. Concerns include a cooling job market, elevated inflation and the federal government shutdown’s potential economic impact.” Source: WSJ

• “The U.S. has to use industrial policy to compete against nonmarket economies like China, Treasury Secretary Scott Bessent told CNBC. The Trump administration will set price floors across a range of strategic industries to combat Beijing, Bessent said.The administration could take equity stakes in more companies in the wake of China’s new restrictions on rare earth exports, he said.” Source: CNBC

• “United Airlines posted higher-than-expected earnings for the third quarter but revenue that missed Wall Street’s estimates. The carrier boosted capacity more than 7% in the third quarter while unit sales fell for both domestic and international travel. United said it expects an adjusted-earnings forecast of $3 to $3.50 a share in the fourth quarter.” Source: CNBC

• From Hodinkee: “On this episode of The Business Of Watches Podcast, we catch up with Antoine Pin, the Chief Executive Officer of Tag Heuer, who is having quite a year. The brand is in the first season of a new decade-long deal to be the official timekeeping sponsor of Formula 1. It’s a high-profile, multi-brand agreement that, if executed correctly, could launch Tag Heuer to a whole new level of visibility. But it also comes at a challenging time for the global economy and the watch industry in general, as soaring input costs, a strong Swiss franc, and U.S. tariffs on Swiss goods take a toll on margins and confidence.” You can listen to the podcast or read a transcript of the interview here on Hodinkee.

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Happy Thanksgiving everyone,

If you don’t have any video of your family spending time together over the Canadian Thanksgiving holiday, give Sora a try.

Listen on Apple, Spotify, or Google Podcasts.

Market Update📈📉

Okay, so while I’m having my philosophical moment about AI, the markets have been telling their own, more straightforward story. Let’s look at the numbers for the last quarter.

September was a pretty good month for stocks, but you had to be in the right places. The S&P 500 was up about three and a half percent. But get this—nearly 70% of that gain came from a handful of Big Tech companies. So if you weren’t in tech, you probably felt a little left out.

The other interesting trend is that capital seems to be flowing into Emerging Markets, which had a fantastic month, up over 7%. At the same time, money is trickling out of Europe. It’s a bit of a rotation we’re keeping our eye on.

And for the first time in a while, US small-cap stocks actually beat large-caps in the third quarter. That’s a sign that the rally might be broadening out a little bit, which is a healthy thing to see.

What Breaks This Market Rally?

It all comes back to the trillion-dollar AI question: Are we in a bubble?

The giants—Amazon, Google, Microsoft, Meta—they’re going to be fine. They are spending an eye-watering amount of money on AI data centers, but they can afford it. It’s like a “tails I win, heads I don’t lose too badly” situation for them. That infrastructure will eventually pay off.

The real risk, if this bubble pops, is for the companies that sell the shovels in this gold rush. Think NVIDIA, Oracle, and all the other companies in the AI supply chain. They would be in for a really tough time.

I’m watching for three things that could be the “uh-oh” moment:

• AI progress hits a wall. We realize AGI isn’t coming next year, and companies ask, “Why are we spending $10 billion for a model that’s only 5% better?”

• Supply finally overtakes demand. For two years we’ve heard “we can’t get enough chips!” What happens when everyone has built their data centers and suddenly there’s more than enough supply to go around? That’s when the panic stops.

• The free money dries up. A few of those AI startups with cool demos but no actual business model run out of cash, and investors get spooked.

Podcast & YouTube Recommendations🎙

Casey Handmer on the Dwarkesh Patel Podcast - I’ve listened 5 times.

Ray Dalio at GEF:

Best Links of The Week🔮

• “OpenAI’s short-form artificial intelligence video app Sora hit 1 million downloads less than five days after its launch in late September... Bill Peebles, head of Sora at OpenAI, shared the milestone in a post on X late Wednesday. He said Sora reached 1 million downloads even faster than ChatGPT, the company’s popular AI chatbot that supports 800 million weekly active users. Sora allows users to generate short videos for free by typing in a prompt.” Source: CNBC

• “China has tightened its controls on rare earth exports ahead of an expected meeting between President Xi Jinping and President Donald Trump. Shares of U.S. rare earth and critical mineral miners surged as the market speculates on further investment in the industry by the White House. The Trump administration has taken equity stakes in several miners this year to stand up a domestic supply chain against China.” Source: CNBC

• Last week saw some notable developments on the SLM side that is worth noting. Venturebeat explains in “Samsung AI researcher’s new, open reasoning model TRM outperforms models 10,000X larger — on specific problems”: “The trend of AI researchers developing new, small open source generative models that outperform far larger, proprietary peers continued this week with yet another staggering advancement.”

“Alexia Jolicoeur-Martineau, Senior AI Researcher at Samsung’s Advanced​ Institute of Technology (SAIT) in Montreal, Canada,​ has introduced the Tiny Recursion Model (TRM) — a neural network so small it contains just 7 million parameters (internal model settings), yet it competes with or surpasses cutting-edge language models 10,000 times larger in terms of their parameter count, including OpenAI’s o3-mini and Google’s Gemini 2.5 Pro, on some of the toughest reasoning benchmarks in AI research.” - Venturebeat

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TLDR: The single biggest question on everyone's mind is: Are we in an AI bubble?

Listen in podcast app and follow below for the podcast topic arc.

• Market update

• Recommendations and Links

Listen on Apple, Spotify, or Google Podcasts.

Market Update📈📉

Now, history is our best guide here. Think about the great capital cycles of the past. The railroads in the 1840s had a simple feedback loop: the government gave them land, they announced a route, speculators drove up land prices, proving the "territorial development" thesis and fueling more railroad construction. Boom. The gilded age.

Then came the telecom bubble of the '90s. The loop was even faster. A company announced a network buildout, their stock price soared on the promise of infinite internet traffic, and they'd use that soaring stock to raise more money to build more networks. Higher stock prices validated the spending.

So, what about today's AI buildout? The key idea is that more compute and more data lead to better models, unlocking a new frontier.

But when you look closely, the one thing we're missing is that hyper-speculative feedback loop seen in past bubbles.

We're not quite there... yet.

The Real Bottleneck

The real story isn't just about chips; it's about the picks and shovels. This AI capital cycle is a three-legged stool: Compute, Data Centers, and the most critical leg, Power.

And that's where the lag is. While a chip cycle might be about 12 months, building a data center takes years. Building a new power plant to run it? That takes even longer. We're seeing companies like GE Vernova booking power plant slots for 2027 and 2028.

This makes power the "golden screw" – the one critical piece that holds everything up. Just like tiny, cheap microcontrollers were the bottleneck for the auto industry a few years ago, massive power plants are the bottleneck for AI today. The industry's eyes are shifting from chips to data centers and power grids, and that's where you'll see the first signs of oversupply when the cycle eventually turns.

The Market's Dilemma

Now, this massive, multi-year buildout is happening against a very confusing economic backdrop.

Last week, Fed Chair Powell basically admitted the FOMC is torn. They're stuck between stubbornly high inflation and a weakening labor market.

The new "Dot Plot," which shows where committee members think rates will be, is all over the place. For 2026, forecasts range from a rate hike to seven more cuts. That's not a consensus; that's a shrug.

But the market? It sees things very differently.

Fed Funds Futures are pricing in an 80% chance of two more rate cuts this year. This is the classic

"bad economic news is good for stocks" setup, because it means cheaper money is on the way.

This dynamic is what's fueling Big Tech.

Companies like Nvidia, Microsoft, and Google are crushing the S&P 500 because they have both a powerful secular growth story in AI and the market betting on lower rates to fund that growth.

So the central tension right now is this:

a massive, long-term AI capital buildout, which desperately needs cheap capital, is running headfirst into a Federal Reserve that is openly broadcasting its own uncertainty.

The big question is, which force wins? Can the AI narrative continue to power the market higher, or will the economic reality of a divided Fed finally cool things down?

Pocket Lobbyist Insights:

• Carney said the Israeli government is "working methodically to prevent the prospect of a Palestinian state from ever being established” at the UN General Assembly on Monday afternoon.

• Trump–in his UN General Assembly Speech–critical of Europe; a country Canada has decided it will more closely ally with economically to offset tariff disputes.

• 25 Republican members of Congress and Senators are calling on Carney to ‘reconsider’ his government’s decision.

• Constitution gives Congress the power to regulate foreign commerce, though the President negotiates trade agreements; Congress has an up/down vote (no amendments with limited debate) on implementing the bill.

• Canada recognizing Palestinian statehood and potential blowback from the Trump administration on tariff negotiations (in addition to United Kingdom, Australia and Portugal).

Best Links of The Week🔮

• “Plans for massive AI investments often lead to larger increases in market value for the companies making the investments. Investors are clamoring for companies spending big on AI, with companies like Nvidia and Alibaba seeing large increases in market value after announcing AI investment plans. The market enthusiasm for AI investments has added significant value to companies like Meta, Microsoft, Alphabet, and Amazon, with their market capitalization boosted by about $1.8 trillion this year.” Source: Bloomberg

• “Microsoft is bringing Anthropic’s Claude Sonnet 4 and Claude Opus 4.1 AI models to its Microsoft 365 Copilot today. It’s a big move that expands model choice beyond just OpenAI’s range of models in Microsoft 365 Copilot, and it will allow Microsoft’s customers to access Anthropic models in Researcher and Microsoft Copilot Studio.” Source: The Verge

• “Instagram has reached 3 billion monthly users and is changing its home screen navigation bar to highlight private messaging and Reels. The app is running tests, including one in India where the app will open directly into Reels, and another that lets users influence their content algorithm by selecting or hiding topics. The changes are part of a broader effort to leverage Instagram's most popular features, with private messaging and video watching being the most popular ways people use the app.” Source: Bloomberg

• The Fed cut rates from the Transcript “At today’s meeting, the committee decided to lower the target range for the federal‑funds rate by a quarter percentage point to 4 to 4 ¼ percent, and to continue reducing the size of our balance sheet.” – Federal Reserve Chair Jerome Powell

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I have a very exciting announcement for our subscribers.

Starting this week I will be releasing a bi-weekly podcast with my good friend Melissa Caouette, Founder of Pocket Lobbyist and Principal at MC Consulting.

subscribe here

We will be bringing you a regular diet of Canadian market and political insights to help you better navigate your business and portfolio of investments.

On to the Market Update:

As I always say, if you must panic… panic first.

At close on friday, the $VIX was sitting in the $14 range.

I do not make market ‘top’ or ‘bottom’ calls. That would be silly.

However, a few times a year the market starts to scream - “be careful and/or take some extra risk.” Once or twice a year when the $VIX spikes to 30 we get an opportunity to hold our noses and buy stocks. And during those times, I am generally looking to add stocks rather than sell them…

There has been three opportunities since 2008 where the $VIX spiked above 60.

• The Great Financial Crisis of 2008

• March 2020 Covid Shutdown

• Liberation Day Tariffs of April 2025.

On it’s own, a $VIX 14-16 means very little.

If you added stocks when the $VIX was 60, you have been rewarded as the $VIX calmed back down the last four months. A low $VIX does not mean I want to sell stocks, but it is the reward for buying the spike in March and a much better moment to ‘panic’ if you must sell.

Here’s a list of… interesting things that are concerning me.

• For some reason people are chasing/piling into Cathie Woods ETF’s again at record pace…

It’s not just that degenerates still trust Cathie after years of awful returns…but penny stock trading has been accounting for 30 percent of market volume throughout this summer. Summers may just be the new season for extra degeneracy as the institutions vacay.

• Next up… Chamath is floating another SPAC. He thinks it’s ok because he calls the market a ‘casino’(never mind his horrendous track record).

Chamath KNOWS that YOU KNOW that he is a grifter and he can still do this and the SEC does not care.

This is the darkside of the degenerate economy. Do not expect guardrails or a bailout.

The warning signs are accumulating.

• Lastly, let’s take one quick look at the mechanics of growth and expectations one should consider. Robinhood has had the run of a lifetime. Based on the numbers, it has made total sense. But, can the background that helped them post these numbers continue?

Decoding the Jackson Hole Message and NonFarm Payrolls: Beyond the Hawkish Headlines

The dust has settled on Fed Chair Powell's highly anticipated speech at the Jackson Hole Economic Symposium. While initial reactions were mixed, a closer look at the text reveals a more nuanced and ultimately dovish stance than many are reporting.

The speech was not a "pounding the table" moment. No new policy was made, and it was certainly not a policy mistake—the FOMC meeting is still weeks away.

Here’s a pragmatic breakdown of the key takeaways and what they signal for the path ahead.

1. The Fed's Core Message: A Clear Nod to the Jobs Mandate

Instead of a hawkish warning, Powell's concluding remarks pointed directly toward a policy adjustment, emphasizing the Fed's concern for its employment mandate. His final line before discussing the new consensus statement was pivotal:

"Nonetheless, with policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance."

This language signals a clear predisposition to ease policy, contingent on incoming data. The market reaction confirmed this, with the probability of a September rate cut ending the week largely where it started (around 83%), despite some intra-day volatility.

2. The Path to a September Rate Cut

The message from the Fed is clear: policy is data-dependent, but the bar for not cutting rates is now extremely high. A rate cut in September seems to be the baseline scenario unless the next cycle of data comes in exceptionally hot across the board.

The Fed will cut rates in September unless we see a combination of:

• Strong employment data (in all its forms).

• Hot inflation reports (CPI, PPI, and Import Prices) in the week before the meeting.

Barring this "fire hot" scenario, the Fed appears poised to act.

3. Debunking the 2% Inflation Target Myth

A significant misinterpretation circulating is that the Fed has abandoned its 2% inflation target. This is incorrect. The FOMC's new consensus statement is about flexibility, not abandonment.

• What Changed: The framework moved away from rigid "inflation averaging" and now allows for more flexibility to tolerate inflation above 2% specifically when the labor market is weak.

• What Didn't Change: The official target remains 2%. The speech did not confirm a commitment to permanently run inflation hot or an abandonment of the target altogether. It's a strategic shift to avoid tightening policy prematurely during a potential downturn.

Looking Ahead: My Perspective

I believe the Fed is slowly and steadily moving toward a view that is more cautious about the real economy and less concerned about persistent inflation. This speech was another step in that direction and the market is pricing in 3 cuts to end this year. and 2 more in 2026.

While I remain critical of the Fed's long-term balance sheet policy, which has contributed to asset inflation, the near-term outlook for monetary policy is leaning dovish. A potential cut is not a policy mistake; it's a pragmatic adjustment to a shifting balance of risks.

The key now is the data. If it doesn't show significant re-acceleration, the Fed has given itself the green light to begin easing.

What was your main takeaway from Jackson Hole? Do you believe a September cut is locked in for this week?

JacksonHole #FederalReserve #JeromePowell #MonetaryPolicy #Economics #Inflation #InterestRates #MarketOutlook #Finance #Investing

Best Links of The Week🔮:

• Oracle’s move off OpenAI Contracts: Oracle (48), led by founder Larry Ellison (81), added half of ten year old OpenAI’s $500 billion recent valuation this week in two days. All over its erupting AI Data Center Building revenue backlog from its $300 billion OpenAI Stargate buildout deal. Source: Bloomberg

• Apple continues to have a unique set of advantages vs its peers in this AI Tech Wave. Especially as AI capabilities truly ramp up across their ecosystem. Won’t have to squint hard to find them. Apple is poised to deliver bottom up AI applications and services to billions in the months ahead. With a laser focus on Design in the hardware and software. - Apple Product Launch Source: Bloomberg

• “A rally that put stocks on the brink of all-time highs sputtered and bond yields rose as euphoria around Federal Reserve rate cuts eased just days ahead of a key inflation reading... Traders are bracing for a not-so-friendly price reading later this week. The Fed’s preferred gauge of underlying inflation probably ticked higher last month, with the personal consumption expenditures price index excluding food and energy rising 2.9% from a year ago. That would be fastest annual pace in five months.” Source: Bloomberg

• “Banks are pushing to change new US stable coin rules over fears they will spark trillions of dollars’ worth of outflows, underlining growing competition between Wall Street and the [virtual] currency industry. Banking lobbies including the American Bankers Association, the Bank Policy Institute and the Consumer Bankers Association last week warned lawmakers of a “loophole” in regulation that will let some [virtual currency] exchanges indirectly pay interest to stable coin holders.” Source: FT

• “Elon Musk’s artificial-intelligence startup xAI sued Apple and OpenAI Monday, alleging the companies are illegally thwarting competition for AI companies. The lawsuit says the iPhone-maker’s partnership with OpenAI makes the startup’s ChatGPT the “only generative AI chatbot that benefits from billions of user prompts originating from hundreds of millions of iPhones.” That enables OpenAI to use the prompts and feedback to improve its model, a significant advantage, according to the complaint. The suit also says Apple is deprioritizing the apps of competing chatbots in its App Store rankings.” Source: WSJ

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HAVEN And The Brothers Who Built A Global Sanctuary For Menswear

In the global lexicon of high fashion, certain cities are spoken with reverence:

Paris, Milan, Tokyo, New York.

Edmonton, Alberta, is not typically on that list. Yet, it is from this industrial prairie city that one of the world's most respected and technically advanced menswear brands emerged. HAVEN.

At the heart of this story are brothers Daniel and Arthur Chmielewski. They are not fashion scions or design school prodigies. Instead, they are pragmatic problem-solvers who left careers in the finance to pursue a shared passion, one rooted in the grassroots authenticity of street culture. Their journey is a testament to a different kind of success—one built on necessity, discipline, and an unwavering commitment to quality.

Founders' Background

Daniel and Arthur Chmielewski grew up in Edmonton, Alberta, a city more known for its oil industry and harsh winters than its fashion scene. Their father, a contractor, instilled in them a "workmanlike approach" to any task, an ethos that would later define their business philosophy and even the physical construction of their first store, which they built themselves with the help of their father and friends.

While their day jobs were in finance, their passion lay elsewhere. The brothers were deeply steeped in "street culture from a grassroots level”. They were particularly drawn to Japanese brands, which they admired for executing product on "a whole 'nother level from a quality standpoint". This appreciation for superior craftsmanship and meticulous design, so different from the mass-market clothing available in Canada at the time, would become a cornerstone of their future enterprise.

The "HAVEN Filter"

The guiding principle behind every product curated or created by HAVEN. This ethos is not an abstract marketing concept but a tangible framework. It is a commitment to purposeful design where function, utility, and performance are paramount.

Defining the Philosophy:

The "HAVEN filter" prioritizes a set of quintessentially Canadian values:

• purposeful,

• utilitarian,

• functional, and

• performance-driven.

The brand's mission is to create "functional everyday clothing" that actively improves the wearer's comfort, performance, and utility in their daily life. This philosophy extends beyond their in-house label to the meticulous curation of other brands they carry. Daniel Chmielewski champions the idea of making conscious choices about consumption, advocating for "exceptional quality and timeless design" over fleeting trends. The goal is to build products that remove barriers, allowing individuals to do more without having to think about what they are wearing.

Digital by Necessity:

While HAVEN's design philosophy was forged by its physical environment, its commercial success was seemingly secured in the digital realm. The brand's early and aggressive adoption of e-commerce was not a calculated strategic move into a burgeoning market, but a crucial pivot born from existential necessity.

In the mid-2000s, when e-commerce was still in its relative infancy, the HAVEN web shop and blog became a vital portal for a global community of enthusiasts. It served as a primary, and often exclusive, North American source for cult-status Japanese brands like NEIGHBORHOOD and WTAPS.

This digital-first strategy allowed HAVEN to cultivate a loyal customer base far beyond the borders of Alberta. By the time they were ready to expand physically to Eastern Canada, their reputation had preceded them. The opening of their Toronto store was met with a pre-existing clientele built entirely through online orders, validating their belief that a void existed in the market for their curated retail experience.

Content as a Cornerstone:

Daniel recognized early that a successful online presence required more than just a transactional platform. He understood that retail is about "storytelling and building relationships with customers".

HAVEN launched its "Intelligence" section, an online journal featuring original editorial content. Through interviews, lookbooks, and feature articles, they educated their customers on the history of the brands they carried and demonstrated how to style the products. This created a "greater understanding and appreciation of the product," transforming passive consumers into an engaged and knowledgeable community.

This decade-long focus on e-commerce technology, content and quality before the major launch of their in-house label represents a masterful, if perhaps unintentional, business strategy. Most brands begin with a product and then face the high-risk, capital-intensive challenge of finding a market and building distribution channels. HAVEN inverted this model. This "platform-first" approach de-risked their product launch and is a fundamental reason for their enduring success.

Strategic Collaborations

Collaborations are a core component of HAVEN's brand identity, serving as a method to reinforce their values and expand their expertise. These partnerships are not arbitrary marketing exercises; they are carefully chosen alliances with brands that are "pushing the envelope when it comes to innovation". Each collaboration acts as a form of third-party validation, reinforcing a specific pillar of the HAVEN ethos.

Partnering with Viberg, a legendary Canadian bootmaker, anchors their identity in high-quality domestic manufacturing and heritage craftsmanship. Working with Norda, a niche Canadian trail-running shoe brand, signals their commitment to cutting-edge, authentic performance. Collaborations with historic English shoemakers like Clarks Originals and Tricker’s demonstrate a deep respect for timeless design, providing a balance to their modern, technical focus. These partnerships allow HAVEN to tell a multi-faceted story, cementing their authority across the domains of Canadian heritage, technical innovation, and enduring quality.

Conclusion.

The story of HAVEN is a modern blueprint for building an authentic and enduring brand in a world obsessed with fleeting trends. Its success is the result of cumulative effects of countless deliberate decisions.

"There's no silver bullet, but there are a hundred golden bb's".

This philosophy—a relentless focus on high-quality products, a steadfast adherence to core values, and a culture of continuous learning and adaptation—is the true secret to their longevity.

The Chmielewski brothers have built something with a deeper resonance. Daniel expresses immense pride in seeing their journey inspire others, particularly young entrepreneurs. Their path from a small-town upbringing to the global stage serves as powerful proof that passion, when fused with discipline and a clear vision, can overcome any perceived barrier, be it geographical or industrial.

Ultimately, HAVEN stands as more than just a clothing brand; it is a quiet champion for a more conscious and purposeful form of consumption. In an era of disposability, their focus on timeless design, exceptional craftsmanship, and functional utility advocates for a "buy fewer, better things" mentality. They have built a sanctuary for those who believe that clothing should not be a fleeting costume, but a reliable and enriching tool for everyday life.

Sources used:

• Built to last - Sharp Magazine

• EyeCMag - Haven Shop opens in Toronto

• Hypebeast - Haven Opens Flagship in Vancouver

• NuvoMagazine - How Haven Became A Streetwear Brand

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com

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Listen in the substack podcast app

Or on Apple, Spotify, or Google Podcasts.

Welcome back.

Im excited to be back making more consistent content for the subs. Todays podcast was a lot of fun to do.

We had a familiar face back on the pod - Melissa Caouette from MC Consulting and Pocket Lobbyist - subscribe here

We talked deeply about the state of play in Canadian Politics and how the tariff war is impacting our economy, Canadians sentiment towards the Prime Minister and what we should expect over the coming 12-18 months.

Market Update📈📉

· Macro: Huge changes to interest rate policy, Jobs data and foreign policy strategy is afoot

· Market: GPT 5 drops… The impacts that should trickle down as a result.

· Media: A Huge Deal between the NFL and Disney changes the landscape of sports media

GPT5 release:

OpenAI’s GPT-5 & Open Source OSS: OpenAI had a very big product week, with both its long anticipated GPT-5 and GPT-OSS, ‘Open-Weight’ AI models. The key takeaways on GPT-5 are that it is simplified and unified such that their 700+ million weekly users don’t have to pre-pick which AI model to click on, from a drop down menu. Now GPT-5 is designed to ‘route’ the queries to the right underlying OpenAI models. Also GPT-5 is broadly available even in free tiers. Although higher usage means higher priced tiers. Also businesses and developers can of course pick specific OpenAI models still via the APIs. On the OpenAI open weight ‘OSS’ models, the offerings should sate businesses and developers who want to use open source to craft their own AIs, but stay within the broader OpenAI ecosystem. Also this helps OpenAI publicly respond to the global popularity of Chinese open source models. And of course address Meta’s Llama LLMs. Both sets of products now will of course be rigorously reviewed. discussed, and assessed by the global market. So stay tuned for that. More here.

Big Tech Navigates AI:

Apple & Nvidia Manage Tariffs: Both Apple for now, and Nvidia a few weeks ago, seem to have mollified and placated the administration in Washington. Most importantly on their ongoing tech tariffs, especially on chips and devices. Both CEOs Tim Cook and Jensen Huang have done what they had to do to personally manage their companies through these geopolitical and ‘just political’ waters. These depths in tech are now more politically treacherous than in any prior tech waves. And it’s not clear that getting exemptions for their particular companies is going to really help long-term. Especially given the enormous, and complex ecosystems their businesses have built and rely on. To do the tech magic at global scale that they’ve achieved for investors to date. More here and here

Mind Candy:

A Great Newsletter Post from Mel at Pocket Lobbyist:

“I spend a lot of time thinking and writing about small-c conservatism and how it applies in modern contexts. A recurring theme that surfaces when I juxtapose philosophical conservatism and philosophical liberalism is the concept of common sense and how it is developed. (Note: these are different than political interpretations).

In the conservative philosophical tradition, 'common sense' is a kind of accumulated wisdom of tradition, which is inherited rather than invented; a kind of practical knowledge grounded in habit and custom. Unlike liberals, who may believe common sense has been historically constructed as a result of bias, privilege, or outdated norms (rather than as a result of experience), conservatives may adopt a practical approach and may rely less on "procedures" or "rules" and focus more on intentionality and practicality.

The rick bell story below about my friend Nuvyn Peters and her family swing encapsulates the damaging impact of governments over-regulating, over-prescribing, and over-involving themselves in areas where application of a rule appears to have lost touch with the spirit of why it was created in the first place. To be grounded in the tradition of philosophical conservatism is to observe how these overreaches can, over time, damage the social fabric of our communities and societies with negative consequences (i.e., bylaw officers are unreasonable; therefore, all bylaws are unreasonable, which is surely not the case).

I have no doubt that many people at the City of Calgary agree that this is an absurd situation and likely agree that the swing should have been left alone.

However, the issue is that we no longer empower people, whether within governments (or airlines and banks as other examples), to develop and apply common sense in executing their duties because we rely so heavily on rules and so-called "expertise," however this may be designated in a particular context.

We are discouraging enforcement officers (be it bylaw, customer service, or otherwise) from thinking critically about their engagement with other human beings by being excessively prescriptive in the name of efficiency or consistency, but to what end?

Even Thomas Paine (a liberal) understood this: "Government, even in its best state, is but a necessary evil...in its worst state, an intolerable one."

Albertans will vote in municipal elections on October 20, 2025. If you find yourself chatting with candidates, ask them what they think of common sense and how they would seek to ensure bylaws build–rather than deteriorate–social cohesion and community. Local government is the closest to us, and it matters a whole lot.”

Podcast & YouTube Recommendations🎙

• What can GPT5 do?

• Stephen Kotkin — How Stalin Became the Most Powerful Dictator in History

• Zeihan on Trumps Ukraine Policy Change

Best Links of The Week🔮

• The story behind Ozempic’s parent company, Novo Nordisk. Born from a desperate quest to save a single life, this Danish pharmaceutical titan would go on to transform diabetes treatment, revolutionize drug delivery, and most recently, ignite a global obsession with weight-loss medications. This is the remarkable story of how a small nation of just six million produced one of the world's most influential biotech empires. Source: Quartr

• "The U.S. government slapped a 39% tariff on imports from Switzerland, including watches, after a diplomatic trip to Washington D.C. by the Swiss president and top government officials failed to win a last minute reprieve from the Trump administration. The new tariff rate of 39% came into effect at midnight on Thursday in the U.S. and at 6 am in Switzerland. The surge in costs for importers in the biggest single market for Swiss watches will challenge an industry that is already struggling with a post-pandemic-era downturn in global demand and a rising Swiss franc that has gained 12% against a weaker U.S. dollar this year. Meanwhile, input costs to produce luxury watches have continued to rise, with the price of gold hitting record highs." Source: Hodinkee

• "Nvidia and AMD have agreed to give the US government 15 per cent of the revenues from chip sales in China, as part of an unusual arrangement with the Trump administration to obtain export licences for the semiconductors. The two chipmakers agreed to the financial arrangement as a condition for obtaining export licences for the Chinese market that were granted last week." Source: FT

"Intel CEO Lip-Bu Tan will visit the White House after President Trump called for his removal due to ties with Chinese businesses. Tan aims to reassure Trump of his commitment to the U.S. and highlight Intel’s manufacturing as a national security priority. Trump’s call followed scrutiny of Tan’s business dealings, including sales to a Chinese military university by a software company he formerly led and his venture-capital firm’s investments." Source: WSJ

"The US expects to largely complete negotiations with countries that have yet to secure a trade deal by the end of October, Nikkei Asia reported, citing an interview with Treasury Secretary Scott Bessent. The comments, made to Nikkei on Thursday, come after President Donald Trump’s sweeping new tariffs took effect. Some key trading partners, including Canada, Mexico and Switzerland, are still seeking to secure more favorable terms with the US." Source: Bloomberg

Disclaimer:

Investing in equities, fixed-income instruments and/or alternative asset classes involves substantial risk of loss. Any action you may take as a result of the information presented on this website, blog or in any Reformed Millennials Podcast (a “podcast”) is your own responsibility. By opening this page and/or listening to a podcast, you accept and agree to the terms of this full legal disclaimer. The information on this website, blog and in any podcast is presented as a general educational, informational and entertainment resource only. While Joel Shackleton is registered to provide investment advice as an Advising Representative this website, blog and any podcast does not provide, and should not be construed as providing, individualized investment, tax or insurance advice, nor as containing any recommendation to buy or sell any specific securities or otherwise make any other form of investment, or take any tax or insurance decision. Nothing contained on this website, blog or in any podcast should be construed or interpreted by you to mean that an investment in any securities presented or discussed would be suitable for you in your particular circumstances. Joel Shackleton specifically disclaim that any viewer of this website, blog or any podcast should rely in any way on any of their contents as investment, tax or insurance advice or as an investment, insurance or tax recommendation. Viewers are encouraged to consult with their individual investment advisor and other financial professionals prior to taking any potential investment actions or making any insurance or tax decisions. The views and opinions expressed herein are the personal views and opinions of Joel Shackleton and any other specific contributor to the blog or podcast only and do not necessarily reflect the views or opinions of their Firm or any of its other registered individuals or employees in partnership with Joel and his guests. Joel Shackleton disclaims any obligation to update any of the information set out on this website or any blog or podcast going-forward.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com

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Welcome to the latest edition of Reformed Millennials!

This week, we're thrilled to feature a conversation with a true innovator in the field of ophthalmology, Dr. Andrew Machuk, the owner and operator of Visionary Eye Surgeons. In a field where technological advancements are happening at lightning speed, Dr. Machuk is at the forefront, bringing the latest in surgical precision and patient care to Western Canada.

We explore the cutting-edge innovations that are revolutionizing eye surgery. From the remarkable accuracy of the Calisto eye-marking system that he utilizes, to the latest in advanced intraocular lenses that can restore a full range of vision, we delve into the technology that is making procedures safer and more effective than ever before.

But the conversation doesn't stop at the operating room door. We also take a wider look at the rapidly evolving landscape of healthcare in Canada. We'll discuss the significant strides being made in preventative medicine, and how early detection and intervention are changing the game for long-term eye health. Dr. Machuk, a passionate advocate for accessible care, will also share his insights on the crucial role in reaching remote and rural communities, ensuring that all Canadians have access to sight-saving expertise.

Finally, we'll navigate the complex and often-debated topic of the business of healthcare in Canada. Dr. Machuk will offer his unique perspective as a physician and a business owner, discussing the challenges and opportunities of operating a private surgical facility within Canada's public healthcare system.

Podcast & YouTube Recommendations🎙

• BG2 and Coatue’s Laffont Brothers:

Best Links of The Week🔮

• The future of the storefront - Rick Rubin on Linkedin

• "The automation of Amazon facilities is approaching a new milestone: There will soon be as many robots as humans. The e-commerce giant, which has spent years automating tasks previously done by humans in its facilities, has deployed more than one million robots in those workplaces... That is the most it has ever had and near the count of human workers at the facilities." Source: WSJ

• "OpenAI CEO Sam Altman is hitting back at Meta CEO Mark Zuckerberg’s recent AI talent-poaching spree. In a full-throated response sent to OpenAI researchers Monday evening and obtained by WIRED, Altman made his pitch for why staying at OpenAI is the only answer for those looking to build artificial general intelligence, hinting that the company is evaluating compensation for the entire research organization. He also dismissed Meta’s recruiting efforts, saying what the company is doing could lead to deep cultural problems down the road." Source: Wired

• "Federal Reserve Chair Jerome Powell kept his options open when he said steady economic activity was giving the central bank time to study the effects that tariff increases have on prices and growth before resuming interest-rate reductions. “We’re simply taking some time,” Powell said Tuesday, repeating his earlier view. “As long as the U.S. economy is in solid shape, we think the prudent thing to do is wait and learn more and see what those effects might be.” Powell spoke alongside central-bank leaders from Europe and Asia at a conference in Portugal hosted by the European Central Bank." Source: WSJ

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com

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• Market update

• Scenerios

• VIX History

• Black Monday

• Recommendations and Links

Listen on Apple, Spotify, or Google Podcasts.

Market Update📈📉

After doom scrolling twitter for the last 60 hours straight, I have come to the conclusion that nobody knows anything.

We’re 3 months into this Tariff war and if someone is claiming to know how this ends, they are either lying or Ignorant.

But im going to trying and piece together the past to help make sense of today and give some scenarios that could play out in the near future.

Trump 1.0’s reaction function was the S&P 500.

Trump 2.0’s seems to be the 10 year treasury yield. And once inflation and the deficit are decisively under control, he will be back to focusing on equity markets.

I’ve been attending a lot of fund manager calls and meetings over the last 2 weeks. HF, LO, Macro.

This is probably the most negative on a forward looking basis I have ever heard such a broad swath of investors in the last 10 + years. Quite something given tech bubble in 2000, GFC in 2008, Covid and 2022.

I think the fragility of this moment is not to be ignored. It would only take one “Truth Social” post backing off tariffs (“we have negotiated some good deals” or “waiting 90 days”) and a little bit of policy stability to start the pendulum swinging the other direction. Or 4/2 being anything other than absolutely terrible.

• Oil down to 58 from 75 since inauguration day.

• Rates are down meaningfully and creeping into the 3’s.

• Truflation at lowest level in 4 years.

• Dollar is down.

• Credit spreads stable relative to any period with similar equity volatility.

There is a massive degrossing in the long leg of the momentum factor; by some measures the sharpest down move ever in this period of time.

The Nasdaq down roughly the same magnitude/velocity as the Covid crash.

FII was less 20 days ago and Trump opened his speech focusing on how much the equity markets were up since his election. I think its reasonable to assume that he still cares despite all the rhetoric to the contrary.

“No crying in the casino,”

It feels to me like there is a little too much confidence that the Trump administration wants a recession. It cant possibly be lost on them the cost of a recession if one were to arise.

Time will tell as ever. Below are some historical charts and scenerios’ to peruse…

Scenerios:

First, the tariff war just started so it’s early, but the bedrock of the “American exceptionalism” trade over the last 15 years has been the virtuous circle connecting stock prices, the allocation of corporate/societal capital, and the US government’s economic policies. This ecosystem generally worked well for most people, and a few weeks of turmoil does not necessarily threaten it. A few months of volatility and ever-lower stock prices, however, risks permanently damaging investors’ confidence in its foundations.

The world isn’t ending. But the rules are changing. For decades, investors benefited from one major tailwind: globalization. Trade was open. Supply chains were efficient. Goods were cheap. That tailwind is fading.

• Worst Case Scenario: The administration is serious about keeping tariffs in place long-term, with the goal of forcing everything back to domestic production and we enter an era of fragmentation. This would mean higher prices for consumers in the short and long term, rising inflation, and a real hit to the average American’s standard of living. We’d likely fall into a deep recession, and the markets could drop anywhere from 30% to 60% in a short period of time.

It’s the classic stagflation scenario — slowing growth and rising prices — and it’s brutal for everyone. No one wins.

• Best Case Scenario: This is all part of a “master plan” — an effort to create global uncertainty and bring countries to the table one by one for better trade terms and concessions on other issues. If that happens quickly (within six months), we could actually see interest rates drop, a recession avoided, and improved trade deals that ultimately benefit U.S. consumers and businesses. In that case, the short-term pain leads to long-term gain. Lots of winners here but its important to sus out the losers.

• Badish Scenario: The intent is negotiation, but it takes more than a couple of quarters. Even if successful, the collateral damage in the meantime sends us into a recession anyway. Supply chains are disrupted, companies hesitate to invest, and consumer confidence erodes before any deals are finalized.

The Market is leaning towards scenario 3 for one main reason in my opinion - The market and its participants believe that the administration lied about the tariffs being 'targeted' and 'reciprocal'. None of the math on their boards made any logical sense and it lacked any intellectual rigor. When Trump said 10% on all nations -- futures rose 1.5% on the news. That win would have raised the $600b (tariff taxes) he wanted/needed for his tax cut AND encouraged companies to reshore.

But instead, he took out his silly billboard of scattered brained math that was arbitrary, and nonsensical. The markets took one look at the China number and reversed the 1.5% gain and shot down 11.5% over the next two days. It’s messy, the tariffs - as they sit - would be devastating if they lasted long, and there’s a lot of uncertainty, but I’m optimistic this wild adventure will come to a conclusion before the summer.

VIX History:

Closes above 40 are rare (occurring just 2.3 percent of the time) and always signal a crisis that demands an immediate policy response. Below is a list from DataTrek of every time the VIX closed above 40, the reason why it was so high, and what happened thereafter:

• August - October 1998: Hedge fund Long Term Capital fails, Fed arranges a private sector bailout.

• September 2001: America hit with 9/11 terror attacks, incremental fiscal and monetary policy supports US economy.

• July – October 2002: Lead up to Gulf War II (2000 – 2002 bear market ended in October 2002, when Congress approved military action against Iraq).

• September 2008 – April 2009: Financial Crisis led to government bailout of US banking system (Q4 2008) and Great Recession spurred Congress to pass the American Recovery and Reinvestment Act (February 2009). Stocks eventually bottomed in March 2009.

• 2010 – 2011: Aftershocks from the Financial Crisis, made worse by the Greek Debt Crisis, which was eventually resolved by an EU bailout.

• 2020: Pandemic Crisis leads to $5 trillion in US fiscal stimulus and Fed taking rates to zero.

The VIX is currently +40 because of US government policies that have created a crisis in investor confidence similar to wars and major disruptions to the global economy, and only a change in those policies will force volatility lower and stabilize stock prices. History is crystal clear on this point.

The only times the VIX has closed higher than Friday’s ending level were in 1998 (1 day), 2008 – 2009 (80 days), 2010 – 2011 (3 days), and 2020 (22 days). In every instance, changes in government policy were needed before volatility declined.

Takeaway: We are now in the chapter of the VIX Playbook where policymakers should be listening to the market and crafting a solution that reduces volatility. It has always worked that way in the past, but government policy itself was never the catalyst for a crisis. This time it is, which makes a speedy resolution more difficult but does not alter the fact that policy must change, or stocks will continue to be under pressure.

Source: CME Group

How were thinking:

For anyone 55 or younger and is accumulating assets, this is an incredible opportunity to buy stocks cheaper than we have seen in 4 years.

For anyone thinking of selling and getting out to wait for clearer skies I want to point to the best and worst market days data below.

The problem with wanting to avoid the bad days is that half of your market return is clustered around the worst and best days in market making it nearly impossible to time.

Currently we are in the heat of a ruthlessly swift bear market sell off. The below stocks are the best performers in 2025 so far that are just starting to roll over into no mans land.

In a bear market, you can't really hide.

First instinct for many is to hedge by buying puts or shorting the stocks that have performed the worst. Unfortunately, that usually bites you in the butt because those are the stocks set to rally the hardest in the event of a policy change.

The VIX is likely going to hit 80 today.

There is no fundamental price to pay attention to during panics like these.

Technicals is all we have.

Some of the levels I am paying attention to: 4907 and 4623.

On Thursday the market tried to bottom at 12:00 and then it rolled over. Friday, the market tried to bottom at 12:30 and then rolled over.When we compare that to 1987, we start to see a possible Wednesday for a near term bottom.

With all that in mind, I think there is good reason to degross your portfolio on 4-5% rallies.I will be focusing the portfolio allocation on the following themes:

• Strong FCF and Dividend Growth.

• Compounders.

• Mexico, Canada and USA.

Twitter links from the pod:

• Stan Druckenmiller on tariffs and markets

• 6 more takes - Joe Wiesenthal

• First 8 takes - Joe Wiesenthal

• The Long View on what trump and his team really wants - Link

Podcast & YouTube Recommendations🎙

• B2G Podcast was a great conversation.

• Ezra Klein on the current moment:

Best Links of The Week🔮

• “The Trump administration will remain steadfast in its reciprocal tariffs on major U.S. trading partners even in the face of a global stock market sell-off, Commerce Secretary Howard Lutnick told CBS’s “Face the Nation” on Sunday. Stocks have sold off heavily in the U.S. and around the world after President Donald Trump rolled out broad-ranging tariffs on April 2. In addition to a 10% duty on all imported goods, Trump announced higher levies on imports from 57 countries, which are set to take place on April 9.” CNBC

• “Federal Reserve Chair Jerome Powell... emphasized the central bank doesn’t need to hurry to adjust interest rates as policymakers wait for more clarity on the administration’s policies and their impact... [he also] said the economic impact of new tariffs is likely to be significantly larger than expected, and the central bank must make sure that doesn’t lead to a growing inflation problem.” Source: Bloomberg

• The downside risks to the S&P 500 as a result of foreigners selling are potentially significant. Apollo Academy

• John Gruber explains why the delayed announcement of a new Siri could mark a key moment in Apple’s history. Daring Fireball

• Shortly before Daniel Kahneman died last March, he emailed friends a message: He was choosing to end his own life in Switzerland. WSJ

• J.P. Morgan Asset Management - Guide to Retirement

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com

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Welcome back.

After a prolonged paternity leave, the podcast has returned with a very special guest - Dr. Jalal Abouhassan.

Jalal is a tenured dentist who has recently ventured out on his own to open his own startup practice. Glenora Circle Dental

Our conversation is wide ranging and covers a number of areas. Ranging from what to expect when you visit a dentist to the opportunities in expanding a dental practice. We’re always looking for new upcoming arenas to watch from a private and public markets perspective.

If you are looking for a new and innovative family friendly dental practice, I highly recommend checking out his practice.

Market Update📈📉

Podcast & YouTube Recommendations🎙

• Dylan Patel goes on B2G and paves the way for the Semi market in 2025:

• Peter Thiel on Real Estate:

• Peter Zeihan on The Canadian Collapse: “Canadian Prime Minister Justin Trudeau's decision to demote former Finance Minister and deputy Prime Minister Chrystia Freeland has triggered a new round of speculation over his political future.”

Best Links of The Week🔮

• NVDA vs. AMD - Semi Analysis

• Google also ramps up AI Reasoning - Tom’s Guide

• Foundation Models are coming to Robots - Michael P on Substack

• Scaling Laws Meet Economics - Fabricated Knowledge

Disclaimer:

Investing in equities, fixed-income instruments and/or alternative asset classes involves substantial risk of loss. Any action you may take as a result of the information presented on this website, blog or in any Reformed Millennials Podcast (a “podcast”) is your own responsibility. By opening this page and/or listening to a podcast, you accept and agree to the terms of this full legal disclaimer. The information on this website, blog and in any podcast is presented as a general educational, informational and entertainment resource only. While Joel Shackleton is registered to provide investment advice as an Advising Representative this website, blog and any podcast does not provide, and should not be construed as providing, individualized investment, tax or insurance advice, nor as containing any recommendation to buy or sell any specific securities or otherwise make any other form of investment, or take any tax or insurance decision. Nothing contained on this website, blog or in any podcast should be construed or interpreted by you to mean that an investment in any securities presented or discussed would be suitable for you in your particular circumstances. Joel Shackleton specifically disclaim that any viewer of this website, blog or any podcast should rely in any way on any of their contents as investment, tax or insurance advice or as an investment, insurance or tax recommendation. Viewers are encouraged to consult with their individual investment advisor and other financial professionals prior to taking any potential investment actions or making any insurance or tax decisions. The views and opinions expressed herein are the personal views and opinions of Joel Shackleton and any other specific contributor to the blog or podcast only and do not necessarily reflect the views or opinions of their Firm or any of its other registered individuals or employees in partnership with Joel and his guests. Joel Shackleton disclaims any obligation to update any of the information set out on this website or any blog or podcast going-forward.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com

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What a week it has been in Canadian Politics!

Melissa Caouette is back to help us understand everything happening in Canadian Politics.

Timeline of the events: 📈📉

MONDAY December 16th:

9:07 est a.m.– Chrystia Freeland posts her Letter of Resignation as Minister of Finance on X

9:30 a.m.– Cabinet meeting

• Communicating what would be included in the Fall Economic Statement

Morning and into afternoon – Opposition responses to resignation start rolling in

• Poilievre and CPC – calling for his resignation/election

• Singh and NDP – "All options are on the table"

• Blanchet and BQ – Calling for an election

12:45 p.m.– Doug Ford Council of Federation Meeting with Premiers

• Puts Freeland on speakerphone

2:20 p.m.– Question Period in the House of Commons

• Prime Minister and Freeland both not present

• Poilievre and CPC grilling the government

4:00 p.m.– Fall Economic Update (tabled by Government House Leader, Hon. Karina Gould)

• $61.9 billion deficit for 2023-24

• $48.3 billion deficit projected for 2024-25

5:00 p.m.–Liberal Caucus Meeting in Ottawa

• Prime Minister addresses caucus

• Freeland gets a standing ovation

7:00 p.m.–Liberal Party of Canada Fundraiser

• Long and hard day

11:30 a.m.–Polls for Langley-Cloverdale by-election closed

• Conservative landslide victory

1:30 est - Clean energy policy changes and update

Best Links of The Week🔮

• Powering Canada’s Future—Canada’s final Clean Electricity Regulations

• Fall Economic Statement - Financial Times

• Canadian Housing Start Data - Twitter link

• Analysis on Freelands resignation - The Hub

• Where the additional budget deficit came from - Trevor Tombe on X

Freeland’s letter to the Prime Minister:

Disclaimer:

Investing in equities, fixed-income instruments and/or alternative asset classes involves substantial risk of loss. Any action you may take as a result of the information presented on this website, blog or in any Reformed Millennials Podcast (a “podcast”) is your own responsibility. By opening this page and/or listening to a podcast, you accept and agree to the terms of this full legal disclaimer. The information on this website, blog and in any podcast is presented as a general educational, informational and entertainment resource only. While Joel Shackleton is registered to provide investment advice as an Advising Representative this website, blog and any podcast does not provide, and should not be construed as providing, individualized investment, tax or insurance advice, nor as containing any recommendation to buy or sell any specific securities or otherwise make any other form of investment, or take any tax or insurance decision. Nothing contained on this website, blog or in any podcast should be construed or interpreted by you to mean that an investment in any securities presented or discussed would be suitable for you in your particular circumstances. Joel Shackleton specifically disclaim that any viewer of this website, blog or any podcast should rely in any way on any of their contents as investment, tax or insurance advice or as an investment, insurance or tax recommendation. Viewers are encouraged to consult with their individual investment advisor and other financial professionals prior to taking any potential investment actions or making any insurance or tax decisions. The views and opinions expressed herein are the personal views and opinions of Joel Shackleton and any other specific contributor to the blog or podcast only and do not necessarily reflect the views or opinions of their Firm or any of its other registered individuals or employees in partnership with Joel and his guests. Joel Shackleton disclaims any obligation to update any of the information set out on this website or any blog or podcast going-forward.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com

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📈Canadian 2024 Budget Highlights with Mel Caouette📉

Welcome back.

We apologize for the inconsistent email and podcast schedule over the last few months. We will be back this summer in full force!

This week’s podcast brings back our most popular guest - Melissa Caouette. We talk about the Canadian Federal Budget and its impact on Canadian entrepreneurs, home owners new and old, and those looking to plan their financial lives.

Twitter links to reference for the pod:

• Professional Canadians impacted by the Capital Gains Inclusion policy.

• Incorporated people deciding on how to pay themselves post-budget policy changes.

• What the new budget means for Canadian Farmers.

• Budget Link that covers the housing portion of the policy.

Quick Market Update:

By now it should be clear to everyone that the Fed doesn’t have a specific plan for when they will cut rates this year. Powell keeps saying they are taking the data one month at a time and adjusting their view. This is why stocks rallied when the jobs number on Friday came well below estimates. A weakening jobs market improves the prospects for an earlier rate cut.

We are already starting to see some easing.

The pace of the Fed’s balance sheet reduction is slowing down.

The Treasury plans to start buying $2Bn worth of Treasuries weekly.

This is why the dips in the stock market continue to be bought.

Earnings season:

Two trends stood out so far – upside gaps often faded while downside gaps followed through. These are both bearish reactions. And yet, the indexes are holding relatively well.

SPY, QQQ, and IWM have made a couple of higher lows and higher highs in the past two weeks. Small caps are firmly back above their YTD VWAP.

SPY and QQQ rallied to their 50-day moving average.

Going above their Friday highs will likely lead to FOMO chasing as many market participants are underinvested. Losing Friday’s low will likely lead to a quick gap close.

In the meantime, Chinese stocks had a second strong week in a row. Sentiment towards Chinese names has been extremely bearish for a long time. F

We are in a market of stocks environment. The popular, well-known stocks have had some troubles this earnings season. They either gap up and then quickly close their gaps or gap down.

Podcast & YouTube Recommendations🎙

• Great recap of the most recent Apple Event and Quarter:

• Justin Lin interviewed by YAV podcast:

• Market update from the guys at RenMac:

Best Links of The Week🔮

• “Trung offers up many examples of how the best athletes in the world across almost every sport are both learning and educating on YouTube. I have seen it in golf and I know if I had the time or inclination I could rapidly improve my game.” Youtube - The learning machine - Source: Trung Phan

• “Over the last thirty-plus years, each major technology wave, like the PC and then the Internet, evolved as a series of technologies in a tech value stack that came to define the full ecosystem with huge collective value over time.” Source: AI - Building Value Over Time

• Disney shares tumbled 9.5 percent on Tuesday even as it reported the first profit in its core streaming business since it leapt into a battle with [NFLX] five years ago. The Disney+ and Hulu streaming unit earned an operating profit of $47mn in the quarter to the end of March, compared with a $587mn loss a year earlier. Disney achieved the milestone months earlier than expected thanks to cost-cutting and the popularity of Hulu programs including Shogun and The Bear. But investors appeared to be more focused on a potential slowdown in the company’s theme parks." Source: FT

"Apple announced new versions of its iPad Air and iPad Pro tablet computers on Tuesday. They’re the first new iPad models Apple has released since October 2022. “This is the biggest day for iPad since its introduction,” Apple CEO Tim Cook said in a video posted on the company’s website." Source: CNBC

"The Biden administration has revoked export licences that allow Intel and Qualcomm to supply Huawei with semiconductors as Washington increases the pressure on the Chinese telecoms equipment company. The move by the US Department of Commerce affects the supply of chips for Huawei’s laptop computers and mobile phones." Source: FT

"TikTok sued the federal government on Tuesday over a new law that would force its Chinese owner, ByteDance, to sell the popular social media app or face a ban in the United States, stoking a battle over national security and free speech that is likely to end up in the Supreme Court." Source: NYT

"Reddit shares rallied 14% in extended trading on Tuesday after the company released quarterly results for the first time since its IPO in March. Revenue increased 48% to $243 million for the first quarter. Reddit reported 82.7 million daily active users for the period." Source: CNBC

Disclaimer:

Investing in equities, fixed-income instruments, and/or alternative asset classes involves substantial risk of loss. Any action you may take as a result of the information presented on this website, blog, or in any Reformed Millennials Podcast (a “podcast”) is your responsibility. By opening this page and/or listening to a podcast, you accept and agree to the terms of this full legal disclaimer. The information on this website, blog, and in any podcast is presented as a general educational, informational, and entertainment resource only. While Joel Shackleton is registered to provide investment advice as an Advising Representative this website, blog, and any podcast does not provide, and should not be construed as providing, individualized investment, tax, or insurance advice, nor as containing any recommendation to buy or sell any specific securities or otherwise make any other form of investment, or take any tax or insurance decision. Nothing contained on this website, blog, or in any podcast should be construed or interpreted by you to mean that an investment in any securities presented or discussed would be suitable for you in your particular circumstances. Joel Shackleton specifically disclaims that any viewer of this website, blog, or any podcast should rely in any way on any of their contents as investment, tax, or insurance advice or as an investment, insurance, or tax recommendation. Viewers are encouraged to consult with their individual investment advisor and other financial professionals prior to taking any potential investment actions or making any insurance or tax decisions. The views and opinions expressed herein are the personal views and opinions of Joel Shackleton and any other specific contributor to the blog or podcast only and do not necessarily reflect the views or opinions of their Firm or any of its other registered individuals or employees in partnership with Joel and his guests. Joel Shackleton disclaims any obligation to update any of the information set out on this website or any blog or podcast going forward.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com

View Details

Listen in podcast app and follow below for the podcast topic arc.

• Joel’s unconventional career path

• How to start a business in your early years

• How to approach the ever changing technology market

• How to think about buying your first house

• Tips and tricks to networking

• Recommendations and Links

Listen on Apple, Spotify, or Google Podcasts.

Happy Easter weekend, everyone.

This weeks episode is a little bit different than our typical show. Part 1 of 2.

Joel is interviewed by Omid from the Second Floor Podcast.

It’s a wide ranging conversation about networking, investing, mentorship, leverage and the Canadian Economy.

If you care to hear Joel’s thoughts on the above subjects, we thinks it well worth your time to listen and subscribe to The Second Floor Podcast.

Podcast & YouTube Recommendations🎙

• “Truly showing belief in others will buy them a ticket to someplace they never knew.” “Create a brand that people chase, don’t chase people with your brand.” Another gem of an episode on @patrick_oshag pod:

• A great podcast covering the new paradigm shift amongst big tech from Ben Thompson and Stratechery.

• The New Face of Military Technology with Peter Zeihan:

Best Links of The Week🔮

• Nvidia’s ACCELERATING AI Strategy. And a Podcast to go with it - Source: the 30 year overnight success story interview with Nvidia CEO Jensen Huang.

• The Concorde Jet vs. Boeing 747 - Source:Trung Phan

• "Xiaomi CEO Lei Jun said the standard version of the SU7 will sell for 215,900 yuan ($30,408) in the country — a price he acknowledged would mean the company was selling each car at a loss. Tesla’s Model 3 starts at 245,900 yuan in China. Lei claimed the standard version of the SU7 beat the Model 3 on more than 90% of its specifications, except on two aspects that he said it might take Xiaomi at least three to five years to catch up with Tesla on." Source: CNBC

• "Reddit shares are plummeting after experiencing a rally stemming from the social media company’s IPO last week. Shares closed Thursday at $49.30, falling below their closing price on Reddit’s first day of trading last week on the New York Stock Exchange. Earlier this week, Reddit disclosed in a corporate filing that CEO Steve Hoffman sold 500,000 shares, and Reddit COO Jennifer Wong also disclosed that she sold 514,000 shares." Source: CNBC

"Home Depot is placing an $18 billion bet that will take the retailer beyond its big orange stores. The home-improvement retailer said Thursday it would buy a company that sells goods for professional roofing and other building projects, branching out to grab more spending by big contractors and construction firms." Source: WSJ

Important Charts From the Last Week:

Crypto, commodities and bond charts courtesy of All Star Charts.

Disclaimer:

Investing in equities, fixed-income instruments and/or alternative asset classes involves substantial risk of loss. Any action you may take as a result of the information presented on this website, blog or in any Reformed Millennials Podcast (a “podcast”) is your own responsibility. By opening this page and/or listening to a podcast, you accept and agree to the terms of this full legal disclaimer. The information on this website, blog and in any podcast is presented as a general educational, informational and entertainment resource only. While Joel Shackleton is registered to provide investment advice as an Advising Representative this website, blog and any podcast does not provide, and should not be construed as providing, individualized investment, tax or insurance advice, nor as containing any recommendation to buy or sell any specific securities or otherwise make any other form of investment, or take any tax or insurance decision. Nothing contained on this website, blog or in any podcast should be construed or interpreted by you to mean that an investment in any securities presented or discussed would be suitable for you in your particular circumstances. Joel Shackleton specifically disclaim that any viewer of this website, blog or any podcast should rely in any way on any of their contents as investment, tax or insurance advice or as an investment, insurance or tax recommendation. Viewers are encouraged to consult with their individual investment advisor and other financial professionals prior to taking any potential investment actions or making any insurance or tax decisions. The views and opinions expressed herein are the personal views and opinions of Joel Shackleton and any other specific contributor to the blog or podcast only and do not necessarily reflect the views or opinions of their Firm or any of its other registered individuals or employees in partnership with Joel and his guests. Joel Shackleton disclaims any obligation to update any of the information set out on this website or any blog or podcast going-forward.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com

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📈Alberta Budget Highlights📉

Welcome back.

This weeks podcast has a special guest: Melissa Caouette founder of Pocket Lobbyist and MC Consulting.

from her political newsletter:

On Thursday, February 29, 2024, Alberta’s Minister of Finance and President of the Treasury Board, Hon. Nate Horner, tabled the Government of Alberta 2024-27 Fiscal Plan: A Responsible Plan for a Growing Province.

TL;DR: Budget 2024 includes a modest $367 million surplus with revenues projected to be $73.5 billion. A relatively positive economic position when considered in the context of global uncertainty with 2.9 per cent projected real GDP growth. Population growth was significant this year but will lower slightly to 3.7 per cent in 2024-25.

Tax updates include a new electric vehicle tax and a new Land Ttitles Registration Levy. The government will increase cigarette and smokeless tobacco taxes and adopt the federal-provincial vaping tax framework. A campaign commitment to introduce the Alberta is Calling Attraction Bonus is also included. Education Property Taxes remain the same.

Here are the links to all the important budget documents for anyone interested in reviewing all the details:

• Minister Horner's Budget Address

• Fiscal Plan

• Capital Plan and Details By Ministry

• Business Plans

About Pocket Lobbyist

Pocket Lobbyist is an innovative, first-of-its-kind platform for government relations and public policy materials in Canada.

We offer innovative products that support organizations in anticipating, interpreting, and mitigating political risk, including a membership portal and cohort-based professional development opportunities.

After launching in 2022, Pocket Lobbyist is a trusted resource for some of Canada’s largest municipalities, economic development associations, non-profits, associations, lobbying firms, and private sector companies.

Twitter links to reference for the pod:

• Trevor Tombe on the 250B-400B Herritage fund

• Canada no longer one of the richest nations on earth

• Land transfer tax gets a huge tax overhaul

Podcast & YouTube Recommendations🎙

• Richard Lewis was a legend and he passed this week. He will be missed,. This best of Richard Lewis on Letterman is fantastic:

• G2 Podcast:

• New Founders Pod:

Best Links of The Week🔮

• PRIME TIME: WHY NIGHT GOLF COULD EXPLODE IN POPULARITY: “There are about 16,000 golf courses in the United States, but less than one percent of them have lights. That could change in the coming years as many in the golf industry feel we are at the beginning of a night golf trend. “Source: here

• Nvidia CEO Jensen highlights Inference over Training AI: With the markets increasingly tuned to the potentially higher upcoming competition from other chip vendors for Nvidia in AI inference vs training, it’s notable that CEO Jensen Huang is making this a priority. Especially in terms of providing the street Nvidia metrics on this front. Source and detailed take: here.

• "Over and over again, Apple Chief Executive Tim Cook has been asked the same question: What is Apple doing about generative artificial intelligence? His answer: Stay tuned. Investors are getting impatient... That sentiment is why Apple’s decision to shift some employees into AI and cancel its electric-car project—one of the most widely anticipated potential tech products in a decade—was greeted with almost universal investor enthusiasm Tuesday." Source: WSJ

• "The Federal Reserve’s preferred gauge of underlying inflation rose in January at the fastest pace in nearly a year, helping explain policymakers’ patient approach to start cutting interest rates. The so-called core personal consumption expenditures price index, which strips out the volatile food and energy components, increased 0.4% from December, data out Thursday showed. From a year ago, it advanced 2.8%. Economists consider this to be a better gauge of underlying inflation than the overall index." Source: Bloomberg

Disclaimer:

Investing in equities, fixed-income instruments and/or alternative asset classes involves substantial risk of loss. Any action you may take as a result of the information presented on this website, blog or in any Reformed Millennials Podcast (a “podcast”) is your own responsibility. By opening this page and/or listening to a podcast, you accept and agree to the terms of this full legal disclaimer. The information on this website, blog and in any podcast is presented as a general educational, informational and entertainment resource only. While Joel Shackleton is registered to provide investment advice as an Advising Representative this website, blog and any podcast does not provide, and should not be construed as providing, individualized investment, tax or insurance advice, nor as containing any recommendation to buy or sell any specific securities or otherwise make any other form of investment, or take any tax or insurance decision. Nothing contained on this website, blog or in any podcast should be construed or interpreted by you to mean that an investment in any securities presented or discussed would be suitable for you in your particular circumstances. Joel Shackleton specifically disclaim that any viewer of this website, blog or any podcast should rely in any way on any of their contents as investment, tax or insurance advice or as an investment, insurance or tax recommendation. Viewers are encouraged to consult with their individual investment advisor and other financial professionals prior to taking any potential investment actions or making any insurance or tax decisions. The views and opinions expressed herein are the personal views and opinions of Joel Shackleton and any other specific contributor to the blog or podcast only and do not necessarily reflect the views or opinions of their Firm or any of its other registered individuals or employees in partnership with Joel and his guests. Joel Shackleton disclaims any obligation to update any of the information set out on this website or any blog or podcast going-forward.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com

View Details

Listen in podcast app and follow below for the podcast topic arc.

• Super Bowl Economics

• Market update

• Underneath all time highs

• Rates aren’t coming down… now what?

• The power of AI and inference

• Recommendations and Links

Listen on Apple, Spotify, or Google Podcasts.

Market Update📈📉

Welcome back.

The Good

The most bullish thing I see out there for the stock market is the lack of new lows… Most stocks are holding and staying above their 52 week lows…

It's mathematically impossible for the stock market to get worse, go into a correction, or even think about the possibility of a bear market, without seeing an expansion in new lows first.

And we're just not seeing it.

The NYSE Composite went out last week at a new all-time high. And even the most short-term of new lows lists have yet to see any expansion.

The Bad

However, the bad thing is that there have been a number of bearish divergences adding up.

The stock market just entered what is historically one of the worst times to own stocks of the entire year, the new 52-week highs list has already dried up.

We are in nomansland.

The all time highs list peaked 2 months ago, and has been deteriorating with every new high you see in the S&P500 and Nasdaq (neither one closed at a new high last week).

US Treasury Bonds are falling off a cliff. When a $130 Trillion asset class is crashing, is your bet that it won't impact the stock market?

You're seeing Consumer Staples outpacing Consumer Discretionary stocks, which is what you normally see in the market right before a good rug pull.

And worst of all, the US Dollar is ripping higher. Over the past several years, when the Dollar is strong, stock are not…

The US Dollar is the only safe haven in this market. And Dollar Index Futures are up every week this year - 7 weeks in a row. All of these, in my opinion, are definitely bad for stocks.

The UGLY

This market is losing its leaders.

Adobe, arguably the most important software stock, is getting crushed.

The iShares Software Index Fund just got back to its former bull market highs from late 2021.

The most important stocks within the index are already rolling over.

If Software is falling, Apple and Microsoft are rolling over, and momentum is diverging everywhere, do you think the Tech Sector Index itself won't follow?

Remember, Technology represents 30% of the S&P500 and over 50% of the Nasdaq100 $QQQ.

Now, this is all to say that we cant possibly see the future and all these bearish signals could change in an instant.

We as investors and market participants must stay nimble.

Twitter links from the pod:

• Capital One buying Discover

• Lifestyle influencers are transitioning out of the business

• EV Leases are plummeting in price

• Raising Canes origin story

• Trevor Tombe talks about the Alberta herritage fund

Podcast & YouTube Recommendations🎙

• The Legend Behind the Legend: This awesome interview was served up of Steve Williams who was Tiger Woods caddy for 13 years. Steve had the best seat in golf for 13 years. There are so many great stories on Tiger Woods’ crazy life, the one on how he got fired and on the legacy of Tiger Woods.

• The Compound brings back my favorite guest:

• B2 is the best new podcast in tech and investing. This episode was a phenomenal cruise around tech markets.

Best Links of The Week🔮

• "Nvidia’s surge to an all-time high is the biggest single-session increase in market value in history, besting Meta’s historic gain just three weeks ago. Shares of the chipmaker jumped 16% Thursday, adding about $277 billion in market capitalization and bringing its total market value near $2 trillion. The addition eclipsed the $197 billion gain made by Facebook-parent Meta at the start of the month." Source: Bloomberg

• "Japan’s benchmark stock average hit a record high Thursday after 34 years of waiting, and the reason mostly boils down to one word: profits. Japanese companies are making a lot of money, and they are handing out a lot of it to their shareholders. In contrast to 3½ decades ago, when Nikkei Stock Average record highs last made headlines, no bubbles or magical thinking are needed to justify the new peak." Source: WSJ

• "Social media company Reddit filed its IPO prospectus with the Securities and Exchange Commission on Thursday after a yearslong run-up. The company plans to trade on the New York Stock Exchange under the ticker symbol “RDDT.” Its market debut, expected in March, will be the first major tech initial public offering of the year. It’s the first social media IPO since Pinterest went public in 2019." Source: CNBC

• "A patient implanted with Neuralink’s brain technology can now control a computer mouse just by thinking, the company’s founder Elon Musk said. ″[The] patient seems to have made a full recovery with no ill effects that we are aware of and is able to control the mouse, move the mouse around the screen just by thinking,” Musk said in a Spaces session on social media platform X. Neuralink is the billionaire’s startup, which says it has developed a brain implant designed to help humans use their neural signals to control external technologies. The company aims to restore lost capabilities such as vision, motor function and speech." Source: CNBC

Disclaimer:

Investing in equities, fixed-income instruments and/or alternative asset classes involves substantial risk of loss. Any action you may take as a result of the information presented on this website, blog or in any Reformed Millennials Podcast (a “podcast”) is your own responsibility. By opening this page and/or listening to a podcast, you accept and agree to the terms of this full legal disclaimer. The information on this website, blog and in any podcast is presented as a general educational, informational and entertainment resource only. While Joel Shackleton is registered to provide investment advice as an Advising Representative this website, blog and any podcast does not provide, and should not be construed as providing, individualized investment, tax or insurance advice, nor as containing any recommendation to buy or sell any specific securities or otherwise make any other form of investment, or take any tax or insurance decision. Nothing contained on this website, blog or in any podcast should be construed or interpreted by you to mean that an investment in any securities presented or discussed would be suitable for you in your particular circumstances. Joel Shackleton specifically disclaim that any viewer of this website, blog or any podcast should rely in any way on any of their contents as investment, tax or insurance advice or as an investment, insurance or tax recommendation. Viewers are encouraged to consult with their individual investment advisor and other financial professionals prior to taking any potential investment actions or making any insurance or tax decisions. The views and opinions expressed herein are the personal views and opinions of Joel Shackleton and any other specific contributor to the blog or podcast only and do not necessarily reflect the views or opinions of their Firm or any of its other registered individuals or employees in partnership with Joel and his guests. Joel Shackleton disclaims any obligation to update any of the information set out on this website or any blog or podcast going-forward.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com

View Details

Listen in podcast app and follow below for the podcast topic arc.

• Good Good tournament with Grass Clippings

• Market update

• Canada betting too much on USA trade

• American exports

• Recommendations and Links

Listen on Apple, Spotify, or Google Podcasts.

Market Update📈📉

Welcome back.

Last Wednesday the Dow, S&P500 and Nasdaq100 all closed at new all-time highs.

But the number of stocks on the NYSE that actually made new highs was a fraction of what it was last week…

Breadth is weak.

The indexes make new highs. The headlines focus only on that.

But then the actual new highs list is non-existent.

A sell off is beginning, we’re just not seeing it at the index level yet.

But, things can change at the drop of a hat.

The number of S&P 500 stocks above their 200 and 50dma is decreasing while the index is making new highs. This is how indexes topped in the past. The trouble is that timing a top is a lot tougher than capturing a bottom.

A bearish divergence can continue a lot longer than most expect and can resolve in two ways:

• We can see an expansion of the rally as more stocks participate. This happened last year in May and June.

• Or we can see a correction and most stocks pull back.

From where we stand, both scenarios are equally plausible right now.

More stocks joining the rally mean more and better opportunities in faster-moving stocks. A correction means lower prices in the strongest companies – so many investors are dreaming about buying pullbacks in the strongest semiconductor and software stocks. Any dips will offer better risk-to-reward opportunities.

As legendary investor, Peter Lynch said: “Far more money has been lost while preparing for a correction than during the corrections themselves”.

Twitter links from the pod:

• Trevor Tombe on Canadian resource investment

• Trevor Tombe on Canada betting too much on USA trade

• Chris Arnade talks about American exports

• Adam Sandler and Brad Pitt

Podcast & YouTube Recommendations🎙

• BG2 podcast with Aaron Levie:

• Using the Apple Vision Pro:

Best Links of The Week🔮

• Todays luxuries are tomorrows commodities - “We're entering a world in which consumers will experience abundance in creativity and productivity, in their relationships and social experiences, and in personal growth across dimensions like education, wellness, and financial health. This will manifest in a new generation of AI-native consumer products and companies that grow faster and engage users more deeply than ever before”. Source: Gamma

• Federal Reserve Chair Jerome Powell said the central bank has shifted its focus toward deciding when to begin cutting interest rates, but that solid economic growth means officials didn’t have to rush that decision. Given recent economic strength, “we feel like we can approach the question of when to begin to reduce interest rates carefully,” Powell said during a rare television interview to be broadcast on CBS on Sunday night. Powell, speaking on “60 Minutes,” said officials were trying to balance the risks of leaving rates too high for too long, which could cause an economic slowdown, and of cutting rates too soon and allowing inflation to settle above the Fed’s 2% goal." Source: WSJ

• "Danish drugmaker Novo Nordisk has been “surprised” by the readiness of European consumers to pay for weight-loss drugs from their own pockets, as the region’s largest company invests in new supply to meet runaway demand. The company’s weight-loss drug Wegovy and diabetes treatment Ozempic powered it to record sales in 2023 and a current market capitalisation of $508bn." Source: FT

• "Hawaiian Airlines is rolling out complimentary Wi-Fi via SpaceX’s Starlink on board commercial flights this week... the first major U.S. airline to offer the satellite-based service. “SpaceX has really cracked the code – literally, in terms of the technology – to be able to deliver a wide bandwidth of very high quality connectivity to an airplane with a global reach,” Peter Ingram, Hawaiian Airlines CEO, told CNBC." Source: CNBC

Disclaimer:

Investing in equities, fixed-income instruments and/or alternative asset classes involves substantial risk of loss. Any action you may take as a result of the information presented on this website, blog or in any Reformed Millennials Podcast (a “podcast”) is your own responsibility. By opening this page and/or listening to a podcast, you accept and agree to the terms of this full legal disclaimer. The information on this website, blog and in any podcast is presented as a general educational, informational and entertainment resource only. While Joel Shackleton is registered to provide investment advice as an Advising Representative this website, blog and any podcast does not provide, and should not be construed as providing, individualized investment, tax or insurance advice, nor as containing any recommendation to buy or sell any specific securities or otherwise make any other form of investment, or take any tax or insurance decision. Nothing contained on this website, blog or in any podcast should be construed or interpreted by you to mean that an investment in any securities presented or discussed would be suitable for you in your particular circumstances. Joel Shackleton specifically disclaim that any viewer of this website, blog or any podcast should rely in any way on any of their contents as investment, tax or insurance advice or as an investment, insurance or tax recommendation. Viewers are encouraged to consult with their individual investment advisor and other financial professionals prior to taking any potential investment actions or making any insurance or tax decisions. The views and opinions expressed herein are the personal views and opinions of Joel Shackleton and any other specific contributor to the blog or podcast only and do not necessarily reflect the views or opinions of their Firm or any of its other registered individuals or employees in partnership with Joel and his guests. Joel Shackleton disclaims any obligation to update any of the information set out on this website or any blog or podcast going-forward.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com

View Details

Listen in podcast app and follow below for the podcast topic arc.

• Sports business update (Netflix $5B Deal with WWE)

• Inflation news and jobs data

• Market update

• META earnings

• AMZN earnings

• Vision Pro impacting culture

• Recommendations and Links

Listen on Apple, Spotify, or Google Podcasts.

Market Update📈📉

Welcome back.

We had a very exciting week in markets. There was some important US data that was released. QRA & RRP, FOMC and Big Tech earnings.

QRA - There was a net funding for US treasury and bills, which was a surprise and would be considered a headwind for equities.

FOMC - Many forecasters assumed that Quantitative Tightening (QT) would end in June, however, after this months meeting it’s quite clear that QT ending is no longer a certainty. There will be no rate cut in march.

In order to see a cut, Jerome Powell will need to see a few CPI prints that negate the benign inflation that we have seen over the last few quarters.

This is all to say, that its clear we are in a fairly precarious place with regards to equity pricing. We are priced for a perfect “no landing'“ situation.

AI and Big Tech:

Big Tech AI driven Earnings Season Momentum continues: Meta took the investor crown with its quarterly results, with the stock up almost 20%, with Amazon also seeing a double digit positive reaction. Microsoft, logged some gains initially post announcement gains, but gave them up later in the week. Apple and Google had modestly muted reactions, Apple for weakness in China, and Google for continued concerns on AI impact on its Search business. Lots in the weeds to parse for each of the ‘Magnificent 7’, but overall, the AI sentiment tailwinds continue.

How to think about the evolution of culturally important technology: Vision Pro

If one looks back at Apple’s ‘platform’ record over the decades, the company is generally never the first in a hot new tech area. But when it does make its move, it’s typically a committed, focused, and multi-year bet on making it a vertically integrated ‘Best’. With an almost religious ‘attention to detail’, fusing both the hardware and software elements. With the North Star of the eventual user experience.

Let’s look at the broad strokes through tech history. Apple typically relabels the tech to whatever it wants. (This time it’s ‘Spatial Computing’ instead of ‘VR, AR or MR’).

Let’s look at this ‘late’ but eventually ‘best’ trend through Apple’s history:

• GUI (Graphical User Interface) pioneering Macs in the 1980s, bringing the world from the ‘Command Line’ of Microsoft’s MS-DOS to their eventual success with Windows 95 and beyond,

• to its Internet ‘built-in’ iMacs in 1997 when Steve Jobs ‘came back’ to Apple,

• to the iPod that revamped the Music industry from albums to buying music tracks individually, changing the habits of billions in how they consumed music,

• to of course the mobile phone with the iPhone in 2007 after Blackberry and many others had already ‘taken the lead’, redefining the ‘Smart Phone’, and establishing the ‘App Store’ and App Economy that now sees over a trillion in business activity per year,

• to the Airpods in the ‘Wearables’ space, overtaking prior wired and wireless efforts,

• to the Apple Watch, which continued the ‘Wearables’ progression from others, painstakingly iterating over many years,

• to now the Vision Pro in headsets that have seen billions in expenditures by everyone from Meta/Facebook with Oculus/Quest headsets to Microsoft, Sony, and so many others.

Twitter links from the pod:

• AMZN earnings recap

• META earnings recap

• Oil stocks to own forever

• Real estate development story that will blow your mind

• Bill Gross talks about QT and QE

Podcast & YouTube Recommendations🎙

• How to think about New All Time HIGHS - from the Compound

• How to think about product pricing - Invest Like The Best

Best Links of The Week🔮

• "After decades in the shadows of record-shattering Wall Street stocks, a transformation of the euro-area’s index of blue-chip companies looks to have finally set the benchmark on course toward a new high. Europe may lack a “Magnificent Seven” tech cohort of its own, but a pared-down version of that phenomenon has emerged. The Euro Stoxx 50 has just hit its highest since 2001, with the latest leg of the surge powered by blowout earnings from the region’s two biggest tech stocks, ASML and SAP." Source: Bloomberg

• "Reddit is weighing feedback from early meetings with potential investors in its initial public offering that it should consider a valuation of at least $5 billion... even as it is estimated below that figure in the volatile market for shares of private companies. The San Francisco-based social media company and its advisers are targeting a valuation in the mid-single-digit billions... The ultimate figure will depend on the IPO market’s nascent recovery... Reddit is considering a possible listing as soon as March." Source: Bloomberg

• "Meta Platforms is hoping Apple’s launch of the Vision Pro can reinvigorate its $50 billion metaverse effort, which consumers have yet to widely embrace. The social-media company wagered its reputation on the technology in 2021... Three years later, Meta’s Reality Labs division accounts for less than 1% of overall revenue, and the company has struggled to expand the cache of its Quest devices beyond a niche market... On the eve of the arrival of Apple’s Vision Pro, which will hit U.S. stores Friday, executives at Meta are optimistic, believing the iPhone maker’s entry into the market will validate Chief Executive Mark Zuckerberg’s gamble and draw more consumers." Source: WSJ

• "China has moved to officially limit short selling after informal efforts failed to stop a worsening stock market sell-off. Investors who buy shares will not be allowed to lend them out for short selling within an agreed lock-up period, the Shenzhen and Shanghai bourses said on Sunday... Regulators are coming under increasing pressure to halt the stock sell-off, which has been fuelled by uncertainty over the country’s economic growth prospects." - Source: FT

• "Big pharmaceutical companies like Bristol Myers Squibb, Merck and Johnson & Johnson face so-called patent cliffs that will put tens of billions of dollars in sales at risk between now and 2030. That refers to when patents expire for one or more leading branded products for a company, which opens up the door for competitors to sell copycats of those drugs, often at a lower price. Some companies appear to be well-prepared to offset some of the losses from upcoming patent expirations." - Source: CNBC

• "The Biden administration, eager to highlight a signature economic initiative as elections approach, is expected to award billions of dollars in subsidies to Intel, Taiwan Semiconductor Manufacturing, or TSMC, and other top semiconductor companies in coming weeks to help build new factories. The grants are part of the $53 billion Chips Act, intended to reshore production of advanced microchips and fend off China, which is fast developing its own chip industry." - Source: WSJ

• "Cathie Wood has said her tech-focused Ark stock market fund “paid its dues” with two years of steep declines, before roaring back last year with one of the industry’s best performances. Wood’s $8bn Ark Innovation exchange traded fund recorded a 68 per cent gain last year, putting it within the top one per cent of its peers, according to data from Morningstar. That rebound came after a 50 per cent annualised loss across 2021 and 2022, when sentiment soured against the high-growth companies it had backed." - Source: FT

Disclaimer:

Investing in equities, fixed-income instruments and/or alternative asset classes involves substantial risk of loss. Any action you may take as a result of the information presented on this website, blog or in any Reformed Millennials Podcast (a “podcast”) is your own responsibility. By opening this page and/or listening to a podcast, you accept and agree to the terms of this full legal disclaimer. The information on this website, blog and in any podcast is presented as a general educational, informational and entertainment resource only. While Joel Shackleton is registered to provide investment advice as an Advising Representative this website, blog and any podcast does not provide, and should not be construed as providing, individualized investment, tax or insurance advice, nor as containing any recommendation to buy or sell any specific securities or otherwise make any other form of investment, or take any tax or insurance decision. Nothing contained on this website, blog or in any podcast should be construed or interpreted by you to mean that an investment in any securities presented or discussed would be suitable for you in your particular circumstances. Joel Shackleton specifically disclaim that any viewer of this website, blog or any podcast should rely in any way on any of their contents as investment, tax or insurance advice or as an investment, insurance or tax recommendation. Viewers are encouraged to consult with their individual investment advisor and other financial professionals prior to taking any potential investment actions or making any insurance or tax decisions. The views and opinions expressed herein are the personal views and opinions of Joel Shackleton and any other specific contributor to the blog or podcast only and do not necessarily reflect the views or opinions of their Firm or any of its other registered individuals or employees in partnership with Joel and his guests. Joel Shackleton disclaims any obligation to update any of the information set out on this website or any blog or podcast going-forward.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com

View Details

Listen in podcast app and follow below for the podcast topic arc.

• Sports recap

• Market update

• MSFT Co-pilot launches and surpasses APPL in market cap

• Amazon bails out regional sports networks

• Benson Boone Soft Launches his hit single Beautiful things

• Recommendations and Links

Listen on Apple, Spotify, or Google Podcasts.

Market Update📈📉

Welcome back.

Lets quickly start with interest rates and the Fed/Bank of Canada:

The Fed/BofC dot plot assumes 3 cuts in 2024.

3 factors drive that assumption

• Inflation falling

• Real GDP falling

• Monetary policy

Lately the market and policy makers have focused entirely on #1. BUT 2. And 3 matter as well.

To validate the 3 cuts, GDP is projected to fall from 2.6 to 1.4. If it doesn't then almost all of the cuts in 2024 would not likely manifest. Last year we saw great progress in fighting back down inflation. This year will be about how the real economy handles current borrow rates.

Will gdp fall a lot? Or will it be stronger for longer?

Market technicals:

I think it's important to reiterate that if the most important sectors are holding their key breakouts, it's hard to be too bearish on the overall market at this stage.

First is Technology - the largest weighting in the S&P500 representing almost 30% of the entire Index. Tech is also 50% of the Nasdaq.

You're seeing similar from Industrials which is historically highly correlated with the S&P500 among all S&P sectors.

The importance of Homebuilders needs little introduction. But also keep in mind that this is one of the key groups within the Consumer Discretionary sector:

We don't have bull markets around here without Financials. So if the NYSE Broker Dealers Index is above those former cycle highs, like all of these others, it's hard to be too bearish on equities:

And finally, the strength out of Semiconductors cannot be overstated. As $TSM released better than expected 2024 guidance.

Twitter links from the pod:

• Roy Maddox on 2024 expectations

• Brent Beshore talks small business investing/characteristics

• Ram talks demographics, growth and inflation

• Nate Silvers on the population Bomb

• How to grow/market/scale an ecommerce business

Podcast & YouTube Recommendations🎙

• Bob Elliott talks about what the Fed needs to see in order to see rate cuts in 2024:

• Beautiful Things - Benson Boone

• Sam Altman and Bill Gates talk the future of AI:

Best Links of The Week🔮

• The Red Sea, a key global trade route, faces material disruption from Iran-backed Houthi rebel attacks on commercial ships. - FT

• In the world of media and technology, there is something that is always in play…the bundling and unbundling of things. - Ben Thompson has covered this over the years.

• I love this Morgan Housel piece titled ‘Information That Would Get Your Attention’.

• The Apple Macintosh is 40 years old (a true reminder to let the Vision Pro breathe)

Disclaimer:

Investing in equities, fixed-income instruments and/or alternative asset classes involves substantial risk of loss. Any action you may take as a result of the information presented on this website, blog or in any Reformed Millennials Podcast (a “podcast”) is your own responsibility. By opening this page and/or listening to a podcast, you accept and agree to the terms of this full legal disclaimer. The information on this website, blog and in any podcast is presented as a general educational, informational and entertainment resource only. While Joel Shackleton is registered to provide investment advice as an Advising Representative this website, blog and any podcast does not provide, and should not be construed as providing, individualized investment, tax or insurance advice, nor as containing any recommendation to buy or sell any specific securities or otherwise make any other form of investment, or take any tax or insurance decision. Nothing contained on this website, blog or in any podcast should be construed or interpreted by you to mean that an investment in any securities presented or discussed would be suitable for you in your particular circumstances. Joel Shackleton specifically disclaim that any viewer of this website, blog or any podcast should rely in any way on any of their contents as investment, tax or insurance advice or as an investment, insurance or tax recommendation. Viewers are encouraged to consult with their individual investment advisor and other financial professionals prior to taking any potential investment actions or making any insurance or tax decisions. The views and opinions expressed herein are the personal views and opinions of Joel Shackleton and any other specific contributor to the blog or podcast only and do not necessarily reflect the views or opinions of their Firm or any of its other registered individuals or employees in partnership with Joel and his guests. Joel Shackleton disclaims any obligation to update any of the information set out on this website or any blog or podcast going-forward.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com

View Details

Listen in podcast app and follow below for the podcast topic arc.

• Sports roundup

• NFL success

• Market update

• Bitcoin ETF

• Tiger and Nike part ways

• Recommendations and Links

Listen on Apple, Spotify, or Google Podcasts.

Market Update📈📉

Lets start with what happened last week.

Bonds traded down and equities traded slightly up.

But what matters to participants is the short end of the yield curve. And how interest rates are going to move as we trade through the year.

“If inflation falls towards target, unless they ease, they will be tight.” - Jerome Powell

What the market is betting on at he moment is that the inflation rate will fall to somewhere between 2.3%-2.5%. which will allow the fed to cut to 2% REAL.

Real interest rates are CPI minus the fed funds rate.

This is where the 4.3%-4.5% fed funds rate is coming from.

The problem is that CPI came in hotter than expected last week.

3.4% vs and expected 3.2%

A lot of people are still trapped in super short dated bills.

The reinvestment risk for most participants is enormous.

Most investors are looking to enter market slightly lower than where we are right now.

Moving forward. Will inflation drift towards target?

At the moment, the proper positioning is likely 60:40 (equity:bonds) for most wealthy long term investors.

40% in 3-4 year duration bonds.

60% long duration equities.

What do we sell? What do we buy?

There is some incredibly exciting opportunities in tech right now. Stuff that could significantly run into the future. But the market feels properly priced here.

None of this is financial advice but this is how I’m thinking through the first week of 2024.

Twitter links from the pod:

• Ram on twitter talks about global investing trends

• Bitcoin ETF Taxation

• Andy Constan on the future of inflation

• Kate and Ashley Quiet Luxury

• CES 2024

Everyone should check these links out:

Consumer Electronics Show (CES) 2024 wraps up an AI-laden week: CES 2024 wrapped up this week with almost every company having an AI featured announcement. Or so it seemed. Useful rounds ups of the plethora of announcements across Electronics, PCs/Laptops/TVs/Automobiles, and gadgets of every type can be read hare, here and here amongst many others, Of particular note of course was the focus by both chip and PC vendors to highlight the AI capabilities of their next generations of products this year. And Intel, AMD and other chip vendors did their best to make their case that they were also in the AI chip race vs Nvidia, which at the moment is running away with the AI infrastructure market. Now it’s on the software and services companies to ramp up their offerings to leverage the local hardware with innovative AI apps and services.

CES also saw a range of new AI Devices and Services: Ahead of Apple’s much-anticipated launch of its Vision Pro glasses which go up for pre-order on January 19, CES also saw new AI devices and services on offer. Sony previewed 'Spatial Content’ Headset against Apple’s upcoming focus on ‘Spatial Computing’. A new company launched its Rabbit R1 $200 AI device product below (no subscription), with an ambition similar to Humane AI’s pin product rolled out a few weeks ago. Samsung had fun with its Ballie AI robot. We’re going to see a cambrian explosion of AI gadgets and services this year, including AI services like ChatGPT stuffed into our VWs and BMWs. My deeper take on this trend here.

Podcast & YouTube Recommendations🎙

• How to become a millionaire in your 20’s

• Scott Galloway talks about his successes and failures investing

• Parenting Podcast of the week

Best Links of The Week🔮

• Permanent Equity Annual Letter. Joel’s favorite private equity gourp. - Link

• "US crude oil and natural gas output is set to notch fresh records in 2024 and 2025, the government has forecast, despite mounting fears that the shale revolution that fuelled the nation’s energy boom has run its course. Average US oil production will amount to 13.2mn barrels per day this year, rising to 13.4mn b/d next year, according to an energy outlook released on Tuesday by the Energy Information Administration. The figures top the 12.9mn b/d estimated in 2023 — itself a record, surpassing levels reached before the pandemic." Source: FT

• Google is going forward with sweeping changes to how companies track users online—moves that have been years in the making. Advertisers still aren’t ready. The changes, among the biggest in the history of the $600 billion-a-year online-ad industry, center on the use of cookies, technology that logs the activity of internet users across websites so that advertisers can target them with relevant ads. Starting Thursday, Google will start a limited test that will restrict cookies for 1% of the people who use its Chrome browser, which is by far the world’s most popular. By year’s end, Google plans to eliminate cookies for all Chrome users." Source: WSJ

• "German inflation accelerated to its fastest rate for three months in December, casting doubt over investors’ hopes that the European Central Bank will start cutting interest rates as early as March. Inflation in Europe’s largest economy rose at an annual rate of 3.8 per cent in December, up from 2.3 per cent a month earlier... The reduction of government subsidies on gas, electricity and food that began last year has triggered a re-acceleration of annual inflation in much of Europe." Source: FT

• "Eli Lilly started a new online service offering telehealth prescriptions and direct home delivery of its new anti-obesity drug Zepbound, an unusual move into the drug supply chain by a pharmaceutical company with one of the hottest-selling medicines." Source: WSJ

• "Peloton is partnering with TikTok to bring short-form fitness videos and other content to the social media channel. The partnership comes as Peloton looks to attract a wider array of customers and boost subscribers amid falling sales and profits. In May, Peloton rebranded as a fitness company “for all,” and is still working to get that message out to the public." Source: CNBC

Disclaimer:

Investing in equities, fixed-income instruments and/or alternative asset classes involves substantial risk of loss. Any action you may take as a result of the information presented on this website, blog or in any Reformed Millennials Podcast (a “podcast”) is your own responsibility. By opening this page and/or listening to a podcast, you accept and agree to the terms of this full legal disclaimer. The information on this website, blog and in any podcast is presented as a general educational, informational and entertainment resource only. While Joel Shackleton is registered to provide investment advice as an Advising Representative this website, blog and any podcast does not provide, and should not be construed as providing, individualized investment, tax or insurance advice, nor as containing any recommendation to buy or sell any specific securities or otherwise make any other form of investment, or take any tax or insurance decision. Nothing contained on this website, blog or in any podcast should be construed or interpreted by you to mean that an investment in any securities presented or discussed would be suitable for you in your particular circumstances. Joel Shackleton specifically disclaim that any viewer of this website, blog or any podcast should rely in any way on any of their contents as investment, tax or insurance advice or as an investment, insurance or tax recommendation. Viewers are encouraged to consult with their individual investment advisor and other financial professionals prior to taking any potential investment actions or making any insurance or tax decisions. The views and opinions expressed herein are the personal views and opinions of Joel Shackleton and any other specific contributor to the blog or podcast only and do not necessarily reflect the views or opinions of their Firm or any of its other registered individuals or employees in partnership with Joel and his guests. Joel Shackleton disclaims any obligation to update any of the information set out on this website or any blog or podcast going-forward.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com

View Details

Listen in podcast app and follow below for the podcast topic arc.

• Reviewing 2023 predictions

• Whats in store for 2024

• 2024 predictions

• Recommendations and Links

Listen on Apple, Spotify, or Google Podcasts.

Market Update📈📉

Welcome back and Happy New year everyone.

The market has gotten off to a very slow start. Erasing all the gains in the final five trading days of last year.

On LinkedIn I posted a little blurb on the January Trifecta that i think is important to talk about as we trade through January.

Santa failed to show up for his Rally.In investing, there are many adages or proverbs that people track.One that has become popular is the New Years Trifecta.The first leg is the Santa Clause Rally. Which combines the final 5 trading days of last year and the first 2 trading days of the new year. The second is “the first 5 days” of January.The third is “as January goes, so goes the rest of the year”.The first adage or indicator is usually measuring the S&P500, but it’s also fair game to expand it more broadly as I think it helps to see the whole market. (See attached chart from All Star Charts)So what does it all mean exactly?Last year, we had one of the best January’s in history. Which lead to one of the best performing years for a 60:40 portfolio in a long time.We’ve gotten off to a poor start here in North America. But the rest of the world, specifically Emerging Markets, Financials and Healthcare have bucked that trend.There are many strategists on the street bullish these three areas of the market.They are showing relative strength.I think that’s important to pay attention to.It’s a new year, with new trends.

2024 Predictions:

• Cancel culture gets canceled

• Ozempic (GLP-1) is bigger than AI

• S&P 500 sees a +15% gain

• Jerome Powell leaves the fed in 2024 after soft landing confirmed and before Trump

• TikTok finally gets banned in the US and Canada (After election)

• Hypest IPO of 2024 is going to be Kim K’s Spanx and Stripe

• Longevity products go mainstream

• Crypto begins a new bull market

• Software moats erode with AI

• Valuation dispersion widens

• A new generational social media product is born

• India has a blockbuster startup IPO

• US IPO market reopens; M&A stalls with regulation

• Small cap tech IPOs will make a comeback

• AI deflates healthcare

• Digital detoxes go mainstream

• The value of culture will skyrocket in the AI age

• Fed will hike more than it will cut in 2024

• Bitcoin spot ETF will not happen in 2024

• Gold will trade below $1700

• No banks will fail

• China Equities will outperform all G7 equities

• YoY US CPI measure for all of 2024 will exceed 2023 year end level

• Mag 7 will again outperform SPX 493

Podcast & YouTube Recommendations

• The best interview of Scott I have ever watched. And I’ve seen darn near all of them.

• Zeihan on Canada’s position economically

Best Links of The Week🔮

• The Case Against Travel by Agnes Callard - An argument we might all be more open to after experiencing an airport around the holidays … Especially in an age of online booking and Instagram, travel shouldn’t be considered an achievement or a hobby.

• An Extraordinary Introduction to the Birth of Israel and the Arab-Israeli Conflict (with Haviv Rettig Gur) by EconTalk Podcast - A much broader perspective on the foundation of Israel that goes well beyond 1948 and puts Zionism in a wider historical context in Europe.

• Bonus (Listen): Sam Lessin of SlowVC: The End of Factory-Farmed Unicorns on World of DaaS pod Everyone is afraid to make predictions, except Sam Lessin. Sam gives an in depth breakdown of the last five years of VC, and where it’s heading in the next five.

• Why The Age of American Progress Ended by Derek Thompson “Invention alone can’t change the world; what matters is what happens next.” The US has more Nobel prizes for science than most of Europe combined, but if there were a Nobel prize for deployment and adoption of new technologies, we certainly wouldn’t be the leading recipients.

• The Secret Life of the 500+ Cables That Run the Internet by Stephen Shankland Some of the facts about the several hundred cables that connect the global internet are unbelievable: They’re only about the width of a garden hose, and they carry 99% of intercontinental internet traffic.

• What do you actually want? by Raffi Grinberg

For the season of goal setting, a practical, replicable exercise to understand more about what you actually want and why, with grounding in modern psychology.

Disclaimer:

Investing in equities, fixed-income instruments and/or alternative asset classes involves substantial risk of loss. Any action you may take as a result of the information presented on this website, blog or in any Reformed Millennials Podcast (a “podcast”) is your own responsibility. By opening this page and/or listening to a podcast, you accept and agree to the terms of this full legal disclaimer. The information on this website, blog and in any podcast is presented as a general educational, informational and entertainment resource only. While Joel Shackleton is registered to provide investment advice as an Advising Representative this website, blog and any podcast does not provide, and should not be construed as providing, individualized investment, tax or insurance advice, nor as containing any recommendation to buy or sell any specific securities or otherwise make any other form of investment, or take any tax or insurance decision. Nothing contained on this website, blog or in any podcast should be construed or interpreted by you to mean that an investment in any securities presented or discussed would be suitable for you in your particular circumstances. Joel Shackleton specifically disclaim that any viewer of this website, blog or any podcast should rely in any way on any of their contents as investment, tax or insurance advice or as an investment, insurance or tax recommendation. Viewers are encouraged to consult with their individual investment advisor and other financial professionals prior to taking any potential investment actions or making any insurance or tax decisions. The views and opinions expressed herein are the personal views and opinions of Joel Shackleton and any other specific contributor to the blog or podcast only and do not necessarily reflect the views or opinions of their Firm or any of its other registered individuals or employees in partnership with Joel and his guests. Joel Shackleton disclaims any obligation to update any of the information set out on this website or any blog or podcast going-forward.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com

View Details

Listen in podcast app and follow below for the podcast topic arc.

• Introduction - Dan Belostotsky

• Where does Honestdoor fit in the Real Estate sector?

• Process of using Honestdoor

• Realtor.ca Court Case

• Real Estate startups

• Hypothetical Buying Agent : Selling Agent scenrio

Listen on Apple, Spotify, or Google Podcasts.

Market Update📈📉

2023 was a year of relief.

Kurt Vonnegut once correctly pondered: "The truth is, we know so little about life, we don’t really know what the good news is and what the bad news is." While 2022 was humbling and bewildering at times for many of my portfolio companies, in hindsight it was one of those moments we needed to just stay calm. Given hopefully multiple decades of life ahead of us, it matters a lot less how 2022 or 2023 went; what matters much more is what lies ahead.

Morgan Housel's recent book "Same as Ever" had this sentence that really left a mark on my mind: "To know where we are going, we should know where we have been. And when you know where we have been, you realize we have no idea of where we are going."

After the pandemic and the massive stimulus in 2020, Russia-Ukraine war, supply chain crisis, and soaring inflation of 2021-22, and then the apparent taming of inflation in 2023, it seems like a good bet that we will keep getting surprised in 2024 (and beyond). Some of them will be positive surprises, and some negatives.

What is going to be most interesting to me and the Canadian Market will be how we tackle our real estate “problem”.

This weeks podcast features Dan Belostotsky, founder and CEO of Honestdoor.

Dan was the perfect guest to round out the year that featured a volatile market in stocks and real estate.

If you’re interested in learning more about Dan and his business, check our their platform here.

links from the pod:

• "Pending home sales in October dropped to the lowest level since the National Association of Realtors began tracking them in 2001. - CNBC

• Zillow Acquires Trulia-Strathechery

• Sharptech on the future of Real Estate

• How to deal with writers block

Best Links of The Week🔮

• Blockbuster year in public markets buoyed by AI: The stock market obviously had a great year given the macro economic developments, and anticipation of a tempering Fed on rates in 2024. - WSJ

• Year-end AI Summaries and Predictions: It’s the time of year of course for year-end summaries and predictions for 2024. - The information and here for predictions

• How the $250 billion plus ‘Creator’ economy that is going to be impacted by AI in 2024. - The information

• There's also Tech products for 2024. - WSJ

• "The New York Times on Wednesday filed a lawsuit against Microsoft and OpenAI, the company behind ChatGPT, accusing them of copyright infringement and abusing the newspaper’s intellectual property. In a court filing, the publisher said it seeks to hold Microsoft and OpenAI to account for “billions of dollars in statutory and actual damages” it believes it is owed for “unlawful copying and use of The Times’s uniquely valuable works.” The Times accused Microsoft and OpenAI of creating a business model based on “mass copyright infringement,” stating their AI systems “exploit and, in many cases, retain large portions of the copyrightable expression contained in those works"." Source: CNBC

Disclaimer:

Investing in equities, fixed-income instruments and/or alternative asset classes involves substantial risk of loss. Any action you may take as a result of the information presented on this website, blog or in any Reformed Millennials Podcast (a “podcast”) is your own responsibility. By opening this page and/or listening to a podcast, you accept and agree to the terms of this full legal disclaimer. The information on this website, blog and in any podcast is presented as a general educational, informational and entertainment resource only. While Joel Shackleton is registered to provide investment advice as an Advising Representative this website, blog and any podcast does not provide, and should not be construed as providing, individualized investment, tax or insurance advice, nor as containing any recommendation to buy or sell any specific securities or otherwise make any other form of investment, or take any tax or insurance decision. Nothing contained on this website, blog or in any podcast should be construed or interpreted by you to mean that an investment in any securities presented or discussed would be suitable for you in your particular circumstances. Joel Shackleton specifically disclaim that any viewer of this website, blog or any podcast should rely in any way on any of their contents as investment, tax or insurance advice or as an investment, insurance or tax recommendation. Viewers are encouraged to consult with their individual investment advisor and other financial professionals prior to taking any potential investment actions or making any insurance or tax decisions. The views and opinions expressed herein are the personal views and opinions of Joel Shackleton and any other specific contributor to the blog or podcast only and do not necessarily reflect the views or opinions of their Firm or any of its other registered individuals or employees in partnership with Joel and his guests. Joel Shackleton disclaims any obligation to update any of the information set out on this website or any blog or podcast going-forward.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com

View Details

Listen in podcast app and follow below for the podcast topic arc.

• Netflix is Cable and Cable is Netlfix

• Amazon will bundle sports and news

• Market update

• 2024 outlook

• Plans for the holidays

• Recommendations and Links

Listen on Apple, Spotify, or Google Podcasts.

Market Update📈📉

Merry Chrysler Everyone!

After one of the biggest rallys in stock market history, we think its fair for the podcast to take a break.

In doing that, we want to provide everyone with all the reading and listening we’ll be tackling as we head into the Christmas break.

Twitter links from the pod:

• Lego thread

• Trevor Tombe talking about Canadian Inflation

• Trevor Scott and the opportunity in Fairfax

Best 2024 Outlooks from across the finance industry:

• BlackRock: 2024 Global Outlook

• PIMCO: Prime Time for Bonds

• Robeco: 2024 Outlook: Goldilocks: Exit stage right

• Charles Schwab: U.S. Outlook: One Thing Leads to Another

• Charles Schwab: 2024 Global Outlook: The Big Picture

Summary Reports

• Vanguard: Economic and Market Outlook for 2024

• Morgan Stanley: 2024 Global Macroeconomic Outlook: Central Banks Look for ‘Just Right’ on Rates

• Morgan Stanley: 2024 Investment Outlook: Threading the Needle

• Goldman Sachs: Macro Outlook 2024: The Hard Part is Over

• Goldman Sachs: 2024 U.S. Equity Outlook: “All You Had To Do Was Stay”

• Bank of America: 2024 Outlook

Real Estate

• Nareit: 2024 REIT Market Outlook

• Realtor.com: 2024 Housing Market Forecast and Predictions

Miscellaneous

• Cambridge Associates: 2024 Outlook: Private Equity & Venture Capital

• Deloitte: 2024 Investment Management Outlook

• McKinsey: The State of Fashion 2024

Podcast & YouTube Recommendations🎙

• Bezos Interview With Lex Friedman and 5 takeaways from the Bezos interview:

1) Deep self-awareness & stacking the deck in your favor is a good formula for career success.

2) Many people self-identify as entrepreneurs because it's cool vs. what's actually true.

3) Great entrepreneurs are able to telescope flawlessly. They drift from cloud to mud discussions in seconds.

4) Irrational optimism lets you start a business. Emotionless pragmatism lets you succeed in business.

5) Powerpoints are terrible meeting tools. They are meant for persuasion & selling vs. problem-solving & truth-finding.

• My Favorite Two Boomer Influencers Talk Health and Longevity:

• What Happened To AI in 2023!?:

Best Links of The Week🔮

• Trading for a Living (Jared Dillian)

Ex-trader turned fantastic writer, Jared Dillian publishes one of my favorite blogs on the internet. Not only does he educate and entertain with everything he writes, but he does so in a style all his own. I particularly enjoyed this piece on trading because it’s filled with insights that are completely foreign to me. Though I have no interest in day trading, Jared is able to make this topic come alive in a way that is both beautiful and intriguing. There is this level of depth of that makes you want to keep reading. Don’t just take my word for it though, see for yourself.

• The Levers That Money Can’t Pull (Lawrence Yeo)

Lawrence Yeo doesn’t usually write about money, but, when he does, I listen. In this post he does a deep dive on the things that money can and can’t do for your life. While we all know that money by itself can’t buy you love or purpose, Lawrence has a unique way of approaching this problem that makes his writing so compelling and memorable. If you ever need a reminder on the importance (and non-importance) of money, this post is for you.

• The Problem with Being House Rich (Ben Carlson)

In this piece, he provides a friendly reminder of the fact that most Americans have most of their wealth in their home. He goes on to explain how this can be problematic for some who look rich on paper, but can’t access their wealth when it is needed most. For those of you that want to better understand the tradeoffs associated with being “house rich,” look no further.

• The Myth of the Broke Millennial (Jean M. Twenge)

I love it when a writer busts a commonly held (yet mistaken). Jean takes her analysis to the next level by demonstrating how Millennials (my generation) aren’t as far behind as previously believed. Her analysis examines changes in income, wealth, and why Millennials still might feel poor despite these improvements (hint: it’s the media). Though the myth of the broke Millennial persists today, I’m hoping this article will change your mind.

• Seven Deadly Stocks (Michael Batnick)

Michael hasn’t written much this year, but this piece shows that he’s still got it. Of all the beliefs that have been endlessly repeated in 2023, the most common one I’ve heard is that the market is being carried by a small number of large stocks (i.e. “The Magnificent 7”). Michael does a great job of providing context to illustrate that the Magnificent 7 weren’t always so magnificent. If you need a short, but sweet post to understand why the rise of the Magnificent 7 isn’t necessarily a problem, then this post is for you.

• Charlie Munger’s Life Was About Way More Than Money (Jason Zweig)

Following the death of Charlie Munger a few weeks ago, the internet was flooded with articles and Twitter threads of Munger’s wit and wisdom. As I read through these I saw the same stories, quotes, and ideas repeated again and again. But then, I read Jason Zweig’s piece about Munger and was truly in awe. Even when you think everything has been said on a topic, Jason finds a way to write something truly original. As I’ve said before, “When information is cheap, wisdom is expensive.” Thankfully, Jason continues to share his wisdom with us year after year.

• "Next year is poised to be a pivotal year, where SpaceX’s performance will act as the barometer for the entire space investment landscape.

The spotlight will shine particularly bright on the much-anticipated Starship launch, with its success being a potential catalyst to galvanize and elevate investor optimism to new heights. Adding another layer of intrigue to the financial landscape is the prospect of Starlink, SpaceX’s satellite internet venture, going public. The mere contemplation of an initial public offering for Starlink has the potential to be nothing short of transformational for the space sector." Source: TechCrunch

Disclaimer:

Investing in equities, fixed-income instruments and/or alternative asset classes involves substantial risk of loss. Any action you may take as a result of the information presented on this website, blog or in any Reformed Millennials Podcast (a “podcast”) is your own responsibility. By opening this page and/or listening to a podcast, you accept and agree to the terms of this full legal disclaimer. The information on this website, blog and in any podcast is presented as a general educational, informational and entertainment resource only. While Joel Shackleton is registered to provide investment advice as an Advising Representative this website, blog and any podcast does not provide, and should not be construed as providing, individualized investment, tax or insurance advice, nor as containing any recommendation to buy or sell any specific securities or otherwise make any other form of investment, or take any tax or insurance decision. Nothing contained on this website, blog or in any podcast should be construed or interpreted by you to mean that an investment in any securities presented or discussed would be suitable for you in your particular circumstances. Joel Shackleton specifically disclaim that any viewer of this website, blog or any podcast should rely in any way on any of their contents as investment, tax or insurance advice or as an investment, insurance or tax recommendation. Viewers are encouraged to consult with their individual investment advisor and other financial professionals prior to taking any potential investment actions or making any insurance or tax decisions. The views and opinions expressed herein are the personal views and opinions of Joel Shackleton and any other specific contributor to the blog or podcast only and do not necessarily reflect the views or opinions of their Firm or any of its other registered individuals or employees in partnership with Joel and his guests. Joel Shackleton disclaims any obligation to update any of the information set out on this website or any blog or podcast going-forward.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com

View Details

Listen in podcast app and follow below for the podcast topic arc.

• Ohtani Contract

• Liv Golf

• Jerome Powell FOMC meeting recap

• Market Update

• Canadian Mortgages

• Recommendations and Links

Listen on Apple, Spotify, or Google Podcasts.

Market Update📈📉

Some thoughts…

Markets are inherently pro cyclical. Liquidity attracts liquidity. Momentum attracts momentum. Sentiment is contagious. The best summary of this is the Minsky Hypothesis.

Minsky had three phases:

Cash Flow Investing Phase: Investors initially focus on investments based on cash flows and fundamental values, driving steady market growth.

The focus is yield and downside minimization

Speculative Phase: Gradually, as markets rise and confidence grows, investors shift towards speculative investments, often relying on debt, disregarding underlying values.

The focus is capital gains and trends

Ponzi Finance Phase: The market reaches a point where investments are made with the expectation that prices will continue to rise, ignoring fundamentals.

The focus is ‘past returns = future returns’ so buy more

This unsustainable growth leads to a market correction when the reality of overvaluation and excessive debt becomes apparent.

Minsky’s framework explains both the 2008 crisis and 2022 crypto leverage crash. It’s a great framework…

Twitter links from the pod:

• This guy created the world's 1st ever, fully transparent fashion brand.

• My relatives immigrated from Bangladesh to Reno, Nevada just 6 months ago.

• Victory over Google! - RIOT vs. Google.

• The Los Angeles Dodgers are proposing to pay the most talented baseball player in history like he's a mediocre middle reliever.

Podcast & YouTube Recommendations🎙

• Optimistic Science Fiction - Foundry

• TCAF with my favorite guest, Bob Elliott:

• Cultivating Happiness with Peter Attia:

Best Links of The Week🔮

• "Big tech stocks reclaimed their position as the market’s leaders this year. Just how far ahead of the pack have they run? Collectively, the stocks known as the Magnificent Seven—Apple, Microsoft, Alphabet, Amazon, Nvidia, Tesla and Meta—have jumped 75% in 2023, leaving the other 493 companies in the S&P 500 in their dust. (Those have risen a more modest 12%, while the index as a whole is up 23%.)" Source: WSJ

• "For LVMH and other luxury-goods stocks, 2024 is shaping up to be 2023 in reverse. Unlike this year, when China’s reopening fueled a splurge on pricey handbags and jewelry before running out of steam, investors expect 2024 to start on a weak footing before a revival in the second half. As analysts at BNP Paribas put it, next year will likely be “a game of two halves” for luxury stocks such as Richemont and Gucci-owner Kering." Source: Bloomberg

• "The mounting deluge of mostly irrelevant information is overwhelming many investors, making financial markets more chaotic and less efficient at pricing in important data, says hedge fund magnate Clifford Asness. The founder of US-based AQR Capital Management, still one of the world’s biggest computer-driven investment firms despite a sharp drop in assets in recent years, once studied under the University of Chicago’s Eugene Fama, who won a Nobel Prize for his efficient markets hypothesis. But three decades of exposure to how markets work has eroded Asness’s belief in the theory." Source: FT

• "Next year is shaping up to be another pivotal year for weight loss drugs, which skyrocketed in popularity despite hefty price tags, mixed insurance coverage and some unpleasant side effects. Investors will be watching to see how Eli Lilly and Novo Nordisk navigate the ongoing supply issues plaguing their treatments. Those two companies and other drugmakers hoping to join the weight loss drug market are also expected to release crucial clinical trial data." Source: CNBC

• "Confronting sizable debt burdens and the fact that most streaming services still don’t make money, studios like Disney and Warner Bros. Discovery have begun to soften their do-not-sell-to-[NFLX] stances. The companies are still holding back their most popular content — movies from the Disney-owned Star Wars and Marvel universes and blockbuster original series like HBO’s “Game of Thrones” aren’t going anywhere — but dozens of other films like “Dune” and “Prometheus” and series like “Young Sheldon” are being sent to the streaming behemoth in return for much-needed cash. And [NFLX] is once again benefiting." Source: NYT

Disclaimer:

Investing in equities, fixed-income instruments and/or alternative asset classes involves substantial risk of loss. Any action you may take as a result of the information presented on this website, blog or in any Reformed Millennials Podcast (a “podcast”) is your own responsibility. By opening this page and/or listening to a podcast, you accept and agree to the terms of this full legal disclaimer. The information on this website, blog and in any podcast is presented as a general educational, informational and entertainment resource only. While Joel Shackleton is registered to provide investment advice as an Advising Representative this website, blog and any podcast does not provide, and should not be construed as providing, individualized investment, tax or insurance advice, nor as containing any recommendation to buy or sell any specific securities or otherwise make any other form of investment, or take any tax or insurance decision. Nothing contained on this website, blog or in any podcast should be construed or interpreted by you to mean that an investment in any securities presented or discussed would be suitable for you in your particular circumstances. Joel Shackleton specifically disclaim that any viewer of this website, blog or any podcast should rely in any way on any of their contents as investment, tax or insurance advice or as an investment, insurance or tax recommendation. Viewers are encouraged to consult with their individual investment advisor and other financial professionals prior to taking any potential investment actions or making any insurance or tax decisions. The views and opinions expressed herein are the personal views and opinions of Joel Shackleton and any other specific contributor to the blog or podcast only and do not necessarily reflect the views or opinions of their Firm or any of its other registered individuals or employees in partnership with Joel and his guests. Joel Shackleton disclaims any obligation to update any of the information set out on this website or any blog or podcast going-forward.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com

View Details

Listen in podcast app and follow below for the podcast topic arc.

• Christmas Parties Belong In December

• Ai’s position in media and the internet ad market

• Market update

• Sports business update

• LIV golf drama

• Recommendations and Links

Listen on Apple, Spotify, or Google Podcasts.

Market Update📈📉

Welcome back.

First I want to urge all readers to check out Ben Thompsons latest piece - Regretful Accelerationism.

As this year comes to a close a year after OpenAI’s ‘ChatGPT moment’ that kicked off the gold rush in the AI Tech Wave last November, it’s clear that for now the big tech ‘Magnificent Seven’, most with market caps over a trillion dollars each, rule the public market roost. Some might say their AI tales are wagging the relative smaller cap ‘dogs’ in the market (pun intended). As the WSJ notes today in “What the Stock Market Taught Us This Year: Don’t Fall for These Investing Traps”:

“A handful of tech and tech-related stocks, weight-loss drugs and artificial-intelligence providers offer the sum total of stock-market outperformance this year. Beyond these headliners, there is less and less attention on individual names.”

“Those tech behemoths, dubbed the “Magnificent Seven,” account for more than 30% of the index and 87% of its return through October. Let us say that again: Just seven stocks represent one-third of the S&P 500 index. Some now consider Google parent Alphabet, Amazon.com, Apple, Facebook parent Meta Platforms, Microsoft, Nvidia and Tesla to be defensive businesses that can grow through any economic cycle.”

We’ve seen this before, and the lesson is always the same: Winner-takes-all can dominate over shorter time frames but is rarely a winning bet in the long run.”

This concentrated performance of the AI boosted performance of big tech is something we’ve talked about on this podcast at length.

As this other WSJ piece also today “How Long Can the ‘Magnificent Seven’ Stocks Hold the Line?” notes:

“As in the eponymous 1960s Western, the so-called Magnificent Seven stocks keep on winning. This also means investors are betting the farm on just a handful of bullets hitting their targets.

The S&P 500 is in a bull market, fueled by soft inflation data in the U.S. and Europe and the widespread belief that interest rates will start coming down early next year. Yet the stock market has become so top-heavy that speaking of a “bull market” carries less meaning than before.”

Without the key seven stocks listed above and talked about at length on this site, the WSJ adds:

“The high-growth, technology-related companies that analysts have dubbed the Magnificent Seven—the S&P 500 would be up only 8% this year, rather than 19%. Indeed, these stocks inched higher Tuesday even as the broader equity market faltered.”

The issue becomes complicated in a public market increasingly dominated by index investing, which for individual investors in abstract is an eminently wise way to invest in stocks for the long term. But the ‘Magnificent 7’ concentration means that:

“That poses a conundrum for investors, who increasingly use index funds. Right now, buying an S&P 500 tracker means investing 30% of the money in just seven stocks. Historically, the top seven have accounted for 21% of the benchmark, taking the end-of-year average of the past decade.”

And this means a stratification in valuations in this concentration:

“This not only runs counter to the principle of diversification, but also means the most important stocks investors own are pricey. The seven stocks have posted strong profits lately, but they are still trading at an average of 32 times forward earnings, compared with 19 times for the broader index.”

Of course, all assets are ultimately driven by the realities and perceptions of where interest rates are and might go, in the much larger bond markets. Investors in both private and public markets are of course adjusting from over a decade of aberration ally low interest rates (aka ZIRP, RIP for now). As the earlier WSJ piece noted:

“The extremely low interest rates that have persisted for much of the past two decades. Over the past 50 years, U.S. interest rates have averaged 5.98%. Today’s 5.5% rate seems high compared with the 0.25% paid during the recession of 2008, but no comparison to 1980 when rates topped out at 20%.”

“Similarly, at the start of the new millennium, a 30-year fixed-rate mortgage was 8.08%—basically in line with 2023 levels, but significantly higher than the bargain 2.96% rate that could be had just two years ago.”

“Higher interest rates now feel like a shock to our systems because we got anchored to some extreme lows. When considered in the full context of a longer history, though, they are in line.”

“Now people are anchored to the S&P 500 beating everything else. But just as we have seen with interest rates in 2023, the trend will revert to the mean, even if it takes a while.”

Of course on the tech and AI front, we’ve long made a point of making sure investors separate financial cycles from secular technology cycles. They’re almost never in sync. This post is to highlight the broader realities of the financial cycles for now. Again, as the WSJ notes in their piece on the ‘Magnificent Seven’:

“With so much market value concentrated in those seven stocks, the benefits of diversifying into small-caps can be severely reduced when a few of their company-specific investments pay off, the research also suggests. The artificial-intelligence boom sparked by OpenAI’s ChatGPT, which has already helped chip-maker Nvidia triple its revenues relative to a year earlier, could be just such a payoff.”

“But reliance on big idiosyncratic effects cuts both ways. Who will benefit most from AI is still an open question. And other megatrends are underpinning the value of the Magnificent Seven, such as Meta’s metaverse or Tesla’s self-driving cars, that are showing less promise.”

Tune into the podcast next week to hear more on this.

Twitter links from the pod:

• BIOTECH BOOM

• Japanese stocks

• Andy Constan talks about market makeup - supply vs. demand

• Trevor Tombe talks about carbon tax policy

Podcast & YouTube Recommendations🎙

• Prof G talks about the GS <> Apple break up:

• Serhant Talks about the biggest trends in real estate:

• Cybertruck is here and its hideous:

Best Links of The Week🔮

• Working - with Barrack Obama on Netflix

• After Charlie Munger passed away at age 99, a reader kindly shared his video Psychology of Human Misjudgement. If you listen to any podcast episode this week, make it this one. Munger goes through the most common causes of human misjudgment, including distorted incentives, the urge to reciprocate, social proof, authority bias, commitment bias, etc.

• I also loved the interview with British historian Edward Chancellor. He’s bearish on the renewables and the private equity industries since they’re hurting from recent interest rate hikes. Chancellor thinks the best value can be found outside the United States, especially in the UK and Japan.

• Finally, have a look at the ASEAN stocks discussed by Ross & Van Compernolle in their recent update. These include Delfi, Velesto, PV Drilling, Marco Polo Marine, CSE Global, Arwana Citramulia, etc. Ross & Van Compernolle believe that the offshore oil & gas services market remains tight as industry capex lags behind demand. They also believe that Indonesia’s economy will benefit from fiscal spending in the run-up to the 2024 election. Most of their stocks trade at single-digit P/E multiples.

• "Companies on both sides of the Atlantic are rushing to issue debt, taking advantage of the cheapest borrowing costs available in months following the sharp global bond market rally... The acceleration in issuance follows a rapid shift in investor sentiment over the past few weeks, in which markets have begun to price in US and European interest rate cuts in the first half of next year... US bonds recorded their best monthly performance in nearly four decades in November." Source: FT

• "Amazon is betting members of its Prime program will want to pay a separate monthly fee for unlimited grocery delivery on some orders. Trial service will give Prime members in three cities the option to pay $9.99 a month for access to free Fresh and Whole Foods deliveries on orders more than $35. The company has tweaked its fee-free grocery delivery threshold in recent years amid mounting costs." Source: CNBC

"A leading Gulf artificial intelligence company has said it is cutting ties with Chinese hardware suppliers in favour of US counterparts, in a sign of the growing geopolitical struggle over the new technology. G42 of the United Arab Emirates is making the move to ensure its access to US-made chips by allaying concerns among its American partners, which include Microsoft and OpenAI, chief executive Peng Xiao said." Source: FT

Disclaimer:

Investing in equities, fixed-income instruments and/or alternative asset classes involves substantial risk of loss. Any action you may take as a result of the information presented on this website, blog or in any Reformed Millennials Podcast (a “podcast”) is your own responsibility. By opening this page and/or listening to a podcast, you accept and agree to the terms of this full legal disclaimer. The information on this website, blog and in any podcast is presented as a general educational, informational and entertainment resource only. While Joel Shackleton is registered to provide investment advice as an Advising Representative this website, blog and any podcast does not provide, and should not be construed as providing, individualized investment, tax or insurance advice, nor as containing any recommendation to buy or sell any specific securities or otherwise make any other form of investment, or take any tax or insurance decision. Nothing contained on this website, blog or in any podcast should be construed or interpreted by you to mean that an investment in any securities presented or discussed would be suitable for you in your particular circumstances. Joel Shackleton specifically disclaim that any viewer of this website, blog or any podcast should rely in any way on any of their contents as investment, tax or insurance advice or as an investment, insurance or tax recommendation. Viewers are encouraged to consult with their individual investment advisor and other financial professionals prior to taking any potential investment actions or making any insurance or tax decisions. The views and opinions expressed herein are the personal views and opinions of Joel Shackleton and any other specific contributor to the blog or podcast only and do not necessarily reflect the views or opinions of their Firm or any of its other registered individuals or employees in partnership with Joel and his guests. Joel Shackleton disclaims any obligation to update any of the information set out on this website or any blog or podcast going-forward.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com

View Details

Listen in podcast app and follow below for the podcast topic arc.

• Market update

• Stock Market posts its best November in history

• How to think about portfolio allocation after a historical rally in stocks and bonds

• Mark Cuban for president or is he selling the top in sports franchise valuations

• New CRA tax reporting rules

• Recommendations and Links

Listen on Apple, Spotify, or Google Podcasts.

Market Update📈📉

Welcome back.

This week marked the completion of the very best November in history for a 60:40 portfolio of stocks and bonds. What an incredible shift in sentiment we just witnessed.

I believe we are in Phase 2 for Risk Assets.

Phase 1 was the Non-Consensus Rally.

Most capital was offside, and wrong-way positioned and value was abundant across all sectors.

In phase 2 - sentiment will thaw (a bit too quickly perhaps).

It’s clear that in this phase, people are leaning in to a new narrative.

There is still skepticism, but another layer of capital has added a bid to markets in the last month. (November)

Valuations are higher but not excessive.

Phase 2 is where markets climb a wall of worry.

Phase 3 is when Consensus is all-in and public markets valuations are excessive.

Usually you have a Goldilocks backdrop and a new economy or a “AI” narrative. That takes a few years to get going…

We have a ways to go. That's my sense today.

I'm always evaluating incoming data to test and falsify these hypothesis…

Chart from all star charts:

Twitter links from the pod:

• I tried Ozempic and… - Sam Par

• People around the world all want the same thing… and its no surprise to capitalists

• Mark Cuban quits shark tank after a decade long run

Podcast & YouTube Recommendations🎙

• Tesla unveils the Cybertruck! In 3 packages.

• Best podcast of the week comes from Peter Zeihan

• Bob Elliot Talks Market Positioning, Gold and Bitcoin:

Best Links of The Week🔮:

• Economist predicts rate cuts in 2024. Source: Financial Post

• "Amazon on Tuesday announced a new chatbot called Q for people to use at work. The product, announced at Amazon Web Services’ Reinvent conference in Las Vegas, represents Amazon’s latest effort to challenge Microsoft and Google in productivity software. It comes one year after Microsoft-backed startup OpenAI launched its ChatGPT chatbot, which has popularized generative artificial intelligence for crafting human-like text in response to a few lines of human input." Source: CNBC

• "Apple is pulling the plug on its credit-card partnership with Goldman Sachs, the final nail in the coffin of the Wall Street bank’s bid to expand into consumer lending. The tech giant recently sent a proposal to Goldman to exit from the contract in the next roughly 12-to-15 months... The exit would cover their entire consumer partnership, including the credit card the companies launched in 2019 and the savings account rolled out this year... The move would mark a swift about-face for a program that just over a year ago was extended through 2029 and was intended to serve as a pillar of Goldman’s main-street ambitions." Source: WSJ

• "Billionaire investor Bill Ackman is betting the Federal Reserve will begin cutting interest rates sooner than markets are predicting. The Pershing Square Capital Management founder said such a move could happen as soon as the first quarter." Source: Bloomberg

• "Home prices were 3.9% higher in September compared with the same month a year earlier,**according to the S&P CoreLogic Case-Shiller Index. The growth coincided with the 30-year fixed mortgage rate’s climb toward 8%. Rents are easing, however, while home prices rise." Source: CNBC

Disclaimer:

Investing in equities, fixed-income instruments and/or alternative asset classes involves substantial risk of loss. Any action you may take as a result of the information presented on this website, blog or in any Reformed Millennials Podcast (a “podcast”) is your own responsibility. By opening this page and/or listening to a podcast, you accept and agree to the terms of this full legal disclaimer. The information on this website, blog and in any podcast is presented as a general educational, informational and entertainment resource only. While Joel Shackleton is registered to provide investment advice as an Advising Representative this website, blog and any podcast does not provide, and should not be construed as providing, individualized investment, tax or insurance advice, nor as containing any recommendation to buy or sell any specific securities or otherwise make any other form of investment, or take any tax or insurance decision. Nothing contained on this website, blog or in any podcast should be construed or interpreted by you to mean that an investment in any securities presented or discussed would be suitable for you in your particular circumstances. Joel Shackleton specifically disclaim that any viewer of this website, blog or any podcast should rely in any way on any of their contents as investment, tax or insurance advice or as an investment, insurance or tax recommendation. Viewers are encouraged to consult with their individual investment advisor and other financial professionals prior to taking any potential investment actions or making any insurance or tax decisions. The views and opinions expressed herein are the personal views and opinions of Joel Shackleton and any other specific contributor to the blog or podcast only and do not necessarily reflect the views or opinions of their Firm or any of its other registered individuals or employees in partnership with Joel and his guests. Joel Shackleton disclaims any obligation to update any of the information set out on this website or any blog or podcast going-forward.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com

View Details

Listen in podcast app and follow below for the podcast topic arc.

• Open Ai Saga completes

• The supply chain of the new AI industry

• How to approach your career path and ladder climbing

• New short term rental policy changes from CRA

• Recommendations and Links

Listen on Apple, Spotify, or Google Podcasts.

Market Update📈📉

Welcome back for the Thanksgiving Reformed Pod.

After a CRAZY week of tech news, it seems absolutely everything fell apart and was rebuilt in 6 days.

What an incredible sequence of events.

Over that week, the market continued its November rally as the nasdaq and S&P touched on new all time highs.

This has been quite the reprieve for investors and advisors after a terrible finish to October.

Some Data from Datatrek:

Mutual fund/ETF investors have found their courage again. Last week we noted that this investor cohort had finally started to add to their equity and fixed income holdings after 3 months of net redemptions. We predicted this was a turning point in their market views, and this week confirms that point of view. The data here is courtesy of the Investment Company Institute (link below):

• For the week ending November 15th, inflows totaled $13.1 billion as compared to $14.4 billion in new investments the week before. The 4 weeks prior to this 2-week period saw outflows of $55.0 billion, so the recent turn in fund investors’ animal spirits is certainly underway.

• Equity mutual funds had net inflows of $10.7 billion last week and $7.2 bn the week before. This compares to the prior 4-week outflows of $19.7 billion so, again, we’re seeing an improvement in investor psychology. Worth noting: fund investors are only adding to US equity positions. Non-US funds continue to see outflows.

• Fixed income funds had inflows last week of $4.7 billion, adding to the prior week’s $7.8 billion of fresh money. The last 2 weeks has now replaced the $10.4 billion redeemed over the prior 4 weeks.

• Fund investors are even adding to their commodity fund positions, with inflows last week of $0.4 billion and $0.6 bn the week before. As with bond funds, this puts back the $0.5 billion they redeemed in the prior 4 weeks.

Takeaway: As we noted a few weeks ago, investor confidence was running at unsustainably low levels in October and any sort of asset price stabilization could prove to be the catalyst for better sentiment. Stocks and bonds made their lows in the back half of last month. The turn in money flows started 1-2 weeks later. As long as stock and bond prices continue to drift higher through year-end, our base case assumption, fund inflows should continue.

Twitter links from the pod:

• Canadian Tax Guy talks about the new CRA changes

• Chamath on future of AI

• Gavin Baker talks about the OpenAI Saga

• Car Dealership Guy on car market sentiment

• Ram Talks OpenAI strategy

• Bucco on NYT and content strategy

Podcast & YouTube Recommendations🎙

• Multibagger Presentation from the MicroCap Club:

• Things that never change - The Compound and Friends:

• Invest like the best with another incredible episode:

Best Links of The Week🔮

• New Commerce view from Shopify - Source: Shopify website

• "Alibaba founder Jack Ma held off on plans to trim his stake in the Chinese e-commerce giant after the share price fell. Ma has not sold a single share, Alibaba’s Chief People Officer Jane Jiang told employees in an internal memo... Alibaba’s stock is currently trading below the company’s actual value, Jiang said, citing this as a reason Ma has not cut his stake. Alibaba’s regulatory filings last week revealed Ma is looking to sell 10 million shares at a value of around $870 million." Source: CNBC

• "The Louvre Museum in Paris has added a “national treasure” to its collection four years after it was discovered during a house clearance. “Christ Mocked” by the Florentine painter Cimabue was found in an elderly woman’s house in the town of Compiegne in 2019. She had kept the rare artwork – which she thought was a Greek religious icon – in her kitchen... The painting, which dates from 1280, went on to fetch almost 24.2 million euros ($26.8 million) at auction in October 2019, more than four times the pre-sale estimate. But the French government then stepped in to block its export, assigning the painting “national treasure” status. The move kept the tiny, ultra-rare painting in the country for 30 months, during which time the government raised the funds to buy it for the nation." Source: CNN

• Must Read of the Day: A slew of retailers have issued tepid, cautious or downright disappointing fourth-quarter outlooks over the past few weeks, casting a pall over the crucial holiday season right as they gear up for the biggest shopping day of the year. The companies, which include everyone from luxury goods giant Tapestry to big boxer BJ’s Wholesale Club, cited a host of dynamics that led them to reduce their outlooks or issue forecasts that came in below expectations. Some, such as Best Buy and Nordstrom, cited the uncertain state of the consumer following months of persistent inflation, while others, such as Hanesbrands, said demand is simply drying up for its basic T-shirts, socks and underwear as wholesalers look to keep inventories in check." Source: CNBC

"Ousted OpenAI chief Sam Altman will return to run the company he co-founded, following days of speculation and turmoil at the leading generative artificial intelligence start-up. In a dramatic reversal, Altman, who was fired by OpenAI’s board of directors last week, will be reinstated under the supervision of a new board, the company said late on Tuesday in California. Greg Brockman, the co-founder and president who quit the company on Friday after Altman was fired, will return alongside him." Source: FT

Disclaimer:

Investing in equities, fixed-income instruments and/or alternative asset classes involves substantial risk of loss. Any action you may take as a result of the information presented on this website, blog or in any Reformed Millennials Podcast (a “podcast”) is your own responsibility. By opening this page and/or listening to a podcast, you accept and agree to the terms of this full legal disclaimer. The information on this website, blog and in any podcast is presented as a general educational, informational and entertainment resource only. While Joel Shackleton is registered to provide investment advice as an Advising Representative this website, blog and any podcast does not provide, and should not be construed as providing, individualized investment, tax or insurance advice, nor as containing any recommendation to buy or sell any specific securities or otherwise make any other form of investment, or take any tax or insurance decision. Nothing contained on this website, blog or in any podcast should be construed or interpreted by you to mean that an investment in any securities presented or discussed would be suitable for you in your particular circumstances. Joel Shackleton specifically disclaim that any viewer of this website, blog or any podcast should rely in any way on any of their contents as investment, tax or insurance advice or as an investment, insurance or tax recommendation. Viewers are encouraged to consult with their individual investment advisor and other financial professionals prior to taking any potential investment actions or making any insurance or tax decisions. The views and opinions expressed herein are the personal views and opinions of Joel Shackleton and any other specific contributor to the blog or podcast only and do not necessarily reflect the views or opinions of their Firm or any of its other registered individuals or employees in partnership with Joel and his guests. Joel Shackleton disclaims any obligation to update any of the information set out on this website or any blog or podcast going-forward.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com

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Listen in podcast app and follow below for the podcast topic arc.

• F1 and Liberty Media

• Stock Market Update

• Dealerships Aren’t Taking EV Orders

• Chinese E-commerce stack (TikTok, Shein and TEMU)

• Recommendations and Links

Listen on Apple, Spotify, or Google Podcasts.

Market Update📈📉

Welcome back.

The market ripped into the close, closing off a >10% rally in stocks in November.

It’s incredible how quickly a narrative can change. Price is powerful.

Todays important reading is all from the Open Ai Developer day:

OpenAI's Dev Day had a vibrancy and buzz reminiscent of the excitement typically seen at Apple's WWDC keynotes. In closing, two overarching themes stand out about OpenAI’s direction, highlighting the company's strategic approach and future ambitions.

• Vertical Integration Strategy: OpenAI's efforts in broadening the range of its model modalities, coupled with reductions in pricing and latency, reflect a strategic move towards vertical integration and getting more workloads into production. This includes extending into areas like storage, memory, and retrieval and also for some customers fine-tuning GPT-4 and custom models. This indicate a strong focus on capturing a larger share of value in delivering models to enterprise clients. The extent of this vertical integration and its impact on surrounding tooling will be important to watch.

• Executing on End-user Ambitions in Parallel: Alongside its B2B/developer focused initiatives, OpenAI is also making significant strides in going direct to end consumers. Key developments include the continued enhancement of ChatGPT, particularly the pro plan and notably, the launch of a platform for users to create and list GPTs via chat/UI in the GPT Store. This raises intriguing questions: Could the GPT Store emerge as the next big app marketplace? And do consumers prefer centralized access to GPT functionalities via ChatGPT, or do they seek these capabilities integrated into their various existing apps?

Announcements from the video:

I. GPT-4 Turbo boasts a number of improvements vs GPT-4:

• 128K context length which is a significant jump from 32K

• Better cost (~3x cheaper) and latency (2x faster)

• Improved instruction following and function calling

Implications:

• More workloads: OpenAI announced that 92% for Fortune 500’s are already using OpenAI. Improved cost and latency should help move more of these into production. In addition, the longer context length closes a gap with Anthropic’s models, and should help OpenAI maintain/gain share vs them.

• Long context windows: Longer context length closes a gap with Anthropic’s models, and should help OpenAI maintain/gain share vs them. They will also help replace techniques such as RAG for some use cases, though as the analysis below shows long context windows are not always a substitute for RAG even in smallish context lengths since accuracy tends to degrade as prompts get longer.

II. Multimodality in GPT-4

Multimodal was another big theme, particularly on the API side for developers. OpenAI announced that the following would be available via APIs in GPT-4 and independently:

• Dall-E 3 for image generation

• A new version of Whisper, v3, for speech-to-text

• A text-to-speech API for the first time, which is competitively priced

• A vision API for image understanding which was already starting to roll out

Implications:

• Impact on other models: It’ll be interesting to see how domain specific models in each of these areas fare vs OpenAI’s bundled approach.

• Multimodal applications: As AI's sensory capabilities continue to broaden and the state of the art continue to improve, it paves the way for novel applications of it which integrate the modalities.

III. The GPT Store

OpenAI also announced the ability for anyone to create their own “GPTs” which are basically custom mini GPTs with a specific prompt and knowledge base and tool access. These GPTs can then be listed on a GPT Store and shared with others and monetised.

A few things stand out:

• Ease of creation: GPTs can be created via a no-code UI and by simply having a conversation. They allow you to upload files and give it additional knowledge, and also help craft the right prompts based on what you’re trying to achieve, and can access external APIs.

• The Store itself: These can then be listed on a store and monetized over time, suggesting OpenAI’s ambitions of creating an App Store for AI and a central place where people go to to use AI in ChatGPT.

IV. Assistants API

OpenAI also announced an assistants AI, which provides additional functionality and simplifies some of the things developers were doing using other tools. In some ways, its the API version of the functionality made available for creating “GPTs” above.

It features:

• Memory of threads and conversations with the chatbot

• Native retrieval and handling of external files directly, allowing to easily add external knowledge to the model

• Enhanced Code interpreter and function calling for using other tools made available as part of the API

Twitter links from the pod:

• Gavin Bakers video of the latest Space X Launch

• Car Dealership Guy talks about the future of cars

• Best Business models - Thought exercise

Podcast & YouTube Recommendations🎙

• AirBnb’s Brian Chesky talks about his new Playbook:

• War All The Time: Martyrmade Podcast:

• Future of office now that weWork is bankrupt:

Best Links of The Week🔮

• Canadian Debt Looms Large - Trevor Tombe

• Super Human has put out a how to guide on using ChatGPT - Superhuman

• China is the worlds Shopping Cart - Rest of world.org

• More Powerful GPU’s and AI Models. “One thing we can count on for some decades now, is technology getting better and cheaper over time. The AI Tech wave, even in its current early days, is following the template of the PC and Internet waves in that regard.” - Michael Parekh

• Nvidia is rolling out their next generation GPUs as well, led by founder/CEO Jensen Huang: “Nvidia on Monday unveiled the H200, a graphics processing unit designed for training and deploying the kinds of artificial intelligence models that are powering the generative AI boom.” - CNBC

• Crowdfunding Takes a Piece of Calgary - Globe and Mail

Disclaimer:

Investing in equities, fixed-income instruments and/or alternative asset classes involves substantial risk of loss. Any action you may take as a result of the information presented on this website, blog or in any Reformed Millennials Podcast (a “podcast”) is your own responsibility. By opening this page and/or listening to a podcast, you accept and agree to the terms of this full legal disclaimer. The information on this website, blog and in any podcast is presented as a general educational, informational and entertainment resource only. While Joel Shackleton is registered to provide investment advice as an Advising Representative this website, blog and any podcast does not provide, and should not be construed as providing, individualized investment, tax or insurance advice, nor as containing any recommendation to buy or sell any specific securities or otherwise make any other form of investment, or take any tax or insurance decision. Nothing contained on this website, blog or in any podcast should be construed or interpreted by you to mean that an investment in any securities presented or discussed would be suitable for you in your particular circumstances. Joel Shackleton specifically disclaim that any viewer of this website, blog or any podcast should rely in any way on any of their contents as investment, tax or insurance advice or as an investment, insurance or tax recommendation. Viewers are encouraged to consult with their individual investment advisor and other financial professionals prior to taking any potential investment actions or making any insurance or tax decisions. The views and opinions expressed herein are the personal views and opinions of Joel Shackleton and any other specific contributor to the blog or podcast only and do not necessarily reflect the views or opinions of their Firm or any of its other registered individuals or employees in partnership with Joel and his guests. Joel Shackleton disclaims any obligation to update any of the information set out on this website or any blog or podcast going-forward.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com

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Listen in podcast app and follow below for the podcast topic arc.

• Market update

• Open Ai changes the world of tech with their first developer day

• Sports Team Valuations and The Marginal Buyer

• Remember the fallen

• Recommendations and Links

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Market Update📈📉

In todays market update, i want to focus on Cost of Capital’s Evolution and Today’s Market Dynamics.

Understanding the Cost of Capital

1. Why It Matters:

• Cash Flow Management: Companies must wisely reinvest their earnings to surpass their cost of capital. Failure to do so can lead to poor market valuations.

• Market Perception: Investors value companies based on their ability to reinvest cash flows in lucrative projects.

2. Historical Perspective:

• 1980s-90s: The rise of junk bonds and the focus on financial leverage. This era saw a heightened consciousness of cost of capital, partly due to the disruptive influence of corporate raiders and academic literature advocating for more debt.

• Dot Com Era: Intellectual capital began to overshadow traditional capital allocation methods. Tech giants like Microsoft and Cisco led the charge, redefining market leadership.

3. The 2000-2020 Shift:

• A Debt-Friendly Environment: Low interest rates led to increased corporate debt, altering the landscape of corporate finance.

• Bear Markets and Equity Cost: The volatile market conditions made assessing cost of equity challenging.

• Tech's Rise: The tech rally in the 2010s highlighted the diminishing importance of financial capital compared to intellectual capital.

4. The Present Scenario:

• Rising Costs: Debt and equity capital costs have returned to early 2000s levels.

• Tech Dominance: Big Tech firms are now major players in the S&P 500, signifying a shift in market dynamics.

• The Debt Dilemma: High corporate debt levels amidst rising interest rates raise concerns about potential economic impacts.

Key Takeaways:

• Intellectual Capital Over Financial Metrics: The past 35 years have witnessed a transition from traditional capital metrics to a focus on intellectual capital, particularly in the tech sector. This shift has significantly influenced management strategies and market valuations.

• Generative AI's Potential Impact: The rise of generative AI could either widen the gap between tech valuations and other sectors or bridge it. Its full impact on market dynamics remains to be seen.

Conclusion: The journey of cost of capital from a mere financial metric to a broader concept encompassing intellectual capital highlights the evolving nature of business and investment strategies. As we navigate this landscape, understanding these shifts becomes crucial for making informed investment decisions.

Twitter Links from the Podcast:

• Trung Phan and the social network

• Ram talks about GOOG - Lumida Wealth

• The history of Insulin

• Tiktok is brainwashing our children

Podcast & YouTube Recommendations🎙

• Bob Macro Update is terrific:

• How to think about Multibaggers - Ian Cassel

• My favorite podcast from this week

Best Links of The Week🔮

• Expectations Debt - Morgan Housel

• Corry Wang on Ozempic - A fascinating thread on the wide-ranging implications of a real anti-addiction drug. An under-appreciated number of consumer categories depend on a tiny cohort of super consumers (including gambling, alcohol, candy and soda). What happens when addiction is curable?

• Banking on Status by Julian Lehr - How luxury takes on the next frontier: Software. (or, why increasingly dull apps and services all look like lifestyle brands)

• The Six Moats of Data Businesses by Travis May - Travis outlines the features that aren’t moats, and what effective moats actually look like in data businesses.

• Jared Kushner: Israel, Palestine, Hamas, Gaza, Iran, and the Middle East on Lex Fridman Podcast - A real-time reaction to the Oct 7 terrible terrorism and a deep-dive into the history of the Abraham Accords.

• Bonus (Heartwarming): Stay in the Game by Drew Dickson - A beautiful, honest story about one of the hardest things in the world to be open about: a troubled child. Plus, an amazing twist ending. Bonus (Listen): Ben Horowitz, co-founder of a16z: Venture Capital on World of DaaS pod - A wide-ranging conversation with one of the greats of modern venture capital. Ben and I discuss culture, the war-time CEO playbook, and whether AI will eat the world like software.

• Must Read of the Day: "Amazon is turning to Prime members to bolster its healthcare business, an industry where the company has sought to expand for years. The tech giant on Wednesday revealed plans to offer its millions of Amazon Prime subscribers a low-cost annual membership to One Medical, the primary-care business Amazon purchased for $3.9 billion earlier this year. Amazon says Prime subscribers can now become One Medical members for $9 a month, or $99 a year. The typical cost to become a One Medical member is $199 annually... The move is the company’s latest to grow in the healthcare industry, including in primary care, pharmacy and even medical-drone deliveries after unsuccessful attempts in recent years to crack the market." Source: WSJ

• "Regulators on both sides of the Atlantic have cleared Eli Lilly’s injectable diabetes medication for use as a weight loss treatment, creating the first direct rival to Wegovy, Novo Nordisk’s obesity drug." Source: FT

Disclaimer:

Investing in equities, fixed-income instruments and/or alternative asset classes involves substantial risk of loss. Any action you may take as a result of the information presented on this website, blog or in any Reformed Millennials Podcast (a “podcast”) is your own responsibility. By opening this page and/or listening to a podcast, you accept and agree to the terms of this full legal disclaimer. The information on this website, blog and in any podcast is presented as a general educational, informational and entertainment resource only. While Joel Shackleton is registered to provide investment advice in Saskatchewan, Alberta, British Columbia and Ontario as an Advising Representative this website, blog and any podcast does not provide, and should not be construed as providing, individualized investment, tax or insurance advice, nor as containing any recommendation to buy or sell any specific securities or otherwise make any other form of investment, or take any tax or insurance decision. Nothing contained on this website, blog or in any podcast should be construed or interpreted by you to mean that an investment in any securities presented or discussed would be suitable for you in your particular circumstances. Joel Shackleton and Cameron Pitchers specifically disclaim that any viewer of this website, blog or any podcast should rely in any way on any of their contents as investment, tax or insurance advice or as an investment, insurance or tax recommendation. Viewers are encouraged to consult with their individual investment advisor and other financial professionals prior to taking any potential investment actions or making any insurance or tax decisions. The views and opinions expressed herein are the personal views and opinions of Joel Shackleton, Cameron Pitchers and any other specific contributor to the blog or podcast only and do not necessarily reflect the views or opinions of their Firm or any of its other registered individuals or employees in partnership with Joel and his guests. Joel Shackleton and Cameron Pitchers disclaims any obligation to update any of the information set out on this website or any blog or podcast going-forward.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com

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• Market update

• Rate commentary

• Carbon Tax

• Vibe Shift in Woke culture

• Recommendations and Links

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Market Update📈📉

October marks the end of a challenging three-month period for US and global equities, and we want to keep you informed about the current market conditions and potential opportunities. Here are some key highlights:

Market Volatility: Despite the S&P 500 showing resilience, the overall market has been under pressure. Small caps and international equities have experienced more significant losses, with the S&P 500’s YTD price return falling to 9.2 percent.

Geopolitical Risks: In addition to concerns over interest rates, the Israel-Gaza conflict has introduced a new risk factor. While oil prices have stabilized after a brief spike, uncertainty remains high.

Seeking Opportunities: With recent poor performance data, some investors are considering increasing equity exposure in November and December to benefit from the usual positive seasonality during these months. Call it the Santa Clause Rally.

Uncertainty in the Middle East: Predicting the impact of events in the Middle East on investments remains challenging. Historically, a more tradeable/investable low will show when/if the CBOE VIX Index reaches 28-36 and 10-year Treasury yields stabilize.

Sectors and Investment Strategies: Only a few sectors, including Utilities, Tech, Communications, and Consumer Staples, outperformed the S&P 500 in October. Value has outperformed Growth recently, but it’s crucial to understand the underlying dynamics. More below.

US Big Tech: Despite the recent market turbulence, US Big Tech companies have shown their strength in supporting the broader market. Their contribution to S&P 500 returns has been substantial.

Energy and Precious Metals: Oil prices have not sustained a high level due to Middle East tensions, which is surprising but potentially bullish for stocks. As Gold has outperformed the S&P 500 this year.

Interest Rates and Small Caps: Rising interest rates have hit the US small cap sector hard, affecting various industries, including Technology, Financials, and Health Care.

Global Tech Markets: Asian Big Tech companies have fared better than their European counterparts in the last three months, reflecting the ongoing market dynamics.

Economic Outlook: The Q3-2023 GDP growth showed a significant rebound, but alternative metrics and concerns about inflation suggest a more cautious approach.

In conclusion, the markets are navigating various challenges, including geopolitical uncertainties and interest rate fluctuations. We encourage you to stay informed and make well-informed investment decisions.

Twitter Links from the Podcast:

• Bari Weiss Wokeness

• How to make money as an individual creator on TikTok

• Credit event isn’t coming

• $APO talks about the concentration of returns in the market

• Trevor Tombe on Carbon Tax

• Peter Lynch and Seth Klaraman on todays market

Podcast & YouTube Recommendations🎙

• Change Makers Conference:

• Palmer on Invest Like the Best:

• Trends with friends:

Best Links of The Week🔮

• The Canadian Carbon Tax - Trevor Tombe

• The Land of Rising Profits - GMO

• "The Treasury Department announced plans Wednesday to accelerate the size of its auctions as it looks to handle its heavy debt load and with financing costs rising. In a development getting close attention on Wall Street, the department detailed its refunding plans for future debt sales. The announcement comes with Treasury yields around their highest levels since 2007, a reflection of financial markets spooked over how much damage higher borrowing costs could exact. Most immediately, the Treasury will auction $112 billion in debt next week to refund $102.2 billion of notes set to mature Nov. 15, raising more than $9 billion in extra funds." - CNBC

• "For almost 30 years now, Nissan.com hasn't been the place to custom order an Altima.Owned by small businessman Uzi Nissan since 1994, the website was set up to represent his various small businesses before the Nissan Motor Corporation took interest. It infamously tried to rip it from him in court, only to lose after prolonged and costly legal battle stretching over a decade. But since Uzi's death in 2020, control of his website has allegedly been stolen by a mysterious thief, forcing the the Nissan family to take the matter to court once again." - Full story here in The Drive

• "DoubleLine Capital CEO Jeffrey Gundlach believes interest rates are about to trend lower as the economy deteriorates further and tips into a recession next year. “I do think rates are going to fall as we move into a recession in the first part of next year,” Gundlach said Wednesday on CNBC’s “Closing Bell"." - CNBC

Disclaimer:

Investing in equities, fixed-income instruments and/or alternative asset classes involves substantial risk of loss. Any action you may take as a result of the information presented on this website, blog or in any Reformed Millennials Podcast (a “podcast”) is your own responsibility. By opening this page and/or listening to a podcast, you accept and agree to the terms of this full legal disclaimer. The information on this website, blog and in any podcast is presented as a general educational, informational and entertainment resource only. While Joel Shackleton is registered to provide investment advice in Saskatchewan, Alberta, British Columbia and Ontario as an Advising Representative this website, blog and any podcast does not provide, and should not be construed as providing, individualized investment, tax or insurance advice, nor as containing any recommendation to buy or sell any specific securities or otherwise make any other form of investment, or take any tax or insurance decision. Nothing contained on this website, blog or in any podcast should be construed or interpreted by you to mean that an investment in any securities presented or discussed would be suitable for you in your particular circumstances. Joel Shackleton and Cameron Pitchers specifically disclaim that any viewer of this website, blog or any podcast should rely in any way on any of their contents as investment, tax or insurance advice or as an investment, insurance or tax recommendation. Viewers are encouraged to consult with their individual investment advisor and other financial professionals prior to taking any potential investment actions or making any insurance or tax decisions. The views and opinions expressed herein are the personal views and opinions of Joel Shackleton, Cameron Pitchers and any other specific contributor to the blog or podcast only and do not necessarily reflect the views or opinions of their Firm or any of its other registered individuals or employees in partnership with Joel and his guests. Joel Shackleton and Cameron Pitchers disclaims any obligation to update any of the information set out on this website or any blog or podcast going-forward.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com

View Details

Listen in podcast app and follow below for the podcast topic arc.

• BOC Rate Hold

• Market update

• Earnings Season

• AirBnB headwinds

• Car Brands vs. Dealerships

• Recommendations and Links

Listen on Apple, Spotify, or Google Podcasts.

Market Update📈📉

The battle between bonds cash and equities is heating back up as investors tussle with rising rates, bonds sellings off and equities retreating.

Its increasingly difficult to justify equity risk with government bonds and GIC’s giving us such a sweet yield.

BUT!

AI spend is real and should serve as a secular tailwind for the ecosystem from chips to electrical fans for server farms. What price to pay is largely determined on whether the optionality of future growth potential is realized (and largely unknown).(Contributed by Benjamin Lavine, CIO at 3D/L Capital).

Source: Bloomberg

Its also very hard to see an imminent recession with spending (consumer, business) so strong and fiscal tailwinds well into 2024.(Contributed by Benjamin Lavine, CIO at 3D/L Capital).

Source: Bloomberg

Twitter links from the pod:

• Greg Isenberg on the future of VC and Attention Commerce

• Cardealership Guy talks about delinquency in the car industry

• Fazeclan going public… was a great idea for them. Bad for the investors.

• Ford with a double miss and poor EV guidance

Podcast & YouTube Recommendations🎙

• Bob Elliot on Investing Through War Economies:

• Invest Like the Best - Aswath Damodaran

• Zeihan Goes on Real Vision:

• All In Talks About Diabetes Drugs and Terror Attacks In Israel :

Best Links of The Week🔮

• How to make money by losing $300,000 a year on slot machines. Link

• Morgan Housel writes about managing expectations. Link

• In an annual letter written over a decade ago, Seth Klarman shared lessons from 2008. Link

• Ten ways to create shareholder value by Al Rapaport. Link

• "Apple is planning an end-to-end overhaul of its AirPods lineup, refreshing a product category that’s emerged as one of the company’s biggest sellers. The changes will include a revamped version of Apple’s entry-level AirPods in 2024 and a new Pro model the following year... The company is updating the products’ earbud design, the look of the cases and audio quality. A new version of the AirPods Max headphones are coming in 2024 as well." Bloomberg

Disclaimer:

Investing in equities, fixed-income instruments and/or alternative asset classes involves substantial risk of loss. Any action you may take as a result of the information presented on this website, blog or in any Reformed Millennials Podcast (a “podcast”) is your own responsibility. By opening this page and/or listening to a podcast, you accept and agree to the terms of this full legal disclaimer. The information on this website, blog and in any podcast is presented as a general educational, informational and entertainment resource only. While Joel Shackleton is registered to provide investment advice in Saskatchewan, Alberta, British Columbia and Ontario as an Advising Representative this website, blog and any podcast does not provide, and should not be construed as providing, individualized investment, tax or insurance advice, nor as containing any recommendation to buy or sell any specific securities or otherwise make any other form of investment, or take any tax or insurance decision. Nothing contained on this website, blog or in any podcast should be construed or interpreted by you to mean that an investment in any securities presented or discussed would be suitable for you in your particular circumstances. Joel Shackleton and Cameron Pitchers specifically disclaim that any viewer of this website, blog or any podcast should rely in any way on any of their contents as investment, tax or insurance advice or as an investment, insurance or tax recommendation. Viewers are encouraged to consult with their individual investment advisor and other financial professionals prior to taking any potential investment actions or making any insurance or tax decisions. The views and opinions expressed herein are the personal views and opinions of Joel Shackleton, Cameron Pitchers and any other specific contributor to the blog or podcast only and do not necessarily reflect the views or opinions of their Firm or any of its other registered individuals or employees in partnership with Joel and his guests. Joel Shackleton and Cameron Pitchers disclaims any obligation to update any of the information set out on this website or any blog or podcast going-forward.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com

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• Market update

• Canadian inflation

• The Bond opportunity

• Warrens Big Miss with Disney Stock

• F1 meets the PGA?

• Recommendations and Links

Listen on Apple, Spotify, or Google Podcasts.

Market Update📈📉

Welcome back Listeners and Readers

Quick take on Canadian Inflation Data:

Canada's annual inflation rate eased to 3.8 per cent in September, reflecting a slowdown in price increases compared to the previous month, when it peaked at 4 per cent. While certain categories, such as airfare and durable goods, saw price decreases, grocery prices remained elevated. Alberta's inflation rate for September was 3.7 per cent, similar to the national average

Some Thoughts on Bonds from the internet:

"this is the biggest bond market rout in 150 years. Last year was worst year since 1871, with a total return of minus 15.7%, even worse than the annus horribilis of 2009. We are looking at bond investors’ two worst years in a century and a half.”

Quilt chart above and US bond yield chart below from BofA Global Investment strategy:

New highs:

Great charts and thread from Bob Elliott - my favorite from the link:

One of the largest bond routes in history.

To put this US selloff into a broader perspective highlights that the ~30% drop in US bonds is on par with the largest historical declines in the UK.

Twitter links from the pod:

• Trevor Tombe details the Canadian Inflation print from Oct 17th

• Fabricated Knowledge compares the AI buildout to the telecom buildout

• Trung Phan talks about Warrens Buffets BIGGEST miss - DIS stock

• Problems with the rails - a great recession indicator

Podcast & YouTube Recommendations🎙

I loved this Theo and Harris Conversation about the business of Youtube Watch Content:

• Scott Galloway gives great personal finance advice:

• Affordable housing clip: Boomer vs. Gen Z

Best Links of The Week🔮

• Marc Andreesen is out with The Techno-Optimist Manifesto - here

• "Interest rates are high, inflation remains elevated and pandemic savings are dwindling. Yet the U.S. consumer is on a spending binge. The display of consumer resilience persisted in the latest retail-sales report, which on Tuesday showed spending at stores, online and at restaurants rose a stronger-than-expected 0.7% in September from a month earlier... Consumers are still splashing out on a range of items and experiences, including on interest-rate-sensitive cars and more expensive restaurant meals." Source: WSJ

• "General Motors’ driverless-car unit Cruise is confronting a new safety investigation by federal regulators, after reports of its autonomous vehicles exhibiting risky behavior around pedestrians. The National Highway Traffic Safety Administration said in a Tuesday filing that it had opened a safety-defect probe into nearly 600 driverless cars operated by Cruise, adding that they might not be exercising appropriate caution in crosswalks and roadways... The probe represents the latest challenge for the San-Francisco-based Cruise, which is majority owned by GM, as the driverless-car firm tries to expand services in the Bay Area, Austin, Texas and Phoenix." Source: WSJ

• "Disney reorganized its company into three segments earlier this year, splitting ESPN and sports apart from its entertainment division. As part of the split, investors are now getting a look under the hood at ESPN. ESPN generated more than $12.5 billion in revenue for the nine months ending July 1." Source: CNBC

"OpenAI is in talks to sell existing employees’ shares at an $86 billion valuation... The artificial intelligence startup behind ChatGPT is negotiating the transaction, known as a tender offer, with potential investors." Source: Bloomberg

Disclaimer:

Investing in equities, fixed-income instruments and/or alternative asset classes involves substantial risk of loss. Any action you may take as a result of the information presented on this website, blog or in any Reformed Millennials Podcast (a “podcast”) is your own responsibility. By opening this page and/or listening to a podcast, you accept and agree to the terms of this full legal disclaimer. The information on this website, blog and in any podcast is presented as a general educational, informational and entertainment resource only. While Joel Shackleton is registered to provide investment advice in Saskatchewan, Alberta, British Columbia and Ontario as an Advising Representative this website, blog and any podcast does not provide, and should not be construed as providing, individualized investment, tax or insurance advice, nor as containing any recommendation to buy or sell any specific securities or otherwise make any other form of investment, or take any tax or insurance decision. Nothing contained on this website, blog or in any podcast should be construed or interpreted by you to mean that an investment in any securities presented or discussed would be suitable for you in your particular circumstances. Joel Shackleton and Cameron Pitchers specifically disclaim that any viewer of this website, blog or any podcast should rely in any way on any of their contents as investment, tax or insurance advice or as an investment, insurance or tax recommendation. Viewers are encouraged to consult with their individual investment advisor and other financial professionals prior to taking any potential investment actions or making any insurance or tax decisions. The views and opinions expressed herein are the personal views and opinions of Joel Shackleton, Cameron Pitchers and any other specific contributor to the blog or podcast only and do not necessarily reflect the views or opinions of their Firm or any of its other registered individuals or employees in partnership with Joel and his guests. Joel Shackleton and Cameron Pitchers disclaims any obligation to update any of the information set out on this website or any blog or podcast going-forward

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com

View Details

Listen in podcast app and follow below for the podcast topic arc.

• Thanksgiving Geopolitical Thoughts

• Importance of diversification during war

• Market update

• Ozempic and Wegovvy are changing the world

• Recommendations and Links

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Market Update📈📉

Welcome back after the Canadian thanksgiving long weekend.

We want to begin todays newsletter by sending our sincerest thoughts and prayers to all of our friends in the Jewish community and the innocent civilians impacted by the brutal terrorist attacks in Israel this weekend. Hate has no place in our community, country, or world.

Headlines of the week:

• On Wednesday, news that LVMH’s revenue growth has slowed dramatically likely marks the end of the global luxury bubble. Global growth investors may cycle into US Big Tech as a result.

• Middle East tensions have pushed gold/silver prices higher but virtual currencies are falling. News that terror groups receive funding via the latter puts this space under renewed scrutiny.

• Appetite-suppressing drugs have received a lot of attention lately for potentially hurting food-related companies’ top lines as people who take them consume less. That may be true in the near-term, but companies’ may be better off over the long-term from the health benefits some of their customers may enjoy along with weight loss. The longer people live, the longer they’ll be “consumers”, after all.

Ozempic thoughts and links from the podcast discussion:

As much as there’s negative sentiment surrounding the impact of weight loss drugs on a variety of industries from an investment perspective, there are also plenty of positives other than obviously benefiting the pharmaceutical and health care companies that offer them. For one, retailers can capitalize on this weight loss trend as people need new wardrobes for their new, slimmer selves. Additionally, there’s a substitution effect here. The less money people spend on food and drinks, the more discretionary dollars they’ll have to allocate towards other goods and services. Ultimately, new innovations always come along to disrupt industries and it’s up to investors to discern which companies can best adapt.

Sources:

https://www.bloomberg.com/news/articles/2023-10-04/walmart-says-ozempic-weight-loss-drugs-causing-slight-pullback-by-shoppers

https://www.wsj.com/business/ozempic-impact-snack-food-companies-9eec87e5?mod=hp_lead_pos10

https://www.wsj.com/health/pharma/wegovy-weight-loss-drug-heart-attack-stroke-570f435e?mod=article_inline

Twitter links from the pod:

• Bob Elliott shows us why diversifying in the face of war produces superior returns

• Bob on the market composition now vs. 2 years from now

• Nikita Beir on how to hire competent consultants

• VC bet by SBF could save investors in FTX platform

• Michael Kao talks about the impacts of the war on Oil prices

Podcast & YouTube Recommendations🎙

• 5000 years of history and Golds important role in a portfolio:

• The conflict between Israel and Palestine can often seem like a permanent feature of the global order. The wars, intifadas, refugees camps, suicide vests, UN resolutions, and peace talks have been painfully burned into our collective consciousness. But how could this have happened? Was it always this way? That’s what we’ll seek to find out in Fear & Loathing in the New Jerusalem, a multi-part series exploring the history of the Israeli-Palestinian conflict.

• Derek Thompson Has a few Israeli Palestine experts on his Plain English Podcast to explain the why:

https://spotify.link/bsiXJER4PDb

Best Links of The Week🔮

• "A sustained rise in long-term Treasury yields could be bringing the Federal Reserve’s historic rate hiking cycle to an anticlimactic end. Top central bank officials have signaled in recent days that they could be done raising short-term interest rates if long-term rates remain near their recent highs and inflation continues to cool... San Francisco Fed President Mary Daly last week said the increase in Treasury yields since Fed officials’ last meeting is roughly equivalent to a quarter-percentage point rate increase in the Fed’s short-term rate." Source: WSJ

• "LVMH’s sales growth softened in the third quarter as shoppers reined in spending on high-end Cognac and costly handbags — more evidence the post-pandemic luxury boom is waning. Organic revenue at the French group’s crucial fashion and leather goods unit, which includes the Louis Vuitton and Christian Dior labels, rose 9%, the company said Tuesday. Analysts expected an 11.2% increase. Sales at the wines and spirits unit tumbled 14%, much worse than estimates." Source: Bloomberg

• "German sandal maker Birkenstock priced its shares at $46 in an initial public offering ahead of its first day of trading on Wednesday, giving the company a market valuation of $8.6bn. The price is in the middle of a range of $44 to $49 set by the company last week, reflecting demand for its shares as the group perpetuates a revival in the US IPO market after a dearth of deals since the start of 2022." Source: FT

• "ExxonMobil has agreed to buy Pioneer Natural Resources in a $59.5bn deal that is set to unleash a wave of consolidation in the US shale oil industry. The biggest western oil supermajor said on Wednesday it had sealed an all-stock deal that values Pioneer at $253 per share. The combination hands Exxon a dominant position in the Permian Basin, the vast field in western Texas and New Mexico that has helped turn the US into the world’s largest oil and gas producer." Source: FT

• "Federal Reserve officials at their September meeting differed on whether any additional interest rate increases would be needed, though the balance indicated that one more hike would be likely, minutes released Wednesday showed. While there were conflicting opinions on the need for more policy tightening, there was unanimity on one point – that rates would need to stay elevated until policymakers are convinced inflation is heading back to 2%." Source: CNBC

"Israel’s new unity government pledged on Wednesday evening to change the “strategic reality” of a Gaza Strip controlled by Hamas as it tightened its siege of the enclave ahead of an expected ground offensive. Prime Minister Benjamin Netanyahu formed the emergency war cabinet and unity government earlier in the day with Benny Gantz, head of the centre-right opposition National Unity party, in response to Saturday’s deadly attack by Hamas." Source: FT

Disclaimer:

Investing in equities, fixed-income instruments and/or alternative asset classes involves substantial risk of loss. Any action you may take as a result of the information presented on this website, blog or in any Reformed Millennials Podcast (a “podcast”) is your own responsibility. By opening this page and/or listening to a podcast, you accept and agree to the terms of this full legal disclaimer. The information on this website, blog and in any podcast is presented as a general educational, informational and entertainment resource only. While Joel Shackleton is registered to provide investment advice in Saskatchewan, Alberta, British Columbia and Ontario as an Advising Representative this website, blog and any podcast does not provide, and should not be construed as providing, individualized investment, tax or insurance advice, nor as containing any recommendation to buy or sell any specific securities or otherwise make any other form of investment, or take any tax or insurance decision. Nothing contained on this website, blog or in any podcast should be construed or interpreted by you to mean that an investment in any securities presented or discussed would be suitable for you in your particular circumstances. Joel Shackleton and Cameron Pitchers specifically disclaim that any viewer of this website, blog or any podcast should rely in any way on any of their contents as investment, tax or insurance advice or as an investment, insurance or tax recommendation. Viewers are encouraged to consult with their individual investment advisor and other financial professionals prior to taking any potential investment actions or making any insurance or tax decisions. The views and opinions expressed herein are the personal views and opinions of Joel Shackleton, Cameron Pitchers and any other specific contributor to the blog or podcast only and do not necessarily reflect the views or opinions of their Firm or any of its other registered individuals or employees in partnership with Joel and his guests. Joel Shackleton and Cameron Pitchers disclaims any obligation to update any of the information set out on this website or any blog or podcast going-forward.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com

View Details

Listen in podcast app and follow below for the podcast topic arc.

• Podcast apologizes for poor trade predictions

• Market update

• Challenges facing Canadian Millennials and Gen Z

• The opportunity presenting investors in Canada

• How the internet broke and fixed music

• The economics of the James Dolan Sphere

• Recommendations and Links

Listen on Apple, Spotify, or Google Podcasts.

Market Update📈📉

Welcome back.

We’re experiencing another volatile week in markets, as the hedge fund and bank bosses return from their summer slumber. The talk on the street continues to be “Higher for longer”. And this sentiment change has started to throw gas on the fire and reinvigorated the “hard landing” bear crowd.

One of my favorite follows from twitter (linked here and quoted below) had a great breakdown of the Hard or Hot Landing narrative. Below is his Hot or Hard landing argument.

“The ‘Hot Landing’ Thesis: The easy wins in inflation - repaired supply chains & declining shelter costs - are behind us.

Now these structural pressures remain:

• Re-shoring from China to Mexico/Vietnam/E. Europe/India increases industry cost structure

• Labor: UAW strikes and 20% wage hike demands are a symbol for wage pressure elsewhere

• Energy & Food: YTD records (almost $100 oil)

• Persistent Budget deficits

• Stimulus from Chips ACT & IRA

I’m not saying we are going to relive the 1970s.

However, the path to 2% gets harder the closer you get.

And 2% is the Fed target - they are not settling for 2.5%.

That means ‘higher for longer’ rates and inflation.

Postscript:

The ‘AI bailout’ scenario is if an AI productivity boom shows up next year.

I’m hopeful on AI, but am not counting on that.”

Twitter links from the pod:

• Canadian Wages settlements still heading higher

• What the fed pause means for interest rates and the yield curve

• Look at the explosive growth and falling costs of batteries, solar and wind in the chart below…the numbers are really impressive.

Podcast & YouTube Recommendations🎙

Bob Elliott talks fed funds and how they are done for now. He talks labor/wages, productivity and consumption habits.

To/dr - fed needs asset prices to come down so inflation can follow suit.

• Mathew Ball takes to Plain English to Explain the rise and fall of Disney and what their path forward to success looks like.

• Nuclear Power!

Best Links of The Week🔮

• Trevor tombe launches an Alberta Pension Plan simulator - here

• "Netflix plans to raise the price of its ad-free service a few months after the continuing Hollywood actors strike ends, the latest in a series of recent price increases by the country’s largest streaming platforms. The streaming service is discussing raising prices in several markets globally, but will likely begin with the U.S. and Canada... Over the past year or so, the cost of major ad-free streaming services has gone up by about 25%, as entertainment companies look to bring their streaming platforms to profitability and lead price-conscious customers to switch to their cheaper and more-lucrative ad-supported plans." Source: WSJ

• Spotify is doubling down on audiobooks: Paying subscribers of the music service will now have access to up to 15 hours of audiobook listening as part of their monthly subscription. - Fast Company

• Canada Mortgage and Housing Corp.'s deputy chief economist says the private sector must be given the proper incentives to invest more in housing in order to address the need for 3.5 million additional units by 2030. - BNN Bloomberg

• Canadian Economy set to get back on its feet in 2024 says Deloitte Canada Chief Economist - BNN Bloomberg

• Canadian Oil exports to hit new heights in next few years - BNN Bloomberg

Disclaimer:

Investing in equities, fixed-income instruments and/or alternative asset classes involves substantial risk of loss. Any action you may take as a result of the information presented on this website, blog or in any Reformed Millennials Podcast (a “podcast”) is your own responsibility. By opening this page and/or listening to a podcast, you accept and agree to the terms of this full legal disclaimer. The information on this website, blog and in any podcast is presented as a general educational, informational and entertainment resource only. While Joel Shackleton is registered to provide investment advice as an Advising Representative this website, blog and any podcast does not provide, and should not be construed as providing, individualized investment, tax or insurance advice, nor as containing any recommendation to buy or sell any specific securities or otherwise make any other form of investment, or take any tax or insurance decision. Nothing contained on this website, blog or in any podcast should be construed or interpreted by you to mean that an investment in any securities presented or discussed would be suitable for you in your particular circumstances. Joel Shackleton specifically disclaims that any viewer of this website, blog or any podcast should rely in any way on any of their contents as investment, tax or insurance advice or as an investment, insurance or tax recommendation. Viewers are encouraged to consult with their individual investment advisor and other financial professionals prior to taking any potential investment actions or making any insurance or tax decisions. The views and opinions expressed herein are the personal views and opinions of Joel Shackleton and any other specific contributor to the blog or podcast only and do not necessarily reflect the views or opinions of their Firm or any of its other registered individuals or employees in partnership with Joel and his guests. Joel Shackleton disclaims any obligation to update any of the information set out on this website or any blog or podcast going-forward.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com

View Details

Listen in podcast app and follow below for the podcast topic arc.

• NBA trade rumors and the biggest issue facing small market teams.

• Swifties meet Football

• Why are markets selling off into Q3/Q4

• Are Stocks Overvalued?

• Alberta and their quest to separate itself from CPP

• Powerball Winner mistakes

• Recommendations and Links

Listen on Apple, Spotify, or Google Podcasts.

Market Update📈📉

One thing about market corrections is that it drives investors and clients nuts. You can see it in the conversations being had on twitter.

But more acutely, you will see it in the media headlines.

In my experience, it's way better to focus on how normal this is and more importantly, pay attention to which stocks and assets are bucking the trend.

Focus on whats working.

Twitter links from the pod:

• Trevor Tombe talks CPP

• Ram talking about VC and asset allocation

• Matthew Ball on Googles relationship with Apple

• Will there be a credit event that comes from the yield curve bear steepening?

Podcast & YouTube Recommendations🎙

• Marks Interview with Sam Altman at Y combinator:

Mark Zuckerberg has said that one of the best things Facebook did was invent the idea of a growth team.

“Making it so that we could grow faster was the most important product feature we ended up building for Facebook. The traditional approach to growing and marketing is you have a communications group or marketing team and you buy ads. Sometimes there’s a place for that.. But if you’re actually trying to grow a product, the best levers for doing that are often within the product itself.” He continues: “There’s no magic in the group we’ve built here that other people can’t replicate. It’s just being very rigorous with data and investing in data infrastructure so that you can process different experiments and learn from what customer behavior is telling you.”

• A wonderful interview touring the macro headwinds facing markets: What to do and how to allocate your money from On The Margin

• The future of the next platform is the home: Dithering podcast

Best Links of The Week🔮

• FTC Sues Amazon - Wall Street Journal

• Alberta eyes more than half of CPP assets - Globe and Mail

• Amazon invests 4b in Anthropic - Tech Crunch

• "The United Auto Workers union will announce expanded strikes at General Motors, Ford Motor and Stellantis plants if the sides don’t make significant progress in negotiations by 10 a.m. ET Friday... The new union-imposed deadline comes a week after the UAW announced it would expand its initial Sept. 15 strikes at assembly plants of each of the Detroit automakers to 38 additional parts and distribution locations for GM and Stellantis. The UAW did not expand its strikes at Ford, citing progress in those talks." - CNBC

• After months of hints and anticipation, today Meta Founder/CEO Mark Zuckerberg unveiled Meta’s ‘Smart Agent’ AIs, along with other new products and services at the company’s Connect Developer Conference. Key difference vs OpenAI, Google and other LLM AIs that Meta was focusing on according to Mr. Zuckerberg, - “People aren’t going to want to interact with one single super intelligent A.I. — people will want to interact with a bunch of different ones.”

• "Minneapolis Federal Reserve President Neel Kashkari said Wednesday he’s unsure whether the central bank has raised interest rates enough to tame inflation. Speaking one day after he penned an essay suggesting that rates may have to go “meaningfully higher” from here in order to bring down prices, Kashkari told CNBC that the neutral rate of interest, or one that is neither holding back the economy nor stimulating it, may have moved higher... Some of his concerns stem from the fact that sectors of the economy that normally are affected by rate hikes seem to be ignoring them." Source: CNBC

Disclaimer:

Investing in equities, fixed-income instruments and/or alternative asset classes involves substantial risk of loss. Any action you may take as a result of the information presented on this website, blog or in any Reformed Millennials Podcast (a “podcast”) is your own responsibility. By opening this page and/or listening to a podcast, you accept and agree to the terms of this full legal disclaimer. The information on this website, blog and in any podcast is presented as a general educational, informational and entertainment resource only. While Joel Shackleton is registered to provide investment advice as an Advising Representative this website, blog and any podcast does not provide, and should not be construed as providing, individualized investment, tax or insurance advice, nor as containing any recommendation to buy or sell any specific securities or otherwise make any other form of investment, or take any tax or insurance decision. Nothing contained on this website, blog or in any podcast should be construed or interpreted by you to mean that an investment in any securities presented or discussed would be suitable for you in your particular circumstances. Joel Shackleton specifically disclaim that any viewer of this website, blog or any podcast should rely in any way on any of their contents as investment, tax or insurance advice or as an investment, insurance or tax recommendation. Viewers are encouraged to consult with their individual investment advisor and other financial professionals prior to taking any potential investment actions or making any insurance or tax decisions. The views and opinions expressed herein are the personal views and opinions of Joel Shackleton and any other specific contributor to the blog or podcast only and do not necessarily reflect the views or opinions of their Firm or any of its other registered individuals or employees in partnership with Joel and his guests. Joel Shackleton disclaims any obligation to update any of the information set out on this website or any blog or podcast going-forward.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com

View Details

Listen in podcast app and follow below for the podcast topic arc.

• The problems facing NFL running back compensation

• Risks of higher interest rates for longer

• How Joel thinks about higher rates for investors

• 5% GST rebate for Real Estate developers

• Recommendations and Links

Listen on Apple, Spotify, or Google Podcasts.

📈📊Market Update💵📉

Today was CPI day and the rest of the world is still struggling with historically tight employment.

Only and Canada and the US have anywhere close to sufficiently tight monetary policy to curb further acceleration in inflation and to top it all off, commodity prices are showing significant momentum.

The dot plot is telling us higher for longer… and that is bad for bonds and its bad for equities. So where does that leave us?

The only thing that seems to be holding up are gold and commodities.

Listen in today and check out some of the links below to see what were listening to and watching.

Valuation Chart from the pod:

Twitter links from the pod:

• GST real estate incentive thread

• Levi’s 21 things he’s learned owning 1.2m sq ft of industrial RE

• Lumida Wealths weightings on big tech

🎙Podcast & YouTube Recommendations🎙

• Bill Gurley speaks at the All In Summit

• Bob Elliott and Andy Constan on the next 5 months in the market:

• Ben Thompson at Sharp Tech talks everything Media:

🔮Best Links of The Week🔮

• Alberta eyes more than half of CPPs assets! - Globe and Mail

• High interest savings account or invest in stocks? - Globe and Mail

• Federal Reserve officials are set to hold interest rates steady at their meeting Wednesday >>Officials debate rate hikes, shifting from inflation concerns to avoiding a sharp slowdown, amid signs of easing inflation and labor market cooling - WSJ

• High borrowing costs and the shortage of properties for sale have slowed home buying by Wall Street’s rental giants >> Higher rates, expensive financing, and fierce competition hinder major landlords from buying homes, despite the rental market boom. - WSJ

• Apollo’s sees ‘Unprecedented Returns’ From Private Debt >>Amid traditional banks' retreat due to rate hikes, private credit providers are poised for unprecedented returns in upcoming years as primary lenders in buyouts. - Bloomberg

Disclaimer:

Investing in equities, fixed-income instruments and/or alternative asset classes involves substantial risk of loss. Any action you may take as a result of the information presented on this website, blog or in any Reformed Millennials Podcast (a “podcast”) is your own responsibility. By opening this page and/or listening to a podcast, you accept and agree to the terms of this full legal disclaimer. The information on this website, blog and in any podcast is presented as a general educational, informational and entertainment resource only. While Joel Shackleton is registered to provide investment advice as an Advising Representative this website, blog and any podcast does not provide, and should not be construed as providing, individualized investment, tax or insurance advice, nor as containing any recommendation to buy or sell any specific securities or otherwise make any other form of investment, or take any tax or insurance decision. Nothing contained on this website, blog or in any podcast should be construed or interpreted by you to mean that an investment in any securities presented or discussed would be suitable for you in your particular circumstances. Joel Shackleton specifically disclaim that any viewer of this website, blog or any podcast should rely in any way on any of their contents as investment, tax or insurance advice or as an investment, insurance or tax recommendation. Viewers are encouraged to consult with their individual investment advisor and other financial professionals prior to taking any potential investment actions or making any insurance or tax decisions. The views and opinions expressed herein are the personal views and opinions of Joel Shackleton and any other specific contributor to the blog or podcast only and do not necessarily reflect the views or opinions of their Firm or any of its other registered individuals or employees in partnership with Joel and his guests. Joel Shackleton disclaims any obligation to update any of the information set out on this website or any blog or podcast going-forward.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com

View Details

Listen in podcast app and follow below for the podcast topic arc.

• Market update

• Interest rates, Gold, and Stocks ++

• Canadian Market

• Sports, ESPN and the rebuilding of the entertainment bundle

• Recommendations

Listen on Apple, Spotify, or Google Podcasts.

What’s Going on in the Market📉📈

Q3 ‘23 was the first quarter in a year where S&P earnings finally grew (albeit only 1%)

Underneath the surface there is a lot of churn taking place

Tech firms are growing earnings across sectors, and taking share from legacy tech

E-commerce is extending beyond retail to drug delivery, food delivery, telemedicine, etc

What i’m seeing:

• CVS > NowRx

• Emergency Rooms > TeleMedicine

• Grocery > Instacart

Legacy advertising continues to lose ground to digital ads

• OutFront Media (billboards) > Google

• CableTV > YouTube / TikTok

• Newspapers > Substack/Beehive

Even industries like Basic Materials are changing.

• Paper manufacturing down

• Steel > Carbon Fiber

• Concrete > cost efficient Concrete

And so on…

Aggregate earnings growth of 1% masks the true underlying change

New players are growing earnings 10 to 20%, while legacy players are seeing earnings decline of 5% to 40%

On the surface, it looks placid.

Underneath the surface industries are transforming…

links mentioned in the podcast:

• Mexico is the new China

• Pandemic Boom and Bust

• No Landing Sentiment - Bob Elliott

Podcast & YouTube Recommendations🎙

• Why Shopify did a deal with big bad Amazon:

• The Rise and fall of ESPN, the future of Cable TV and bundling:

• An update on the business of Rolex:

Best Links of The Week🔮

What Happened in Vegas by David Hill

How Jimmy Hoffa built the Teamster’s modest pension fund into something that “operated as one of America’s largest banks,” and what happened when he turned it away from conservative public market investments toward bets like financing casinos with the mafia.

SVB's Demise: The Hidden Cost of Overcharging in the Competitive Banking Landscape

Contrary to popular belief, the collapse of SVB was not due to a sudden frenzy of withdrawals. Their practice of overcharging customers would have driven them out of business if the March 2023 collapse hadn’t gotten there first.

Bonus (Listen): Bryan Johnson: How to Age in Reverse on World of DaaS

Bryan Johnson is spending millions of dollars a year to reverse his biological age, and it’s working. His program is intense, but he shares the most easily replicable pieces of it (which are more approachable than you might think).

How Larry Gagosian Reshaped the Art World by Patrick Radden Keefe

A look into the secretive empire of art dealer Larry Gagosian, a unique global force who helped make the art world the $65 billion industry it is today.

“Winners Take None” by Hunter Walk

Most software markets are winner take all. Some of the most (over)hyped VC-backed “tech companies” of the past decade are probably winner take none, and maybe never were tech companies either.

Amazon’s Cloud Crisis: How AWS Will Lose the Future of Computing by Dylan Patel

A comprehensive look at the rise (and potential fall) of an $80 billion business.

The wonder drug I hoped would stop my 11.30pm fridge raids for cheddar and chorizo didn’t work for me. But I still believe it could change the lives of millions by Boris Johnson

Whatever you think of Boris Johnson, he’s a masterful writer. No US president since Thomas Jefferson could write like him.

Bonus (Listen): Steven Pinker: Human Cognition vs. AI

Steven brings his perspective from cognitive psychology to explain how AI does (and does not) mirror the human brain. We also discuss rationality, intellectual freedom and super powerful AGI.

MORE:

• Dara from $Uber talks about why he’ll always find a reason to say his company sucks - Wired.com

• How Dollar stores became magnets for crime - ProPublica.org

• How people are getting Doxed for just 15$ - 404 media.co

• How Saudi Arabia is buying up the world - New Statesman.com

• Nikes Marketing Blind spot - Trungphan Substack

Disclaimer:

Investing in equities, fixed-income instruments and/or alternative asset classes involves substantial risk of loss. Any action you may take as a result of the information presented on this website, blog or in any Reformed Millennials Podcast (a “podcast”) is your own responsibility. By opening this page and/or listening to a podcast, you accept and agree to the terms of this full legal disclaimer. The information on this website, blog and in any podcast is presented as a general educational, informational and entertainment resource only. This website, blog and any podcast does not provide, and should not be construed as providing, individualized investment, tax or insurance advice, nor as containing any recommendation to buy or sell any specific securities or otherwise make any other form of investment, or take any tax or insurance decision. Nothing contained on this website, blog or in any podcast should be construed or interpreted by you to mean that an investment in any securities presented or discussed would be suitable for you in your particular circumstances. Joel Shackleton as registered representative specifically disclaim that any viewer of this website, blog or any podcast should rely in any way on any of their contents as investment, tax or insurance advice or as an investment, insurance or tax recommendation. Viewers are encouraged to consult with their individual investment advisor and other financial professionals prior to taking any potential investment actions or making any insurance or tax decisions. The views and opinions expressed herein are the personal views and opinions of Joel Shackleton and any other specific contributor to the blog or podcast only and do not necessarily reflect the views or opinions of their Firm or any of its other registered individuals or employees in partnership with Joel and his guests. Joel Shackleton disclaims any obligation to update any of the information set out on this website or any blog or podcast going-forward.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com

View Details

Listen in podcast app and follow below for the podcast topic arc.

• Opening riff on the NBA preseason drama

• Market update

• CREA Update (July) & Calgary market note

• Taylor Swift

• Sports items - ex-ESPN on air starting new fantasy media corp with big backers

• Recommendations and Predictions

Listen on Apple, Spotify, or Google Podcasts.

📈📊Market Update💵📉

Last week was another tough week for markets as investors were hit with more inflation data.

Some good reads to help you better understand where were at in this tightening cycle:

• The Rise (and Fall) of inflation in Canada - Trevor Tombe

• Liberal PM meets with Cabinet to discuss impacts of inflation on voters - Bloomberg

• Consumers betting on variable rates as mortgage rates skyrocket - BnnBloomberg

Chart of the week: REITs positioning.

Twitter links from this weeks podcast:

• Great thread on how Dahner compounded capital better than almost all roll up companies in history.

• Do carbon taxes affect food prices - Trevor Tombe

🎙Podcast & YouTube Recommendations🎙

• Macro Sunday with Michael Kao

• All In talks Media polarization and the Rich Men North of Richmond.

• Nick Colas on how to use the VIX to Invest Money more effectively.

🔮Best Links of The Week🔮

• Canada continues to inbound tens of thousands - globe and mail

• Global Sports investment can bring the world closer together - Sportico.com

• White House announces new China Tech Curbs: As expected, the administration moved forward to curb US VC and private equity investments in China across semiconductors, quantum computing and AI for now. Won’t be implemented until 2024 after a review process. There is an effort to balance the overall trade relationship vs containing China related to ‘national security issues.

• Nvidia’s new GPUs: Founder/CEO Jensen Huang officially kicked off Nvidia’s next generation GH200 GPU ‘Superchips’, while the current A100 and H100 chips are already in superhot demand and on global allocation. Nvidia also announced iterations of other Enterprise focused AI infrastructure services around its hardware and software compute architecture. Nvidia continues to be the biggest provider of GPU chips for the current global AI gold rush going into 2024 and beyond.

• Meta out-executes TikTok on monetizing short videos: A surprising thing that came out in Meta’s quarterly results call last week was Mark Zuckerberg outlining that Meta’s short video Reels monetization with advertisers is on a “revenue run rate that jumped to $10 billion, up from $3 billion last fall, and $1 billion last summer.” That means that Reels is about the size of TikTok’s business as of 2022 end, and poised to potentially surpass it this year. This despite the general industry reality that Reels as an AI algorithm drive video product is still not as good as TikTok. Watch the 13 to 16 minute marks in this YouTube video discussion by the tech reviewers at the Verge for more context. This underlines Meta’s unparalleled ability to focus, execute, and leverage its multi-billion global user base ahead of their competitors.

Disclaimer:

Investing in equities, fixed-income instruments and/or alternative asset classes involves substantial risk of loss. Any action you may take as a result of the information presented on this website, blog or in any Reformed Millennials Podcast (a “podcast”) is your own responsibility. By opening this page and/or listening to a podcast, you accept and agree to the terms of this full legal disclaimer. The information on this website, blog and in any podcast is presented as a general educational, informational and entertainment resource only. This website, blog and any podcast does not provide, and should not be construed as providing, individualized investment, tax or insurance advice, nor as containing any recommendation to buy or sell any specific securities or otherwise make any other form of investment, or take any tax or insurance decision. Nothing contained on this website, blog or in any podcast should be construed or interpreted by you to mean that an investment in any securities presented or discussed would be suitable for you in your particular circumstances. Joel Shackleton specifically disclaims that any viewer of this website, blog or any podcast should rely in any way on any of their contents as investment, tax or insurance advice or as an investment, insurance or tax recommendation. Viewers are encouraged to consult with their individual investment advisor and other financial professionals prior to taking any potential investment actions or making any insurance or tax decisions. The views and opinions expressed herein are the personal views and opinions of Joel Shackleton and any other specific contributor to the blog or podcast only and do not necessarily reflect the views or opinions of their Firm or any of its other registered individuals or employees in partnership with Joel and his guests. Joel Shackleton disclaims any obligation to update any of the information set out on this website or any blog or podcast going-forward.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.reformedmillennials.com

View Details

Listen in podcast app and follow below for the podcast topic arc.

• Market update

• What does $PENN look like without Barstool

• Berkshire earnings

• Steve Jobs transition to Tim Cook

• Future of sports gambling and content production

• Sports franchise valuations

• Recommendations and Predictions

Listen on Apple, Spotify, or Google Podcasts.

📈📊Market Update💵📉

Quick read on US CPI from Bloomberg!

We’re keeping the commentary short and sweet this week… but have some great podcasts and links to check out below!

US equities fell on Wednesday ahead of today’s July consumer price index report.

Technology (-1.51%) and communication services (-1.24%) lagged the broader market indices, while energy (+1.22%) and real estate (+0.20%) outperformed.

The Nasdaq lost 1.17%, while the "FAAMG" stocks dropped:

The 30-year and 10-year Treasury yields finished at 4.176% and 4.009% respectively, while the 2-year yield ended at 4.810%.

• If you read anything related to stocks this week, I highly recommend Chris Bloomstran’s tweet thread on Berkshires most recent report:

https://twitter.com/ChrisBloomstran/status/1687913318860619777?s=20

What is everyone thinking about?

• US credit card debt just hit $1 trillion, a big flashy number, but entirely consistent with long term trends. This is not a sign that the US consumer is tapped out.

• US retail money market fund balances hit their own record recently, at $1.5 billion. This is a significant change from prior 40-year trends and bodes poorly for smaller US banks.

• US bank stocks have rallied by +1 standard deviation versus their long run track record. The easy money has been made.

Twitter links from the pod:

• Bob Elliott on short term rates

• Bob Elliott on what people are missing about inflation

🎙Podcast & YouTube Recommendations🎙

• Nick Kolas talks about how to value Tesla:

• Steven Pinker talks with World of DAAS about humans vs. AI:

• A great listen from the Founders Pod. Paul Graham is one of the most interesting people in venture capital

• Bryson vs. Phil money game was a fun watch:

🔮Best Links of The Week🔮

• Josh Brown Explains His Thesis On $UBER - Reformed Broker

• "Twenty-five years after the Cadillac Escalade launched General Motors into large, highly profitable luxury SUVs, the Detroit automaker is hoping a new all-electric version of the vehicle will ignite the same success for a new generation of luxury buyers. - CNBC

• Where the market is for luxury watches - The luxury watch dealer

• "European natural gas prices surged almost 40 per cent on Wednesday as the potential for disrupted global liquefied natural gas supply from Australia spooked traders betting on further price declines." - FT

• AI: Video hits Home…as Meta shows, with Advertisers & Users

Disclaimer:

Investing in equities, fixed-income instruments and/or alternative asset classes involves substantial risk of loss. Any action you may take as a result of the information presented on this website, blog or in any Reformed Millennials Podcast (a “podcast”) is your own responsibility. By opening this page and/or listening to a podcast, you accept and agree to the terms of this full legal disclaimer. The information on this website, blog and in any podcast is presented as a general educational, informational and entertainment resource only. While Joel Shackleton is registered to provide investment advice as an Advising Representative with Gold Investment Management Ltd., a firm registered as a portfolio manager and located in Edmonton, Alberta, this website, blog and any podcast does not provide, and should not be construed as providing, individualized investment, tax or insurance advice, nor as containing any recommendation to buy or sell any specific securities or otherwise make any other form of investment, or take any tax or insurance decision. Nothing contained on this website, blog or in any podcast should be construed or interpreted by you to mean that an investment in any securities presented or discussed would be suitable for you in your particular circumstances. Joel Shackleton and GIM specifically disclaim that any viewer of this website, blog or any podcast should rely in any way on any of their contents as investment, tax or insurance advice or as an investment, insurance or tax recommendation. Viewers are encouraged to consult with their individual investment advisor and other financial professionals prior to taking any potential investment actions or making any insurance or tax decisions. The views and opinions expressed herein are the personal views and opinions of Joel Shackleton and any other specific contributor to the blog or podcast only and do not necessarily reflect the views or opinions of GIM or any of its other registered individuals or employees. Joel Shackleton and GIM disclaim any obligation to update any of the information set out on this website or any blog or podcast going-forward.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.reformedmillennials.com

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• Opening riff - re: dog days of sports but NFL is around the corner

• Market update from Joel & Comments on consumer sentiment bifurcation

• Meta, Google and Microsoft

• H1-B Visa Holders

• The Content Creator Economy - boost from writer/actor strike?

• Prof Galloway and Adam Grant commentary

• Recommendations

Listen on Apple, Spotify, or Google Podcasts.

📈📊Market Update💵📉

Q2 closed with some pretty mind-numbing performance numbers from the Nasdaq.

Few people predicted that the first half of the year would produce such a phenomenal performance from the tech sector.

This week, Datatrek had a great performance roundup in their daily newsletter that i will highlight below:

After lagging US large caps in Q1 and Q2 2023, rest of world stocks (ACWX) outperformed in July. After leading in the first half of 2023, the S&P 500 trailed every other widely followed measure of US stock performance in July. That the Nasdaq Composite outperformed is no surprise; it has been doing so all year. But mid and small cap indices of every description, as well as the Dow and even-weight S&P, did better in July than the 500. Sector, style, and market cap rotation was the story in July.

The “catch up trade” we have been discussing over the last month is in full swing. A scan down the rightmost column in the table above shows that July’s leaders are still 2023’s laggards. That does not happen by accident. The US market narrative is changing.

#2: Major developed and emerging economy equity market indices in comparison to the S&P 500:

Emerging Markets were July’s standout region after lagging badly in Q1 and Q2.The rally in Chinese stocks helped, but so did gains in South Korean and Brazilian equities. There is growing hope that China’s economic policymakers will soon act to boost the country’s flagging economy. This is helping South Korean stocks as well. MSCI Brazil is 18 percent weighted to Energy, a winning group last month with oil’s sudden price surge.

European and Japanese stocks continued to underperform last month, just as they did in Q2. While both areas did well in Q1, they have not been able to find their footing since then. In the case of European stocks, that is a bit surprising since their Q1 outperformance was largely based on initial enthusiasm over China’s economic reopening. Worries about a slowing local economy are weighing on Europe’s equity markets, except for the Netherlands, due to its 22 percent weight in global tech company ASML.

#3: US large cap sector performance:

Of the 3 sectors heavily weighted to US Big Tech, only Communication Services continued its 2023 streak of outperformance in July. That was due to Alphabet (+10.0 pct) and Meta (+11.0 pct), largely because of strong Q2 earnings reports. US large cap sector leadership shifted in July to Energy, Financials, and Materials.All 3 came into Q3 badly underperforming the S&P 500. Hopes for a continued economic expansion have given them a tailwind, as have rising oil prices. This is good news, since it shows markets are now more forcefully rejecting recession fears. We continue to favor large cap Financials, especially the banks.

#4: Big Tech’s changing role in the ongoing US large cap rally, with the data for each name’s point contribution to the S&P 500:

US Big Tech stocks’ contribution to the S&P 500 in July was largely in line with their collective weighting (28 percent) rather than being the lion’s share of the gains as they were in Q1 and Q2. As with the prior points, this shows that the US equity rally is broadening out. It’s not that Big Tech is a drag on US large caps – far from it, in fact. But other groups, as noted above, are having their day (finally).

#5: Growth versus Value investment styles for US small and large cap stocks:

In July, Value came back into favor in US large caps, but not small caps. As is so often the case with these labels, the devil is in the sector-specific details. For example, Energy (a top performer last month) is 6.5 percent of large cap Growth but just 1.5 pct of large cap Value. Strange, but very true. As for small caps, Financials (another big July winner) are 25.8 percent of Value but just 6.5 pct of Growth. At least that differential makes some sense, unlike Energy in large cap Growth/Value.

Twitter links from the pod:

• Oil Inventories!

• Bob Elliott on bonds

• Adam Grant on parenting

🎙Podcast & YouTube Recommendations🎙

• Where to start investing in AI - Odd Lots with Josh Wolfe from Lux Capital

• The history of Disney and Picasso - Founders Podcast

• A good primer on LK-99 in this weeks episode of All In

🔮Best Links of The Week🔮

• The Role of Gold in a portfolio - Unlimited Funds

• Calgary Real Estate is on fire - Some data from the Calgary Harold

• CROE downgrades the home sales forecast. The story of Canadian and US realestate remains an inventory problem. WE NEED SUPPLY - The Globe and Mail

• Sparkline Capital - Investing in AI: Navigating the Hype (17 pages) Kai Wu's latest research applies lessons from the dot-com bubble to the AI craze today, showing how “intangible value” can help investors navigate the hype cycle. He then analyzes the AI exposure of popular ETFs and which employers stand to benefit from the impact of Generative AI on their workforces.We've shared a lot of Wu's research before, but this is a must-read.

• The Online Creator Economy gets a big boost from Hollywood strikes: While Hollywood writers and actors stay on strike, online creators get a boost on their increasingly abundant audience followings and market power. The Washington Post has a detailed piece worth perusing. Meanwhile, Goldman Sachs has a new report here seeing this market go from $250 billion to almost $500 billion in four years. - Michael Parekh

• Strong Quarterly Results & AI Focus by Meta, Google and Microsoft: All three tech mega cap companies reported robust results this week, with the stocks responding well, especially Google and Meta. Microsoft also had a strong report, and the three companies now collectively trade at almost a $5 trillion market cap. Amazon and Apple report their results on August 3rd next week. Focus as expected, was on the AI plans by each company, and the companies were proactive outlining their plans in the months to come. Investors were unfazed by the billions in continued capex investment by the companies in AI and other initiatives, for now. - Michael Parekh

Disclaimer:

Investing in equities, fixed-income instruments and/or alternative asset classes involves substantial risk of loss. Any action you may take as a result of the information presented on this website, blog or in any Reformed Millennials Podcast (a “podcast”) is your own responsibility. By opening this page and/or listening to a podcast, you accept and agree to the terms of this full legal disclaimer. The information on this website, blog and in any podcast is presented as a general educational, informational and entertainment resource only. While Joel Shackleton is registered to provide investment advice as an Advising Representative this website, blog and any podcast does not provide, and should not be construed as providing, individualized investment, tax or insurance advice, nor as containing any recommendation to buy or sell any specific securities or otherwise make any other form of investment, or take any tax or insurance decision. Nothing contained on this website, blog or in any podcast should be construed or interpreted by you to mean that an investment in any securities presented or discussed would be suitable for you in your particular circumstances. Joel Shackleton specifically disclaim that any viewer of this website, blog or any podcast should rely in any way on any of their contents as investment, tax or insurance advice or as an investment, insurance or tax recommendation. Viewers are encouraged to consult with their individual investment advisor and other financial professionals prior to taking any potential investment actions or making any insurance or tax decisions. The views and opinions expressed herein are the personal views and opinions of Joel Shackleton and any other specific contributor to the blog or podcast only and do not necessarily reflect the views or opinions of their Firm or any of its other registered individuals or employees in partnership with Joel and his guests. Joel Shackleton disclaims any obligation to update any of the information set out on this website or any blog or podcast going-forward.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.reformedmillennials.com

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• Q3 Earnings Season!

• Market Update

• Netflix and Disney+ is the new cable bundle

• Mbappé to Madrid or Saudi Arabia

• Recommendations and must listens

Listen on Apple, Spotify, or Google Podcasts.

📈📊Market Update💵📉

Datatrek posted a great recap of the fed meeting yesterday:

Markets: Chair Powell accomplished what he needed to do at today’s post-FOMC meeting press conference, telling markets that further rate hikes are still on the table. He also poured cold water on the idea that rate cuts will start in the first half of next year. On a happier note, he believes the US banking system is getting back to a solid footing after the March mini crisis. Fun fact: the S&P 500 is now up 3.5 percent since the first rate hike of the cycle in March 2022. That reflects a still-resilient US economy, but the Fed’s job is still not done with respect to inflation.

1: Fed Funds Futures took Chair Powell’s press conference comments as slightly dovish regarding rest of year monetary policy decisions. Odds of another hike are sub-50 percent.

2: Powell made the point that core inflation (now 4.8 pct) leads headline (now 3.0 pct). This is true, especially during periods of declining energy prices. Core inflation is the more important number from now on.

3: The “Great Rotation” continues. Mutual fund/ETF investors continue to sell stocks and buy bonds.

Disruption: With all the recent focus on gen AI, respected technologist Ben Evans is out with a piece claiming that waves of automation will grow employment, not hurt it. That’s likely true over the long run. However, the greater issue for economic and corporate earnings growth is how gen AI will impact productivity. Long-run US labor force productivity growth has fallen to levels last seen pre-Internet. Whether gen AI helps boost output/worker in coming years will come down to how aggressively businesses adopt it rather than Big Tech simply using it to enhance their entertainment offerings.

Twitter links from the pod:

• Bob Elliott on short term rates

• Naval’s out of office response

• Central Bank’s pausing misses the point

• JohnathonMB’s twitter thread on Barbie vs. Oppenheimer

🎙Podcast & YouTube Recommendations🎙

• Josh Kushner from Thrive Capital

favorite quote from the pod:

“Read the affordable care act in a weekend and started a business to help solve a problem”

• This week in startups with Utah Jazz Owner Ryan Smith

• Bob Elliott on the Fed and his new YouTube Channel:

🔮Best Links of The Week🔮

• Steve Clapham: A blueprint for 10-baggers (8 mins)

• Pyramids and Pagodas on Tom Burgis’s book The Looting Machine (6 mins)

• Hoisington’s 2Q2023 letter discussing inflation & money supply (6 pages)

• Warden Capital’s 2Q2023 commentary on US housing (17 mins)

• Silver Beech on Asbury Automotive, Playa Hotels, Alphabet (9 pages)

• 1Main Capital letter on Basic-fit, Dentalcorp, IWG, KKR, Limbach (9 pages)

• Moon Capital’s 2Q2023 letter on First Horizon, Canadian Natural (14 mins)

Disclaimer:

Investing in equities, fixed-income instruments and/or alternative asset classes involves substantial risk of loss. Any action you may take as a result of the information presented on this website, blog or in any Reformed Millennials Podcast (a “podcast”) is your own responsibility. By opening this page and/or listening to a podcast, you accept and agree to the terms of this full legal disclaimer. The information on this website, blog and in any podcast is presented as a general educational, informational and entertainment resource only. While Joel Shackleton is registered to provide investment advice as an Advising Representative this website, blog and any podcast does not provide, and should not be construed as providing, individualized investment, tax or insurance advice, nor as containing any recommendation to buy or sell any specific securities or otherwise make any other form of investment, or take any tax or insurance decision. Nothing contained on this website, blog or in any podcast should be construed or interpreted by you to mean that an investment in any securities presented or discussed would be suitable for you in your particular circumstances. Joel Shackleton specifically disclaim that any viewer of this website, blog or any podcast should rely in any way on any of their contents as investment, tax or insurance advice or as an investment, insurance or tax recommendation. Viewers are encouraged to consult with their individual investment advisor and other financial professionals prior to taking any potential investment actions or making any insurance or tax decisions. The views and opinions expressed herein are the personal views and opinions of Joel Shackleton and any other specific contributor to the blog or podcast only and do not necessarily reflect the views or opinions of their Firm or any of its other registered individuals or employees in partnership with Joel and his guests. Joel Shackleton disclaims any obligation to update any of the information set out on this website or any blog or podcast going-forward.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.reformedmillennials.com

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• A quick Market Update featuring some insights from JC Parets’ newsletter

• MSFT’s new Chat Ai integration with Microsoft 365

• Bill C-18 impact on the Canadian media landscape

• Netflix continued dominance in the

• Recommendations and must listens

Listen on Apple, Spotify, or Google Podcasts.

📈📊Market Update💵📉

some thoughts from JC Parets:

Technical Analysis is the study of the behavior of the market and its participants. So while identifying price trends is our ultimate goal, sentiment plays an important role in that process. Prices don't move up or down because of "fundamentals" or "the economy". The price of assets move based on positioning. When investors are all positioned one way, and are at a consensus, who's left to drive prices further in that direction?

Last summer we saw some of the most pessimistic sentiment towards stocks in history.

Some of that sentiment has started to shift a bit, like in the AAII and II polls. We're back somewhere towards the middle in those. You need, at least, some bulls to buy stocks to have a bull market.

But when it comes to Fund Managers, Cash is still their largest position, and they're most bearish on equities.

This is not something we see historically right before a major market selloff. Quite the opposite, in fact.

This is fuel for further gains. This cash needs to be put to work.

J.P. Morgan asked investors if they plan to increase or decrease exposure to stocks in the coming days/weeks.

We're down to only 17% of respondents who are looking to add to equity exposure:

Again, it's when they all plan to add to equity exposure that investors should start to worry.

Currently it's the exact opposite.

They're all scared to death.

And the S&P500, Dow Jones Industrial Average and Nasdaq100 all keep closing at new 52-week highs.

This is not something we see in downtrends.

So what do we know? Stocks have been going up consistently over the past year. And investors are not participating.

Who on earth could they be listening to?

Well, let's remember that after the greatest first half to the Nasdaq in history, Wall Street strategist currently have their most bearish second half outlook on record:

Investors have found themselves following wall street strategists into really bad decisions.

Twitter Links we reference:

• Bob Elliott on how to properly predict Macro

• Mike Solana on the Twitter vs. Threads War

• Google holds off on releasing Bard in Canada

• Netflix continues to dominate streaming

🎙Podcast & YouTube Recommendations🎙

This weeks All-In Pod was actually worth a listen, if only for their thoughts on Debt to GDP financing at the national level:

• The Acquired Podcast: Porsche

• Harrison Ford goes On Conans Pod:

🔮Best Links of The Week🔮

• Bill C-18 and it’s impact on Canadian Media - Globe and Mail

• Why you believe the things that you do - Morgan Housel

• Michael Parekh has a great overview of Elon’s Xai announcement. Sign up for his free blog covering all things AI.

• "China’s billionaires have stepped out of the shadows to praise the Communist party’s efforts to restore private sector confidence as Beijing attempts to recharge the economy’s faltering post-pandemic recovery. The country’s typically low-profile titans of industry — many of whom have been hit by regulatory crackdowns in recent years — put out a series of editorials and statements on Wednesday and Thursday declaring their support for an action plan by the party to bolster private companies. The apparently orchestrated expression of confidence from the tycoons comes as the world’s second-largest economy is struggling with sagging private sector business and consumer confidence." FinancialTimes

• "Cruise, the self-driving arm of General Motors, has begun initial testing and data collection in Miami, the company said in a tweet Wednesday... The news comes two months after Cruise expanded to Houston and Dallas, where the AV company has begun supervised testing and is on track to begin driverless ride-hail service for members of the public “soon”... Most of Cruise’s operations have been in its hometown of San Francisco, where it competes head-to-head with Alphabet’s Waymo. The two companies are currently in permit limbo as they await California’s Public Utilities Commission to grant them both the right to charge for robotaxi services throughout the city 24/7... Waymo and Cruise have run up against opposition from residents and city agencies, which may have caused the CPUC to delay hearings to approve their permits." TechCrunch

Disclaimer:

Investing in equities, fixed-income instruments and/or alternative asset classes involves substantial risk of loss. Any action you may take as a result of the information presented on this website, blog or in any Reformed Millennials Podcast (a “podcast”) is your own responsibility. By opening this page and/or listening to a podcast, you accept and agree to the terms of this full legal disclaimer. The information on this website, blog and in any podcast is presented as a general educational, informational and entertainment resource only. While Joel Shackleton is registered to provide investment advice as an Advising Representative this website, blog and any podcast does not provide, and should not be construed as providing, individualized investment, tax or insurance advice, nor as containing any recommendation to buy or sell any specific securities or otherwise make any other form of investment, or take any tax or insurance decision. Nothing contained on this website, blog or in any podcast should be construed or interpreted by you to mean that an investment in any securities presented or discussed would be suitable for you in your particular circumstances. Joel Shackleton specifically disclaim that any viewer of this website, blog or any podcast should rely in any way on any of their contents as investment, tax or insurance advice or as an investment, insurance or tax recommendation. Viewers are encouraged to consult with their individual investment advisor and other financial professionals prior to taking any potential investment actions or making any insurance or tax decisions. The views and opinions expressed herein are the personal views and opinions of Joel Shackleton and any other specific contributor to the blog or podcast only and do not necessarily reflect the views or opinions of their Firm or any of its other registered individuals or employees in partnership with Joel and his guests. Joel Shackleton disclaims any obligation to update any of the information set out on this website or any blog or podcast going-forward.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.reformedmillennials.com

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• Joel breaks down the Bank of Canada’s decision to raise interest rates

• Market Update

• Thoughts on the James Dolans Las Vegas Sphere

• Liv Golf and the PGA tour merger proposals

• Recommendations and must listens

Listen on Apple, Spotify, or Google Podcasts.

📈📊Market Update💵📉

Joel’s thoughts on Canadian Mortgages and Interest Rates: (not financial advice!)

Bank Of Canada is at 5.00%. Prime is at 7.20% What Happens Next?

Remember their mandate:

• Price stability

• Full employment

When inflation grows beyond target 2-3%, our Central Banks respond by hiking interest rates. If employment starts to fall, our Central Banks usually cut interest rates.

It’s fairly clear to me now that we’ve found a modicum of price stability in our economy. Housing prices are falling, energy prices are relatively low and food prices have, for the moment, stopped going up.

The last shoe to drop is employment. And for better or worse, the job market is VERY tight.

Prediction: (not financial advice and for entertainment purposes only)

In order for us to start seeing a cut in real rates we need to see employment fall or at the very least, crack.

In my mind, this starts in October/November of 2023.

At which point, 9 to 10 months before BoC starts to cut we will see fixed mortgage drop because they tend to lead. So early spring and summer of 2024, we will have rates back to where they were early this year.

• 5 - Yr Fixed from 3.99% to 4.49%

• 3 - Yr Fixed from 4.39% to 4.79%

We’re at peak rate pain right now. The next shoe to drop is employment. And when it does, we will finally start to see an environment where were no longer talking about rate hikes, but rate cuts.

Trevor Tombe has a great piece on the recent rate hike here.

Twitter links from the pod:

• Income Driven Cycle - Bob Elliott

• Liv Golf Proposals - NUCLR Golf

• Akaash Gupta on the Sphere

🎙Podcast & YouTube Recommendations🎙

• Microcap Investing with the king - Ian Cassel

• Tom Holland on the Smartless Pod:

• Harvard Biologist David Sinclair on what it will take to live to 120

🔮Best Links of The Week🔮

• The Evolution of a Value Investor - Source:TSOH

• The Vanishing: The erasure of Jews from American life by Jacob Savage

According to YouGov data, just 4% of elite academics under 30 are Jewish, compared to over 20% of boomers.

• My Friend, Stalin’s Daughter by Nicholas Thompson

Svetlana Alliluyeva (Stalin’s daughter) was a sensation when she defected to the U.S. in the late 60s, but her later years in the U.S. were more fraught. An unbelievable arc of 20th century life from the Kremlin to Spring Green, Wisconsin.

• Images From Words - Michael Parekh

Disclaimer:

Investing in equities, fixed-income instruments and/or alternative asset classes involves substantial risk of loss. Any action you may take as a result of the information presented on this website, blog or in any Reformed Millennials Podcast (a “podcast”) is your own responsibility. By opening this page and/or listening to a podcast, you accept and agree to the terms of this full legal disclaimer. The information on this website, blog and in any podcast is presented as a general educational, informational and entertainment resource only. While Joel Shackleton is registered to provide investment advice as an Advising Representative this website, blog and any podcast does not provide, and should not be construed as providing, individualized investment, tax or insurance advice, nor as containing any recommendation to buy or sell any specific securities or otherwise make any other form of investment, or take any tax or insurance decision. Nothing contained on this website, blog or in any podcast should be construed or interpreted by you to mean that an investment in any securities presented or discussed would be suitable for you in your particular circumstances. Joel Shackleton specifically disclaim that any viewer of this website, blog or any podcast should rely in any way on any of their contents as investment, tax or insurance advice or as an investment, insurance or tax recommendation. Viewers are encouraged to consult with their individual investment advisor and other financial professionals prior to taking any potential investment actions or making any insurance or tax decisions. The views and opinions expressed herein are the personal views and opinions of Joel Shackleton and any other specific contributor to the blog or podcast only and do not necessarily reflect the views or opinions of their Firm or any of its other registered individuals or employees in partnership with Joel and his guests. Joel Shackleton disclaims any obligation to update any of the information set out on this website or any blog or podcast going-forward.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.reformedmillennials.com

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• Joel and Cam debate Threads vs. Twitter

• Market Update

• The problem F1 is having with its fair weather fan base.

• Recommendations and must listens

Listen on Apple, Spotify, or Google Podcasts.

📈📊Market Update💵📉

What a first half of the year.

The market has ripped into the summer and we’ve seen meaningful upside resolution from the S&P500. But the rest of the world hasn’t kept up. In DataTreks most recent newsletter, they talked about the lagging ROW(rest of world).

from their free report:

The theme of today’s Story Time Thursday is “the invisible becomes visible”. The first example is real interest rates, which for many years were zero or negative. Now they are high and rising, lifting 10-year yields and corporate cost of/access to capital. The second example is investors’ expectations for US/global equity returns. Q2’s sluggish rest of world equity performance is a good reminder that non-US stocks have a disappointing long term track record, most probably due to a fundamental lack of shareholder value creation. This will not likely change soon.

Data: Today’s JOLTS report showed US job openings fell back below 10 mn in May, but they still outnumbered unemployed workers by 1.6x versus 1.2x in February 2020 (pre-pandemic). Our “Take this job and shove it” indicator (quits/total separations) rose to 68.4 pct versus 60.4 pct in Feb 2020. Workers remain confident in finding better paying jobs, while employers are still reluctant to let employees go given an ongoing labor shortage/still decent economy. Today’s JOLTS report and strong ADP jobs print show why Chair Powell continues to signal additional rate hikes this year.

Disruption: 1: Today’s Initial Claims report was broadly in line with expectations (unlike ADP). Claims are slowly moving higher as the year progresses, a trend we expect to continue.

2: Two-year Treasury yields briefly broke out to new post-Pandemic Era highs this morning but closed lower than that key level. Stocks responded in near lock step. We continue to believe 2-years above 5 percent put a bit of a damper on stocks over the near term.

Threads vs. Twitter:

It’s a completely different social graph and there’s two ways to look at it:

“𝗧𝗵𝗿𝗲𝗮𝗱𝘀 won’t work because it doesn’t allow you to import your Twitter followers”

Let me invert that statement for you:

How many of your non-Twitter friends would become activated on Twitter if they could import their 𝗜𝗻𝘀𝘁𝗮𝗴𝗿𝗮𝗺 social graph?

Zuck is incredibly good at throwing his weight behind something at the precise moment his products begin to lose relevancy.

He never misses the next train.

Only Elon could have made all this happen. He has been the most charitable tech person of 2022 and 2023 by paying out ex-Twitter employees that he despises top dollars for their Twitter shares last year and now juicing the stock of his competitor Face/Insta/Metabook shares to $300 by destroying his own shareholder’s value at Twitter. Bravo.

While people dismiss the idea of ‘Threads’ because it is Zuckerberg and data evil, as Fred Wilson (a seed investor in Twitter who has stopped using Twitter) says in his post today

Threads is about two really important things:

1/ Competition for Twitter. Long overdue and badly needed.

2/ The emergence of a widely supported social media protocol. Which should produce a vibrant and interoperable social media ecosystem.

• Top 10 stocks so far in 2023

🎙Podcast & YouTube Recommendations🎙

• The Future of Ai with LinkedIn’s Reid Hoffman

Topics: what percentage of the American population will eschew it, how gaming will evolve, whether AI’s future will be open-source or proprietary, the binding constraint preventing the next big step in AI, which philosopher has risen in importance thanks to AI, what he’d ask a dolphin, what LLMs have taught him about friendship, how higher education will change, and more. They also discuss Sam Altman’s overlooked skill, the biggest cultural problem in America, the most underrated tech scene, and what he’ll do next.

• Noam Chompsky On World Of Politics and Liberalism

🔮Best Links of The Week🔮

• Why Starlink is such a big deal. - Source: Casey Handmer

• Student loan debt in America is about to reemerge as a major problem for their politicians and pocketbooks. Starting September 1st, people with debt will have to restart their monthly payments. - Source: Payitoff

• Portfolio Nuclear. - Source: The Gregor Letter

• AI: Building Value over Time via Tech Stacks, Staircases and Loops. - Source: AI A Reset To Zero

• "Private sector jobs surged by 497,000 in June, well ahead of the 267,000 gain in May and much better than the 220,000 estimate. Leisure and hospitality led with 232,000 new hires, followed by construction with 97,000, and trade, transportation and utilities at 90,000. The unexpected jump in payrolls comes despite more than a year’s worth of Federal Reserve interest rate increases." Source: CNBC

• "Meta said more than 30mn people had signed up to its long-awaited competitor to Twitter in what chief executive Mark Zuckerberg pitched as a “friendly” alternative to the struggling social media platform owned by Elon Musk." Source: FT

"Electric-vehicle sales in the U.S. surged by 50% in the first half of the year, although the pace of growth slowed amid a buildup of unsold EV inventory at dealerships. For the first half of 2023, automakers sold 557,330 electric vehicles with the growth rate far eclipsing that of conventional cars, according to data released Thursday by research firm Motor Intelligence. Sales of internal-combustion-engine vehicles grew about 10% in the period. EVs are a small but rapidly expanding part of the new-vehicle market, accounting for 7.2% of overall sales in the January-to-June period, up from 5.4% a year earlier." Source: WSJ

Disclaimer:

Investing in equities, fixed-income instruments and/or alternative asset classes involves substantial risk of loss. Any action you may take as a result of the information presented on this website, blog or in any Reformed Millennials Podcast (a “podcast”) is your own responsibility. By opening this page and/or listening to a podcast, you accept and agree to the terms of this full legal disclaimer. The information on this website, blog and in any podcast is presented as a general educational, informational and entertainment resource only. While Joel Shackleton is registered to provide investment advice as an Advising Representative this website, blog and any podcast does not provide, and should not be construed as providing, individualized investment, tax or insurance advice, nor as containing any recommendation to buy or sell any specific securities or otherwise make any other form of investment, or take any tax or insurance decision. Nothing contained on this website, blog or in any podcast should be construed or interpreted by you to mean that an investment in any securities presented or discussed would be suitable for you in your particular circumstances. Joel Shackleton specifically disclaim that any viewer of this website, blog or any podcast should rely in any way on any of their contents as investment, tax or insurance advice or as an investment, insurance or tax recommendation. Viewers are encouraged to consult with their individual investment advisor and other financial professionals prior to taking any potential investment actions or making any insurance or tax decisions. The views and opinions expressed herein are the personal views and opinions of Joel Shackleton and any other specific contributor to the blog or podcast only and do not necessarily reflect the views or opinions of their Firm or any of its other registered individuals or employees in partnership with Joel and his guests. Joel Shackleton disclaims any obligation to update any of the information set out on this website or any blog or podcast going-forward.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.reformedmillennials.com

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• Joel breaks down the returns of the 10 biggest stocks in 2003 over last 20 yrs

• Market Update

• Thoughts on longevity

• Recommendations and must listens

Listen on Apple, Spotify, or Google Podcasts.

📈📊Market Update💵📉

Apple is now a $3 Trillion Dollar USD Market Capitalization and the Nasdaq 100 had it’s best first half EVER rising 39 percent… Does that sound like a bear market to you?

Today is the last day of Q2 and the S&P500 is up over 7% for the quarter.

The S&P500 was also up over 7% in Q1.

And it was up another 7% in Q4 last year.

Along the way, we've seen consistent sector rotation and an expansion in market breadth, both among sectors in the U.S. and in countries around the globe.

Datatrek’s thoughts on Big Tech:

US large cap tech is up 37.5 pct YTD versus +22.0 pct for small cap tech. Large cap tech’s top 5 holdings (58 pct of the index) are up an average of 73 pct YTD. Small cap tech’s top 5 holdings are only 22 pct of the index and they are underperforming large caps (+64 pct YTD on average). Moreover, small cap tech is lagging large cap tech by 15.4 percentage points over the last 100 days, over one standard deviation below the average. History says US small cap tech is unlikely to meaningfully snap back relative to large cap tech over the next 100 days amid still-tight financial conditions.

Twitter links from the pod:

• Top 10 stocks

• Longevity

• Longevity thread 2

🎙Podcast & YouTube Recommendations🎙

• The Quantum Realm I The Compound & Friends #99

• Kevin Kelly - The importance of kindness and generosity

• Dithering podcast - How Elons Starlink Works

🔮Best Links of The Week🔮

• Software That You Can't Shut Down - The term “censorship resistant” is used a lot in the decentralized computing/web3/crypto space to talk about a core feature of these systems. I don’t love the term censorship resistant because it is a wonky term. Source

• Why you believe the things that you do - Morgan Housel

• "Despite a bloated pipeline of companies waiting to go public and a rebound in tech stocks that pushed the Nasdaq up 30% in the first half of 2023, the IPO drought continues. There hasn’t been a notable venture-backed tech initial public offering in the U.S. since December 2021, when software vendor HashiCorp debuted on the Nasdaq. Across all industries, only 10 companies raised $100 million or more in U.S. initial share sales in the first six months of the year... During the same stretch in 2021, there were 517 such transactions, highlighted by billion-dollar-plus IPOs from companies including dating site Bumble, online lender Affirm, and software developers UiPath and SentinelOne." Source: CNBC

• Liberal Bill forcing Google and Meta to pay for content - Source: BNN

• "For years Microsoft has kept a lid on details about the true size of its Azure cloud server rental business, making it impossible for investors to know how Microsoft’s cloud operations unit stacked up against industry leader Amazon Web Services. But this week, thanks to antitrust regulators, the world got a peek under the lid. Azure generated half the revenue of its primary rival, Amazon Web Services, in the 12 months ended June 2022... That means Azure’s share of the market was several percentage points smaller than some analyst firms had estimated. That could change investor perceptions of Microsoft’s success in cloud, suggesting it hasn’t done as well as widely believed." Source: The Information

• "Four volunteers entered a simulated Mars habitat on Sunday, where they are expected to remain for 378 days while facing a range of challenges designed to anticipate a real-life human mission to the red planet. During their time inside of the 3D-printed, 1,700-square-foot habitat, the crew is set to carry out an array of "mission activities," including simulated spacewalks, robotic operations, growing of crops, habitat maintenance, personal hygiene and exercise, according to NASA... They crew will also face a series of obstacles that likely mirror those of a true Mars mission, as researchers simulate conditions like resource limitations, equipment failure, communication delays and environmental stressors." Source: CBS News

Disclaimer:

Investing in equities, fixed-income instruments and/or alternative asset classes involves substantial risk of loss. Any action you may take as a result of the information presented on this website, blog or in any Reformed Millennials Podcast (a “podcast”) is your own responsibility. By opening this page and/or listening to a podcast, you accept and agree to the terms of this full legal disclaimer. The information on this website, blog and in any podcast is presented as a general educational, informational and entertainment resource only. While Joel Shackleton is registered to provide investment advice as an Advising Representative this website, blog and any podcast does not provide, and should not be construed as providing, individualized investment, tax or insurance advice, nor as containing any recommendation to buy or sell any specific securities or otherwise make any other form of investment, or take any tax or insurance decision. Nothing contained on this website, blog or in any podcast should be construed or interpreted by you to mean that an investment in any securities presented or discussed would be suitable for you in your particular circumstances. Joel Shackleton specifically disclaim that any viewer of this website, blog or any podcast should rely in any way on any of their contents as investment, tax or insurance advice or as an investment, insurance or tax recommendation. Viewers are encouraged to consult with their individual investment advisor and other financial professionals prior to taking any potential investment actions or making any insurance or tax decisions. The views and opinions expressed herein are the personal views and opinions of Joel Shackleton and any other specific contributor to the blog or podcast only and do not necessarily reflect the views or opinions of their Firm or any of its other registered individuals or employees in partnership with Joel and his guests. Joel Shackleton disclaims any obligation to update any of the information set out on this website or any blog or podcast going-forward.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.reformedmillennials.com

View Details

Listen in podcast app and follow below for the podcast topic arc.

• The state of Movie Theatre / Box Office releases

• US Open Highlights

• Market Update

• Gavin Baker and the bright future of Ai

• Canadian Real Estate Market

• Recommendations and Predictions

Listen on Apple, Spotify, or Google Podcasts.

📈📊Market Update💵📉

Few predicted that this would be a great year for technology stocks, but it has been. The Nasdaq has ripped.

Why?

Nobody knows why on timing, which is why it is so important to be ‘IN’ the market even when its hard. I really liked Fred Wilson’s riff on technology:

The combination of computer science advances in machine learning, decentralized systems (blockchains), and new forms of interacting with compute (chat interfaces, heads up displays, voice, etc) presents the most potent cocktail of innovation I have ever seen. We are also seeing amazing scientific advances in areas like renewable/clean energy, health and wellness (biotech), robotics, and many other areas.

These are bright times. As bright as they come.

This is why I read newsletters and blogs of people that think clearly and share consistently and tend to avoid the very loud click bait financial news.

I have been using Midjourney (AI) every day and sharing my ‘prompts’ on the blog. I liked this post from Auren Hoffman (who has a great newsletter) on his journey with Midjourney.

Auren linked to a few other posts I recommend you take a look at…

In Praise of Memorization. Mastering the oldest “productivity hack” in the book, and why it works.

The age of average. In the 1990s, two Russian artists paid polling firms to create surveys on the “ideal” painting in a dozen countries around the world. The paintings all turned out more or less the same. Three decades later, that phenomenon has crept into all corners of style and culture around the world.

I really liked this post from Morgan Housel… Compounding Optimism.

Lastly - Datatrek does a phenomenal job breaking down how the Global Index is so heavily weighted to US equities: see below

Global equity portfolio allocations by country. Say you are a Swiss or French institutional investor, and you allocate just 5 – 10 percent of your stock portfolio to your home country equity market. You might think you are being exceptionally prudent since you are not letting home country bias sway your decision-making.

A look at MSCI’s All-Country Index says otherwise. Here are the top 10 weightings by country:

• US: 61.3 percent

• Japan: 5.6 pct

• United Kingdom: 3.6 pct

• China: 3.2 pct

• France: 3.0 pct

• Canada: 2.9 pct

• Switzerland: 2.5 pct

• Germany: 2.1 pct

• Australia: 1.8 pct

• Taiwan: 1.7 pct

And here are the top 5 names and their weightings:

• Apple: 4.6 percent

• Microsoft: 3.7 pct

• Alphabet: 2.2 pct

• Amazon: 1.7 pct

• Nvidia: 1.5 pct

Takeaway: US equities dominate a market cap-weighted indexed approach to global investing, which means owning more Apple than China or more Microsoft than Germany just to track the index. Intuitional investors often tweak portfolio weightings to express an investment view, but straying too far from the benchmark creates the risk of material underperformance. US Big Tech is not just a must-own group of names for domestic investors. They are also more important than entire countries for global asset owners. Big Tech’s recent run is not just strong enough to pull capital out of other US stocks. It can also force capital to move out of other countries.

🎙Podcast & YouTube Recommendations🎙

• Gavin Baker Joins Jason Calcanis for an Interview:

• Avlok, the CEO of Angel List. - I am LP investor in Angel List . In this podcast he talks about AI and dual threat CEO’s.

• Sebastian Mallaby - The Greatest Storyteller in Venture Capital.

🔮Best Links of The Week🔮

• 13,000 feet below from Mike Solana at Pirate Wires - Source: here

• "Microsoft today announced its roadmap for building its own quantum supercomputer, using the topological qubits the company’s researchers have been working on for quite a few years now. There are still plenty of intermediary milestones to be reached, but Krysta Svore, Microsoft’s VP of advanced quantum development, told us that the company believes that it will take fewer than 10 years to build a quantum supercomputer using these qubits that will be able to perform a reliable one million quantum operations per second. That’s a new measurement Microsoft is introducing as the overall industry aims to move beyond the current era of noisy intermediate-scale quantum (NISQ) computing. “We think about our roadmap and the time to the quantum supercomputer in terms of years rather than decades,” Svore said." Source: TechCrunch

• "Amazon will hold its 2023 Prime Day sales event on Tuesday, July 11, and Wednesday, July 12... The company will introduce a new invite-only Prime Days deals program, giving Prime members the ability to request invitations in advance to purchase products that are expected to sell out during the Prime Day event... Also for the first time, Prime Day deals will extend to participating third-party sites in the Buy with Prime program. Launched last year, Buy with Prime lets Prime members buy items on non-Amazon sites just as they would on Amazon.com, with benefits including streamlined checkout and free delivery." Source: GeekWire

• "The US Federal Trade Commission has sued Amazon, accusing it of duping customers into signing up for its Prime service without their consent and “sabotaging” efforts to undo their subscriptions. The FTC said in the heavily redacted complaint filed on Wednesday that Amazon had used “manipulative, coercive, or deceptive user-interface designs known as ‘dark patterns’ to trick consumers into enrolling in automatically-renewing Prime subscriptions.” Lina Khan, FTC chair, said in a statement: “Amazon tricked and trapped people into recurring subscriptions without their consent, not only frustrating users but also costing them significant money"." Source: FT

Disclaimer:

Investing in equities, fixed-income instruments and/or alternative asset classes involves substantial risk of loss. Any action you may take as a result of the information presented on this website, blog or in any Reformed Millennials Podcast (a “podcast”) is your own responsibility. By opening this page and/or listening to a podcast, you accept and agree to the terms of this full legal disclaimer. The information on this website, blog and in any podcast is presented as a general educational, informational and entertainment resource only. While Joel Shackleton is registered to provide investment advice as an Advising Representative this website, blog and any podcast does not provide, and should not be construed as providing, individualized investment, tax or insurance advice, nor as containing any recommendation to buy or sell any specific securities or otherwise make any other form of investment, or take any tax or insurance decision. Nothing contained on this website, blog or in any podcast should be construed or interpreted by you to mean that an investment in any securities presented or discussed would be suitable for you in your particular circumstances. Joel Shackleton specifically disclaim that any viewer of this website, blog or any podcast should rely in any way on any of their contents as investment, tax or insurance advice or as an investment, insurance or tax recommendation. Viewers are encouraged to consult with their individual investment advisor and other financial professionals prior to taking any potential investment actions or making any insurance or tax decisions. The views and opinions expressed herein are the personal views and opinions of Joel Shackleton and any other specific contributor to the blog or podcast only and do not necessarily reflect the views or opinions of their Firm or any of its other registered individuals or employees in partnership with Joel and his guests. Joel Shackleton disclaims any obligation to update any of the information set out on this website or any blog or podcast going-forward.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.reformedmillennials.com

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• Nuggets win the NBA championship!

• Nick Taylor Wins the RBC Canadian OPEN in dramatic fashion

• Ottawa Sells to ATS Heathcare CEO

• Market and Inflation update

• State of Canadian Real Estate

• Recommendations and Predictions

Listen on Apple, Spotify, or Google Podcasts.

📈📊Market Update💵📉

If you want to get up to speed on what happened in markets last week and up to today start with these links!

The Transcript explains what happened in markets last week: see here

Everyone needs to read this piece from A16Z on how AI can make everything better. I found it to be a refreshing take on the opportunity presented by AI.

Its not all doom and gloom.

Bob Elliot on US inflation/CPI data here. And how they plan on managing for main street not wall street.

Ben Thompson on the future of Xbox and the Activision sale.

I really enjoyed this Interview with Stan Druckenmiller where talked about his portfolio and the economy:

🎙Podcast & YouTube Recommendations🎙

• Staying put and letting things compound

Compounding is where all the good things in life come from - Morgan Housel

• Interview with Charlie Munger - Founders Podcast

• Mr Beast with another record breaking Youtube Video:

🔮Best Links of The Week🔮

• Peter Thiel on the Diversity Myth - The New Crtierion

• Paul Graham on work from home and going back to the office - Twitter

• Here is John Gruber with his impressions using Apple’s Vision Pro. - The Verge

• Apple finally made a TV - Daring Fireball

• How Marvell swallowed Hollywood - The New Yorker

• The world is finally spending more on solar than oil production. - MIT Technology Review

• Vannevar Bush - Engineering the American Century - Founders Podcast

Disclaimer:

Investing in equities, fixed-income instruments and/or alternative asset classes involves substantial risk of loss. Any action you may take as a result of the information presented on this website, blog or in any Reformed Millennials Podcast (a “podcast”) is your own responsibility. By opening this page and/or listening to a podcast, you accept and agree to the terms of this full legal disclaimer. The information on this website, blog and in any podcast is presented as a general educational, informational and entertainment resource only. While Joel Shackleton is registered to provide investment advice as an Advising Representative this website, blog and any podcast does not provide, and should not be construed as providing, individualized investment, tax or insurance advice, nor as containing any recommendation to buy or sell any specific securities or otherwise make any other form of investment, or take any tax or insurance decision. Nothing contained on this website, blog or in any podcast should be construed or interpreted by you to mean that an investment in any securities presented or discussed would be suitable for you in your particular circumstances. Joel Shackleton specifically disclaim that any viewer of this website, blog or any podcast should rely in any way on any of their contents as investment, tax or insurance advice or as an investment, insurance or tax recommendation. Viewers are encouraged to consult with their individual investment advisor and other financial professionals prior to taking any potential investment actions or making any insurance or tax decisions. The views and opinions expressed herein are the personal views and opinions of Joel Shackleton and any other specific contributor to the blog or podcast only and do not necessarily reflect the views or opinions of their Firm or any of its other registered individuals or employees in partnership with Joel and his guests. Joel Shackleton disclaims any obligation to update any of the information set out on this website or any blog or podcast going-forward.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.reformedmillennials.com

View Details

Listen in podcast app and follow below for the podcast topic arc.

• LIV merges with the PGA

• Apples Vision Pro

• Market update

• Canadian Interest Rates

• Recommendations and Predictions

Listen on Apple, Spotify, or Google Podcasts.

📈📊Market Update💵📉

It’s been two week since we last recorded and it feels like a year.

• Alberta election

• 1mm Barrel cut from the Saudi led OPEC

• New timeline for TSLA’s game-changing Cyber Truck

• Apple Vision Pro release

The Transcript thread explains what happened in markets last week: this time with charts

Bob Elliot Explains why the bank of Canada cant afford to fally behind on its 2-3% target mandate here

🎙Podcast & YouTube Recommendations🎙

• The King of Real Estate, Sam Zell’s last podcast ever with Meb Faber

• Ben Thompson talks the future of VR, the tech behind the hardware and the future of its economics.

🔮Links Were Reading This Week🔮

• For the Dads out there - 10 thoughts on parenthood from Wait But Why - Source: Waitbutwhy

• “Getting Out on a High Note.” Jerry Seinfeld, Steve Martin and Quentin Tarantino show the psychological power of walking away at the top. - Source: TrungPhan

• “The era of Artificial Intelligence is here, and boy are people freaking out.” Why Ai will save the world - Source: A16Z

• "🇨🇦 Housing Bubble Set to Burst". Canadian mortgage market most at risk of default - Source: IMF

• “By my estimates, Meta has spent approximately $56B on its Reality Labs division since 2012, and generated about $7B in cumulative revenue over the same period, producing a $49B net loss.” Matthew Ball talks about the VR/Metaverse industry in his most recent post.- Source: Big Techs Big Bets

• "The Securities and Exchange Commission sued [virtual currency] exchange Coinbase in New York federal court on Tuesday morning, alleging that the company was acting as an unregistered broker and exchange and demanding that the company be “permanently restrained and enjoined” from continuing to do so. Shares closed down 12% Tuesday. Coinbase stock had already fallen 9% on Monday, after the SEC unveiled charges against rival [virtual currency] exchange Binance and its founder Changpeng Zhao." Source: CNBC

• "The PGA Tour and LIV Golf, the Saudi-backed upstart that sent the industry into chaos when it teed off last year, have agreed to a stunning merger that ends the divide that has dominated the sport for the last year. The deal weds the Saudi money and the PGA Tour name and connections after months of bruising litigation and sharply traded accusations. It also consolidates the biggest assets in professional golf—at a time when golf bodies including the Tour are being investigated by the Justice Department for antitrust violations." Source: WSJ

Disclaimer:

Investing in equities, fixed-income instruments and/or alternative asset classes involves substantial risk of loss. Any action you may take as a result of the information presented on this website, blog or in any Reformed Millennials Podcast (a “podcast”) is your own responsibility. By opening this page and/or listening to a podcast, you accept and agree to the terms of this full legal disclaimer. The information on this website, blog and in any podcast is presented as a general educational, informational and entertainment resource only. While Joel Shackleton is registered to provide investment advice as an Advising Representative with Gold Investment Management Ltd., a firm registered as a portfolio manager and located in Edmonton, Alberta, this website, blog and any podcast does not provide, and should not be construed as providing, individualized investment, tax or insurance advice, nor as containing any recommendation to buy or sell any specific securities or otherwise make any other form of investment, or take any tax or insurance decision. Nothing contained on this website, blog or in any podcast should be construed or interpreted by you to mean that an investment in any securities presented or discussed would be suitable for you in your particular circumstances. Joel Shackleton and GIM specifically disclaim that any viewer of this website, blog or any podcast should rely in any way on any of their contents as investment, tax or insurance advice or as an investment, insurance or tax recommendation. Viewers are encouraged to consult with their individual investment advisor and other financial professionals prior to taking any potential investment actions or making any insurance or tax decisions. The views and opinions expressed herein are the personal views and opinions of Joel Shackleton and any other specific contributor to the blog or podcast only and do not necessarily reflect the views or opinions of GIM or any of its other registered individuals or employees. Joel Shackleton and GIM disclaim any obligation to update any of the information set out on this website or any blog or podcast going-forward.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.reformedmillennials.com

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• NBA and NHL finals are upon us… who cares?

• The business of Top Golf

• How to make money drafting the momentum of sector shifts

• Market update

• Canadian housing and the Alberta election

• Recommendations and Predictions

Listen on Apple, Spotify, or Google Podcasts.

📈📊Market Update💵📉

The Transcript twitter thread explains what happened in markets last week or check out their audio episode here:

The Nasdaq is at 13 month highs but the financial headlines continue to be gloomy.

Everyone this year has been talking about bonds, inflation and real estate crisis. Now the debt ceiling is getting its day in the sun and I recommend listeners and readers go and check out our recommended reads this week. Matt Levine kills it with his most recent post.

To distill where we currently are in the market, I want people to check out the rotation report here as I felt they did a really good job discussing this market and what the participants are pricing in.

💸Reformed Millennials - Post of The Week

Best blog post we read this week: from Morgan Housel - Vicious Traps

There are times in nature when two plus two equals ten – when two little things combine to form one huge thing.

A little cool air from the north is no big deal. A little warm breeze from the south is pleasant. But when they mix together over Missouri you get a tornado.

Two calm water currents are not a problem. But if opposing currents meet, you get a deadly whirlpool.

Bleach and ammonia are common household products. Mix them together and you get lethal chloramine gas.

In each case it’s easy to underestimate risk – or at least be surprised at what happens – because the initial ingredients seem harmless. The idea that two innocent small things can combine to form one big dangerous thing isn’t intuitive.

This same thing happens with personality traits.

…

The right balance is knowing what you’re good at and not being afraid to say it while being just as eager to share what you’re not great at.

🎙Podcast & YouTube Recommendations🎙

Our favourite video and audio content from the week:

Lunch with Sam Zell: Founders Podcast

Deepdive on Restoration Hardware: Business Breakdowns

Peter Zeihan on Deodorization: Three things to look for

• Size and huge volume requirements (Eur, Yen, Chinese Yuan, USD)

• Availability of currency

• Freely traded currency

Peter Attia appeared on the Chris Williamson Show:

• Hazard ratio’s, the importance of exercise > diet and more

🔮Best Links of The Week🔮

• Ughhh more about the debt ceiling - Source: Matt Levine

• RBCs 5 things showing the NA Labor markets are cracking - Source: RBC Special Report

• Bob Elliot explains the case for Gold In portfolios - Source: Unlimited Funds

• "The price of copper has widened to the biggest discount against its futures equivalent in almost two decades, in a warning sign of a sudden weakening in global demand as China’s economic rebound stalls. Copper for settlement in two days was $66 cheaper on Monday than buying a contract to deliver the metal in three months’ time, a difference that traders said reflected concerns that China’s industrial rebound was not materializing. The gap between the two prices is the largest since 2006, according to the London Metal Exchange." - Source: FT

• "Elon Musk said he sees the need for an artificial-intelligence business to rival Google and Microsoft that could involve different parts of his corporate empire, including Twitter, which he predicted could halt its losses as soon as next month." - Source: WSJ

👉 For specific investment questions or advice contact Joel @ Gold Investment Management.

Disclaimer:

Investing in equities, fixed-income instruments and/or alternative asset classes involves substantial risk of loss. Any action you may take as a result of the information presented on this website, blog or in any Reformed Millennials Podcast (a “podcast”) is your own responsibility. By opening this page and/or listening to a podcast, you accept and agree to the terms of this full legal disclaimer. The information on this website, blog and in any podcast is presented as a general educational, informational and entertainment resource only. While Joel Shackleton is registered to provide investment advice as an Advising Representative with Gold Investment Management Ltd. (“GIM”), a firm registered as a portfolio manager and located in Edmonton, Alberta, this website, blog and any podcast does not provide, and should not be construed as providing, individualized investment, tax or insurance advice, nor as containing any recommendation to buy or sell any specific securities or otherwise make any other form of investment, or take any tax or insurance decision. Nothing contained on this website, blog or in any podcast should be construed or interpreted by you to mean that an investment in any securities presented or discussed would be suitable for you in your particular circumstances. Joel Shackleton and GIM specifically disclaim that any viewer of this website, blog or any podcast should rely in any way on any of their contents as investment, tax or insurance advice or as an investment, insurance or tax recommendation. Viewers are encouraged to consult with their individual investment advisor and other financial professionals prior to taking any potential investment actions or making any insurance or tax decisions. The views and opinions expressed herein are the personal views and opinions of Joel Shackleton and any other specific contributor to the blog or podcast only and do not necessarily reflect the views or opinions of GIM or any of its other registered individuals or employees. Joel Shackleton and GIM disclaim any obligation to update any of the information set out on this website or any blog or podcast going-forward.

In his capacity as an investment adviser with GIM, Joel Shackleton (or other representatives of that firm) may be buying or selling for clients of the firm securities presented on this webpage, in a blog or in a podcast concurrently, before or after any information presented therein, and may be acting for clients in a manner contrary to the information presented therein.

Joel Shackleton and his co-host, Cam Pitchers, or members of their respective immediate households or families, own securities of the following companies mentioned therein: {RH}. Joel Shackleton and Cam Pitchers personally are, or members of their respective immediate households or families are, paid by the following companies mentioned therein: {NONE}. Joel Shackleton and Cam Pitchers personally have, or members of their respective immediate households or families have, a financial relationship with the following companies mentioned therein: {NONE}.

GIM, or accounts managed or controlled by the firm, own securities of the following companies mentioned in this article: {RH}. GIM, or accounts managed or controlled by the firm, are paid by the following companies mentioned in this article: {NONE}. GIM, or accounts managed or controlled by the firm, have a financial relationship with the following companies mentioned in this article: {NONE}.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.reformedmillennials.com

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• Gary Bettman’s legacy

• Market Update

• Hard vs. Soft Landing

• Google IO - Bard vs. Open Ai

• Alberta Election is in 14 DAYS

• Recommendations and Predictions

Listen on Apple, Spotify, or Google Podcasts.

📈📊Market Update💵📉

The Transcript does a fantastic job on twitter summarizing last weeks most important market topics: see the link here to their running thread.

What a year it’s been.

Markets are up, but the participation has been super thin, especially in the US.

The rest of the world east of North America, while tangled in war, are all knocking on all time highs. JC at All Star Chats sets the table well in his newsletter here: Quotes blocks are his.

S&P can’t make up it’s mind:

BUT everything else is doing fine: Check the Nasdaq

When you look elsewhere, you continue to see strength in places that you would not expect to see it if, in fact, stocks all over were about to collapse.

Highest weekly close for the Nasdaq100 since August.

The Japanese market is banging on the door of 52 week highs:

All of this is to say that while North American markets feel expensive and challenged. There are pockets of the global market that continue to show signs of promise.

Heading into the week ahead, market participants will continue to be pricing in the likelihood of recession.

I highly recommend checking out the Datatrek daily market update if you want to keep your finger on the pulse of markets and interest rates.

💸Reformed Millennials - Post of The Week

As a kid I spent a lot of time alone. Golfing. Reading. Watching sandlot…

Now that I’m 33 with a family, a phone addiction and a reasonably strong network… I find it hard to get to know myself to the same degree I did as a kid.

A quote from the article:

“If you want to live a happy and fulfilling life, it’s important to take the time to get to know yourself.

That means spending time alone, reflecting on your thoughts and feelings, and exploring your interests. It also means being honest with yourself about your strengths and weaknesses.

Once you know yourself, you can start making choices that align with your values and goals. You can also build stronger relationships and set boundaries that protect your time and energy.”

🎙Podcast & YouTube Recommendations🎙

• Stan Druckenmiller appeared at Sohn and it is well worth the watch: Some of the things he talks about - Biotech, copper, silver, gold and the opportunity in AI.

• Google IO: “Seven years into our journey as an AI-first company, we’re at an exciting inflection point. We have an opportunity to make AI even more helpful for people, for businesses, for communities, for everyone. We’ve been applying AI to make our products radically more helpful for a while. With generative AI, we’re taking the next step. With a bold and responsible approach, we are re-imagining all of our core products, including search.”

🔮Best Links of The Week🔮

• Google IO and state of play in AI Source: Ben Thompson

• Blumhouse: The Hollywood Horror Hit Machine - How Jason Blum turned "constraints breed creativity" into a business model. Source: Trungphan

• All the tools and information you’ll need to track the Alberta Election - Source: Pocket Lobbyist

• "Howard Marks, the co-founder of $172bn investment group Oaktree Capital Management, has warned that the boom in private credit will soon be tested as higher interest rates and slower economic growth heap pressure on corporate America. The 77-year-old billionaire told the Financial Times that big asset managers had competed aggressively to lend to the largest private equity groups as money poured into their coffers in 2020 and 2021, raising questions over the due diligence the funds conducted when they agreed to provide multibillion-dollar loans." Source: FT

• "Smartphone applications developed by Chinese companies are spreading around the world, despite the growing trend of governments viewing them as possible security threats. Looking at the top five downloads in 95 countries and regions, Chinese apps such as TikTok accounted for a third of the total in the first quarter of the year, according U.S. research company Sensor Tower, which looked at downloads from Google and Apple distribution services. Of the total 475 top five apps for the first quarter, 156 were Chinese. That represents 33% of the total and an 8-point rise from 2020. ByteDance's TikTok, a short video sharing platform, was the most popular, hitting the top five in 82 markets, or 86% of the total. Its CapCut video editing app is also rapidly growing, reaching the top five in 48 markets, or 51% of the total." Source: Nikkei Asia

• Bob Elliott twitter thread on inflation and CPI data - Source: Twitter

👉 For specific investment questions or advice contact Joel @ Gold Investment Management.

Investing in equities, fixed-income instruments and/or alternative asset classes involves substantial risk of loss. Any action you may take as a result of the information presented on this website, blog or in any Reformed Millennials Podcast (a “podcast”) is your own responsibility. By opening this page and/or listening to a podcast, you accept and agree to the terms of this full legal disclaimer. The information on this website, blog and in any podcast is presented as a general educational, informational and entertainment resource only. While Joel Shackleton is registered to provide investment advice as an Advising Representative with Gold Investment Management Ltd. (“GIM”), a firm registered as a portfolio manager and located in Edmonton, Alberta, this website, blog and any podcast does not provide, and should not be construed as providing, individualized investment, tax or insurance advice, nor as containing any recommendation to buy or sell any specific securities or otherwise make any other form of investment, or take any tax or insurance decision. Nothing contained on this website, blog or in any podcast should be construed or interpreted by you to mean that an investment in any securities presented or discussed would be suitable for you in your particular circumstances. Joel Shackleton and GIM specifically disclaim that any viewer of this website, blog or any podcast should rely in any way on any of their contents as investment, tax or insurance advice or as an investment, insurance or tax recommendation. Viewers are encouraged to consult with their individual investment advisor and other financial professionals prior to taking any potential investment actions or making any insurance or tax decisions. The views and opinions expressed herein are the personal views and opinions of Joel Shackleton and any other specific contributor to the blog or podcast only and do not necessarily reflect the views or opinions of GIM or any of its other registered individuals or employees. Joel Shackleton and GIM disclaim any obligation to update any of the information set out on this website or any blog or podcast going-forward.

In his capacity as an investment adviser with GIM, Joel Shackleton (or other representatives of that firm) may be buying or selling for clients of the firm securities presented on this webpage, in a blog or in a podcast concurrently, before or after any information presented therein, and may be acting for clients in a manner contrary to the information presented therein.

Joel Shackleton and his co-host, Cam Pitchers, or members of their respective immediate households or families, own securities of the following companies mentioned therein: {GOOG, MSFT, AMZN, NVDA, AMD}. Joel Shackleton and Cam Pitchers personally are, or members of their respective immediate households or families are, paid by the following companies mentioned therein: {NONE}. Joel Shackleton and Cam Pitchers personally have, or members of their respective immediate households or families have, a financial relationship with the following companies mentioned therein: {GOOG, MSFT, AMZN, NVDA, AMD}.

GIM, or accounts managed or controlled by the firm, own securities of the following companies mentioned in this article: {GOOG, MSFT, AMZN, NVDA, AMD}. GIM, or accounts managed or controlled by the firm, are paid by the following companies mentioned in this article: {NONE}. GIM, or accounts managed or controlled by the firm, have a financial relationship with the following companies mentioned in this article: {NONE}.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.reformedmillennials.com

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• Business of winning a Championship

• Market update

• Federal reserve monetary policy

• Apple earnings

• Berkshire meeting

• Recommendations and Predictions

Listen on Apple, Spotify, or Google Podcasts.

📈📊Market Update💵📉

The big news from last week was Jerome Powell’s decision to raise the Fed Funds rate another 0.25%. This signaled what my people believe to be the last rate hike in a 14 month onslaught that saw the Fed raise rates 5%.

US stocks have weathered the most aggressive monetary policy tightening cycle since the late 1970s/early 1980s astoundingly well. There’s been a lot of volatility on the way, of course, but this is simply remarkable.

US large cap stocks are exiting the recent monetary policy cycle largely untouched from where the Fed first started “going big” – can be read in one of two ways. Either it says the road ahead is clearer than the bears think, or it says the impact of the last 9 Fed meetings has yet to be felt.

Chair Powell is hoping the former is true, but markets strongly believe the latter is correct.

Data Trek had a fantastic recap on what they thought was the most important pieces from Powells press release and commentary/Q&A.

Powell on Regional Banks:

Powell expressed guarded optimism that the rolling crisis in US regional banks is contained. In his prepared remarks he said conditions in the banking system have improved since March, when Silicon Valley Bank failed. During the Q&A session, he said regional banks are now improving their liquidity positions. In response to another question about the topic later in the press conference, he said the sale of First Republic “drew a line” under the current problems. He seems to view the issue as a macro problem.

Even with these reassuring words, the S&P Regional Bank Index (ETF symbol KRE) made a new 1-year low today. This is hardly a vote of confidence in Powell’s view, which seems to overlook the plodding but clearly apparent momentum of the problem.

Second, the Chair actually said, “This time could be different”, those famously dangerous words, about the risk of an upcoming recession. In his mental model, the US economy and particularly the country’s labor market both remain strong. To a degree, he has a point. The Fed has raised rates by 5.0 percentage points in a little over a year, and yet unemployment remains low and demand for labor is still high.

Some markets agree with Powell, and other do not. One could argue that an S&P 500 trading for 19-20x forward earnings is sympathetic to the Chair’s sunny forecast. But Treasuries and Fed Funds Futures both expect the FOMC to cut rates later this year, presumably because a recession has begun. And it’s not just fixed income markets saying that US rates are heading lower. The euro made a new 1-year high versus the dollar today.

Datatreks Favorite Sound Bites from Powell:

• Powell reaffirmed that the Fed continues to hold to a 2 percent inflation target. There has been a lot of speculation that the FOMC will change to a 3 percent target rather than drive the US economy into a deep recession.

• Corporate profit margins should continue to decline as supply and demand continue to come back into balance. This idea stands in stark contrast to Wall Street analysts’ earnings estimates, which continue to predict all-time high record S&P 500 profits by year end even as US economic growth continues to run below trend.

• US inflation has been stickier and more volatile than the Fed expected. We will dig into this issue in Data.

• Powell expressed the view that 3 percent wage inflation lines up with 2 percent price inflation. Last month’s Jobs Report showed average hourly wage growth of 4.2 percent, down from 5.9 pct a year ago. We clearly have a way to go on this front.

In closing, consider the following: cont. from datatrek

• On May 4th, 2022 the Fed raised rates by 50 basis points as it started to get more serious about taming inflation, and the day after that hike the S&P 500 closed at 4,147.

• Today, as the Fed most likely ended its post-Pandemic rate hiking cycle, the index closed at 4,091, just 1.4 percent below where we started this journey.

Next up was apple earnings, coming in better than many expected. A beat on both the top and bottom line. Apple continues to be the best business in history. But what was most notable, was the Active device base number. Deepwater Asset Management has a great piece outlining the new most important Apple investor Data point.

Device Base Info from DAM:

Apple did not report the base’s growth rate as they did in the December quarter (up 8%), but they did report it grew which is impressive given products revenue was down 4.6% y/y in March. That means more Apple customers are adding devices, and many of the devices that get turned in/resold are being refurbished and sold to first-time Apple customers. The used Apple device story is emerging as the company’s avenue to target the most price-sensitive smartphone buyer. While Apple does not directly benefit from the sale of a used device, there is a long-term revenue opportunity of selling services and capturing hardware upgrades in future quarters.

💸Reformed Millennials - Post of The Week

Aritzia vs. Lulu Lemon vs. Nordstrom

I've been participating in the O Zone Advisory governance and strategy program this spring and as we work our way through earnings season I've been paying a lot of attention to Canadian retail and the strategies being implemented.

I can't help but think about the colossal screw-up Nordstrom's(JWN) board made by rejecting the family's $50/share ($ 8 billion bid) buyout offer in 2018. The stock is ~$14.50 today (~$2.3 billion).

Aritzia (ATZ) reported last night and after revenue growing 160% over the last 2 years the stock is getting hammered. Their lowered guidance on CY margins seems to not be what investors wanted to hear.

It feels very 2017 Lulu Lemon($LULU) for Aritzia right now. In 2017, $LULU had a massive investment year that they executed well on but the stock struggled and didn't take off until 18 months after their "investments in infrastructure/square footage" were made.

Norstrom(JWN) isn't Aritzia or LuluLemon. But it's interesting to contrast the competing strategies and timelines.

One (ATZ) is expanding and leaning into its revenue growth while the other (JWN) is reducing its footprint and fighting the trend of the consumer in favor of small boutique shopping.

Should be interesting to see how this plays out into the future.

It's also important to recognize just how important a competent board is to the enterprise value of your company long term.

🎙Podcast & YouTube Recommendations🎙

3 part series on Cannabis: OddLots

Against All Odds - James Dyson: Founders Podcast

🔮Best Links of The Week🔮

• AI is here and there is nothing we can do to stop it - Source: The Catalyst

• Big business behind winning a championship - Source: Huddle Up

• Alberta Election Polling Data and it is TIGHT as a Tiger - Source: ThinkHQ, Ipsos

• Investing’s Big Blindspot - What makes Warren and Charlie so different? - Source: Sapient capital

• The Seven Virtues Of Great Investors (Curiosity, Skepticism, Independence, Humility, Discipline, Patience and Courage) - Source: Jason Zweig

• "The Dune: Part Two trailer promises that filmmaker Denis Villeneuve’s sequel will deliver more action than his first installment. That’s a notion Villeneuve shared last week at CinemaCon, when he showed off the first footage from the sequel. “Part One is more of a contemplative movie. Part Two is an action-packed, epic war movie. It is much more dense. We went to all new locations,” said Villeneuve... Dune: Part Two is based on Frank Herbert’s seminal novel and has a script from Villeneuve and Jon Spaihts. It has a release date of Nov. 3." You can watch the trailer here on The Hollywood Reporter.

👉 For specific investment questions or advice contact Joel @ Gold Investment Management.

Investing in equities, fixed-income instruments and/or alternative asset classes involves substantial risk of loss. Any action you may take as a result of the information presented on this website, blog or in any Reformed Millennials Podcast (a “podcast”) is your own responsibility. By opening this page and/or listening to a podcast, you accept and agree to the terms of this full legal disclaimer. The information on this website, blog and in any podcast is presented as a general educational, informational and entertainment resource only. While Joel Shackleton is registered to provide investment advice as an Advising Representative with Gold Investment Management Ltd. (“GIM”), a firm registered as a portfolio manager and located in Edmonton, Alberta, this website, blog and any podcast does not provide, and should not be construed as providing, individualized investment, tax or insurance advice, nor as containing any recommendation to buy or sell any specific securities or otherwise make any other form of investment, or take any tax or insurance decision. Nothing contained on this website, blog or in any podcast should be construed or interpreted by you to mean that an investment in any securities presented or discussed would be suitable for you in your particular circumstances. Joel Shackleton and GIM specifically disclaim that any viewer of this website, blog or any podcast should rely in any way on any of their contents as investment, tax or insurance advice or as an investment, insurance or tax recommendation. Viewers are encouraged to consult with their individual investment advisor and other financial professionals prior to taking any potential investment actions or making any insurance or tax decisions. The views and opinions expressed herein are the personal views and opinions of Joel Shackleton and any other specific contributor to the blog or podcast only and do not necessarily reflect the views or opinions of GIM or any of its other registered individuals or employees. Joel Shackleton and GIM disclaim any obligation to update any of the information set out on this website or any blog or podcast going-forward.

In his capacity as an investment adviser with GIM, Joel Shackleton (or other representatives of that firm) may be buying or selling for clients of the firm securities presented on this webpage, in a blog or in a podcast concurrently, before or after any information presented therein, and may be acting for clients in a manner contrary to the information presented therein.

Joel Shackleton and his co-host, Cam Pitchers, or members of their respective immediate households or families, own securities of the following companies mentioned therein: {AAPL}. Joel Shackleton and Cam Pitchers personally are, or members of their respective immediate households or families are, paid by the following companies mentioned therein: {NONE}. Joel Shackleton and Cam Pitchers personally have, or members of their respective immediate households or families have, a financial relationship with the following companies mentioned therein: {NONE}.

GIM, or accounts managed or controlled by the firm, own securities of the following companies mentioned in this article: {AAPL}. GIM, or accounts managed or controlled by the firm, are paid by the following companies mentioned in this article: {NONE}. GIM, or accounts managed or controlled by the firm, have a financial relationship with the following companies mentioned in this article: {NONE}.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.reformedmillennials.com

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• Big Sports Weekend

• Market Update

• Big Tech Earnings (Meta, Amazon, Microsoft, Google)

• The Canadian Housing Crisis

• Recommendations and Predictions

Listen on Apple, Spotify, or Google Podcasts.

📈📊Market Update💵📉

BUY WHAT YOU KNOW!

Recap of Big Tech Earnings This Week:

What a crazy week for earnings.

The consumer remains resilient but credit card data is showing a slowdown in consumption for the American consumer. This is echoed by Amazon's 0% sales growth YoY and this excerpt from the Capital One confrence call:

Meta’s family of apps continues to show signs of strength in the face of ATT, ticktock, and a slowing consumer/ad spend.

Highly recommend reading Eric Seufert’s twitter thread on revenue and ATT here.

With that said, the return of big tech dominance is mind-numbing. Consider the below:

• Apple and Microsoft have accounted for nearly 50% of the S&P500 move YTD.

• Add the rest of FAANG and it has accounted for a whopping 94% of the S&P500 return YTD.

• With Amazon having reported yesterday after the close with beats, FAANG outperformance could account for the entire S&P500 gain when the US opens today.

• Microsoft accounted for 140% of the NDX move on Thursday. The equal-weighted Nasdaq was actually down.

The question around markets has become - “Is this a flight to safety in America just for big tech? Or is there a flight out of US equities ex-big tech into Europe and emerging markets?

Or both?

Chart below is from: Jim Bianco

And the story about the chart from Jim’s Tweet thread:

The contribution to the year-to-date return of the S&P 500.

• Through yesterday (April 26), the year-to-date return S&P 500 (black line) was 5.13%

• The top eight FAANG+ M N T (names on the chart) contributed 5.57% to the overall 5.13% of the S&P 500

• The "other 492" contributed a -0.44% return to the S&P 500; the "other 492" has collectively dragged the S&P 500 lower. So, what is the message from the stock market?

• The economy is good as the stock market is up more than 5% after four months.

• The economy is suspect as collectively, "other 492" stocks are dragging the S&P 500 lower again this year like last year.

💸Reformed Millennials - Post of The Week

The main conversation I’m having with clients right now is whether or not housing prices have bottomed…

Obviously this is impossible to know. But I do think putting into perspective the rise in the price of a home and the subsequent rise in the cost of financing helps people think about what could happen to rents and the price of housing.

My thoughts regarding the Discipline funds chart above: if rates stay higher for much longer then...that puts downward pressure on the economy AND house prices.

Further, disposable income hasn't nearly kept pace with rent increases so landlords don't even have the pricing power to push rents up at the current rate of change.

This doesn't mean house prices have to crash. I don't think they will. But I do think the much more probable outcome here is a multi-year muddle through where house prices continue to fall modestly and rents grow modestly as the two converge in the coming years.

Wild card continues to be supply… prices bouncing hard up here recently on terrible supply.

And is why I don't think prices will crash. But supply shortage is also running into a demand shortage which is only going to get worse as lending standards continue to tighten.

Canadian Tweet of The Week🇨🇦

https://twitter.com/ronmortgageguy/status/1653022875710902275?s=20

🎙Podcast & YouTube Recommendations🎙

• Elon’s full interview with Bill where he talks about Twitter, AI, Water and Electric Vehicles.

• “When copies are free, you need to sell things that cannot be copied. Well, what can’t be copied? Trust, for instance.” ~@kevin2kelly

🔮Best Links of The Week🔮

• Books might be a colossal waste of productivity because we absorb very little of what we read. Is it time to design a medium that helps us understand ideas more effectively? This article explores that question. - Source: Andy Matuschak

• RBC Consumer Spending Tracker Report - Source: RBC Special Reports

• Investing’s Big Blind Spot - Source: Sapient Capital

• "Elon Musk expects SpaceX to spend about $2 billion on its Starship rocket development this year, as the company pushes to build on its first launch earlier this month. “My expectation for the next flight would be to reach orbit,” Musk said, speaking during a discussion on Twitter Spaces on Saturday... Musk said the company does “not anticipate needing to raise funding” to further bolster the Starship program and its other ventures... He put the probability of reaching orbit with a Starship flight this year at “probably” 80%, but espoused that he thinks there is a “100% chance of reaching orbit within 12 months"." -Source: CNBC

• ChatGPT is going to change education, not destroy it - The narrative around cheating students doesn’t tell the whole story. Meet the teachers who think generative AI could actually make learning better. - Source: MIT Technology Review

👉 For specific investment questions or advice contact Joel @ Gold Investment Management.

Investing in equities, fixed-income instruments and/or alternative asset classes involves substantial risk of loss. Any action you may take as a result of the information presented on this website, blog or in any Reformed Millennials Podcast (a “podcast”) is your own responsibility. By opening this page and/or listening to a podcast, you accept and agree to the terms of this full legal disclaimer. The information on this website, blog and in any podcast is presented as a general educational, informational and entertainment resource only. While Joel Shackleton is registered to provide investment advice as an Advising Representative with Gold Investment Management Ltd. (“GIM”), a firm registered as a portfolio manager and located in Edmonton, Alberta, this website, blog and any podcast does not provide, and should not be construed as providing, individualized investment, tax or insurance advice, nor as containing any recommendation to buy or sell any specific securities or otherwise make any other form of investment, or take any tax or insurance decision. Nothing contained on this website, blog or in any podcast should be construed or interpreted by you to mean that an investment in any securities presented or discussed would be suitable for you in your particular circumstances. Joel Shackleton and

GIM specifically disclaim that any viewer of this website, blog or any podcast should rely in any way on any of their contents as investment, tax or insurance advice or as an investment, insurance or tax recommendation. Viewers are encouraged to consult with their individual investment advisor and other financial professionals prior to taking any potential investment actions or making any insurance or tax decisions. The views and opinions expressed herein are the personal views and opinions of Joel Shackleton and any other specific contributor to the blog or podcast only and do not necessarily reflect the views or opinions of GIM or any of its other registered individuals or employees. Joel Shackleton and GIM disclaim any obligation to update any of the information set out on this website or any blog or podcast going-forward.

In his capacity as an investment adviser with GIM, Joel Shackleton (or other representatives of that firm) may be buying or selling for clients of the firm securities presented on this webpage, in a blog or in a podcast concurrently, before or after any information presented therein, and may be acting for clients in a manner contrary to the information presented therein.

Joel Shackleton and his co-host, Cam Pitchers, or members of their respective immediate households or families, own securities of the following companies mentioned therein: {MSFT, GOOG, META, AMZN}. Joel Shackleton and Cam Pitchers personally are, or members of their respective immediate households or families are, paid by the following companies mentioned therein: {MSFT, GOOG, META, AMZN}. Joel Shackleton and Cam Pitchers personally have, or members of their respective immediate households or families have, a financial relationship with the following companies mentioned therein: {MSFT, GOOG, META, AMZN}.

GIM, or accounts managed or controlled by the firm, own securities of the following companies mentioned in this article: {MSFT, GOOG, META, AMZN}. GIM, or accounts managed or controlled by the firm, are paid by the following companies mentioned in this article: {MSFT, GOOG, META, AMZN}. GIM, or accounts managed or controlled by the firm, have a financial relationship with the following companies mentioned in this article: {MSFT, GOOG, META, AMZN}.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.reformedmillennials.com

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• Market update

• Space X Launch

• Netflix earnings

• HBO Max Makes a Branding Mistake

• AI Breakthroughs Of The Week

• Recommendations and Predictions

Listen on Apple, Spotify, or Google Podcasts.

title pic:

📈📊Market Update💵📉

If you missed Friday's market action, here is a useful summary by CNBC.

US equities ended little changed on Friday after a raft of corporate earnings results. Large caps and small caps closed slightly higher: S&P 500 (+0.09%) vs. Russell 2000 (+0.10%).

Consumer discretionary (+1.20%) and consumer staples (+0.75%) bested the broader market indices, while materials (-0.91%) and energy (-0.59%) lagged. Procter & Gamble (+3.46%) and Disney (+1.53%) led the Dow (+0.07%) higher; Intel (-1.81%) and Dow Inc (-1.49%) were the index's worst performers.

The Nasdaq gained 0.11%, while tech lost 0.32%. The "FAAMG" stocks mostly fell: Meta (-0.08%), Amazon (+3.03%), Apple (-0.98%), Microsoft (-0.12%), Alphabet (+0.01%).

The VIX slipped 2.33% to 16.77. The 30-year and 10-year Treasury yields increased to 3.771% and 3.568% respectively, while the 2-year yield rose to 4.179%.

Most of US Big Tech reports calendar Q1 earnings this week (GOOG, MSFT, META, AMZN), with Apple scheduled to release next week.

With these stocks all outperforming the S&P 500 by a wide margin YTD, the expectations bar is set quite high for their earnings. Not only must these companies beat, but they must also guide to a re-acceleration of EPS growth in Q2 2023 and beyond. That’s what the Street is looking for and is the key catalyst behind this group’s remarkable resurgence in 2023.

Big Tech Earnings Expectations from Data Trek: everything below

Most of US Big Tech reports earnings this week, so for Disruption today we have a summary of what the Street is expecting from each name. We will also discuss Apple’s expected results, due out on May 4th. The discussion format for each company is the same:

• Year to date price returns (every one of these names has beaten the S&P 500 by a wide margin thus far in 2023).

• Calendar Q1 expected EPS and revenue growth.

• The company’s recent track record for beating/missing analysts’ EPS estimates.

• Current revenue and EPS growth expectations for Q2 2023.

Alphabet/Google, +19.5 percent YTD (reports Tuesday):

• Expected EPS: $1.07/share, down 13.0 percent from last year.

• Expected Revenues: $68.9 billion, up 1.3 percent from last year.

• Alphabet has missed earnings expectations in every quarter over the last year.

• Analysts expect GOOG to return to earnings growth in Q2 (up 5.0 percent year over year) on modestly accelerating revenue growth (+3.7 percent) versus Q1.

Comment: GOOG is the only name on today’s list that has missed estimates in every one of the last 4 quarters, so one would think numbers are finally set low enough that the company might actually beat. It needs to … The Street is looking for a resumption of year over year EPS growth in Q2 (the current quarter). Away from the nitty gritty of quarterly numbers, analysts and investors will likely want to know how Generative AI products might affect the company’s current dominance in search.

Microsoft, +19.2 percent YTD (also reports Tuesday):

• Expected EPS: $2.23/share, essentially unchanged from last year’s $2.22/share.

• Expected Revenues: $51.0 billion, up 3.4 percent from last year.

• Microsoft has beaten earnings expectations in 3 of the last 4 quarters, but only by 1-2 percent. Its one miss (calendar Q2 2022) was also small (3 percent).

• Analysts expect MSFT’s year over year earnings growth to reaccelerate in calendar Q2, to 10.3 percent.

Comment: The Street expects MSFT to go from zero year over year EPS growth in Q1 to 10 percent in Q2, the largest sequential increase among the names we are reviewing. It’s probably too early for its integration of ChatGPT to have a meaningful economic impact, so investors will want to understand the bridge between a flat calendar Q1 to a double-digit EPS growth Q2.

Meta/Facebook, +76.9 percent YTD (Wednesday):

• Expected EPS: $2.03/share, down 25.4 percent from last year.

• Expected Revenues: $27.6 billion, essentially unchanged (-1.0 percent) from last year.

• Meta has missed expectations over the last 3 consecutive quarters, by anywhere from 5 – 21 percent.

• Analysts expect META to show similar EPS to year ago levels in Q2 ($2.41/share versus $2.46/share in Q2 2022)

Comment: Meta has been aggressively cutting costs, and Wall Street analysts expects the payoff to come in Q2. The stock’s YTD rally – the best of any name we’re covering today – suggests we may see some of it in Q1’s results.

Amazon, +27.3 percent YTD (Thursday):

• Expected EPS: $0.22/share versus a loss of $0.38/share last year.

• Expected Revenues: $124.5 billion, up 6.9 percent from last year.

• Amazon has missed expectations in 3 of the last 4 quarters, posting small losses instead of small gains.

• Analysts expect AMZN to build on its Q1 profits in Q2 (EPS estimate of $0.33/share).

Comment: AMZN has the largest revenue base of any Big Tech name, but this only occasionally translates into respectable profits. Calling AMZN’s EPS is difficult in the best of times. Forecasting its Q1 2023 results seems more difficult than usual given waning US consumer spending through the quarter.

Apple, +27.0 percent YTD (May 4th, a week from Thursday):

• Expected EPS: $1.43/share, down 5.9 percent from last year.

• Expected Revenues: $92.9 billion, down 4.5 percent from last year.

• Apple has beaten estimates in 3 of the last 4 quarters by 2-6 percent, but its one miss was just last quarter (3 percent).

• Analysts expect AAPL to post year over year EPS growth in calendar Q2 ($1.23/share versus $1.20/share)

Comment: Closing out with another name where the Street thinks EPS growth will resume in Q2 after Q1’s expected earnings decline. Given recent weakness in global consumer electronics demand, that seems a stretch to us. Still, Apple is the best run company in global Big Tech and it’s hard to bet against Tim Cook and his team.

💸Reformed Millennials - Post of The Week

Finally we can breathe.

After 9 months of mind warping Ai advancements, it seems the S curve of progress is starting to reach its mid term apex.

From the wired article:

“Altman’s declaration suggests an unexpected twist in the race to develop and deploy new AI algorithms. Since OpenAI launched ChatGPT in November, Microsoft has used the underlying technology to add a chatbot to its Bing search engine, and Google has launched a rival chatbot called Bard. Many people have rushed to experiment with using the new breed of chatbot to help with work or personal tasks.

Meanwhile, numerous well-funded startups, including Anthropic, AI21, Cohere, and Character.AI, are throwing enormous resources into building ever larger algorithms in an effort to catch up with OpenAI’s technology. The initial version of ChatGPT was based on a slightly upgraded version of GPT-3, but users can now also access a version powered by the more capable GPT-4.

Altman’s statement suggests that GPT-4 could be the last major advance to emerge from OpenAI’s strategy of making the models bigger and feeding them more data. He did not say what kind of research strategies or techniques might take its place. In the paper describing GPT-4, OpenAI says its estimates suggest diminishing returns on scaling up model size. Altman said there are also physical limits to how many data centers the company can build and how quickly it can build them.”

Netflix Earnings:

Two items Important to Read If you’re interested in the streaming business:

Ben Thompson’s stratechery post here.

The most important takeaway, though, is that Netflix was right to introduce ads, and that that business represents a meaningful growth opportunity, above and beyond the benefit it provides to Netflix’s other initiatives like paid sharing and password-sharing crackdowns. Netflix has the opportunity to basically increase revenue per customer without raising prices (while also opening the door to more future price raises), even as it offers a lower entry price; it’s a pretty compelling example of how advertising tends to be much more of a win-win than its many critics allege.

Tweet Thread from Eric Suefert: Here

🎙Podcast & YouTube Recommendations🎙

• The first 20 mins of the All-In Pod are all you need to listen to this week as the rest was… boring. The first features my favorite fund investor, Gavin Baker and Private markets Investor Antonio Gracias. The dive into the Space X launch of Starship:

• Autobiography of Winston Churchill:

🔮Best Links of The Week🔮

• The Change in Consumption - Scott Galloway

• Sobering Thread from Bob Elliot on Englands Inflation Problem and how it’s likely to impact western policy makers: Twitter Thread here

• Apple is starting a bank and everyone should be shaking in their boots - Source: the FT

• Top executives from Teck Resources Ltd. and Glencore Plc have each been making their case to investors on the best path forward for the Vancouver-based mining company. While Glencore is seeking to take over the Canadian mining company, Teck is looking to move ahead with its plan to segment its steelmaking coal business through a key shareholder vote taking place on April 26. - Source: BNN

• "Alphabet CEO Sundar Pichai saw his total pay last year rise to $226mn, thanks to a giant stock award that is likely to have made him one of America’s best-paid business leaders for the year. News of the stock award, which Google’s parent company makes to its CEO once every three years and which was worth $218mn, follows the company’s move earlier this year to cut jobs across the board in the face of a sharp advertising slowdown. Pichai was reported at the time to have told workers that senior executives would receive lower bonuses as part of the cost-cutting." Source: FT

• "Technology companies including Google parent Alphabet and Amazon as well as stalwarts from the food, pharmaceutical and energy sectors, highlight a busy earnings week amid concerns about the U.S. economy. The coming reports will provide clues to investors about how companies fared in the first quarter of 2023 as the recent banking crisis, continuing layoffs in sectors such as technology, and inflation weighed on the economy. Other tech heavyweights on tap to report include software company Microsoft, Facebook owner Meta Platforms and chip maker Intel." Source: WSJ

👉 For specific investment questions or advice contact Joel @ Gold Investment Management.

Disclaimer:

Investing in equities, fixed-income instruments and/or alternative asset classes involves substantial risk of loss. Any action you may take as a result of the information presented on this website, blog or in any Reformed Millennials Podcast (a “podcast”) is your own responsibility. By opening this page and/or listening to a podcast, you accept and agree to the terms of this full legal disclaimer. The information on this website, blog and in any podcast is presented as a general educational, informational and entertainment resource only. While Joel Shackleton is registered to provide investment advice as an Advising Representative with Gold Investment Management Ltd., a firm registered as a portfolio manager and located in Edmonton, Alberta, this website, blog and any podcast does not provide, and should not be construed as providing, individualized investment, tax or insurance advice, nor as containing any recommendation to buy or sell any specific securities or otherwise make any other form of investment, or take any tax or insurance decision. Nothing contained on this website, blog or in any podcast should be construed or interpreted by you to mean that an investment in any securities presented or discussed would be suitable for you in your particular circumstances. Joel Shackleton and GIM specifically disclaim that any viewer of this website, blog or any podcast should rely in any way on any of their contents as investment, tax or insurance advice or as an investment, insurance or tax recommendation. Viewers are encouraged to consult with their individual investment advisor and other financial professionals prior to taking any potential investment actions or making any insurance or tax decisions. The views and opinions expressed herein are the personal views and opinions of Joel Shackleton and any other specific contributor to the blog or podcast only and do not necessarily reflect the views or opinions of GIM or any of its other registered individuals or employees. Joel Shackleton and GIM disclaim any obligation to update any of the information set out on this website or any blog or podcast going-forward.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.reformedmillennials.com

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• Market update

• NBA/NHLPlayoff predictions

• Thoughts on Ai

• Parenting advice with Ai in mind

• Recommendations and Predictions

Listen on Apple, Spotify, or Google Podcasts.

📈📊Market Update💵📉

Last week we learned:

• Growth remains above trend.

• Employment still secularly tight.

• Wage growth stable at 6-7%.

• Inflation above target and expectations rising.

• Banking "crisis" fading.

• Fed's main concern is still inflation.

US Inflation:

March CPI data came in this week. Headline CPI came in at 5.0% YoY vs consensus of 5.1%. Headline CPI has now fallen for 9 consecutive months. Core CPI came in at 5.6% YoY vs consensus of 5.6%.

The Fed minutes from the March meeting were also released. Interesting, those minutes showed that the Fed expects the United States to enter a mild recession later this year. Time will tell how that effects their rate policy setting.

What I’m Seeing:

Many of the recent breakouts to 52-week highs in stocks haven’t really followed through. The sentiment out of market talking heads is very bearish.

Chart from JC Parets @ allstarcharts

While hedge funds and institutions position for an incoming economic recession, stocks keep getting bought up.

Semiconductors are the undisputed big leader year to date but they have fallen behind in the past couple of weeks. Their relative strength line has been declining as other sectors have picked up.A lot will depend on the market reaction to earnings in the coming month. The new earnings season has just begun. Big banks like JPMorgan crushed estimates and gapped above their 50-day moving average.

This alleviates some of the concerns about the financial sector which has been keeping the S&P 500 down. Next on deck is Big Tech which reports in the next three weeks.Much of equities’ resilience in the past month or so can be attributed to declining inflation expectations and a weak US dollar. The dollar has been almost perfectly negatively correlated to the S&P 500. If for whatever reason the US Dollar rallies, equities are likely to have a serious headwind.

Quick Stat Line For Those Skeptical of Generative AI:

ChatGPT has 4x more search interest than peak Ethereum, 30x peak Metaverse and 50x peak Web 3.0. Product-market fit unseen since the iPhone at a minimum.

"ChatGPT can reason out the answers to novel problems" via Benedictevans

💸Reformed Millennials - Post of The Week

Jassy and Amazon are democratizing generative AI.

Amazon’s cloud computing division announced new artificial intelligence offerings Thursday, becoming the latest tech giant to try to cash in on generative AI, the technology behind ChatGPT.

Unlike Alphabet's Google and Microsoft, which have announced products for the general public, Amazon’s Amazon Web Services is targeting corporate customers. In addition to new AI tools, the company is expanding access to custom-made chips that it says can run AI software more efficiently and cheaply than competitors.

Read more here: Wall Street Journal

🎙Podcast & YouTube Recommendations🎙

Chinese Monetary Policy: Given the size of China in the global economy, it is as important to understand the PBOC approach to policy as the Fed, ECB and BoJ. This weekend Gov Yi gave a rare speech on monetary and FX policy which is worth listening to in its entirety.

On monetary policy Yi outlined an interesting framework for the policy response function. One that is based on the economic environment at hand. In some cases proactive and interventionist, and in others slow moving.

Whether you personally like it or not, the PBOCs actions have substantial influence on the global macro environment. Hearing from the top technocrat at the PBOC outline the reaction function and framework is enlightening for thinking about their policy approach.

Of course there are additional considerations - particularly fiscal and regulatory - in understanding the complete policy picture, but found this to be one of the clearest explanations of the MP framework.

Think the biggest takeaway today is that the actions are likely to be more slow moving and muted than many may expect. We are not likely to see a repeat of the post-GFC boom in monetary and fiscal. Further, even in a cyclical downturn, the policy response will be likely muted.

That is an important difference from the type of reaction function we would expect to see in the west. And with it has likely pro-cyclical growth implications over time, which is an important evolution relative to the last few decades where China was a counter cyclical pressure.

• AI Generated Song ft. Drake & The Weeknd:

It's by "Ghostwriter977" on TikTok and it's blowing up on socials + streaming platforms. UMG, which controls around 1/3 of the global music market, has already asked streaming platforms to ban AI. A modern Napster moment. Will be fascinating to watch this all unfold in real-time.

https://twitter.com/rpnickson/status/1647548141384736770?s=20

🔮Best Links of The Week🔮

• I’m not Sure Speculation Is Gone - Jim Chanos positioning and thoughts on Tesla, Fin-Tech and Data Centers - Source: themarket.ch

• An incredible story of how a gambler shocked casinos around the world by doing the impossible: beating roulette. - Source: Bloomberg

• "Google’s employees were shocked when they learned in March that the South Korean consumer electronics giant Samsung was considering replacing Google with Microsoft’s Bing as the default search engine on its devices. For years, Bing had been a search engine also-ran. But it became a lot more interesting to industry insiders when it recently added new artificial intelligence technology. Google’s reaction to the Samsung threat was “panic"... An estimated $3 billion in annual revenue was at stake with the Samsung contract. An additional $20 billion is tied to a similar Apple contract that will be up for renewal this year. A.I. competitors like the new Bing are quickly becoming the most serious threat to Google’s search business in 25 years, and in response, Google is racing to build an all-new search engine powered by the technology." - Source: NYT

• "Saudi Arabia has put a second 4% stake of state oil giant Saudi Aramco, valued at nearly $78 billion, under the control of the country’s sovereign-wealth fund, as the kingdom leverages a year of high oil prices toward diversifying its economy." - Source: WSJ

"The US Securities and Exchange Commission on Friday altered a proposed rule to make more explicit that digital-asset exchanges and decentralized-finance platforms must register with the regulator. The SEC’s plan, which was first proposed in 2022, is meant to close a regulatory gap created by platforms that offer trading in securities but don’t register as exchanges or brokerages. The agency’s revised plan adds language specific to digital assets, many of which the regulator says fall under its purview." - Source: Bloomberg

👉 For specific investment questions or advice contact Joel @ Gold Investment Management.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.reformedmillennials.com

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• Market update and an interesting future investment theme

• Whats the right price for Oil?

• The Companies That Will Survive ZIRP

• At ai Group chats

• Migration of Millionaires

• Recommendations, Bet Reviews and Predictions

Listen on Apple, Spotify, or Google Podcasts.

📈📊Market Update💵📉

Check out the Daily Energy Report for a fantastic piece on how OPEC thinks through the pricing of oil.

Stocks fell while bonds rallied in a shortened week, with individual stock news remaining the focus of investors. The banking industry appears to have stabilized, at least for now. Bank earnings reports, which start next week, should give us better insight into the state of bank balance sheets. Hopefully, the reports will allow markets to take a breath and move forward, but credit is likely going to tighten because of what happened.

Consumers appear to have mostly returned to their usual habits; however, one important retailer did report negative comps in March. Economic pressure may be building, so a recession is not off the table.

Consumer confidence is improving in China

"I do think the Chinese consumer has been under real pressure. But I think that we're seeing some better signs of consumer confidence improving." - Walmart (WMT ) CEO of Walmart International Judith McKenna

Precious metals:

Gold along with bitcoin has started to act as a safe haven, with gold topping $2,000 again. from Allstarcharts. It’s weird to see gold high new all time highs while the Global ETF demand remains subdued.

Canada and Interest Rates:

From RBC Economics:

The Bank of Canada likely won’t make any change to the overnight interest rate next week. After announcing a conditional pause on interest rate hikes in January, the central bank is widely expected to make a second consecutive decision to hold. This is despite economic growth that’s been more resilient than expected so far this year. Indeed, though the January Monetary Policy Report anticipated GDP growth of 0.5%, we’re tracking it at closer to 2.5%. And labour markets remain exceptionally tight, with another 35,000 jobs created in March.

Week Ahead:

• The U.S. year-over-year CPI inflation rate is expected to fall by almost a full percentage point to 5.1% in March. The pullback is largely from a drop in energy prices, although food price growth has also been edging lower in recent months. ‘Core’ (ex-food & energy) inflation has been ‘stickier’ than expected but is also expected to tick lower. Home rents have been driving a rising share of core price growth but should begin to slow going forward as softer growth in current market rents feeds through gradually to the CPI measure as leases are renewed.

• Statistics Canada’s advance estimate of February manufacturing sales showed a 2.8% decline – led by lower sales in the motor vehicle, beverage and tobacco, primary metal and food industries. Lower prices (concentrated in a drop in petroleum prices) would explain about half the nominal February sales drop by our count.

• U.S. retail sales likely saw a second consecutive decline in March (-0.2%), largely driven by a price-related drop in gas station sales (-4.5%) but also softer motor vehicle sales. We expect U.S industrial production to tick up 0.6% in March, thanks to a weather-related increase in utility output (7.1%) and manufacturing output (0.2%).

Chips Demand:

TSMC reports its March revenues: —Net revenue for March down 10.9% MoM and 15.5% YoY to NT$ 145.4B —Q1 revenues up 3.6% YoY to NT$ 508.6B Q1 earnings due on Thursday, April 20th

💸Reformed Millennials - Post of The Week

Oil Prices Spiked This Week: Why?

OPEC+ is cutting production in the face of the economic reopening in China. [1]

This, rightfully, has concerned interest rate watchers as it increases the pressure on inflation.

Many market commentators think that this decision by OPEC+ is a shot at Biden. I think it's more likely to be two-fold

First, it’s important for the group to see global inventories continue to draw and erode pricing power away from those willing to release their barrels. (think countries with less production elasticity)

Second, they are setting themselves up to be the ‘arbiter of oil’ over the next decade. Regaining the “swing production/capacity” vote that they held in the '90s & 2000s.

Over the last 13 years, supply growth has shifted from the East to the West - The Shale Revolution.

Ever since the day the USA became a net exporter, the OPEC+ coalition has been jockeying to regain power and control of prices.

My read on this — the market expects OPEC to support supply and demand balances in the short-term while remaining cautious longer-term. The shift from back-end contango to backwardation [2] over the past year also echo’s the sentiment of a higher longer-term market.

conclusion: I don't think that this supply they are "cutting" is leaving the market, rather, it's being used as a buffer. It will come back at some point. OPEC+ is just flexing its muscles here as the less economic producers in the West struggle with less elastic reserves.

#growth #power #oil #china #OPEC+

1. https://www.reuters.com/.../sarabia-other-opec-producers.../

2. https://www.cmegroup.com/.../what-is-contango-and...

🎙Podcast & YouTube Recommendations🎙

• Theo And Harris had a fantastic video for watch people interested in the Rolex Production increases.

• That wasn’t the bottom from The Compound and Friends - they had Tony Dwyer on this week and he made the case for retesting the October 2022 lows.

🔮Best Links of The Week🔮

• Rogers - Shaw Merger commits $5.5 Billion to expand 5G coverage and services while also further committing $1Billion to connect rural, remote and indigenous communities to high speed internet. Source: Alberta.ca

• "ExxonMobil’s new low-carbon businesses could one day be more lucrative than its fossil fuel production, a top executive said, as the US oil major laid out ambitious plans to generate tens of billions of dollars from biofuels, hydrogen and carbon capture within a decade." Source: FT

• Dr. Nir Barzilai discovered the first “longevity gene” in humans and pioneered key research around the biology of aging. He’s the founding director of the Institute for Aging Research at the Albert Einstein College of Medicine in New York and the author of the book Age Later. - Source: Safegraph

• A city once remade for voitures has transformed itself into an unlikely utopia for cyclists and pedestrians. What can it teach us? - Source: Slate

• How a shipping error 100 years ago launched the $30 billion chicken industry - Source: Vox

• Mapping the migration of the worlds Millionaires - Source: Visual Capitalist

👉 For specific investment questions or advice contact Joel @ Gold Investment Management.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.reformedmillennials.com

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• Market update

• WEE Merges with UFC

• Canada and its growth problem

• Important Items from the 2023 Canadian Budget

• Rogers <> Shaw Merger

• 2023 Masters predictions

• Recommendations and Predictions

Listen on Apple, Spotify, or Google Podcasts.

📈📊Market Update💵📉

The market is feeling really tricky right now.

• Futures are pointing to a Fed pause and potentially outright cut while inflation implodes on a YoY basis.

• US and Canadian consumer has rolled over since the SVB/Credit Suisse saga per cc data. First real deceleration since Covid. And commodities breaking out might ruin all of the positives in point 1 above.

Tech companies sounded good at Microsoft Secure, but this was before SVB + CS collapse and it’s been a different consuming world since then.

Even though technology companies have all found religion on cost-cutting, margins and Stock Based Compensation, it wont likely be enough to crush the fears present in the market.

All of these dynamics are complicated by the fact that Large Language Models are the most important technology development since the iPhone at a minimum and are going to have a massive impact on the world.

To quote FireFox, they are going to “change the structure of our world.”

LLMs reshuffle the board for megacap tech as they are both an existential threat and opportunity for each company. Everyone was in their own swim lane for the last 10 years - and now there seems to be only one.

Execution will be everything.

Datatrek Has a Great recap of Q1 in their Sunday update: I’ve cleaned up and summarized it for easier digestion.

Q1 performance review for various equity indices as well as major currencies / commodities. The data is price return-only and equity index returns are based on the relevant MSCI index unless otherwise noted.

#1: Comparing US and non-US equity returns for Q1 2023:

• S&P 500: +5.5 percent

• S&P 500 (equal weight): +2.4 pct

• NASDAQ Composite: +16.8 pct

• Russell 2000: +2.3 pct

• S&P Mid Cap 400: +3.5 pct

• S&P Small Cap 600: +2.2 pct

• All-Country ex-US: +7.2 percent

• Europe: +10.3 pct

• Japan: +7.8 pct

• Emerging Markets: +4.1 pct

Comment: Non-US stocks broadly beat US equities in Q1, although their results are somewhat spotty. Europe and Japan were clear out-performers, even with currency appreciation. The NASDAQ Comp did better than every other index on the list, and by a wide margin. US Tech stock outperformance was Q1’s key global equity investment theme.

#2: Non – US single country equity indices:

• United Kingdom: +5.2 percent

• France: +14.1 pct

• Switzerland: +8.1 pct

• Germany: +15.1 pct

• Netherlands: +13.1 pct

• China: +5.0 percent

• Taiwan: +12.9 pct

• India: -5.7 pct

• South Korea: +8.4 pct

• Brazil: -2.1 pct

Comment: France, Germany and Taiwan were the standout performers in Q1, but for very stock-specific reasons. French equities got an outsized boost from LVMH, up 24.2 percent YTD on China’s reopening, worth almost a quarter (3.2 points) of their total Q1 performance. German equities saw a similar sized bump from SAP (+21.3 pct YTD) and Infineon (+31.1 pct YTD), which added 2.3 and 1.3 points to MSCI Germany’s Q1 performance. Taiwan Semi was up 24.9 percent in dollar terms in Q1, adding 5.6 points to MSCI Taiwan (43 pct of total YTD returns).

#3: US Large Cap sector returns (ranked high to low):

• Technology: +21.4 percent

• Communication Services: +20.8 pct

• Consumer Discretionary: +15.8 pct

• Materials: +3.8 pct

• Industrials: +3.0 pct

• Real Estate: +1.2 pct

• Consumer Staples: +0.2 pct

• Utilities: -4.0 pct

• Health Care: -4.7 pct

• Energy: -5.3 pct

• Financials: -6.0 pct

Comment: All the S&P 500’s positive 5.5 percent YTD return – and then some – comes from 3 sectors, and specifically 7 names, in that trio:

In Technology:

• Apple (+26.9 percent YTD): 1.8 points of total S&P YTD returns

• Microsoft (+20.2 pct): 1.2 points

• Nvidia (+90.1 pct): 1.4 points

In Communication Services:

• Alphabet/Google (+17.2 percent YTD): 0.6 points

• Meta/Facebook (+76.1 pct): 0.8 points

In Consumer Discretionary:

• Amazon (+23.0 percent YTD): 0.6 points

• Tesla (+68.4 pct YTD): 0.9 points

The total contribution of these stocks to the S&P’s YTD performance is 7.3 percentage points, or 133 percent of the index’s gains year to date. US Big Tech got very oversold at the end of last year and has been making up for lost time in 2023. Excluding their performance, the S&P 500 is actually down 1.8 percent on the year.

#6: Growth versus Value in US Large/Small Caps:

• S&P 500 Growth: +9.2 percent

• S&P 500 Value: +4.6 pct

• Russell 2000 Growth: +5.7 percent

• Russell 2000 Value: -1.2 pct

Comment: Growth trumped Value in both US large and small caps in Q1. This was largely due to the Tech sector/Big Tech outperformance, as well as the hit taken by the Financials sector in March.

Takeaway: Q1 was a welcomed reprieve from last year’s difficult stock and bond markets, but much of the YTD gains are concentrated in a handful of names or based on a view of future Fed policy that the central bank itself explicitly rejects. April has a long history of being one of the kindest months for US equities, so recent trends may well continue.

Not Financial Advice.

2023 Key Budget Items From MNP: (bold my favs)

• Employee Ownership Trusts!

• Automatic Tax Filing

• Grocery Rebate

• RDSP and RESP plan changes

• Bill C-208 intergenerational transfers

• Tax on share buybacks

From their post:

Budget 2023 introduces a number of business tax incentives to encourage the use of clean energy:

Clean Electricity Investment Tax Credit

A 15 percent refundable tax credit for investments in specific electricity generating activities and equipment for the transmission of electricity between provinces. Both new projects and refurbishment of existing projects will be eligible. The credit will be available for projects that begin after March 28, 2023 (Budget Day) and will cease to be available after 2034.

Clean Technology Manufacturing Credit

A 30 percent refundable tax credit for the cost of investments in new machinery and equipment used to manufacture or process key clean technologies and extract, process, or recycle key critical minerals. The credit would apply to property that is acquired and becomes available for use on or after January 1, 2024. The credit will be phased out starting in 2032 and will be fully eliminated in 2034.

Clean Hydrogen Investment Tax Credit

A refundable tax credit of between 15 percent and 40 percent of eligible project costs that produce clean hydrogen and a 15 percent tax credit for certain equipment.

Clean Technology Investment Tax Credit

Eligibility for the existing 30 percent credit is expanded to include geothermal systems eligible for capital cost allowance under Classes 43.1 and 43.2. In addition, the phase-out will begin in 2034 (previously 2032) and will not be available thereafter.

Carbon Capture, Utilization and Storage Investment Tax Credit (CCUS)

The existing credit is enhanced to apply to additional equipment; further legislation detailing the credit and certain labour requirements will be released later.

Reduced rates for zero-emission technology manufacturers

The reduced tax rates of 4.5 percent and 7.5 percent for zero-emission technology manufacturers will be extended by three years to 2034, with phase-out beginning in 2032. In addition, eligibility will also be expanded to include manufacturing of nuclear energy equipment, and processing and recycling of nuclear fuels and heavy water for taxation years beginning after 2023.

Lithium from brines

Budget 2023 proposes to allow producers of lithium from brines to issue flow-through shares, and to expand the eligibility of the Critical Mineral Exploration Tax Credit to lithium from brines.

💸Reformed Millennials - Post of The Week

Everyone's Most Hated Billionaire Wrote An Essay About Ai:

"I’d been meeting with the team from OpenAI since 2016..."

CHATGPT AND AI ARE AS REVOLUTIONARY AS:

• the microprocessor

• the personal computer

• the Internet

• and the mobile phone

So in the spirit of Ai - I asked GPT4 to succinctly break down the essay into its most important points.

PRODUCTIVITY:

Get ready for a personal AI that knows everything about you, and works seamlessly across all devices.

AI copilots will be everywhere. The main way of using a computer is natural language, not pointing and clicking.

"Soon the pre-AI period will seem as distant as the days when using a computer meant typing at a C:> prompt rather than tapping on a screen."

AI company agents will absorb knowledge from across the company and sit alongside regular employees.

AI IN HEALTH:

AI will rapidly accelerate medical breakthroughs.AIs will provide triage and health advice in poor countries. Give advice about how to deal with health problems, & decide whether they need to seek treatment

AI IN EDUCATION:

Personalized AI tutors will tailor content based on your interests, goals & learning styles.AI will only ever enhance (not replace) the teacher-student dynamic in the classroom.Education will adapt to the rise of tools like ChatGPT.

"I know a lot of teachers are worried that students are using GPT to write their essays.Educators are already discussing ways to adapt to the new technology, and I suspect those conversations will continue for quite some time."

RISKS & PROBLEMS:

Will AIs develop their own goals that deviate from human goals?

"Then there’s the possibility that AIs will run out of control. Could AI decide that humans are a threat, conclude that its interests are different from ours, or stop caring about us?"

People can use AI for bad as much as they will for good. Governments need to get involved.

We've already seen examples of AI models making up fake information.

FUTURE PRINCIPLES :

"We should try to balance fears about the downsides of AI—which are understandable and valid—with its ability to improve people’s lives."

Government and philanthropy need to play a role to reduce inequity in AI.

"Finally, we should keep in mind that we’re only at the beginning of what AI can accomplish. Whatever limitations it has today will be gone before we know it."

https://www.gatesnotes.com/The-Age-of-AI-Has-Begun

🎙Podcast & YouTube Recommendations🎙

• Invest Like The Best - Forever Episodes with The Founders Podcast Host David Senra

This podcast got me AMPED UP. What a FANTASTIC listen

• The Chat GPT Report - Goes over the MidJourney V5 update and the recent AI halt letter posted in Times Magazine

🔮Best Links of The Week🔮

• Dementia prevention - Start early and prevent by delay, not elimination. - Wired Magazine

• Sam Altman interviewed - The Contradictions of Sam Altman, AI Crusader - WSJ

• The Potentially Large Effects of Artificial Intelligence on Economic Growth - Goldman Sachs

• Rogers-Shaw deal approved by Canada's industry minister - BNN Bloomberg

• "ByteDance, the Chinese owner of TikTok, generated more than $80 billion in annual revenue last year, up more than 30% from roughly $60 billion in 2021. The 2022 result... is significant because most technology companies with that kind of revenue experienced a marked slowdown in growth last year. It also means ByteDance revenue is on par with that of Tencent, an iconic Chinese social media company that owns WeChat. And it shows a substantial majority of ByteDance’s revenue growth came from its core advertising business in mainland China, where it operates Douyin, an app similar to TikTok that has hundreds of millions of daily active users." - The Information

• "The world has been learning an awful lot about artificial intelligence lately, thanks to the arrival of eerily human-like chatbots. Less noticed, but just as important: Researchers are learning a great deal about us – with the help of AI. AI is helping scientists decode how neurons in our brains communicate, and explore the nature of cognition. This new research could one day lead to humans connecting with computers merely by thinking–as opposed to typing or voice commands. But there is a long way to go before such visions become reality." - WSJ

"Canada’s natural resources minister has warned the US against waging a “carbon subsidy war” with its allies, saying the Biden administration’s $369bn clean energy package creates an “unlevel playing field” in global trade." - FT

"OPEC+ announced a surprise oil production cut of more than 1 million barrels a day, abandoning previous assurances that it would hold supply steady and posing a new risk for the global economy. It’s a significant reduction for a market where — despite the recent price fluctuations — supply was looking tight for the latter part of the year. Oil futures weren’t trading when the cut was announced on Sunday, but the inevitable price reaction could add to inflationary pressures across the world, forcing central banks to keep interest rates higher for longer and crimping economic growth." - Bloomberg

👉 For specific investment questions or advice contact Joel @ Gold Investment Management.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.reformedmillennials.com

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• Market update

• Chinese Tensions Increase

• Banning TikTok

• Canadian Opportunity

• Budget Highlights

• New Canadian Tax Filing Requirements

• Recommendations and Predictions

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📈📊Market Update💵📉

We go into this week with Futures strongly believing the Fed is done raising rates and will be easing aggressively in the second half of 2023.

Now investors need to suss-out why or for what reason is the fed cutting the rates at the back half of this year.

Are they cutting because this most recent credit crunch is finally slaying the inflation dragon - allowing for an economic soft landing?

OR

Or is it that these markets now see a deep recession as inevitable?

If it’s a soft landing because inflation has retreated to the feds target 2% rate, one might a interpret that as bullish.

If its the perception of a recession in earnings, an investor would probably assume equities would trade lower…

JC Parets from All Star charts had a terrific post on what he’s watching to assess where the market see’s this going - see below and here

US interest rates have fallen to their lowest levels since Q3 last year. And with falling rates has come a consistent bid into Technology and growth all year so far. That has driven the Nasdaq100 to its highest weekly close in 7 months:

And it's not just Large-cap Growth that's showing relative strength. You're seeing it as you go down the cap scale as well. Look at Small-cap growth stocks hitting new 52-week highs relative to Value:

This is all being driven by interest rates. So proof once again that even if you don't trade bonds, they need to be front and center for stock traders and investors. Now, on an absolute basis, the Russell2000 Small-cap Index is at key levels right now. The buyers stepped in this week, and they better keep stepping in, or else...

That former resistance in $IWM from 2018 and 2020 has turned into support since last summer. But if that gives out, it's going to be a major problem for this market.

💸Reformed Millennials - Post of The Week

One of the bigger questions facing Canadian investors this year has revolved around real estate and interest rates.

For me, the missing factor in valuing real estate for the long term is demographics, but more importantly, immigration flows.

Recently, there have been some fantastic improvements in tracking the Canadian population:

https://www150.statcan.gc.ca/.../71-607-x2020003-eng.htm

Canada's population grew by more than 1 million people in 2022. Fastest growth since 1972.

Yet our federal, provincial, and municipal governments still don't have any plans in place to build housing...Interest rates might be high. But supply shortages are worse.

🎙Podcast & YouTube Recommendations🎙

• The Best 4 Mins on TikTok from Scott Galloway:

• Odd Lots Has 2 phenomenal podcasts: Where the stress is showing in the 20 Trillion Commercial RE Market:

🔮Best Links of The Week🔮

• No matter how many rough-cut gems you can shove up your ass or how plush your bunker, there is no escaping the fallout of our democracy failing. - Scott Galloways - No Mercy No Malice

• Why not put TSMC and Samsung fabs in Canada? - Noahpinion

• China’s Political Discourse February 2023: A Balloon Comes to Symbolize High-Altitude Tensions; Chinese Modernization; TikTok - Sinocism

• Daisy & The Six from Amazon Studios - by Matthew Milam

• Spot prices for gold this week touched $2,000 per ounce for the first time since the immediate aftermath of Russia’s invasion of Ukraine. Prices slipped back after testing the level several times throughout the week, but trading in options contracts linked to the metal suggest many investors are expecting a more sustained rally in the weeks ahead." Source: FT

• In the United States, there are growing calls to ban TikTok, owned by China-based company ByteDance, or to pass bipartisan legislation to give President Joe Biden’s administration legal authority to seek a ban. Devices owned by the U.S. government were recently banned from having the app installed." Source: CNBC

👉 For specific investment questions or advice contact Joel @ Gold Investment Management.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.reformedmillennials.com

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• Market update

• Confidence game and how banks depend on it

• Foxconn forecasting a slowdown

• GPT4 release and the importance of understand how to use AI

• Golf Ball Restrictions

• Recommendations and Predictions

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📈📊Market Things💵📉

This weeks show and newsletter is heavy on the links and recommendations.

Next weeks podcast is going to be super informational and were going to cover the new Canadian budget in depth - so don’t forget to tune in.

However, this week is all about banking and its crisis.

To understand this banking crisis well I want to point everyone in the direction of Matt Levine at Bloomberg - his Money Things column is the best financial news writing on the internet and he’s doing phenomenal work recapping the banking crisis were currently experiencing. He makes complex subjects seem simple.

Canadian Housing - from RBC

It increasingly looks like Canada’s housing market is finally finding its footing—at least from a transaction volume perspective. The precipitous slide in home resales has been easing significantly in recent months. February results even showed a slight 2.3% increase from January to 403,400 units (annualized). We think it points to a nearby bottom in many local markets.

This isn’t stopping the price correction for now, though. The national composite MLS Home Price Index fell another 1.1% m/m in February, marking the 12th-straight monthly decline. The pace did ease a little from an average of -1.5% in the previous six months but for the most part the trajectory is still unambiguously down, especially in Ontario and British Columbia.

A sharp drop in new listings and concomitant tightening in demand-supply conditions in February could signal a moderation in price declines over the coming months. If sustained, it would support our view that prices will bottom sometime in the summer or shortly thereafter (with the timing varying by market).

Energy - from DER

EIA Annual Energy Outlook 2023: EIA projects that the US “will remain a net exporter of petroleum products and natural gas through 2050 in all cases”

In its Annual Energy Outlook (AEO) 2023, which addresses long-term energy trends in the US, the Energy Information Administration (EIA) expected US production to remain “historically high” due to growing finished product exports amid rising global demand. This will also keep US refinery runs strong as the local refinery sector stays competitive in the global market “through 2050 in all cases,” the EIA said. See Figures (1) and (2) below as published in the AEO report.

Figure (2)

Source: EIA, 2023

Moving to the gas sector, the EIA said in its AEO2023 report that domestic natural gas consumption will remain “relatively stable – ending recent growth in most cases,” this is despite the growing share of renewable sources and batteries in power generation. But the EIA notes that natural gas production will keep growing in some cases due to global LNG demand, “supported by associated natural gas produced along with crude oil.”

“Given the combination of relatively little growth in domestic consumption and continued growth in production, we project that the United States will remain a net exporter of petroleum products and natural gas through 2050 in all AEO2023 cases,” the EIA said.

Figure (3)

EOA’s Main Takeaway:

There is strong evidence to support the natural gas projection, but we doubt the EIA’s forecast regarding petroleum products. We believe that US production will be lower in the long run, while demand for petroleum products will likely be higher, leading to lower exports.

💸Reformed Millennials - Post of The Week

Concession stand prices at Candlestick park in 1971:

I’ll never understand how the baby boomers did it. It was so darn expensive back then. My gosh.

• $30k for a 1,000 sq ft house…

• $1.50 for a boxed lunch

• $5.00 for 10 beers

🎙Podcast & YouTube Recommendations🎙

The best explainer video I’ve found for the bank contagion from 2 greybeards. (2 ex-bridgewater hedgefund managers)

• Peter Attia Goes on to the Tim Ferris Show to talk about his new book:

🔮Best Links of The Week🔮

• "One of the hottest apps in the U.S. right now is TikTok’s lesser-known sibling that is also owned by Chinese parent ByteDance. App trackers show that CapCut, a video-editing tool that helps people quickly create online videos and memes, has been downloaded more in recent weeks than TikTok... CapCut allows people to edit videos easily with various templates, filters, visual effects and music. Users say it helps them produce clips that look more professional and have a better chance of going viral on TikTok and other platforms such as Meta's Instagram and Alphabet's YouTube." - WSJ

• Banks Borrow $164.8 Billion From Fed in Rush to Backstop Liquidity

• UBS, Credit Suisse Oppose Idea of Forced Combination, Sources Say

• Credit Suisse and Silicon Valley Bank’s problem is an addiction to clients

• Schwab Clients Pull $8.8 Billion From Prime Funds in Three Days

• TikTok Sale Likely to Be Rejected by China

• ME Finds Some Nickel Underlying Its Contracts Is Missing

• Madison Square Garden Owner Feuds With Part-Time Liquor Inspector

👉 For specific investment questions or advice contact Joel @ Gold Investment Management.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.reformedmillennials.com

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• Market update

• SVB collapse and whats next

• Why is the Canadian dollar plummeting vs the USD

• Oilers are really good and its making me nervous

• Recommendations and Predictions

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📈📊Market Update💵📉

There is an old saying…‘Cash Is King’.

Unfortunately that is outdated.

It should read…’Treasuries are King’ or ‘Cash is King up to $250,000.00’

This past weekend we watched as Venture Capitalists cried contagion and spread FUD to anyone who would listen. For the first time in this long tightening cycle, something actually broke. I think this matters.The president and his FDIC/Fed came to the rescue of those VCs and their portfolio companies.

What this means for interest rates?

It’s quite likely that this is the end of FOMC members and governors spouting off about inflation.

Powell is trying to engineer the impossible. And his lackeys have done a terrible job staying in line.

Yesterday evening, Powell and Yellen went big to save their system, pulling on the all important “its better to go big and move swiftly, than to act late” stings they have available.

All the while, the CBOE VIX Index made a near 4-month high on Friday, closing at 24.8.

Despite all the SVB drama, Futures are still pricing in more aggressive FOMC rate hikes in March and May than a week ago. Past those meetings, this interest rate/bond market is turning more dovish.

Despite taking 3.7% out of their 2023 earnings estimates over the last 3 months, Wall Street analysts still expect record S&P quarterly earnings in Q3/Q4. At least Q1 estimates look reasonable.

Last Friday’s Jobs Report and this Tuesday’s CPI release are very likely economic bookends, reflecting a similar narrative of US wage/price inflation that is only slowly diminishing. (Not Fast Enough)

The CBOE VIX Index and S&P 500 returns.

The chart below shows the VIX (blue line) and S&P 500 price returns (red/green numbers) as the index cycled between 20 and +30 from 2022 to the present:

• As you would expect, there is a clear relationship between a rising/falling VIX and equity returns. When the VIX rises from 20 or below to 30 or above, the S&P drops. As the VIX declines from +30 back to 20, the S&P rallies.

• There is solid data as to why these levels matter. The VIX’s long run average (1990 – present) is 20. The standard deviation around that mean is 8 points. A VIX of 20 in the current still-uncertain macro environment is too low, so stocks tend to top out when the index hits that level. As “fear” pushes the VIX to 28 – 36, equities bottom out.

• The VIX has been relatively flat around 20 since December 1st 2022, when the S&P 500 closed at 4,077. As of Friday’s close, the S&P is down 5.3 percent from those levels.

The CBOE VIX remains a relevant market signal about near term tradable and/or investable lows. On the one hand, it is heartening that even the failure of a large bank did not push the VIX to 28. Even still, recent history (December 2022 – present) shows there’s not much money to be made in US large caps when the VIX remains between 20 and 28. We would wait for the VIX to hit at least 28 before adding equity exposure.

Sources:

FDIC Failures by Year, 2001 – Present:

2023 Fed Stress Test: https://www.federalreserve.gov/publications/2023-Stress-Test-Scenarios.htmCommodities -

Emerging Market commentary -

💸Reformed Millennials - Post of The Week

What happened at Silicon Valley Bank: Simple Terms

The FDIC made a major move as of Sunday March 12th 6:00EST

What happened in very basic terms:

The recent bank run on Silicon Valley Bank (SVB) highlights the interconnectedness of the tech ecosystem, and how a bank run can have ripple effects throughout the Startup world… and to a lesser extent, the banking world.

SVB is a bank that specializes in lending to Startup’s and venture capital firms.

It played a key role in the growth of the tech industry over the past 4 decades. It’s asset base exploded in 20/21 as tech stocks IPOD and deposits rolled in.

However, as interest rates rose and the tech bubble burst, SVB's assets began to decline, and depositors started to withdraw their money.

This, combined with a critical duration investment error created a black hole. The chain reaction of depositor pulling cash and interest rates skyrocketing blew their models to smithereens. Startup’s, who were already struggling to survive in a tough funding environment, began to panic and withdraw their cash from SVB. All of this happened while their reserve assets got smoked in a generational tightening cycle.

The bank had a pile of illiquid underwater assets, which made it more vulnerable to a bank run.

The depositors and investors lost trust, a banks biggest/best asset.

The bobbling of the equity issuing and capital raise was the end. That needed to be done perfectly. The fear of insolvency was terminal.

The write-down by itself wasn’t enough to make the bank insolvent, but the shift in trust spooked enough people into thinking that even bigger write-downs were in the near future…

The FDIC stepped in to take over the bank and pay back depositors. This has now extended to coverage of deposits above 250k.

In a way, this is just one more shoe dropping in the slow deflation of the Second Tech Boom. This ISN’T 2008.

The broader financial system is not as exposed to SVB's debt and assets. The U.S. economy has remained strong despite the tech slump, and there's reason to believe that it will continue to do so after this bank run…

The big lesson for me, as a Canadian looking in Startup’s should be aware of the risks of relying on a single bank or financial institution, and to have contingency plans in place for worst-case scenarios such as this. And for investors, it's a reminder of the importance of diversification and being aware of interconnectedness in the tech/banking ecosystem.

Many Startup’s/businesses were left in a precarious position, unable to make payroll and fearing the worst.

The FDIC promised to pay SVB’s depositors an “advance dividend” to make payroll. To do this, they’ll either find a buyer for all of SVB’s assets or sell off some of SVB’s ++ marketable bonds in order to send depositors enough $$ for payroll until they can comp the broader sale.

The FDIC has a strong incentive not to let Startup’s vaporize over the next few weeks because they can’t pay their employees.

In 2020, we built a lot of secondary rails for the problems we’re seeing at SVB today.

People should be optimistic we can move forward stronger after this with alternative banking and financing models that are better suited to the needs of Startup’s.

Nothing cleans a system like a good bank collapse.

The SVB crisis is a sobering reminder that even the most innovative and dynamic industries are not immune to financial challenges.

But… it's also a reminder that the tech industry is full of resilient and adaptable people who are capable of finding solutions to even the toughest problems.

The equity and debt holders of the bank are likely zero. Signature bank and Silvergate look to be next.

My favorite threads on the SVB Saga: from Bob Elliott

• How the banking system is built and how SVB problem arose.

• What the regulators did to shore up the run on the Banks:

• US HOUSING: The monthly mortgage payment needed to buy the median priced home for sale in the US has increased from under $1,500 2 years ago to over $2,500 today.

🎙Podcast & YouTube Recommendations🎙

• Presocratic Philosophy - This episode they discuss “Out of Africa Theory”, the adversity of early humans, the term “Pre-Socratic”, the first philosopher Thales, the meanest philosopher Heraclitus and Democritus, the godfather of the theory of atomism.

• Sharp China - What to think about the opening of Asia

🔮Best Links of The Week🔮

• I really liked this Morgan Housel piece -

The more successful you are, the nicer you should be. The better things are going, the nicer you should be. That’s probably the best – or only – way to guard against entitlement, which is the main thing that blindsides you when luck turns the other way. It’s like an automatic stabilizer that keeps you in check and keeps your social circles solid – both of which probably lead to sustainable, durable, non-lucky success over time.

• "Federal regulators rolled out emergency measures Sunday night to stem potential spillovers from Friday’s swift collapse of Silicon Valley Bank, including measures to backstop all depositors. Regulators announced the action in a joint statement from Treasury Secretary Janet Yellen, Federal Reserve Chair Jerome Powell and Federal Deposit Insurance Corp. Chair Martin Gruenberg. The group said that depositors at SVB will have access to all of their money on Monday." Source: WSJ

Marc Rubinstein from Net Interest - the first bank run of the digital age’

• "One of the hottest collector’s items these days is a preowned luxury watch. Expensive secondhand watches from brands such as Rolex and Patek Philippe have become increasingly popular in recent years, particularly with younger buyers, according to a report published this month by Boston Consulting Group. Preowned luxury watches became more valuable as demand grew but supply remained tight, BCG said. Those watches have become so coveted that the market for them has outpaced the overall stock market, growing about 20% annually from mid-2018 through this January, compared with the S&P 500 index’s yearly growth rate of 8% during that period, BCG said." Source: WSJ

👉 For specific investment questions or advice contact Joel @ Gold Investment Management.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.reformedmillennials.com

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• Market update

• Quick chat about social media’s new 15$/month tax

• Setting the table for the sports streaming transition

• The cable bundle collapse is worse than you think

• How athletes can have their cake and eat it too

• Recommendations and Predictions

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QUICK UPDATE:

US equities rallied on Friday as bond yields fell. Large caps bested small caps: S&P 500 (+1.61%) vs. Russell 2000 (+1.35%).

Technology (+2.14%) and consumer discretionary (+2.12%) outperformed the broader market indices, while consumer staples (+0.08%) and industrials (+1.06%) lagged. Apple (+3.51%) and Boeing (+2.40%) led the Dow (+1.17%) higher; Coca-Cola (-0.47%) and Verizon (-0.39%) were the index's worst performers.

The Nasdaq gained 1.97%, while the "FAAMG" stocks rallied: Meta (+6.14%), Amazon (+3.01%), Apple (+3.51%), Microsoft (+1.66%), Alphabet (+1.85%).

The VIX dropped 5.62% to 18.49. The 30-year and 10-year Treasury yields declined to 3.878% and 3.958% respectively, while the 2-year yield fell to 4.861%.

If you aren’t in the Reformed Millennials Facebook Group join us for daily updates, discussions, and deep dives into the investable trends Millennials should be paying attention to.

📈📊Deeper Market Update💵📉

The S&P 500 has traded around 4,000 several times (including now) since first hitting that level in April 2021. Interest rates have been volatile, but earnings power has been constant.

Over the last week markets have dramatically adjusted their expectations for 2023 Fed policy and now expect Fed Funds to end the year well above the FOMC’s December 2022 guidance.

But even still, the VIX is bouncing around the historic average of 20 and the S&P500 continues to trade at 18X earnings.

Wall Street analysts have been cutting their 2023 S&P 500 earnings estimates by more than usual over the last 2 months (3.4 pct versus long run average of -1.0 pct). These cuts are, however, not as severe as a typical recession scare (-5.1/-4.4 pct in 2015/2016).

Corporate bond spreads over Treasuries (IG: 1.27 pts, HY: 4.18 pts) are lower now than the end of 2022 (IG: 1.38, HY: 4.81) and similar to a year ago (IG: 1.38, HY: 3.90). This market shares the equity market’s confidence that future earnings will remain stable, a bullish sign for stocks.

Even though Q4 2022 was a disappointing quarter in terms of S&P 500 companies beating analysts’ earnings expectations, the index still reported $52.42/share. That’s only 2.4 pct below the trailing 6-quarter average. The Street expects earnings to rebound after Q1 but even if they just hold constant that could be enough to support current equity prices.

This will be a busy week on the macro front, with Chair Powell testifying in front of Congress, January JOLTS, and February’s Jobs Report. Markets want to hear 50 bp in March is off the table… Will they get it?

China:

China’s equity market perked up last week and is now back to being up on the year. The same goes for the Chinese offshore yuan. The last week’s air pollution data from China’s 5 largest cities supports market confidence in the country’s economic reopening. Air quality is generally worse than the prior week(s), suggesting economic activity is increasing across the systematically important areas across the country.

Confidence in China’s economic reopening improved last week, lifting the country’s equity and currency values.

Official information on the country’s economy is not always as reliable as western investors would like, but many have found that air pollution has been a solid indicator of China’s economic conditions over the last 3 years. Moreover, it is real time data, so we don’t have to wait weeks or months to see how things are progressing.

China’s 5 largest cities in terms of their contribution to national GDP focusing on week over week comparisons.

#1: Shanghai:

The most recent week showed greater levels of air pollution than the week before, although not back to levels in early/mid-January. There have, however, been two “red” days in the last 2 weeks, the first since the very start of 2023. Economic activity in Shanghai looks to be on an upswing.

#2: Beijing:

Beijing’s air quality varies considerably by day, but it does appear that there has been a sustained pickup in economic activity since the start of February. Also worth noting: weekend pollution levels are quite high, which suggests an increasing level of discretionary personal travel. We do not see the same in the Shanghai data above.

#3: Shenzhen:

Air pollution is getting noticeably worse in this major global hub for tech manufacturing. Last week saw the greatest number of “red’ days this year, including over the weekend. The trend here looks quite positive from an economic perspective.

#4: Guangzhou:

As with its southerly neighbour Shenzhen, Guangzhou is seeing an uptick in airborne pollutants. The change in recent weeks is the most notable of any city we are looking at today.

#5: Chongqing:

Takeaway: It’s hard to take too much from any week’s data, but it does appear that there is a concerted effort to reinvigorate the Chinese economy.

💸Reformed Millennials - Post of The Week

Social Media Is Offically - “Pay to play”

from mobiledevdemo

Meta recently announced "Meta Verified," a paid verification product that confirms the identity of an account. But Meta Verified also provides subscribers with amplified reach. I contend that this product and others like it signify the end of the Internet's Grand Bargain.

The Internets Grand Bargain allowed social media to reach pro omnibus hominibus; in essence, it offered consumers free & universally-equal access to publishing tools in exchange for advertising opportunities. I consider the concept a foil to the "you are the product" aphorism.

Meta Verified, which will cost $11.99 (web) or $14.99 (iOS/Android), provides users with protection against impersonation, but also something else: "increased visibility and reach." In other words: the ability to pay for superior visibility.

Meta isn't alone in offering a paid product that provides superior reach: both Snap and Twitter offer similar products that amplify content from subscribers in Snapchat+ and Twitter Blue, respectively.

In the piece (link above), Eric argues that privacy policies like Apple's App Tracking Transparency (ATT) and impending legislation/regulation have undermined the economics of the Internet's Grand Bargain: personalized ads aren't as lucrative in the new privacy landscape.

Note that these products aren't paywalls: the choice provided to users isn't paid access or no access at all, but rather preferential treatment. Social media may be evolving into a two-tier ecosystem, where influence is derived from economic status.

🎙Podcast & YouTube Recommendations🎙

• The Best Invest Like The Best Podcast of the last 12 months:

Tweet thread breaking out some important notes

• Morgan Housel Has a Podcast About Money:

🔮Best Links of The Week🔮

• NewYork Times Blasts Tesla - Bluth has been early, but now the NYT is on board: “Public perception hasn’t yet caught up with the reality of the situation. If you want to work for a flexible, modern company, you don’t apply to $TSLA. You apply to 120-year-old $F.”

• "Sen. Mark Warner, D-Va., said Sunday he is introducing a broad bipartisan bill that will outline an approach to banning or prohibiting foreign technology like TikTok. Warner said he is working on the bill with Sen. John Thune, R-S.D., and that he is concerned over the type of content that Americans are seeing on the platform. Warner’s bill comes after U.S. House Foreign Affairs Committee voted Wednesday to advance a bill that would grant President Joe Biden the authority to ban TikTok." Source: CNBC

• "Operators of hotels, bars and restaurants—hit hard as the pandemic took hold—are now among the country’s fastest-growing employers, offsetting a slowdown in tech-related hiring. The leisure-and-hospitality industry is rebuilding its workforce after cutting back during the pandemic’s early days. In contrast, companies focused on providing business and tech-related services have slowed their growth in recent months. Because the hospitality industry includes a larger number of private-sector jobs than the tech and information sectors, the shift in hiring patterns has helped keep the U.S. unemployment rate at a 53-year low and the overall job market tight." Source: WSJ

• "For the first time, public companies are revealing how much compensation their CEOs are actually poised to get, by tabulating gains and losses in the stock awards that make up much of their pay packages. For Olivier Le Peuch, chief executive of oil-field-services company Schlumberger, the new disclosure shows the value of his pay jumped nearly $24 million during the course of last year, driven by a sharp rise in the company’s share price. At nuts-and-bolts-maker Fastenal, new equity awards for CEO Daniel Florness lost nearly half their value in 2022. The new measure of compensation, dubbed “compensation actually paid” under Securities and Exchange Commission rules, is designed to move executive-pay disclosure beyond the moment-in-time snapshots that investors have considered for years." Source: WSJ

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.reformedmillennials.com

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• Market update

• Thoughts on the Full Swing Doc

• Earnings Season and the looming recession

• Dating app economics

• The Ai Hype Cycle

• Recommendations and Predictions

Listen on Apple, Spotify, or Google Podcasts.

If you aren’t in the Reformed Millennials Facebook Group join us for daily updates, discussions, and deep dives into the investable trends Millennials should be paying attention to.

👉 For specific investment questions or advice contact Joel @ Gold Investment Management.

📈📊Market Update💵📉

The theme last week was No Landing vs a Soft Landing.

This week, Walmart, Home Depot, Coinbase, Domino's and Alibaba report earnings. Those companies cover a lot of the global economy.

The NY Fed Recession Probabilities model, based on the historical relationship between the shape of the US Treasury yield curve and economic activity, is saying the US will certainly see a recession in the next 12 months. Markets are seemingly ignoring this warning, but not because they dismiss history as irrelevant…

The Recession Probabilities model is at 57 pct. And that is higher than it was heading into the 2008 Great Recession. Yet, no one seems to care. This is probably probably because Fed-induced recessions should have Fed-induced recoveries.

Investors believe that history WILL repeat itself, and the Fed will turn dovish. (Pivot)

This lack of clarity in monetary policy has lead to outperformance from our “Value” corner of the market. Anything Growing fast has been sold off and the markets that have struggled in the face of free money are finally having their time in the sun.

As you can see here, Europe went nowhere for 20 years, mostly due to its lack of exposure to high growth stocks.

Industrial and cyclical stocks leading the way in this new bull market, Europe is the global leader once again.

It's the U.S. that's the laggard.

Here's the Euro STOXX 600 hitting new 52-week highs and coming out of a multi-decade base: Chart from All Star Charts

And if you're wondering whether or not this index will see new all-time highs soon, I would encourage you to check out what some of the individual countries are doing.

Take France for example. Hitting all time highs last week.

A great thread from Gavin Baker Speaking to the difficulties investors are having pricing equities in the short-medium term:

Deep Dive of The Week: from TSOH

We’re In The Business Of Discovery: $SPOT

From “We’re Doing Much Better Than You Think”:

“Consider this data in light of what I shared above: from FY18 - FY21, music revenues increased from €5,259 million to €9,468 million, or cumulative growth of €4,209 million. Over the same period, music gross profits increased from €1,353 million to €2,679 million - cumulative growth of €1,326, with incremental gross margins of ~31.5%. That number - the 31.5% - was ~330 basis points higher throughout this period due to Marketplace. Naturally, if the Marketplace contribution significantly outpaces revenue growth, that benefit will expand over time... This is an important revelation; it shows the clear path to 30%+ Music gross margins at Spotify.”

In Q4 FY22, Spotify reported its strongest monthly active user (MAU) growth – by far – in its history. Long time readers may remember that I previously worried about MAU growth following the “Stream On” market launches; with the benefit of hindsight, it turns out that I just needed to be patient. (Adjusted for the Russia exit, Spotify added roughly 88 million net MAU’s in FY22.)

While MAU growth is a great starting point, ad-supported users generate significantly lower revenues than Spotify’s premium subscribers (the premium ARPU is roughly 10x higher than the ad-supported ARPU). Over time, it’s critical that Spotify demonstrates continued success with driving premium penetration (providing enough value to convince ad-supported users to subscribe to the premium offering). As shown below, Spotify hit a major milestone in Q4 FY22, with the company crossing 200 million premium subscribers; Spotify’s premium subscriber count has quadrupled since the end of 2016. (“[In 2014], Ek began to concede that Spotify’s paid tier was the key not only to its longevity, but to its very survival.”)

While penetration rates continue to track nicely in the U.S. and Europe, with both regions at >50% premium mix, there’s work to be done in LatAm and Rest of World. Some of this is timing (there’s a lag between when a user joins Spotify and when they typically decide to become a paid sub / engagement reaches a threshold to justify paying); that said, it’s also important to recognize that these are geographies where “free” may be a major selling point for users. This is a key metric to track in the quarters ahead.

MAU and premium sub growth are both important – the underlying drivers of mid-teens constant currency revenue growth for Spotify in 2022 – but they are one part of the story. Another notable metric is profitability (or lack thereof), with the company reporting a €659 million operating loss for the year. With Spotify expected to reach half a billion MAU’s in Q1 FY23, inclusive of more than 200 million premium subs, they have absolute and relative scale (if this isn’t scale, I don’t know what is). That position should confer certain advantages to Spotify (as CEO Daniel Ek likes to say, “everything changes at scale”). The key question to answer in the years ahead, as I wrote in “The Power Question”, is whether Spotify can leverage product-market fit to establish a power opportunity in the audio industry.

💸Reformed Millennials - Post of The Week

The Ontario housing market is showing some cracks.

🎙Podcast & YouTube Recommendations🎙

• Ben Thompson Interviewed Matthew Ball and they talk at length about the future of the streaming industry. Specifically, they cover the inevitable spin off of ESPN, Hulu Acquisition completion and the business of Sport.

🔮Best Links of The Week🔮

• Becoming Trader Joe. Source: New Yorker

• Risk and Regret - “David Cassidy’s last words were, “So much wasted time.” Source: Collaborative Fund

• Biden’s Surprise Visit to Kyiv and The Russian State of the Union Speech. Source: Bloomberg

• Neither the media nor the public belong in politicians’ bedrooms - Mel Caouette

• Finding an emerging franchise to hitch your wagon to. Source: The Wolf of Franchises

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.reformedmillennials.com

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• Weekend recap

• Market and earnings season update

• MSFT vs. GOOG Bard

• Starlink vs. Canadian Telecoms

• Jobber raises 100mm series D

• Canadian Realestate

• Recommendations and Predictions

Listen on Apple, Spotify, or Google Podcasts.

If you aren’t in the Reformed Millennials Facebook Group join us for daily updates, discussions, and deep dives into the investable trends Millennials should be paying attention to.

👉 For specific investment questions or advice contact Joel @ Gold Investment Management.

📈📊Market Update💵📉

February is very interesting month within the context of the presidential cycle and bull market cycles.

February tends to be one of the worst months. It often is a digestion month within the most bullish cycle.

And prices are responding to this.

The S&P 500 is essentially halfway between its January 2022 all-time high and the October 2022 lows. This year’s gains have put it right at that fulcrum point. Many commentators argue 2023’s ramp is due to a better macro environment. Fair, but 2023’s rally also could just be a classic “January effect”. The next 2 weeks will matter – a lot – to market psychology.

The Cleveland Fed’s Inflation Nowcast is predicting a hotter than expected CPI report this Tuesday. Separately, non-shelter services inflation will be a key set of inflation categories to watch.

Q4 US corporate earnings season continues to be well below average, both in terms of revenue and earnings beat rates/amounts.

Forward year earnings expectations for the S&P 500 are basically the same now ($249/share for 2023) as they were a year ago ($248/share for 2022). The S&P is down 7 pct in the last year because valuations contract when companies miss earnings expectations. PE multiples expand only when companies start beating estimates again.

Fed Funds Futures reset last week and now do not expect the FOMC to cut policy rates later this year.

China’s economic reopening appears to be gaining some real traction now that New Year’s celebrations are over. Daily air quality is generally worse than Q1 2022 levels in Beijing, Shanghai, Tianjin, Shenzhen, and Guangzhou. This strongly suggests higher levels of economic activity across the country.

Halfway back, but why? The S&P 500 is almost exactly halfway between its all-time high and its 2022 lows:

• Friday’s close: 4,090

• January 3, 2022 high: 4,797

• October 12, 2022 lows: 3,577

• Midpoint: 4,187

• Difference to midpoint from Friday’s close: +2.4 percent

The index’s year to date rally of 6.5 percent is why we are so close to the metaphorical fulcrum on the market’s seesaw, but what is the cause of that move?

The simplest answer is a classic “January effect”, where stocks rally in the new year since they no longer have the selling pressures associated with December’s tax loss harvesting. Consider the following recent returns for the S&P 500, Russell 2000, and NASDAQ Composite:

• The S&P 500 was down 5.9 percent in December 2022, at least in part due to tax loss selling after a very difficult year (index -18.0 pct in 2022). It then rallied 6.2 percent in January 2023.

• The Russell 2000 was down 6.6 percent in December 2022 but then rallied 9.7 pct in January 2023. Unlike the S&P, which is up 0.3 pct in February, the Russell has given up a bit of its 2023 gains this month and is now only up 9.0 pct on the year.

• The NASDAQ Composite was down 8.7 percent in December 2022 but up 10.7 percent in January 2023 and a further 1.2 pct for the current month to date.

With this rally in US stocks has come a shift in market narratives to explain why we’ve begun the year on such a strong note. A few examples of now-popular bullish themes:

• China’s economic reopening will boost growth across southeast Asia and Europe. This is especially important for the latter region, which just a few months ago seemed destined for a deep recession in 2023 due to energy prices, high interest rates, and geopolitical concerns.

• The US economy is still in good shape even after the Federal Reserve’s aggressive rate increases last year. Job growth was nothing short of stunning last month and unemployment remains low. A simple fact to consider: you can’t have a recession if labor markets remain strong.

• Inflation is coming down. WTI crude oil prices are down 17 percent year over year. Housing inflation has clearly just peaked. Services inflation remains an issue, but this should decline this year even if the US economy continues to grow modestly.

• Markets feel they have a handle on upcoming Fed policy decisions. We’ll get a few more 25 basis point rate hikes, but then the FOMC should pause for the rest of 2023.

Takeaway: there is certainly some truth to the bull case, but how much of it is simply a result of trying to fit a fundamental narrative around what may have been a technical move in January/early February related to December’s tax loss selling.

One thing seems certain: the next few weeks will be very important to market psychology. If we can hold the year’s gains, it will show January was not just a dead cat bounce. If we cannot, all the recent bullish narratives will seem (at best) premature.

💸Reformed Millennials - Post of The Week

Zeihan On Canada - Interview

Some notes on the first 40 mins:

• conflicts north America cares about shrinks and china fails to transition as its demographics fall apart

• the business case for Canadian export of LNG has drastically improved due to the Ukraine war

• natural gas pipe east is almost impossible because of the province's politics

• pipelines need to go west to serve japan's future needs

• timing lines up well to serve japan and a future global shortage

• natural gas emits half the carbon as coal...

• hydrogen is new and the current tech is the most carbon-intensive energy production on the planet (theory is it's going to fall fast)

GEOGRAPHIC AND POLITICAL:

• the population is very stretched out hugging the south

• each province cares more about its relationship with America than it does with the rest of their Canadian partners

• Canada had a very privileged position during the cold war because we were between America and Russia and we levered it to get sweet deals from America

• NAFTA 2 not as good as NAFTA 1

• labor structure is distorting as people move out of Vancouver, Montreal, and Toronto

• Canadian Demographics are deteriorating because we aren't having enough children

• Alberta is the exception to our country's demographic problem

• result of the above 2 notes is that taxes are going up and capital is going to become incredibly competitive

• immigration is our cheat code. highly educated and pay heavy taxes because they are young

OPPORTUNITIES:

• Mexico is fastest growing country for the next 30 years

• House development (multi-family)

• manufacturing and processing in prairies

• education export

• robotics and ai dependent on immigration of 350-550k ppl/yr

Markets Video and Tweets of the Week:

Association and connecting the creative charm bracelet:

🎙Podcast & YouTube Recommendations🎙

• 241 - Living Intentionally, Valuing Time, prioritizing relationships and more keys to a rich life

• 225 - The comfort Crisis - doing hard things with Michael Easter

🔮Best Links of The Week🔮

• The LULU of the Medical field - Source: Trina Spear of FIGS

• How to lose a monopoly - Source: Ben Evans

• The New Gatekeepers Presentations - Source: Ben Evans

• Must Read of the Day: "The prices of metals used to make objects such as aircraft and electrical wire have rebounded toward last year’s highs, lifted by China’s pandemic reopening and low global supplies... Behind the gains: a faster-than-expected reopening in China, where pandemic lockdowns lowered demand from the world’s largest consumer of commodities. Europe also dodged predictions that sanctions on Russia would lead to winter energy shortages, lifting demand from manufacturers and consumers. And in the U.S., signs of unexpected economic resilience have increased expectations for robust demand." Source: WSJ

• "US oil producers flush with cash after a year of bumper profits are hunting for deals as concerns grow that the shale patch’s best drilling sites are becoming more scarce, priming the sector for a wave of consolidation. Bankers and lawyers have reported a sharp uptick in activity in recent weeks as buyers and sellers across the sector mobilise teams for a barrage of dealmaking after a lengthy dry spell — especially in the sprawling Permian Basin of Texas and New Mexico, the world’s most prolific oilfield." Source: FT

• StyleCaster put together a list of the "best Super Bowl Commercials of 2023" with their videos on YouTube. It includes everything from Ben Affleck working a Dunkin' Donuts drive-thru and Maya Rudolph rebranding m&m's as "Ma&Ya’s" to Ben Stiller and Steve Martin roasting each other to promote Pepsi Zero Sugar. You can watch them all here.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.reformedmillennials.com

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• Market update

• The Year Of Efficiency and New Car Programs

• China and the balloon

• How TSLA makes money

• What Sports need to do to survive

• Recommendations and predictions

Listen on Apple, Spotify, or Google Podcasts.

If you aren’t in the Reformed Millennials Facebook Group join us for daily updates, discussions, and deep dives into the investable trends Millennials should be paying attention to.

👉 For specific investment questions or advice contact Joel @ Gold Investment Management.

📈📊Market Update💵📉

Companies finally have respect for their shareholders. The year of efficiency has begun.

This is bad for enterprise tech but great for commodity businesses.

So far, 2023 is a mirror image of 2022. The weakest stocks from last year are like rockets year-to-date. Anything that did well last year, has been under pressure. Clear rotation from old-economy sectors back into tech.

It could be a mean reversion after an over-correction; it could be the market assuming that the Fed is almost done raising rates and the economy is still strong. Even the Fed acknowledged that inflation is coming down in many sectors. This is exactly what the market has been pricing in and wanted to hear. Everything ripped higher after Powell’s comments. What matters more from a practical perspective is the market reaction to earnings so far this quarter. Every single mega-cap tech company either reported earnings below estimates or guided lower. The market didn’t care. Even disaster earnings reports like Intel, Goldman, and Snapchat could not hold them down for too long. The market is sending a clear message. It’s as if it is saying that the reports were so bad that they can only get better from here. The sentiment is extremely bullish. Any bad news is considered temporary and a reflection of past events. Any good news is considered an argument that things are getting better.

JOBS:

Seeing the US economy add 517,000 jobs in January was shocking. Even still, this dataset’s recent history shows

• anomalies occur and

• labor demand is still weakening.

Wage growth is the thing to focus on, and Friday’s report showed wage inflation is still slowing.

US IG/HY corporate bond spreads over Treasuries are currently 1.21/3.94 pct points. These are noticeably below the 2015 – 2019 5-year average of 1.33/4.56 points. The corporate bond market is not discounting any real possibility of a deep 2023 – 2024 earnings/economic recession.

Q4 US corporate earnings season is (still) not great. Earnings leverage is negative (revenue growth +4 pct, earnings down -5 pct). Expect news of further job cuts as the next 50 pct of the S&P 500 companies report.

Wall Street analysts forecast the S&P 500 to show strong sequential quarterly earnings growth by Q3/Q4 2023. Current equity valuations say the market agrees with that optimistic assessment.

Fed Fund Futures continue to price in “peak Fed” in Q2, rate stability in Q3 and some chance of rate cuts in Q4. As with the prior point, equity markets seem to agree.

US Big Tech is off to strong start in 2023, with TSLA, META, and NDVA all up +40 percent. All three were off at least 50 pct last year, so the YTD move is likely more due to the end of tax loss selling than anything fundamental.

Chanos on China:

💸Reformed Millennials - Post of The Week

Introducing the Slickest Con Artist of All Time:

Is it possible that Chat GPT is just a con? really great rif on that idea here.

My conclusion isn’t just that ChatGPT is another con game—it’s the biggest one of them all. Microsoft even wants to hand over its entire search engine to this AI bot. Premium subscriptions are already available.

Some of you will tell me that I’m making a hasty judgment. ChatGPT will get better, they say. It will get smarter.

That’s exactly what I’m afraid of.

The ethics code should have been inserted at the ground level—but it wasn’t. At this point, incremental improvements only make it better at its confidence game.

Technology of this sort is designed to be a con—if the ancient Romans had invented ChatGPT, it would have told them that it’s cool to conquer barbarians and sacrifice slaughtered bulls to the god Jupiter. Tech like this—truly made in the image of its human creator—can only feeds back what it learns from us. So we shouldn’t be surprised if ChatGPT soaks up all the crap on the Internet, and compresses it into slick-talking crap of a few sentences.

The slickness of the delivery is its major achievement. Gosh, it sounds so convincing, even when it’s so wrong.And that’s precisely how you know it’s a confidence game. But in one way, it’s all so fitting. The con artist always gives people exactly what they want. And in a post-truth society, nobody does this better than AI. So I predict great things for ChatGPT—at least in economic terms. It will certainly live up to Sneaky Pete’s standards:

“I give people confidence. They give me money.”

Best Quotes From The 4 Horsemen Stock Reports:

AMZN:

..it's important to remember that over the last few years, we took a fulfillment center footprint that we've built over 25 years and doubled it in just a couple of years. And then we, at the same time, built out a transportation network for last mile roughly the size of UPS in a couple of years

-Andy Jassy (4Q'22 Earnings Call)

GOOG:

More than 6 years ago, I first spoke about Google being an AI-first company

-Sundar Pichai (4Q'22 Earnings Call)

META:

"Facebook just reached the milestone of 2 billion daily actives. The progress we're making on our AI discovery engine and Reels are major drivers of this"

• MarK Zuckerberg (4Q’22 Earnings Call)

AAPL:

Tweet Thread of the Week:

A discussion about AI and God via Wait but why:

How the s curve works and whether we are going to be able to handle how fast this intelligence is going to race past us.

🎙Podcast & YouTube Recommendations🎙

• Fun podcast of the week from Smartless - Dana Carvey

• Want an update on china and how to think about Asia - Sharp China

🔮Best Links of The Week🔮

• Morgan Housel had a couple good posts - FOMO - The Worst Financial Trait and Everything You Can't Have

• "Apple’s exploring the possibility of launching a more expensive iPhone “Ultra” above the iPhone Pro and Pro Max models, according to Apple tracker Mark Gurman. The high-end device could arrive as soon as 2024 with the iPhone 16 lineup. Last September, Gurman predicted that an “Ultra” model could replace the Pro Max branding with this year’s iPhone 15, but his latest theory suggests that Apple wants to establish a more powerful — and more expensive — tier of iPhones. That means the device could have an even higher price tag than the iPhone 14 Pro Max, which starts at $1,099." Source: The Verge

• "Oil companies delivered the market’s best shareholder returns last year, but Wall Street is still wary. The biggest Western oil companies, Exxon Mobil, Chevron and Shell together cleared a record of more than $132 billion in annual profit in 2022 and handed investors $78 billion via share buybacks and dividends, about 50% more than the last time oil topped $100 a barrel in 2014." Source: WSJ

• "Traders are betting artificial intelligence and machine learning will have the biggest impact on financial markets in the coming years. More than half of respondents to a JPMorgan Chase & Co. survey of 835 institutional and professional traders said those technologies would have the most influence on trading in the next three years. That’s up from a quarter in 2022. “This trend toward automation is something we’re seeing across the market now, and is expanding into the credit and rates side as well as commodities,” said Scott Wacker, head of FICC e-commerce sales at JPMorgan." Source: Bloomberg

• The number of newborns in China in 2016 was 17.9 million, a jump of more than 1 million from the year before. However, births dropped each year after that, to 9.56 million in 2022, the lowest since at least 1950. Source: Bloomberg

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.reformedmillennials.com

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• Market update

• Transition from rate worries to earnings misses

• Lessons from studying successful family real estate investing

• How Netflix makes money and the next act under new management

• Why is apple finally building a touch screen for the Macbook?

• Recommendations and Predictions

Listen on Apple, Spotify, or Google Podcasts.

If you aren’t in the Reformed Millennials Facebook Group join us for daily updates, discussions, and deep dives into the investable trends Millennials should be paying attention to.

👉 For specific investment questions or advice contact Joel @ Gold Investment Management.

📈📊Market Update💵📉

The S&P 500 closed on Friday right where it was in mid-May 2022, but for VERY different reasons. Back in May, Fed policy was the big story. Now, it is uncertainty over 2023 corporate earnings.

The S&P net margins (net income/revenues) in Q4 2022 are expected to be back to 2019 levels (11.2 – 11.4 pct). Margins peaked in Q3 2021 and have been declining since… This is giving investors cause for concern.

US corporate bond spreads right now (IG: 130 bp, HY: 439 bp) are very close their 2015 – 2019 average (133 bp, 456 bp). Like equities, this market is not discounting a recession…

US Q4 corporate earnings season is off to a poor start, with just 65 pct of companies beating estimates. That is lower than the 1-, 5- and 10-year beat percentages of 75, 77 and 73 pct.

Analysts are cutting their 2023 S&P 500 earnings estimates by the largest amounts since Q3 earnings season. Current year estimates are still 3.6 pct above 2022 near-actuals, however.

Q4 US GDP comes out on Thursday, and the Atlanta Fed’s GDPNow model is still looking for this report to beat consensus (3.5 vs. 2.6 pct).

So… whats up with the VIX? Like the CBOE VIX Index, the “VIX of” the NASDAQ (VXN) is sitting right on its long-run average today. That is both strange and very telling. Strange, because we face much more uncertainty about Big Tech earnings/outlooks than average. Telling, because it says markets are discounting any further Fed policy uncertainty and are solely focused on future earnings power. It’s likely that the US large cap tech stocks continue to outperform over the near term as they play a little catchup after last year’s drubbing.

How Netflix Makes Money:

Q1 FY23 Guidance:

• Revenue +4% Y/Y (+8% fx neutral)

• Operating margin 20%

• The operating margin was 20% fx neutral (high end of target)

• Operating cash flow: $2.0B (6% margin)

• Free cash flow: $1.6B (5% margin)

Netflix share of TV time (December 2022)- Streaming overall accounts for less than 40% of viewing across all markets.

TV time in the US:

• Streaming is 38%.

• Netflix alone is 8%.

💸Reformed Millennials - Post of The Week

ALL about Volatility:

Since the start of the year, the NASDAQ has outperformed the S&P 500 by a considerable margin:

• S&P 500: +3.5 percent

• NASDAQ Composite: +6.4 pct

• NASDAQ 100 (the QQQ ETF): +6.2 pct

So what has the “VIX of” the NASDAQ 100 been telling us about how the options market is thinking about any further rally in US tech stocks?

The idea is the same as the CBOE VIX Index math we regularly discuss with you. When implied volatility (IV, what the VIX measures) is elevated, markets are usually worried about negative near-term catalysts. When IV is low, markets see smoother sailing ahead.

Over the last 13 months, the CBOE VIX Index has been a reliable indicator of US equity market tops (VIX below 20) and bottoms (VIX over 30).

Why? Because the VIX measures investors’ “mood”. When it is high, they are skittish, and this has tended to be a good entry point for a trade. When it is low it means the market has become too complacent about interest rate/earnings risk. Those periods have been near term tops.

Here is some long run data about the NASDAQ VIX Index (VXN) that is important to understand:

• Since its start in February 2002, the VXN has averaged a daily closing reading of 25.1. The standard deviation around that mean is 11.6 points.

• Like the VIX, the VXN has signaled market lows were near once it gets to over 3 standard deviations from the mean (59.9). This occurred in September 2001 (VXN of 72), November 2008 (81), March 2020 (80).

• Also like the VIX, VXN rarely sits at its long run average for very long. It can be well below 25 for years (2004 – late 2007, 2013 – mid-2015, 2016 – 2017). It can also remain above 25 for a year or more (almost the entire last 12 months, for example).

The funny thing is that the NASDAQ 100 VXN closed on Friday at 24.5, almost exactly on that long run average of 25.1. Here is the most recent data for that index:

• The long run average for the CBOE VIX Index (back to 1990) is 19.7 with a standard deviation of 8.0.

• The VIX closed on Friday at 19.9, also very close to its long run average.

Takeaway: Both the VIX and VXN are very close to their long run averages, which is both strange and quite telling about the current US equity market setup. As we discussed in Markets, investors have largely put Fed Policy worries behind them. Right or wrong, both Fed Funds Futures and 2-year Treasuries signal an imminent peak for Fed Funds and then a slow decline. This leaves future corporate earnings as the only genuine uncertainty. As a result, the VIX/VXN are back to their long run averages.

Takeaway: We still think the NASDAQ can continue to outperform the S&P 500 over the near term. Big Tech earnings will almost certainly be “meh”, as we discussed last week. Even still, a more favourable rate picture should help the NASDAQ. On top of that, US large cap Tech was hit exceptionally hard relative to the S&P 500 last year. It should therefore still have some runway to outperform.

🎙Podcast & YouTube Recommendations🎙

• Best Video I watched all last week was a chat between Howard Lindzon and Raul Pal at Real Vision

• Real Estate Links - Moses Kagen - How I became a RE developer

• Clean Tech Primer and Forward guidance from Business Breakdowns:

🔮Best Links of The Week🔮

• "Federal Reserve officials are preparing to slow interest-rate increases for the second straight meeting and debate how much higher to raise them after gaining more confidence inflation will ease further this year. They could begin deliberating at the Jan. 31-Feb. 1 gathering how much more softening in labor demand, spending and inflation they would need to see before pausing rate rises this spring. In recent public statements and interviews, Fed officials have said slowing the pace of rate increases to a more traditional quarter percentage point would give them more time to assess the impact of their increases so far as they determine where to stop." Source: WSJ

• "After a brutal year for technology stocks, individual investors have lost their appetite for buying the dip, with one notable exception. They are still scooping up shares of Tesla. Individual investors’ net purchases of a basket of eight popular tech stocks hit a recent peak in November, before dropping sharply through the end of the year, according to Vanda Research. Buying has since picked up slightly in the new year as tech shares rebound." Source: WSJ

• "FTX’s new chief executive, John J. Ray III, said he is looking into the possibility of reviving the bankrupt [digital asset] exchange as he works to return money to the failed company’s customers and creditors." Source: WSJ

• "[NFLX] founder Reed Hastings is giving up his CEO role but will stay on as chairman, the company announced alongside its earnings report Thursday... [NFLX] matched Wall Street’s revenue expectations and posted millions more subscriber adds than anticipated." Source: CNBC

• "So what's on deck for moviegoers in 2023? Looking down the barrel of this year’s lineups, we’re seeing superhero movies; sequels; threequels; adaptations of well-known books, from a classic YA novel to a bestselling nonfiction tale of murders in a Native American community; superhero movies; new twists on old characters (like, say, Dracula’s longtime henchman); the tale of a bear on a killer drug-fueled bender; superhero movies; a few outrageous comedies; some intriguing biopics on conflicted men; and more superhero movies." You can read all the details about 34 upcoming movies the Rolling Stone singled out here.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.reformedmillennials.com

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• Market update

• New Paradigms in Tech

• 2023 Global Risks

• Alcohol Inflaiton

• Ai and their impacts on the big 5 tech companies

• Stable Diffusion

• How Nike makes money

• Recommendations and Predictions

Listen on Apple, Spotify, or Google Podcasts.

If you aren’t in the Reformed Millennials Facebook Group join us for daily updates, discussions, and deep dives into the investable trends Millennials should be paying attention to.

👉 For specific investment questions or advice contact Joel @ Gold Investment Management.

📈📊Market Update💵📉

Short week but important week as America will be celebrating Martin Luther King day today.

Over the last year, I feel like I’ve heard every possible comparison of the current economic and market cycle:

• “It’s the 1970s all over again!"

• “It’s 2000 to 2003 with the Dotcom bubble!”

• “It’s the 1920s”

• “It’s the 1930s”

• “It’s the 1940s, you moron!”

• “It’s the Fourth Turning”

But last year most certainly was the beginning of a new regime. What worked in the past is unlikely to work the same into the future…

So please. don’t look now, but $ARKK is up 15% YTD.

Sure, it’s still down 77% from all-time highs and shaved off 70% last year, but it’s back baby!

ARKK has been the punching bag of old-school value investors as it took a beating buying profitless tech companies that push cash flows out to further dates in order to invest R&D on innovation.

Time will tell whether this year-start rally will sustain or not, but my bet is that it will not and ARKK is likely going to revert back to its poor relative performance. This ETF will not be what leads as we transition into a new bull market in the coming years.

Optimism reigned supreme last week, with risk assets continuing their upward climb.

Inflation came in-line with expectations. Inflation is truly declining as monthly headline/core inflation readings are back to pre-pandemic levels.

Fed futures are now only pricing in 2 more 25bp rate increases in February and March but are now giving high odds that the FOMC cut on the back side of the year.

The World Economic Forum’s 2023 Annual Meeting kicks off on Monday evening. Many of the panel discussions focus on disruptive innovation, and global geopolitical risks:

While the Davos meetings are likely to win a number or media headlines this week, it’s very likely that the “debt ceiling” chatter will pick up.

I want people reading this to understand that the debt ceiling is nothing to worry about. Never has been and isn’t going to start today. Cullen Roche says it best:

The rest of the pod, we talking about AI and paradigm shifts… read below to see what we’re paying attention to in 2023.

💸Reformed Millennials - Post of The Week

Recent positive data points on wage and general price inflation as well as better price action in global capital markets strongly suggest that 2022’s “Only the Fed Matters” paradigm will not be as useful in 2023.

HERE ARE 4 IDEAS FOR POTENTIAL INVESTMENT NARRATIVE/PARADIGM SHIFTS IN 2023:

• The stability of US economic growth and corporate earnings. We are coming off an economic era with no precedent in the modern world. Pandemic-related fiscal and monetary policy created a fast, powerful snapback in consumer spending. Businesses struggled to find and retain workers to satisfy that demand but had the balance sheets and profits to pay up for talent.

The coming year carries much less momentum than the last two. Perhaps the Fed’s belated efforts to contain inflation gave the US economy enough of a shove to allow it to coast over the crest of higher interest rates and into the next phase of growth. That’s a tough bet to make, however, given the paradigm of high current rates versus the neutral rate of interest creating elevated recession risk. (Exemplified by the current difference between 2- and 10-year Treasury yields.)

• China’s post-pandemic reopening also has little precedence, making it another potential paradigm shift this year. The last time China broke away from the global economy was just after the 2008 Financial Crisis, when it enacted a broad set of economic policies to insulate it from a global slowdown. The country’s economy is more than three times the size now ($18 trillion) as it was then ($5.1 tn), so any acceleration in economic growth will be felt around the world.

We will be watching oil prices to measure the vitality of China’s reopening-related economic growth this year. From the start of 2010 to April 2011, WTI crude went from $73/barrel to $113/barrel as China’s economy surged even while the developed world struggled. Oil prices are $78/barrel today. If crude reacts the same way in 2023 as it did post-Financial Crisis, it could both dampen global growth and reignite inflation concerns.

• Positive real interest rates. Ten-year Treasuries currently offer a 1.4 percent real (after expected inflation) yield. The last time you could get a similar real return before the last 120 days was in back in February 2011. Investors no longer must hold risk assets to have a shot at positive returns in real terms. Risk-free Treasuries offer that right now.

This is due to the piece of current Fed policy no one really talks about: quantitative tightening (selling bonds from the central bank’s balance sheet), which by design increases real rates. Positive real rates should pull marginal capital out of risk assets and also encourage saving over consumption. We have not yet seen any effect on stock valuations – the S&P 500 trades for 18x current earnings – but as positive real yields persist they should have some impact.

• Lower correlations will reduce market volatility. If we are correct that there’s more to 2023’s “paradigm” than just Fed monetary policy, then individual stocks and industry sectors should trade more independently of the overall market than last year. This will result in lower overall market volatility. More stocks/sectors will “zig” while others “zag” as they respond to multi-variate fundamental forces instead of just macro concerns like rates and possible recession. This should leave theTSX, S&P, Russell and NASDAQ indices more stable on a day to day/week to week basis than in 2022.

Thursday’s VIX of 18.8, below its long run average of 19.7, tells us a multi-paradigm 2023 is already starting to play out. This does not assure smooth sailing ahead, however.

It just says that there will be many different challenges this year rather than just one overarching concern.

• Final thought… it is tempting to think that the US/global equity rally we’ve had since the start of the year augurs well for the next +11 months, but we think it is just a sign of the paradigm shift away from 2022’s one-factor market to multi-factor one. Rather than focusing on 8 FOMC meetings and 12 CPI reports, investors now must consider a much wider set of issues. They will ebb and flow through markets on their own timetable rather than based on the economic calendar. In the end, this makes us marginally more positive on stocks than we were through most of last year. We’re hardly raging bulls, but a fundamentally driven market is much more “normal” to us that what we’ve all had to deal with over the last year.

Best Tweets From Last Week:

Google DeepMind vs. Open AI

Cable vs. Streaming: from the hustle

🎙Podcast & YouTube Recommendations🎙

• Business Breakdown - Hermes

The price range of the Birkin and Kelly bags. (Cheapest Birkin is 8,500 USD and the cheapest Kelly is $6,800 USD)

Why they’re so iconic. How they maintain their 70% gross margins and how they intend on growing the business into the future.

• The Best 20 Min Dive Into How Chat GPT disrupts The World and Big 5 Tech - Ben Thompson

🔮Best Links of The Week🔮

• AI and the Big 5 - Stratechery The story of 2022 was the emergence of AI, first with image generation models, including DALL-E, MidJourney, and the open source Stable Diffusion, and then ChatGPT, the first text-generation model to break through in a major way. It seems clear to me that this is a new epoch in technology.

• "U.S. inflation eased in December for the sixth straight month following a mid-2022 peak as the Federal Reserve aggressively raised interest rates and the economy showed signs of cooling. The consumer-price index, a measurement of what consumers pay for goods and services, rose 6.5% last month from a year earlier, down from 7.1% in November and well below a 9.1% peak in June." Source: WSJ

• "Sweden’s state-owned mining company LKAB has said it has discovered Europe’s largest deposit of rare earth metals. The discovery bolsters the continent’s ambition to rely less on imported raw materials needed for the green transition. The deposit, dubbed Per Geijer, is located north of the Arctic Circle in Sweden’s province of Lapland and contains more than 1mn tonnes of rare earth oxides — the largest known deposit of its kind in Europe, the company said." Source: FT

• 2023 Oil research from Anas Anaiji - Substack His main bullets from his post:- 23’ is expected to be a tale of two opposite halves: bearish to neutral in the first half and bullish in the second.- Global oil demand is expected to reach a record high in 2023, defying all earlier forecasts of peak demand in 2019.- Almost all average price forecasts for 2023 are between $80/b and $100/b. Our estimate is toward the lower end of these forecasts.Any OPEC+ production cuts will create a price floor but may not raise prices significantly.- Refilling the US SPR will have a limited impact on the oil market.Russia’s oil exports are not expected to decline significantly in 2023, but the Russian government may be forced to reduce taxes on oil companies.- The impact of China’s reopening on energy markets will be felt in the second half of 2023. Beijing, however, will likely release oil from its SPR as oil demand and prices rise.The return to fossil fuels in Europe and some US regions last year to address energy needs was unprecedented. A repeat in 2023 should call for a new way of thinking with a focus on relative prices of energy sources.

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• Market update

• Canadian Dependence On America

• Inflation Reduction Act

• Car Market is f’d

• Real reason USA is supporting Ukraine

• Chat GPT and it’s impact on the 4 largest companies on earth

• Recommendations and Predictions

Listen on Apple, Spotify, or Google Podcasts.

If you aren’t in the Reformed Millennials Facebook Group join us for daily updates, discussions, and deep dives into the investable trends Millennials should be paying attention to.

👉 For specific investment questions or advice contact Joel @ Gold Investment Management.

📈📊Market Update💵📉

• Canadian Equities rallied along with the rest of the world on Friday and closed near highs. This rally was lead by financials and Energy. (+1.55%)

• US equities rallied on Friday after the jobs report showed wages grew slower than expected. Large caps and small caps advanced: S&P 500 (+2.28%) vs. Russell 2000 (+2.26%).

• Materials (+3.44%) and technology (+2.99%) bested the broader market indices, while health care (+0.89%) and energy (+1.68%) lagged. Intel (+4.25%) and Walgreens (+4.04%) led the Dow (+2.13%) higher; UnitedHealth (+0.01%) and Home Depot (+0.65%) were the index's worst performers.

• The Nasdaq gained 2.56%, while the "FAAMG" stocks rallied: Meta (+2.43%), Amazon (+3.56%), Apple (+3.68%), Microsoft (+1.18%), Alphabet (+1.60%).

• The VIX dropped 5.92% to 21.13. The 30-year and 10-year Treasury yields declined to 3.684% and 3.560% respectively, while the 2-year yield fell to 4.258%.

2023 is off to a good, if strange, start. China’s reopening is clearly the key driver, lifting Chinese/EM equities (+10.0/+5.7 pct). Oil prices are lower (WTI -8.1 pct) despite this development, helping EAFE outperform US stocks (+3.8/+1.4 pct). US bonds are outperforming domestic stocks by a wide margin (AGG +2.2 pct).

The new year is already very different than 2022.

The difference between 2-/10-year Treasury yields has turned more negative since the start of the year, suggesting incremental recession/shock risk.

Q4 earnings season starts this week, and analysts have been cutting estimates by more than usual. Even though US economic growth remains good, S&P earnings will likely be close to flat in Q4 and for the next 3 quarters. This is the usual recipe for corporate cost cutting/layoffs, and we expect to hear more such announcements in the weeks ahead.

Friday’s US Jobs Report reignited hopes that the Fed is nearly done raising rates. Futures now expect two sequential 25 bp increases in February/March and then a long pause.

We have some important events as earnings season begins:

Powell Speaks, CPI Data etc.

CES 2023 Recap: The Most Influential Tech Event in the World

Top 8 Ideas from CES 23:

1. Sony said its partnering with Honda on a new EV brand called Afeela. Here are some details from Mashable:

“The Afeela has an actual display built into the front bumper, which can be used to provide information to passing cars and pedestrians.”

“The Sony and Honda EV will also have an entertainment console built into the car offering various Sony movies, music, and gaming titles.”

“The Afeela will have a whopping 45 cameras and sensors both inside and outside the vehicle.”

Sony will start taking orders in 2025 and begin shipment in Spring 2026.

Source: https://mashable.com/.../sony-honda-afeela-ev-car-ces-2023

2. Mercedes said it plans to build its own global network of electric vehicle chargers, a feat only tackled by few car companies such as Tesla. Here are the details from the Wall Street Journal:

“It intends to install roughly 10,000 high-power EV chargers worldwide, starting in the U.S. and Canada this year.”

“The Mercedes-Benz-branded network would allow the car company’s own customers to pre-book a charging space from their car, but it will also be open to drivers of rival brands with compatible technology.”

“Mercedes-Benz says the build out in North America is projected to cost about $1.05 billion, a figure that will be split with its partner on the project, MN8 Energy, a U.S.-based renewable energy and battery-storage operator.”

Mercedes hopes to have 2,500 EV chargers available at 400 hubs in North America by 2027.

Source: https://www.wsj.com/.../mercedes-benz-plans-to-install...

3. Asus showed off an OLED screen that generates a 3D experience from a laptop without glasses. Here are the details from CNET:

“It says OLED's high contrast and fast pixel response time promise less crosstalk and ghosting -- in other words, visibly crisper 3D rendering -- than with the IPS panels used by Acer.”

“The panel itself is the 3.2K 120Hz model Asus has been using in some of its current models, but the 3D is generated via a layer of lenticular lenses bonded to it -- to refract the emitted light to different eyes -- and Acer combines it with eye tracking to figure out how to orient the object.”

Source: https://www.cnet.com/.../watch-3d-images-leap-out-of.../

4. LG Electronics debuted a 97-inch OLED TV without any wires connecting it to media sources. CNET’s first take:

“Across the room from the TV sat the wireless transmitter box. On the back of the box were standard HDMI plugs and a handful of other connections, and one HDMI cable ran to a Blu-ray player. The image on the screen was from a Blu-ray disc, sent wirelessly -- and flawlessly, to my eye -- from the box to the TV. The top of the box can be rotated to aim an internal antenna at the television.”

“LG says the box can be located up to 30 feet from the TV.”

Source: https://www.cnet.com/.../lgs-wireless-97-inch-oled-tv.../

5. Ottonomy announced a new delivery robot with an auto dispense mechanism, eliminating the “need for a person to be present to receive the package,” according to TechCrunch.

“The startup calls the product “the first fully autonomous unattended delivery robot on the market”.”

“Once it reaches its destination, the last-mile-delivery bot can drop its contents onto a doorstep or transfer them into a compatible locker for safe keeping until the human arrives to pick them up.”

“Another interesting angle here is the potential for product returns — specifically, a customer could put the robot to use to get unwanted product back to the original seller.”

Source: https://techcrunch.com/.../ottonomys-new-delivery-robot.../

6. Holoride – backed by Audi – revealed a new device that can make any car ready for VR, allowing passengers to play video games, watch TV or scroll through social media platforms.

“Holoride retrofit works similar to its existing technology. The product connects to a VR headset via Bluetooth.”

“Holoride’s software taps into a vehicle’s movement and location data. The virtual reality content syncs with a vehicle’s movements in real time to prevent motion sickness.”

Source: https://techcrunch.com/.../holoride-launches-device-to.../

7. BMW unveiled new car technology, including an AI-powered virtual assistant and full-windshield heads-up display, such as changing the car’s colors.

The company’s i Vision Dee electric sports sedan concept “also included a full-color version of the E Ink technology seen on last year’s concept for the first time ever… Instead of just black, white, and gray, 32 colors are now available. Not only that but the i Vision Dee is made up of 240 E Ink e-paper segments, all of which can be controlled individually.”

“What’s more, this concept uses the latest tech from E Ink, called Prism 3 film, which is fully programmable and meant to be low on power consumption for sustainability. Prism 3 can also be manufactured in any shape, making industrial design applications seemingly endless.”

Source: https://www.theverge.com/.../bmw-color-changing-car...

8.The Hollywood Reporter had a review of a SAG-AFTRA sponsored panel discussion on how artificial intelligence could change the entertainment industry.

One panelist opined that 90 percent of content may be, at least in part, AI generated by 2025. Another, the chief metaverse officer at talent agency CAA, highlighted her firm’s investment in AI-powered video production. Other speakers discussed technology which can create natural-looking lip-synced versions of movies in multiple languages and also “de-age” actors.

Comment: Disruptive technology has already fundamentally changed content distribution, so it makes sense that the next chapter is a more aggressive push into content creation. In theory, this has the potential to dramatically improve profitability across a variety of vectors (i.e., non-human AI actors, writers and production staff should be cheaper). The catch is that the product must still be appealing to a large audience. We are reminded of the old William Goldman quote that, in Hollywood, “no one knows anything” about what sorts of content will prove popular. Perhaps AI can do better … Or at least no worse …

Read more here: https://www.hollywoodreporter.com/movies/movie-news/ces-ai-sag-aftra-1235290431/

💸Reformed Millennials - Post of The Week

Everyone’s using ChatGPT. And it's almost as though we now have a free virtual research assistant.

Rob Lennon on twitter had a great thread that i tried out myself. His course is attached

10 TECHNIQUES TO USING CHATGPT TO GET AHEAD WITH AI:

• Simulate an expert

Ask ChatGPT to play the part of a customer, co-host, or talented expert.

Have a conversation with it, or ask it to generate content as if it were that specific persona.

/Example prompt/

You are a talented analyst at a top-tier market research firm, a graduate of Harvard Business School. Coach me to create content that connects with C-level executives at B2B SaaS companies. What open-ended questions do I ask? Prioritize uncommon, expert advice.

• Challenge the conventional narrative

Ask for examples of what contradicts the dominant narrative.

Generate content that challenges readers' assumptions.

Seek out provocative angles that defy expectations and break the mold.

/Example prompt/

Topic: Growing your email newsletter

For the above topic, give examples that contradict the dominant narrative. Generate an outline for thought-provoking content that challenges assumptions.

• Use unconventional prompts

Try using prompts that are more open-ended or abstract.

This way you’ll get unique and creative responses nobody else is.

By getting weird, you can unlock ChatGPT's creative potential in finding vivid language and unexpected topics.

/Example prompts/

Write a poem about copywriting.

Describe feeling like an entrepreneur in 10 adjectives.

• Ultra-Brainstormer

It’s easy to have ChatGPT generate a list of potential topic ideas for your next project.

But often they're generic and expected.

Instead, ask it to come up with new angles or approaches to cover a familiar topic.

/Example prompt/

Topic: How to double your creative output.

For the topic above, brainstorm new angles or approaches. Prioritize ideas that are uncommon or novel.

• Capture your writing style

Feed ChatGPT your writing.

Ask it to help you create a style guide for future outputs.

It’ll give you the exact words to describe your voice and tone in a way that AIs understand.

/Example prompt/

Analyze the text below for style, voice, and tone. Using NLP, create a prompt to write a new article in the same style, voice, and tone:

(Insert your text here)

• Add in human-written techniques

Ask ChatGPT it to work according to good advice you've read elsewhere.

In the prompt below, I take some tips on persuasive writing from the Grammarly blog and ask it to apply them to my topic.

/Example prompt/

Write a brief post about why copywriting is an essential skill in 2023.

Use these strategies:

• Use strong persuasive language

• Ask questions to transition between paragraphs

• Back up main points with evidence and examples

• Speak directly to the reader

• Have ChatGPT write from different perspectives

Ask it to write from the perspective of a group of characters with different backgrounds or viewpoints.

Explore new ideas and perspectives, and add depth to your writing.

/Example prompt/

Topic: Productivity for entrepreneurs

For the above topic, write multiple perspectives from a group with different viewpoints. For each perspective, write in their own voice, using phrases that person would use.

• Write in different styles or tones, such as satire or irony

Takeaway: By experimenting with different voices and perspectives, you can use ChatGPT to create more dynamic and varied content.

/Example prompt/

Give the most ironic, satirical advice you can about using ChatGPT to create more effective content.

• Use ChatGPT to write in different formats

Ask ChatGPT to vary its output.

Outline • Mind map • Bullet points • Persuasive essay • Chunks of text of less than 280 characters • Using the structure: 1) What, 2) Why, 3) How

/Example prompt/

Create a mind map on the topic of using Notion to stay organized as a content creator, listing out the central idea, main branches, and sub-branches.

• Generate content with a specific purpose or goal in mind

Tell ChatGPT who your audience is and what you want to achieve with your content.

Remember, it has no context about who you are or what you want unless you give it some.

So give it context.

/Example prompt/

Topic: How to grow your coaching business For audience: Business coaches Content goal: Motivate audience to feel excited about growing their business while teaching them one tip. Writing style: Clear, concise, conversational, down-to-earth, humble, experienced

Get creative with ChatGPT: • The more you experiment, the more you'll discover • Try out new and unconventional ideas • Seek out new ways to find interesting and unique content angles

Source: https://aicontentreactor.com/

20 stocks with the most meaningful exposure to Inflation Reduction Act (IRA) benefits.

🎙Podcast & YouTube Recommendations🎙

• Peter Zeihan Goes on Joe Rogan and talks Geopolitics and his book, the end of the world is just the beginning.

• The First Month of Reopening; Xi’s Credibility; Qin Gang and US-China Relations - Sharp China

• Tim Dillon Has Joe Rogan on His Show on Joe’s Set

Money fame and conspiracy with a LOT of edge.

🔮Best Links of The Week🔮

• "Avatar: The Way of Water has grossed more than $1.7bn at the global box office, giving a boost to Disney as some Wall Street analysts are warning that its famed blockbuster engine has started to run out of steam. The movie’s haul at the weekend makes The Way of Water the seventh-highest grossing film of all time, ahead of Jurassic World. The original Avatar, released in 2009, remains the top moneymaker in cinema history with $2.9bn in total grosses." Source: FT

• "EY is setting aside $2.5bn to fund an acquisition spree for its consulting arm following its planned separation from the Big Four firm’s audit business, as it presses ahead with preparations for the historic split. The war chest will allow the new company, which EY is aiming to float in New York, to double the pace of dealmaking as it battles to win market share from its Big Four rivals and standalone consulting firms, according to people familiar with the plan." Source: FT

• The Messari Crypto Theses for 2023 - Investment memo will take 2-3 hrs to get through. The mammoth annual report on the crypto industry from Ryan Selkis, covering the key trends, people, and projects to keep an eye on in 2023. - Messari.io

• Age and the Nature of Innovation - New ideas vs deep expertise; conceptual vs experimental innovation. Source: Matt Clancy

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.reformedmillennials.com

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• Market update

• Biggest Loser of 2022

• Quick look back on 2022

• What to expect in 2023

• Gold or Bitcoin?

• Tiktok

• UCP vs. NDP

• Ottawa Senators

• Manchester United

• Ai in Health care and Search

• Recommendations and Predictions

Listen on Apple, Spotify, or Google Podcasts.

If you aren’t in the Reformed Millennials Facebook Group join us for daily updates, discussions, and deep dives into the investable trends Millennials should be paying attention to.

👉 For specific investment questions or advice contact Joel @ Gold Investment Management.

📈📊Market Update💵📉

What happened in 2022 is the bottom fell out of the capital markets and the startup and tech sector more broadly. And Commodities made a name for themselves.

A big problem with bubbles is the reflexive association between wealth and wisdom, so a bunch of crazy ideas are taken seriously because a temporarily rich person said it. Insert Elon.

2022 was the 7th worst year for stocks in history:

Such an awful performance happened only twice in the past 20 years (stocks fell 38% in 2008 and 23% in 2002). And before that? You’d have to go back to 1974 and 1937.

The common phrase is that the stock market goes up like an escalator (slowly and gradually) and down like an elevator (less often, but much faster).

The S&P benchmark returned an average 10% annual return from 1926 to 2021, and 74% of the years were positive. However, stocks are extremely volatile. They make us put up with years like 2022 every decade or so.

• Bull Markets: 2.7 years, +112% gain.

• Bear Markets: 10 months, -36% loss.

Investors try to avoid the bear.

They should be focused on not missing the bull.

The stock market is often referred to as forward-looking because it is based on the expectations of future economic performance. So the general consensus is that business fundamentals will be ugly in 2023, with a potential recession looming.

However, as best put by Peter Lynch:

"This one is different," is the doomsayer's litany, and, in fact, every recession is different, but that doesn't mean it's going to ruin us.

Unless you own a crystal ball and can predict the future (I can’t), you need a sustainable and repeatable process over many years and be prepared for a rollercoaster ride.

To benefit from the amazing wealth-creation machine that is the stock market, you need to make a lifelong commitment to it. It involves riding the ups and downs without interruption and letting the power of compound interest do its magic.

I believe that sometime in the first half of 2023, the central banks around the world will start backing off the tightening that they have been engaged in as inflation continues to ease and the economy continues to cool. Interest rates will level off in the first half of 2023 and I think there is a good chance of a “soft landing” or a very mild recession in 2023…

Conservatives Have a Millennial Problem

Recently, a Fascinating trend has evolved showing that Millennials aren't growing more conservative as they age.

Link here for the full article: https://enterprise-sharing.ft.com/error.../expired-link...

IF YOU DON'T PAY FOR THE FT:

What's going on?

A common response is "it’s things like homeownership that make people more conservative. Fix that, and they’ll come back". While there is certainly some truth to this, it’s not nearly as simple as people think.

In the UK, even among homeowners, Millennials are less conservative than previous generations and show no sign of following the old trend.

Of course, the simple difference in levels between those two charts matters, and by my calcs if Millennials owned homes at the same rate as boomers did at that age, they would be a couple of points more conservative, but only a couple. There are clearly deeper-lying problems.

(tho important to note, conservative parties should not just think of fixing housing affordability as a convenient hack for turning Millennials conservative — they should think of it as demonstrating that they care about this generation, and that might have a much bigger impact)

So while homeownership is playing a role, the underlying reasons are likely deeper and fuzzier. A useful framework for thinking about it is in terms of age, period, and cohort effects, a concept from public health analytics: https://www.publichealth.columbia.edu/.../age-period...

An age effect is something that affects all individuals are they age:

e.g the historical pattern of becoming more conservative as you grow older.

This can’t explain the Millennial problem, because they aren’t getting more conservative as they age.

A period effect is where an external factor impacts people of all ages simultaneously. Trussonomics was a class example, shifting all ages away from Tories. But that was a brief shock whereas we’re looking at a multi-year trend, and it can’t explain the same pattern in the US or Canada

So we’re left with a cohort effect: a difference that emerges among people who experience a common event at the same time.

When you consider that Millennials came of age in the aftermath of the global financial crisis, and entered their thirties with homes less affordable than ever, it starts to feel quite plausible that this context may have shaped this generation differently from its predecessors.

This is borne out in the data, too. Millennials in both the US, Canada, and the UK favor more left-wing economic policies than previous generations did at the same age. They’re much more in favor of redistribution from rich to poor.

You then have the culture war (of which Brexit was a perfect distillation), the pursuit of which has been undoubtedly successful for conservative parties over the last decade, but which may now come back to bite them.

Cultural war issues generally map very neatly onto education, so it should hardly be surprising that they go down badly with the most well-educated generation in history. The problem is, it may now prove difficult to undo that damage.

But it’s critical for conservative survival that they find a way to undo the damage because while the Millennial vote has been easy to dismiss due to lower turnout among young people, Millennials aren’t 25 forever. Many are now in their 40s. And people in their 40s vote.

IN SUMMARY:

• Parties on the right used to rely on people aging into conservatism. Millennials are different, likely due to the following 2 things:

• Coming of age during econ and home-ownership crises -> forming more left-wing views

• Using culture war politics on the most educated generation ever

💸Reformed Millennials - Post of The Week

Gambler’s Ruin

How to understand the Markov Chains from 10-K Diver.

This is a phenomenal thread explaining how to think about bet sizing.

🎙Podcast & YouTube Recommendations🎙

• Rebecca Lynn- Finding your customers

At 30 mins she talks about the sales and satisfaction roles inside of businesses

At 42mins she talks through the impact of Ai in voice and health care

• Interest Rates, Inflation and “getting fit” with Brad Gerstner - This Week In Startups

🔮Best Links of The Week🔮

• 45 Ai Applications for Healthcare - Builtin.com

2023 Macro Reports from the largest financial institutions:

• Goldman Sachs: https://lnkd.in/eKzF_2K4

• J.P. Morgan: https://lnkd.in/eHb6-622

• Morgan Stanley: https://lnkd.in/e2nAMjmM

• Fidelity International: https://lnkd.in/eJwK6tVx

• KKR: https://lnkd.in/eRivWDns

• Bank of America: https://lnkd.in/e8XFD8TW

• BlackRock: https://lnkd.in/eYxCBRGj

• HSBC: https://lnkd.in/eNfBiJvH

• Barclays: https://lnkd.in/eRT4dsFY

• Citi: https://lnkd.in/eXwA-Y4X

• UBS: https://lnkd.in/exudCU6V

• BNP Paribas: https://lnkd.in/ec4hWEdm

• Apollo: https://lnkd.in/ewwq_62M

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.reformedmillennials.com

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• Market update

• Last Fed Meeting Until February 23’

• Navigating the Canadian Economy in 23’

• Top 10 Innovations of 2022

• What to get your husband for Christmas in this year

• Recommendations and Predictions

Listen on Apple, Spotify, or Google Podcasts.

If you aren’t in the Reformed Millennials Facebook Group join us for daily updates, discussions, and deep dives into the investable trends Millennials should be paying attention to.

👉 For specific investment questions or advice contact Joel @ Gold Investment Management.

📈📊Market Update💵📉

• US equities retreated on Friday as investors negotiate monetary policy tightening. Large caps lagged small caps: S&P 500 (-1.11%) vs. Russell 2000 (-0.63%).

• Real estate (-2.96%) and consumer discretionary (-1.74%) weighed on the broader market indices, while communication services (-0.11%) and materials (-0.41%) outperformed. American Express (-2.61%) and Nike (-2.36%) weighed on the Dow (-0.85%); Caterpillar (-0.11%) and Dow Inc (+0.55%) were the index's best performers.

• The Nasdaq lost 0.97%, while tech dropped to 22.62. The "FAAMG" stocks mostly fell: Meta (+2.82%), Amazon (-0.67%), Apple (-1.46%), Microsoft (-1.73%), Alphabet (-0.37%).

• The VIX edged down 0.92% to 22.63. The 30-year and 10-year Treasury yields ended at 3.543% and 3.742% respectively, while the 2-year yield finished at 4.182%.

US equities are having a tough December, but not because of rates (lower since end of November) or global risk-off sentiment (non-US currencies stronger, international stocks holding in). Recession concerns are hitting investor confidence, and that in turn is hurting valuations across the board

BBB/CCC US corporate bond spreads are at/near multi-month lows, a remarkable vote of confidence considering the marginal nature of these credits.

Last week’s US equity market weakness was not only due to Fed monetary policy worries, but also the fact that Wall Street analysts were cutting their earnings forecasts for S&P 500 companies by the largest amount in a month. The data, courtesy of FactSet’s Earnings Insight report (link below):

• Analysts reduced their Q4 2022 S&P 500 corporate earnings estimates by 0.5 percent last week, to $54.24/share. This was their largest reduction since the week of November 11th, when they cut their Q4 numbers by 1.2 percent.

• Q1 2023 estimates came down by 0.4 percent last week, to $54.60/share, the largest cut since November 11th’s 0.4 pct reduction.

• Also worth noting: Q4 2022 and Q1 2023 estimates of $54.24/share and $54.60/share are below the last 2 quarters actuals of $56.69/share (Q2 2022) and $55.65/share (Q3 2022).

• For all of 2023, analysts’ estimates now stand at $231.59/share. That is down 0.3 percent from the prior week, the largest reduction since November 11th’s 0.4 percent cut.

• However, Wall Street analysts do still expect the S&P 500 to earn 4.9 percent more in 2023 ($231.59/share) than 2022 ($220.87/share). Much of this improvement is loaded into the second half of next year, when the Street is expecting quarterly earnings to hit fresh records of $59.03/share in Q3 and $59.82/share in Q4. Those would be 4.1/5.5 percent better than the prior record of $56.69/share in Q2 2022.

WHY?

As much as analysts have reset their Q4/Q1 expectations down to more realistic levels, there isn’t much difference between what they expect over the next 2 quarters and recent S&P earnings power.The average of their Q4/Q1 estimates is $54.42/share, and the Q4 2021 – Q3 2022 “actuals” quarterly average is $55.45/share. The difference there is just 1.9 percent and far from the typical 20 percent decline in S&P profits during a recession.

The Street’s back half 2023 estimates assume a resumption of growth in the latter part of next year, an idea that is out of step with the market’s concerns about an upcoming recession. While the S&P 500 trades for 16.6x the consensus estimate of $231.59/share, that doesn’t make it “cheap”. Rather, that multiple is below the 5-year average of 18.5x because investors are rightly concerned that analysts continue to overestimate 2023 earnings power.

💸Reformed Millennials - Post of The Week

Navigating 2023 - Canada in the crosshairs (from RBC)

The global economy will continue to be swayed by geopolitics and COVID aftereffects in 2023—especially as advanced economies fight inflation and China looks to exit its zero-COVID policy. The U.S., China, and the European Union—representing half of global GDP—are already headed for recession or slow growth in 2023.There may be darker clouds ahead. The most consequential monetary tightening cycle in a generation is coinciding with the most significant fracture in international relations. At the same time, new economic paradigms appear to be emerging around labour markets, interest rates, emissions, trade, and national defence.The year 2023 will be choppy, and could see global reverberations from distress in highly-indebted economic sectors, volatile commodity prices, central bank policy, geopolitical maneuvering, and heightened economic competition even between friendly countries.

How Canada will be influenced by these global factors as it manages its own set of challenges and opportunities in the new year:

• The Bank of Canada’s most challenging task lies ahead in determining when to pivot to loosen rates. The drift upwards in inflation expectations, high household indebtedness, and tight labour markets make the decision more difficult than usual.

• Highly-indebted Canadians and sky-high housing markets will be further tested in 2023 with high rates and slowing growth. Spending and house prices will fall further and delinquencies will rise. But, it’s a rare, more significant negative income shock that could lead to an ugly outcome.

• Climate investment in Canada could be a bright spot, as geopolitics drives interest in clean energy, and the federal government responds to US’s cleantech incentives. Still, it will not be enough to keep climate spending on target as the current environment disadvantages riskier cleantech.

• With recent policy changes driving a huge boost to permanent resident flows, Canada is testing the limits of its ability to attract and integrate new Canadians, at least for now. Doubling down on skills development for the domestic and immigrant workforce is the next frontier in Canada’s talent strategy.

Thought Provoking Predictions In Tech for 2023

Below is a list of some thought-provoking tech predictions for 2023.

#1: The Verge put together a slew of tech predictions for 2023. Here’s what stood out:

• “The Web3 vision fades into the rear view. With the events of 2022 having made pro-[virtual currency] partisans look like fools, and the threat of a recession making venture capitalists more cautious in the New Year, expect 2023 to carry lots of [digital asset] startups to their graves.”

• “The use of ChatGPT in education will spark a national conversation about AI… this conversation will massively accelerate in 2023, as the technology spreads by word of mouth among kids home from school over the winter break. By spring break, we will have seen controversies related to the use of AI in education around the country, and by year’s end I wouldn’t be surprised if OpenAI had been dragged in front of Congress to talk about it.”

• “The media will begin its divorce from Twitter…. Alternative platforms like Mastodon, while smaller and less intuitive to use, offer a safe haven to more and more people — particularly journalists — looking for off-ramps.”

Source: https://www.theverge.com/2022/12/16/23512588/tech-platform-predictions-2023-facebook-twitter-moderation

#2: Forbes collected some forecasts from industry experts. Here they are:

• “ESG regulations, together with people’s demands for a high standard of living, will drive property technology developments, as well as health, safety and security tech, to new levels. - Spiros Liolis, Micro Focus”

• ““The metaverse” is something of a catchall term used by futurists to describe the “next level” of the internet. With this emerging technique, we can interact with brands and fellow consumers through fully immersive technology, including 3D environments and virtual reality. We also might use avatars of ourselves to describe our products and services. - Cristian Randieri, Intellisystem Technologies”

• “2023 will bring the rise of Web3 as a utility, not a gimmick. As more industries and businesses identify and understand the use cases for this new wave of technology—from tokenization for customer engagement (for example, digital collections and loyalty programs) to future-proofing payment platforms for digital assets, Web3-related technology will become part of many companies’ core solutions. - Kevin Lehtiniitty, Fortress Web3 Technologies”

Source: https://www.forbes.com/sites/forbestechcouncil/2022/12/16/13-industry-experts-predict-rising-business-tech-trends-of-2023/?sh=bcef081f3102

#3: Amazon CTO Dr. Werner Vogels’ 2023 tech predictions:

• “Like music and video, sports will become data streams that we can analyze. The insights that these will unlock in the coming years will transform the entire sports industry and redefine what it means to play—and experience—every game.”

• “Spatial computing. Simulation. Digital twins. These technologies have been slowly maturing for years, but the everyday impact has been limited. This is quickly changing, and in 2023, the cloud will make these technologies more accessible, in turn enabling a new class of use cases that will be unbound by physical constraints.”

• “Energy-storing surface materials. Decentralized grids. Smart consumption technologies. In 2023, we will see rapid development on a global scale that improves the way we produce, store, and consume energy.”

• “In 2023, adoption of technologies such as computer vision and deep learning will propel the supply chain forward. Driverless fleets, autonomous warehouse management, and simulations are just a few of the optimizations that will lead to a new era in smart logistics and global supply chain.”

• “Use of purpose-built chips will rapidly increase in 2023. As a result, the pace of innovation will accelerate as workloads take advantage of hardware optimizations that maximize performance, while lowering energy consumption and reducing costs.”

Source: https://www.aboutamazon.com/news/aws/werner-vogels-tech-predictions-2023

#4: CNBC’s feedback from media executives about next year:

• “Netflix will merge with another company. This one was actually mentioned twice — one executive predicted Netflix would merge with Paramount Global. The other guessed Disney, as Iger’s signature move upon returning to CEO.”

• “The cost of sports rights will peak. Live sports rights have been the lifeblood of the legacy pay TV industry for decades… But media companies are now focused on building their streaming businesses as replacements for traditional pay TV... Limited audiences, combined with a legacy media industry intent on focusing on profits and cost cutting, could end the trend of live sports commanding big rights increases.”

• “Apple will ban TikTok from the App Store. Sen. Marco Rubio, R-Fla., introduced bipartisan legislation last week to ban TikTok from operating in the United States. The Senate also voted unanimously to ban TikTok on government phones and devices.”

Source: https://www.cnbc.com/2022/12/18/media-executive-predictions-2023-netflix-disney-nfl.html

#5: Gartner’s tech predictions:

• “Through 2027, fully virtual workspaces will account for 30% of the investment growth by enterprises in metaverse technologies and will “reimagine” the office experience.”

• “By 2027, social media platform models will shift from “customer as product” to “platform as customer” of decentralized identity, sold through data markets.”

• “By 2025, without sustainable AI practices, AI will consume more energy than the human workforce, significantly offsetting carbon-zero gains.”

Source: https://www.gartner.com/en/articles/gartner-top-10-strategic-predictions-for-2023-and-beyond

🎙Podcast & YouTube Recommendations🎙

• Lifespan with Dr. David Sinclair - 7 episodes around the science and progress we’ve made in longevity medicine.

• Plain English with Derek Thompson - Chat GPT, Obesity Drugs, Exoplanet Images and Medical Miracles

🔮Best Links of The Week🔮

• "Salesforce co-CEO Marc Benioff told employees in a Slack message on Friday that the company’s newest hires aren’t being productive enough, and he asked for feedback as to why that’s the case. “Are we not building tribal knowledge with new employees without an office culture?” he asked in a message viewed by CNBC. He said he was “asking for a friend,” a phrase people often use on the internet to humorously reveal their curiosity about a topic. The message included an emoji showing a smiling face with a halo hovering over it, suggesting innocence." Source: CNBC

• "[The virus] is spreading rapidly through China’s biggest cities, leading to widespread medicine shortages and exposing Beijing’s lack of preparation after authorities reversed strict pandemic controls. Residents of Shanghai, Shenzhen and other cities reported pharmacies have sold out of fever medicine and [virus] tests, while social media images contrast long queues outside [virus] clinics with otherwise empty streets." Source: FT

• "Rising borrowing costs have dramatically increased the cost of buying a home this year, reviving interest in mortgage products like temporary buydowns that fell out of favor after the 2008 financial crisis. Temporary buydowns offer steep but short-term savings on mortgage rates. Borrowers get a much lower rate in the loan’s first year that gradually increases until it resets to a rate in line with market conditions at the time the loan was made. They differ from standard buydowns, in which buyers pay an upfront fee to permanently lower the loan’s rate. And unlike adjustable-rate mortgages, the loans reset to a fixed rate." Source: WSJ

• Capital Allocation: Results, Analysis, and Assessment (Article | 75 mins)

Michael Mauboussin and Dan Callahan release their most comprehensive research ever on capital allocation. The references alone stretch over 15 pages. - Source: Morgan Stanley

• Sea Change (Investment Memo | 24 mins)

Howard Marks tells us why it really is different this time. The 40-year fixed income bull run is over and it has far reaching consequences for investors in all asset classes. - Source: Oaktree Memo

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Check out learning corner for Joel’s favorite company deep dive of the week.

• Market update/forecast

• Canada is done raising rates

• Dave Portnoy’s new watch brand

• How Call of Duty parent company makes money

• Sovereignty Act thoughts

• LinkedIn Jobs report

• Meghan and Harry Netflix Show

• Recommendations and Predictions

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If you aren’t in the Reformed Millennials Facebook Group join us for daily updates, discussions, and deep dives into the investable trends Millennials should be paying attention to.

👉 For specific investment questions or advice contact Joel @ Gold Investment Management.

📈📊Market Update💵📉

US equities retreated on Friday amid concerns about monetary policy tightening and its impact on the economy and corporate earnings. Large caps bested small caps: S&P 500 (-0.73%) vs. Russell 2000 (-1.19%).

Energy (-2.33%) and health care (-1.28%) underperformed the broader market indices, while communication services (+0.02%) and real estate (-0.20%) outperformed. Chevron(-3.19%) and Amgen (-2.42%) weighed on the Dow (-0.90%); Disney (+0.90%) and Verizon (+0.81%) were the index's best performers.

The Nasdaq lost 0.70%, while tech dropped 0.61%. The "FAAMG" stocks mostly fell: Meta (+0.49%), Amazon (-1.39%), Apple (-0.34%), Microsoft (-0.80%), Alphabet (-0.94%).

The VIX edged up 2.42% to 22.83. The 30-year and 10-year Treasury yields increased to 3.568% and 3.586% respectively, while the 2-year yield rose to 4.342%.

Last Week:

Markets are grappling with the possibility that long-term real and nominal interest rates are going to be structurally higher post-pandemic. Current 10-year rates in both the US and Canada are above rates that prevailed for most of the last decade.

In the near term, inflation expectations will play the starring role. Breakeven inflation rates suggest markets believe both the Fed and Bank of Canada will bring inflation back within target over the medium term.

So now we need to think about how this effects the consumer and the earnings of companies.

Many analysts expect the S&P500 to ultimately bottom at around 3,250 in this prolonged bear market. Estimating that earnings should ultimately trough at around $185 (~ minus 20%), but multiples and earnings rarely bottom together as the Fed will be cutting way before EPS bottom…

Alf at the Macro Compass has a fantastic piece on whether a recession is already priced into equities or not. Here

Next Week:

This is the last big week for equities in 2022. As the the Fed’s rate decision hits the tape. The market has put the odds at 90+% for a 50bp hike.

Whats going to be most important will be the following commentary from Chair Powell and his team.

Surprises drive asset prices, and right now everything from the VIX to S&P 500 valuations to stable 2-year yields say there are no nasty surprises in the offing.

US corporate bond spreads over Treasuries tell a similar story. At current levels, IG and HY spreads are back down to levels last seen in May/June, the last time markets thought they had everything figured out.

The Cleveland Fed Inflation Nowcast is predicting Tuesday’s CPI report will show lower than expected headline inflation and inline core annual inflation.

Wall Street analysts’ 2023 S&P 500 earnings estimates are likely too high. There are 2 somewhat unrelated reasons for this. 1) Analysts expect the 3 sectors with the largest negative 2022 earnings comps (Cons Disc, Comm Services, Financials) to improve their net margins next year. 2) Outside these sectors, most analysts are not modeling a margin-contracting recession.

The S&P 500 should be doing better than it has over the last week because 2-year Treasury yields have been stable. Recession worries are ticking slightly higher, and there is a lot riding on the week’s FOMC meeting and Chair Powell press conference.

The power of surprise and Earnings. Investors should be looking at the potential 2023 earnings surprises, for good or bad, related to US Big Tech names versus other super cap stocks. To assess the difference, look at the highest and lowest estimate for each name for next year, rather than the consensus. The wider the range, we reason, the greater the uncertainty about 2023 earnings.

Here is the size of the range for each Big Tech stock’s 2023 EPS estimates along with the high/low estimates that bookend this spread in expectations:

• Apple: 22 percent ($6.01 to $7.36/share)

• Microsoft: 20 pct ($10.42 to $12.48/share)

• Alphabet/Google: 58 pct ($3.81 to $6.00/share)

• Amazon: 712 pct ($0.34 to $2.76/share)

• Tesla: 95 pct ($4.08 to $7.97/share)

• Nvidia: 55 pct ($3.35 to $5.20/share)

• Meta/Facebook: 144 pct ($4.96 to $12.11/share)

• Average: 158 percent

• Average ex-Amazon: 66 pct

Now, here is the same data for the 7 largest non-Tech names in the S&P 500:

• Berkshire Hathaway: 4 percent ($15.00 to $15.59/share)

• UnitedHealth: 3 pct ($24.62 to $25.39/share)

• Johnson & Johnson: 17 pct ($9.49 to $11.10/share)

• Exxon Mobil: 60 pct ($8.75 to $13.98/share)

• JP Morgan Chase: 23 pct ($11.81 to $14.51/share)

• Procter & Gamble: 9 pct ($6.03 to $6.59/share)

• Home Depot: 17 pct ($15.10 to $17.62/share)

• Average: 19 percent

• Average ex-Exxon: 12 pct

Takeaway: uncertainty related to future Big Tech earnings is orders of magnitude (6 – 8x) higher than for major non-Tech companies in the S&P 500. Yes, these are the same companies that still command premium valuation multiples (excluding META, of course). And perhaps they will continue to hold those premiums even with this higher level of uncertainty … The point here is that the potential for surprise (good or bad) is much higher for Big Tech than similarly valued non-Tech companies. Much higher indeed.

Learning Corner: MEG Deep Dive (new weekly)

In this corner I am going to be posting the best company deep dive from the week.

The first one is from an anonymous twitter account: WTI Realist

What it covers:

• Looking at MEG’s inability to easily grow through the drill bit

• Why the post-payout royalty hasn’t been digested by the equity markets

• Considering their multiple, and NAV, and where it should be

• Reviewing their capital return and buyback program

• Briefly cover WCS and their positioning in the market

• Closing it out by counter-arguing everything I’ve discussed, AKA the positives

💸Reformed Millennials - Post of The Week

Alberta Sovereignty Act - Some Info

• Wiki - The Bill seeks to protect Alberta from federal laws and policies that the Alberta legislature deems to be unconstitutional or harmful to Albertans or the province's economic prosperity, in areas such as natural resources, gun control, COVID-19 public health, education, and agriculture.

• National Post top 5 important things to know about the Sovereignty Act

• Is it Constitutional? from the PolticalOption

• Everything you need to know from the far rights position - (true north)

• Everything you need to know from the lefts position - (the guardian)

• More from the Edmonton Journal

Joel’s personal opinion - this bill isn't important. Alberta doesn’t need it, and it divides us further. I think that Danielle Smith is pushing forward with something that is very likely going to cost her party the election come May.

An interesting thing to consider: 32% of Canadians voted for Justin Trudeau, 32% of Albertans want #Bill1 - I would be willing to make an argument that neither side should take such dramatic moves as this sovereignty act when there is so little of a mandate and public desire for any action.

If the feds wanted to scale back the political fire I would suggest pulling bills #C11, #C18, #C21 these are deeply controversial measures that will have a dramatic impact on many people's lives and they only serve very narrow special interest groups.

The same is true for this idiotic Bill 1 (Sovereignty Act).

Tweet Thread: Mark Leonard On Entrepreneurship

🎙Podcast & YouTube Recommendations🎙

• Twitter Files: Was it right wrong or otherwise? - All-In Podcast

• Dave Portnoy’s Watch Brand - Theo and Harris Review

• Terrible approach. 10% to brick by brick

• decided to do a watch because after his 5mm first sale of shares he wanted to buy a gold Rolex but felt like it was a frivolous purchase

• what would I have done? He should have done a combo release with a brand watch like nixon or fossil in the same way that Swatch did a watch with Omega. The price point is a huge miss too. Your competition at 2500 is realllllly tough. Tudor, used Omega, Tag Huer etc.

• Love and Lizards | The Tim Dillon Show

RM thoughts - Meghan Markle caught between two worlds. Ran a fantastic scheme to the tune of $100mm from Netflix. Couldn’t leave unless it was a scandal. So she does the Oprah interview, says that the imperial dynasty of England is racially insensitive. (shocker)

“She thought it was a joke that she had to curtsy to the QUEEN OF ENGLAND!”

🔮Best Links of The Week🔮

• How Mr. Beast built his $1.5 Billion Youtube Empire -Jimmy Donaldson (aka MrBeast) is the most followed person on YouTube. He’s turned that massive audience into a massive consumer business. And is raising money for his empire at a $1.5B valuation.- Trung Fan

• "US basketball star Brittney Griner was freed in a prisoner swap with Russia on Thursday, a diplomatic breakthrough in Moscow’s more than nine-month war with Ukraine. Griner was released in exchange for Viktor Bout, an imprisoned Russian arms dealer who was serving a 25-year sentence in the US." Source: FT - Link

• "Lululemon’s third quarter profit and sales topped Wall Street’s expectations. However, the company offered softer-than-expected guidance for the holiday quarter. CEO Calvin McDonald acknowledged a “challenging” environment for sales." Source: CNBC - Link

• "The Federal Trade Commission Thursday sued Microsoft to block its planned $75 billion acquisition of Activision Blizzard taking one of its biggest shots under the Biden administration at halting a merger of technology giants. The lawsuit sets the stage for a court challenge over the deal as Microsoft agreed as part of negotiations with the “Call of Duty” publisher to defend the acquisition against a government lawsuit." Source: WSJ - Link

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.reformedmillennials.com

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• Market update

• Thoughts on Greed vs. Envy

• Shopify Q3 and Cyber Monday

• Sports consumption and the future of salary caps

• US/Canadian Housing

• Chat GPT/AI

• Recommendations and Predictions

Listen on Apple, Spotify, or Google Podcasts.

If you aren’t in the Reformed Millennials Facebook Group join us for daily updates, discussions, and deep dives into the investable trends Millennials should be paying attention to.

👉 For specific investment questions or advice contact Joel @ Gold Investment Management.

📈📊Market Update💵📉

2022 has been a tale of 2 halves for the S&P 500, -20.6 pct in 1H and +7.6 pct in 2H-to-date. Jan – June was all about the fear of higher rates. July – now reflects relief that earnings are OK and the Fed is starting to moderate rate hikes. A VIX at 19 says market confidence is too high for a still-uncertain environment, but December seasonality remains a near-term positive.

US corporate bond spreads have had their own “tale of 2 halves” and are just as confident about futures cash flows/earnings as stocks right now.

The US Jobs Report supports the Fed’s concern that a lack of labor supply (LFP down) will continue to create wage inflation (+5 pct) even if hiring declines (Nov weakest job growth in +1 year).

Fed Funds Futures are slowly buying into the Fed’s “higher for longer” rate messaging, even if they are fading Chair Powell’s guidance about +5 pct rates next year.

Analysts have cut their 2023 earnings estimates by 8 pct since April, but they still think next year can see 5 pct growth versus 2022.

Both the NASDAQ and virtual currency valuations have the same 1H/2H performance pattern as the S&P 500, with an important caveat. The NAS is actually lagging the S&P thus far in the second half, only up 3.9 pct vs. 7.6 pct and aggregate virtual currency values are down 5 percent for the 2H-to-date. Disruptive tech valuations have not bounced back as quickly as US large caps since June 30th, likely reflecting how aggressive they were going into the year. Very little in the 2H return data suggests this valuation reset is yet over.

Theres an old Lee Cooperman quote that I think works well with todays current narrative:

“you don’t want to live in a world where the Fed can’t achieve whatever outcome it wants to see”

Right now, it wants to see inflation come down quickly and has acted decisively (relative to the last 30 years of history, anyway) to get that result. Going from Fed Funds at 0.08 percent to 3.78 pct in less than a year may not be Volcker-esque in terms of end points (rates got to 19 pct in 1981). But … On a rate of change basis Powell has outdone his predecessor. When “Tall Paul” took the US monetary policy reins in 1979, Fed Funds were already 10 percent, after all.

The bottom line here is that it is easy to see how the market may think the puzzle of higher rates is largely complete. The Fed has gone a long way in a short period of time, the results of their actions are starting to become visible, and any further rate hikes will be fine tuning but nothing more.

Now, if we are actually facing a crossword puzzle-like trajectory of market uncertainty, then the problem will be “right idea, wrong price”. That is a common hedge fund PM retort to any stock pitch featuring a clever argument paired with a stupid/nonsensical valuation.

Fleshing out this idea: yes, perhaps we’re closing in on the end of the Fed jigsaw puzzle, but how do we get bullish given the following:

• We must place some non-zero odds on a US recession next year. An inverted yield curve says so. So does common sense: the Fed cannot likely achieve its goal of reducing labor market demand without an economic contraction.

• We know current S&P earnings power is $220/share.

• We therefore know that 1) the index trades for 18.5x earnings and 2) that’s a rich multiple going into a recession.

That’s a whole lot of empty crossword grid squares to fill, with a clue that reads “market response to a man-made (i.e., Fed-induced) recession”. Current valuations say the answer is “ignore it”, or “if we start to go down the recessionary rabbit hole, the Fed will cut rates quickly”. And that may be the correct answer, even if it has little precedence in the historical record.

All I know for sure is that, if we really are now into the crossword portion of the market’s puzzle over future stock prices, the first stretch will seem easy.

But the last bit … When we realize we don’t know where earnings actually do trough … That may be quite hard.

💸Reformed Millennials - Post of The Week

Social Media Isn't Going Away

So how do we deal with it?

I think the study of debate would empower us to better deal with the new media mediums we find ourselves exposed to.

In this 5 minute video, Bo Seo makes a case for educating ourselves and our youth in the art of debate.

Debate is crucial to a healthy society. After all, having productive debates is how people have learned, resolved conflicts, and generated new solutions for thousands of years. In Ancient Greece, it was even considered a kind of civic duty to be able to persuasively argue your point about the various issues of the day.

I think there's a good chance our solution to mass social media technology advancement isn't its removal but our re-engagement with the art of debate and long-form learning/engagement.

Chat GPT Bot: Best links and Threads From Last Week

🎙Podcast & YouTube Recommendations🎙

• The Game Has Changed - The Compound and Friends

• Stutz - Netflix a new Jonah Hill-directed documentary about his therapist Phil Stutz.

🔮Best Links of The Week🔮

• "Remember when making actors look older or younger in movies was a huge deal? The amount of postproduction work to achieve realistic results was immense back in the day, but now, researchers from Disney have revealed FRAN, a new artificial intelligence tool that can convincingly age or de-age an actor in a fraction of the time. In an academic paper, Disney Research Studios explains that FRAN (which stands for face re-aging network) is a neural network that was trained using a large database containing pairs of randomly generated synthetic faces at varying ages, which bypasses the need to otherwise find thousands of images of real people at different (documented) ages that depict the same facial expression, pose, lighting, and background." Source: The Verge

• "Major Chinese cities, including financial hub Shanghai and Zhengzhou — home to the world’s largest iPhone factory — said Wednesday they were lifting lockdowns. Zhengzhou is the site of “iPhone City,” a sprawling campus owned by Taiwanese contract manufacturer Foxconn that normally houses about 200,000 workers churning out products for Apple (AAPL), including the iPhone 14 Pro and 14 Pro Max. The city locked down its urban districts last Friday or five days as [virus] cases surged." Source: CNN Business

• A Few Things We Learned - Octahedron Capital - Deck link here

• Mark Zuckerbergs Dealbook Summit Interview - "So still the vast majority of what we're doing is, and will continue to be, going towards social media for quite some time until the metaverse becomes a larger thing"

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.reformedmillennials.com

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• Market update

• Home Depot Breakdown

• Fighting the Good Fight with Brian Johnston

• E-Scooter Bankruptcy

• Big 4 Accounting Firms and How Much They Make

• Can Apple Even Buy Disney?

• Elon vs. Apple

• Crypto Is Killing the Luxury Car Market

• Recommendations and Predictions

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If you aren’t in the Reformed Millennials Facebook Group join us for daily updates, discussions, and deep dives into the investable trends Millennials should be paying attention to.