Most global stock markets are lower than their levels two weeks ago. As has been the norm in 2018, intermittent volatility visited stock markets this week, erasing and exceeding last week's increases.
This decline, which began on Monday, was due in part to the
Cambridge Analytica story
on the harvesting of private information of 50 million Facebook users.
However, the larger aspect influencing markets are worries surrounding U.S. tariffs. In addition to previously mentioned tariffs on steel and aluminum, President Trump recently announced measures to punish China for intellectual property theft. With the implementation, counter measures and, of course, implications to global trade unknown, markets have responded by trending lower, particularly this (Thursday) afternoon!
Emerging markets continue to be this year's global standout performer. Two factors have been driving this. First, their economies are growing faster than the developed world for the foreseeable future. Second, although not as cheap (on a price-to-earnings basis) as they were last year, emerging market valuations remain lower than the developed world.
The combination of lower valuations and faster growth is usually a long-term recipe for success in investing. The most prominent downside of investing in the emerging markets is they have historically been more volatile than developed markets. This will likely continue. Although too much volatility can be scary, if you religiously rebalance your portfolio, it can also be a blessing.
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IN THE REVIEW QUEUE
The Evolution of Everything: How New Ideas Emerge
by
Matt Ridley:
Most books on evolution focus on genetic evolution. The Evolution of Everything does something different. It attempts to illustrate how the principles of evolution (bottom up, unplanned emergence), not only applies to virtually every aspect of life, but when given the choice, are preferable to top down or central planning.
Although I found the book's overall thesis compelling, I found it glossed over the downside of bottom up, unplanned emergence more than was accurate. For example, the book lays most of the blame of the 2008 financial crisis on well-intentioned government programs, regulators, and agencies that encouraged and aided poor people to buy homes, even when they likely shouldn't have.
While true, there was no mention of the excessive risk financial institutions took in expanding their debt levels or financial incentives given to mortgage brokers to push home ownership on the financial illiterate and poor.
Quibbles aside, this is a book worth reading. It will make you think, show you the world in ways you hadn't considered, and make you question how everything around you came to be.
Born a Crime
by Trevor Noah:
A wonderfully written and performed audiobook by the host of The Daily Show. On the one hand, it's an gritty yet humorous look into the hard life he and his mother endured while he was a young. On the other hand, it describes South Africa struggling to transition from pre- to post-Apartheid life. Noah's experience is particularly enlightening, as his mother was black and his father white, making his mere existence the result of a crime----- interracial relationships were illegal when he was born.
Although clearly not a sequel, I felt Born a Crime picked up where Nelson Mandela's
Long Walk to Freedom
left off. Read, or even better, listen to this book-you won't regret it.
How to Apply Science to the Humanities
by Farnam Street:
A relatively short, but dense article on the value of interdisciplinary learning, especially on how understanding some of the big ideas from the sciences can improve your grasp of the humanities.
Canada, U.S. must prepare for the next economic or financial crisis
by Glen Hodgson:
When times are tough, it's understandable that governments need to spend more money than they take in. When times are better, they should reverse course and pay back some of the money they borrowed to prepare for the next recession or crisis. Unfortunately, the Canadian federal government isn't doing that-a strategy history indicates could be foolhardy.
Infinite Learner - Barry Diller (Part 1)
by Masters of Scale:
Masters of Scale is becoming one of my favourite podcasts. In this episode (Part 1 of 2), Barry Diller (former chairman of Expedia, IAC, Paramount, Fox, etc.) is featured for his relentless interest in learning new and exciting things.
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THOUGHTS FROM BORN A CRIME
"[...] remember the thing that caused the trauma, but I don't hold on to the trauma. I never let the memory of something painful prevent me from trying something new. If you think too much about the ass-kicking your mom gave you, or the ass-kicking that life gave you, you'll stop pushing the boundaries and breaking the rules. It's better to take it, spend some time crying, then wake up the next day and move on. You'll have a few bruises and they'll remind you of what happened and that's okay. But after a while the bruises fade, and they fade for a reason-because now it's time to get up to some shit again."
"I don't regret anything I've ever done in life, any choice that I've made. But I'm consumed with regret for the things I didn't do, the choices I didn't make, the things I didn't say. We spend so much time being afraid of failure, afraid of rejection. But regret is the thing we should fear most. Failure is an answer. Rejection is an answer. Regret is an eternal question you will never have the answer to."
"Nelson Mandela once said, 'If you talk to a man in a language he understands, that goes to his head. If you talk to him in his language, that goes to his heart.' He was so right. When you make the effort to speak someone else's language, even if it's just basic phrases here and there, you are saying to them, 'I understand that you have a culture and identity that exists beyond me. I see you as a human being.'"
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PARALYMPICS 2018 
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As the 2018 Paralympic Winter Games wrapped up in PyeongChang last week, the
Boston Globe's
Big Picture captured some breathtaking and inspiring photos!
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