As 2021 draws to a close, I’m filled with conflicting emotions. Since the onset of COVID, our world has been turned upside-down. Now, with the Omicron variant spreading rapidly, we’re left to wonder what the near, intermediate, and perhaps even long-term future holds.
Although the path forward remains murky, I’m grateful mortality rates have plummeted and, despite recent restrictions seen at home and around the world, I’m cautiously optimistic. Each step back, at least to my eye, has been followed by two steps forward. Let us hope that our increased knowledge of COVID, and the expanding number of tools we have to fight it, allows this trend to continue.
Turning to financial markets, it’s been a strong year for global equities with most international markets currently trading over 20% higher than they were at the end of 2020. Stock markets, at least in the short term, are essentially voting machines that capture investors’ notions of the future - though not a guarantee of future economic news, these positive returns indicate a degree of optimism.
In terms of outliers, the Canadian bond index and gold trade about 6% lower on the year, while emerging markets are slightly negative. Our portfolios haven’t contained bond indexes for some time (this is not an environment for passive bond products), so our fixed income portfolio is actually higher on the year. On the positive outlier side, the Canadian oil index, despite falling due to Omicron news, trades almost 80% higher than at the year’s start.
Looking forward, strong government spending, central bank printing, and pent up demand, should drive markets upward. This of course depends on the severity of Omicron or any other variant that may arise down the road. I’m even more bullish on how our portfolios are positioned relative to the markets. Although we are well-diversified, our portfolios are tilted towards value and commodities. Both have been out of favour for over-extended periods and appear to have turned the corner. Historically, this has led to numerous years of outperformance.
I will continue to monitor the situation as things evolve, as well as continue rebalancing portfolios - a practice that proved very profitable throughout the pandemic. As always, feel free to reach out if you have any questions, and if you’re looking for more timely information on the markets, you can find them on the research section of my website, or on my Twitter, Facebook, and LinkedIn feeds.
I would also like to take this time to wish you and yours a very happy holiday season! I know this year hasn’t been easy, but hopefully you find yourselves with some time to rest and refresh over the holidays. Stay safe everyone!

If you’re one of my clients, you know Carolina da Silva well. We first worked together almost a decade ago before she took an opportunity in another area of finance. As luck would have it, a few years ago, she and I were both looking for a change and the stars aligned, enabling us to work together again. I was very lucky indeed!
However, there will be another pause in our working relationship come January. I’m very happy to announce that Carolina and her husband, Phil, are expecting their first child shortly. While Carolina will be missed, Tanya and I are very excited for them!
I am also pleased that Tanya has agreed to join the team in a greater capacity. With COVID affecting her work over the last 22 months, and my practice becoming increasingly busy, Tanya’s been working with Carolina and I for the last year. She’s now agreed to take over Carolina’s role during her maternity leave. With that, please feel free to email Tanya, or call her at 416-777-6365, if you require anything service related.

Dawnshard by Brandon Sanderson: A few months ago, a friend let me know that I had missed a novella between books three and four of The Stormlight Archive series. The situation has now been rectified. For those who enjoy fantasy, I highly recommend the series.

Mario Gabriele’s 10 Favourite Business and Tech Articles of 2021: I haven’t read all 10 of these yet, but highly recommend The Great Online Game by Packy McCormick.
The Mundanity of Excellence by Daniel F. Chambliss: What leads to excellence? According to a wide-ranging study of swimmers, there are three key factors: Excellence is a qualitative phenomenon - doing more doesn’t mean doing better; talent is a useless concept; and excellence is mundane - it’s accomplished through ordinary actions that are performed consistently, carefully and habitually so they compound together over time.
While this paper is worthy of serious consideration, as the research is limited to one field of study, it’s possible, perhaps even likely, that the formula for success in swimming differs from other sports and endeavours, like physics or business. There are numerous examples of how relying on only one study can be problematic.
Aphorisms for Thirsty Fish: The Lost Writings of Wu Hsin by Farnam Street: “One hundred years after Confucius, came Wu Hsin. His name literally means ‘no-mind.’ And there is almost no trace of this person available, except The Lost Writings of Wu Hsin. His messages are timeless and full of paradoxes that cause the mind to slow down and even stop.”

All Placebos Are Not Created Equally by All That Is Solid: We all know how powerful the placebo effect can be. However, I never considered that one type of placebo, say a pill, would vary in impact from another, like a cream. This article is worth a read.
Discord: Imagine a Place by Not Boring: Most who regularly play video games know of, or use, an app called Discord. It provides multiple text and voice chat features, essentially for free. I use it regularly to keep in touch with my cycling teammates and to talk when we race. After a few weeks of using it, I started wondering how they made money. There’s no advertising and their paid feature does little to enhance the experience, it’s mostly there as a means for users to support the platform if they’re inclined.
This Not Boring - I told you I’d read another in the near future - cleared up most of my questions. Discord is a fascinating business model and could, if it chooses, be an integral player in Web 3.0 in the coming years.
They Don’t Make Them Like They Used To by The Roots of Progress: As we need to replace our appliances and gizmos more often, it’s easy to yearn for the days when things, like stoves, lasted 100 years or more. This article provides a counter argument to that notion.
Nassim Nicholas Taleb Has Never Borrowed a Cent in His Life by Adrienne Westenfeld: A quote from Taleb, “People ask me my forecast for the economy when they should be asking me what I have in my portfolio. Don’t make pronouncements on what could happen in the future if you’re immune from the consequences. In French, they use the same word for wallet and portfolio.”
The Big Multigenerational Psychological Cycle by Ray Dalio: Good article by Ray Dalio on the five multigenerational psychological cycles that are usually seen throughout history.
Two All-Purpose Pieces of Advice: Small Groups and Mentors by Tyler Cowen: Recommendation #1, “When working on any kind of problem, task or question, embed yourself in a small group of peers with broadly similar concerns.” And #2, “Get mentors.”

I’ve found these simple pieces of advice to be hugely beneficial! However, I’d be wise to follow Tyler Cowen’s lead and expand the number of areas in which I seek mentors.

Four Christmases: A cute holiday movie if you’re looking for something fun on a slow day.

Shang-Chi: Legend of the 10 Rings: If you love martial arts movies, mythology, beautiful cinematography, or just a good story, this movie is for you. Far exceeded my expectations!
Making Lego Car CLIMB Obstacles by Brick Experiment Channel: I found myself almost holding my breath as this little Lego car attempted to climb various obstacles.
Why You Should Have an Anti-Mentor by The Knowledge Project: Sometimes the best way to learn or improve is by observing those you least want to be like - and to avoid their behaviour and actions.
Why Retaining Walls Collapse by Practical Engineering: Who knew so much went into building retaining walls?
The Complete History & Strategy of Standard Oil (Part 1 & Part 2) by Acquired: Fascinating story about Standard Oil and, of course, its founder, John D. Rockefeller, arguably the richest person who ever lived. Despite considering himself very moral, many of his business practices were ruthless and, by today’s standards, very unethical. As an aside, the podcast explains the unlikely manner Teddy Roosevelt became president.

“Keeping one’s distance from an ignorant person is equivalent to keeping company with a wise man.”
- Ali Bin Abi-Taleb, scholar
“You only need to know the direction, not the destination. The direction is enough to make the next choice.”                                                                                                                              
- James Clear

“Excellence is mundane. Superlative performance is really a confluence of dozens of small skills or activities, each one learned or stumbled upon, which have been carefully drilled into habit and then are fitted together in a synthesized whole. There is nothing extraordinary or superhuman in any one of those actions; only the fact that they are done consistently and correctly, and all together, produce excellence.”
- Daniel F. Chambliss, on excellence
Matthew Lekushoff
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