To say global stock markets have had a weak start to 2022 is like saying Game of Thrones had a few deaths. Importantly though, the results have been far from equal. Over the last decade or so, U.S. markets have been the runaway best performer. However, they have already fallen more than 10% this year. Canada and other international markets have also fallen, but by less than half that amount. Emerging markets and gold (underperformers last year), while lower, have only declined 2% since December 31.
On the other hand, oil continues its phenomenal run, already climbing a remarkable 16% in 2022, while trading 108% higher than a year ago!
So, why have many markets fallen so much, while others have fared better? While it’s hard to know for sure, I’ll discuss a few factors that may be influencing these discrepancies.
There are currently a number of geopolitical issues confronting the world. The most significant appears to be the potential Russian invasion of Ukraine, which could result in significant energy disruptions. But it could also lead to other consequences, such as the recent U.S. threat of cutting Russian companies off from the global banking system. There are also concerns of a potential Chinese invasion of Taiwan - there have been a number of threatening actions from China, while both Japan and the U.S. have expressed support for Taiwan. Lastly, there was a recent missile attack in Yemen, which likely came from Saudi Arabia.
On the economic front, central banks are widely expected to begin raising interest rates (likely multiple times) in 2022 in order to curb inflation, while global stock markets have risen considerably over the past two years, likely causing investors to trigger gains made on securities with frothy valuations.
Stock markets generally hate uncertainty, especially when that uncertainty could lead to violence. This usually results in investors seeking “safe havens” like gold, as a shelter from the storm. Oil, however, is not a traditional safe haven, and often falls when economic threats are sighted. But, with major energy producers (Russia and Saudi Arabia) in the midst of these issues, should their ability to supply energy to global markets be hindered, it could lead to an increase in the price of oil, potentially in a significant manner!
As a reminder, even if these geopolitical issues are safely resolved, we are well-positioned for the potential changes the global economy may undergo (see Ray Dalio articles below). 

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.
BEST OF 2021

In 2020, I began keeping a record of the best things I’ve read, listened to, or watched. For 2021 I decided to do the same, with my Best of 2021. It’s a great exercise and I plan on using it as a resource of things to revisit in the future.
If you’re interested, here is the list for 2020

How Proust Can Change Your Life by Alain de Botton: Although I’ve yet to read anything by Proust, this short book has been on my list for some time. I wasn’t disappointed. Turns out, Proust was a fascinating character with rather unique opinions. The parts I found most interesting were his thoughts on friendship, as well as his reflections on how to open your eyes to seldom-noticed things, and how to take your time.

The Pareto Funtier by Not Boring: Packy McCormick explores the opportunity cost between fun and money, and how he believes Web 3.0 will expand their efficient frontier. In other words, Web 3.0 will enable our decisions to result in both more fun and money.
The Case Against Crypto by Stephen Diehl: I’ve read a lot on cryptocurrencies over the last six months - most by authors who favour them. Given how uncertain Web 3.0’s future is, I’m trying to ensure I expose myself to arguments on both sides of the equation.
Personally, I think cryptocurrencies will be a part of our future. Will it be Bitcoin, Etherium, Dogecoin, or a stablecoin issued by a central bank? That I don’t know, but I’ll continue to learn what I can until it’s obvious.
How to Make High-Quality Decisions by Annie Duke: Great Twitter thread on the importance of making good decisions.
Molar City by Tom Thor Buchanan: Interesting look into the world of medical tourism, where a town in Mexico has more dentists per capita than anywhere else on the planet.
Why Birds Can Fly over Mount Everest by Walter Murch: “How did birds get such great lungs? They inherited them from dinosaurs. Birds are dinosaurs! When I was growing up in the 1940s, there was a category in biology called Aves, which meant birds. But scientists have now folded Aves into a category called Dinosauria, and those dinosauria, like pigeons and seagulls and geese, are flying all around us today. If you want to know what a dinosaur probably tasted like, eat some chicken!”
The Rising Tide of Semiconductor Cost by Fabricated Knowledge: Semiconductors have been in the news a lot lately. This article discusses some issues facing the industry and why their price may increase for the first time in recent memory.
America Is Running on Fumes by Derek Thompson: Atlantic author Derek Thompson explores why the rate of new ideas and progress (from film, science and the economy) has slowed considerably.
Run Your Own Race by Ava: A great reminder for the new year that it’s best to live your life based on what is important to you, not what society values.
The Changing World Order: The New Paradigm by Ray Dalio: “The world order is changing in important ways that have happened many times before in history, though not in our lifetimes. How the world order is changing has created the paradigm that we are in. By “paradigm,” I mean the environment that we are in. Paradigms typically last about 10 years, with occasional big corrections within them. They are driven by a persistent set of conditions that takes those conditions in a swing from one extreme to an opposite extreme. Because of this, each paradigm is more likely to be opposite than similar to the one before it.”

2022: A Year of Transition by Ray Dalio: As indicated in the passage above, the world may be changing in important ways, and 2022 may be the year where a great deal of this change begins.

The Celtic Holocaust by Hardcore History: “Julius Ceasar is our travel guide as he takes us through his murderous subjugation of the native Celtic tribal peoples of ancient Gaul. It sounds vaguely like other, recent European colonial conquests…until the native nearly win.”
Diane Macedo — The Sleep Fix (EP.81) by Infinite Loops: New anchor Diane Macedo discusses her book The Sleep Fix, where she explores topics like: ‘insomnia’ vs. ‘sleep deprivation'; sleep efficiency; the importance of journaling to help you sleep; and other important sleep-related aspects.
If you have trouble either falling or staying asleep, this may be worth checking out!

What All Billionaires Do To Make Big Bets, But Never Say by The Knowledge Project: Despite the click-baity title, this is a good interview discussing the value of advantageous divergence, which is the process of being contrarian and right.
Well This is Interesting: I can’t say I understand the science behind this, but it certainly is fascinating!
The Peloponnesian War by The Khan Academy: Spoiler Alert…the Athenians lost. It’s interesting how many of the themes facing the world today were also in play 2,500 years ago.
Wheel of Time (Season 1) by Amazon: I’ve been reading fantasy books for 25 years. And the series that got me hooked was Robert Jordan’s epic 14-book series, The Wheel of Time. So when I heard Amazon was making it into a TV series, well, my excitement was palpable.
So how was Season 1? As a purist, I have some issues with the casting and how the storyline has deviated from the books. But in fairness, unless they’re planning on making 14 seasons - which they should not! - some change was inevitable.
I’d give this first season a seven out of 10. However, I am optimistic they can improve on the foundation they’ve built. Fingers crossed…

“A year from now you will wish you had started today.”
— Karen Lamb
“Two things determine how your life will turn out: luck and the quality of your decisions.”
                                                                                                                                              — Annie Duke
“You should take the approach that you, the entrepreneur, are wrong. Your goal is to be less wrong.”
— Elon Musk
“Avoid having your ego so close to your position that when your position falls, your ego goes with it.”
— Colin Powell
“The person who gets 1 shot needs everything to go right.
The person who gets 1000 shots is going to score at some point.
Find a way to play the game that ensures you get a lot of shots.”
— James Clear
Matthew Lekushoff
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