MARKET WATCH
Despite rising COVID-19 cases in Europe, most global markets and gold are trading slightly higher on the month. However, concern over increased COVID-19 restrictions, including Austria’s fourth national lockdown, has taken the wind out of energy’s sails with Brent crude trading 3% lower and WTI 6% lower in November. Although Canadian energy stocks were also hampered for most of November, a recent recovery in oil prices this week have prompted these companies to trade 5% higher on the month and are now 88% higher on the year.
With temperatures dropping in the Northern Hemisphere leading to more time spent indoors, it’s likely that COVID-19 numbers will continue to rise. The question for most global stock markets, and especially energy, is: Will numbers remain where people can maintain their slightly-back-to-normal lives, as we have over the past several months, or will restrictions and lockdowns become routine until the weather abates?
Lastly, with interest rates near record lows, central governments printing money aggressively, tight global labour markets, and supply chain management issues, inflation will likely continue its brisk pace. This should be good, perhaps very good, for gold and other commodities until things change.
As always, we continue to take profits in various areas by rebalancing regularly.
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BOOKS
If you feel your understanding of the next generation of technologies is lacking, this is a good book to read. And you can opt to only read the first half, as the second part focuses on the author’s solutions to the issues the new technologies are creating.
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ARTICLES
Sc3nius by Packy Mckormick: Possibly the best article I’ve read on why progress is more robust in some eras as opposed to others. This is the third Not Boring article I’ve read. All have been long, excellent, and thought-provoking. There’s a good chance you’ll see more articles from it in the near future!
Nature Shows How All This Works by Morgan Housel: Great short read on how extremes lead to other extremes, and how small changes, over large periods of time, can be extremely impactful.
The Nature of Desire by Andrew Wildinson: Thought-provoking Twitter thread on the dangers of mimetic desire: the tendency to desire things largely because others possess them, or because society deems them important.
Aggregation Theory by Ben Thompson: “The value chain for any given consumer market is divided into three parts: suppliers, distributors, and consumers/users. The best way to make outsized profits in any of these markets is to either gain a horizontal monopoly in one of the three parts or to integrate two of the parts such that you have a competitive advantage in delivering a vertical solution. In the pre-Internet era the latter depended on controlling distribution.”
This 2015 article is about how many of today’s most successful companies have grown by controlling distribution, which Ben Thompson refers to as aggregation theory.
But this article isn’t about Sapiens, it’s about a new book called The Dawn of Everything: A New History of Humanity by the recently deceased David Graeber and David Wengrow. Why the reference to Sapiens? Because The Dawn of Everything purports that much of what we know of prehistoric societies (and what is contained in Sapiens), is wrong, which could mean that many of our basic assumptions about human nature may also be wrong. I intend on reading this book!
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MY NEW OBSESSION
Zwift: What has five letters and has been my biggest obsession since May? The virtual cycling platform called Zwift. Before COVID, I worked out four to five times a week and was in good, possibly great shape. However, a market crash, social isolation, little movement, and a lot of take-out for 15 months added 25 pounds to my frame. Thank goodness for stretchy pants!
However, after a few months (okay, perhaps more than a few months) of gentle nudging, Tanya convinced me it was time to start exercising again. That is when I decided to try Zwift.
Essentially, it’s a virtual cycling world that measures the power you generate from a real world or stationary bike, while factoring your weight, the virtual course, the bike you choose, and the aerodynamics of riding among others. And three million people have used it to train, ride socially, or my favourite - to race! Strange as it may sound, I’m part of a virtual racing organization of 330 people and ride on a team of six blokes in the U.K.
Since May I’ve ridden more than 3,200 virtual kilometers, burned 254 pizza slices, my cardio is great, I’ve lost 15 pounds, and, most importantly, I’m having a blast!
The reason I’m sharing this is that, with the colder weather upon us and many not feeling comfortable going to public gyms, this may be an alternative worth considering. It’s convenient, low impact, and far more social than you’d imagine (we talk when riding and racing together). Tanya and I may actually go to the U.K. next year to meet some of my teammates.
If you have any questions, feel free to contact me. I love talking about it, and it would give Tanya a break from listening to me go on about it all the time. I’m willing to bet a few pizza slices she regrets getting me into it.
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SELECTED INSIGHTS
“An example of a really responsible system is the system the Romans used when they built an arch. The guy who created the arch stood under it as the scaffolding was removed. It’s like packing your own parachute.”
- Charlie Munger
“It is often easier to describe an intimidating dictatorial system than it is to explain why people go along with it. Thus, the bribe.”
- Lewis Mumford
“Most lucky events in life are opportunities, not outcomes.”
- James Clear
“Not every problem needs to be overcome, just the ones stopping you from getting where you want to be.”
- Ann Hill
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Matthew Lekushoff
416-777-6368
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