MARKET WATCH June brings the beginning of a new season - at least from a Canadian perspective - and with it comes a plunging COVID-19 case count in these parts. Aside from the primary benefit of reduced mortality rates, most businesses are on track to fully reopen over the next few months, which should create a surge of employment and discretionary spending that results in a burst of economic activity.   The big question then is, “How much inflation will this lead to?”   With last year’s low watermark levels for many commodities and goods, inflation has already reached multi-year highs. With increased economic activity, rising commodity prices, a historically strained supply chain, and a tight employment market south of the border, there is reason to believe inflation could be an issue. However, we are in uncharted waters. It will likely take time to see how things play out.   In terms of monthly investment returns, most global markets and commodities trade close to their end of May values. Having said that, the markets have felt more volatile lately.   Given these unprecedented times, it’s as important as ever to maintain a balanced position, while also assuming a position that will benefit from sectors that could dramatically increase. And that is exactly how we are invested. Our portfolios are diversified geographically, by economic sector and balanced along the yield curve. We will continue to watch the markets and rebalance as needed. 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.

BOOKS   The Black Swan (Incerto Series #2) by Nassim Taleb: The Black Swan is about how the extreme, the unknown, and the very improbable (according to our knowledge) explain almost everything in our world. But it’s also about: how what we don’t know is usually more relevant than what we do know; our ignorance regarding the magnitude of our forecasting errors; how most huge discoveries derive from bottom-up tinkering, as opposed to top-down planning; the dangers of using the bell curve when it’s not applicable; and so much more!   I’ve said it once, but will say it again - Nassim Taleb may not be the easiest author to read, but he’s among the most important philosophers of our day. Next up, Book #3 (a book of aphorisms) of his Incerto Series, The Bed of Procrustes: Philosophical and Practical Aphorisms.   Pachinko by Min Jin Lee: A touching work of historical fiction chronicling the challenges a Korean family encountered as they attempted to co-exist in twentieth century Japan.

LONG THINGS THAT AREN'T BOOKS Understanding Russia: A Cultural History by The Great Courses: It took almost eight months, but Tanya and I finally finished this 12-hour course (24-30-minute lectures) on Russia’s history and culture. Am I glad I watched it? Yes. Was it riveting? Well, Tanya caught me nodding off more than a few times. But we learned a lot about Russia, its difficult history, and how art reflected this history - at least to the extent the government allowed. It also helped us better understand why Russia is the way it is today.

ARTICLES   Growing Mortgage Debt Making Canada's Economy Vulnerable by Reuters: The Bank of Canada has become increasingly concerned about the scale of mortgage debt Canadians have accumulated. Should home values fall, it could lead to painful repercussions.   Advice for Young Scientists—and Curious People in General by Farnam Street: “If you want to make progress in any area, you need to be willing to give up your best ideas from time to time. Science proceeds because researchers do all they can to disprove their hypotheses rather than prove them right.”   10,000 Hours with Reid Hoffman: What I Learned by Ben Casnocha: Great collection of lessons learned from Reid Hoffman, co-founder and executive chairman of LinkedIn. Reid is not only bright and successful, he also seems like a great person!   Truckers Are Getting Big Pay Hikes, But There's Still a Shortage of Drivers by Chris Isidore: We are currently experiencing a historic shortage of products across the supply chain. In part, the reason for this is the current shortage of truck drivers. This article explains why, despite sizeable pay increases, there still aren’t enough drivers.   How Philosophers Think by David Perell: Sometimes a Twitter thread provides volumes of insight. This is one of those. Wonderful synopsis of the best cognitive methods used by philosophers.   Sixteen Years Old, $1.7 Million in Revenue: Max Hits It Big as a Pandemic Reseller by The Wall Street Journal: Some may take issue with this student’s methods, but I love his entrepreneurial spirit.   The Optimal Amount of Hassle by Morgan Housel: “If you recognize that BS is ubiquitous, then the question is not “How can I avoid all of it?” but, “What is the optimal amount to put up with so I can still function in a messy and imperfect world?” If your tolerance is zero – if you are allergic to differences in opinion, personal incentives, emotions, inefficiencies, miscommunication and such – your odds of succeeding in anything that requires other people rounds to zero.” Oil Price Hits Pandemic High as Investors Bet on Green Energy by The Wall Street Journal: Oil prices have reached levels not seen since late 2018. This is due to a few reasons: Rising energy demand as COVID restrictions wane, OPEC+ countries maintaining reduced production levels, and energy companies curtailing expenditures to shore up their bloated balance sheets (from loans taken last year when the price of oil crashed). These reasons aren’t too surprising. However, a fourth reason might be: To improve their brands and combat global warming, energy companies have increasingly shifted investment from oil and gas exploration towards green energy initiatives, reducing the amount of oil and gas produced. It’s difficult to know how things will turn out, but the price of oil could continue rising if the status quo remains.

MOVIES Network: Thought-provoking movie with a great cast (Faye Dunaway, William Holden, Robert Duval, Peter Finch). It was fascinating to see a movie from the mid-70s provide a glimpse of what some of today’s editorial TV has become. Soul: A touching exploration into human passions, self-doubt, and how to live a meaningful life.

SELECTED INSIGHTS "It is easier to keep adding exceptions and justifications to a belief than to admit that a challenger has a better explanation." - Zeynep Tufekci "The trouble with psychology is that it doesn't take human nature into account." - Ruth Rendell   "You’ve got to say, I'm a human being goddammit, my life has value!!" - Howard Beale, Network   "I'm just afraid that if I died today, my life would have amounted to nothing." - Joe Gardner, Soul

Matthew Lekushoff 416-777-6368 matthew.lekushoff@raymondjames.ca www.matthewlekushoff.ca

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