With the U.S. presidential election less than a week away and COVID numbers surging in the northern hemisphere, global markets have become increasingly skittish.
Most markets were trading in positive territory. That changed this week, as they fell significantly on Monday and Wednesday. With these being the largest declines in some time, indexes are trading a few points below their September month-end levels.

As per usual, there was at least one exception. Canadian REITs (which are yielding 5.7 per cent) are four per cent lower on the month. Canadian energy stocks are also worth mentioning. On the surface, they don’t seem notable, as they are trading close to their levels of a month ago. However, after rising 11 per cent on the month, those gains were completely ceded this week. 
In other news, all eyes are, unsurprisingly, on the presidential race. As of today (Thursday), is giving President Trump about a 1 in 9 chance of winning. For perspective, the polling site gave him almost a 3 in 10 chance at this point in 2016. If you remain among those who question the trustworthiness of polls, or are curious to see what the “experts” learned from 2016, you may find this video helpful.
As important as the election result may be, the most crucial issue for investors is the pandemic. With numbers surging again, it’s unknown if more dramatic measures will be implemented to stem the tide. If they are, and if they are in place for an extended period of time, it will not bode well for financial markets in the short, and possibly medium term. On the other hand, if a safe vaccine can be developed and distributed in the next few months, securities will likely respond well.
Unfortunately, it’s too difficult to know which way things will go. Given this unpleasant equilibrium of fear and optimism, we will continue to monitor the situation and react accordingly.

If you’ve been thinking this newsletter looks a little different than usual, you would be correct. I’m excited to announce the relaunch of my website and corresponding white paper, The Enlightened Entrepreneur.
With a new look and feel, improved functionality, additional research resources and an expanded blog section, we decided an update to the newsletter was also needed!
Stay tuned for new blog posts and feel free to explore the site - we hope you enjoy it!
A Trick of the Light by Louise Penny: The seventh book of the Inspector Gamache series, A Trick of the Light, is Louise Penny’s most personal book yet. It explores themes, such as whether people can change, forgiveness, and addiction. Aside from the layers Penny has woven into the series, Tanya and I have enjoyed the development of our favourite characters. Each return to the series continues to feel like visiting a second family for a while.
Lives of Stoics: The Art of Living from Zeno to Marcus Aurelius by Ryan Holiday: The only thing better than a good biography is a good book of biographies. The Lives of Stoics focuses on the stoics of antiquity. Though they came in all shapes, sizes, and temperaments, their dedication to the four stoic virtues - courage, temperance, justice, and wisdom - rarely varied. This book reminded me how important Stoic values are to a thriving society, and how badly they are needed today. 

The Changing World Order (Chapter 7) by Ray Dalio: Chapter 7 of Ray Dalio’s upcoming book takes an in-depth look into the relationship between China and America, the similarities and differences between the two countries, as well as their respective strengths and weaknesses. When it’s released, this will be one of the best economic books of the year!

The Dark Side of Smart by Diana Fleischman: “The dark side of smart is that whenever we do good works, and cooperate, we draw from our manipulative past. The even darker side of smart is that competition doesn’t just select an ability to manipulate but also an adaptive ability to be unpredictable. And one of the best ways to be unpredictable is to not know yourself. So we have evolution to thank for shielding us from complete self-knowledge. As a result, most of our own minds are shrouded in darkness.”
Erdoğan’s Leadership and the Turkey-Greece Dispute: Part I & Part 2 by Confluence: Turkey is often considered the gateway between Europe and Asia. It’s geographic location and population (84 million) has made it central to the region’s prosperity and security. This two-part series on the country, its heavy handed leader, and its current geopolitical situation provides an important perspective for those who don’t have much prior knowledge of the country or its history.
Have Emerging Market Equities Lost Their Edge by RBC: A nice summary of emerging markets securities and the three advantages they have over developed markets.
Global Real Estate Bubble Index 2020 by UBS Global: This year’s UBS real estate bubble index rates Toronto as the third most overvalued city in the world. It’s no secret that property values have been expensive in “The 6ix” for some time. However, with the number of people leaving Toronto for smaller communities, it will be interesting to see if the recent rent declines in Toronto’s condo market begins to extend into the rest of the housing market.
Canso October Market Observer: Canso’s October newsletter discusses COVID, the U.S. presidential election, America’s fiscal and monetary response to the current pandemic, and the bond market in relation to interest rates and the economic environment. There is a lot here, but worth a read.
Some Perspective on Gold in the New Paradigm by Bridgewater: Gold has had a stellar year so far. Yet, even after this rally, Bridgewater remains bullish on its future. In this paper, they illustrate how some of gold’s past rallies have dwarfed the current one, and how today’s environment may bode well for the yellow metal’s future. Perhaps more importantly, they show how owning gold can increase an investor’s risk adjustment returns over time. 
Coming Into Focus by Howard Marks: Howard Mark’s latest memo, the first in two months, is one of his longest in some time. A meaningful section discusses how the March interest rate cuts played a sizable role in helping markets recover so quickly. He also comments on the interconnectedness of asset classes and how he believes the markets are trading at reasonable valuations, but that future returns will likely be lower than previously expected. Well worth your time!

Armchair Expert with Seth MacFarlane: Great conversation with the funny and talented Seth MacFarlane.
EconTalk with Matt Ridley: Author Matt Ridley discusses the difference between invention and innovation. “Ridley argues that we give too much credit to inventors and not enough to innovators - those who refine and improve an invention to make it valuable to users. Along the way, he emphasizes the power of trial and error and the importance of permissionless innovation.”
EconTalk with Lisa Cook: Lisa Cook discusses her research on racism in the U.S. around the turn of the 20th century. In stopping most Black Americans from doing business with the general population, a generation of Black entrepreneurs were severely hampered. She and host Russ Roberts also explore how these policies likely hindered the U.S. economy over the past century and a half. Their conversation reminded me of the power of exponential growth. When fostered, it’s far more powerful than most understand. When impeded, it can have detrimental effects. In this case, it likely caused Black Americans to fall further behind in regards to wealth, life expectancy, and so much more. 

What Got You There with Sean DeLaney With Blas Moros: If you’re looking for great summaries of non-fiction books, Blas Moro’s website, The Rabbit Hole is one of the best! It also includes great essays and is building out an archive of how the big disciplines interconnect. In this conversation, Blas discusses his background, why he started his website, and where he’s taking it. If you don’t have time to listen to the podcast, you may find the show notes helpful.

Casablanca: It’s been years since I first watched Casablanca. Even better than I remembered!
The Maltese Falcon: Another classic movie I watched for the second time. I also enjoyed it, but was most impressed by Sidney Greenstreet, who at age 61, was acting in his first film.
The Largest Star in the Universe – Size Comparison via Universe in a Nutshell: Ever wonder how big the largest star is relative to our sun and the rest of the universe? It’s mind-boggling.
Visualizing the 200 Year History of Interest Rates by Visual Capitalist: Two noteworthy takeaways: how interest rates have fallen over the past 40 years, and what an aberration current interest levels are. These are important to know because it indicates that low interest rates may not be here forever. This doesn’t mean rates will rise any time soon, but if rates revert back to their mean, they could cause unexpected and unwanted consequences.

“A change in perspective is worth 80 IQ points.”
– Alan Kay (computer graphics pioneer)
“She wasn’t afraid to be wrong. And that, the Chief knew, was a great strength.” 
Louise Penny, A Trick of the Light
“Until you make the unconscious conscious, it will direct your life and you will call it fate.” 
Carl Jung
Matthew Lekushoff

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