Matthew Lekushoff |


While most markets are lower than they were two weeks ago, most notably negative were oil and energy stocks. After enjoying strong gains for a month, oil has tumbled. 

Its slip is largely attributed to Russian and Saudi Arabian willingness to increase production should global supplies continue tightening, though profit taking may be a factor as well. Encouragingly, however, energy stocks have not dropped to the same extent.

Five months into 2018, market behaviour can be described as erratic at best with most starting the year strong, only to see those gains recede within the first two months. Emerging markets (EMs) led the way and remain the strongest of the lot despite their faster rate of decline.

Meanwhile, the Canadian index and energy stocks fell into negative territory, but gained strength in early April. Although taking very different turns throughout the first five months of the year, most markets have ended up at the same place-----about zero return.

As usual, we've taken advantage of the volatility and rebalanced portfolios accordingly. For example, when EMs were up 15%, we trimmed them to add to our Canada and energy positions. We recently reversed this move, trimming our energy stocks for EMs. 

The beauty of rebalancing portfolios  is that it takes advantage of market movements, especially when they are most erratic. We may change securities or their weightings from time to time, but we see no reason to ever stop rebalancing.


This morning, the Trump administration announced it is removing an exemption for Canada, Mexico, and the EU on the previously announced steel and aluminum tariffs. The tariffs will be effective as of June 1----  tomorrow. Mexico and the EU have already indicated their retaliation plans, while the Trudeau government considers its options.
Given Trump's propensity for erratic decisions, it's hard to tell if this is a short term negotiating ploy or if the tariffs will remain in place for an extended period. Should the latter be the case, it may have long-term negative impacts on global trade and possibly lead to higher global inflation.
We will continue to monitor this situation.


On Dialogue  by David Bohm: A short, but dense book offering improved ways to converse with, and learn from, each other.
The Meaning of Human Existence  by Edward O. Wilson:  Humans have wrestled with the meaning of human existence for thousands of years. While this book lacks any "aha" moments, as the title might suggest, renowned biologist E.O. Wilson does a nice job of walking the reader through human evolution. Although I enjoyed the book, I thought Richard Dawkins' River Out of Eden more effectively synthesized this process.
How to Stop Procrastinating Using the 70% Rule  by Taylor Pearson: This post reminded me of my first manager, who was fond of saying: "If you wait until all the lights are green, you'll never leave your driveway." He was probably right.
How I Rewired My Brain to Become Fluent in Math  by Barbara Oakley: This article is not really about math. It's really about how to learn.
Half Life: The Decay of Knowledge and What to Do About It  by Farnam Street: The effects of most things wear off after a while-----  the caffeine from your morning coffee, aspirin's pain-numbing effects, or a perfume's scent. This law of decay also applies to knowledge. Although some of the things you learn will be useful for the rest of your life, most won't. This article argues that the majority of the information we come across today is usually in the second category. If we're going to spend our valuable time learning something, it is better to do so on things that won't change, or will at least remain useful for longer periods.
I Wish You Bad Luck - Supreme Court Justice John Roberts Unconventional Speech:  I like good commencement speeches. When done well, they balance reflection, worldly wisdom, and sagely advice. Justice John Roberts approaches his speech from a different angle and undercuts expectations. He wishes graduates bad luck, but for the right reasons.

"If the heuristic and analytic power of science can be joined with the introspective creativity of the humanities, human existence will rise to an infinitely more productive and interesting meaning." 
Edward O.Wilson, The Meaning of Human Experience

"The origin of the human condition is best explained by the natural selection for social interaction-----  the inherited propensities to communicate, recognize, evaluate, bond, cooperate, compete, and from all these the deep warm pleasure of belonging to your own special group." 
Edward O.Wilson, The Meaning of Human Experience

"Opinions thus tend to be experienced as "truths", even though they may only be your own assumptions and your own background. You got them from your teacher, your family, or by reading, or in yet some other way. Then for one reason or another you are identified with them, and you defend them." 
 David Bohm, On Dialogue  
"Whenever you feel that some situation or some person is ruining your life, it is actually you who are ruining your life...Feeling like a victim is a perfectly disastrous way to go through life. If you just take the attitude that however bad it is in any way, it's always your fault and you just fix it as best you can----  the so-called "iron prescription"-----  I think that really works." 
Charlie Munger, How to Stop Procrastinating

  • Mamoudou Gassama, a young Malian migrant and French resident, climbed four floors of balconies to save a child holding onto one of the railings. As a reward, French President Emmanuel Marcron made him a French citizen. Gassama was also offered a job by the Paris fire brigade.
  • Munk Debates on Political Correctness: Last week, the spring Munk Debate covered an issue that has garnered much media attention recently: Political correctness and free speech. Although the debate often strayed from the designated topic, it was a success as the participants-Michael Eric Dyson, Michelle Goldberg, Stephen Fry, and Jordan Peterson-were insightful, passionate, and funny.

Matthew Lekushoff

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