Hello
I have an investment focused top ten this week and I start with a 55 year veteran of the business and his outlook. Jeremy Grantham is such a wise investment pro and I included his full commentary and a link to a Bloomberg interview.
Eric Nuttall had his first trip to Qatar and he has some observations of that country and he thinks Canada should follow some of them. Another energy expert in our country, Peter Tertzakian, provided his own top ten list focused on what Canada should do.
The WSJ had an article that highlighted the many challenges and delays of this renewable initiative and the article is attached.
Kevin McCullough was one of the first to openly question the activities at FTX and he was a guest on Smarter Markets. Kevin also gives some advice to those who look to social media for investment advice. The people at Quillette provided a summary of the fraud in the Crypto Token Economy.
I posted a piece from Dan Pontefract who outlined the despicable treatment of Bruce Boudreau by Canuck Management and ownership and it sure got a lot of attention. It is interesting to know that they now have three head coaches on their payroll and it is more than what they are paying their captain, Bo Horvat.
The Academy Award nominations was announced and there were many first time nominees in the acting category. Steven Spielberg got his 10th directing nomination this year for The Fabelmans.
My good friend sent me a piece from The Atlantic that updates on that Harvard Study I have shared on before. There is a common denominator of what is needed to improve your happiness and with it being the longest study ever, I think they are on the right path.
Have a great weekend.
David
Number 1 – GMO - After a Timeout, Back to the Meat Grinder
Executive Summary
The first and easiest leg of the bursting of the bubble we called for a year ago is complete. The most speculative growth stocks that led the market on the way up have been crushed, and a large chunk of the total losses across markets that we expected to see a year ago have already occurred. Given the starting conditions of extraordinary speculative euphoria, this was all but certain. The negative surprises of last year, from war in Ukraine to the global inflation spike, were quite unnecessary to ensure a significant downturn.
Now things get more complicated. While the most extreme froth has been wiped off the market, valuations are still nowhere near their long-term averages. Further, in the past, they have usually overcorrected to below trend as fundamentals deteriorated. Such an outcome still remains highly likely, but given the complexities of an ever-changing world, investors should have far less certainty about the timing and extent of the next leg down from here. In fact, a variety of factors – especially the underrecognized and powerful Presidential Cycle, but also including subsiding inflation, the ongoing strength of the labor market, and the reopening of the Chinese economy – speak for the possibility of a pause or delay in the bear market. How significantly corporate fundamentals deteriorate will mean everything during the next twelve to eighteen months.
Beyond the near term, for long-horizon fundamental investors, the biggest picture remains that long-run issues of declining population, raw materials shortages, and rising damage from climate change are beginning to bite hard into growth prospects. The resource and geopolitical shocks of last year will only exacerbate those issues. And over the next few years, given the change in the interest rate environment, the possibility of a downturn in global property markets poses frightening risks to the economy.
Jeremy Grantham warns again: https://www.bnnbloomberg.ca/jeremy-grantham-warns-of-a-17-plunge-in-the-s-p-500-this-year-1.1874198
Number 2 - Jim Thorne - The Phillips curve is dead – when will central banks come clean?
Recent economic data suggest that wage growth is declining to a rate consistent with central banks’ 2 per cent inflation target. Simply put, historical and current data support the thesis that the Phillips curve is dead. To ensure it’s truly dead and buried, inflation must continue to decelerate dramatically.
Number 3 - Eric Nuttall: Canada could be as green and wealthy as Qatar and Saudi Arabia if government wakes up
Instead of vilifying the oil and gas sectors, Canada should champion them
With the Government of Canada set to release details of its long-term vision for its oil and gas sector, impacting its 202,000 workers and investors alike, are there any lessons that we can learn from Qatar, Saudi Arabia and other Middle Eastern countries? Rather than vilifying their oil and natural gas sectors, these countries are championing them, using their resource wealth to grow their economies, and slowly diversify away from hydrocarbon reliance while significantly investing in alternative energy. Could Canada and the environment be better off adopting a similar all-of-the-above strategy instead of its current either/or approach?
Number 4 - Canadian Energy in a Tumultuous World – Top Ten Takeaways from Peter Tertzakian – Resource Works
From net-zero to Ukraine and the energy crisis, here are our top ten takeaways from Peter Tertzakian’s remarks on the state of Canadian energy at Resource Work’s inaugural lunch event series.
Number 5 - Investors Plow Into Renewables, but Projects Aren’t Getting Built – Wall Street Journal
Some notable excerpts from the article that highlight the pace of expansion in renewables facing headwinds from supply chains, regulatory/government, uncertainty of completion, grid considerations, inflation etc.
Number 6 - Keith McCullough, Founder & CEO, Hedgeye
“You only learn by making mistakes and/or by somebody telling you that you’re making one. The faster we can close that loop, the better – or less bad – we’ll be.”
https://www.smartermarkets.media/a-smarter-way-episode-2-keith-mccullough/
We continue our series A Smarter Way with Keith McCullough, the Founder & CEO of Hedgeye. SmarterMarkets™ host David Greely sits down with Keith to discuss the lessons of FTX and the state of financial advice on traditional and social media.
Number 7 - The Crypto Token Economy Is Second-Order Fraud
https://quillette.com/2023/01/24/the-crypto-token-industry-is-second-order-fraud/
The scorched-earth behavior of some of the biggest players in the cryptocurrency space suggests they know the walls are finally coming down. The falling valuation of better-regulated crypto companies apparently operating mostly within the bounds of the law—Coinbase stock has been down as much as 90 percent from its 2021 IPO in recent weeks—suggests a poor outlook for even the “legitimate” firms operating in a sector driven by fraud once that fraud is excised. When your house is a Ponzi scheme built atop Ponzi schemes atop a Ponzi scheme, everything starts to come down when the base buckle
Number 8 - The Despicable Treatment of Bruce Boudreau
Dan Pontefract on the Boudreau treatment
Number 10 - What the Longest Study on Human Happiness Found is the Key to a Good Life
The Harvard Study of Adult Development has established a strong correlation between deep relationships and well-being. The question is, how does a person nurture those deep relationships?
We hope you found the Top Ten interesting this week, and are looking forward to another selection of articles, stories, and commentary next week. If you know of anyone else who would be interested in receiving our weekly note, please let me know.
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