Hello
Our top ten starts with some long-term investment themes from Morgan Stanley: 1) Millennials and Gen Z Take Center Stage, 2) Sizing Up Semiconductors, 3) Feeding a Hungry Planet.
The Financial Post reminds readers that real economic growth has not been this bad since the 1930’s. We need economic growth to pay for things and hopefully all three levels of government start to understand that.
Mr. Druckenmiller again, has some warning signals on the economy and the WSJ points out the many challenges facing the ‘Clean Tech’ push.
Berkshire’s annual meeting took place, and I must highlight some more gems from Warren Buffett. You will also see below that they have been adding to their energy positions as well.
The great people at Doomberg explain that the Liberals have changed their attitude towards nuclear energy and to many people out there, this is our real opportunity to deal with the energy issues of the planet.
Bruce Mehlman produced another great slide deck. He points out the four areas we have been addicted on that has to change: China (for manufacturing, supply chains & deficit financing), Digital (as everything digitized, networked & automated), Easy Money (as low interest rates & QE persisted without serious inflation), Debt financing (as institutions spend more than they took in).
Steve Saretsky again looks at the desire for immigration growth in Canada, but the housing supply cannot keep up. David Rosenberg is part of his piece and David thinks that Canada must change course for a while.
It is important to understand our younger generations better and David Brooks’ op-ed explains some issues out there.
Finally, I am looking forward to seeing my mom on Sunday and I include some gift ideas for the best population group out there…our moms.
David
PS…The world is currently going through a realignment of the global financial system, with China playing a critical role. As important as China’s economy has been for decades, the current transition is something new altogether and has major ramifications for Canadian investors.
On Tuesday, May 16 at noon we are hosting William Chin, Economist at Caldwell Investments who will be presenting on the Global Reset, China’s role, and what it means for markets around the world. Details are in the attachment. Please feel free to share this with interested parties. We would love to have you there and lunch will be served.
Global Reset_ China’s Influence on Investing in a Changing World
Number 5 - Warren Buffett
Some people got up early on Saturday to watch King Charles III’s coronation. Others tuned in to another kind of royal ceremony: the Berkshire Hathaway annual shareholders meeting in Omaha, Nebraska.
Berkshire CEO Warren Buffett, 92, holds the annual “Woodstock for Capitalists” in his hometown every year to discuss his company’s performance and share his thoughts on timely economic issues with tens of thousands of fans in attendance.
Here are the highlights.
On the regional banking crisis: Buffett bashed leaders at the banks that failed this spring (First Republic, SVB, etc.), saying they “should suffer” and face “punishment.” But he also blamed the “totally crazy” bank regulations that incentivize bad behavior and “very poor” messaging around the debacle from politicians and the media. Buffett thinks the government was right to intervene to protect SVB depositors, claiming, “It would have been catastrophic” otherwise.
On the status of the dollar: “We are the reserve currency. I see no option for any other currency to be the reserve currency,” Buffett said. He called the notion of bitcoin or other tokens dethroning the dollar a “joke.”
On Berkshire’s investment in Apple: The value of Berkshire’s stake in Apple has ballooned to $151 billion, amounting to nearly half the value of its entire stock portfolio. “It just happens to be a better business than any we own,” Buffett said.
On living your best life: “You should write your obituary and then try to figure out how to live up to it,” Buffett said. “It’s not that complicated.”
Number 6 - Gaining Steam - Doomberg
Airtime given to solar, wind, battery storage, and nuclear power is most often focused on how best to serve our electricity grids, but vast swaths of the economy burn huge amounts of fossil fuels to create steam for use in heavy manufacturing. The newfound momentum behind nuclear energy creates an opening to decrease the carbon intensity of this important vertical in our economy. In a notable development, a major chemical company is collaborating with an innovator in SMR technology to customize a nuclear solution addressing the need for industrial-grade steam. If successful – an outcome that is by no means certain – the initiative could catalyze a structural change to the front end of our economy. In our view, the project has not received the attention it deserves. Let’s give it some.
Number 7 - Easy money, China, debt and digitization, The Four Addictions - Bruce Mehlman
https://mehlmanconsulting.com/wp-content/uploads/The-Four-Addictions-Q2-2023-Mehlman.pdf
Over the first two decades of the 21stCentury, the U.S. (and world) grew increasingly dependent on:
China (for manufacturing, supply chains & deficit financing)
Digital (as everything digitized, networked & automated)
Easy Money (as low interest rates & QE persisted without serious inflation)
Debt financing (as institutions spend more than they took in)
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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