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Below is our monthly commentary on topics covering the markets, the economy, and our investment approach. To receive an email notifying you when our blog is updated, fill out the form at the bottom of this page.

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Stocks Go Up, Stocks Go Down

Is it time to panic? On February 5th the Dow Jones Industrial Average index fell as much as 1,600 points, an intraday record. And the financial media lost their minds: Source: Bloomberg, Wall Street Journal, Financial Times, Globe and Mail As often happens when inflammatory headlines proliferate, the general public became worried. In a matter of […]

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Consequences have Consequences

Physics is a pretty straightforward field of study. Those who are well-versed in it can accurately predict the timing of a solar eclipse, map the path of a rocket, or design the voltage of an electrical outlet. Human behaviour, by contrast, is much messier to study. Trying to predict how humans will react to a […]

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Bitcoin and Baseball: Evaluating the Quality of Decisions

Moneyball is one of our favourite books. Written by Michael Lewis, it gives an insider’s view of how the Oakland Athletics’ front office made decisions about trading and signing players. As the book describes, the Athletics focused on improving their player evaluation process so that they could generate a higher return (in terms of wins) on each […]

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Equity Markets Checkup

It has been a lucrative year to be an equity investor. Unless you’ve been invested in Canada. Or Australia. Or the U.K. But other than that it’s been great! As the following chart shows, equities in emerging markets, the U.S., and Japan have all posted solid returns. Owing to our circle of competence, we don’t […]

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The Power of Incentives

There are two ways you can get a mule to move: with a stick or with a carrot. You could punish the mule by hitting it with a stick until it moves. Alternatively, you could encourage the mule to move by dangling a tasty carrot in front of it. Either way, if you want it […]

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Warm and Fuzzy Investing

We like sports. We like investing. Which is why the recent sale of the NBA’s Houston Rockets caught our attention. The sale price of US$2.2 billion struck us as an awful lot of money to pay for a team based in only the tenth-largest market of the big four professional sports (NBA, NFL, MLB, NHL). So we […]

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ETFs in a Bear Market

Exchange-traded funds (“ETFs”) have enjoyed tremendous growth since the financial crisis. We’ve discussed this growth previously, but as a refresher, the following chart illustrates how passive investment funds have been stealing market share from funds that are managed actively. Source: Morningstar Direct If you were an individual investor who decided to switch your entire portfolio from […]

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Canadian Household Debt: What’s Next?

Canada turned 150 years old this month. Over this century-and-a-half, the country’s GDP has grown from under $400 million to over $2 trillion. From beaver pelts and codfish to bitumen and car parts, the face of Canada’s economic growth has changed considerably over the last 150 years. In the last few years, the face of Canada’s economic […]

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What is Risk?

A question for you. Let’s say that you invested $100 in each of two different securities. Suppose you held both of these securities for five years before selling them. Over the five year period, the securities’ prices performed as shown in the following chart. Which of these two securities is riskier? Option 1: Security A […]

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The Cost of Decisions

You are currently reading this. That means there are many other things you aren’t doing. You could, instead, be exercising at the gym. Or you could be working a part-time job at a coffee shop. Or you could be writing your own blog post for an asset management firm. The world is your oyster. (We […]

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