Elon Musk – The Walker Report

Investing in Hype: Understanding Market Volatility in 2026

This June, Facebook (now officially Meta) will shut down Horizon Worlds. You’d be forgiven for not recognizing the name, but it was meant to be the flagship social platform of the “Metaverse” — Mark Zuckerberg’s much-heralded pivot into virtual reality, announced in October 2021 alongside the company’s rebrand.

The original announcement video is still on YouTube. In retrospect, three things stand out about that grand vision of a future that looked suspiciously like Ready Player One:

Nobody came. The Metaverse was a dead mall — sparse, empty, and largely ignored.
It cost $88 billion. In inflation-adjusted terms, more than the Saturn V rocket program, and nearly a third of Apollo.
Financial experts were astonishingly credulous about its prospects.

Consider McKinsey, which estimated the Metaverse could generate up to $5 trillion in value by 2030. This wasn’t an offhand remark — it was supported by a 60-page report laying out the case in detail. They were hardly alone. Companies like Gucci and Disney lined up to invest, eager to establish a virtual brand presence.

Under normal conditions, being this wrong — a roughly 6,350% reversal of value — might prompt some reflection on how we evaluate technological hype. But there has been no reckoning. No serious questioning of the institutions that promoted it, nor any meaningful reassessment of Meta’s valuation, which still hovers around $1.6 trillion.

Instead, the cycle continues. In 2026, we are preparing for a wave of mega IPOs: SpaceX, expected to be valued between $1 trillion and $2 trillion; OpenAI; Anthropic — each priced at levels that assume enormous future success.

At the same time, investors are being asked to absorb the volatility generated by Trump’s war with Iran. Now in its seventh week, the conflict sits in a fragile ceasefire, with peace talks already having broken down. Markets have been repeatedly jolted by pre-market announcements from Trump, aimed at calming investors or pushing down oil prices. They work briefly — until reality reasserts itself and volatility returns.

And beneath it all, the line between investing and gambling continues to blur. You can now bet on almost anything: sports, elections, military strikes, even market movements. If you prefer your speculation dressed up as investment, there are cryptocurrencies — from meme coins promoted by social media personalities to those endorsed by political leaders.

Meanwhile, the Artemis II mission has just returned from the far side of the moon — the closest humans have come since the 1970s. It is a genuine technological achievement, built on decades of expertise and engineering discipline. Yet even here, the narrative is distorted. Elon Musk has publicly dismissed the program, despite ongoing struggles to safely launch his own super-heavy rocket. His public persona is built on compressing timelines, dismissing constraints, and projecting certainty where experts see complexity.

SpaceX, for all its accomplishments, is profitable primarily because of Starlink. Its core rocket business is not, nor are its adjacent ventures in AI, reportedly losing close to $1 billion per month. And yet, it is among the companies expected to command a trillion-dollar valuation.

This is the environment we are operating in: one of extraordinary hype. The current focal point is artificial intelligence — a technology with real promise, and real risks, that is increasingly being framed not as a tool, but as a wholesale replacement for human labor.

In practice, the results are far more mixed. AI systems are being deployed widely, and while there are genuine successes, they often fall short in complex, real-world applications. Signs are emerging that progress at the frontier may be slowing, and that integration into everyday workflows is proving more difficult than expected.

At the same time, the risks are becoming harder to ignore. Reports suggest that a recent Anthropic model was able to contact its researcher despite being tested in isolation, and identified tens of thousands of software vulnerabilities, prompting emergency responses across major institutions. Elsewhere, an AI system in China reportedly began mining cryptocurrency without explicit instruction — an example of emergent behaviour that remains poorly understood.

From a risk-reward perspective, the disconnect is striking. Investors are being asked to discount meaningful downside — including the possibility of systems behaving unpredictably — while accepting highly optimistic assumptions about their ability to replace large portions of the workforce. Structural issues, such as hallucinations, remain unresolved and may limit the technology’s long-term utility.

And yet the dominant narrative persists: spend aggressively, build relentlessly, and assume the future will justify the cost.

It’s no surprise that many people feel uneasy about the pace of change. Not long ago, the internet was slow and confined to desktops. Smartphones only became widespread after 2008, and within a few years had been refined into engines of constant engagement, capturing attention through endless notifications. Today, we are immersed in a media environment optimized for immediacy, amplification, and emotional response.

For investors, this creates a dangerous dynamic. The fear of missing out is immediate and visceral; the benefits of skepticism are slow and often invisible. But they are no less real.

2026 will likely bring a steady stream of dramatic headlines — each demanding attention, each tempting reaction. The discipline required is simple, but not easy: remain calm, examine the facts, and resist the urge to act on noise.

We are living in an era of exceptional credulity, reinforced by opaque flows of capital and influence. The responsibility, then, falls on investors themselves — to think critically, to question confidently, and to resist the pull of narratives designed to benefit from their belief.

Aligned Capital Partners Inc. (“ACPI”) is a full-service investment dealer and a member of the Canadian Investor Protection Fund (“CIPF”) and the Canadian Investment Regulatory Organization (“CIRO”). Investment services are provided through Walker Wealth Management, an approved trade name of ACPI. Only investment-related products and services are offered through ACPI/Walker Wealth Management and covered by the CIPF. Financial planning services are provided through Walker Wealth Management. Walker Wealth Management is an independent company separate and distinct from ACPI/Walker Wealth Management.

April 15, 2026 by The Walker Report of Walker Wealth Management and Aligned Capital Partners Inc

The Demographic Deformation

This week the IMF concluded that we were entering a prolonged period of slow growth for the globe. Inflation had failed to materialise in Europe and the United States. China’s economy is “transitioning” from one of infrastructure building to internal consumption, easily said but in practice hugely complicated and fraught with peril. A failing China and a rising US dollar have also put the squeeze on the Emerging Markets, and added to that is the low price of oil that has put many oil dependent economies on their heel. Throw in a refugee crisis and an escalating situation with Russia and there just may not be enough rose tint in the world for your glasses.

I am encouraged though by the idea that much of this is temporary. These are the challenges we face right now and they will pass. So I try to keep some perspective about the problems of “now”. Because there are some real challenges that are facing us that we haven’t even begun to address.

Like old people.

B97489188Z.120150812190729000G75AI3NT.11 — This man is 104 years young. Which is another way of saying he is very old. Which is why he is sitting in a Tim Hortons.

Old people. I’m sure you’ve seen them out on the street, hanging out in Tim Hortons and frustrating you in traffic by driving 5km under the speed limit. But it may surprise you to learn that we are all getting old, and at such a regular pace you could time it by the Earth’s rotation around the sun. And somewhat surprisingly we are about to have a lot of old people, a historically large amount.

The baby boomers are obviously not babies anymore. The name was coined to account for the post war boom in children, but the most interesting fact about them may be how few children they had. Wealthy populations with low infant mortality and high education rates simply have less kids. Globally this is a positive trend, as every country has seen a slowing rate of population growth. But in the day to day management of an economy a large number of elderly people can create significant challenges.

Japan_sex_by_age_2010 — This is Japan’s current demographic make-up. The population is inverted, with the largest segments being the oldest, and the smallest being the youngest, a reversal of a typical population chart. This means that there are fewer workers to pay the taxes to support the benefits of the oldest segments of the population, a problem that will only get worse with each passing year.

There are the usual problems, like benefits and entitlements which grow exponentially as a population ages. Those programs that the elderly depend on become highly burdensome when there isn’t a workforce to create enough economic activity to tax. This has been the long understood problem of Japan, whose debt to GDP ration now tops 240% and is thought to be the source of much of Japans economic malaise. But there are also less well understood issues, like how a large aging population affects behavior.

China’s Self Created Demographic Disaster Is Coming

As a group, the elderly tend to seek similar things from their investments: less risk, less volatility, and consistency in income. But when put into practice it has the effect of warping the investment world if done on mass. Dividend stocks, a popular source for lower risk equity that pay consistent income, have been driven up in price through demand, making them both more expensive and reducing the relative yield. The same is true for fixed income, as investor demand has compounded the effect of quantitative easing and kept interest rates low and pushed conservative investors into more risky bonds.

Liquidity is something most investors value, and this is especially true for retirees. The fear of being locked into an investment as its value plummets keeps many up at night and it is reasonable that people depending on their investments to fund their lifestyle have the option . The attraction of liquidity though also magnifies the volatility we seek to avoid. The ease with which investors can opt out of a market on short notice makes bad market days terrible market days as mass selling can take hold.

Lastly, the sheer number of people that are retiring and leaving the workforce depresses economies. In case you’ve missed it, countries everywhere have low, or lowered their interest rates. The purpose of that is to encourage investors to seek out riskier investments for better returns, thus stimulating the economy. But retirees aren’t crazy and have largely resisted this trend. Instead they have held on to lower risk investments even as the returns have dropped, meaning that the richest segment of the economy isn’t putting money to work in a way that undermines government monetary policy.

This is from the "Value of Advice" report from 2011. You can read it HERE, but it's primary purpose was to show the difference in household values when people work with an advisor. This chart on the other hand gives some indication of where most investable assets lie. It should be no surprise that an older population seeking conservative investments means less money pumping into growth sectors of the economy. — This is from the “Value of Advice” report from 2011. You can read it HERE, but it’s primary purpose was to show the difference in household values when people work with an advisor. This chart on the other hand gives some indication of where most investable assets lie. It should be no surprise that an older population seeking conservative investments means less money pumping into growth sectors of the economy.

We are beginning to see a demographic deformation, one that will challenge many of the ways we mange the finances of a nation. Everything from healthcare to education to interest rates will be affected. And this is all uncharted territory. When we talk about challenges we face we tend to focus on near term issues, but big challenges are glacial, slowly altering the world around us and exposing weaknesses in our assumptions and institutions. Dealing with these challenges could require some significant sacrifice, asking much of a wealthy generation to part with their entitlements at the moment they would most like to use them. But even then these are challenges to which we have no good answers yet.

October 9, 2015 by The Walker Report of Walker Wealth Management and Aligned Capital Partners Inc

What a Race Car Driver Taught Me about Oil Prices

Tesla is all over the news. Most recently I have seen several postings about the new P85D Tesla’s Insane Mode, a setting in the car that delivers the maximum amount of power to the car (a big thanks to my client who sent me the link).

Tesla, and it’s CEO Elon Musk (who is a real life bond villain) has made quite a splash, building a high quality and competitive electric car with a solid range. A real first. And while his current offerings in the market remain decidedly high end, his ambitions include creating a more affordable middle class version as well.

But the economics of electric vehicles remain challenging at best. There are more options than ever, from Chevrolet, to Ford to Toyota. But these cars all tip the scales at the upper end of the car market, and are not sensible economically on a three year lease.

This is the Tesla Model X. It's due to hit the road in 2016, and is gorgeous. Notice the "Falcon Wing." Notice it! Did you notice it? Awesome, right? — This is the Tesla Model X. It’s due to hit the road in 2016, and is gorgeous. Notice the “Falcon Wing.” Notice it! Did you notice it?
Awesome, right?

But the problem for electric cars may be best explained by the new Formula E series that is currently in it’s inaugural season. Using a newly designed electric race car I was surprised to learn that there are limits on the power that drivers can use in races, (while fans can vote to give some drivers an addition 50 bhp to boost speed each race via twitter). Why is this? Ostensibly it is to help preserve the life of the battery, already the heaviest part of the car and not powerful enough to get a car through a single race without a second car. In other words, the economics of the battery is still the biggest challenge facing all auto producers.

By some good fortune my brother in law is a driver in Formula E for team Mahindra. Mahindra & Mahindra isn’t as well known in Canada, but is a large conglomerate and a significant auto producer that sells in many countries. This past year they have launched India’s first electric passenger vehicle, the Reva e2o, which they had loaned to Karun and afforded me the opportunity to test drive while visiting my extended family in India. It’s a good car, and I could see that Karun had enjoyed driving it. But he pointed out the first challenge to electric cars in India was that the Indian government is only just introducing an electric car subsidy (having previously canceled one in 2012). In fact it is government subsidies that have helped foster the boom in electric cars.

What this all leads to is the inevitable challenge poised by the sudden drop in the price of oil. Electric cars sit at the top of the market in terms of cost, and many aren’t even viable until after you both:

Don’t have to buy gas anymore when oil is over $100 a barrel.
Are given money by the government to help afford the car.

So if high gas prices underly the business case for electric cars, then a sudden cut in the price of oil does significant damage to that business case. It makes traditional petrol cars more cost effective, more competitive and more profitable compared to their e counterparts.

This tells us two things about oil and electric cars. The first is that while oil prices may stay depressed compared to previous market highs, the demand for oil is unlikely to decline and will likely recover as cheap oil spurs economic growth. The second issue is whether the rise of companies like Tesla is overstated. As exciting as they may appear, the market valuation of TESLA is the real insane mode, and certainly not in line with a traditional auto maker. The reality at least is that the end of oil, and the growth of electric cars is going to be dependent on considerable innovations in battery technology and will not be viable in the long term with cheaper oil and government subsidies. But who knows, next year’s Formula E series will allow teams to design their own cars and we may begin seeing some interesting innovations start in battery development.

February 5, 2015February 5, 2015 by The Walker Report of Walker Wealth Management and Aligned Capital Partners Inc