A quick video looking at the sudden rise in markets last week and what conclusions we can draw from it.
Information in this commentary is for informational purposes only and not meant to be personalized investment advice. The content has been prepared by Adrian Walker from sources believed to be accurate. The opinions expressed are of the author and do not necessarily represent those of ACPI.
A series of bad days, a moment of respite, and then more selling. This was the story of 2008, and it lasted for months. The rout lasted until finally investors felt that enough was going to be done to save the economy that people stopped selling. Massive quantitative easing, an interest rate at 0%, aggressive fund transfers, bailouts to whole industries, and the election of a president who seemed to embody the idea of “hyper competence”. That’s what it took to save the economy in 2008. Big money, an unconditional promise to save businesses and people, and the rejection of a political party that oversaw the bungled early handling of a crisis and had lost the public confidence.
I don’t think Donald Trump has never had been viewed as hyper competent. I doubt even his most ardent supporters see him as incredibly clever, but instead a thumb in the eye of “elites” who have never cared to take their concerns seriously, and to an establishment that seemed incapable of making politics work. Trump was a rejection of the status quo and a “disruptor in chief”. A TV game show host who played the role of America’s most sacrosanct character, the self made man, asked now to play the same role in politics.
There’s nothing I need to cover here you don’t already know. A history of bad business dealings, likely foreign collusion to win an election, surrounded by sycophants and yes men with little interest or understanding of the machines they have been put in charge of, and an endless supply of criminal charges. Like a dictator his closest advisors are members of his own family, and perhaps more shockingly he fawns over and publicly admires the dedications of respect other dictators get from their oppressed populations. Never has a person been so naked in their desires and shortfalls as Donald Trump.
Markets have played along with this charade because Trump seemed, if anything, largely harmless to them. Indifference to the larger operation of the government and the laser like focus on reduced regulations and tax cuts made Trump agreeable to the Wall Street set. If he could simply avoid a war and keep the economy humming, Trump was a liveable consequence of “good times”. Until the coronavirus issue, Trump had not done terribly. The economy wasn’t exactly humming. It had a bad limp due to a trade war with China. It had a chest cold because wealth inequality was continuing to worsen despite decreasing unemployment. And its general faculties were diminished as issues around health care, deficit spending, and other aspects of the society began to languish. But as far as unhealthy bodies go, the American economy still had its ever strong beating heart, the American consumer.
Today, @realdonaldtrump said: “I’ve always known this is a pandemic. I’ve felt that it was a pandemic long before it was called a pandemic … I’ve always viewed it as serious.”
Whatever name you prefer; COVID-19, the coronavirus, SARS-CoV-2, or the #Chinesevirus (as Trump is now busy trying to get it renamed) has exposed the fault lines in the administration and the danger of such blinkered thinking by Wall Street. Having spent the last few weeks downplaying the severity of the outbreak and hoping China would be able to contain it, until finally, grudgingly, acknowledging its seriousness. Markets have suddenly come face to face with a problem that bluster and bravado can’t fix. Trump is a political liability for markets, and his leadership style, which is heavy on cashing in on good times with little management for rainy days, means that markets may not really have any faith that he can properly address these problems.
Other efforts to calm markets, largely through the federal reserve, have not reassured anyone. Two emergency rate cuts are not going to fix the economy but did spook investors globally (it did signal to banks that they should take loans to cover potential shortfalls). The promise of a massive set of repo loans to provide liquidity will keep markets open and lubricated, but again won’t save jobs and won’t prop up the physical economy. What will fix markets is an end to the pandemic, a problem with the very blunt solutions of “social distancing”, “self isolation” and the distant hope of a vaccine.
What investors are facing are three big problems. First, that we don’t know when the virus will be contained. Optimistically it could be a month. Realistically it could be three. Pessimistically people are talking about the rest of the year. Even under the best conditions we are also likely facing a recession in most parts of the globe, and even then stimulus spending and financial help won’t be as effective until people can leave their homes and partake in the wider market (postponing tax filings and allowing deferrals on mortgages are good policies for right now, but at some point we need to spend money on things). But the last problem is one of politics. The Trump administration is uniquely incompetent, has shown little interest in the mechanisms of government, and in a particularly vicious form of having something come back to bite you, dismantled the CDC’s pandemic response team.
The best news came last week, when it seemed a switch had been flicked and the general population suddenly grasped the urgency of the situation and people began self isolating and limiting social engagements (I am now discounting Florida from this statement). Those measures have only been strengthened by government action over the last few days. Similarly, while I write this, Trudeau has announced a comprehensive financial package to come to the aid of small businesses and Canadian families. All this is welcome news, and I expect to see more like this over the coming weeks as Western governments take a more robust and wide ranging response to the crisis. So there is just one issue still unaddressed. The political mess in Washington.
I can’t say that markets will improve if Trump is voted out of office, but its hard to imagine that they could be made worse by his exit. Markets, and the investors that drive them, are emotional and it is confidence, the belief that things will be better tomorrow, that allow people to invest. Trump promised a return to “good times”, to Make America Great Again, and it is his unique failings that have left it, if anything, poorer.
Information in this commentary is for informational purposes only and not meant to be personalized investment advice. The content has been prepared by Adrian Walker from sources believed to be accurate. The opinions expressed are of the author and do not necessarily represent those of ACPI.
Over the weekend investors got a chance to read the fine print on the faustian bargain they had with President Donald Trump. Since Trump’s election night win, markets had jumped significantly. The promise of stimulus spending, tax cuts and a renewed focus on deregulation had given investors a “sugar rush”, and eclipsed the more basic concerns about Trump’s general lack of suitability to be president.
But with the stroke of a pen investors were being reminded about how quickly Trump’s essential character and the presidency he promised could bring chaos and confusion. On Friday Trump signed an executive order to temporarily restrict accepting refugees from seven predominantly muslim countries. The order was vague, poorly thought out, badly executed and quite possibly illegal. Confusion reigned and initially the order was applied to people with legal immigrant status in the United States, including those with green cards.
The weekend was filled with protests at airports, backtracking by members of the administration, and out and out insurrection by members of the government who believed that the order was unconstitutional. Very quickly the official story has descended into the kind of decontextualized factual minutia that has come to characterize attempts to grapple with the truth in the age of the internet. Did Obama do something similar? Is this a Muslim ban or something more restrained? Is it more or less reasonable than it was presented? Accusations or partisan hackery and racism powered the internet and every conversation everyone had over the weekend and well into today.
The answers to these questions are largely immaterial. Trump is a populist and is likely going to do exactly what he said he would do on the campaign trail. That his cabinet is a group of people with little understanding of the nuances of government and that he may in fact be heading up an administration that is kleptocratic on par with a South American government is part of his current appeal. This weekend won’t be the last time controversial and vague (or illegal) orders are issued by this president and it won’t be the last time that they are met with organized resistance.
2016 was a year in which great changes to the status quo were made without many of those changes having an impact. Investors may have come to believe that the rising tide of angry populism won’t have any negative repercussions, or may even be positive. But this weekend brought investors face to face with the reality of unpredictable populist outsiders calling the shots. Volatility is in the cards, and even if (as many believe) that Trump will be good for the economy, his style is not slow and deliberate, but fast and reckless. Investing in the US, which has a strong economy, is unlikely to be smooth even if the trajectory is up.
That’s the problem with Faustian bargains. You get what you want but what you sacrifice has typically been undervalued. The future for the American markets still looks good; but NAFTA talks loom, there are threats of trade wars, and a stable and predictable government seems unlikely. Investors should take note; its day 11 and there are another 4 years ahead. Even if we can’t predict tomorrow, we should acknowledge that tomorrow’s unpredictability may be the thing that investors have to make peace with.
With Brexit around the corner, the potential for a Donald Trump presidency and a host of other global problems (big problems), it’s hard not to talk about all the chaos and what it might mean to investors even when there is lots of other things to go over. For now, this will be our last article on the subject of Brexit until next week following the vote. I will take a look at some other issues later in the week.
Here's our piece on the potential for a "Brexit," which is a not great word and a worse idea. https://t.co/VGYmalNGZq
One thing that jumps out at me about “Brexit” is how fragile much of our world is. Progress is most often thought of as making things stronger or better, but that is only true to a point. Progress also has the unfortunate downside of making things much more fragile. The more progress allows us to do, the more fragile each step makes us.
Historically that fragility can frequently be seen during times of war. Britain, undoubtedly the world’s most powerful empire at the outset of the first and second world war, saw how quickly its strengths could be overcome by the weaknesses of a far flung empire. The supply lines, the distant resources and the broad reach of the war all exposed the underlying frailty of the British Empire. Two World Wars was all it took to end an empire that had been 500 years in the making.
What we hold in common with the British Empire is the causal assumption that things are the way they are naturally, that we cannot change the inherent status quo in our lives. Canada, the United States and Europe are rich nations because they are naturally rich nations, and not the result of a combination luck, science, philosophy and culture that have conspired to land us where we are today.
We live in a breakable society, one that doesn’t realize how fragile it is. In the past few years it has been tested in a multitude of ways, and this year is no exception. Brexit isn’t even the worst of how it can be. Syria has been reduced to rubble, Turkey has essentially lapsed into a dictatorship, with Russia having gone the same way. Venezuela, which I wrote about earlier, has moved from breadlines to mob violence.
Progress isn’t just uneven, it also isn’t guaranteed. Nations, empires and great civilizations have all come and gone, each of them burning brightly, however briefly, before being extinguished. The speed of a decline in Venezuela isn’t just a result of bad management, it is a reflection to just how much support our civilization needs. The rise of the new introverted nationalism doesn’t see this, and has sought an imagined self sufficiency as a way to relieve temporary difficulties. If people thought that the EU was difficult to deal with when you were a part fo it, wait until you aren’t.
Brexit is a choice that is both scary and appealing because it is scary. For an entire generation there may never be a choice like this again, a chance to permanently alter the geopolitical landscape, even with little understanding of what those changes can mean or do. Whether Britain will be poorer or richer over the next decade may ultimately hinge on the vote this Friday. Far more frightening is whether our ability to build something lasting, powerful but fragile will be permanently undone in the European sphere.
The first (and so far only) good day in the markets for 2016 shouldn’t go by without instilling some hope in us investors. The latter half of 2015 and the first weeks of 2016 have many convinced that the market bull is thoroughly dead, having exited stage left pursued by a bear (appropriate for January). The toll taken by worsening news out of China, falling oil, and the rising US dollar have left markets totally exhausted and despondent. But is the bull dead, or just mostly dead? Because there’s a big difference between all dead and mostly dead. In other words, is there a case to be made for a resurgence?
I am, by nature, a contrarian. I have an aversion to large groups of people sharing the same opinion. It strikes me as lazy, and inevitably many of the adherents don’t ultimately know why they hold the views that they do. They’ve just gotten swept up in the zeitgeist and now swear their intellectual loyalty to some idea because everyone else has. And when I look at the market today, I do think there is a contrarian case for a market recovery. Not yet, it’s too early, but there are reasons to be hopeful.
Don’t mistake me, I’m not trying to downplay the fundamental challenges that markets and economies are facing. Canada has real financial issues. They are not driven by sentiment, they are tangible and measurable. But they are also fixable, and they do not and will not affect every company equally. The same is true for China, just as it is true for the various oil producers the world over. What we should be wary of is letting the negative sentiment in the markets harden into an accepted wisdom that we hold too dear.
Put another way, are the issues we are facing today as bad or worse than 2011, or even 2008? I’d argue not, and becoming too transfixed by the current market sentiment, the panicked selling and the ridiculous declarations by some market analysts only plays into bad financial management and will blind you to the opportunities the markets will present when a bottom is hit and numbers improve.
So is the bull dead? No. He is only mostly dead and there is a big difference between mostly dead and all dead. We will navigate this downturn, being mindful of both the bad news and the good news. Investors should seek appropriate financial advice from their financial advisors and remember that being too negative is just another form of complacency, a casual acceptance of the world as it currently appears, but may not actually be.
Remember, the bull is slightly alive and there’s still lots to live for.
For over 20 years we have been helping Canadians navigate difficult markets like this, by meeting in their homes and discussing their personal situations around the kitchen table. If you are looking for help, would like a complimentary review of your portfolio, or simply want to chat about your finances, please contact us today.
As we bring this year to a close, markets continue to frustrate. The US markets, along with most global markets and especially Canada, are all negative. Over the past few weeks Canada has dipped as low as -13% on it’s year-to-date (YTD) return. In speaking with some people within my industry, expectations to finish flat for the year will be sufficient for a pat on the back and considered solid performance.
Years are ultimately an arbitrary way of organizing time. January 1st will simply be another day from the standpoint of the earth and the sun. Neither China’s nor Canada’s problems will have solved themselves when markets reopen in 2016, but from the perspective of investors a new year gives us a chance to reframe and contextualize opportunities and risks in the markets. The surprises of 2015 will now be part of the fabric of 2016, new stories will come to dominate investor news and new narratives will popup to explain the terrain for Canadians.
So when we do get to our first trades in January, what kind of world will we be looking at? What opportunities and risks will we be considering?
The risks are very real. After a steep sell off in Canada we may be tempted to think that the Canadian market is cheap and ideal for investment. I’ve had more than one conversation with market analysts that suggests that things could change very quickly. Cheap oil, a cheap dollar and rising consumer spending to the south could all spell big opportunities for Canada.
But this argument has another side. Since 2007, despite lots of volatility, the TSX has barely moved. In February of 2007 the TSX was at 13083, and at close on Friday last week the market was 13024. The engines of Canada’s economic growth from the past few years have largely stalled. Commodity prices have fallen and may be depressed for some time, with exports of everything from timber to copper and iron being reduced significantly. Oil too, as we have previously said, is unlikely to bounce back quickly. Even if oil recovers to around $60, the growth of cheap shale energy will likely eclipse Canadian tar sands, and will not be enough to restart some previously canceled projects.
Similarly, the Emerging Markets have been badly beaten this year, driving down the MSCI EM Index to levels well below the early year highs. But those levels also reflect the ongoing and worrying trend. The MSCI EM Index (a useful tool to look at Emerging Markets) isn’t just lower than it’s previous year’s high, it’s lower than it was back in 2011, and in 2007. In other words we’ve yet to surpass any previous highs, and when faced with the reality that the United States will likely be raising rates for the next few years, the EM will likely continue to lose investments to safer and higher yielding returns in the United States.
In an ideal world a new year would be a chance to wipe the slate clean, mark the previous year’s failings as in the past and move forward. But what drives markets (in between bouts of panic selling and fevered buying) are the fundamentals of economies and the companies within them. So as celebrations of December 31st give way to a return of regular business hours, investors should temper any excitement they have about last year’s losers becoming the new year’s winners. The ground has shifted for the Canadian economy, as it has for much of the Emerging Markets. Weaknesses abound as debt levels are at some of their highest and global markets have largely slowed.
It is a core belief that investors should seek “discounts”. The old adage is buy low and sell high. That advice holds, but investors should be wary as they walk the tightrope between discounted opportunities, and realistic market danger. Faced with a world filled with worrying trends and negative news an even handed and traditional approach to investments should be at the top of every investor’s agenda for 2016.
Liquidity is a sacred cow among the investing professional class and the importance of being able to sell and redeem an investment at a moment’s notice is a cornerstone of presumed investor safety and a hallmark of modern investing. In fact, improving liquidity has been a goal of markets and it’s a major achievement that there isn’t a commonly held mutual fund, ETF or stock that can’t be sold at the drop of a hat.
But in the same way that we can overemphasize the benefits of some health trends to the point of excluding other good for you foods, (I’m looking at you gluten free diet) the assumed exclusive positive benefits of liquidity can crowd out some very reasonable reasons to seek investments with low or limited liquidity.
Why would you choose an investment that can’t be sold easily? It’s worth pointing out all the ways that liquidity make investing worse. Volatility is increased by liquidity. High frequency trading, ETFs and trading platforms that let novice investors monitor the ups and downs of the market provide liquidity while magnifying risk. Sudden events best ignored become focal points for sell-offs. Liquidity is almost always the enemy of cooler heads.
Liquidity also costs money. For investments that are traditionally illiquid, like some bonds and GICs, redeemable options often trade at a discount. According to RBC’s own website the difference between a redeemable and non-redeemable GIC is 25 bps ( a quarter of 1%), which doesn’t sound like much, but when rates are as low as 1.5% for a five year GIC that is a 16% reduction in return.
The principle of investing has been that buying and holding something over a period of time would result in returns in greater excess than the rate of inflation. That rate of return is based on the associated risk of the enterprise and how long the investment should be held for. But into this mix we have also come to value (greatly) the ease with which we can walk away from an investment. It is the underpinning of a stock market that your commitment to a corporate venture need not be you, but that your financial role can be assumed by someone else for a price (your share).But that feature has come to dominate much of what we both value and hate about investing. Canadians are relieved to know that can sell their investments on short notice, protecting them from bad markets or freeing up cash for personal needs. But by extension things like High Frequency Trading use that same liquidity to undermine fair dealings within markets.
Are there reasons to not choose a liquid investment (aside from your house)? I think the answer is yes. For one thing we may put an unnatural value on liquidity. We pay for its privilege but we rarely use it wisely. The moment we are tempted to use liquidity to our advantage we usually make the wrong choice. Selling low and buying high are the enemy of smart investing, but all too often that is exactly what happens. Every year DALBAR, a research firm, publishes a report detailing investor behavior and its results are sobering to say the least.
Poor investor decisions have led to chronic underperformance by “average investors”. The inability to separate emotions from investing, and the ease with which changes can be made have led to meager returns. In the 2014 study showed that the “average investor” 10 year return was a paltry 2.6%, nothing compared to the return of most indices. That return got surprisingly worse over time, with a 2.5% annualized return over 20yrs and 1.9% over 30. Reduced liquidity could inadvertently improve returns for investors by simply removing the temptation to sell in poor markets; in those moments when our doubt and emotions tell us to “run”.
So what types of investments are typically “illiquid”? Such products are normally reserved for “accredited investors”, or investors that have higher earnings or larger net savings. These deals are traditionally considered riskier and would be unsuitable for a novice investor (unfamiliar with the risks) or ill-suited to someone who might need to depend on their savings on short notice. That makes a lot of sense and any manager worth their salt would tell you that you shouldn’t tie up your savings if you might need them. But it is worth considering whether we have let our obsession with the convenience of liquidity undermine our goals as investors. Something to consider next time the urge to sell in bad markets comes upon you.
This summer might prove to be quite rocky for the American and global economies. The smart money is on the Federal Reserve raising its borrowing rate from a paltry 0.25% to something…marginally less paltry. But in a world where borrowing rates are already incredibly low even a modest increase has some investors shaking in their boots.
Why is this? And why do interest rates matter so much? And why should a small increase in the government borrowing rate matter so greatly? The answer has everything to do with that financial black hole 2008.
No matter how much time passes we still seem to orbit that particular mess. In this instance it is America’s relative success in returning economic strength that is the source of the woes. Following the crash their was a great deal of “slack” in the economy. Essentially factories that didn’t run, houses that sat empty and office space that was unused. The problem in a recession is convincing 1. Banks to lend to people to start or expand businesses, and 2. to convince people to borrow. During the great depression the double hit of banks raising lending rates and people being unable to borrow created a protracted problem, and it was the mission of the Federal Reserve in 2008 to not let that happen again. source: tradingeconomics.com
To do that the American government stepped in, first with bailouts to pick up the bad debt (cleaning the slate so to speak) and then with a two pronged attack, by lowering the overnight lending rate (the rate that banks can borrow at) and then promising to buy bonds indefinitely, (called Quantitative Easing). The effect is to print mountains of money, but in ways that should hopefully stimulate banks and corporations to lend and spend on new projects. But such a program can’t go on for ever. Backing this enormous expansions of the treasury requires borrowing from other people (primarily China) and the very reasonable fear is that if this goes on too long either a new financial bubble will be created, or the dollar will become worthless (or both!).
Similarly we have some guesses about what might happen if the Fed raises its rates in the summer or fall. Most of the predictions are temporary instability, but generally the trend is good, raising rates usually correlates to a stronger and more profitable market.
But that’s the key word. Usually. Usually European countries aren’t issuing negative interest rates on their debt. Usually we aren’t in quite a pronounced deflationary cycle. Usually we aren’t buying billions of dollars of bonds every month. Usually.
The answer isn’t to ignore the bad predictions, or obsess over them. The best idea is to review your portfolio and make sure it’s anti-fragile. That means incorporating traditional investment techniques and keeping a steadfast watch over the markets through what are often considered the quiet months of the year.
The reality of the 21st century is that finding clarity in world events for investors is almost impossible. Take the recent price drop in oil, which has been hailed as both a good and bad thing. And as the new lower price of energy slowly becomes the norm, everyday news reports come in about its respective benefits and unintended negative consequences.
Those seeking to know what those events mean and what guidance headlines should give will only be frustrated by the almost endless supply of information that seeks to empower decisions but leaves many scratching their heads in wonder about the future.
A big reason for this is the sheer volume of information that we can now rely on. Since the advent of computers and the more recent rise of high-speed communication and networking we have found that the core truth of an event still isn’t apparent until after something has happened. In other words it’s almost impossible to predict corrections before they happen despite an almost inconceivable amount of data and endless ability to process it.
This is true no matter where we look in the world of investing. Consider Black Friday, the end all and be all day in shopping in the United States. This year Black Friday seemed to fizzle. Sales were down 11% year-over-year and that got people nervous. Yet Cyber Monday, the electronic version of Black Friday, sales were up 17% and topped $2 billion for the first time. Combined with the longer sales period leading up to the weekend, many suspect that total sales were actually higher.
All of this data conflicts with each other, which for investors means sometimes you will be wrong. Small things sometimes prove to be big things, and what initially appears simple turns out to be surprisingly complex, and much of it you simply won’t predict. This points investors back to some dull but surprising truths about investing.
1. Not much has changed when it comes to determining what makes a company worthwhile to invest in. Corporate health, sound governance and healthy cash flow still tell us more than loud hype about potential new markets, new products and new trends.
2. Time is a better arbiter than you about investing. The old line is time in the market, not timing the market, and that still appears true. Many Canadians are likely wringing their hands about the sudden drop of oil and the impact it is having on their portfolios. But the best course of action maybe not to abandon their investments, but make sure they are still sensibly invested and well diversified. The market still tends to correct in the long run and immediate volatility (both up and down) are smoothed out over time.
Not every sensible investment will work out, but a portfolio of sensible investments over time will. For investors now wondering about the future and their investments in Canada, the best thing to do is understand the logic behind their investments before choosing a course of action.
***This post will refer to both a mutual fund company and a particular fund. This post should not be construed as endorsing that fund. We always make sure that we cite our sources and in this instance our source is a fund company, and we are not suggesting in any way that you should invest in or purchase this fund. If you are interested in any fund, please consult with your financial advisor first for suitability, especially if that financial advisor is us!***
Since the price of oil dropped there have been lots of reasons to be excited. First the price of gas at the pumps is so low that I don’t hate going there anymore. Second, investments in energy have suffered since oil lost close to $30 in value.
And while energy stocks have recovered somewhat from their low points, they are still way off where they were earlier in the year. I’m not going to get into the finer points about the nuances of energy producers and the various types of oil and costs of production. It’s a worthwhile article, but will take up too much time here. Instead I wanted to focus on a different way that Canadians can participate in the energy sector.
Commodities can be volatile but also a valuable element of a portfolio. So how can Canadians play the energy sector while being mindful of the risks associated with it?
The answer may be by investing in what is called “Midstream MLPs”. Midstream MLPs (Master Limited Partnerships) are American operators that transport energy from the producers to the consumers. It’s a capital intensive business that is federally regulated but traded on the stock market. It therefore provides consistent cash flow while offering liquidity to investors. But Canadians already have opportunities for energy infrastructure, so why should they care about this in the United States?The answer has everything to do with the rising levels of oil production in the United States combined with what federal regulators are willing to do to encourage new growth.
That brings us to the growth of the shale revolution in the United States. Newly discovered reserves (of significant size), improved technology and a dropping costs of production have set the US on a course to be the largest global energy provider in the coming years. This combination of efficiencies means that the United States is going to continue to increase its oil production over the next decade, while dropping the cost of extraction for each additional barrel. But each barrel produced has to go somewhere.
In the United States, Midstream MLPs are responsible for moving that oil. But it’s a sector that also must grow. Infrastructure to move oil efficiently from shale producers doesn’t exist yet, and regulators are eager to get MPLs in place with new development. New infrastructure is costly, and while the business model for an MLP doesn’t require a high price for energy to be profitable, it does need assurances about the consistency of the volume of oil to be moved. To encourage that growth regulators are allowing the price that MLPs charge to rise at a rate faster than inflation. Why are they doing that? Much of the shale oil is having to be shipped via rail to get to its right home. This causes price disparities that reduces producer margins and rankles federal governments.
Currently there is only one fund option in Canada that we are aware of for investing in MLPs. We had an opportunity earlier this week to meet the managers of this fund and were greatly impressed by what they had to show us. I am already a big believer in the growing Shale Revolution, and am particularly pleased by the arrival of new opportunities for investment. Growth in the Canadian and American energy sectors is good news for not just investors, but also citizens. Russia, Saudi Arabia, Venezuela and a host of other despotic and semi-despotic regimes have been able to get by on the high price of oil. Now they are feeling the pinch of a decreasing price that has the benefit of bringing jobs back to North America while weakening their influence. In all, this is a good story for everyone.