Staying the Course
Inflation is topical again, so here comes a 2022-esque insights chart. The lesson here is that staying invested over the long term is a very good method of fighting inflation, even if certain asset classes don’t necessarily act like the inflation hedge you might always expect (looking at you, gold).
The Impact of AI
A brief chart pack from Apollo that is worth a skim for anyone with an interest in the scale of artificial intelligence (AI) in financial markets. Most people know that a large portion of the S&P 500 is now driven by AI investment—but they might be surprised to see that almost 50% of investment grade bond issuance is tied to AI.
We have said it before, but understanding your exposure is crucial at this moment in time given markets are converging on one giant trade.
The new 60/40 is AI versus non-AI.
Can Anyone Solve Canada’s Brain Drain Problem?
This article covers another topic we often find ourselves discussing with clients—and, unfortunately, one we see in action with repeat startup founders all too often. We don’t have all the answers here, but we would rank the outflow of human capital (and tax revenue) towards the top of the list of issues facing Canada at present.
According to Bank of Canada research, the study that generated the much-discussed finding, roughly 40 per cent of Canadians who would rank in the top 1 per cent of earners have emigrated south, along with 30-50 per cent of the next nine percentiles. Canadian-born individuals in the U.S. are more educated than native-born Americans, earn substantially more, and cluster in top income brackets. The study finds these top earners account for three-quarters of the Canada-U.S. GDP per adult gap and up to two-thirds of the labour productivity gap.
Paul Graham Live From Stockholm
Y Combinator founder Paul Graham is almost always insightful, and this recent talk maintains the trend. This is a practical conversation covering why businesses scale in hubs, the value of surrounding yourself with impressive people, and other advice that you can probably apply to broader life, even if Paul speaks in the context of business.
It comes across as a bit of a pitch for Silicon Valley, but if you read through the lines, there is a lot of great advice in here.
The more right you are, the less you can wait.
Prediction Markets Are Learning From the Addiction Industry
Prediction markets might not be getting as much media exposure as AI, but given the potential for societal issues (think sports gambling 2.0), they are something we should pay attention to. The statistics around insider activity are jarring and likely to only get worse as the industry scales unless thoughtful regulation is implemented.
Despite claims that prediction markets operate as investment tools, they are not sound investments for the average person. An analysis from The Wall Street Journal recently found that just 0.1 per cent of accounts on Polymarket earn 67 per cent of all profits on the platform, and that there are nearly three unprofitable accounts for every one that makes money on Kalshi. In one study, users of prediction markets were worse off, on average, than customers of traditional sports books.
Congratulations to the team at Capitalize for Kids for hitting a new all-time high in fundraising at the 9th annual Bay Street Games, with ~$500,000 raised to support the youth mental health sector!
Gallant MacDonald is a Private Investment Office serving a select group of ultra-high net worth families who have made significant contributions to business, public service, and philanthropy.
If you enjoyed this month’s Insights, please feel free to reach out, subscribe, or share!
Gallant MacDonald is a Private Investment Office serving a select group of ultra-high net worth families who have made significant contributions to business, public service, and philanthropy.
If you enjoyed this month’s Insights, please feel free to reach out, subscribe, or share!