EdgePoint Q4 2022 commentaries are now live on the website. This quarter:
• New growth? (equity) – Andrew Pastor discusses why we believe investor biases help us buy growing companies without having to pay for that growth.
• A rose by any other name (fixed income) – Derek Skomorowski takes the opportunity to tell us why labels matter less than content.
Alexandria DiBellonia, partner since 2014 (Ottawa, Ontario)
How Americans spent their money in 2021 by age
Robots are spreading to other industries…
…and are integrating more into them
The middle class is growing in emerging markets
MBA Mortgage Market Index shows U.S. mortgage volumes are the lowest in over 20 years
The cost of a new vehicle is almost a year’s worth of income
Lack of trust in the media
Investors Seek to Pull $20 Billion From Core Real Estate Funds
A group of property funds for institutional investors ended last year with $20 billion in withdrawal requests, the biggest waiting line since the Great Recession, according to IDR Investment Management, which tracks an index of the open-end diversified core equity [ODCE] funds.
“It’s like the nightclub where everybody lines up to get in and then lines up to leave when it closes,” John Murray, head of global private commercial real estate at Pacific Investment Management Co., said in an interview.
The capital outflows are ratcheting up the pressure on institutional fund managers as higher interest rates batter the commercial real estate market. At the same time, managers such as Blackstone Inc. are seeing retail investors — wealthy individuals in particular — pulling money from real estate bets amid volatile markets.
Redemptions are “prompting many core funds to attempt to sell their most liquid assets, like industrial and multifamily assets, which implies a headwind for even the most relatively resilient sectors” of commercial real estate, Murray wrote in a December note.
For institutional investors, the exit queue is at least partly a response to what’s known as the denominator effect. Investment managers often have certain targets for how much they want to have invested in stocks, bonds, real estate and other assets. As markets slumped last year, their stock and bond holdings shrunk in size while real estate held up better, meaning it often constituted a bigger slice of their portfolios than they initially intended.
This week’s fun finds
Lunar New Year celebration
We celebrated the upcoming Year of the Rabbit in both the Toronto and Montreal offices with our second moai of the year.
The Best Routine, According to Science
The research on routines is clear. They are indeed effective. They help you activate when you’re feeling low, automate decisions so you don’t burn willpower, and prime your mind-body system to more easily groove into the task at hand. If you work out every morning, you don’t have to think about working out, you just do it. And, if you’re like most people, you feel much better afterward, regardless of how you were feeling before.
But here’s the catch: Although routines can be magical, there is no magic routine. What works for one person might not work for others. This is problematic for those in the cult of routines, especially those looking to make a buck selling their own.
The bottom line is that the only way to an optimal routine is through astute self-awareness—not mimicking what other people do—and experimentation. The more you can match your activities to your energy levels, the better. The more you can figure out which types of environments stimulate your best work, the better.
There is also a danger in becoming overly attached to your routine. If for whatever reason you can’t stick to it—you’re traveling, your special coffee shop closes, whatever elixir you order from your favorite podcast’s advertising goes out of business—you won’t know what to do. It’s like a Zen koan: The first rule of routines is to develop one and stick with it. The second rule is to cultivate the capacity to easily release from it.
Boston Dynamics’ latest Atlas video demos a robot that can run, jump and now grab and throw
Boston Dynamics just released the latest demo of its humanoid robot, Atlas. The robot could already run and jump over complex terrain thanks to its feet. Now, the robot has hands, per se. These rudimentary grippers give the robot new life. Suddenly, instead of being an agile pack mule, the Atlas becomes something closer to a human, with the ability to pick up and drop off anything it can grab independently.
The claw-like gripper consists of one fixed finger and one moving finger. Boston Dynamics says the grippers were designed for heavy lifting tasks and were first demonstrated in a Super Bowl commercial where Atlas held a keg over its head.
NASA's Webb telescope has discovered its first exoplanet
NASA's Webb telescope has discovered an exoplanet, which is any planet that is outside of our solar system, for the first time, the agency announced Wednesday.
Researchers were scanning the skies using NASA's Transiting Exoplanet Survey Satellite (TESS) when they came across the exoplanet, and used the Webb's spectrograph technology to further investigate. Spectrographs transmit light from an object to a spectrum, which can give information about the object's temperature, mass and chemical composition.
"These first observational results from an Earth-size, rocky planet open the door to many future possibilities for studying rocky planet atmospheres with Webb," said Mark Clampin, astrophysics division director at NASA headquarters in D.C. "Webb is bringing us closer and closer to a new understanding of Earth-like worlds outside our solar system, and the mission is only just getting started."
