First quarter commentaries are now live!
This quarter, George Droulias talks about the importance of having “non-obvious” insights, while Frank Mullen discusses how he believes EdgePoint's fixed income approach answers a lot of the questions investors have about the current market environment.
Alexandra, partner since 2018 (Toronto, Ontario)
This week in charts
Investment options
Mortgages
Canadian savings
Toronto housing
In the US, immigration accounted for about half of the growth in the working age population between 1995 and 2014 according to Pew Research. Unfortunately, between Donald Trump’s “build a wall” jingoism and the Covid pandemic, there was then a sharp drop in immigrant workers. Over the course of four years, according to a February paper from the San Francisco Federal Reserve, the Trump administration took 472 executive actions aimed at reducing immigration, from increasing immigration enforcement to freezing refugee admissions to moving away from family immigration. Between 2016 and 2019, the number of new permanent residents dropped 13 per cent and the number of student F1 visas declined 23 per cent.
Covid didn’t help. Many laid-off workers lost visas or simply preferred to ride out the pandemic in their own countries. The two trends together fuelled a strong tightening in the labour markets, according to the San Francisco paper. The authors found that the drop in immigration from 2017 onwards resulted in a 5.5 percentage point increase in the vacancy to unemployment ratio in the US.
But happily, the recent uptick has resulted in a 6 percentage point reduction to that ratio. More than 900,000 immigrants became US citizens during 2022 — the third highest level on record and the most in any fiscal year since 2008, according to Pew. The largest numbers came from Mexico, India, the Philippines and Cuba, and the highest growth in flows were from Cuba, Jamaica, the Philippines, India and Vietnam.
That’s great news not just for inflation, but for growth, labour force mobility and entrepreneurship. Immigrants are more likely to be self-employed and start new businesses than native born Americans. They are the heart of the ever-evolving American dream. In my own home town in Indiana, there are Spanish groceries, restaurants, nightclubs and dual language service providers to cater to a community of former migrant farm workers. A couple of generations on, they are increasingly middle-class and represent much of the entrepreneurial zeal in the area.
Indeed, the Dallas Fed’s research points to the fact that the future of American growth exceptionalism (relative to Europe and other rich countries) may be largely down to the future of immigration. Dallas Fed economists did a long-run projection that included the growth contributions of immigrants and their children. They found that if immigration to the US were to continue at 2016 trend levels until 2060, the labour force would grow 0.45 per cent, eventually creating a 193mn person workforce — given that growth is basically people plus productivity, a larger workforce is key. Conversely, a 30 per cent decline in immigration would mean 180mn workers, and a 50 per cent cut would mean 173mn workers.
That means millions fewer people to pay taxes, fund entitlements and start new businesses. While immigrants represent 13.6 per cent of the US population, they start a quarter of new businesses. Indeed, a study by the American Immigration Council last year found that 43.8 per cent of the Fortune 500 companies were started by immigrants or their children. Anti-immigration, business-friendly conservatives in particular should think carefully about that figure.
Frozen food beating fresh as shoppers seek savings
Frozen food is outperforming fresh in supermarkets at the moment, data from research firm Kantar suggests.
Frozen chicken, ready meals, pizzas and chips are the most popular items.
"Frozen food tends to be much cheaper, and there's less waste, so you can see why it's selling well in the cost of living crisis," said retail analyst Ged Futter.
Overall, frozen food volumes have held steady, even though overall shoppers are buying less. In the 12 weeks to mid-March, total grocery volumes fell by 4% while the volume of frozen goods bought was unchanged, the data shows.
Mum-of-two Kate Hall from Bromley set up a website, The Full Freezer, to advise people how to save money and reduce waste by using their freezer properly.
She said she's had much more engagement in the last six months, as living costs soared.
"People are getting over their fear of frozen food, and that's a good thing," she said.
"There's much less food waste if you use your freezer effectively, and that's something people are really conscious of right now."
This week’s fun finds
Rare Canadian “Supercar” For Sale: The Enterra Vipre
Exactly how a group of waiters came up with the idea of starting their own car company may be lost to history, but we do know that in the early-to-mid 1980s the waitstaff at the Keg Restaurant on Vancouver’s Granville Island hatched a plan to launch their own custom car brand and call it Cymbria.
Rather than building a car from scratch as Bricklin has done a decade earlier before collapsing into bankruptcy the team at Cymbria decided too instead base their car on a preexisting production sports car to save time and money.
The car they chose was arguably the hottest American sports car of the time, the Pontiac Fiero, an affordable mid-engined car with a lightweight fiberglass body. Cymbria developed their own custom bolt-on fiberglass body for the car, then they developed a more luxurious interior, they doubled the sticker price, and put their car on the market.
The first prototype was built in 1984 as the Cymbria Vipre, however the poor fitment of the fiberglass body panels and overall build quality left a lot to be desired. The moulds had to be completely redone, by the time they were ready it was 1986. The car was relaunched, now as the Enterra Vipre, with a price of over $30,000 USD – the equivalent to $71,277 USD in 2023 and roughly double the cost of a standard V6 Fiero.
Despite the fact that the car was being sold through selected Pontiac dealerships in the USA it was a complete flop. The lack of brandname awareness for Enterra coupled with the high price and the fact that the car had slightly worse performance than the stock V6 Fiero (due to to the larger/heavier body) resulted in dismal sales.
Fewer than 40 were sold, though it’s believed that 6-8 cars remained in the factory in partially-built condition when bankruptcy proceedings began. It’s not known what happened to them or how many of the production versions of the car have survived to the modern day.
The car you see here is an original surviving 1986 Enterra Vipre, it’s based on the high-specification Pontiac Fiero SE and it’s powered by the 2.8 liter V6 sending power to the rear wheels via a 5-speed manual transmission.
It’s now being offered for sale out of Totem Lake, Washington on Bring a Trailer, and you can visit the listing here to read more or register to bid.
Cube-shaped creature with 24 eyes discovered hiding in pond in Hong Kong, study says
The researchers found the creature hiding in the “brackish water” of shrimp ponds at Mai Po Nature Reserve, according to a study published March 20 in the journal Zoological Studies. They returned three summers in a row and kept finding more of these creatures.
The scientists analyzed the animals and discovered a new species of box jellyfish, the study said.
Box jellyfish are named for their “cube-shaped” bodies, researchers said. This group of jellyfish contains “some of the most venomous marine animals in the world.”
The new species, Tripedalia maipoensis, has a see-through body with a slight whitish tinge, photos show. The jellyfish, measuring less than an inch long, has three tentacles extending from each corner of its body, the study said.
The jellyfish has 24 eyes arranged in sets of six, researchers said. On each side, the creature has two larger eyes — the upper and lower lens eyes — surrounded by four smaller eyes known as the pit and slit eyes.
Two of these eyes are used for seeing images while the other four are used to detect light, according to an April 18 news release from Hong Kong Baptist University.
Tripedalia maipoensis is the first box jellyfish species to be discovered in Chinese waters, the release said.
