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50 reasons why we don't invest for the long-term (Link) 
"Adopting a genuinely long-term approach to investing is one of the few genuine edges or advantages any investor can hope to exploit.  Unfortunately, it can feel as if everything is conspiring against our attempts to benefit from it – but that does not mean we should not try."

1: Because it is boring.
2: Because markets are random and it’s difficult to accept.
3: Because of short-term benchmark comparisons.
4: Because we are remunerated based on annual performance.
5: Because of quarterly risk and performance reviews.
6: Because there is always something/somebody performing better.
7: Because we watch financial news.
8: Because we think we can time markets.
....

Buy Canada?

Diversification? (Link) 

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Things I'm pretty sure about (Link) 
"Market behaviors feed on themselves. We all see the same market price and read the same commentary, the latter of which acts like gasoline on the flames of herd behavior. So investing misbehaviours can snowball. The consequence is that markets rarely sit at “average” valuations; they spend far more time in areas that look historically cheap or historically crazy. Underestimating adaptation and reversion to the mean is the greatest cause of pessimism. If you can stick around long enough to stomach the adaptations, optimism should virtually always the default assumption."

The Big Mac index shows currencies are very cheap against the dollar (Link)
"The Big Mac index is based on the theory of purchasing-power parity (PPP), which states that currencies should adjust until the price of an identical basket of goods—or in this case, a Big Mac—costs the same everywhere. By this metric most exchange rates are well off the mark. In Russia, for example, a Big Mac costs 110 roubles ($1.65), compared with $5.58 in America.  That suggests the rouble is undervalued by 70% against the greenback."




With an aging population spurring an ongoing economic revival, Japan is proving demographics aren't always destiny $(Link)
"Japan is refreshing its labor force from three often-neglected pools: the elderly, women and foreigners. This offers important lessons for the many other countries that now, or will soon, face similar demographic pressures."

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While investors display clear skill in buying, their selling decisions underperform substantially (Link) 

"We present evidence consistent with limited attention as a key driver of this discrepancy, with investors devoting more resources to buy decisions than sell decisions. When attentional resources are more likely to be equally distributed between prospective purchases and sales, specifically around company earnings announcement days, stocks sold outperform counterfactual strategies similar to buys. We document managers' use of a heuristic that overweights a salient attribute of portfolio assets - past returns - when selling, whereas we do not observe similar heuristic use for buys. Assets with extreme returns are more than 50% more likely to be sold than those that just under- or over-performed. Finally, we document that the use of the heuristic appears to a mistake and is linked empirically with substantial overall underperformance in selling."

CPP ads on one of the most expensive TV spots for Canadian TV. (Link)

"Canadian viewers of this year’s NFL’s wild card weekend were startled to see a certain commercial in heavy rotation. No, not the Budweiser Clydesdales, or the burger and soft drink ads that are the pricey broadcasts’ usual fare. Rather, this important message was brought to you by the Canada Pension Plan Investment Board. “You don’t think about CPP Investment Board,” the announcer chirped, while the usual assortment of smiling Canadians went blissfully about their assorted business, “but we think about you every day.” Indeed, “while you may not think about it, you started saving for retirement with your first paycheque.” Cue the music (Great Big Sea’s “Ordinary Day”) and the slogan: “Investing today for your tomorrow.”

Canadian Equities

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Too busy during the week? Catch up with last week's charts and articles:


Housing

Markets

World

Looking back on the last 40 years of reforms in China by Ray Dalio (Link) 

Wouldn't it be sad if Canada can't help displace coal in emerging markets? (Link) 

Businesses 

Apparently LEGO sets have outperformed equities over the long-term (Link)

How much of the internet is fake? Turns out, a lot of it, actually (Link)

Addiction to a language-learning app $(Link)

Industrial production

Millennials

Youth use of e-cigarettes has soared over the past year  $(Link)

Millennials aren't the only ones struggling to find a home to buy. A shortage of houses in the entry-level price range is prompting institutional landlords to begin building new ones themselves. $(Link)

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Looking back on the last 40 years of reforms in China by Ray Dalio (Link) 

 "I believe while there will be trade wars and trade truces, they aren’t the most important things. The most important things are that 1) China has a culture and system that has worked well for it for a long time so it shouldn’t be expected to change much, 2) the U.S. has the same, 3) these systems (and those of other countries) will be both competing and cooperating, and how well they do that will be an important influence on global conditions, 4) how well each system works in practice will have a far greater influence on where each country stands in the future than the terms of the deals that they strike with each other, so each would do well to examine its own weaknesses and come up with reforms to rectify them, and 5) there is a lot to respect about the Chinese culture and approach that led to its remarkable accomplishments, 6) we would do well to learn from each other, cooperate and compete to bring each other up rather than to tear each other down, and 7) China is a place we need to continue to evolve with and invest in."

Wouldn't it be sad if Canada can't help displace coal in emerging markets? (Link) 

"At present, Chinese LNG demand is surging. For the first nine months of the year, Chinese imports are up an incredible 50% year-on-year. However, it’s not just China that will drive LNG demand going forward. Using our same methodology, we expect India, Turkey, Pakistan, and Thailand will all see sharply higher demand for LNG volumes between now and 2025. Furthermore, as domestic demand comes in stronger than expected, several LNG exporting countries are facing feed gas shortages. Indonesia, Egypt, and Brazil have all run into problems and limited exports since we first identified this potential bottleneck several years ago. Indonesia’s new large-scale export terminal on Papua is now expected to entirely serve domestic gas demand, and as a result, no volumes are expected to reach the export market."

Investor behaviour - investors remain their own worst enemy

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Millennials aren't the only ones struggling to find a home to buy. A shortage of houses in the entry-level price range is prompting institutional landlords to begin building new ones themselves. $(Link)

"California-based American Homes 4 Rent has been building houses throughout the Southeast to add to its pool of more than 52,000 rental homes across the country. Chief Executive David Singelyn told a recent gathering of rental investors that in some places the company can build houses for about the same price that it costs to buy existing ones. By building houses, American Homes avoids sales commissions and renovation costs. It can outfit homes with its preferred fixtures and finishes at the onset, and charge higher rents than it can fetch for its older homes, Mr. Singelyn said."

U.S. millennial stats 

 Source: Raymond James Report on 2019 outlook 

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Youth use of e-cigarettes has soared over the past year  $(Link)

"Youth use of e-cigarettes has soared over the past year, thanks largely to Juul, whose sales have skyrocketed since mid-2017. One out of every five high school students—more than three million teens—reported using e-cigarettes recently, according to a federal survey conducted this past spring. Some, like Mr. Kinard, have become addicted to the powerful doses of nicotine that Juuls and similar e-cigarettes pack."

How much of the internet is fake? Turns out, a lot of it, actually (Link)

"Take something as seemingly simple as how we measure web traffic. Metrics should be the most real thing on the internet: They are countable, trackable, and verifiable, and their existence undergirds the advertising business that drives our biggest social and search platforms. Yet not even Facebook, the world’s greatest data–gathering organization, seems able to produce genuine figures. In October, small advertisers filed suit against the social-media giant, accusing it of covering up, for a year, its significant overstatements of the time users spent watching videos on the platform (by 60 to 80 percent, Facebook says; by 150 to 900 percent, the plaintiffs say)."

Addiction to a language-learning app $(Link)

"Von Ahn set out with his developers to make the app as addictive as Candy Crush and other popular games—in a good way. Good or bad, Duolingo’s addiction rate is way up. Next-day retention is 55 percent, up from 13 percent in 2012. And with about 300 million users, Duolingo is the largest language-teaching company in the world, by user base. The company has tapped into the latest research from behavioral scientists such as Angela Duckworth, an expert on self-control, and cadged ideas from game makers, who, von Ahn says, “have nailed down behavioral addiction really well.” One copied technique, “appointment mechanics,” encourages users to keep returning by rewarding streaks of uninterrupted daily practice with jewels that can be traded for in-game rewards."