This week's interesting finds

The case of the missing Inside Edge E-mail 

For those of you looking forward to your weekly Inside Edge E-mail, we apologize for not sending it last week, due to a technical issue 

And now back to our regularly scheduled programming. 

Mike, partner since 2021 (Punta Cana, Dominican Republic)   

This week in charts 

Consumer spending   

2022 vs 2023 YTD performance   

You Might Live Longer Than You Think. Your Finances Might Not.

Demographers and actuaries make the following distinction between life expectancy and longevity: Life expectancy refers to the average number of years someone will live from a given age, whereas longevity refers to how long he or she might live if everything goes well, typically expressed as the probability of living beyond a certain age such as 85, 90 or even 100. 

A growing body of evidence shows that many people are ignorant of their so-called longevity risk—the probability of living a very long time—and the complications that presents. 

“A lot of people are thinking about life expectancy, but the extent to which people are asking questions about longevity is much lower,” said Abigail Hurwitz, a professor at the Hebrew University of Jerusalem who studies pensions and behavioral finance. 

Or, as Olivia Mitchell, a University of Pennsylvania professor and co-author on a pair of recent papers, put it: “The chance you might live a very long time in retirement and run out of money is something we haven’t focused enough on at all.” 

People can look up their longevity risk with an online Longevity Illustrator maintained by the American Academy of Actuaries and Society of Actuaries, based off the latest mortality data from the Social Security Administration. 

They might be surprised, especially by the probability that one member of a couple could live a very long time, said James Poterba, a Massachusetts Institute of Technology economics professor who has long studied retirement-savings patterns. 

What matters for most people is the life expectancy and longevity risk of their specific age group going forward. (If you’re 65, the death rates of people ages 0 to 64 are no longer part of your calculation.) Of course, pandemics, other health risks and medical advances might alter these calculations, but consider where things stand now.   

This week’s fun finds 

A comprehensive guide to the new science of treating lower back pain 

The big takeaway: Millions of back patients like Ramin are floundering in a medical system that isn’t equipped to help them. They’re pushed toward intrusive, addictive, expensive interventions that often fail or can even harm them, and away from things like yoga or psychotherapy, which actually seem to help. Meanwhile, Americans and their doctors have come to expect cures for everything — and back pain is one of those nearly universal ailments with no cure. Patients and taxpayers wind up paying the price for this failure, both in dollars and in health. 

When back pain strikes, your first instinct may be to avoid physical activity and retreat to the couch until the pain subsides. 

But doctors now think that in most cases, this is probably the worst thing you can do. Studies comparing exercise to no exercise for chronic low back pain are consistently clear: Physical activity can help relieve pain, while being inactive can delay a person’s recovery. 

Those researchers suggested that a combination of exercises — strength training, aerobic exercise, flexibility training — may be most helpful to patients, and that there seemed to be no clear winners among the different approaches but that each had its own benefits. 

Multidisciplinary rehab takes the “biopsychosocial” view of back pain — again, that the pain arises from the interplay of physical, psychological, and social factors. It can of course be tricky to disentangle whether mood disorders like anxiety or depression contribute to people’s pain, or whether they arise out of the pain, but either way, the biopsychosocial model views the physical as only one part of the equation. So these practitioners deal with what’s going on inside the head as part of their back pain therapy — helping patients get treatment for their depression or anxiety, or guiding them through cognitive behavioral therapy to improve their coping skills. 

Welcome to the Shoppy Shop – Why does every store suddenly look the same? 

Neil Shankar, a designer at the company formerly known as Square, has a term for these types of stores: shoppy shops. He told me the name resonated on his TikTok page, which dissects the consumer-packaged-goods industry. “There didn’t really seem to be a name for all these artisanal markets that are popping up that carry these brands,” he said. “You could walk into any one of these shoppy shops and you see Graza, you see Brightland, you see Diaspora, you see Fishwife. So there is kind of this symbiotic relationship between these modern brands and the curated shops that carry them.” 

Even though the companies sell different products, some similarities are impossible to ignore. “We need a new term for ‘internet-based small businesses that still use global supply infrastructure,’” said my friend, the culture writer Kyle Chayka, when I told him about this story. “We know these minimalist-ish generic aesthetics are not connected to any true local origin, but we see them as indicative of some kind of authenticity. My current thought is that they don’t feel local to a place, but instead they feel local to the internet, which is, after all, where we all live.” 

Successfully marketing a product so that it feels local everywhere is an art. I’ve started calling this crucial step in a product’s development “smallwashing,” i.e., when a brand positions itself as a small business and shows up on shelves as if it were small, even though it has probably been through at least one comfy fundraise and a hotshot General Catalyst VC sits on the board. (Bonus points if the company in question hires Gander to handle the design.) 

Faire is one of the true decacorns — with a $12 billion valuation, alongside household names like Shopify — in what’s known as the “e-commerce enablement space,” that is, the collection of companies that build the infrastructure allowing you and me to buy things on the internet in the first place. Founded by a group of former Block employees (that’s the company that used to be Square), Faire is a digital marketplace that makes it seamless for store owners to find new products and buy wholesale. And before you even ask, yes, of course, it’s algorithmic: Marketing copy on the site excitedly proclaims, “The more you shop our wholesale website, the better recommendations you’ll get.” Cha-ching! 

In other words, Faire is a website where people can purchase products; then those products are delivered to the purchasers. I asked how Faire is different from, say, Amazon. “It’s literally night and day,” Levitan said. “We only sell wholesale, so our customers are all retailers, as opposed to end customers like you or me, and we’re selling to these retailers who are really — I always say they’re the original influencers, the local store that has a shopkeeper with a great eye who really understands the pulse and the interest of their local consumer, and they curate unique products for that community.”

This week's interesting finds

Grant, partner since 2018 (Downtown Winnipeg, Manitoba) 

Photo by one of our advisor partners: Lonn Vokey   

Canadian personal debt 

A milder Covid winter 

Investors: The one thing separating excellent from competent 

The market exerts an enormous gravitational pull. Because managers are constantly being compared to it. This is great when they’re beating it, but horrible when they’re not: It creates a toxic mix of peer pressure and personal financial risk (chiefly getting sacked). The pressure to ‘copy’ the market is huge, so most end up mimicking it to one degree or another. 

Humans naturally fear an outsider, and acting differently marks you out as a threat (even if the thing you’re doing is perfectly harmless). We instinctively know this and feel the pressure to conform for safety’s sake. And you can see this allotment’s peer pressure a mile off, which is why, despite not appearing happy to, most are doing the same as everyone else. 

All great investors, past and present, are specialists, not generalists. They’re laser focused on doing one thing, and doing that one thing really well. 

The rub is that, no matter what your one thing is, it won’t work each and every year. This means there will be years when everyone else — the market — looks better than you (even Buffett — he’s had plenty of years like that). 

Now, if I (or you) pick managers who say they only do one thing, but stop doing it after a tough year or two, I’m stuffed. It means I’m spending too much time exposed to their one thing when it’s not working, and not enough time when it is. 

How America Took Out The Nord Stream Pipeline 

Last June, the Navy divers, operating under the cover of a widely publicized mid-summer NATO exercise known as BALTOPS 22, planted the remotely triggered explosives that, three months later, destroyed three of the four Nord Stream pipelines, according to a source with direct knowledge of the operational planning. 

Two of the pipelines, which were known collectively as Nord Stream 1, had been providing Germany and much of Western Europe with cheap Russian natural gas for more than a decade. A second pair of pipelines, called Nord Stream 2, had been built but were not yet operational. Now, with Russian troops massing on the Ukrainian border and the bloodiest war in Europe since 1945 looming, President Joseph Biden saw the pipelines as a vehicle for Vladimir Putin to weaponize natural gas for his political and territorial ambitions. 

Asked for comment, Adrienne Watson, a White House spokesperson, said in an email, “This is false and complete fiction.” Tammy Thorp, a spokesperson for the Central Intelligence Agency, similarly wrote: “This claim is completely and utterly false.” 

Biden’s decision to sabotage the pipelines came after more than nine months of highly secret back and forth debate inside Washington’s national security community about how to best achieve that goal. For much of that time, the issue was not whether to do the mission, but how to get it done with no overt clue as to who was responsible. 

There was a vital bureaucratic reason for relying on the graduates of the center’s hardcore diving school in Panama City. The divers were Navy only, and not members of America’s Special Operations Command, whose covert operations must be reported to Congress and briefed in advance to the Senate and House leadership—the so-called Gang of Eight. The Biden Administration was doing everything possible to avoid leaks as the planning took place late in 2021 and into the first months of 2022. 

The direct route, which bypassed any need to transit Ukraine, had been a boon for the German economy, which enjoyed an abundance of cheap Russian natural gas—enough to run its factories and heat its homes while enabling German distributors to sell excess gas, at a profit, throughout Western Europe. Action that could be traced to the administration would violate US promises to minimize direct conflict with Russia. Secrecy was essential.   

This week’s fun finds 

Don’t Just Spend Your Time – Invest It 

The go-to verb for what we do with time is “spend” it. Researchers say it might be better to think of time as something we invest, using our precious hours to accumulate a wealth of fulfillment and meaning that our future selves can draw on. 

This shift in thinking is particularly important because it might help us think longer term. Recent research by Hal Hershfield and Cassie Holmes, both professors at UCLA’s Anderson School of Management, and their collaborators indicates that those who think about their time over longer horizons—say, years or a lifetime—tend to be happier day-to-day and more satisfied with their life.

When we invest money, we tie up our present resources in exchange for future gains. But investments of time have the advantage of paying out in both present enjoyment and far-off benefits, says Prof. Holmes. 

Prof. Holmes recommends determining your own best investments by performing an audit of your time use for a week or two. This exercise, which Prof. Holmes details in her book “Happier Hour,” consists of recording, in half-hour increments, what you did and how happy you felt while doing it on a scale of 1 to 10. 

When choosing between different ways you could allocate your time, it can also help to imagine what your future self might hope you chose. 

“Who am I, what am I going to be doing in five years, 10 years?” asks Prof. Hershfield. “When we look back, we don’t want to regret finding that our time slipped through our fingers, being spent on stuff that turned out to not be all that meaningful.” 

This 22-year-old is trying to save us from ChatGPT before it changes writing forever 

After the fall semester ended, [Jeff] Tian traveled home to Toronto for the holidays. He hung out with his family. He watched Netflix. But he couldn't shake thoughts about the monumental challenges confronting humanity due to rapidly advancing AI. 

And then he had an idea. What if he applied what he had learned at school over the last couple years to help the public identify whether something has been written by a machine? 

Tian already had the know-how and even the software on his laptop to create such a program. Ironically, this software, called GitHub Co-Pilot, is powered by [ChatGPt’s predecessor] GPT-3. With its assistance, Tian was able to create a new app within three days. It's a testament to the power of this technology to make us more productive. 

Now humanity faces the prospect of an even greater dependence on machines. It's possible we're heading towards a world where an even larger swath of the populace loses their ability to write well. It's a world in which all of our written communication might become like a Hallmark card, written without our own creativity, personality, ideas, emotions, or idiosyncrasies. Call it the Hallmarkization of everything. 

Which brings us to the other purpose that Tian envisions for his app: to identify and incentivize originality in human writing. "We're losing that individuality if we stop teaching writing at schools," Tian says. "Human writing can be so beautiful, and there are aspects of it that computers should never co-opt. And it feels like that might be at risk if everybody is using ChatGPT to write."

This week's interesting finds

Pierre et Catherine, partners since 2009 and 2022 (360 St. James St. West – Old Montreal, Québec)

Translation: We’ve met the enemy and it’s us. Work with an advisor who can help you from yourself!  

This week in charts 

Retail traders   

International comparisons of household debt 

Big Oil mega-deals would put investors on the spot 

Exxon Mobil and Chevron are rolling in cash. So are Shell, BP and TotalEnergies, but investors value U.S. oil majors way higher than European ones. That raises the question of whether Exxon or Chevron might undertake a transatlantic swoop. 

The American duo’s valuation lead is tangible even though Shell’s 2022 results, released on Thursday, showed that earnings doubled year-on-year, matching those of its U.S. peers. $473 billion Exxon and $331 billion Chevron trade at 6 times expected EBITDA for 2023, twice the average of $210 billion Shell, $154 billion Total and $109 billion BP. One reason why is that as oil prices have soared, American drillers look more attractive than European ones that are also pressing into potentially lower-return renewable energy. 

One [question] is whether U.S. shareholders want the bother of a mega-deal in lieu of the huge buybacks and dividends they are currently trousering. Any cross-border deal would see Chevron’s Mike Wirth or Exxon’s Darren Woods take a big bet on continuing high oil prices, and also attract political heat. They might have to dispose of UK petrol station assets on competition grounds, and spin off BP or Shell’s solar and wind assets that form a part of Britain’s decarbonisation plans. While BP’s Gulf of Mexico assets should be attractive to a U.S. acquirer, other bits would be less so. 

The other question is whether UK-based institutions want to hold paper in a U.S. driller less focused on building out renewables. Some of them are genuinely attracted by Shell, BP and Total’s vision of being stewards of the energy transition, and might therefore require a bigger deal premium, or reject an offer outright. But even BP boss Bernard Looney appears disappointed with some of the returns from low-carbon investments, according to the Wall Street Journal. And despite the European groups’ environmental ambitions, shareholders have not rewarded them with higher valuations, suggesting doubts that they can make a profitable transition away from fossil fuels. A U.S. offer might therefore be a test of investors’ own green bona fides. 

Accelerating shareholder value creation in private and public companies 

Over the years, I have observed that private companies are more productive and have consistently outperformed public companies in value creation. I have tried to find the core reasons for this significant gap, and I want to share some of my observations with you. Although I have been associated with many private and public companies, the examples below are generic observations I have gathered watching the performance of many other companies. 

• Focus on product and innovation strategy – The biggest difference I see between private companies and public companies run by public company boards is that private companies have much more focus and board discussion on product strategy, innovation, technology roadmaps, and focus on a growth agenda. 

• Board Composition – Most private companies have board members who have significant ownership equity interests and hence have a direct responsibility toward company performance. 

• P&L Accountability – In private companies, I have seen a lot of effort by the board and the management to define true KPIs to monitor the operational improvements in the company. Private companies try to remove FX effects, deferred revenue effects, monitor billed revenue, monitor cash EBITDA vs. adjusted EBITDA, etc. 

• Management Compensation Tied to Outcomes – In private companies, management teams are heavily incentivized for shareholder value creation.   

This week’s fun finds 

The Daily Habits of Happiness Experts 

The meaning of happiness is, to an extent, subjective. But nearly every expert we surveyed emphasized the same cocktail of ingredients: a sense of control and autonomy over one’s life, being guided by meaning and purpose, and connecting with others. And they largely agreed that happiness can be measured, strengthened, and taught. “The more you notice how happy or how grateful you are, the more it grows,” Grizont says. 

The experts we surveyed had a handful of happiness habits in common. Spending time with family outside of the house, and with friends in a non-professional setting, were big ones: the majority did both at least once a week, and many gathered socially three to four times a week. John Zelenski, a psychology professor at Carleton University, describes social relationships as the chief building blocks of happiness. We all stand to benefit from close friendships, romantic partners, and a “general sense of respect and belonging in a community,” he says. 

Pursuing hobbies, such as art, music, cooking, or reading, was also universally important. Most respondents carved out space for these interests five to six times a week. Mental well-being has long been linked to sufficient sleep, and our respondents prioritized getting at least seven hours a night. Exercising or playing sports was another shared habit, with respondents saying they fit it in three to six times weekly.   

Why Eggs Cost So Much 

Prices have risen for just about everything over the past couple of years. But anyone shopping for groceries recently has probably noticed the cost of one item in particular: eggs. 

Keeping the supply of these eggs flowing depends on the hens that lay them. Like so much else, feeding hens their typical diet of grains like corn, oats and barley now costs more for egg farmers. This chart shows grain prices in 2022 compared with previous years: 

Another factor in egg prices is the supply of hens themselves. The population of egg-laying hens in the U.S. fell drastically when a highly contagious avian influenza broke out early last year and again in the fall. About 44 million egg-laying hens died as a result, or slightly more than one in 10 hens from the pre-outbreak population.

This week's interesting finds

Frank Mullen – Partner since 2009 (Peak of Blackcomb Mountain – Whistler, British Columbia) 

This week in charts 

Resources, Manufacturing and China   

Real estate 

U.S. mortgages 

This week’s fun finds 

What the Longest Study on Human Happiness Found is the Key to a Good Life 

Since 1938, the Harvard Study of Adult Development has been investigating what makes people flourish. After starting with 724 participants—boys from disadvantaged and troubled families in Boston, and Harvard undergraduates—the study incorporated the spouses of the original men and, more recently, more than 1,300 descendants of the initial group. Researchers periodically interview participants, ask them to fill out questionnaires, and collect information about their physical health. As the study’s director (Bob) and associate director (Marc), we’ve been able to watch participants fall in and out of relationships, find success and failure at their jobs, become mothers and fathers. It’s the longest in-depth longitudinal study on human life ever done, and it’s brought us to a simple and profound conclusion: Good relationships lead to health and happiness. The trick is that those relationships must be nurtured. 

In this sense, having healthy, fulfilling relationships is its own kind of fitness—social fitness—and like physical fitness, it takes work to maintain. Unlike stepping on the scale, taking a quick look in the mirror, or getting readouts for blood pressure and cholesterol, assessing our social fitness requires a bit more sustained self-reflection. It requires stepping back from the crush of modern life, taking stock of our relationships, and being honest with ourselves about where we’re devoting our time and whether we are tending to the connections that help us thrive. Finding the time for this type of reflection can be hard, and sometimes it’s uncomfortable. But it can yield enormous benefits. 

It never hurts—especially if you’ve been feeling low—to take a minute to reflect on how your relationships are faring and what you wish could be different about them. If you’re the scheduling type, you could make it a regular thing; perhaps every year on New Year’s Day or the morning of your birthday, take a few moments to draw up your current social universe, and consider what you’re receiving, what you’re giving, and where you would like to be in another year. You could keep your chart or relationships assessment in a special place, so you know where to look the next time you want to peek at it to see how things have changed.   

Toronto ranked most 'disappointing' Canadian city: poll 

The Big Smoke has been ranked as Canada’s most ‘overrated’ city, according to a poll by independent market analyst King Casino Bonus in the United Kingdom. 

The poll found 10.9 per cent of visitors it surveyed found Canada’s largest city “disappointing,” with the most regrettable attraction being the Toronto Zoo. 

Montreal was a close second to Toronto, with 10.3 per cent of survey respondents saying the city didn’t live up to expectations. Its most disappointing attraction was the Biodome de Montreal. 

Meanwhile, Vancouver placed third in the ranks — 9.3 per cent of visitors surveyed found the city disappointing, with Gastown being the most underwhelming attraction. 

10 Nutrition Myths Experts Wish Would Die 

We surveyed some of the country’s leading authorities to reveal the truth about fat, dairy, soy and more. 

1) Fresh fruits and vegetables are always healthier than canned, frozen or dried varieties. 

2) All fat is bad. 

3) ‘Calories in, calories out’ is the most important factor for long-term weight gain. 

4) People with Type 2 diabetes shouldn’t eat fruit. 

5) Plant milk is healthier than dairy milk. 

6) White potatoes are bad for you. 

7) You should never feed peanut products to your children within their first few years of life. 

8) The protein in plants is incomplete. 

9) Eating soy-based foods can increase the risk of breast cancer. 

10) Fundamental nutrition advice keeps changing — a lot.

This week's interesting finds

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."

This week's interesting finds

 

Craig Advice – Partner since 2008 (Canmore, Alberta)

This week in charts

Who owns U.S. equity? 

Share buybacks by U.S. companies   

Projected top-6 countries by population in 2100 

CLO Managers Face Trading Crunch in Downturn 

By the end of 2023, more than 40% of collateralized loan obligations will be subject to restrictions on their ability to easily manage their portfolio by investing in new loans, according to Bank of America Corp. 

That means CLO managers will have less flexibility to keep their loan collateral safe just when they need it most. The share of CCC rated loans in CLO portfolios hit 5.6% by mid-December, according to the bank, not far from the carefully watched 7.5% level where individual CLOs may need to begin looking to divert cash flows from equity holders. 

“CLO managers are likely working hard to sort out the B- loans that will eventually be downgraded from those that won’t be downgraded,” said Steven Abrahams of Amherst Pierpont Securities, a broker-dealer owned by Santander. 

One way they’ll be able to tell the good from the bad is by looking at prices. The universe of loans rated B- is trading at a wide range, from roughly 70 to 90 cents on the dollar. The main difficulty lies in what to do about loans at the bottom end of that range. It’s too late now to sell those loans without locking in steep losses. 

“The ability to pick through loans to separate the ones that can be salvaged from the ones that can’t is what will distinguish managers this year,” said Abrahams.   

This week’s fun finds 

EdgePointers continue (and adapt) an annual tradition 

We delayed our annual holiday gathering into the new year, but it was worth the wait as (partner-shucked) oysters made their way to the festivities. 

Tea if by sea, cha if by land: Why the world only has two words for tea 

With a few minor exceptions, there are really only two ways to say “tea” in the world. One is like the English term—té in Spanish and tee in Afrikaans are two examples. The other is some variation of cha, like chay in Hindi. 

Both versions come from China. How they spread around the world offers a clear picture of how globalization worked before “globalization” was a term anybody used. The words that sound like “cha” spread across land, along the Silk Road. The “tea”-like phrasings spread over water, by Dutch traders bringing the novel leaves back to Europe. 

A few languages have their own way of talking about tea. These languages are generally in places where tea grows naturally, which led locals to develop their own way to refer to it. In Burmese, for example, tea leaves are lakphak.

This week's interesting finds

Sandro Panella and Cesare Rizzuto – Partners since 2008 and 2011 (Little Italy – Toronto, Ontario)

 

This week in charts 

Tesla’s market-cap drop in perspective 

Bloomberg negative-yielding debt index loses its last member 

Canadian housing affordability 

Inflation category weights 

How private markets became an escape from reality 

The rage for private investing began in the early 2000s, after the success of the Yale University endowment fund led by David Swensen, who embraced private investments to diversify away from stock and bond markets and stabilise returns in the long run. Swensen’s definition of “long” was decades — not a mere ten years, much less the next turn from bear to bull market. He looked for private managers who were building companies rather than stripping and flipping for a quick profit. Swensen defined his job as generating multigenerational wealth to support Yale, which he assumed to be “immortal”. But his approach also had the potential to free money managers from daily pressure in the markets, and transcend the short-term thinking that was infecting modern capitalism. 

What started as a sound idea has become an escape from something else entirely: reality. In return for the promise of superior returns, private funds typically “lock in” client money for up to 10 years, then report to clients much less frequently than public funds do — quarterly at most, not daily. In the new tight money era, with losses spreading across asset classes, private channels have become a way for money managers to conceal losses from clients — typically capital allocators at pension funds or other big savings institutions — who are often content in the dark. They don’t want to face the agonies of daily volatility either.   

Alberta sees largest population increase ever: StatsCan data 

"I think it would be fair to say that the Alberta economy has been doing reasonably well for the last couple of years, and that's made it more attractive," said Janet Lane of the Canada West Foundation. 

Lane, the director of the foundation's Human Capital Centre, says the job market is the first driver of population changes. 

"A very close second recently has been the cost of living in Vancouver and Toronto, the cost of housing for young people. It has absolutely been out of reach to be able to buy a home." 

British Columbia and Ontario were the two largest sources of migrants within Canada, with about 11,000 and 12,000 people arriving, respectively, from each. 

While Alberta led the country in proportional population increases, Ontario by far had the largest increase in sheer numbers. 

That province added more than 153,000 net new residents, largely due to international migration, but it lost more people to other provinces than it gained, many of them to Alberta.

This week’s fun finds   

Are Mushrooms the Future of Alternative Leather? 

MycoWorks eventually focused on creating a material that had the look and feel of leather but was free of animal parts. Called Reishi, after the Japanese name for the genus of mushrooms Mr. Ross first used, it can currently be produced in sheets of six square feet. (MycoWorks declined to disclose pricing except to say that it is currently comparable with exotic hides. As the company continues to grow, they added, MycoWorks will be able to offer some at lower prices.) 

The company, whose headquarters are in Emeryville, Calif., has obtained more than 75 patents and now has over 160 employees in the United States, France and Spain. It has also secured collaborations with high-end companies like Hermès and, most recently, the furniture maker Ligne Roset and GM Ventures, the investment arm of General Motors. 

In contrast, MycoWorks “can achieve the same quality and performance as animal leathers without the need for any sort of plastics,” Matthew Scullin, MycoWorks’ chief executive, said at a temporary exhibition showroom in New York in the spring. Now too large to rely solely on local farmers for its supply of mycelium, the company has its own strains which “we basically keep in cold storage,” Mr. Scullin said. 

The process starts by combining the mycelium with waste from sawmills in trays; as the sawdust decomposes, the mixture begins to develop into a thin sheet. The material can then be customized to meet clients’ specifications, including specific textures, and can include the addition of other fibers, like cotton. The Fine Mycelium, the trademarked name for its patented technology, is then finished by outside tanneries. (The tanning process does not use chromium, historically one of the most polluting parts of leather manufacturing.) 

Because the process for creating Reishi has only a few steps, Mr. Scullin said, it has a “low impact” on the environment. In addition, he said, while animal hides vary in size and texture, Reishi is more consistent and predictable for clients. 

The Surprisingly Profound Power of Thank-You Notes 

Near the end of December, I open my email or pick up a pen, and I begin composing thank-you notes. The messages are usually just a few sentences long: I recap my interactions with the recipient that year, put my finger on what I appreciated, and say I’m grateful. But when I consider whom to thank, I realize the list could go on and on. I try to think of everyone who made my year better: the established journalist who referred me to a radio program, the HR staff who processed my paperwork, the friend who dropped off groceries when I was recovering from COVID. Almost always, I get a note back expressing similar gratitude. 

Typically, we’re told to write thank-you notes at specific junctures—after finishing a job interview, receiving a gift, hosting a wedding or another significant function. These notes can be lovely, but they also run the risk of being rote and transactional. We send them because we’re expected to. End-of-year thank-you notes, though, aren’t written out of obligation. Those who get them are reminded unexpectedly that someone is thinking of them—and that their actions haven’t gone unnoticed. 

I’d argue that end-of-year thank-you notes are good for the sender too. Looking back on the year, I don’t stop reflecting after thinking about what I’ve accomplished. When I make a mental list of everyone who supported me, I remember that no achievement is the result of my efforts alone. That realization is humbling; it grounds me in gratitude for all I was able to do rather than resentment for what I didn’t or couldn’t do. 

Making a New Year’s Resolution? Don’t Go to War With Yourself 

“It’s helpful for resolutions to be resilient—ones that you’re going to be able to stick with even when life doesn’t run as perfectly as you planned. I like the idea that Dan Harris, the meditation writer and podcaster, talks about, which is resolving to do things “day-ish”—the notion that you can make your plan for change a lot more sustainable if it’s not so rigid that one missed day spells failure. 

“The other thing is just to remember that the difference between not doing anything at all and doing 10 minutes a few times a week is absolute. It’s the same idea as “the best kind of workout to do is the one you’re actually going to do.” If it happens to not be the ideal physical regimen according to science right now, that couldn’t matter less. 

“I don’t think there’s anything helpful about resolutions that put you at war with yourself. Often, it’s basically just a resolution to, like, shout even louder at yourself this year until you finally do the things that you think you ought to be doing. That kind of internal combat never works in the end, because you start to resent the person who’s yelling at you to do all these things—even if that person is yourself.”