Friday, March 15, 2019

Weekend catchup

Your weekend edge - catch up with this week's readings:

Get the Edge - Click here to view an archive of investment education, daily musings, book recommendations and more.

Listen to the story behind "The Incredibles" and the power of misfits (Link)
Pixar was founded on a disruptive vision. Their leaders fervently believed it was never too early to throw your own recipe out the window. Pixar founder Steve Jobs wanted to keep raising the bar—bigger hits, longer run times—so he picked a couple of outsiders to drive a shakeup. So they hired Brad Brid who was just fired from Disney. Brad hated being told “that’s the way we’ve always done it” as he believed you needed to continually shake things up. Brad joined Pixar with an idea that was far beyond what Pixar had ever done. That idea was The Incredibles, which required animating a whole family with super powers..Pixar had never animated humans before because the coding behind creating a realistic animated human was something viewed as impossible in CG animation. Brad searched Pixar’s ranks for people who were frustrated with the status quo and willing to give Brads idea a try. It turns out Brad was onto something as his new team of frustrated individuals was super motivated to develop fresh new solutions and wanted to bring Brads incredible idea to life. The Incredibles went onto gross over $600 million and win two Oscars. Not bad for a misfit like Brad.

Twenty crazy investing facts (Link)
- Since 1916, the Dow has made new all-time highs less than 5% of all days, but over that time it’s up 25,568%. 95% of the time you’re underwater. The less you look the better off you’ll be.

- The Dow has compounded at less than 3 basis points a day since 1970. Since then its up more than 3,000%. Compounding really is magic.

- The Dow has only been positive 52% of all days. The average daily return is 0.73% when it’s up and -0.76% when it’s down.

- The Dow has spent more time 40% or more below the highs than within 2% of the highs (20.6% of days vs. 18.4% of days) No pain no gain.

- In 1949 the stock market was trading at 6.8x earnings and had a 7.5% dividend yield. 50 years later it reached a high of 30x earnings and carried just a 1% dividend yield.You can calculate everything yet still not know how investors are going to feel

Human development: fueled by energy - Chris Slubicki, CEO of Modern Resources Inc. (Link)
Chris Slubicki provides an objective perspective of the global and Canadian energy industries. Canadians are benefiting greatly today because we had the courage to build in the past.The world needs energy and no one is better at providing it then Canada. Chris concludes with great examples in Canadian history where we had to courage to build. We need to step up again and build. 

Government policies have made Canada less attractive to investment in energy industry (Link)
U.S based, Devon Energy adds to the exodus of foreign oil and gas companies leaving the Canadian oil patch. Devon Energy has roots in Canada dating back to 1998 and opened its first facility in 2007. Their Canadian operation represented about 24% of their overall production with 750 employees in Canada. The company is leaving Canada to complete its“transformation to a high-return U.S. oil growth business". According to the 2018 Global Petroleum Survey, the U.S. is the most attractive region for oil and gas investment, while Canada now ranks fourth.

California is building unnecessary power plants (Link)
California uses 2.6% less electricity annually from the power grid now than in 2008, despite this reduction residential and business customers are paying $6.8 billion more for power than they did then. The added cost to customers will total many billions of dollars over the next two decades, because regulators have approved higher rates for years to come so utilities can recoup the expense of building new plants. California regulators have for years allowed power companies to go on a building spree, vastly expanding the potential electricity supply in the state. Today the gap between what Californians pay to turn on their lights versus the rest of the country has nearly doubled. California has this tradition of astonishingly bad decisions.

How did the U.S. stock market get so old? (Link)
The average age of companies listed on US exchanges has been steadily rising for three decades. Now it’s 20 years which is almost twice the average in 1997, during the dot-com craze. The trend toward fewer and older companies has been developing for years. Firms are staying private for longer, and initial public offerings—once a rite of passage for a successful startup—get done later. Once companies do list, they quickly become prey. In a market dominated by megacaps, behemoths swallow up competitors with ease.
US prime age labour force has room to grow
Ex-cons are now joining the US labour force
US prison populations are declining and a thriving job market is giving many ex-prisoners a second chance in the labour market.