The DumbWealth newsletter is a daily (almost) bite-sized summary of select economic and market developments in a highly visual format.
1: Margin debt (borrowing within investment accounts) is at an all time high. Cash balances are at an all time low. Investor exuberance is quite elevated right now, which could signify markets are priced for perfection.
2: The other day I shared a chart showing shipping rates are starting to come down - Baltic Dry Index is down about 50% from its recent high - suggesting the worst of the supply chain issues might be behind us. The chart below from Bloomberg Economics corroborates this finding. Too soon to call this a ‘win’, but stay tuned...
3: The 15 largest companies in the US are much younger than the 15 largest companies in Canada. This points to the huge innovation gap between the two countries. Moreover, it highlights how Canada’s population structure - which is comparatively low and widely dispersed - is conducive to the creation of oligopolies and monopolies that can easily deter competition.
4: As many have suspected, Canadian homes are increasingly being purchased by investors. This trend has become notable since the start of the 2020 pandemic.