#149 - The Perfect Storm For Millennial Canadians, Alberta Budget Surplus and the NDP HAS NO IDEA
In this week's episode of Reformed Millennials, Joel and Cam talk Canadian Politics, the Alberta Budget Surplus and Why Taking Bitcoin as your Salary is a BAD idea.
PS: The links at the bottom of the newsletter are fantastic this week.
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Last week just 2 percent of stocks in the S&P were above 50 day moving average and that generally leads to great forward returns.
The market is better at predicting the news than the news is at predicting the market. Financial markets typically look 6-9 months ahead and try to anticipate what could happen. They are currently betting that the Fed’s aggressive tightening policy is going to send the economy into recession and the Fed will have to stop hiking sooner than previously expected.
As result inflation expectations are tapering and we saw a major mean reversion last week.
The worst-hit groups year-to-date outperformed significantly last week
ARKK went up 18%, the cloud ETF – WCLD, went up 15%, biotech XBI went up 14%. In the meantime, the best performing sector year-to-date – oil & gas (XOP), lost 6%, tested its 200-day moving average and it is now down almost 30% from its annual highs.
The odds are that this is just another bear market bounce that will eventually be faded again. It is really hard to know how long it can last. The conventional wisdom says that the declining 50 and 200-day moving averages are likely to be major areas of resistance for SPY and QQQ but markets often overshoot. In the meantime, there’s nothing wrong with being nimble and playing the relief rally. If the bounce has legs, we should see more stocks setting up and offering decent risk/reward entry points. As of right now, the number of good long setups is still relatively small.
But, the longer term picture continues to be a mess now that all moving averages are pointing down. It will not be medium term easy to get all these averages trending up again. Expect the unexpected.
💸Reformed Millennials - Post of The Week
Alberta budget surplus in 20/21 is going be blown out of the water by 21/22.
A review should show incredible royalty revenues.
The rest of Canada is going to be psyched! More deficits paid for by Alberta!
Canadian naturals horizon project is going to pay more than a billion into Alberta’s pockets. (Or Quebecs)
“I truly believe this is going to become Alberta’s decade.”
The words spoken by Doug Schweitzer, Alberta’s minister of jobs, economy and innovation, onstage at the Alberta Innovates tech conference Inventures earlier this month.
Speaking to a crowd of thousands, Schweitzer added, “You guys are on the map and you’re winning.”
Being on the map is a fairly new experience for Alberta’s tech scene. Only in recent years have the maturing tech startups, increased investment capital, and provincial government buy-in led the province to become globally recognized as an emerging tech hub.
Alberta tech clearly has some steam. But with the resignation of Premier Jason Kenney, and Minister Schweitzer announcing he does not plan to run for re-election, the future of the province’s tech spending may be up in the air.
BetaKit spoke with stakeholders in the sector and gauged their opinion about how the political changes might affect the hard-fought relationship between Alberta tech and the provincial government.
“Tenuous to say the least”
continued at the link above…
🐦 Twitter Thread of The Week 🐦
From Michael Shellenberger:
🔮Best Links of The Week🔮
The Case For EVs - Fred Wilson
Invisible Asymptotes - Eugene Wei