Juggling Dynamite

I recently stumbled upon this episode of Rich Roll’s podcast and it’s ruminated with me since. Like many people, my family tree is full of anxiety and addiction and I have spent my life pondering how and why this manifests to such varying degrees and behaviours in different people.

Dr. Gabor Maté has spent a lifetime on this topic and offers thought-provoking observations.

In a nutshell, Dr. Maté notes that being alive is to exist in a state of constant uncertainty, risk and vulnerability to pain.  This causes anxiety and suffering in all of us, to varying degrees, whether we admit it or not.  The extent to which we can admit this and discuss our suffering and feelings with a compassionate witness can make a difference between constructive or destructive behaviours in our life.

You can advance the play bar to 8:09 to skip the opening commercials.

At 34:26 the discussion around Rich’s own life offers some context for those who had a relatively fortunate childhood, and yet, suffer all the same.

Here is a direct audio link, advance the playbar to 8:09 to skip the intro commercials.

As an author, Dr. Maté has written extensively on the subjects of addiction, early childhood development & trauma, attention deficit disorder, and the relationship between stress and disease. His most recent award-winning book, In the Realm of Hungry Ghosts: Close Encounters with Addiction* (a #1 bestseller in Canada) mixes personal stories with science to present a radical re-envisioning of addiction not as a discrete phenomenon confined to an unfortunate or weak-willed few, but as a continuum that runs throughout (and perhaps underpins) our society at large; not a medical “condition” distinct from the lives it affects, but rather the result of a complex interplay among personal history, emotional, and neurological development, brain chemistry, and the drugs (and behaviors) of addiction.

While stock markets end January at new cycle highs and record hyper valuations, John Hussman’s February missive is worth a little mull for thinking minds.  Here’s a snippet:

“Understand this. The more glorious this bubble becomes in hindsight, the more dismal future investment returns become in foresight. The higher the price investors pay for a set of future cash flows, the lower the return they will enjoy over time.

…if market valuations, which are presently about triple their historical norms on the most reliable measures, simply move to double their historical norms a decade from today, the implied 10-year annual total return for the S&P 500 would be roughly (1.036)*(2/3)^(1/10)-1+.02 = 1.48% annually.

Simply touching the historical norm – not even reaching historically undervalued levels – would imply a 10-year annual total return for the S&P 500 of roughly (1.036)*(1/3)^(1/10)-1+.02 = -5.18% annually.

Whatever they’re doing, it’s not “investment.”

Jim Cramer’s comments on CNBC this morning are a mainstream acknowledgement of a secular shift which we have noted for some time now.  The investment ‘belief’ phase in fossil fuel companies has turned.

“I’m done with fossil fuels. They’re done,” @MadMoneyOnCNBC‘s @JimCramer says after oil giants Exxon Mobil and Chevron reported Q4 earnings this morning. “We’re in the death knell phase.” https://t.co/rdcmoeRGMB pic.twitter.com/yl8iP7hpMi

— CNBC (@CNBC) January 31, 2020

As noted by IEEFA analysts last year, the sector valuation has fallen significantly from 29% in 1980 to just 5% of the S&P 500 market cap today, so it is not that difficult for US-focused money managers and fiduciaries to reallocate 5% of their investment portfolio compared with when it was 29%.

Unfortunately, this is not the case for Canadian-based funds and managers, since the oil and gas sector remains more than 16% of the TSX composite weight today, and international divestment flows represent concentrated selling pressure for the overall Canadian stock market.