The Fed has a 2% inflation target; inflation has been above that target for approximately 39-40 months (over three years), so any money manager missing their target for three consecutive years would start questioning their approach.

China's fundamentals are strong: dramatic improvements in human capital (graduation from 1 million to 13 million university students per year), more patents filed than the US annually, visible in biotech, robotics, and energy sectors.

There are two main things that grease the wheels of commerce and allow an economy to function: the cost of capital and the cost of energy; when both are cheap and plentiful, an economy should do well.

Entrepreneurs are naturally bipolar paranoids who become very excited but also fear things will turn terrible; they primarily crave certainty, predictability, and clear rules to decide whether to invest.

Economic growth equals the number of workers plus the productivity of workers; if worker numbers decline due to immigration crackdowns or uncertainty, productivity must increase significantly to maintain strong GDP growth.

Surveys have become less reliable in recent years compared to hard data; in 2022-2023, many surveys like ISM and PMI pointed to recession but hard data kept clicking upward, suggesting survey-based recession predictions were wrong.

Medical insurance costs are officially at their lowest nominal terms since 1999, and auto insurance is similarly understated in official inflation figures, making true inflation feel significantly higher than reported 2.5-3%.

With tariffs, the price of secondhand and firsthand cars will rise, which means car insurance costs must increase because the cost to replace a vehicle has increased.

Energy prices have remained contained and are the biggest risk to financial markets; if energy spikes to $120/barrel due to Middle East or Russia events, inflation could reach 3.5-4%, eliminating rate cut expectations and causing bond market selloff and equity correction.

Energy price shocks have immediate wage pressure: when gasoline costs rise, workers quickly demand higher pay to offset commuting costs, creating a direct transmission mechanism from energy inflation to wage inflation.

The dollar was previously a shelter currency where it would appreciate 5% when equities fell 15%, providing a hedge for foreign investors; now the dollar falls with equities, creating a reflexive negative feedback loop where lower equities trigger dollar weakness triggering more capital outflows.

Latin America is in a massive bull market because weak dollar enables local central banks to ease; every Latin American country will cut interest rates between 100-400 basis points over the next 18 months, creating huge tailwinds for local assets.

Western governments take 50% of citizens' money through taxes and fees, making government a more expensive input in Western countries than in China; combined with expensive energy, labor, and capital, the West cannot compete with China on cost.

Canada already has cheap electricity from hydro like Quebec, has natural gas domestically, and doesn't need large hydro projects because Canada doesn't have that much industry compared to China, which is the world's industrial powerhouse.

If the US dollar weakens and China moderates its investment pace, US industrials, energy stocks, and materials would benefit from improved margins and reduced competitive pressure.

When analyzing trend-following opportunities, evaluate across five prisms: fundamentals (does it make sense?), valuations (are they attractive?), momentum (is direction positive?), investor positioning (is it crowded?), and policy support (does government back it?).

If something ticks all the boxes of a systematic process, you have to follow through on it, otherwise the process itself becomes meaningless.

If Canadian pension funds reallocate from US stocks to Canadian infrastructure, they become buyers of the Canadian dollar instead of sellers, removing the marginal seller in the currency and causing the looney to appreciate significantly.

Carney is a former Goldman Sachs banker; the old adage 'you can take the guy out of Goldman but you can't take Goldman out of the guy' applies, suggesting he has deal-making incentives and capability.

We now live in a weak US dollar world, which means investors need to own different types of assets than they have owned for the past 14 years because the structural conditions supporting dollar strength have changed.