When It Rains it Pours


When it rains it pours – a fitting analogy to describe the onslaught of headlines that have roiled global equity markets to start the year. From sticky inflation and rising commodity prices fueling market speculation about central bank response, to pandemic aided policy tailwinds starting to show their age in corporate earnings results, to growing unrest in our nation’s capital and now escalating geopolitical tensions overseas. The culmination of these issues has done well to elevate uncertainty and drive investor sentiment to lows not seen since the beginning of the pandemic.

At times like these, we are reminded that while history doesn't repeat itself, it often rhymes:

“In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.”
- Warren Buffet

This perspective frequently serves as a healthy reminder to investors that it is important to stay focused on longer-term outcomes - to distinguish the signal from the noise. However, this is easier said than done when faced with the prospects of war and both social and traditional media weighing in on every small detail in real-time. Looking at the current situation in Ukraine, we expect that the risks associated with Russia's attempted annexation of breakaway states — assuming it doesn’t escalate beyond a regional conflict — to remain relatively contained for developed markets. We build this view on recent history (the annexation of Crimea by Russia in 2014) and the longer-term history of geopolitical conflicts and their impact on markets:



The messaging here is that on average, declines are shallow and short-term in nature. As illustrated (below) by research group Fundstrat, the uncertainty created before an actual invasion is responsible for most market downside; with recoveries taking hold just before an invasion occurs:


Is it possible we're close to this inflection point today? Absent further escalation, we most certainly could be (and we surely hope so). The fact is no one can be sure. For that reason, we remain vigilant in evaluating all new information as it presents to determine its impact on the long-term outlook of our portfolio companies and strategic allocations.

Sudden market drops can be a frightening event for many investors. Maintaining focus in the midst of market turbulence can help avoid making hasty decisions that could derail your long-term plans. If you have concerns about these recent events, we will be happy to set aside time for a more detailed discussion about these issues.

Being widowed and an executor

When drafting their wills, many people select their spouse or common-law partner to be a primary executor (or liquidator, in Quebec), which makes the widowed individual legally responsible for settling an estate. Being recently widowed is hard enough. However, making important decisions amid your grief is harder.

Here is a helpful guide outlining many of the duties required of a widowed individual who is also tasked with being an executor to their partner's estate. Each estate will unfold in its own unique time and way. Keep in mind the sequence of tasks is not critical, nor are all tasks applicable in every estate. Moreover, the estate's size and nature may require the executor to complete additional tasks.

Diversion: On a more optimistic note

It is easy to overlook many of the positive developments that are taking place every day. For those developments, the team enjoys many of the posts Martin Harbech contributes on LinkedIn. Named a LinkedIn Top voice for his contributions to the social platform, Harbech delivers thought-provoking perspectives on technology and innovation - drawing on experience from his time working at Google, Amazon and Facebook.

We turn to a recent post from Harbech to highlight some of the more positive developments of 2022 - a nice change of pace to current news flow:

We’re just 50 days into 2022, and already…

  • Nuclear fusion saw another major breakthrough… a ‘huge step’ in the quest for clean energy.
  • A woman was cured of HIV through a breakthrough stem cell treatment.
  • MIT engineers created an ‘impossible’ new material… stronger than steel but as light as plastic.
  • An international team of scientists used supercomputers to unlock a ‘giant leap’ in the fight against antibiotic resistance.
  • A new ‘game-changing’ carbon capture technology could deliver a step change in our ability to remove carbon dioxide from the air.
  • Researchers set a new Guinness World Record for fastest-ever DNA sequencing technique… using it to sequence a human genome in just 5 hours and 2 minutes.
  • A new breakthrough in spinal cord implant ‘could potentially allow paralyzed people to walk again’.
  • A ground-breaking new technology regrew a frog’s lost leg… and it might work on humans too.
  • Surgeons completed the first-ever heart transplant with a genetically-modified animal heart… saving the life of a 57-year-old and taking a big step towards helping solve the global donor organ shortage.
  • Biodegradable surgical tape has been invented… making some intestinal fixes as easy as ‘duct tape around leaky pipes’.
  • James Webb, the awe-inspiring $10 billion space telescope 25 years in the making, took its first images… a huge scientific milestone.
  • An autonomous drone carrying a defibrillator saved the life of a 71-year-old having a heart attack… a first in medical history.
  • Researchers in Sweden found a promising way to use solar power to convert carbon dioxide into fuel… using ultra-fast laser spectroscopy.

Just a few of many incredible achievements in the first 50 days of the year.

The world is far from perfect, but we shouldn’t forget that about 90% of all scientists that ever lived are alive today. Never before have we had so many people whose sole purpose of work is to better understand how the world works.

2022 is shaping up to be a remarkable year in science and technology.