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Kathryn Toope: Welcome to Barenaked Money, the podcast where we strip down the complex world of finance to its bare essentials, with your hosts, Josh Sheluk and Colin White, portfolio managers with Verecan Capital Management Inc.

Colin White: Welcome back to Bare Naked Money. Josh and Colin coming at you, the OG. And we are sitting here today very excitedly with trepidation. Going to correct me where where I’m wrong here, Josh. We’re gonna evaluate last year’s year ahead look and and also look ahead.

Which which one which one are we gonna do first?

Josh Sheluk: Well, yeah. These are gonna be 2 separate podcasts as we usually do. We’re going to evaluate last year’s predictions and all the stupid stuff I predicted 12 months ago. And next podcast, we’ll tease it now. We’re going to do our stupid predictions for 2025.

Some of them will be smart. Some of them will be smart. They’ll all be thoughtful, but some of them will be ridiculous.

Colin White: I’ll I’ll be I’m aiming for thought provoking. Things to make you go.

Josh Sheluk: Yes. That without a doubt, we will we will nail that for sure.

Colin White: Alright. So we’re gonna concentrate for the time being on what we said last year, and you, as always, have prepared your list. I’m excited to see where your list starts.

Josh Sheluk: So going back to our podcast that was recorded about 12 months ago, here’s what we predicted for 2024. So the first thing was that Canadian inflation would be under 2% at some point during 2024. And I can say this is a pretty bold claim, I think, at the time. Most people probably wouldn’t have supported this claim. But without a doubt, this has been absolutely nailed because we’re running on several months now where inflation is under that 2% level.

And even the most recent reading, even core inflation is under the 2% level. So big pats on the back for this claim.

Colin White: Well, this just to be clear, this isn’t the inflation that excludes everything except for one thing just to get the number under 2%. Like, this is the inflation number that includes everything. Like, that that inflation number. Alright. Big big flaming gold check mark.

Big flaming gold check mark. Interestingly, I I and again, I want your I want your take on this, Josh. I have not really seen the Bank of Canada up thumping its chest about look how great we are. We killed inflation. Like, that hasn’t really been a narrative as I feared or expected it was gonna happen this year.

I I have not really heard them be that boastful. Is that is that accurate in what you’ve been reading as well? I think that

Josh Sheluk: that that’s a fair statement, and maybe part of that is because now they’re dealing with growth issues. So nothing’s ever the next worry. Yet.

Colin White: Yeah. You move under the next worry.

Josh Sheluk: Exactly. Exactly. You go just from one one worry to the next and it seems to have transitioned pretty quickly. Several months ago, I was like, okay, inflation is no longer a problem, but growth is a problem. So now we need to try to tackle that issue.

So yeah, it’s nice that it’s nice that they didn’t pat themselves on the back because I don’t think you wanna be too congratulatory to oneself in this situation. But, I ultimately, I think central banks have done a reasonable job of addressing this over the past few years.

Colin White: Yeah. And we went through that brief period where the commentary was on where wage inflation was gonna spike because the the wage increases were were picking up. So for about 6 minutes in the middle of the year, there was this whole fear that, you know, the wage growth catching up to where inflation had been was going to spur inflation on further that didn’t really seem to get any, any traction at all during the year. Or if if it did, it it certainly didn’t didn’t create a spiral that was out of control.

Josh Sheluk: Yeah. So moving on here, the second claim, second prediction was that short term real estate would be okay, and that longer term, which we don’t know at this point, that real estate would be kinda just okay, kinda middling middling type of performance. So if if you look at the numbers, real estate’s been sort of flat throughout 2024, just in aggregate. Obviously, different pockets are gonna say different things, but this is residential real estate, been roughly flat in aggregate in Canada over the course of the year. So I’d say that that first part is is reasonably true, reasonably accurate.

Real estate has been okay, and it quite frankly for me, it’s held up better than I would have expected. If you had told me interest rates are gonna go up 500 basis points over the course of 12 months, what’s gonna happen to real estate? I probably would have expected 2 years ago that, yeah, we’re probably gonna have more challenges than we’ve actually had.

Colin White: Yeah. And I think some of that is in, you know, the price discovery in that market. It’s a slow moving market. So, you know, there’s the the supply is pretty, elastic. So I think that that’s absorbed some of that.

But I also think that we were talking specifically about residential real estate. I am hearing more stories about, you know, REITs trying to unload properties and, you know, unprofitable stuff in the office space and or retail space. You know, I think that that area is still being hit. So if you look at it with a broader lens, then maybe it’s it those sectors have been hit, and the the condo market in Toronto is not doing well either. Okay.

The condo market in Toronto isn’t all that healthy as as as a pocket. I don’t know if that’s not healthy as an accurate way of describing it or on its deathbed. Or

Josh Sheluk: Oh, k. On its deathbed, it might be a bit extreme. I’d say it’s Maybe. It’s sick. It’s sick.

It’s got it’s got a, persistent sickness. As you you said that, you cough. It’s got kind of like a lingering cough, and and nobody wants to get too close to it right now because that cough is a little bit alarming.

Colin White: So it’s not like a festering leg wound. You know, it’s more of just a persistent cough.

Josh Sheluk: I guess time will tell, but, I I would I would edge more, lean more towards the side of things will be okay, but it might be kind of a messier couple of years here. And then this kind of feeds into the other part of that prediction that long term, you’re not going to see substantial growth in real estate in Canada, in my opinion. And that’s because we pulled forward so much of that growth to the 1st couple decades of, of the century here.

Colin White: Yeah. And I I think this is a good time for a disclaimer or disclosure that, you know, this is not a, again, this there are gonna be pockets that behave radically different. So to take, you know, real estate’s gonna be okay as support for purchasing any piece of real estate anywhere in Canada under any circumstances is is not what that comment is, is meant to back up. You know, there’s still some very, very volatile pieces and it’s very situation dependent, very location dependent.

Josh Sheluk: Yeah. For sure. So changing gears, number 3, 3rd prediction was that Bitcoin would trade at a higher price than at any point in 2023 and at a lower price than at any point in 2023. So, the first part of this was obviously has come true. Bitcoin’s basically hit new highs throughout the year.

The second part of this didn’t come anywhere close to coming true because it basically just went for the most part up and up and up throughout the calendar year.

Colin White: Well, first of all, when we recorded it though, it had dropped. Like, that day, you you had made a comment on that podcast. And as we recorded, you thought we had already, you know, successfully for that day anyway, maybe it’s an intraday number was was lower that day.

Josh Sheluk: No. We had actually successfully already hit new highs, when we recorded. So we never even came close to hitting new, new lows or lower points than 2023, this year. And I think Bitcoin continues to behave much like a risk asset in my mind. So risk assets this year, stock markets, cryptocurrencies whatever other things you wanna throw into that bucket have gone kind of one direction all year and that’s up and there hasn’t been a lot of volatility.

It’s been a very low volatility year, very stable year from that perspective. So there was not really the environment that I expected with a little bit more volatility that would have, led to potentially Bitcoin hitting hitting lower points.

Colin White: Guess I’d bristle a little bit at classifying it as an asset. You know? Are are lottery tickets an asset, Josh? I mean

Josh Sheluk: technically, I would say yes. Wow.

Colin White: Okay. I’m gonna go I’m gonna go back to accounting school because I’m pretty sure.

Josh Sheluk: Well, to me, an asset is something that has value. A lottery ticket does have value, but it’s you wouldn’t wanna pay you wouldn’t wanna pay what you’re actually paying for a lottery ticket because your expected value on that would be negative. And that could be much the same as Bitcoin. It’s it’s worth something right now.

Colin White: And and it’s interesting because that was probably one of the weaker ass kind of predictions you could have made on with Bitcoin last year. I mean, it was you know, that’s not really much of a prediction. And even that we got wrong. So Yeah.

Josh Sheluk: It was a weak ass prediction. That’s a fair call for sure.

Colin White: You know, because yeah. Sure. It’s gonna trade higher and lower. Why? Because that’s that’s what things do.

They go higher and lower. And the fact that even that even that was wrong, just as the fragility of of of of making these kind of predictions. So listener be warned.

Josh Sheluk: Yep. Alright. My next one does not look like it’s going to come true. It’s December 19th right now, so we still have 12 days, but it’s highly unlikely I would say at this point. I said bonds will perform last year’s return.

So in 2023 bonds had about a 6.7% return and as we sit here today, we’re probably roughly 3 to 4% or so, and this was the Canadian bond, Canadian aggregate bond market specifically. So, bonds have done okay this year, but I would have expected a little bit more of a decline in the longer term interest rates, and that just hasn’t happened.

Colin White: Well, yeah. So I was gonna ask as to what has led to that is this, you know, the the verdantness of the yield curve that is is the interesting part that’s influenced this or more where the overnight rate got to over the year, which which of those was a bigger contributor to you, do you think to to this outcome?

Josh Sheluk: Well, I I think the fact that if so inflation, as we predicted at the outset, inflation coming down, that’s actually happened pretty much exactly the or very similar to what we had predicted or what we had thought coming into the year. But what hasn’t happened is, a more material weakness in growth, I guess. The the growth environment has stayed okay in Canada and the employment picture has remained okay. The economic picture at large has remained okay and that’s kept longer term interest rates a little bit more anchored than I probably would have expected coming into the year. We did have 3 months ago, this this prediction was looking really, really good because interest rates had come down quite a bit, but the last few months as economies maybe have shored up a little bit or at least that’s what the data is showing us.

Interest rates have have spiked up a little bit again, and that’s kind of eroded some of the gains that we got from lower interest rates.

Colin White: Well, the no lending lending. No.

Josh Sheluk: It’s kind of where we’re at right now. It seems, especially with some of the data coming out earlier this week out of, out of the US. I part of this is I I think of Canada was its own world that that maybe we would have seen this prediction play out. But Canada is influenced obviously by a lot of other economies around the world, the US being one of them. And the US economy has held up reasonably well this year, maybe even maybe even better than reasonably well.

Maybe maybe even you could say it’s good or very good. And that has, I think, anchored Canadian interest rates to some extent as well. None of this stuff exists in a vacuum.

Colin White: Well yeah. And, you know, there you go. You’re shining a light on something that’s very important. I mean, we’ve made the case, and we continue to believe that Canada is in a relatively weaker spot to, you know, the US for sure. But that doesn’t mean it’s weak because, you know, big brother’s gonna drag us to the party, you know, whether we have the ability to get there on our own or not.

And now what exactly that look like is to be determined. But, you know, there it’s very much the case that nothing exists in a vacuum. None of these predictions existed in the vacuum.

Josh Sheluk: Yeah. And we try our best to consider every one of the the variables, but it’s just a little bit hard to do that, believe it or not.

Colin White: Maybe impossible. I don’t know. Just throwing it out there.

Josh Sheluk: Yeah. Alright. Number 5 was that the magnificent seven will decline as a percentage of the S and P 500. So yeah. Totally wrong.

Totally wrong. And this was wrong, like, immediately in the year too because they just skyrocketed especially in the 1st 6 months of the year. So the number that I had, the s the the magnificent 7 made up about 28% of the s and p 500 as of December 2023. That means that the the market, the US stock market is very concentrated, very dominated by a handful of very large companies, but that’s got even more extreme throughout this calendar year. As of the end of October, those, 7 stocks were over 31% of the S and P 500.

And so the big just keep on getting bigger.

Colin White: Well, I mean, they’ve almost approached Nortel stage, you know, as far as market dominance. I mean, one company did that in Canada. So, I mean, it’s

Josh Sheluk: I know. Yeah. They still got a long way to go.

Colin White: But no. But I’m I’m gonna challenge you just for a second, Josh. You know, to to it didn’t turn out the way we expected, for sure. Were you wrong to say that at that time based on what was known at that time? No.

I’m not gonna call you wrong and I’m not gonna call myself wrong. I agreed with you. I mean, I think based on any rational thought, based on any person who thinks the world is is rooted in reality. That was the right thing to say. No.

It didn’t turn out, but it is accurate to say that you can commit no errors and still lose the game. You know? And I think that that absolutely is the case here because there was and we we weren’t the only ones who were calling it. I was just on the another podcast, and they were talking about their predictions earlier last year. And there was a couple of people on there about, you know, the peaking of the magnificence 7 because any rational person, you know, doing math is gonna go, well, no.

There’s no way this could go higher. We’ve we’re running out of runway. But Mhmm. The the market can remain irrational longer than you can remain liquid. So that’s why you don’t place bets on stuff like that.

Right?

Josh Sheluk: Yeah. Well, that’s for sure. I the what we’re doing right now has the full benefit of hindsight, and we can look back and define for sure whether we were right or wrong about what we predicted. That doesn’t mean we are right or wrong to make that prediction at the time because as we always do when we’re investing, we’re taking the information that we have today and making a thoughtful calculated prediction about the future, but that doesn’t mean that it’s gonna play out the the the right way, the way that we think it’s gonna play out. This set this next one here, I think, is, I’d say without a doubt, we can say has come to be.

AI will take another leap forward this year.

Colin White: I I I am gonna argue argue contrary to that, but please do continue.

Josh Sheluk: Okay. So so so let me let me hear your contrary argument. So you don’t think AI has taken another leap this year. Is that what you’re saying?

Colin White: I I think it has disappointed this year. It has not taken the expected leap. In fact, it has proven to be a little frail, and you can take a look at, you know, the the precedent that was quoted in court that was made up by AI to the advice to use superglue to glue your pepperoni to a pizza to, you know, all of the different hallucinations that are out there. And the I think there’s way more suspicion over the quality of AI output now than there was a year ago. I think it’s you know, some of the the the shine is off the rose and people are a little more suspicious about AI output at this point than they were last year.

For me, for a tooth to have taken a giant leap forward, I would think that people would be relying on it and more confident in it at this moment. But my read, my my certainly, personally, I am not as confident in it as I was a year ago. I know more about it now. But once you know more about something, then it’s like, oh, this isn’t a flying car. This is just a car that looks like a flying car.

Like, this this isn’t a hoverboard. It’s got wires holding it up. I mean, it’s not as magic as maybe people thought about it a year ago. So it it hasn’t lived up to the hype as I was interpreting the hype a year ago.

Josh Sheluk: Interesting. Yeah. I think I would my opinion is slightly different than yours. I think that I was suspicious last year, and I continue to have some suspicion. Like, I and I don’t think at any point I’ve thought this is like a finished product that’s ready to replace all of human thought.

So I the the leaps that I have seen this year, I think the models generally have continued to improve. Are they still flawed? Yes. But have they continued to improve? Yes.

And I think in a mostly meaningful way, there’s become more democratic access to some of these models, and and not just the the GPT type models, but, video generation and image generation and those types of things. I think more people continue to adopt AI as, a useful tool in their daily lives. I don’t think it’s widespread or mainstream by any means yet, but I think it’s fairly widely widely adopted and I continue to find new cases that are are interesting and ways where AI can, deliver things above my expectations still. I’m still surprised on in a positive way some of the things that AI can do and that’s why I would I would characterize it. Maybe maybe it’s not a large leap forward, but I would say Well,

Colin White: this is this is what I was gonna I was gonna go back and say, where’s the giant leap in there? Like, everything you’re talking about seems to be incremental, and I absolutely will give it incremental. But the expectation when we and I was agreeing with you that we would see a giant leap forward. I can’t look back and say there was the leap. You know, I’m hearing I’m hearing more interesting use case scenarios about it.

I heard, you know, somebody talking about how it’s the death of Hollywood because they can turn out a a a movie without any actors now and have it, like, way higher quality than what animation is. And, you know, again, I’m hearing all these stories, but I’m not seeing it, just bumping into it on the street. So I don’t and maybe it’s unreasonable to be looking for a giant leap at this point. Maybe the giant leap has happened, you know, like the giant leap. We have an Internet now.

Okay. That was the giant leap. Then each year, another couple 100000 or couple 1000000 people get access to it Yeah. And it gradually, you know, seeps across the planet and changes the world. But there’s very little in there that I think would be described as a giant leap unless you’re a nerd really paying attention to everything really, really closely.

Josh Sheluk: Yeah. I I would also say that the investment environment around AI has continued to, I would say, exceed expectations. Like, it’s it’s been, still very much a boom environment for AI adjacent companies.

Colin White: Yeah. And the only see, I think that’s an important distinction to make. Like, I don’t I think that the adjacent companies, NVIDIA’s of the world, are the ones that I’ve seen getting a lot of the traction and doing well. You know, I I still think a lot of the use case scenarios, companies that are founded on the uses of AI, are are not getting the same kind of traction, and there’s there’s not the same winners and losers from what I’ve seen anyway.

Josh Sheluk: So moving on but staying on the hype train, I had predicted that healthcare will be on the hype train this year and that included pharma, biotech, drug related things, and GLP ones. And I’d say this is a pretty big miss. I don’t think that, the pharma space came anywhere close to the hype train that I thought we were we’re gonna be on. There were some pockets. I think people are somewhat aware of some of the breakthroughs that we’ve had in in, drugs specifically with these GLP one drugs over the past couple of years, but it hasn’t quite hit the level of notoriety, I guess, that I would have expected.

Colin White: Yeah. I think that there there there’s 2 different things when you when you talk about pharma and the medical field in general. Number 1 is the efficacy and the improvement of treatments and rolling things out. The second is the the financial result of that. I do think that the nerds are winning.

I mean, AIDS just doesn’t kill people anymore. You know, there wasn’t a big you know, we didn’t have a big thing on an aircraft carrier. Mission accomplished. Don’t just gradually it stopped killing people. You know, outcomes for cancer treatment are getting better incrementally.

And some of that is stuff that was believed to be really firmly entrenched 5 or 10 years ago, which now we’re able to push back the barriers and stuff like that. So I’ve seen a lot of anecdotal stories about the progress there. I think what’s missing is enough people noticing and putting assigning any kind of magnitude to it because frankly, it’s complicated. It it it it’s it’s nuanced. It’s difficult to get in and consume that information and then understand the playing field it’s on and go, oh, wait.

This is a big idea. That’s a lot of work. And, you know, I got other things to do with my Saturday. So I think that that’s part of what’s in that space is, you know, your nerd is showing, Josh.

Josh Sheluk: And that could be it. I I kinda thought this would be more running in parallel with the AI I train. Like, everybody talks about AI. It’s a very big buzzword, but I think a lot fewer people are talking about what I think is a pretty profound potentially, breakthrough with these GLP one drugs like I heard earlier this week that they’re starting to test this for, treatment of of, addictions like drug and alcohol abuse, which could have an incredible effect.

Colin White: Immeasurable. Immeasurable.

Josh Sheluk: Yeah. So that but that doesn’t nobody’s talking about that. Nobody’s talking about that. And my my thought was that it would be a lot more talked about now than this. So maybe this is just gonna be something that has a huge, profound leap and it just flies under the radar, or maybe it’s just gonna take more time for it to build.

But I actually think in 23, I heard a lot more about this than in 2024. So it’s actually taken a step back in my mind. So it hasn’t come anywhere close to what I thought it was it was gonna have an impact in, like, you know, pop culture or gen the general population?

Colin White: Well, I think it’s a little bit like back to our Bank of Canada conversation about how they didn’t stand on the mountain top and pound their chest over beating inflation. They just went on to worry about the next thing. That that that is the human condition. Like, we’re worried about this. It’s not a problem.

Okay. Well, I wanna worry about something else now. But the really fascinating thing for me, and I’ll I’ll steal this from our what our next podcast will be talking about. You add pharma to AI to quantum computing and begin to start to think about what could become possible in our lifetime. That’s where it really is mind blowing because if you take those three fields and put them together and how they’re interrelated, if we’re smart enough to point the quantum computing and AI at the right target and give it the right guidance, we could get somewhere if we’re smart enough.

Josh Sheluk: And that remains to be seen. So something where we’re not very smart, but our prediction, I think, was probably on point. We said at least one novel investment product will launch at exactly the wrong time, throughout the year. And you had actually said, it’s not just gonna be one for the entire year. It’s probably gonna be 1 per quarter.

Do you think are are there ones that you can put your finger on specifically that you think, launched at exactly the wrong time?

Colin White: Well, I think there was a novel investment product, that launched now. I guess I won’t call it the wrong time. It was a stupid product, but it it worked. The the single stock ETFs became big this year. Yeah.

And now many of them picked Nvidia as the single stock, so they did okay. But I I haven’t gone back and looked at them recently, But the call that they wrote on them, I think, probably stripped a lot of the value out of, out of, you know, just investing in the company. So I think that, you know, slapping an AI sticker on a bunch of stuff was probably the biggest novel idea I saw for the year. And then when you dug under the hood, like, what’s AI about this? Or how is this a product?

And why are you charging 40 basis points for this? Right?

Josh Sheluk: Yeah. Yeah. No. That I think the closest one I would say that was a object failure from 2024 was those covered single stock covered call ETFs because, yeah, they they put a call on a highly volatile position and all that position did was go straight up. So you’ve basically capped your upside with something that is should in in my opinion be bought specifically for the upside.

So that one seems to it I I don’t think it it’s not like people blew up their money, but they definitely left a lot of money on the table by going down this path.

Colin White: Only thing I was I was thinking about this morning as I walked in the office, I should and live in real time, Josh, I’m gonna ask you this question. It seems to me that I am seeing less promotion and less interest and less traction in the private equity offerings that are being pushed to the public. Is that just because my news feed has gone quiet, or do you think that that’s that that that that wave had crested earlier this year with the preponderance of new things that are coming out? Is that something you’ve noticed?

Josh Sheluk: I think the private equity hype train is alive and well, and I say this because I get reached out to probably every 2 days to once per week by a private equity manager wanting to talk to me about their product. So I don’t think I don’t think that’s diminished or died at all this year. If anything, through the latter half of the year, I think it’s actually increased. I I don’t know in terms of fund flows, what’s going into the private equity stuff. They might have taken a bit of a back seat because public equities have done so well this year, but there certainly is no shortage of people that wanna pitch their product to us to put our investors money in this type of thing.

Colin White: Yeah. No. And you you make a good point. I mean, maybe it’s getting less traction. Maybe they’re having to push harder because as you said, the public markets you can do so what you have done so well.

I mean, there’s a recency bias to that. You know, the even the wild projections coming out of some of the private equity guys pale in comparison to the reality of what’s been achievable in the public markets. And of course, we will let everybody know in the next podcast what they can expect for 2025. So I don’t wanna steal our thunder. But the future does not have to equal the past.

Josh Sheluk: Right. Right. And I do have a special ETF product to make a prediction on for 2025. I think you’ll like it.

Colin White: I can’t wait.

Josh Sheluk: Yeah. So the last thing that you predicted earlier this year was that there will be something that happens this year that no one will predict. So what was it? What happened this year that you think was, was totally unpredicted?

Colin White: I think what caught everybody flat footed was the expansion of the geopolitical conflict in and around Israel, like Iran and Israel and Lebanon and all of that. I remember clear as day Iran launched a 1,000 drones into Israel, and and the oil price went down. And I’m looking at it going like, Holy shit. This is Armageddon. Like if you had said to anybody at the beginning of last year that, you know, described the kind and nature and scope of conflict going on around Israel right now and said that the market wouldn’t even give a shit, nobody would have listened to you.

Nobody would have been they thought those two things could exist at the same time. And there are the many out there who have been predicting the imminent sky is going to fall and this war is going to happen because of the tensions in the Middle East. But I didn’t see anybody, any credible person that I read or was around that was saying, Hey, this is the year and here are the reasons why. So that’s one of the more recent things at Plato that really had me confounded on both sides. The magnitude and size of it and the complete lack of interest, the the the global economy seems to be paying a tip to it.

Josh Sheluk: Yep. Yeah. I I actually think 2024 has been a fairly predictable year, maybe. I don’t know if predictable is the right word, but we haven’t had that that sort of shock or surprise. I don’t think that was the first incursion of Hamas into Israel.

Right? That was that was truly out of nowhere, the COVID pandemic in 2020, the

Colin White: Russia going into Ukraine.

Josh Sheluk: In Ukraine in 2022, the spike of inflation up to high single digit percentages in 2022. So there I’d I’d say 2024 is kind of boring from that perspective.

Colin White: Well, well, wait. Donald Trump won an election. Now we can’t say nobody saw that coming because, well, there’s a group of die hards who always see it coming. But I I think that’s gonna have to go into the surprising category.

Josh Sheluk: That that cannot be a surprise. That there’s no possible way that could be a surprise.

Colin White: First of

Josh Sheluk: all, he was a favorite to win the election for the last 8 or 9 months. 2nd of all, he’s already won an election. So anybody who’s surprised by this outcome needs to give their head a shake because it was a surprise last time. It shouldn’t have been a surprise again.

Colin White: Joshdot atveracan.com for anybody who wants to make

Josh Sheluk: a cut. Yeah. Yeah. Okay. Send me the email, so I’ll be happy to fill them.

Colin White: Wow. Yeah. You’re right. I mean, 2024 was was kind of a consolidation year a little bit. I I don’t wanna lean back on it too much, but I think this is the first full complete calendar year that I can say other than people who graduated out of university, who came into the work first during COVID or wandering around like a fucking deer lost in the forest, other than that cohort of people, everything else was pretty much status normal.

Like, you know, everybody’s back to flying. Everybody’s back to going out. Conferences are all back on schedule. You know, the the world’s gotten back to pre COVID. Now we’re carrying with us, like I said, a cohort of people who don’t know what pre COVID was and we’re still working with them.

You know, we we’re we’re getting them some therapy. We’re bringing them along. But it was a bit of a consolidation year. I think the here, let me throw one at you that’s like right in your wheelhouse. Like, we’re still waiting for that recession.

And I think that the nerds and nerds of the world, you know, if you’re being honest, have to be surprised because this has completely exceeded anything that was in sorry. I’m gonna I’m gonna ask it as a question. Has this exceeded anything that was in the textbook? Are we now completely and firmly into territory that all of the indicators have failed at a level that has never been recorded before?

Josh Sheluk: I don’t think that’s the case. I think there have been times in the past where it hasn’t worked out exactly the way that we would have expected. It’s few it’s definitely let’s call it a historical anomaly, but not something that I think is nonexistent from a historical perspective. And I think coming into the year, the average expectation would have been that things would be weaker throughout the year, whether you’re talking about markets or economics or whatever. But there were still enough optimism, I think, towards the end of 2023 that there were people that would have predicted really good things.

So I don’t I don’t think it was a totally unpredictable outcome. It might not have been, like, the base case prediction, but I don’t think it was totally off base with with, things either.

Colin White: And and again, I’m asking because I haven’t kept track. And I’ve like, it’s been a couple months since I’ve asked you this question where the the the 210 or the 25 inversion, like, the yield curve inversion, is that completely is that still like, what what magnitude is that at right now?

Josh Sheluk: Yeah. Well, the the 2 so, typically, we look at the 3 months, 10 year Mhmm.

Colin White: For

Josh Sheluk: when we’re talking about the yield curve. And at times briefly in the last few months, there has been an un inversion if you wanna call it that or a a version. I know that’s A version. A reversion. Something where the long term rate was higher than the short term rate, but that was very brief for the most part this year.

The yield curve has remained inverted. So again, that that is one of the indicators that you’re talking about that has historically has, has a pretty good not perfect but pretty good maybe even very good, track record of of preceding recessions, and that hasn’t happened yet. It’s been a couple years since the first, since the yield curve first inverted. So we either remain waiting or we will carry on and nothing will happen and then it will be another one of those, those incidents where something, something was triggered that didn’t lead to what we expected it to lead to.

Colin White: We’re gonna do neither of those things, Josh. We’re gonna come up with new words. We’re gonna come up with micro recession. We’re gonna come up with a vibe session. We’re gonna come up with all kinds of other words because, you know, we we need to label things, and they need to be, they need to be a negative story.

And so we need to just to to focus on the negative. And if we have to make up words, goddamn it, we’re gonna make up words.

Josh Sheluk: Yep. Yep. The the the vibe session is a real thing.

Colin White: So you can’t even say it with a straight face.

Josh Sheluk: Oh, it’s crazy. But it’s actually a real it isn’t real because if you look at all the consumer surveys, everybody thinks that the economy is in a bad spot and has been for the better part of 2 years and when it’s pretty much grown consistently over that period of time. So I don’t know. I guess there’s a point where you can the data can tell you one thing, but if the people are all telling you another, then maybe you have to consider things a little bit differently than you are.

Colin White: Great argument to get rid of democracy. Not everybody gets a vote.

Josh Sheluk: Well, we’ll leave it there, and stay tuned for our next podcast where we do some predictions for 2025. I think it should be fun and exciting.

Colin White: Well, just but let me just add a little bit that I think this exercise should drive home to people the the dangers about trying to make predictions going forward, even as weak ass as something is gonna go up and down for the year sometimes can be wrong. So, you know, there’s there’s lots of things in the future that we can’t know, won’t know, but it’s fun to talk about. So make sure you take this as entertainment only. If you’re breaking a sweat trying to figure out what your financial advisor is talking about, you’re not getting the service you need. You probably hate trying to get an answer from them, but you also think moving your accounts will be a headache.

And it might be. But working with Dontrocktheboatwealthplanning.comor.ru isn’t exactly stress free, is it? Call us. We will demystify the world for you.

Kathryn Toope: For more information on the subject of today’s podcast or any other financial topic, please visit us online at verecan.com. That’s verecan.com. There’s plenty of information there, or you can reach out to someone on the team. Thanks for listening. Please note, the information provided in this podcast is for general information purposes only.

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