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A roundup of what The Globe and Mail’s market strategist Scott Barlow is reading today on the Web

The Trudeau government’s report on the economy and federal fiscal health was marred by a significant accounting charge for public pension shortfalls, according to Bank of Montreal economists,

“Ottawa’s “Fall” Economic and Fiscal Update reveals a weaker federal fiscal picture than presented in the Budget nine months ago. It has little to do with the economy but everything to do with higher liabilities in public sector pension plans as long-term bond yields have tumbled”

Canada’s public pension system is, however, much better than segments of the U.S.,

“Kentucky, New Jersey, and Illinois have the worst-funded retirement systems in the nation … the pension funds in those three states had less than half of the assets needed to cover liabilities in 2017…the US public sector pension crisis will only get worse. Why? Because pensions are all about managing assets and liabilities and I foresee low to negative rates being with us for a very long time, especially if deflation strikes the US, which means liabilities will soar to unprecedented levels and assets will not deliver anywhere close to the requisite returns pensions need ”

The latter excerpt is from a report on the Pension Pulse website called “The American Retirement Nightmare”, that details the lack of retirement saving south of the border that is not really workers’ fault.

“@SBarlow_ROB Cdn federal finances struggling with pension liabilities” – (BMO research excerpt) Twitter

“The American Retirement Nightmare” – Pension Pulse


The recent U.K.’s Sohn Conference featured a number of top-performing hedge fund managers presenting their best investment ideas. Proceeds from the event go to childhood disease research. The Market Folly site helpfully summarized the 10 different presentations.

Trian Fund Management’s Brian Baldwin’s pick, regional plumbing supply provider Ferguson PLC, provides an example of the level of detail that goes into these choices,

“Ferguson has the scale to get good prices from suppliers. Its scale also allows it to provide a wide range of products (100,000SKUs) to meet plumbers’ need. Ferguson has used this scale to take 3-4 percentage points of market share per year over the last nine years. Revenue has been growing at over 9% CAGR for the last five years. EBIT at 11% CAGR over the same period. It is the market leader with 20% market share. There is still room for growth”

“Notes From Sohn London Investment Conference 2019” – Market Folly


Merrill Lynch’s widely-followed monthly survey of portfolio managers uncovered a significant uptick in bullishness that is, of course, negative for contrarian investors,

“ Global growth expectations jump 22ppt to net 29% of investors polled indicating they expect global growth to improve over the next year, marking the biggest 2-month jump in growth expectations on record … 20% of fund managers surveyed think the global economy will experience above-trend growth and below-trend inflation, a 7-month high; 65% continue to expect below-trend growth and inflation … Investor cash levels hold at 4.2% in December, the lowest level since March 2013. “

“@SBarlow_ROB Merrill fund manager survey - everybody getting bullish” – Twitter


Newsletter: “The decline of ‘dumb money’ and active management” – Globe Investor

Diversion: “ Keynes was wrong. Gen Z will have it worse: Instead of never-ending progress, today’s kids face a world on the edge of collapse. What next?” – M.I.T. Technology Review

Tweet of the Day: “ @morganhousel Imagine if in your 2009 market outlook you said “By 2019 we expect President Donald Trump will be facing impeachment as the Dow ticks past 28,000.” It would be the last note of your career” – Twitter