Plus: why Canada’s stock market is crushing it December 2, 2024 Sign Up | View online IN THIS ISSUE 8 min read 📚 Books! (And more books!) Want to sound smart at holiday parties? We’ve got some book recommendations to help with that. Read on. | Wealthsimple THE WEEK IN MARKETS The TSX is crushing it Another strong week of trading has put the global markets on pace for a second consecutive blockbuster year, particularly for U.S. stocks, which just finished their best month of the year and are now up 27% in 2024. The U.S. rally is getting all the attention, but you know who else has been quietly crushing it? Canada! The TSX is up about 22% this year, more than doubling the performance of other developed markets, like Japan, Great Britain, and the EU. Investors like to joke that the Canadian stock market is just two banks and an oil company in a trench coat. Even if there’s some truth to that, the big banks are printing money at the moment thanks to interest-rate cuts. And the finance sector overall is up more than 30% and is responsible for half of the TSX’s 2024 return. The other big drivers? Mining, thanks to huge demand for copper and nickel to build EVs, and Shopify, Canada’s tech darling, which is on a serious tear. People who are trying to figure out if the rally will keep rallying will be watching: (1) whether the Bank of Canada cuts interest rates as much as investors are hoping, (2) whether inflation will stay dead or rise from the crypt, and (3) whether Canada’s 10 largest companies, which make up a whopping 40% of the TSX, will continue to perform strongly. FROM OUR SPONSOR THE FOMO INDEX by Stacey Woods IMPORTANT 💸 There’s a new tariff in town: Trump threatens a 25% tax on all Canadian goods entering the U.S. Source 📦 Striking Canada Post has lost over 8 million parcels to competitors. Really disappointed. Wanted to lose them on their own. Source 🧙 Theatres banning people from singing along to Wicked. Invites them back to please, please sing over the Bob Dylan movie. Source 🎵 Drake files another lawsuit over Kendrick Lamar song. Pitchfork gives the filing a 5.8, calls it “wildly self-indulgent.” Source CRASH & BURN TO THE MOON 🛒 Medieval-era London market referenced in two Dickens novels is finally closing. At least Diagon Alley's still there. Source 🪦 U.K. cemetery has started selling VIP passes. And make sure you get a wristband for the Afterlife After Party. Source 🧘 Couple arrested for allegedly stealing nearly US$1 million worth of Lululemon merchandise. Suspects considered limber and dangerous. Source 🍿 Cineplex offering a free refill on popcorn and drinks across Canada, mostly to stop you from singing along to Wicked. Source WHO CARES THE BIG IMPORTANT STORY HOLIDAY SPECIAL 10 Books That’ll Teach You Everything (Or at Least a Lot) About Money Each week in TLDR, we offer up bite-size news and analysis to help you better understand money and markets. But with the holidays coming up, we thought we’d take a step back from the news cycle and suggest a few books that are a full meal of economic and business insight in case you need to round out your Christmas list. These books — a mix of newish releases and modern classics that each reveal something compelling about money — will make you smarter, no doubt, and they’re not total snoozefests, either. The Company: The Rise and Fall of the Hudson’s Bay Empire by Stephen R. Bown (2020) In 1665, two French fur traders met with the king of England to pitch him a deal: if the king agreed to finance their operation, they’d handle the difficult business of building relationships with Indigenous trappers and establishing a port on the remote Hudson Bay. The king obliged, and for the next 200 years, the Hudson’s Bay Company would be the most dominant economic and political force in the 3.9-million-square-kilometre tract known as Rupert’s Land, which stretched from present-day Alberta to Nunavut to North Dakota. This quick-reading history details how HBC controlled trade first by creating a complex network of outposts and then by using its pseudo-militaristic muscle to extract as much wealth as possible from the new world. Throughout, Bown brings to life incredible figures from Canadian history, including Thanadelthur, a trilingual teen interpreter who deftly negotiated a trade deal between the Cree and the Chipewyan, leading to decades of profits for European traders. Key takeaway: HBC created the blueprint for how to be a politically influential corporate behemoth in Canada: it amassed power and wealth not through the free market but through eliminating competition. But without competition, HBC eventually became sluggish and ineffective, as have so many other companies that have followed its example. The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution by Gregory Zuckerman (2019) Jim Simons has been called the “greatest moneymaker in modern financial history,” and for good reason. For three-odd decades, his hedge fund, Renaissance Technologies, made 66% in annualized returns, handily outperforming its competitors. This dynamic biography recounts how Simons, a chain-smoking former U.S. government codebreaker, notched such legendary returns by developing what we now call quantitative trading. In the early 1980s, when other firms were mostly relying on their own judgments, Simons hired physicists and other non-finance types to build algorithms that looked for patterns in markets to identify trading opportunities. These powerful algorithms picked up on changes in everything from the weather to tiny shifts in commodity consumption, and they’ve since influenced biology, quantum physics, and beyond. Simons died earlier this year at age 86, making this a timely read. Key takeaway: Markets are absurdly complex, so much so that even with powerful algorithms, Simons’s firm only made money on a little more than half its trades. That illustrates how difficult it is to beat the market and why most folks are better off sticking to index funds. Capital in the Twenty-First Century by Thomas Piketty (2014) Each year, workers worldwide generate something like $105 trillion in output. The hitch is that more than 20% of this haul ends up in the hands of the richest 1% of people. The distribution of wealth, or “capital,” across the globe is the central concern of Piketty’s much-talked-about masterwork. In it, Piketty, a French economist, uses data to show that, for myriad reasons, assets and investments have long grown faster than worker wages, exacerbating the divide between rich and poor. He observes that the 20th century was an anomaly in terms of inequality, since union efforts, steep marginal tax rates on top earners, and the destruction wrought by two world wars helped to narrow the wealth divide dramatically. But now inequality is getting worse: in the U.S., that 1% has seen a three-fold increase in wealth over the past 50 years while the average worker has gained essentially nothing. Key takeaway: Capitalism has lifted more people out of poverty than any other economic system. The trouble is when too much wealth ends up in too few hands. Piketty argues that economies would be far healthier if vast fortunes weren’t sitting idly in barons’ bank accounts and instead put to more productive uses in the hands of the many. China Unbound: A New World Disorder by Joanna Chiu (2021) Joanna Chiu, a former Toronto Star reporter, spent more than a decade in China reporting on the country’s economic growth — and on the growing authoritarian tendencies of its leaders. Shortly after Chiu returned home to Canada in 2018, Meng Wanzhou, a Huawei exec, was arrested in Vancouver over accusations of evading U.S. sanctions. China swiftly retaliated by detaining two Canadians. These events crystallized for Chiu that China was now a global story. Her book is a riveting primer on the threat China’s government poses to other nations, and she dutifully catalogues its vast espionage efforts and human-rights abuses. But she also faults Western nations for failing to live up to their lofty democratic ideals — such as when the U.S. unlawfully invaded Iraq and used drone strikes against civilians. In doing so, Chiu argues, the U.S. modelled for China that international rules can be flouted, and the world is now suffering the consequences. Key takeaway: The world is in flux, and it remains unclear whether China is an ascendant power or already in the early stages of decline. In either case, Chiu’s view is that hawkishness by the West, rather than savvy geopolitical maneuverings, only risks further heightening tensions between China and the West, to the benefit of no one. Other exceptional reads: Chip War: The Fight for the World’s Most Critical Technology by Chris Miller (2022): An absorbing account about the arms race to control the semiconductor supply chain — and the geopolitical consequences for the nations vying for supremacy. Lords of Finance: The Bankers Who Broke the World by Liaquat Ahamed (2009): A Pulitzer Prize-winning book about how four central bankers brought the global economy to its knees and kick-started the Great Depression. Having and Being Had by Eula Biss (2020): An acclaimed essay collection that describes how strange it is to both own things and feel owned by things. If you’ve ever coveted items in a Crate & Barrel catalogue while simultaneously feeling guilty about your spending habits, read this. Barbarians at the Gate: The Fall of RJR Nabisco by Bryan Burrough & John Helyar (1990): One of the all-time great business books about how a Canadian CEO with a taste for excess struggled to retain control of his cookie-and-cigarette empire amid a leveraged buyout. The Financial Activist’s Playbook by Jasmine Rashid (2024): A funny, practical financial guidebook that teaches readers how to become “everyday philanthropists” and how to responsibly manage their money in a way that benefits their community. The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness by Morgan Housel (2020): Housel, a former Wall Street Journal columnist, explains how financial success has much to do with emotional behaviour and ingrained biases. —Sarah Rieger OTHER VERY GOOD READS 🍼 Want to Raise a Kid in Canada? That’ll be $293,000 …and climbing. | The Walrus 💅 The Influencer Lawsuit That Could Change the Industry A court battle for the “clean girl” look. | The Verge 📬 Sorry, Your Life Savings Are in the Mail Many banks still transfer money with cheques — and those cheques are in limbo. | Financial Post THE WISDOM OF SOCIAL If we have to rely on domestic beef production, Drake has to write some better bars. THOUGHTS ON TODAY’S ISSUE? Love it Good So so This week’s newsletter contributors: Ben Mathis-Lilley (writer), Devin Gordon (writer), Stacey Woods (writer), Sarah Rieger (news writer), Ambrose Martos (fact checker), Ciara Rickard (copy editor), Clare Douglas (copy editor), Sara Black McCulloch (fact checker), Mohini Tailor (lifecycle marketing manager), Matthew Karasz (markets editor) Jared Sullivan (senior editor), Peter Martin (senior editor), Kat Angus (managing editor), and Devin Friedman (editor-in-chief). Wealthsimple Media Inc. 80 Spadina Ave Suite 400 Toronto, ON, M5V 2J4 VIEW IN BROWSER PRIVACY POLICY UNSUBSCRIBE Self-directed Investing is offered by Wealthsimple Investments Inc. (“WSII”). WSII is a member of the Canadian Investment Regulatory Organization. Customer accounts held at WSII are protected by Canadian Investor Protection Fund (“CIPF”) within specified limits in the event WSII becomes insolvent. A brochure describing the nature and limits of coverage is available upon request or at CIPF. 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