Shifting Tides
Shifting Tides
3.05 | Crypto, VR, Getting Ahead |“We cannot solve problems with the kind of thinking we employed when we came up with them.” — Albert Einstein
News and Numbers
Markets this Week:
S&P 500 is up 1%
NASDAQ 100 is trading flat
Bitcoin-USD is trading flat
Ethereum-USD is down 5%
Headlines from this Week:
The Bank of Canada hiked its interest rate by another quarter percentage point on June 7, bringing it to 4.75%.
The US Securities and Exchange Commission (SEC) has filed lawsuits against Binance and Coinbase for allegedly offering unregistered securities.
Apple unveiled their long anticipated mixed reality headset at their annual conference.
Soccers stars changed clubs: Lionel Messi is going to Miami (MLS) and Karim Benzema is going to Al Ittihad (Saudi Arabia).
Finance
By Vlad Estoup, B.Comm. (Finance); working in Ethereum cybersecurity
The Speed of Crypto Bull Runs and Its Effect on Traditional Markets
As cryptocurrency increasingly gains mainstream acceptance, its market behavior has started to shape the ebb and flow of traditional financial markets. A striking difference between the two is the pace at which bull runs occur. Whereas bull markets in stocks can last years, if not decades, crypto bull runs are usually much more compact, lasting just a few months. The recent upward trajectory of the stock market, paired with a downward trend in cryptocurrencies, suggests a dynamic interplay between these two financial ecosystems that deserves closer analysis.
Compact Crypto Bull Runs
Cryptocurrencies have been known to experience dramatic price increases in relatively short time frames. This phenomenon is attributed to several factors. For one, the cryptocurrency market operates 24/7, unlike traditional stock exchanges. Additionally, cryptocurrencies often see frenzied speculation, partially due to their decentralized nature, lack of regulatory oversight, and the sheer number of retail investors involved.
Another factor driving the pace of crypto bull runs is market accessibility. Unlike traditional securities markets, where barriers to entry can be high, practically anyone with an internet connection can participate in the cryptocurrency market. This democratization of access, combined with the influence of social media, can contribute to highly volatile swings in cryptocurrency values.
Effects on the Stock Market
An interesting pattern has emerged recently. While the cryptocurrency market is facing a downturn, the stock market has been on an upward trajectory. This inverse relationship can be partially explained by investors seeking stability amid crypto volatility. When cryptocurrencies experience a downturn, investors, especially institutional ones, may move their assets into the more stable and predictable traditional markets.
Rotation into Value Stocks
Moreover, recent overbought signals in the technology sector indicate a likely rotation into value stocks. Value stocks — companies that are considered undervalued by the market — have traditionally been a safe harbor during periods of volatility and uncertainty. These stocks often have long-standing, reliable business models and can offer stable returns, which make them appealing in times when growth stocks, such as technology companies, appear overvalued.
This rotation could be a result of the same risk-averse sentiment that's driving the crypto-to-stock shift. As the tech sector, which has seen solid returns in recent months, starts to appear overbought, investors may look to hedge their portfolios with less risky, more stable investments.
Conclusion
The recent trends in the cryptocurrency and stock markets highlight the complex dynamics at play in the global financial landscape. The compact nature of crypto bull runs can lead to rapid shifts of capital, with ripple effects across the broader financial market. Understanding these patterns can provide insights into potential investment opportunities, including the anticipated rotation into value stocks. However, as always, investors should do thorough research and consider their risk tolerance before making any investment decisions.
This is not financial advice and you should always do your own research before investing in any securities or cryptocurrencies.
Sci-Tech
By Keyann; Software Engineer in Web3
Apple’s Vision for 2024
After years of anticipation and speculation, Apple finally unveiled their mixed reality headset product, the ‘Vision Pro’, at their annual World Wide Developer Conference (WWDC), earlier this week.
The headset is said to come out early 2024, with an eye opening price tag of $3500 USD, or $4700 CAD, (before tax 😢). They also have an exclusive partnership with Unity for developers to build 3D apps.
Of course there have been mixed responses, with many criticizing the price, battery pack, or dystopian feel of it. To get a true sense of the product, you have to either use it, watch the videos on it, or a video of someone that’s used it.
I, for one, am very content with the release, and quite excited for its arrival. The news also comes at an interesting time.
At the wake of the pandemic’s declared end, and a volatile year caused by both inflation and energy price wars, interest rates are continuing to increase, yet the nasdaq has managed to go up 26.68% YTD, companies like Tesla are up 100% YTD, and others like Nvidia has reached new all time highs (ATH). With that kind of, there’s a lot of uncertainty and doubt about how much more these companies can keep growing in the near future. However with the consumer adoption of generative AI (which has stolen the limelight from web3 and the metaverse), and now Apple’s mixed reality headset (which is kind of bringing the limelight back), it’s as if there’s new optimism that’s been reinjected into the market.
What’s different this time? Although Generative AI is far from perfect, it has surpassed user expectations, and the rate at which it’s improving does not seem to be slowing down any time soon. 3D design and development, which were once very tedious and expensive crafts, are now being streamlined with generative A.I.
Before, the market for 3D apps weren’t that big. Granted, there was Meta’s Quest, Playstation VR, and web3 spaces like Sandbox and Decentraland, the market penetration for these technologies still lagged. But with the Apple’s historical success in new markets, like the Personal Computer, Laptop, Smart Phone, and Smart Watch, there’s little doubt that they can’t execute on this too.
It’s like pre 2010 - there’s all this new technology, and no one can really fathom it’s relevance, but in a decade from now we’ll look back and kick ourselves for now seeing how obvious it was. For example, I didn’t get the iPhone 2G but I eventually got an iPhone. I didn’t get the first apple watch, but 5 years or so later, many of my friends and I got one.
Let’s put it this way, although 3D and web3 aren’t new, AI and mixed reality pave the rest of the road for a new era of digital media (3D videos and models), a new era for software and experiences (3D apps and app stores), which opens up a new era for gaming, film making, socializing, and shopping, which brings about analytics, advertisement, and security.
Paradigm Shift
By Roman Kuittinen-Dhaoui, BBA, CPHR Candidate; working in Human Resources
Getting Ahead
In today's society, there seems to be an implicit timeline of milestones and expectations that dictate when certain life achievements should occur. When you're a 20-year-old student burdened with debt, it's considered average and even expected. Similarly, being a 25-year-old server trying to figure out your career path is seen as normal. However, once you reach 30 years old and still haven't "gotten your shit together," society's perception shifts, and you might be labeled as a man-child or woman-child.
One contributing factor to this shifting perception is the soaring cost of housing, particularly in places like Canada. The above graphs illustrate how home prices in Canada have consistently outpaced increases in disposable income. This trend is not exclusive to Canada, as certain American real estate markets, such as New York, Seattle, Miami, and Los Angeles, are also experiencing skyrocketing housing costs.
Growing up in Vancouver, Canada, I learned early on that I needed to prioritize getting my finances and life in order to have a chance at affording property in this city. For reference, Vancouver is now ranked as the third least-affordable city in the world, after Hong Kong and Sydney, presents a stark reality. This affordability crisis has prompted a necessary reevaluation of traditional societal expectations, challenging the notion that your 20s are for enjoyment and that settling down happens in your 30s.
In this context, I propose that it is crucial for younger generations to expedite their personal growth and financial responsibility. While enjoying life and having fun in your 20s remains important, it should not overshadow the need to lay a solid foundation for the future. The current housing situation in Canada, and other expensive cities around the world, calls for an earlier maturity and a sense of urgency.
Finding balance between work and personal life is essential, but it's crucial to prioritize building a strong foundation during your 20s. This period should be devoted to seeking rapid growth and pursuing opportunities that can yield substantial returns in your career, investments, and relationships. By focusing on developing a solid base in your 20s, you increase the potential for compound interest gains and long-term success in your 30s and beyond.
Unfortunately, younger generations are facing the challenges of diminished affordability and the luxury of time to explore different paths. To continue living in expensive cities, they must adapt to this new reality and take proactive steps to secure their financial future. This may involve making sacrifices, seeking alternative career paths, or considering innovative housing solutions. The changing landscape demands an accelerated transition into adulthood and financial responsibility.
TLDR: you can’t afford to waste your 20s; work hard while young to build a solid foundation for your 30s and beyond!
Graph source: https://nationalpost.com/news/canada/canadas-unhinged-housing-market-captured-in-one-chart
(Head)Space
By Roman
Expected to Win
During my childhood, I immersed myself in the world of karate. From ages 8 to 18, my sister and I dedicated ourselves to training and competing at various national and international tournaments. With the guidance of our skilled Sensei, we became talented athletes, representing our karate school at a high level.
As star pupils, we carried the weight of expectations on our shoulders. We were known for our exceptional fighting skills and more often than not emerged victorious in sport karate divisions such as point sparring and continuous sparring. Even during practice sessions at the dojo, we felt like the champions everyone was eager to defeat. Our reputations ensured that we received everyone's best efforts.
In our minds, there was a fundamental difference between hoping to win and expecting to win. We expected and were expected by others to win. Anything less, such as a second or third-place finishes, felt like failures. This mindset fueled our relentless dedication to training.
However, when we did win, it didn't always bring the joyous celebration one might expect. Instead, it often felt like a weight had been lifted from our shoulders. We had accomplished what was expected of us, but the satisfaction was tinged with relief. We found ourselves constantly looking ahead to the next tournament, the next challenge, without taking the time to appreciate our achievements.
This mindset extended beyond karate and permeated other areas of my life, including academics. I carried the same expectation of success into school, always striving to perform well. However, when milestones were reached, such as graduating from university with distinction from the business honnours program, the absence of celebrations didn't bother me. I was already focused on my HR career, and the next goal had already captured my attention.
In retrospect, and as I look to the future, I have come to understand the importance of celebrating milestones in life. It's vital to acknowledge and express gratitude for the progress made before rushing toward the next objective. By taking the time to celebrate, we cultivate a sense of fulfillment and satisfaction. This doesn't mean becoming complacent or stagnant, but rather finding balance between striving for more and reflecting on how far we have come.
Moving forward, I aim to embrace a mindset that allows me to appreciate and celebrate each milestone, both big and small. Expressing gratitude for the achievements along the way will not only enhance my sense of fulfillment but also provide the motivation and perspective needed to continue progressing.
TLDR: Life is a journey, and by pausing to celebrate our accomplishments, we can find meaning and joy in the pursuit of our goals.
Company of the Week
Saudi Aramco
Saudi Aramco, officially the Saudi Arabian Oil Group or simply Aramco, is a state-owned Saudi Arabian public petroleum and natural gas company based in Dhahran, Saudi Arabia. The company was founded in 1933, and is 90% owned by the government of Saudi.
As of 2022, it is one of the largest companies in the world by revenue and has repeatedly achieved the largest annual profits in global corporate history. Saudi Aramco has both the world's second-largest proven crude oil reserves, at more than 270 billion barrels, and largest daily oil production of all oil-producing companies. Saudi Aramco most notably operates the Ghawar Field (the world's largest onshore oil field) and the Safaniya Field (the world's largest offshore oil field).
In 2022, Saudi Aramco had a revenue of $535 billion, and more than $150 billion in profits. More than Apple, Amazon, Google, or Microsoft.
Written by: Vlad Estoup, Keyann Al-Kheder, and Roman Kuittinen-Dhaoui