The greatest geek who ever lived

Jul 13, 2018 | Dian Chaaban


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I came across a great article this week about Nikola Tesla. To be honest, I recognized the name because of the car (as I’m sure you did, too) but quickly realized that he is much more than that.  In fact, he has nothing to do with the American car company per se; Tesla founders Martin Eberhard and Marc Tarpenning (CEO Elon Musk joined soon after the company incorporated) named their company Telsa as homage to Nikola Tesla: the Serbian investor and engineer who created the induction motor and alternating-current (AC) power transmission.

Reading through the article, I was impressed by Tesla’s many inventions and contributions to our lives today (over 100 years ago) yet no one outside of the engineering industry really knows who the heck he is. So because of that and because July 10th was Nikola’s birthday (1856), I’ll tell you a little bit more about why Nikola Tesla was the greatest geek who ever lived.

In addition to AC power and the induction motor, Telsa filed more than 700 patents for everything from wireless communication to radio, radar and fluorescent lighting – but of most interest and contention, is the invention of the lightbulb.  And I know what you’re thinking – wait, wasn’t it Thomas Edison who invented the light bulb?  Apparently not. 

Telsa worked for Edison early in his career (alongside 22 other men) who pioneered the light bulb.  Edison improved upon the ideas of these men and simply figured out how to sell the light bulb (reminds me of the way McDonald’s became the fast-food place we know today – if you don’t know that story about the McDonald brothers and Ray Kroc I recommend reading or watching it on Netflix). 

So, who do we really have to thank?  He who thought of it or he who sold it?  I’d say one wouldn’t really exist without the other. Every good idea or service needs to be explained, presented or sold to the right person, at the right time.  But it can’t be sold unless it provides value.

A slight stretch but similar thought trajectory is our institutional money management platform here at RBC DS – we call it A+. Cleverly named to reflect the caliber of the investment managers we’ve brought together in one single account.  In other words, A+ is an innovative investment program that gives you access to some of the world’s best institutional money managers, backed by RBC’s proven investment discipline.

We believe in a multi-manager approach to portfolio construction because no one manager can do it all – so we’ve built our best of the best roster by employing rigorous due diligence to scrutinize and identify leading managers that have demonstrated long-term, consistent quality and merit. Ultimately, this helps ensure excellence and objectivity in the management of your investments.

As the leading wealth management firm in Canada, we have the ability to engage multiple independent, world-class investment managers and simply get their attention. Managers like Walter Scott, Connor Clark & Lunn, Federated, Guardian Capital, Kempen, Mawer, Aristotle and Madison, to name a few, who you likely haven’t heard of because they haven’t had to spend a penny on marketing - all they do is manage money for the ultra-wealthy – and it’s what they do best.  But you need your Investment Advisor to access these geeks.  In other words, you need Edison to access Tesla. 

Click here to learn more about Nikola Tesla (like how he was friends with Einstein, spoke 8 languages, could memorize entire books and recite them, went a little crazy in his final years, lived to be 86 and was celibate his entire life).

Now you are in-the-know with Word on the Street. 

Enjoy the weekend,

D.

Dian Chaaban
Investment & Wealth Advisor
416.842.4234
________________________________________

Market Minute
In this week's Global Insight:

 The S&P 500 closed up 3.02 points (0.11%) on the day
 The S&P/TSX closed down 6.30 points (-0.04%) on the day
 The DOW closed up 32.55 points (0.39%) on the day
 CAD/USD closed at 0.7599 cents
 Crude oil closed at $69.95 (US) per barrel
 Riding earnings momentum, but tuned in to tariff tiffs | Earnings momentum should keep its mojo going, but we’ll be listening closely to signals from management teams about what the trade crosscurrents mean to their earnings outlooks. We think the overall backdrop remains constructive and maintain our Market Weight stance on U.S. equities
 Banks should benefit from accelerating US loan growth – page 3
 Takeaways from the BoC’s Monetary Policy Report – page 3
 “Soft Brexit” plan triggers a backlash – page 4
 Xiaomi makes its market debut – page 4

Click here for the Global Insight Weekly

Quote of the Week

“Compound interest is the eighth wonder of the world. He who understands it, earns it. He who doesn’t, pays it.”
– Albert Einstein

Technical Update

Opinions abound. There is much going on in the world today, and much of it is things that have never happened before. And so it is with interest that we read the various opinions of what it may all mean, but also realize that no one has the answers to all the events taking place that we think will no doubt have an effect on future trends. One can pick from a variety of statistics to support whatever stand is taken, but life is really more complicated than that. The trend of the stock market is one measure of the expected direction for the economy and world going forward, and the current market trend has been neutral for the past five months. This suggests to us that the short-term concerns that are generated by the daily news may not be a serious as the headlines indicate. We also notice that the bulk of the commentary is focused on a potentially negative future outcome for what is happening now, but the markets remain firm. Historically, the stock market tends to react well in advance of economic trouble, and that indication is not evident today, in our opinion. 

Current stock market trends (technical analysis):
Short-term (days to weeks): Neutral
Intermediate (weeks to months): Neutral
Long-term (months to years): Bullish

Chart of the week

Political Beating | Considerable uncertainty was already priced into H shares heading into Ontario’s June election with this week’s announcement further compounding the downside.  The uncertainty presented by the Board’s replacement, the CEO’s resignation and the perceived threat of further government intervention is unwelcome and raises several important questions (e.g. who will be CEO?, will other executives leave?, will productivity gains stall?, implications for Avista deal?, etc.).  However, we (RBC) continue to view H shares as possessing attractive characteristics in a Utilities sector that is increasingly devoid of true safe havens.  H boasts a discounted valuation, lower financial risk, a higher dividend yield and a lower payout ratio relative to the peer group.  We would look to take advantage of the weakness.
Click here to request the latest research report from RBC Capital Markets.

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Video | US Economic Outlook

Tom Porcelli, Chief US Economist, RBC Capital Markets discussed the outlook for the US economy, fed rates and trade wars over the next couple of years and how the outlook compares to that of the broader global economy. Watch here.

Just for Fun

Netflix > HBO
Netflix beat out HBO for the most Emmy nominations. That was notable because the cable network had held the distinction for 17 years straight, and because Netflix’s first original series, premiered a short five years ago. The streaming service captured 112 nominations versus HBO’s 108, reflecting the strength of Netflix hits like The Crown and Stranger Things. HBO’s Game of Thrones got the most nominations of any series, and will compete against Hulu’s The Handmaid’s Tale, which last year became the first streaming series to win best drama.
Read more here | Bloomberg

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Scientists got very excited about neutrinos. An observatory designed to spot one of the elusive subatomic particles in Antarctic ice did just that, and traced its origins back to a blazar (a type of galaxy) almost 4 billion light years away. While the science is hard to grasp, suffice it to say the discovery gives birth to a new era for astronomy in which scientists may be able to use neutrinos, and not just light photons and gravitational waves, to help them map the cosmos.
Read more here | Reuters

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Read more here | Deloitte

US$30 million
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