"Life is not just about peaks and valleys, about wins and losses. Life is about the journey. You hear that all the time. You’ve got to absorb that. You’ve got to know that. The journey has to become the destination because there is no true destination. There is no endpoint. There is no goal. All rivers run to the sea and yet the sea is not full. Life goes on; accept what life gives you. The sun rises the morning after you win the championship or lose in the first round." Paul Assaiante, Run to the Roar

Good Mornin’

And just like that…..yes folks, we are into November

It’s wild that winter is around the corner, as I’m sure many of you spent the weekend raking leaves and preparing for the new season ahead.

It’s certainly been a busy few weeks in the markets…..I was fortunate enough to spend a timely few days south of the boarder in Arizona last week, attending investment conference. An opportunity to gain some outside perspective on events around the globe, and find some economic insight into the unprecedented environment we find ourselves in today.

It was also a busy weekend at the Henderson house, a full jam packed weekend of dance, hockey, theater and Taylor Swift. I did find some time for my son Bowie to help me put the hardtop on the Scout II, which will help us enjoy the summer truck for a few more country drives before the snow arrives. Despite the leaves and activities, I did also find time to connect with bestselling author Shane Parrish over the weekend, and I look forward to some deeper conversations.

For those of you that have yet to hear of Shane, his journey is an exciting one and he’s worth paying attend to…

A Canadian native, Shane started a personal blog where he could explore what others have discovered about decision-making, purposeful living, and how the world works….his blog quickly blossomed into one of the fastest-growing websites in the world.

With over 600,000 subscribers, consistently sold-out workshops, and over 10 million podcast downloads, Shane’s Farnam Street has become the go-to resource that CEOs, athletes, professional coaches, and entrepreneurs rely on to find a signal in a world of noise.

Shane's work has been featured in nearly every major publication, including the New York Times, The Wall Street Journal, Huffington Post, and The Economist.

Shane and I are aligned in much of our thinking. I always say that we spend most of our time seeking happiness, but being clear in our thinking can bring a sense of well-being, of meaning, of purpose.

Shane has recently released his book Clear Thinking: Turning Ordinary Moments into Extraordinary Results…which I wont spoil for you, but there are some key concepts I think worth sharing, namely his point that the most effective way to enhance your decision-making is by starting from a position of strength. With a proven framework and practical strategies, Clear Thinking is your roadmap to navigating any situation with poise and intelligence.

STRENGTH 1: SELF-ACCOUNTABILITY

“Self-accountability means taking responsibility for your abilities (developing your abilities), your inabilities (managing your inabilities), and your actions (using reason to govern your actions) … Self-accountability is the strength of realizing that even though you don’t control everything, you do control how you respond to everything. It’s a mindset that empowers you to act and not just react to whatever life throws at you. It transforms obstacles into opportunities for learning and growth. It means realizing that the way you respond to hardship matters more to your happiness than the hardship itself. And it means understanding that the best path is often just to accept things and move on.”

STRENGTH 2: SELF-KNOWLEDGE

“Self-knowledge is about knowing your own strengths and weaknesses (what you’re capable of doing and what you’re not). You must know what you can do and what you can’t; your powers and limitations, your strengths and vulnerabilities, what’s in your control and what isn’t. You know what you know, and what you don’t know. And you know, moreover, that you have cognitive blind spots—that there are things you don’t know, and you don’t know you don’t know them … Knowing about your strengths and weaknesses, your abilities and their limits is essential to counteracting your defaults. If you don’t know your vulnerabilities, your defaults will exploit them to gain control of your circumstances.”

STRENGTH 3: SELF-CONTROL

“Self-control is the ability to master your fears, desires, and emotions … Self-control is about creating space for reason instead of just blindly following instincts. It’s about being able to view and manage your emotions as if they were inanimate objects—things that don’t have the power to determine what you do unless you let them.”

STRENGTH 4: SELF-CONFIDENCE

“Self-confidence is about trusting in your abilities and your value to others … Self-confidence is the strength to focus on what’s right instead of who’s right. It’s the strength to face reality. It’s the strength to admit mistakes, and the strength to change your mind. Self-confidence is what it takes to be on the right side of right. Outcome over ego.”

“You get paid linearly for analyzing and solving problems. You get paid non-linearly for spotting and seizing opportunities.” Shane Parrish

And now, to the markets

There’s certainly been a lot of action, and many opportunities in the market over the last few weeks. Global equity and bond markets have started the month of November on a bit of a better note compared to the past few months. The U.S. Federal Reserve held interest rates steady in its policy update this past week, following in the path of a few other major central banks. The general message from policy makers has been consistent: they are trying to balance the risk of over-tightening financial conditions with the need to ensure policy is sufficiently restrictive for long enough to bring inflation sustainably under control. Below, we share some takeaways from the third quarter earnings season which is well more than halfway complete.

Overall, corporate earnings results have been fine, particularly when compared to expectations that remain cautious. The better-than-expected U.S. earnings results come on the heels of similarly better-than-expected U.S. economic data. The most recent U.S. GDP figures, which represent the most common measure of economic growth, grew at an annualized pace of nearly 5% for the July-through-September period. That was not only higher than expected but represented the highest rate of quarterly growth since late 2021. The strength was driven by an ever-resilient consumer, which continues to surprise to the upside. It’s worth noting the data hasn’t been as inspiring on the Canadian side, where comparable GDP figures have been weaker.

Despite positive headlines around the U.S. economy and corporate earnings results, the overall tone of the outlooks and commentary from management teams has been more guarded. This reflects the concern that businesses have over the elevated level of uncertainty with respect to the future path of the economy given high borrowing costs, inflation pressures, geopolitical risks, and pressures in some foreign markets like China and even Europe to some extent. Many businesses acknowledged that the U.S. economy, and the consumer in particular, have been stronger than expected. But many questioned whether, or more accurately, how long, the consumer resilience could be sustained.

Some potential cracks on the consumer front have started to emerge, with delinquencies trending higher in areas like credit cards and auto loans. Nevertheless, banks continue to characterize the latter increases as being a normalization of credit trends, rather than anything particularly troubling. Meanwhile, the labour backdrop remains healthy but changes are occurring at the margin, with management teams through this past earnings season commenting on the lower levels of employee turnover and slower pace of hiring. Several companies have intensified their focus on costs and have reduced their capital spending plans as a result.

The actions noted above may be music to the ears of central banks. After all, they raised rates aggressively and quickly over the past year or so in an effort to slow inflation pressures and cool economic activity. Businesses seem to increasingly be doing their part by adapting to the environment. On the other hands, U.S. consumers seem to largely be undeterred by higher rates and the higher cost of living to this point. Nevertheless, it may just be a matter of time before they too start to adjust their behavior in a bigger way by slowing their own spending plans, leading to weaker demand for goods and services. Admittedly, this view may continue to require some patience to see it play out.

“In the short term, you are as good as your intensity. In the long term, you are only as good as your consistency.” Shane Parrish

As my clients know, I enjoy introducing you to new ideas, concepts, and new ways of thinking….and, in the process, I also enjoy hosting events with guests including economists, CEO’s, authors and some of the worlds most forward thinkers. I look forward to introducing you to Shane in the weeks ahead.

“You don't need more time, you need more focus.” Shane Parrish

Shane’s new book highlights that few things will change your trajectory in life or business as much as learning to think clearly. Yet few of us recognize opportunities to think in the first place. You might believe you’re thinking clearly in the moments that matter most. But likely, when the pressure is on, you won’t be thinking at all. And your subsequent actions will inevitably move you further from the results you ultimately seek–love, belonging, success, wealth, victory. According to Farnam Street founder, we must get better at recognizing these opportunities for what they are, and deploying our cognitive ability in order to achieve the life we want. Clear Thinking gives you the tools to recognize the moments that have the potential to transform your trajectory, and reshape how you navigate the critical space between stimulus and response.

As we cruise into the first week of November 2023, here are a few of Parrish’s concepts worth pondering…..

• Mastering your circumstances rather than be mastered by them
• Avoiding the self-destructive behaviors that have been secretly holding you back
• Creating an environment that transforms your desired behaviors into default behaviors.
• Shifting your perspective to see the situation clearly.
• Keeping your calm, even when others can’t
• Getting back on track when you make a mistake.
• Turning ordinary moments into extraordinary results

"What we consider defining moments, like promotions or a new house, matter less to life satisfaction than the accumulation of tiny moments that didn't seem to matter at the time. In the end, everyday moments matter more than big prizes. Tiny delights over big bright lights." Shane Parrish

Be well and enjoy the moments,

Derek