Episode 141 – Richard Dias – A Dynamic Economic Exchange

“I think Canada is positioned to be one of the most powerful, richest countries in the world.” – Richard Dias  

  • [02:08] Patrick introduces his next TEDM guest, Richard Dias.
  • [04:20] Richard and Patrick get started with a shout out to the Loonie Hour show. Richard also fills us in on what he does in the world.
  • [06:03] Richard talks about what his company Acorn Macro Consulting Ltd. does, for whom, and what their approach is for investors.
  • [07:28] Richard shares what drove him to become an entrepreneur, his love of learning, and the journey he took from school to his first job in 2008 – an interesting time to start a finance career to be sure. Starting from a young age watching his parents run their business, Richard has a great appreciation for how they started, and the lessons he absorbed from their teaching.
  • [12:48] Patrick reflects on his love of learning and research. While working within the culture of REIN has always made research and economics top of mind, the last two years have brought his attention front and center with worldwide economics.
  • [15:20] One of Richard’s superpowers is research, and he talks about the work he does with institutional investment groups within that. Patrick confesses to his “chart envy.” (check out Richard’s Twitter link above)
  • [18:33] The more knowledge you have the less money you need. While this is an adage that holds true in real estate investing, Richard uses an example to show how this is not necessarily the case when investing in markets. With that, he also explains how it in fact can apply.
  • [21:41] Richard describes his contrary view of the advice he got from his parents, and how he perceives millennials and the consequence of the central banking system.
  • [28:50] Richard offers another angle to what has transpired over the last several years of investors jumping on the bandwagon of stocks, crypto, ETFs etc. While many investors have made a lot of money, their perceived genius has more to do with being on the right side of the game when interest rates were low. Now, inflation is a thing.
  • [31:55] Interest rates. Patrick offers his view of where they are going, and Richard breaks that down to weigh in on the short-term interest rate path, longer-term interest rates, and population growth/immigration as it relates to the housing market.
  • [39:50] Patrick shares insight into the foundational piece of REIN’s education which is the long-term real estate success formula. Positive GDP > jobs > immigration > rental demand > vacancy rates decrease > rents increase > housing demand increases > prices increase. Conversely, negative GDP has the exact opposite effect.
  • [44:28] Richard and Patrick discuss influencers or secular trends/cyclical trends which also affect the market, e.g. interest rate policies, politics, black swan events, productivity growth, job creation and age of population.
  • [45:08] Going down the political and economic rabbit hole with both Richard and Patrick about the [over]reaction to the events that have unfolded over the past several years and the astounding wealth transfer that occurred for a select demographic. Richard further reflects on the financial crisis of 2008 and how that reaction is relevant to today.
  • [56:15] As more of an optimist and glass half-full guy, what does Richard see coming down the pipe economically? Any light at the end of the tunnel aside from a train wreck? He offers a perspective that is a little less narrow and self-interested than what the masses often believe, while acknowledging the real risks at hand.
  • [63:11] Patrick and Richard have a spirited conversation around financial risk mitigation, GDP, the viability of China and the US, and a tight oil rant about Canada’s current account balance reality without it. They are certainly in their element!
  • [74:35] Richard dives into his view of Canada’s enormous potential as a country, and why it has not yet lived up to that potential.
  • [80:46] Richard further explains the relationship of manufacturing in China as well as certain parts of Canada and their reliance on inexpensive energy. In his view this a wildly underutilized resource in Canada.
  • [82:29] Another asset unique to Canada that Richard feels is largely overlooked is our societal values.
  • [83:51] Going back to an earlier question: what the heck do we do with our capital? Richard gives his perspective on a variety of investment types, and the reality of the cycle he feels we are headed into.
  • [90:16] Richard expands on several opportunities he sees in the equity sector. At the next level of granularity, he discusses energy, more specifically oil, and the fallacies that are perpetuated around human consumption and dependency.
  • [95:13] A quick dip into crypto currency, the danger of central bank digital currencies and Richard’s opinion of Bitcoin and precious metals.
  • [97:23] Patrick throws a few rapid-fire questions Richard’s way: favourite fiction and non-fiction authors, iPhone or Android; a favourite and very specific genre of music; sci-fi movie buff; room-desk-car; message at the pearly gates.
  • [89:00] Richard’s gratitude.

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