Uncommon Sense for Navigating Uncertainty: Investing Lessons from 2008 to 2025

In July 2008, just months before the world was shaken by the largest financial crisis of our time, a backyard barbecue gave me the clarity to make a decision that would protect my clients from the storm.

It was July 5th—a quiet summer Saturday on the heels of the Canada Day and Independence Day holidays. I had invited three friends over: two advisors and an avid investor. Between flipping burgers and discussing markets, we pieced together a troubling realization—something big was coming. A financial collapse was looming, and we needed to act.

At the time, I was a newly minted Certified Investment Manager, entrusted with the responsibility of making discretionary decisions for my clients. Like many advisors at my firm, I was preparing to implement a proven Quantitative model that analyzed companies’ earnings, assets, and debt to identify undervalued opportunities. This approach, widely adopted in our firm, had delivered solid results for years. Yet, as I reviewed its recommendations, something felt wrong.

Oil prices had hit $147 per barrel—a historic high. Canada, with its vast reserves, was experiencing a surge in profitability, and the Canadian dollar was at parity with the U.S. dollar. The Quant model, recognizing the immense profits in oil and gas, recommended allocating 80% of assets to this sector. It seemed like a logical move, but my gut told me otherwise.

By the end of the barbecue, my friends and I concluded that the Quant model was broken. Oil at $147 was unsustainable. A global recession would crush demand, sending oil prices and oil stocks tumbling. Acting on this insight, I made a bold decision: I moved away from the Quant model, sold nearly all my clients’ Canadian equities, and shifted into U.S. dollars and cash.

This proactive strategy helped my clients weather the Great Financial Crisis. It also taught me a crucial lesson: challenging assumptions and thinking critically can safeguard portfolios, even in unpredictable times.

Uncommon Sense Investing for 2025

Today’s markets are driven by different forces, but the lessons of 2008 remain as relevant as ever. Success lies in looking beyond the obvious, understanding hidden forces, and staying ahead of market dynamics. Here are three guiding principles to help you navigate 2025 with confidence.

1. Study the Tide, Not the Boats

Capital flows—how money moves in and out of markets—are the primary driver of investment performance. Passive investing, which now represents over 50% of global long-term funds, has amplified these flows, creating sharp market swings.

Key questions to consider:

• How much money are governments creating?
• Are interest rates rising or falling?
• Are governments increasing spending or cutting back?
  
  

When capital flows are positive, markets rise; when money is withdrawn, markets fall. By studying these tides, you can anticipate when to get defensive or lean into opportunities. For example, in 2022 and 2023, central banks tightened monetary policy, leading to market declines. Understanding these patterns helps you position your portfolio for the future.

2. What’s the Narrative?

In today’s world, narratives drive markets. A single story can spread across the globe in hours, influencing investor sentiment and market behavior. Recognizing and forecasting these narratives is critical to staying ahead.

Take electric vehicles (EVs) as an example. Over the past decade, the narrative shifted from skepticism to widespread adoption, fueled by media coverage and corporate commitments. Investors who spotted this trend early reaped the rewards. Now, the story is evolving again, shaped by new leadership and geopolitical factors. Understanding where the narrative might go next can reveal valuable investment opportunities.

3. Cui Bono? (Who Benefits?)

One of the best ways to identify opportunities is to follow the money. Ask yourself: who benefits? Powerful institutions often shape markets to their advantage, and aligning your strategy with theirs can pay off.

In early 2024, I initiated a position in Bitcoin. This wasn’t speculative hype—it was a calculated decision based on the significant investments by firms like BlackRock and Fidelity. These institutions had invested heavily in lobbying and platforming Bitcoin, making its success a priority. By understanding who stood to benefit, I aligned my strategy with theirs, turning an emerging asset class into a lucrative opportunity.

This principle extends beyond cryptocurrency. Look for investments where influential players—governments, corporations, or institutions—are actively shaping outcomes. Their involvement often signals long-term potential.

Closing Thoughts
As we enter 2025, the world of investing remains complex and ever-changing. Success lies in thinking critically through the right lens—looking beyond the surface, recognizing unseen forces, and staying ahead of shifting dynamics. By applying uncommon sense, we can navigate uncertainty together and uncover opportunities where others see challenges.