The cost of borrowing might be falling. But food is expensive, savings accounts could start returning less, three tech giants are potentially inflating history’s most innovative bubble, massive global tech outages have evidently become a real possibility, and any chance of making money in a supposed “stock-picker’s market” is not much of a chance at all.
We have more on those forces below, and how they beg the question: Should I buy a dinosaur?
In the news
- Developing: Global tech outage grounds flights, hits banks, telecoms and media
- All major Canadian grocers agree to sign on to grocery industry code of conduct
- Ford Motor Co.’s Oakville plant to turn out large gas-powered pickup trucks by summer of 2026
- Federal Labour Minister Seamus O’Regan to resign from Trudeau’s cabinet
- Yukon considers seizing control of Eagle mine site
Up top
‘This will be the largest IT outage in history’
A software update wreaked havoc on computer systems globally on Friday, grounding flights, forcing some broadcasters off air and hitting services from banking to health care. (It also delayed our ability to send this newsletter; we regret the inconvenience.)
An update to a product offered by global cybersecurity firm CrowdStrike appeared to be the trigger, affecting customers using Microsoft’s Windows Operating System. Microsoft said later on Friday the issue had been fixed.
Troy Hunt, a prominent security consultant, wrote in a social media post: “I don’t think it’s too early to call it: this will be the largest IT outage in history. This is basically what we were all worried about with Y2K, except it’s actually happened this time.”
One expert put the news into perspective in a quote to the Financial Times: “This is a very, very uncomfortable illustration of the fragility of the world’s core internet infrastructure,” said Ciaran Martin, professor at Oxford university’s Blavatnik School of Government and former head of the National Cyber Security Centre.
In focus
Where to invest? Welcome to Jurassic Park
A Stegosaurus skeleton became the most valuable fossil ever sold at auction, going for $44.6 million.CHARLY TRIBALLEAU/Getty Images
As the old saying goes: If you have to ask whether you can afford a dinosaur, you probably can’t afford a dinosaur. So, I’m not off to a great start.
That question might not even have crossed the mind of billionaire Ken Griffin, the founder and chief executive of Chicago-based hedge fund Citadel, who this week paid US$44.6-million for a late-Jurassic stegosaurus skeleton. Sotheby’s, which auctioned off the 150-million-year-old dinosaur, estimated it would sell in the range of $4-million to $6-million.
Granted, that might have a lot to do with the amount of money in Griffin’s bank account, but it’s nevertheless the latest deal in the growing market for prehistoric fossils. In terms of investment potential, think somewhere along the lines of fine art, old wine and rare watches.
But as the CFA Institute wrote in a report last month, macroeconomic factors also appear to be playing a part in boosting the market for extremely old bones. The report notes a 10.7-metre T-Rex named Stan sold for $31.8-million during a period of quantitative easing in 2020. At the onset of the 2008 recession, by contrast, a 7.6-metre Triceratops skeleton failed to fetch its expected €500,000 (CDN$746,700).
Fossils fuel investment
Targets like full stegosaurus skeletons might be on the more extreme side of alternative investment plays, but they’re increasingly popular ones for those who can afford it.
“This plays into the rise of real assets as inflation hedges – a trend that has taken hold the last couple of years,” Globe investment columnist Tim Shufelt told me. “Lots of people chasing returns outside the traditional portfolio.”
He wrote this week about the mirage of a stock-picker’s market – an environment in which active funds claim they can pick winners and losers at the right time and place. The results, he finds, are deeply south of impressive.
So how about the market in general? For all its current high spirits, Ian McGugan observes, the U.S. stock market is an “expensive, politically volatile place that is riding high on AI euphoria and big deficits.”
As for the global picture, the subject line of Reuters’ “Econ World” newsletter yesterday did not mince words: “World economy disappointing.”
Which brings me back to the dinosaur
There are many, many, many alternative directions in which to direct your money. One of them, of course, could be nowhere: Savings accounts still pay good rates, and there are products that essentially amount to savings accounts for investors.
But there might be a way into the dinosaur market for me, after all.
A brand called Timeless, under the German-based investment firm New Horizon GmbH, calls ownership of prehistoric objects “an incredible opportunity to diversify your portfolio,” noting recent auctions have shown the market’s enthusiasm for dinosaurs. On its website, you can currently buy a share in a megalodon tooth or place an offer on the “entire asset.”
Combining rarity, historical significance, and increasing demand, (dinosaur fossils) transcend traditional boundaries and represent a unique investment opportunity for anyone.
— "Timeless" website
On another website, I am able to enquire about buying a full wooly mammoth skeleton, or with one click “add to bag” a spinosaurus tibia for $14,482.90. With free shipping!
A paleontologist’s prediction
In his 27 years as a paleontologist working for both public and commercial interests, Anthony Maltese says he has watched with “bemusement” as dinosaur bones sell for increasingly higher prices.
“Sitting on the sidelines and seeing what happens, it’s interesting, I don’t understand it, but that’s the world we live in right now,” said Maltese, who works for the Rocky Mountain Dinosaur Resource Center in Colorado, as well as the commercial company Triebold Paleontology. His company worked on preparing Stan, the T-Rex, for auction on contract from Sotheby’s.
In the wake of Griffin’s big bid for the stegosaurus, more fossils might find their way to market.
“You will see more people coming up with specimens, I think, just because when people see there’s a market for something, they will go ahead and fill that market. It’s simple capitalism at that point,” he said.
So, should I buy a dinosaur?
Maltese: “As long as it’s ethically collected, prepared and sold, sure! Just look at all the attention this particular sale is getting for natural history museums worldwide. Sales do a lot to keep these dusty old bones in the public’s eye.”
McGugan: “I know Leonardo DiCapiro and Nicholas Cage are both dino collectors, but I would suggest that’s the opposite of an investment recommendation. The general rule in collecting fine art or great wine is that about 40 per cent of the price you pay is composed of various transaction fees. So, if you buy something for $100,000 and want to turn around and immediately resell it, you should expect to get only $60,000 or so. (Because anyone who buys it from you will have to pay roughly $40,000 in transaction fees to sell it to another sucker.)”
Shufelt: “Even if you could buy a dinosaur skeleton on a newsletter writer’s salary, it’s highly questionable that this is going to perform better as an investment than a classic mix of stocks and bonds. Plus, it’s not exactly a liquid asset, and I doubt you’ll be able to pay your kid’s tuition with a dinosaur rib.”
The verdict:
Strong neutral
Charted
The cost of shipping goods is rising sharply, a trend that is tied to strong demand for discounted Chinese products, Matt Lundy reports in the latest Decoder.
Freight rates have soared by 257 per cent this year, according to an index of eight major shipping routes from Drewry, a maritime consultancy. On one of those routes – Shanghai to Los Angeles – the spot rate for shipping a 40-foot container is roughly US$7,300, up from US$1,965 a year ago.
The lookout
On our radar and reading list
On the oil sands: Suncor CEO Rich Kruger talks politics of oil and gas and the company’s future
On the road: How Quebec-based FLO aims to conquer the EV charging market.
In British Columbia: An Indigenous-led hydrogen project is seeking to supply the heavy-duty transportation sector, gearing up to play a role in decarbonization in B.C.
Back to dinosaurs: A team of Brazilian scientists has discovered a fossilized skeleton of what they believe is one of the world’s oldest dinos.
Morning markets
World stocks edged lower as uncertainty across major economies added to headwinds for investors, while a global tech outage hitting services from airlines, banks and financial services capped a turbulent week in markets.
Wall Street futures fell, as traders shifted out of expensive megacap technology stocks while assessing the impact of the worldwide tech outage. TSX futures were also pointing lower.
Overseas, the pan-European STOXX 600 was 0.61 per cent lower in morning trading. Britain’s FTSE 100 gave back 0.53 per cent, Germany’s DAX fell 0.76 per cent and France’s CAC 40 slid 0.67 per cent.
In Asia, Japan’s Nikkei closed down 0.16 per cent, while Hong Kong’s Hang Seng fell 2.03 per cent.
The Canadian dollar traded at 72.92 U.S. cents