It was a chart crime, but still… February 24, 2025 Sign Up | View online IN THIS ISSUE 8 min read 🧳 Sightseeing stoppage 🤖 Rent-raising robots 🔍 Chart crimes We foiled four crimes — chart crimes, that is! Below, we explain how to sniff one out yourself. | United Artists/Amazon MGM Studios THE WEEK IN MARKETS Stocks are telling us a new story Here’s something we haven’t said in a while: stocks took a hit on Friday, erasing all of the week’s gains. Markets remain near all-time highs, but underneath the hood is a fascinating reversal. After four blockbuster years, it’s no longer American Big Tech that’s lifting markets up. The so-called Magnificent Seven, after rocketing more than 60% in 2024, is down 2.5% so far this year, while the S&P 500 is north about 2.5%. (The TSX is flat.) Global stocks, in contrast, are up almost 4% in 2025. And if you exclude U.S. companies, that number climbs to 6.6%. What’s going on? The Silicon Valley giants are still swimming in cash. But the higher their share prices (and five of the seven hit record highs in December), the more their profits need to beat expectations to continue driving up their stocks. The difficulty of doing that, plus the prospect of a truce between Russia and Ukraine and signs of Beijing ending its domestic tech crackdown, has benefited global markets. If there’s a takeaway for Canadian investors, it’s that narratives flip fast. WHAT HAPPENED LAST WEEK IMPORTANT Canadians to America: we’re not playing with you anymore. In January — aka before all this trade-war talk really ramped up — the number of Canadians driving back from the U.S. declined for the first time since COVID shut down the border. It’s only a 1% drop so far, but stretch that across a full year and the decline could cost America US$2 billion and 14,000 jobs. Will the trade war make that happen? Who knows! But travel agents are already reporting that many Canadian customers are outright cancelling their American holidays, opting for domestic or non-U.S. trips instead. Robots might have raised your rent. Last year, we told you about a U.S. lawsuit filed against rental companies using algorithms to inflate rent prices by as much as 33% — and a Canadian company that even bragged about using the software to pad landlord profits. Now, Canada’s Competition Bureau is investigating the practice, which has affected at least 50,000 Canadians. Artificial intelligence is capable of some amazing things — detecting diseases, accelerating scientific breakthroughs — yet companies in real estate, retail, groceries, and beyond also clearly see it as a tool to stealthily inflate their bottom line. INTERESTING Should Canada “jailbreak” U.S. tech? Digital-rights activist Cory Doctorow has a provocative take on defying Trump: if the U.S. isn’t going to respect our free-trade agreements, Canada should just toss aside American intellectual property laws. Why? Under our current trade agreement, Canadians can’t repair U.S.-made cars (or tractors or printers) without going through the manufacturers. Doctorow holds that, rather than boycott American cars or pass retaliatory tariffs, Canadian companies should “jailbreak” every U.S. vehicle — that is, unlock the features so any independent mechanic can work on them. That would be a crafty way to hit the U.S., since American car brands and dealerships make half of their profits servicing vehicles. —Sarah Rieger FROM OUR SPONSOR THE FOMO INDEX by Stacey Woods IMPORTANT 🪨 Chances of a huge asteroid hitting earth in 2032 rise to 3%. “Thoughts and prayers,” say dinosaurs. Source 👖 Ricki’s and Cleo will be sold to the parent company of Toys “R” Us. Look for fun rebrand: Mom Jeans “R” Us. Source 🇨🇦 New app lets you scan products to see if they’re made in Canada. Now just need an app to make No Name Cola taste like Coke. Source 🧴 Fires, earthquakes, floods, and now this? New California bill seeks to impose age minimum on anti-aging skin care products. Source CRASH & BURN TO THE MOON 📲 Instagram testing new “dislike” button. Posts about war and pestilence going to need a minute to rethink this whole thing. Source 🤖 Google launches “Career Dreamer,” an AI tool to help you explore career paths. Great unless your dream job is to be a career counsellor. Source 🛑 Reddit says paywalls are coming. Finally, a chance to share ideas with people who think it’s a good idea to pay for Reddit. Source 🏙️ First-ever Toronto Tech Week festival coming in June. Don’t worry, there’s still time to sculpt your Toronto Tech Bod! Source WHO CARES THE BIG IMPORTANT STORY FINANCE 101 Don’t Fall for Bad Graphics. Here’s How to Foil Four Common Chart Crimes Every investor loves a good chart. That’s because some data just hit differently in a visual compared to plain ole numbers, like seeing how global wealth has gone vertical over the past 125 years. But, like any tool, a chart can be abused — in what’s known online as a chart crime. Some chart crimes involve purposefully stretching the truth to convince average folks that disaster is imminent or that they need to buy a stock ASAP. But even well-meaning people will accidentally commit chart crimes; X users are notorious for trying to answer financial questions — like is Such-and-Such Blue-Chip Stock overvalued? — by posting graphics that don’t provide any real insight. And that can result in a lot of misinformation. (Because we believe in honesty here at TLDR, we’re obliged to admit that we have been accused of producing confusing charts.) Here are a few common chart crimes to watch out for: A classic chart felony is to overlay something that’s happening in the present — say, the current performance of a stock — on something that happened in the past over a longer period. This can make the stock appear poised to hit the moon — or, in the case of Nvidia in 2024, crash and burn. If you look at this chart — posted on X in February of last year — the implication is that you should sell, sell, sell before the tech superstar collapses like Cisco, which was briefly the world’s largest company by market cap in 2000. This is a perfect chart crime because it addresses one of the financial world’s biggest questions: is Nvidia overvalued? Only people from the future know the answer. But if you had seen this chart, panicked, and sold your Nvidia shares a year ago, you would have missed out on $NVDA climbing by more than 100% since then. Don’t get us wrong: stocks sometimes do crater. But one stock’s past performance doesn’t tell you much, if anything, about the future performance of an entirely different company. This chart is a mess and raises all sorts of questions — like, why do the left and middle bars both cover the years 2020 to 2023? And why does the left bar span seven years, the middle one four years, and the right bar seven years? The choices here are batty! Then there’s this tiny text at the bottom: “The percentage for 2023-29 is an estimate.” Private credit has been hot recently, and there may be legit reasons to think the market will grow further. But the bars in this chart are displayed in such a way that the asset’s estimated future returns appear far more solid than they actually may be. (Points for the lighter shade of green but not many.) By presenting estimates this way, the chart suggests a positive trend will continue, when there’s a chance it might not. As with Nvidia, a lot of investors are wondering whether Tesla shares are overvalued. In July of 2024, one Tesla fan tried to argue that the company’s stock was fairly priced by posting this chart, which isn’t technically incorrect: Tesla’s cumulative revenue has indeed risen — because cumulative revenue always goes up. Don’t get us wrong — a company’s revenue greatly affects its stock price. But cumulative revenue doesn’t matter at all because it’s just one number added to another; the total sum will always get bigger. In Tesla’s case, its cumulative revenue doesn’t prove, or disprove, that its earnings justify its stock price. (To make that sort of assessment, you’ll want to look at its future price-to-earnings ratio.) Bottom line: stay vigilant against irrelevant metrics. Now check out this dramatic chart: it seems to show that China’s currency, the renminbi, will soon match the U.S. dollar as the currency most held by central banks around the world. If this were true, it would likely mean a redrawing of the entire global financial system! But if you look closely, you’ll notice the chart uses two different y-axes and two different step sizes — the dollar axis goes from 45 to 75 (i.e., multiples of five) and the renminbi axis goes from 0 to 7 (i.e., single digits). This is an especially egregious case of using different scales when comparing two things. If you make a version of the chart with a more apples-to-apples y-axis, like we did, you can see that the greenback’s place as the world’s reserve currency looks very, very secure: THE UPSHOT Data — and how it’s visualized — can either clarify or confound. If a chart makes you feel like you need to do something urgently, it’s worth asking yourself if it’s trying to sell you something — be it a particular stock, a narrative, or the impression that the person behind it has special insight. Our advice? Read every chart through a discerning lens, and curate a list of resources you know you can trust. And, above all, don’t forget: successful investing rarely involves frantic action. History strongly suggests that it’s much better to stay calm, stick to your investing plan, and not make a big decision based on one piece of information. —Ben Mathis-Lilley OTHER VERY GOOD READS 💻 The Women Who Made America’s Microchips In the ’70s, Americans paid a price for domestic chip manufacturing. | The Verge 🦭 North of North Celebrates Inuk Culture A love letter to Canadian-made TV. | The Tyee 🗞️ How the News Drives Stocks — and How It Doesn’t A priced-in explainer. | Wealthsimple Magazine THE WISDOM OF SOCIAL So the U.S. can’t even pay us to consider becoming the 51st state. THOUGHTS ON TODAY’S ISSUE? Love it Good So so This week’s newsletter contributors: Ben Mathis-Lilley (writer), Devin Gordon (writer), Stacey Woods (writer), Sarah Rieger (news writer), Dan Xin Huang (news editor), (Ambrose Martos (fact checker), Ciara Rickard (copy editor), Clare Douglas (copy editor), Sara Black McCulloch (fact checker), Mohini Tailor (lifecycle marketing manager), Eva Grace Clement Cruz (editorial producer), Matthew Karasz (markets editor), Jared Sullivan (senior editor), Peter Martin (senior editor), and Devin Friedman (editor-in-chief). 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