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- Topley’s Top Ten – December 12, 2019
Topley’s Top Ten – December 12, 2019
Matt Topley
December 12, 2019
1.Global Auto Sales Drop
Zero Hedge
2.Sector Leadership Changes in the Last 2 Months.
Interest Rate Sensitive REITS and Utilities Fading
3.Number of Cannabis ETFs Growing ….All Down 30-50% in 2019
All Down 30-50% in 2019
4.How SALT Has Iced Home Prices in High Tax States
Wed,Dec 11, 2019
In the past couple of days, we’ve releaseda few more sections of our 2020 Outlook Report including thoseon Washington, Commodities, and Housing. In addition to gauging theoverall health of the economy and potential for future economic growth, inthe Housing section, we also discussed homeprice trends using the gold standard for housing prices: the Case-Shiller Homeprice indices. Below is a complimentary excerpt from the Housing section of our 2020 Outlook Report. To view theentire section and gain access to all of the other sections (plus the rest ofour research offering), join Bespoke Premium with this 2020 special offer.The Case-Shiller indices saw home price growth slow sharply in 2018 from the6% to 7% YoY range all the way down to the 2% range, but in 2019 home priceappreciation began to pick back up. One significant cause of thefluctuations in home prices over the past couple of years has been theimplications of tax policy. Prior to the passage of the Tax Cuts & Jobs Act (TCJA) at the end of2017, relatively high and low tax metro areas had no consistent home pricetrends relative to each other. The Trump tax bill capped SALT (state andlocal taxes) deductions, however, which hurts higher-tax metro areas like DC,LA, New York, and Chicago more than lower-tax metro areas like Denver, LasVegas, Charlotte, and Dallas. This has resulted in home prices rising more inlow-tax jurisdictions versus high-tax jurisdictions in each month since early2018 as shown in the chart below. This trend is not likely to last forever,especially as the effects have already waned in 2019 compared to 2018, but theTCJA has certainly been a big penalty for homeowners in high tax metros, andthe data proves that out.
©2019 Bespoke InvestmentGroup
5.Percentage of Investment Grade Corporate Rated Single A or Higher at an All-Time Low.
Jeffrey Gundlach on the Corporate Bond Market:
The percentage of the investment gradecorporate bond market that’s rated single A or higher is at an all-time low. It used tobe two-thirds of the corporate bond market was rated single A or higher, 25 years ago. Now it is 35% ofthat market. So, the rating is actually worse. So, the yield spread should behigher than average. Not at near a low level.So, that is a very badsign.
Gundlach Interview.
2019 Big Run Up in Investment Grade Corporate
6.How to Master Your Emotions and Make Good Investment Decisions
Investment UBy Mark FordOriginally posted December 11, 2019 on Liberty Through Wealth
Is the glass half full or half empty? Whether you’re an optimistor a pessimist, your tendency could be hindering your ability to achieve careersuccess and attain a rich life.
If it is, Mark Ford explains how you can move forward.
Boldnessin taking on new business opportunities is considered a virtue by many… andtimidity a vice.
I’m notso sure.
When I ambold, I often gamely invest my time and money into projects that are foolish,unnecessary, and/or unlikely to succeed. When I am feeling timid, I shy awayfrom good and likely opportunities.
Emotionaltendencies matter. If you know your basic nature, you’ll be able to make betterbusiness and investment decisions by taking contravening measures against yourdominant mood.
But howdo you figure out such a thing?
DeterminingYour Basic Nature
Are youfundamentally an optimist or a pessimist? Answering the following questionsshould help you find out.
When offered investment or business opportunities, are youinstantly and positively excited?
Do you often take on projects that you regret later on?
Do you enjoy meeting new people, seeing new sights and going onadventures?
When talking about a new business or investment with friends orcolleagues, do you tend to exaggerate the benefits and profit potential?
Do you often take on social obligations you later regret?
If youanswered yes to three or more of the questions above, I would call yougenerally optimistic. You may even be overly optimistic.
Nowanswer these five questions.
Do you feel that, generally speaking, you have more challengesand obligations than you can properly handle?
In social situations, do you find yourself often thinking aboutbusiness obligations or problems? Do you have difficulty staying in the “hereand now”?
Would you rate your boss and colleagues negatively?
Do you often feel anxious or even sad about going on businesstrips or attending business functions?
Do you fantasize about retiring or quitting your job and gettinganother one?
If youanswered yes to three or more of these last five questions, you might havepessimistic tendencies. If you answered yes to all five, you are probablyoverly pessimistic.
Admittedly,this is not a scientific test. But optimism and pessimism aren’t reallyscientific terms.
And as Isaid above, emotional tendencies matter when it comes to business decisions. Topush back against your dominant mood, here is what I recommend doing…
Optimists,Curb Your Enthusiasm
Understandthat there is a part of your brain that is not operating efficiently. That isthe part that, in other people, causes doubt and fear.
Be happythat you have a frame of mind that gives you the feeling that you canaccomplish just about anything, but promise yourself that you’ll run all yourimportant impulses through an outside filter.
Don’tsign any contracts or agree to any business deals without running them by atrusted lawyer and accountant first. Tell your advisors that their job is tospot the problems and to be tough on you when you try to dismiss them withquick rhetoric. (That’s what you’ll want to do when they toss a pail of coldwater on your fire.)
Don’t buyanything expensive on the spot. Don’t hire anyone on the spot. Don’t fireanyone on the spot. Don’t take a job on the spot.
Don’tsend out “reactive” emails on the spot. Wait 24 hours, and then either deleteor modify the email. If, in reading the email 24 hours later, you get angryagain and want to send it out unchanged, hold off for another 24 hours. Don’tsend out that first email under any circumstances. You will regret it.
Don’tever say anything in an email about anyone unless you wouldn’t mind themreading it… because they surely will. The same rule applies to anything writtenin letters or spoken on the phone or in person.
Pessimists,Fill Your Glass a Bit More
Acceptthe fact that you have some deficiency in your brain chemistry. Recognize thatyour instinctive tendency to see the dark side can sometimes limit your successby dampening your enthusiasm or the enthusiasm of others.
Be happythat you have a natural ability to detect the potential problems in everysituation. Use that talent to assess the risks and problems inherent in anymajor venture you undertake.
Make it ahabit to always say something positive before you say whatever it is that’s onyour mind.
After youget through writing your daily task list, spend five or 10 minutes visualizingevery task. Imagine yourself happily achieving the objective. Even if you findthe job odious and the person you are doing it with repugnant, find some way toimagine actually enjoying the experience.
This mayseem like advice that borders on the silly – it certainly did to me when Ifirst tried it – but you’ll be amazed at how well it works.
Practicesmiling in the mirror. Do this as often as you can stomach it. And then do itsome more. Again, this advice may seem ludicrous… but it will work.
Whentalking on the phone, smile. The person on the other end is cueing off theenergy from your voice. If you want him to respond enthusiastically to yourideas, you need to breathe that enthusiasm into the tone of your voice.
Everytime you see someone for the first time, greet him or her with a firmhandshake, a smile and a confident “eye lock.”
RecognizeWhat Mood You Are In
You may findthat your mood swings between optimism and pessimism. If you are like me, thatswing can be very large.
Aftergoing through a rather deep depression some time ago, I began to chart mymental state in terms of how I felt, what I thought about and what sort offunctionality I had.
At thebottom of the scale, I felt suicidal, had repetitively negative thoughts, andcould not get out of bed or even carry on a conversation. At the top of thescale, I was euphoric. I loved everyone and everything I encountered.
Bylogging my moods, I discovered that when I was below a 6, I made bad decisions.I shied away from every challenge or opportunity, including many that could dome nothing but good.
When Iwas above an 8, I often made bad decisions in the other direction. I would takeon almost any new project or invest in any new business opportunity.
Nowadays,I follow a rule that keeps me in good stead. I never make business orinvestment decisions unless I’m in the 6 to 8 range.
You don’thave to use my system to get the same effect. Simply recognize that if you havesignificant mood swings, you should defer decisions when you are feelingespecially good or bad.
In otherwords, say yes to new opportunities only when you are not being swayed by youremotions. Whether optimistic, pessimistic or something in between, recognizethat whatever your goals are, you’ll have a better chance of achieving them ifyou approach them with a level mood.
Goodinvesting,
Mark
7.Average Family of 4 $80 Bucks for Night Out at Movies….Compared to $12 a Month Unlimited Streaming.
Wilmington Trust
8.Quiet Your Ego
by Dan Solin, 12/10/19
Photo by Kristina Flour on Unsplash
AdvisorPerspectives welcomes guest contributions. The views presented here donot necessarily represent those of Advisor Perspectives
Click here to watch a video and learn more aboutEvidence Based Advisor Marketing.
If your egois too loud, it stops you from reaching your goals and having a happier, more fulfillinglife.
That’s themessage from Scott Barry Kaufman, a psychologist at Columbia University, in aninsightful article publishedin Scientific American.
The problem
Kaufmandefines your ego as, “that aspect of the self that has the incessant need tosee itself in a positive light.” He claims that, “the more the ego is quieted,the higher the likelihood of actually reaching one’s goals.”
His viewsare shared by Mark R. Leary, the author of The Curse of Self. Learyobserved that “egoism” can “profoundly affect people’s lives, interfering withtheir success, polluting their relationships with other people, and underminingtheir happiness.”
Kaufman andLeary advocate self-awareness and reflection. Both are essential for reachingyour goals. Problems arise when our egos are so “noisy” they actually impedethe goals we are trying to achieve. Kaufman puts it this way: “A noisy egospends so much time defending the self as if it were a real thing, and thendoing whatever it takes to assert itself, that it often inhibits the very goalsit is most striving for.”
Thesolution
Instead ofadopting a defensive posture in an effort to prove you are “right,” and beingconcerned about self-enhancement, Kaufman suggests you quiet your egos, whichwill foster a sense of well-being, health, self-esteem and other benefits.
Having aquiet ego means being less concerned about getting across your point of viewand more concerned with identifying with the experience of others. Instead ofdominating a conversation, show your interest in what others are saying. Notonly is your behavior a form of kindness, it will be perceived by the otherperson as being compassionate.
Tips forimplementing
Those withquiet egos have a “detached awareness,” which permits them to see both sides ofan issue. They are open to reexamining their thoughts, positions and beliefs.
They havean “inclusive identity.” They are cooperative and compassionate towardothers, rather than focusing on themselves.
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I’m working on a new self-help book for thegeneral public. It’s called:
Why it’simportant
Success asan advisor is largely dependent on your ability to make an emotional connectionwith prospects and clients. A “noisy” ego leaves little room for focusing onothers. Your bandwidth is absorbed by a preoccupation with yourself – how youare being perceived, your views on the issues, your background and expertise.The list goes on…and on.
When youquiet your ego, you appreciate it’s not about you. It’s about your ability tofocus intensely on your prospect, client, loved ones and colleagues.
On a macrolevel, Kaufman observes, “I don’t think it’s an overstatement to say that thecultivation of these skills in our society would lead to greater mental health,useful reality-based information, as well as peace and unity among humans.”
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