Topley’s Top Ten – December 2, 2019

Author

Matt Topley
December 02, 2019

1.When You’re Born Will Affect Returns….Two 30 Year Comparisons.

When you’re born has ahuge impact on lifetime investment returns. Genetics play a rolein our health, and when we’re born has a big effect on our portfolio. Aninvestor born in 1902 that invested 100% in U.S. stocks (VTI) from 1932 to 1962 earned 10.2% peryear – turning $100,000 into an inflation-adjusted $1.8 million.

Shifting the investment window to1965 to 1995 results in only earning $343,000. We can’t control when we’reborn, so it’s important to focus on what we can control: saving more money,reducing fees, and increasing diversification.

Source: Page 27 of The Four Pillars of Investing

2.Blank Check SPAC Companies Hit Record.

Special PurposeAcquisition Company (SPAC)

REVIEWED BY JULIE YOUNG

 UpdatedJun 25, 2019

What is a Special PurposeAcquisition Company (SPAC)?

A specialpurpose acquisition company (SPAC) is a publicly traded company that raisesa blind pool capital through an initialpublic offering (IPO)for the purpose of acquiring an existing company. The money raised through theIPO of a SPAC is put into a trust where it is held until the SPAC identifiesa merger or acquisition opportunity topursue with the invested funds. Shares of a SPAC are typically sold in relativelyinexpensive units that include one share of common stock anda warrant conveying the right to purchase additional sharesor partial shares.

Blank-Check IPOs Hit New Record

Growingmainstream acceptance of special purpose acquisition companies, or SPACs, hasfueled a boom in blank-check listings

3.Comparing Recessionary vs. Non-Recessionary Drawdowns.

It’s also instructive to look at the differences in thedrawdowns which take place in the context of a recession and outside of thoseperiods.

4.ETRADE Last Small Guy Standing After Schwab/TD Merger….1999-Etrade Ticked at $600.

ETrade long-term chart…Current stock market is nothing like 1999 bubble.

E*TRADE Financial – 23 Year Stock Price History | ETFC

5.Top Performers in S&P 2019

Stocks To Be The Most Thankful For

Wed, Nov 27, 2019

Below is a list of the 25 best performing stocks in the S&P 500 so far in 2019.  Advanced Micro Devices (AMD) tops the list with a gain of more than 100%.  While no other S&P 500 stocks have yet to double this year, another semi name, Lam Research (LRCX) has come close with a gain of 99%.  Xerox (XRX), MarketAxess (MKTX), and Target (TGT) have also all risen more than 90%.  Apple (AAPL) is the 19th best performing stock in the list above.  But because of its trillion+ dollar market cap, Apple’s (AAPL) 69% gain has a much bigger impact on the overall stock market than all of the other stocks that have seen a bigger price move this year.  In fact, of the S&P 500’s 25% price gain this year, Apple has accounted for 2.24 of those percentage points (or roughly 9%).  Instead of looking at simple year-to-date price change, below is a list of the stocks that investors should be most thankful for this year because of their contribution to the S&P’s gains.  Right behind Apple (AAPL) in first is the other trillion+ dollar company — Microsoft (MSFT) — which has accounted for 1.7 percentage points of the S&P’s 25% gain.  After AAPL and MSFT are Facebook (FB), Alphabet (GOOGL), and Amazon (AMZN).  Together these five mega-caps account for 25% of the S&P’s move higher this year.  While this group of companies has been vilified in 2019 for a number of things, they’re certainly still delivering for the stock market in a big way.  See Bespoke’s most actionable investment ideas with a two-week free trial to Bespoke Premium.

6.Record Low Sub-Sectors of Unemployment

Barrons

The unemployment rate was down to only 3.6% during October. Hereare the latest unemployment rates for teenagers (12.3%, among the lowestreadings since 1969), African Americans (5.4%, record low), Latinos (4.1%, nearSeptember’s 3.9% record low), college educated (2.1%, bouncing around itslowest readings since 2008), and high-school educated (3.7%, around its lowestrate since 2000).

One Year Unemployment Chart 2019

Historical Unemployment Chart

Trading Economics

7.The U.S. Population is Moving Less and Less.

The chart below shows thatroughly 10% of the population, or 30 million people, move to a new home everyyear, down from 20% a few decades ago. In other words, the US population isless and less mobile. This development started in the 1980s, and the financialcrisis has not had any particular impact on the slope of the trend, see againthe chart below and here.

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Let us know if you would liketo add a colleague to this distribution list.

Torsten Sløk, Ph.D.Chief EconomistManaging Director

8.4000 Warehouses Using Robots Today…50,000 by 2025

50,000 Warehouses to Use Robots by 2025 as Barriers toEntry Fall and AI Innovation Accelerates

Oyster Bay, New York – 26 Mar 2019

By 2025, over 4 million commercial robots will beinstalled in over 50,000 warehouses, up from just under 4,000 roboticwarehouses in 2018, according to ABI Research, a market-foresightadvisory firm providing strategic guidance on the most compellingtransformative technologies.  The rapid rate of adoption will be driven bythe need for flexible, efficient, and automated e-commerce fulfillment assame-day delivery becomes the norm. Global adoption of warehouse robotics willalso be spurred by the increasing affordability and Return on Investment (ROI)of a growing variety of infrastructure-light robots as they are an attractiveand versatile alternative to traditional fixed mechanical automation or manualoperations.

“Flexibility and efficiency have become primarydifferentiators in the e-commerce fulfillment market as retailers andThird-Party Logistics (3PLs) struggle to cope with volatile product demand,seasonal peaks, and rising consumer delivery expectations.” said Nick Finill,Senior Analyst at ABI Research. “Robots enable warehouses to scale operationsup or down as required while offering major efficiency gains and mitigatinginherent challenges associated with labor and staffing.”

Automated Guided Vehicles (AGV) and Autonomous MobileRobots (AMR) Goods-to-Person systems can directly replace heavier mechanizedautomation that typically requires massive upfront investment and rigidphysical infrastructure. Robots enable the optimization of space in expensivewarehouse facilities and can reduce the need for new and costly greenfieldfulfillment centers. Mobile robotic systems also offer major flexibilityadvantages. Robot vendors, such as Fetch, Geek+, and Invia, enable additionalrobots to be added to or removed from a fleet as operational demands require.They also allow easy and relatively rapid reconfiguration of entire workflowsand operations if product lines or fundamental operational requirements change.This is a major advantage in the unpredictable and dynamic e-commerce market.

Thanks to impressive innovation in computer vision,Artificial Intelligence (AI), deep learning, and robotic mechanics, robots arealso becoming increasingly adept at performing traditionally harder-to-automatetasks. Economically viable mobile manipulation robots from the likes ofRightHand Robotics and Kindred Systems are now enabling a wider variety ofindividual items to be automatically picked and placed within a fulfillmentoperation. By combining mobile robots, picking robots, and even autonomousforklifts, fulfillment centers can achieve greater levels of automation in anefficient and cost-effective way.

Many robot technology vendors are providing additionalvalue by offering flexible pricing options. Robotics-as-a-Service models meanthat large CapEx costs can be replaced with more accessible OpEx costs that aredirectly proportional to the consumption of technologies or services, improvingthe affordability of robotics systems among the mid-market, further drivingadoption.

“By lowering the barriers to adoption for robots in thewarehouse, vendors are disrupting the wider logistics value chain,” explainedFinill. “If advanced automation becomes possible for mid-size e-retailers, theywill be able to fight back against the dominant players and also bringfulfillment operations back in-house, disrupting the relationship betweenretailers and 3PLs.”

These findings are from ABI Research’s report Robotics in E-commerce Fulfillment applicationanalysis report. This report is part of the company’s  Intelligent Supply Chain service, whichincludes research, data, and Executive Foresights. Based on extensive primaryinterviews, Application Analysis reports present in-depthanalysis on key market trends and factors for a specific application, whichcould focus on an individual market or geography.

About ABI Research

ABI Research provides strategic guidance for visionariesneeding market foresight on the most compelling transformative technologies,which reshape workforces, identify holes in a market, create new businessmodels and drive new revenue streams. ABI’s own research visionaries takestances early on those technologies, publishing groundbreaking studies oftenyears ahead of other technology advisory firms. ABI analysts deliver theirconclusions and recommendations in easily and quickly absorbed formats to ensureproper context. Our analysts strategically guide visionaries to take action nowand inspire their business to realize a bigger picture. For more informationabout subscribing to ABI’s Research Services as well as Industrial and CustomSolutions, visionaries can contact us at +1.516.624.2500 in the Americas,+44.203.326.0140 in Europe, +65.6592.0290 in Asia-Pacific or visit www.abiresearch.com.

Article Found at Morning Brew https://www.morningbrew.com/

9.Self-driving cars were supposed to be here already — here’s why they aren’t and when they should arrive

PUBLISHED SAT, NOV 30 20199:00 AM EST

Morecompanies are trying to bring self-driving cars to the masses than ever before.Yet a truly autonomous vehicle still doesn’t exist. And it’s not clear if, orwhen, our driverless future will arrive.

Proponentsin the industry, including Tesla CEO Elon Musk,Waymo CEO John Krafcik and Cruise CEO Dan Ammann, touted an aggressive timelinebut missed and reset their goals.

In athird-quarter earnings call, Musk said Tesla “appears to be on track for atleast an early access release of a fully functional Full Self-Driving by theend of this year.” Other leaders in the field are taking a more sober view ondriverless cars, what’s still needed to perfect them and how long before theyare part of our daily lives.

Avideh Zakhor, aprofessor at the University of California at Berkeley’s electrical engineeringand computer sciences department, explained what inspired the rationalreckoning in the industry:

“There was a sense maybe a year ortwo ago, that ‘Oh, our algorithms are so good! We’re ready to launch. We’regonna launch driverless cars any minute.’ And then obviously there’s been thesetbacks of people getting killed or accidents happening, and now we’re a lotmore cautious.”

Statesdon’t have clear regulations governing the safety testing and deploymentof driverless cars, and that’s one challenge togetting them out on the road.

As ofOctober, 41 states have either enacted legislation or signed executive ordersregulating the testing and use of autonomous vehicles. In September, theNational Highway Traffic Safety Administration released new federal guidelinesfor automated driving systems — but they’re only voluntary at this point.

Miles driven by test vehicles on realroads had been a frequently touted metric. But to advance the safety of theirdriverless systems, big players including GM-ownedCruise and Amazon-backed Aurora have also developed theirown means of testing in simulation, much like rocket and airplane makers wouldbefore a first test flight.

Aurora CEOand co-founder Chris Urmson explained why this kind of testing matters so much,in addition to real world test driving:

“We can create situations thatwe’re basically never going to see or very rarely see. So, for example, wemight want to simulate what happens as a bicycle comes through an intersection,runs a red light and crashes into the side of our car. Turns out that doesn’thappen very often in the real world, but we want to know that if that happens,our vehicles are going to do something safe … we’re basically allowing thecar to practice up in the cloud instead of on the road. And at the end of theday the training that happens online turns into better and better performanceoffline.”

Asafety-focused culture is essential, said Sam Abuelsamid, principal research analyst atNavigant and an engineer.

“Whenyou’re testing autonomous vehicles out on public roads, you know, not only arethe people riding in that car part of the experiment, but so is everybody elsearound you. And they didn’t consent to being part of an experiment,” he said.

DanAlbert, an autos historian and author of “Are We There Yet?,” saidsome companies have overstated the benefits of their “self-driving” systemstoday, and clearer communications about what the technology can and can’t doare needed.

“One of the things I often hearfrom people is when an autonomous vehicle is better than the 50th percentiledriver on the road, we have an absolute responsibility to let them onto theroad,” he said. “And others like Elon Musk have said, you know, it’s almostirresponsible not to have these vehicles out there because they are safer andwill be safer than human drivers … And so even if we could say that anautonomous vehicle was better than a human driver, it doesn’t mean that anautonomous vehicle is better than a human driver plus all the advanced driverassist systems we have.”

But there’sno doubt self-driving vehicles will eventually extend mobility options toseniors, people with disabilities and others who don’t have access or theability to drive themselves. And there’s still hope they will reduce the numberof deaths on U.S. roads every year, approximately 40,000, with human errorcausing more than 90% of those crashes.

Finally,when will these vehicles arrive?

“We expectlevel-four vehicles to be feasible in small quantities within the next fiveyears,” Urmson said. “What that means is you’ll probably see hundreds or maybethousands of vehicles out either delivering packages or moving people throughneighborhoods, or maybe hauling goods on our freeways.”

Cruise’sAmman declined to give a specific time frame.

“This issomething we need to do with society, with the community, and not at society,”he said. “And we take that very seriously. We’re building mission criticalsafety systems that are going to have a huge positive impact on people’s lives.The tech adage of ‘move fast and break things’ most assuredly does not apply towhat we’re doing here.”

10.A New-Look Motive Hierarchy for Human Flourishing

UpdateMaslow by putting personal agency in the driver’s seat.

Source: Graphic: Dick Close, usedwith permission

Introducedin the mid-20th century, Abraham Maslow’s hierarchy of needs (HON) wasimpressive then and is still famous today. Surprisingly, though, Maslow never used the iconic pyramid todepict his hierarchy. It, therefore, isn’t impertinent to use new research(many others’ including mine) to update the pyramid in meaningful ways thatrespect Maslow’s original thinking.

Theproposed hierarchy is motive-based rather than need-based and emphasizes actiondriven by personal agency. It thus features “doing” along with having(needs) and being (self-actualized). People choose their individualizedpathways to the new peak of the pyramid: human flourishing, including otherpeople’s as well as one’s own.  

A RevisedHierarchy of Human Motives

Thefigure shows a new motivation hierarchy with seven components.

At thehierarchy’s foundation, subsistence motives subsume Maslow’s two lower-orderneeds: physiological and safety/security. At the next level up, social motivesecho Maslow’s love, belonging, and social needs, while agency is both apowerful motivator—related to needs for competence and control—and ahigh-leverage bridge to action. The core belief in personal agency is self-efficacy—our belief in our ability to perform atask. Efficacy beliefs influence the choices people make, the goals theypursue, and the courses their lives take.

Efficacybeliefs affect whether people pursue growth, self-development, andself-transcendence, and the forms those pursuits will take. Self-developmentemphasizes exploiting and strengthening one’s knowledge, talents, andcapacities; it captures self-actualization as Maslow described it; and itincludes personal and professional growth and accomplishment.

Self-transcendenceis a motive distinguished from self-development by serving externally directedgoals that benefit other people and causes. Maslow wrote that humanpotentialities could be individual or collective or even species-wide,describing some but not all of his self-actualized study participants asunselfish people desiring to help the human race. Commensurately, the newhierarchy identifies self-transcendence as an alternative to self-development,a high-level motive manifested in choices and behaviors that create positiveoutcomes for others.

Self-developmentand self-transcendence support and propel growth and flourishing in oneself andothers. People can satisfy these (as well as lower-level) motives throughnaturally occurring circumstance and developmental processes, but also viaagentic choice and self-direction.

HumanFlourishing at the Pinnacle

Intheorizing about self-actualization, Maslow drew from the humanistic psychologists of the time while alsocrediting Aristotle’s concept of Eudaimonia, translated variously as happiness, well-being, optimal human functioning, andflourishing. Harvard’s Human Flourishing Program definesflourishing as “a state of complete human well-being.”

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Well-beingis an active research domain inits own right. Merging their literature, human flourishing means doing well orbeing well in:

1.Physical and mental health, including self-acceptance and life satisfaction

2.Purpose in life

3.Character and virtue

4.Positive social relationships

5.Autonomy and environmental mastery (for instance, feeling competent and incontrol)

6.Personal growth.

Each ofthese indicators is an end in itself (and often a means to other ends), andeach is a nearly universal desire.

Pathwaysto Flourishing

Atleast four contexts—family,work, education, and religious community—offer pathways tomultiple flourishing criteria. Within and across contexts, flourishing canappear via either circumstantial or self-generated opportunities. The paths tomultiple flourishing include lower to higher levels, meaningful projects andwell-doing, free traits, and proaction.

Lower tohigher levels

Thepathways to flourishing open wider when lower-level needs are satisfied in themoment and over time. The foundation for subsistence, and therefore a conditionfor sustained flourishing, is access to resources—financial,medical, social, and natural/geographical in the face of climate change—sufficiently secure to continueadequately.

Meaningfulprojects and well-doing

Flourishingand well-being derive from well-chosen actions—what ProfessorBrian Little describes as ”well-doing,” manifested through thesustained pursuit of personally-valued core projects. Activities that are funand pleasurable promote hedonic, satisfaction-based well-being, whereas a moreprofound, eudaimonic well-being derives from pursuing impactful projects thatsatisfy higher values and purpose.

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Freetraits

Doingwell in life, work, and meaningful projects demands a vast repertoire ofbehaviors and performances. Our personalities—whatever we think they are orhowever “tests” might score us—fit comfortably with some, butcertainly not all, of these demands. Thankfully, what may be the most important trait of them all is whatProfessor Little calls free traits: the flexibility and ability to behavedifferently from our natural tendencies when circumstances require it. A primeexample is a person labeled an introvert who does well in a presentation or a bigsocial event, even when preferring to be in the audience or at smallergatherings.

As stressful as uncomfortable challenges can be,breaking the confines of personal tendencies can have eudaimonic effects. Freetraits help us grow and flourish in domains that we had previously thought werebeyond the bounds of our competency.

Proaction

Bandura’s social cognitive theory isboth realistic and optimistic about people’s abilities to shapedesirable futures. Extending his theorizing to the workplace, management researchers study the meaning and manyconsequences (net positive but often risky) of behaving proactively—that uniqueclass of behavior that overrides situational influences, transcendsconstraints, changes current trajectories, and forges new paths. 

Proactionis the self-chosen exercise of agency. Proaction is purposeful andfuture-focused—forethought being the temporal extension of agency—and intendedto create positive change in oneself (self-development) or environments, withbenefits to oneself and other people (self-transcendence). In combination, thisduality generates human flourishing in the broadest sense.

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Conclusion 

Maslow’stheorizing spread from psychology to the business world.This revised motive hierarchy holds additional implications for career and self-management, as well as for humanresources programs, such as employee engagement, wellness, and leadershipdevelopment.

Maslowexpressed frustration that managers and management scholars ignored his broadervision of a more enlightened and engaged citizenry. He wrote that a goodsociety is a psychologically healthy one, giving its members the best chancesof self-actualizing. He would have valued workplaces and communities that 1)meet subsistence and social needs, 2) support healthy and productive levels ofpersonal agency, 3) provide opportunities for self-development andself-transcendence, and 4) contribute to human flourishing beyond and acrossorganizational and geographical boundaries.

The testof leadership, Maslow believed, is the effect of policies and actions onpeople’s behavior outside of work, in the community. The new motivationhierarchy emphasizes doing as well as being, highlighting personal agency as aspringboard to self-development, self-transcendence, and flourishing. Ifleaders and others help create workplaces and communities in which peopleflourish, the refreshed motive hierarchy can contribute to an even moreaspirational and empowering Maslow legacy.