Topley’s Top Ten – December 30, 2019

Author

Matt Topley
December 30, 2019

1.Ten Years Into Expansion Discretionary Spending for Consumers and Corporates is Still Below Historical Average.

Check out Torsten Slok on CNBC Monday

I will be on CNBC tomorrowat 10 am to discuss the outlook for markets in 2020. This expansion has been characterized by an extremedegree of caution among consumers and corporates. Because of the experience in2008-2009, households and companies have been hesitant to spend too much moneyand take too much risk. As a result, ten years into this expansion,discretionary spending for consumers and corporates is still below itshistorical average. As the chart below shows, this is highly unusual comparedwith previous cycles. The lack of willingness to spend on consumer durables andcorporate capex is also the reason why this expansion has been so weak. And itis also the reason why this expansion could continue for many more years; weare simply less vulnerable to shocks in 2020 because there are few imbalancesin the economy, see again chart below and hereand 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

2.ETF Assets Cross Mutual Fund Assets in 2024

The Slow Demise of Mutual Funds-Mutual funds are under attack on all fronts. Can they survive? –Diana Britton |

Vanguard on Cover of Barrons this weekend….Here are the stats for net assets mutual funds and ETFs.

Vanguard Led the Way for Decades. Now It’s Playing Catch-Up.-Daren Fonda

3.European Stocks Breaking a Twenty Year High

Posted December 16, 2019 by Joshua M Brown

JonKrinsky made a big call this fall –in late October he titled his weekly technical research note PrestigeWorldwide and informed us about some big moves happening in overseasmarkets. The whole world was likely on the verge of breaking out and Jon stuckhis neck out just before it happened. I wrote about it here.

It turned out to have been prescient, withstocks all over planet earth taking out 52 week highs and accelerating theiradvances.

This week, Jon took a look at Europeanequities, via the STOXX 600 index and noted that this asset class, which almostno one is excited about, may be on the verge of breaking out of a twentyyear base…

Europe – The Lost Two Decades

While the S&P 500 has doubled from itsMarch 2000 peak, Europe has largely been a dud. Even over the lastfour-and-a-half years, the Euro Stoxx 600 (SXXP) is essentially flat. Will thenext decade be better than the last two? Our bet is yes as it’s just nowbeginning to emerge from a 20-year base.

Joshhere – I would note that this index is price only, so including dividendsinvestors would have done slightly better, but price indices are what matter totraders when assessing price action.

One of the biggest anchors holding downEuropean stocks over the last decade or more would be the financial servicesindustry. European banks have just been absolutely atrocious. But if that wereto turn, sentiment would turn with it. Here’s Jon’s peek at the Euro banks’recent attempt at bottoming…

Sowhat could support this price action fundamentally? Well, who knows, but mybest guess is they have to stop with the negative interest rates bullshit,which does absolutely no good, has not produced the desired “inflation target”and has done severe harm to bank balance sheets, lending operations andconfidence. Recent remarks from several EU officials have revealed a newfoundskepticism for negative rates, so let’s see if they’ve had enough of thatnonsense at some point in 2020.

European stocks currently sell for 15xforward earnings, while US stocks are more like 19x. We are all aware of thefact that Europe has less technology companies and the US economy is growingfaster, so don’t worry about emailing me that.

Source:

The Next Breakout Candidate: ConsumerDiscretionaryBaycrest Partners – December 15th, 2019

FROM JOSH BROWN REFORMED BROKER

4.Corporate Profits Vs. Tax Receipts.

From BarryRitholtz blog

5. 29 States Have Raised the Minimum Wage Above Federal Level.

Minimum wage rising in 20 states and numerous cities-By DAVID A. LIEB, Associated Press

6.Atlantic City Online Betting Up 66% Year Over Year to $460m

New Jersey Sports-Betting Frenzy Boosts Online Casinos-Revenuefrom online games like blackjack and roulette in New Jersey is on track to grow66% this year

7.Breakdown in College Enrollment.

For Profit College Enrollment -54%

College Enrollment Skids for 8th Year in a Rowin 2019, But Student Loans Skyrocket. What Gives?

by Wolf Richter • Dec 16,2019 • 225 CommentsThe stunning decline ofmen in the student headcount.By Wolf Richter for WOLFSTREET.

8.Immigrant share in U.S. nears record high but remains below that of many other countries

Nearly14% of the U.S. population was born in another country, numbering more than 44million people in 2017, according to a Pew Research Center analysis of the U.S.Census Bureau’s American CommunitySurvey.This was the highest share of foreign-born people in theUnited States since 1910, when immigrants accounted for 14.7% of the Americanpopulation. The record share was 14.8% in 1890, when 9.2 million immigrantslived in the United States.

9.Ranking of American Institutions by Trust

A New Year’s Resolution for Corporations: Address the TrustCrisis

Companieshave plans for our digital lives over the next decade, but they don’t have ourconfidence

10.How to Find Your Life Purpose

How to obtain direction,meaning, and motivation.

I once had a client who, when asked abouther deepest values, paused for a long time, before she finallysaid: “That’s the scariest thing I’ve ever been asked.”

After another pause, she added, “I’ve notthought about that in a long, long time,” and began to cry.

Unfortunately, the experience of my clientis not uncommon. It’s easy to get bogged down in our daily chores and habitswhile losing sight of what matters most. Like a cog in a machine, we mightfunction on the outside but are actually stuck, repeating the same old motions,unable to change, or even see a different way of living.

We might have mindlessly adopted thevalues and goals of our friends and family, never daring to explore ourown out of fear they might deviate from our culturalupbringing. Or we might have come to doubt our ability to pursue a differentpath, because we are not smart enough, not confident enough, not good-lookingenough, or simply… not enough.

There are many reasons why we lose touch,and they all lead to suffering—because humans are not mindless machinesfollowing a programmed script, but rather breathing beings with a yearning formeaning and self-direction. Without purpose, life becomes empty and dull, whichis why values are central to my work with clients.

What Values Can Do For You

Values are chosen qualities of being anddoing, suchas being a caring parent, being a dependable friend, being loving, loyal,honest, and courageous. They can be expressed with verbs and adverbs, liketeaching compassionately and giving gratefully. However, they are not goals.

Goals are finite; they are achievements,and once achieved, you are done with them. Values, on the other hand, are enduring, ongoingguides to living. You cannot achieve a value; you can onlymanifest it by acting in accordance with it.

Your values not only tell you where tofocus your efforts and energies but also provide you with a new source of motivation. Whatever pain you have to endure along yourjourney becomes much easier to bear when it’s in the service of your goalsand values. And acting in line with your heart’s deepest desires brings a senseof fulfillment and vitality that no material wealth is able to match.

Which values you choose is completely upto you. However, if you’re unclear what those values might be, and how toimplement them, here are a few helpful steps.

How to Know Your Heart’s DeepestDesires

1. Rate Your Life Areas

The following exercise is based on theValued Living Questionnaire by my friend and colleague Kelly G. Wilson. Pleasetake a look at the following life areas, and rate their importance on a scaleof 1-10 (1 = less important, and 10 = highly important). Remember, this is foryou and nobody else. There is no right or wrong answer.

  • Family(other than marriage or parenting)

  • Marriage/couples/intimaterelations

  • Parenting

  • Friends/social life

  • Work

  • Education/training

  • Recreation/fun

  • Spirituality

  • Citizenship/communityLife

  • Physicalself-care (diet, exercise, sleep)

  • Environmentalissues

  • Art,creative expression, and aesthetics

2. Rate Your Consistency

Next, look at the life areas once more,but this time rate yourself in terms of how consistent your actions have beenlately with your values in each of these domains.

  • Family(other than marriage or parenting)

  • Marriage/couples/intimaterelations

  • Parenting

  • Friends/sociallife

  • Work

  • Education/training

  • Recreation/fun

  • Spirituality

  • Citizenship/communitylife

  • Physicalself-care (diet, exercise, sleep)

  • Environmentalissues

  • Art,creative expression, and aesthetics

3. Write Your Values

Take a look at your answers from theprevious exercise and identify the domains that have a high importance score (9or 10) and a low consistency score (6 or less). These are problem areas,and I suggest you start your values work with one of them.

Next, take a piece of paper and write for10 minutes about your values in one of your previously identified domains.Really do it—10 minutes is not very long. You can ask yourself, “What do Icare about in this area?” or “What do I want to do in this area that reflectsthat caring?” and ”What might I do to manifest this value more in mylife?”

Research has shown that writing about yourvalues has a measurable effect on your health and behavior. Keep in mind thatthis is only the beginning. There are many ways to connect deeper with yourpurpose and live more in alignment with your goals and values, lots of which Ishare in my new book, ALiberated Mind.

Living in line with your values is notjust about knowing what matters but also about how to act according to theseprinciples. It’s not a one-time choice, but a lifelong journey of choosing andcommitting. Again, and again.