Topley’s Top Ten – February 13, 2020

Author

Matt Topley
February 13, 2020

1.Market Volatility—110 Days Without 2% Trading Day.

Blackrock

2.Volatility in Election Years

State Street

StateStreet-SPDR

3.Robotics ETF Approaching New Highs

ROBO ETF

Top Holdings

4.Bond Charts From Wolf Street

Credit-Card Interest Rates Soar to Record High,Bond Yields Drop to Record Low: What Gives?

by Wolf Richter • Feb 12,2020 • 34 CommentsBy Wolf Richter for WOLFSTREET.

5.The coronavirus is infecting everything in the energy sector

It’shard to get one’s head around all the ways that coronavirus is affecting oilmarkets, energy-related industries and even carbon emissions.

Whyit matters: The tragic outbreak underscores that when it comes toenergy, China is the straw the stirs the drink as the world’s largestoil-and-gas importer, largest auto market and largest carbon emitter.

Thebig picture: Here are a few ways that coronavirus, which is centered in China buthas now spread to over two dozen countries, is shaking things up…

Whenit comes to oil, it has pushed prices down to their lowest level in a year,stemming largely from reduced travel and economic activity in China.

  • That’s a problem for OPEC and its alliance with Russia — the OPEC+ group has struggled to reach a deal this week on deepening joint production cuts to tighten markets. Russia, while agreeing in principle, has yet to sign off, per multiple reports.

  • “Brent is likely to hover around $55 [per barrel] as long as uncertainty on the impact of coronavirus persists and until OPEC+ ministers meet and agree to a cut,” S&P Global Platts analysts said in a note.

It’simpacting the liquefied natural gas market, which was alreadyweak due to excess supplies.

  • Per Reuters and others, the Chinese energy giant CNOOC this week said it will temporarily stop honoring some import contracts.

  • “China’s near-term gas consumption is in question given the coronavirus quarantines and shutdown of factories, which consume the bulk of the country’s imported gas,” the Wall Street Journal reports.

Chinais the world’s largest solar equipment manufacturer, and anote from the consultancy Wood Mackenzie says work at several module plants isunlikely to resume until late February or later.

Teslawas forced to temporarily close its Chinese factory anddelay vehicle deliveries, per multiple reports.

  • CNBC reports that a Tesla executive’s comments about delays helped to push its share price back down Wednesday after its meteoric rise in preceding days.

  • It’s hammering the auto industry, which is already struggling with soft sales, more broadly as automakers are forced to keep plants idled. CNN has more.

There’seven a climate change dimension, per Bloomberg, which reports: “Ifthere’s a silver lining to the deadly coronavirus outbreak in China, it’s thatthe world’s biggest polluter is spewing less carbon, at least for now.”

  • The piece points out that emissions will drop temporarily due to halted plane and auto travel, closed steel mills and coal mines, and other effects.

  • It’s unclear, Bloomberg reports, whether this will lead to a year-over-year drop in CO2 emissions.

  • Here’s a wild stat, via S&P Global Platts: “Even a 1% drop in China’s annual CO2 emissions from energy consumption would amount to 96 million [metric tons], equivalent to France’s annual regulated CO2 emissions.”

6.Student Debt Breakdown by Age Groups.

7. ‘Wretched excess’ means there’s ‘lots of troubles coming,’ warns Berkshire Hathaway’s Charlie Munger

Getty Images

Warren Buffett and Berkshire-Hathaway partnerCharlie Munger

‘I think there are lotsof troubles coming… There’s too much wretched excess.’

That’s Charlie Munger, vice chairman ofBerkshire Hathaway BRK.A, +0.06%  ,sharing his thoughts on the current climate at the Daily Journal annualshareholder meeting on Wednesday.

Munger, who serves aschairman for the Daily Journal along with his Berkshire role, cited theincreasing use of EBITDA — earnings before interest, taxes, depreciation andamortization — as an example of that excess.

“I don’t like wheninvestment bankers talk about EBITDA, which I call ‘bulls**t earnings,’” Munger,96 years old, explained. “It’s ridiculous. Think of the basic intellectualdishonesty that comes when you start talking about adjusted EBITDA. You’realmost announcing you’re a flake.”

He then called outinvestors in China for how they play the game

“They love to gamble instocks. This is really stupid,” he said. “It’s hard to imagine anything dumberthan the way the Chinese hold stocks.”

Munger was also asked about Tesla TSLA, -2.68% and had some interesting, if unsurprising, things to say regarding the stock’srecent surge.

“I think Elon Musk ispeculiar and he may overestimate himself, but he may not be wrong all thetime… Tesla sales went up because Elon has convinced people he can curecancer,” he said. “I would never buy it, and I would never sell it short.”

Watch his fullpresentation, courtesy of CNBC:

Munger, with anestimated net worth of about $2 billion, has long been a business partner ofWarren Buffett. The two first met more than 60 years ago.

As for trouble ahead, no sign of it inWednesday’s session, as the Dow Jones Industrial Average DJIA, +0.94%  ,S&P 500 SPX, +0.65% andNasdaq Composite COMP, +0.90% alllogged solid gains.

8.Inflation Adjusted Homeowner Equity Back to Highs.

Withhome equity near an all-time high and mortgage rates near an all-time low, Ihave to believe many homeowners will sell their current home and get a biggernicer home in 2020. JohnBurns Real Estate Consulting hashtag#JBRECDailyInsights

9.Where People Want to Leave.

10.Let Go of These 10 Things and Start Making Better, Faster Decisions

Theaverage person makes a ton of mind-blogging decisions every day, solearning to make decisions more quickly can save valuable time and energy.Here’s the thing, though. Making decisions faster isn’t always about adding newhacks to your arsenal. It’s subtracting certain things from your life to enablethe fast-decision-making process. Here are ten things to let go of so that youcan make faster decisions.

1. Making decisionson the fly

Thereare times when you have to make a split-second decision. But usually,everything you need to decide on can be done in advance. The key is bookingtime to think.

Ilike to plan out my calendar on Sunday night. Several people at the officelike to plan out their calendars for the following week on Friday afternoons.When you choose to mark your calendar doesn’t matter as much as the fact thatyou make it a consistent habit.

Tryit, and you’ll find that making decisions ahead of time preventsdecision fatigue, leaving reserve energy to make critical decisions.Plus, researchers have found that the most accuratedecision-making occurs between 8 a.m. and 1 p.m. regardless if you’rechirping with the Meadow Lark or a Nightingale.

2. Overthinking

“Contraryto what we tend to think, it is almost impossible to calculate future outcomesbecause people and life are very unpredictable,” writes Ilene Strauss Cohen. “Therefore, making decisionsis usually a crapshoot.”

“Don’tget me wrong,” she adds. “It’s still useful to have confidencein the decisions you make, but it’s important to be aware that you have nocontrol over the outcome of them.”

Heradvice? Stop overthinking things.

3. Distractions

Thinkabout it: You’re deciding what meals to make for the week — in my case,with winter in full force, I decided to make vegetable soup for dinner. As Iwas writing my grocery list, I got a phone call from a friend and took off at amoment’s notice. Guess what? I totally forgot half the things I needed topurchase when I got to the store and didn’t have all the ingredients tomake the meal when returning home.

Whenyou’re working on something important, eliminate distractions when it’s time tomake a decision. You know the drill — turn off your phone, work in a quietspace and focus on one thing at a time. Time management is key.

4. Choosingsomething because you’re “supposed to”

I’min no way advocating that you ignore your responsibilities. But don’t wasteyour time and energy on things that you feel pressured to do.

Forexample, you may be tempted to relocate your startup to Silicon Valley.But, is this thought a necessity or just something you’ve been talked intoby other entrepreneurs? If a relocation (or other decision) is not a necessity,then you can ignore it.

5. Comparisons

Personally,this is something that I’ve been working at for years, and I think mostentrepreneurs are in the same boat. It’s hard not to have comparisons when yousee other businesses thrive while yours may be struggling.

Iknow this is easier said than done. But, get over it and make the bestdecisions for you today. Or, if you need a more inspiring quote, followthe words of advice from Tina Fey: “Don’t waste your energy trying tochange opinions — do your thing — and don’t care if they like it.”

6. Ignoring yourinstinct

I’msure you’ve heard this before. When put to a head-to-head test, a Stanfordpsychologist found that you need to listen to your gut. In fact, 68 percent of the time, intuition led to the best decisions.

Thereis a caveat, though: Listening to your gut is most effective when facingpersonal decisions, such as deciding where to move. For more complex decisions,you should still carefully weigh the pros and cons.

Howshould you listen to your gut? Well, it comes down to whether or not you feelexpansive, meaning excited or powerful, or contractive, which leavesyou with a sensation of dread or heaviness.

7. Fear

Arguablythe biggest reason why you procrastinate on making a decision is that you’reafraid, and there’s a good reason why.

AsTim Rettig explains in a Medium post, “You have the control to make that decision,but you don’t have control over what happens next.” For instance, you may quityour job to finally go for your dream of starting your own business. You doeverything by the book. But, what if a recession hits just as your business isgaining traction? That’s going to impact your business. It’s also completelyout of your hands.

Thesolution? Don’t consume yourself with what happens next. 

8. The trivial

Oneof the most effective ways to combat decision fatigue is to stop sweating thesmall stuff.

Forexample, stop spending half an hour figuring out what to wear for the day. Inthe grand scheme of things, this is a rather unimportant decision that drainsyour mental energy and wastes time. That’s why you can decide and prepare yourwardrobe for the week in advance. Or go the Steve Jobs, and MarkZuckerberg route and have a signature look.

9. Perfectionism

“Perfectionismprevents you from improving and discovering new opportunities,” writes Deanna Ritchie in a Calendar article.“And, it also wrecks your productivity since you’re spending too much timesecond-guessing yourself.” 

Howcan you overcome perfectionism? Well, Ritchie suggests:

  • Surrender to the fact that you’re not perfect and accept that your decisions are part of the process.

  • Set goals, you’ll actually achieve.

  • Embrace feedback.

  • Use “hypothesis testing.” For instance, write a blog post and don’t proofread it. You’ll discover that despite any mistakes, it’s not the end of the world.

  • Stop dwelling in the past or obsessing over problems that don’t have a solution.

10. Limitingyourself to “yes” or “no”

Finally,realize that not every decision you have to make is a “yes” or “no.” Instead,consider alternatives or compromises.

Let’ssay that an employee or business partner wants to meet for lunch tomorrow. Youalready have plans, so you automatically want to respond with a flat-out,“no.” Before rejecting that time request, consult your calendar. Doyou have availability next Tuesday? If so, offer that date instead. Better yet,share your calendar with people so that they can see when you’re free to meet.

John Rampton is an entrepreneur,investor, and startup enthusiast. He is a founder of the calendar productivitytool Calendar. You can sign up for earlyaccess to Calendar here!

This article wasoriginally published on Entrepreneur.