Topley’s Top Ten – October 24, 2019

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Matt Topley
October 24, 2019

1. B Rated Junk Bonds Spread

“It’s Different This Time” Takes Root in the Junk-Bond MarketAmid Parallels to Post-Lehman 2008

by Wolf Richter • Oct 23,2019 • 32 Comments • Email to a friend

 2. Dividends and Buybacks Exceed Free Cash Flows Since 2013 

 3. Beyond Meat Drops Below $100 

The dayfollowing the earnings report may also be stoking investor worry. It’s the daythat the lockup period for a chunk of 48 million shares willexpire, meaning they will be available to trade on the public market. 

The sharesrepresent 80% of Beyond Meat’s total shares outstanding, which could lead to aselloff. One group that stands to gain is short-sellers, who have a $672million wager against the company, according to recent data fromfinancial-analytics provider S3 Partners.

Beyond Meat falls below $100 per share ahead of earnings after a seriesof wins for competitors (BYND)–Carmen Reinicke

 4. Global Stocks Starting to Inflect Higher 

Posted October 21, 2019 by Joshua M Brown

MyChart o’ the Day comes from the incredibly insightful Ari Wald at Oppenheimer,who is considering the possibility that, globally, stocks are acting betterthan current sentiment about the global economy might imply. If you’re morefocused on the headlines than on price itself, you may have been missing thistrend. Ari explains the implications…

 The S&P 500 has rallied toward a test of its July peak (3,028), and although timing the next leg higher remains challenging, we think this setup is slowly developing. We’ve discussed key positives like the lack of investor enthusiasm, stabilized interest rates, an oversold economy, as well as renewed seasonal tailwinds, and this week we focus on the improvement in global participation too. Currently, 59% of the stocks in MSCI All-Country World (ACWI) are trading above their 200-day average. Readings between 60-80% have been followed by above-average S&P returns over the next 6-12 months since 1995, and we’d ideally like to see a higher-high vs. May’s print (69%) similar to the action in 2016. We believe incremental improvement in Europe, E.M., and US small-caps are the pillars for this to occur.

Andhere’s his chart, which contains tons of interesting information…

Joshhere – when stocks around the world begin to make their move higher in concert,some interesting things happen during the course of the follow-through. Ari’slook at the next 6 and 12 month returns for the US stock market deserveconsideration.

Source: Three Charts Central to the Global Bull Case Oppenheimer & Co – October 19th, 2019

FROM JOSH BROWN BLOG https://thereformedbroker.com/2019/10/21/global-stocks-starting-to-inflect-higher/

 5. Natural Gas Cut in Half From Highs Rolls Back Over  

UNG-Natural Gas CHart

 6. Interesting Point….Major Cities Seeing Shrinking Tax Revenues Across Board. 

Data: National League of Cities City Fiscal Conditions Report;Chart: Axios Visuals

Almost two in three financeofficers in large cities are predicting a recession as soon as 2020, accordingto a new report from the National League of Cities, as weakening major economicindicators and shrinking revenue sources put pressure on municipal budgets.

Why itmatters: One of the first signs of changing economic conditions canbe seen in city revenue collections. For the first time in 7 years — generallyseen as the recovery phase since the Great Recession — cities expect revenuesto decline as they close the books on the 2019 fiscal year.

7. Spending Comparison Average Households. 

The HappinessSpending Threshold And What It Really Means To Live Within Your Means–Michael Kitces

 8. 8 Out of 10 College Students Take on Debt. 

Meanwhile, the cost of attending a four-year public college oruniversity has grown significantly faster than income over the same timeperiod.

More than 8in 10 families tap scholarships and grants — money that does not have to berepaid — to help cover the cost.

More than half of families borrow, or take outloans, according to Sallie Mae’s most recent “How America Pays for College”report, pushing outstanding student debt to a stunning $1.6 trillion.

Among thealmost 70% of students who borrow for school, the typical senior now graduateswith nearly $30,000 in debt.

Why college tuition keeps rising-Jessica Dickler

 9. Finally, the drug that keeps you young 

Anti-aging pioneer Judith Campisiexplains how a recent breakthrough could ward off age-related disease.

Oct 23,2018

JudithCampisi has been a leading figure in the biology of aging since the early1990s, when her research on the basic mechanisms of cancer revealed anunexpected finding—that cells enter a phase known as senescence that preventsthem from becoming cancerous. More than 25 years later, the insight has led toa new kind of drug that may slow or modestly reverse human aging.

Thisstory is part of our November/December 2018 issue

Campisi’sresearch is on the role of cellular senescence in cancer and other age-relateddiseases. Senescent cells undergo a transition into a twilight state where theyare still active but no longer dividing; research by Campisi and others showedthat this was a strategy to derail incipient cancers, which are characterizedby runaway cell division and growth. But she and others also discovered thatthese senescent cells accumulate as we grow older, secreting an array ofmolecules that promote the tissue degradation associated with aging.

In thepast five years, this insight has led to the pursuit of a new class of drugsknown as senolytics, which eliminate senescent cells and, in animalexperiments, restore more youthful characteristics. Campisi, a professor at theBuck Institute for Research on Aging in Novato, California, cofounded a companycalled Unity Biotechnology in 2011, which launched a human trial of its firstsenolytic drug last July.

Sherecently discussed her work with Stephen S. Hall, a journalist who has beenfollowing anti-aging work for more than two decades.

Whyshould we suddenly get excited about anti-aging drugs again?

Thereare now tools available to biomedical scientists that simply didn’t exist whenI was a graduate student or even a postdoc. So we’re finally able to doexperiments that were either considered impossible in some cases or were justdreams 20 or 25 years ago. The other thing that has changed is that the field ofsenescence—and the recognition that senescent cells can be such drivers ofaging—has finally gained acceptance. Whether those drugs will work in people isstill an open question. But the first human trials are under way right now.

Howspecifically does senescence contribute to aging?

Thecorrect way to think about senescence is that it’s an evolutionary balancingact. It was selected for the good purpose of preventing cancer—if [cells] don’tdivide, [they] can’t form a tumor. It also optimizes tissue repair. But thedownside is if these cells persist, which happens during aging, they can nowbecome deleterious. Evolution doesn’t care what happens to you after you’ve hadyour babies, so after around age 50, there are no mechanisms that caneffectively eliminate these cells in old age. They tend to accumulate. So theidea became popular to think about eliminating them, and seeing if we canrestore tissues to a more youthful state.

You’vesuggested that health care could be transformed by senolytic drugs, whicheliminate senescent cells. That’s a pretty broad claim.

If wethink of aging as a driver for multiple age-related pathologies, the idea wouldbe that a new generation of physicians—we call them geriatricians today—willtake a much more holistic approach, and the interventions will also be moreholistic. That’s the idea—it would revolutionize the way we’re thinking aboutmedicine nowadays. And just to remind you, 80% of patients in the hospitalreceiving acute medical attention are over the age of 65. So the idea is thatsenolytics would be one weapon that geriatricians will have in their arsenal ofweapons to treat aging holistically as opposed to one disease at a time.

AuthorKayvan Kian explains why it’s important to not let fear keep you stuck doingonly what you’re already good at, especially if it doesn’t give you energy.

[Photo: Swaraj Tiwari/Unsplash]

BY KAYVAN KIAN7 MINUTE READ

Isthere something you’re not particularly good at, but that gives you energy whenyou do it?

We callthese skills “hidden treasures” and the answers we’ve received from youngleaders relate to things outside of work like playing soccer, writing poetry,or playing guitar. There’s nothing wrong with these answers, but what’sconsistent is that they tend to overlook skills that relate to their job. It’sunderstandable—if you’re not good at something, you’re probably not going to doit at work because you don’t want to look incompetent or be embarrassed.

Or,their job doesn’t require them to use a particular skill that gives themenergy. Someone might use strategic thinking often as an accomplished chessplayer, but they’re not asked to think strategically at work. As a result, theydon’t get to apply that skill in a new context.

When weignore these hidden treasures, we deny ourselves the energy that can help usdeal with challenging times in our lives. Unlike strenuous gifts—thoseskills we excel at but that drain us—you want to identify these skills so youcan practice them more often.

WHAT HIDDEN TREASURES LOOK LIKE

Whilethere’s nothing wrong with drawing energy from soccer, poetry, or playing theguitar, I want to focus our attention on skills that relate to the workplace.To do this, I need you to broaden the scope of your thinking beyond yourcurrent job description. As we’ve seen, you might be interested in skills thatyou’re scared to practice at work or don’t “fit” into your job.

Creativityis a great example. Coming up with new ways to complete a task or solve aproblem is a valuable skill, but if you simply check boxes at work, you won’tget to practice it.

Entrepreneurshipis a skill that appeals to many young leaders. They have ideas for their ownbusiness, but the thought of building a company as big as the one where theycurrently work feels totally overwhelming. The small step of seizing anopportunity to build something new in their current job doesn’t even registerwith them, so this treasure remains hidden.

Humoris a skill one young leader used to think didn’t belong in the workplace. Asshe started negotiating, she realized that humor can, at the right moment,break the ice during tense negotiations, even if she wasn’t as funny as herfavorite stand-up comedian.

Resourcefulnessmeans mobilizing resources in an unconventional or creative way. If you don’tget the budget or team you want, can you somehow try to pull things together tostill do the job? If the thought of doing this thrills you, resourcefulnessmight be one of your hidden treasures.

Organizing,strategizing, and writing are other examples of skills that can give youenergy, even if you’re not good at them right now. If a skill is bubbling up inyour mind right now and you feel resistant to it, keep in mind that skillsrequire two things: feedback and practice.

Yes,you might not be good at a skill now, but it’s not entirely due to your innateability. Unless you’re a violin prodigy, you’re going to be bad at playing theviolin the first time you try it. But the more you practice that skill(especially if it energizes you), the better violin player you’ll become. Thissounds obvious, but given the hesitation that exists around finding andcultivating hidden treasures in a work context, it’s important to remindprofessionals that it takes time to develop these new, energizing skills.

WHY HIDDEN TREASURES ARE WORTH PURSUING

Sure,it would be nice to do things that provide you with energy, but what else willyou get out of pursuing new skills?

Forstarters, you’ll find out your aptitude for learning something new. When you gofrom being below average or average at something to being exceptional at it, itgives you a huge confidence boost. You don’t have to continue to rely on yourcurrent skills because you now know that you’re capable of becoming adept atsomething challenging.

Whenthat happens, you’ve discovered a new talent, and talents are valuable in theworkplace. Not every hidden treasure will be a talent—because receiving energyis not 100% tied to our performance of that skill, but the possibility ofuncovering a new talent is very real.

Developingskills that reveal talents can help advance your career. If you begin teachingworkshops, writing content that improves your marketing efforts or internal communication,or take an entrepreneurial risk to develop projects that benefit the entirecompany, you’ll gain more visibility and become a more valuable part of yourorganization.

Whenyou make the pursuit of hidden treasures a group effort, it can be inspiringfor your whole team. One of the main impediments I’ve seen in developing newskills at work is fear. People are afraid they’ll look incompetent or beembarrassed. But if you asked each member of your department which hiddentreasure they’d like to cultivate to feel more energized, suddenly that fearfades away.

Finally,hidden treasures help balance out your strenuous gifts and your weaknesses. Forexample, if you know crunching numbers for two straight days at work is goingto zap your energy, doing something energizing after you get done is a greatway to compensate for that draining (but necessary) activity. In fact, merelyanticipating that reward is enough to give you energy while you’re working.Here’s how to uncover your hidden treasures.

FOLLOW YOUR CURIOSITY

If youperk up watching a colleague teach, you might be drawn to teaching. If you lovereading stories about Elon Musk and the lives of startup founders, that mighthint at unexplored entrepreneurial skills. You just might have never had theexperience, coaching, and feedback to develop these skills. Your firstreaction might be, “That’s not for me.” If that’s the case, but that sameactivity stills sparks your curiosity, it’s a good sign that you’ve found ahidden treasure.

DRAW FROM YOUR HOBBIES

If youenjoy organizing family gatherings and thinking through the logistics of thoseevents, perhaps you could apply that skill in a work context. You might nothave done that because your family doesn’t have the same level of standards asyour employer. Nevertheless, you could organize something small at work and seehow it goes. Did the experience turn out okay and actually give you energy? Ifthe answer is yes to both of those questions, you just uncovered a hiddentreasure.

LOOK AT YOUR PREVIOUS INTERESTS

Thinkall the way back to when you were in school. Was there a skill you werediscouraged from pursuing as a career, or something you actually pursued butdidn’t see much value in at the time? Writing is a great example. Many talentedwriters were told by their parents that there’s no money in writing, so theydecided to give up that interest and not pursue it further.

Orperhaps you received unfair feedback that discouraged a skill. When a young,aspiring public speaker is told by classmates, “You’re just not cut out tospeak onstage,” those words can be a powerful disincentive, especially at amore impressionable time early in their life.

Let goof the harsh feedback or discouraging words for a moment and focus on thepresent. Does that skill give you energy? Does it excite you? If so, it doesn’tmean you should quit your job to begin honing that skill. It means you can addsome positive excitement into your work by applying that skill—be it teaching,entrepreneurship, writing, etc.—in a new way.

ASK OTHERS FOR INPUT

Find acolleague you trust and ask them, “What do you think energizes me and whichskills would you encourage me to do more of?” Most times, those close to us cansee us more clearly than we see ourselves. They might tell you, “I sense thatyou enjoy taking our customer’s perspective when we make decisions, but you’reholding yourself back there. Could you do more of that?”

Gettingfeedback from others can result in a light bulb moment for you. You might nothave seen yourself that way, or you held back because a skill like coachingothers is not part of your official job description. If that’s the case, I’dinvite you to think about how your hidden treasures could not only give youmore energy but also help you reach your goals.

BE INTENTIONAL WITH YOUR HIDDEN TREASURES

If youwait for the “perfect” opportunity to come along at work, or someone else toinvite you to do so, you might be waiting forever. Instead, think of smallsteps you can take today to cultivate a hidden treasure once you discover it.

Don’tlet fear keep you stuck doing only what you’re already good at, especially ifit doesn’t give you energy. That’s how you deplete yourself with strenuousgifts. Discover and develop your hidden treasures. At a minimum,you’ll feel more energized. They might even turn into new strengths that canbenefit you, your teams, customers, and society in surprising ways.

Thisarticle was adapted from the book What is Water? How Young Leaders Can Thrive in an Uncertain World byKayvan Kian, who is also a management consultant in McKinsey’s Amsterdamoffice.