Topley’s Top Ten – October 28, 2019

Author

Matt Topley
October 28, 2019

1.How Do S&P Sectors Perform During and After Elections?

Barrons

Stocks Worth Buying Regardless ofWho Wins the White House

2.More Value Vs. Growth Data.

DFA FUNDS—Growth at 161% of Historical Annualized Returns vs. Value 101%

3.40 Rate Cuts in 3 Months From World Central Banks.

Down, down they go: Emerging central banks deliver most ratecuts in a decade-Karin Strohecker, Ritvik Carvalho

4.Watching Copper For a Bottom in World Economic Slowdown

Copper Chart

5.Death By Amazon’s Best Performers

Thu,Oct 24, 2019

On Monday, we updated our popular Death By Amazon index. The index is composed of retailers that we view as most vulnerable to competition from online retail like Amazon (AMZN).  Looking at year-to-date total returns of the largest five (by market cap) members of our Death By Amazon index, Target (TGT) has ran away from the rest of the group in 2019.  Including dividends, the stock has netted a 72.7% gain since the start of the year in large part due to the massive surge on earnings in the late summer.  Close competitor and the largest retailer in the index, Walmart (WMT), has given investors less than half of that as WMT has returned 30% thus far in 2019.  Before the earnings report that sent TGT skyrocketing, Costco (COST) had been a close contender for the highest returning spot. Currently, COST has the second best YTD return at 47.5% with TJX in third at 33.9%.  On the other hand, CVS has dramatically underperformed only providing a return of 3%.  Meanwhile, the namesake of the index, AMZN, actually has the second worst return in 2019 of just 18.7% YTD. Earlier this year in the spring, AMZN had actually returned the most.  Over the past year, AMZN’s return looks even worse.  Since October of last year, the stock has only returned 7.1%. While better than CVS’s 3.3% loss, each of the other largest stocks in the Death By Amazon index have offered investors more.  But over the long term, as the trend of online retail has matured, Amazon (AMZN) has offered investors a far higher return.  Total return for the stock over the past five years is 514.9%.  That is nearly three times more than the next best stock of these, Costco (COST), which has returned 158.5%.  Start a two-week free trial to Bespoke Premium to access our Death By Amazon index as well as other B.I.G. Tips reports, interactive tools and more.

©2019 BespokeInvestment Group

6.S&P Earnings Growth History.

Top Down Chart

7.Non-Mortgage Debt.

The Fed’s recent cuts allowed some Americans trim some of theirbiggest debts, but other sources of debt continue to pile up. The analysts“see little sign” of the lower rates hitting the everyday consumer,and warn that the amount of debt outstanding across the nation could begin todrag on spending habits.

Theratio of consumer debt service sans mortgages has slowly grown while mortgagedebt has fallen with the lowered interest rates. Ignoring this steady riseleaves investors with only part of the country’s debt story, BAML said.

“Whenonly focusing on mortgage debt, we can make the case that there has beenmeaningful deleveraging in an environment of low rates,” the analystswrote. “This is not the same story for other consumer debt.”

8.Industry Lobbyist Spending.

Who Has Spent The MostDollars Lobbying Washington In 2019?by Tyler Durden

9.This waterfront city is the No. 1 place in America to retire

Plus: 4 affordablealternatives on the beach  byCATEYHILL

iStock

Fort Myers and the CaloosahatcheeRiver in Florida.

If warmweather, easy access to the beach and an affordable price tag sound like yourdream retirement, this town might be for you.

U.S. News & WorldReport recently released its list ofthe best places to retire, and Fort Myers — a midsize riverfront city insouthwest Florida just a stone’s throw from Gulf of Mexico beaches — topped thelist. What’s more, Kiplinger’s called outFort Myers on its list of 50 best places to retire this year, noting that itwas “yet another great place to consider for your retirement.”)

So whatmakes Fort Myers special? U.S. News writes that the city has “retained itssmall-town heritage … with a charming downtown lined with shops andrestaurants, many of which are dog-friendly” adding that “museums, parades, festivals,theaters, parks, historical sites and art galleries pepper the metro area andits social calendar.” And for those who love the beach, “just a few miles away,Fort Myers Beach, Cape Coral and Sanibel Island are popular among boaters,kayakers, sailors and anglers.”

Perhaps best of all, it’s prettyaffordable, with a cost of living that’s just a bit above average and a medianhome priced at just a little over $200,000, according to Sperling’s Best Places.Plus, Florida doesn’t have a state income tax,so your 401(k), IRA or pension withdrawals won’t be taxed by the state, norwill your Social Security.

Ofcourse, Fort Myers has some big downsides, which include muggy, hot summers andthe fact that the area can sometimes feel overrun with tourists.

The townsthat rounded out the top five on the U.S. News list were Sarasota, Fla.;Lancaster, Pa.; Asheville, N.C.; and Port St. Lucie, Fla. U.S. News looked atthe 125 largest metro areas and graded them on happiness, housingaffordability, health-care quality, desirability, retiree taxes and job-marketratings.

Should Fort Myers not be your thing, and you’restill looking for an affordable spot to retire near the beach, you’re inluck: MarketWatch recently created its own list of the best beachtowns where you can retire comfortably on about $40,000 a year. These include Pensacola, Fla.; Bay St. Louis, Miss.; andCorpus Christi, Texas.

10.Mark Manson-Important Questions of Your Life.THE MOST IMPORTANT QUESTION OF YOUR LIFE

Everybody wants what feels good. Everyone wants to live acarefree, happy and easy life, to fall in love and have amazing sex andrelationships, to look perfect and make money and be popular and well-respectedand admired and a total baller to the point that people part like the Red Seawhen you walk into the room.

Everyonewould like that — it’s easy to like that.

IfI ask you, “What do you want out of life?” and you say something like, “I wantto be happy andhave a great family and a job I like,” it’s so ubiquitous that it doesn’t evenmean anything.

Amore interesting question, a question that perhaps you’ve never consideredbefore, is what pain do you want in your life? What are you willing to strugglefor? Because that seems to be a greater determinant of how our lives turn out.

Everybodywants to have an amazing job and financial independence — but not everyonewants to suffer through 60-hour work weeks, long commutes, obnoxious paperwork,to navigate arbitrary corporate hierarchies and the blasé confines of aninfinite cubicle hell. People want to be rich without the risk, without thesacrifice, without the delayed gratification necessary to accumulatewealth.

Everybodywants to have great sex and an awesome relationship — but not everyone is willing to gothrough the tough conversations, the awkward silences, the hurt feelings andthe emotional psychodrama to get there. And so they settle. They settle andwonder “What if?” for years and years until the question morphs from “What if?”into “Was that it?” And when the lawyers go home and the alimony check is inthe mail they say, “What was that for?” if not for their lowered standards andexpectations 20 years prior, then what for?

Because happiness requiresstruggle. The positive is the side effect of handling the negative.You can only avoid negative experiences for so long before they come roaringback to life.

Atthe core of all human behavior, our needs are more or less similar. Positiveexperience is easy to handle. It’s negative experience that we all, bydefinition, struggle with. Therefore, what we get out of life is not determinedby the good feelings we desire but by what bad feelings we’re willing and able tosustain to get us to those good feelings.

Peoplewant an amazing physique. But you don’t end up with one unless you legitimatelyappreciate the pain and physical stress that comes with living inside a gym forhour upon hour, unless you love calculating and calibrating the food you eat,planning your life out in tiny plate-sized portions.

Peoplewant to start their own business or become financiallyindependent. But you don’t end up a successful entrepreneur unless you find away to appreciate the risk, the uncertainty, the repeated failures, and workinginsane hours on something you have no idea whether will be successful or not.

Peoplewant a partner, a spouse. But you don’t end up attracting someone amazing withoutappreciating the emotional turbulence that comes with weathering rejections,building the sexual tension that never gets released, and staring blankly at aphone that never rings. It’s part of the game of love. You can’t win if youdon’t play.

Whatdetermines your success isn’t “What do you want to enjoy?” The question is, “Whatpain do you want to sustain?” The quality of your life is not determined by thequality of your positive experiences but the quality of your negativeexperiences. And to get good at dealing with negative experiences is to getgood at dealing with life.

There’sa lot of crappy advice outthere that says, “You’ve just got to want it enough!”

Everybodywants something. And everybody wants something enough.They just aren’t aware of what it is they want, or rather, what they want “enough.”

Becauseif you want the benefits of something in life, you have to also want the costs. Ifyou want the beach body, you have to want the sweat, the soreness, the earlymornings, and the hunger pangs. If you want the yacht, you have to also wantthe late nights, the risky business moves, and the possibility of pissing off aperson or ten thousand.

Ifyou find yourself wanting something month after month, year after year, yet nothing happens andyou never come any closer to it, then maybe what you actually want is a fantasy,an idealization, an image and a false promise. Maybe what you want isn’t whatyou want, you just enjoy wanting. Maybe you don’t actually want it at all.

SometimesI ask people, “How do you choose to suffer?” These people tilt their heads andlook at me like I have twelve noses. But I ask because that tells me far moreabout you than your desires and fantasies. Because you have to choosesomething. You can’t have a pain-free life. It can’t all be roses and unicorns.And ultimately that’s the hard question that matters. Pleasure is an easyquestion. And pretty much all of us have similar answers. The more interestingquestion is the pain. What is the pain that you want to sustain?

Thatanswer will actually get you somewhere. It’s the question that can change yourlife. It’s what makes me me and you you. It’s what defines us and separates usand ultimately brings us together.

Formost of my adolescence and young adulthood, I fantasized about being a musician— a rock star, in particular. Any badass guitar songI heard, I would always close my eyes and envision myself up on stage playingit to the screams of the crowd, people absolutely losing their minds to mysweet finger-noodling. This fantasy could keep me occupied for hours on end.The fantasizing continued up through college, even after I dropped out of musicschool and stopped playing seriously. But even then it was never a question ofif I’d ever be up playing in front of screaming crowds, but when. I was bidingmy time before I could invest the proper amount of time and effort into gettingout there and making it work. First, I needed to finish school. Then, I neededto make money. Then, I needed to find the time. Then… and then nothing.

Despitefantasizing about this for over half of my life, the reality never came. And ittook me a long time and a lot of negative experiences to finally figure outwhy: I didn’t actually want it.

Iwas in love with the result — the image of me on stage, people cheering, merocking out, pouring my heart into what I’m playing — but I wasn’t in love withthe process. And because of that, I failed at it. Repeatedly. Hell, I didn’teven try hard enough to fail at it. I hardly tried at all.

Thedaily drudgery of practicing, the logistics of finding a group and rehearsing,the pain of finding gigs and actually getting people to show up and give ashit. The broken strings, the blown tube amp, hauling 40 pounds of gear to andfrom rehearsals with no car. It’s a mountain of a dream and a mile-high climbto the top. And what it took me a long time to discover is that I didn’t liketo climb much. I just liked to imagine the top.

Ourculture would tell me that I’ve somehow failed myself, that I’m a quitter or aloser. Self-help wouldsay that I either wasn’t courageous enough, determined enough or I didn’tbelieve in myself enough. The entrepreneurial/start-up crowd would tell me thatI chickened out on my dream and gave in to my conventional social conditioning.I’d be told to do affirmations or join a mastermind group or manifest orsomething.

Butthe truth is far less interesting than that: I thought I wanted something, but itturns out I didn’t. End of story.

Iwanted the reward and not the struggle. I wanted the result and not theprocess. I was in love not with the fight but only the victory. And life doesn’t work thatway.

Whoyou are is defined by the values you are willing to struggle for. People who enjoy thestruggles of a gym are the ones who get in good shape. People who enjoy longworkweeks and the politics of the corporate ladder are the ones who move up it.People who enjoy the stresses and uncertainty of the starving artist lifestyleare ultimately the ones who live it and make it.

Thisis not a call for willpower or “grit.” This is not another admonishment of “nopain, no gain.”

Thisis the most simple and basic component of life: our struggles determine oursuccesses. So choose your struggles wisely, my friend.

Note: I’ve recorded an 8-minuteaudio commentary where I go into how this article has been the most impactfuland important article I’ve written. I also talk about how I found theinspiration for this post, and the relationship between effort and success inwriting. Site members can listen to it by clicking the Commentary button above.To become a site member, click here.

(Coverimage credit: an untrained eye)