Topley’s Top Ten – September 17, 2019

Author

Matt Topley
September 17, 2019

1.Hedge Funds Record Low Exposure to Small Cap Value.

Twits note howmuch funds hate value

From Dave Lutz at Jones Trading.

2. Mid-Cap Value Hitting New Highs.

VOE-Vanguard Mid-Cap Value.

5 Year Mid-Cap Growth VOT +54%  vs. Mid-Cap Value VOT +33%

3.Small Cap Low Volatility Had Outperformed Small Cap Value Handily With Similar Fundamentals.

Small Cap Low Volatility XSLV +64% vs.Small Cap Value VBR +30%

Small Cap Low Volatility Price to Book Lower than Small Cap Value

XSLV Fundamentals.

VBR Small Cap Value Fundamentals.

4.The U.S. Political Landscape is Leading Concern Among Investors.

SCHWAB

5.Heightened Political Risk is Global….Global Economic Policy Uncertainty in Chart.

Thomas Quinn FIS

6.Vanguard Updated 10 Year Projected Returns.

7.The U.S. Economy Hasn’t Grown Above Average Since 2005….

From Abnormal Returns Blog www.abnormalreturns.com

Chart of the day

The US economy hasn’t grown at an “above average” rate since2005.  (MarginalRevolution)

8.WeWork will reportedly shelve its IPO in a ‘last-minute decision’ after weak investor interest

Theron MohamedSep. 17, 2019, 05:03 AM Getty Images

WeWork has delayed its initial public offering, according to Reuters.

The shared-workspace group was gearing up for an investor road show this week and a public debut this month, but it made a “last-minute decision on Monday to stand down,” Reuters said, citing people familiar with the matter.

SoftBank, a key investor for WeWork, discussed kicking in $750 million to $1 billion to support the IPO, but WeWork determined it would still have raised less than the $3 billion needed to unlock a $6 billion credit line, Reuters reported.

WeWorkhas delayed its initial public offering, according to Reuters.

Theshared-workspace group was gearing up for an investor road show this week and astock-market debut this month, but it made a “last-minute decision onMonday to stand down,” Reuters said, citing people familiar with thematter.

WeWorkpostponed over concerns that not enough investors would participate in itslisting, the sources told Reuters. It says it still plans to complete it thisyear.

“TheWe Company is looking forward to our upcoming IPO, which we expect to becompleted by the end of the year,” WeWork told Markets Insider in astatement. “We want to thank all of our employees, members, and partnersfor their ongoing commitment.”

Thegroup’s largest investor, the Japanese conglomerate SoftBank, discussed kickingin $750 million to $1 billion to support the IPO, the sources told Reuters.WeWork, however, reportedly determined that a listing would have raised littlemore than $2 billion even with SoftBank’s help. That would be short of the $3billion it needs to unlock a $6 billion credit line. The bank financing is alsocontingent on an IPO by the end of this year.

WeWorkhas faced growing concerns about its path to profitability, the sustainabilityof its business model, and its corporate governance. The doubts have led thecompany to slash its targeted public valuation to as low as $10 billion to $12billion, according to Reuters, a far cry from the $47 billionprivate valuation it secured in January.

Thegroup reported a net loss of about $1.6 billion last year, almost matching itsroughly $1.8 billion in revenue. Its strategy — signing long-term leases forproperties and then dividing them up, renovating them, and offering short-termrentals — could suffer during an economic downturn.

CEOAdam Neumann’s control of WeWork, large stock sales, property deals, and familymembers’ involvement in the business have also raised flags, leading the groupto announce sweeping changes to its governance last week.

9.5 Easy Ways to Boost Your Brain Health

Stop wasting money on brain supplements and try these science-backed tricks

Source: brain-1845962_1920pixabay TheDigitalArtist

Brainsupplements are big business. In 2015, the supplement market specificallytargeted toward boosting brain health was worth an estimated 2.3 billion dollars. By2024, that number is expected to increase by 500 percent, reaching an estimated11.6 billion dollars.

More andmore, people are turning to supplements to enhance their memory,alleviate depression and anxiety, increase their attention and focus, supportlongevity, and prevent dementia. Among the most popular of thesesupplements are carnitine, ginkgo, ginseng, fish oil, turmeric, and most recent toenter the market, CBDoil.

But doany of these supplements actually work?

Unfortunately,supplements are loosely regulated and good-quality research studies on theireffectiveness are hard to come by. But the studies that have been conductedcontinue to find no evidence in support of their effectiveness. Forexample, a study published in The Lancet Neurologyexaminedginkgo biloba use among 2,854 older adults with memory complaints over thecourse of five years. In the end, the group who took ginkgo twice a day had thesame number of Alzheimer’s cases as the group who took a placebo.

So ratherthan wasting your hard-earned money on ineffective supplements, try these fivetips for boosting your brain health. Not only are they backed by science, butthey’re also easy to do and cost way less than supplements (many are evenfree).

1. ThinkFork, Not Pill

Supplementsin pill form may be ineffective, but there are lots of benefits to adding themto your diet the natural way—throughfood. Research showsthat better brain health is associated with adiet rich in green leafy vegetables, walnuts, berries, and fatty fish.

Forinstance, a 2012 study on thousands of adults found that thosewho took fish oil pills to get their omega-3s performed just as well on a short-term memory testand had just as many dementia diagnoses as those who took a placebo. But another study found that people who got their omegasthe natural way—by eating a diet rich in fatty fish like salmon—did have alower risk of dementia.

Certainvitamins and minerals do seem to be effective in boosting brain health, but youhave to take them via a fork, not a pill (a great cookbook that includesrecipes with brain-boosting ingredients is Fat for Fuel)

2. GetYour Sweat On

We allknow exercise is great for your body, but it’s just as good for your brain.

A studypublished in the Journal of Alzheimer’s Disease foundthat a lack of exercise in older adults put their risk of developing dementiaon par with adults who were genetically predisposed to the disease. So even ifyou are not genetically predisposed for dementia, you could be putting yourselfat risk if you are leading a sedentary lifestyle.

articlecontinues after advertisement

Butprotecting against dementia isn’t the only benefit of exercise. Regularheart-increasing activity helps the brain work more efficiently, no matter yourage or condition. And this doesn’t mean you have to hit the gym hard to boostyour brain health. Less strenuous activities, like walking, yoga, tai chi, arealso effective as long as they get your heart rate up. Skip counting steps andinstead focus on getting a minimum of 150 minutes per week of elevated heartrate activity (this is where a fitness tracker like Fitbit comes in handy).

3. TrainYour Brain

Yourbrain is like a muscle if you don’t use it, it’s strength will start to fade.Regularly exercising your brain—through the use of brain teasers, crosswordpuzzles, or learning a new language—is a great way to keep your brain inshape.

Now, notall studies support the effectiveness of brain training, but there are enoughout there that do, suggesting this is a viable option (it also suggests we needa lot more studies conducted on this topic). For example, a 2018 study hadhealthy adults perform a training exercise that focused on attention,processing speed, visual memory, and executive functioning. One group performedthis training exercise for 15 minutes per day, seven days a week, for threeweeks. The other group skipped the training altogether. In the end, thebrain-training group demonstrated significantly better attention and responsetimes.

Insteadof spending your free time mindlessly binging on Netflix, consider doing tasksthat give your brain a workout.

articlecontinues after advertisement

4. Get aPet

There arelots of studies showing how having a pet provides mental health benefits.

Forexample, a 2016 meta-analysis analyzed 17 academicstudies and found that people with long-term mental health problemssignificantly benefited from owning a pet. As the researchers put it, “Pets provided a unique form ofvalidation through unconditional support, which they were often not receivingfrom other family or social relationships.”

And anotherstudy conducted on children found that for children with a dog, 12percent tested positive for anxiety, compared to 21 percent of children withouta dog.

So thenext time you need to boost your mood, spend some time with a furry friend.

5. GrabZzzz’s

Sleep isarguably the most important and most underappreciated factor when it comes tobrain health. We live in an age where CEOs, TV show hosts, and presidents bragabout being able to function on just a few hours of sleep, but the datasuggests that skimping on sleep is akin to starving your brain.

Studyafter study shows that getting seven to eight hours of sleep is necessary forall aspects of proper brain functioning, including memory, attention,learning, and creativity. Youwould never starve yourself of food before going to the gym. Why would youstarve your brain by skimping on sleep?

Gettingmore sleep is easy, free, and essential for mental as well as physical health.If you take away one piece of advice from this post, it’s that you need to makesleep a priority and try to get seven to eight hours each night. For anexcellent read on why sleep is important and how to get more of it, checkout Matthew Walker’s book Why We Sleep.

And whatif you absolutely can’t squeeze in more zzz’s? Try taking a nap. One study foundthat an hour-long midday nap boosted cognitive performance better than 200 mgof caffeine (equal to two espressos).

10.6 Reasons Salespeople Win or Lose a Sale

STEVEN MOORE FORHBR

Why does a salesperson lose a sale?

It’s a question I’ve studied for years, as part of the win-lossanalysis research I conduct.

There’s a tendency to assume that the salesperson lost becausetheir product was inferior in some way. However, in the majority of interviewsbuyers rank all the feature sets of the competing products as being roughlyequal. This suggests that other factors separate the winner from the losers.

In order to identify these hidden decision-making factors, morethan 230 buyers completed a 76-part survey. The research project goals were tounderstand how customers perceive the salespeople they meet with, explore thecircumstances that determine which vendor is selected, and learn how differentcompany departments and vertical industries make buying decisions. Wehad six key research findings:

#1: Some Customers Want to be Challenged

What selling style do prospective buyers prefer? The surveyshows 40% of study participants prefer a salesperson who listens, understands,and then matches their solution to solve a specific problem. Another 30% prefera salesperson who earns their trust by making them feel comfortable, becausethey will take care of the customer’s long-term needs. Another 30% want asalesperson who challenges their thoughts and perceptions and then prescribes asolution that they may not have known about.

From a departmental perspective, under 20% of accounting and ITstaffers want to be challenged, while 43% of the engineering department does.Over 50% of marketing and IT prefer a salesperson who will listen andmatch a solution to solve their specific needs. The sales departmentequally preferred having a salesperson listen and solve their needs and beingchallenged; HR was equally split across all three selling styles.

There’s an interesting explanation for selling stylespreferences, which is based on whether the buyer is comfortable with conflict.Seventy-eight percent of participants who preferred a salesperson who wouldlisten and solve their specific needs agreed with the statement: “I try toavoid conflict as much as I can.” Conversely, 64% of participants who preferreda salesperson who challenges their thoughts disagreed with the statement andare comfortable with conflict.

#2: It’s Really a Committee of One

Whenever a company makes a purchase decision that involves ateam of people, factors including self-interests, politics, and group dynamicswill influence the final decision. Tension, drama, and conflict are normalparts of group dynamics, because purchase decisions typically are not madeunanimously.

One critical research finding is that 90% of study participantsconfirmed that there is always or usually one member of the evaluationcommittee who tries to influence and bully the decision their way.Moreover, this person is successful in getting the vendor they want selected89% of the time. In practicality, it can be said that a salesperson doesn’thave to win over the entire selection committee, only the individual whodominates it.

#3: Market Leaders Have an Edge

In most industries a single company controls the market.Compared with their competitors, they have a much larger market share,top-of-the-line products, greater marketing budget and reach, and more companycachet. For salespeople who have to compete against these industry giants, lifecan be very intimidating indeed.

However, the study results provide some good news in thisregard. Buyers aren’t necessarily fixated on the market leader and are morethan willing to select second-tier competitors than one might expect. In fact,only 33% of participants indicated they prefer the most prestigious, best-knownbrand with the highest functionality and cost. Conversely, 63% said they wouldselect a fairly well-known brand with 85% of the functionality at 80% of thecost. However, only 5% would select a relatively unknown brand with 75% of thefunctionality at 60% of the cost of the best-known brand.

Not surprisingly, the answer to this question differed byindustry. The fashion and finance verticals had the highest propensity toselect the best-known, top-of-the-line product, while manufacturing and healthcare had the lowest.

#4: Some Buyers Are “Price Immune”

Price plays an important role in every sales cycle. Since it isa frequent topic during buyer conversations, salespeople can become fixated onthe price of their product and believe they have to be lowest. However,decision makers have different propensities to buy, and the importance of pricefalls into three categories. For “price conscious” buyers, product price is atop decision-making factor. For “price sensitive” buyers, product price issecondary to other decision-making factors such as functionality and vendorcapability. For “price immune” buyers, price becomes an issue only when thesolution they want is priced far more than the others being considered.

Study participants were asked to respond to different pricingscenarios, and their responses were analyzed to categorize their pricingtendency. From a departmental perspective, engineering would be classified asprice immune; marketing and sales as price sensitive; and manufacturing,information technology, human resources, and accounting as price conscious.From an industry perspective, only the government sector would be classified asprice immune. Banking, technology, and consulting would be price sensitive,while manufacturing, health care, real estate, and fashion are price conscious.

#5: It’s Possible to Cut Through Bureaucracy

The most feared enemy of salespeople today isn’t solely theirarchrivals; it’s buyers’ failure to make any decision. This is because everyinitiative and its associated expenditure is competing against all the otherprojects that are requesting funds. Do the departments have different abilitiesto push through their purchases and defeat their company’s bureaucratictendency not to buy?

The answer is yes. Based on the research results, sales, IT, andengineering have more internal clout to push through their projects as opposedto accounting, human resources, and marketing. Therefore they’re betterdepartments to sell into from the salesperson’s perspective.

#6: Charisma Sells in Certain Industries

Imagine three salespeople who’ve pitched products that are verysimilar in functionality and price. Which would you rather do business with:

  • A) A professional salesperson who knows their product inside andout but is not necessarily someone you would consider befriending

  • B) A friendly salesperson who is likable and proficient inexplaining their product

  • C) A charismatic salesperson who you truly enjoyed being withbut is not the most knowledgeable about their product

While top selection in every industry was the friendlysalesperson, the media and fashion industries selected “charismaticsalesperson” more than most, and the manufacturing and health care industrieshad the highest percentage of “professional salesperson” responses.

Many salespeople behave as if buyers are rational decisionmakers. In reality, human nature is complicated, and a mix of factors — somerational, some not — determine how buyers evaluate sales reps and who theyselect. Ultimately, it is the mastery of the intangible, intuitive humanelement of the sales process that separates the winner from losers.

Steve W. Martin teaches sales strategy at the University of SouthernCalifornia Marshall School of Business. His new book is titled Heavy Hitter I.T. Sales Strategy:Competitive Insights from Interviews with 1,000+ Key Information TechnologyDecision Makers.