Category Archives: Daily Top Ten

Topley’s Top 10 – May 09, 2022

1. 10 Year Treasury Yield Approaching Decade Highs

MacroTrends-10 Year Chart of 10 Year Treasury Yield

https://www.macrotrends.net/2016/10-year-treasury-bond-rate-yield-chart


2. IPO ETF Heading for Covid Lows

IPO -60%…back to mid-2020 levels

www.stockcharts.com


3. Small Cap Value -7.6%. YTD vs. Small Cap Growth -23%

www.yahoofinance.com


4. Another Theme ETF Breaking Down….Robotics ETF -30%….Breaks Up Trend Line Going Back to 2015

See break of blue uptrend line going back 7 years

www.stockcharts.com


5. One-Year Returns…Bitcoin -41% vs. U.S. Dollar +14% vs. GOLD +2%

www.yahoofinance.com


6. Ray Dalio Bubble Gauge Down Substantially from Highs

Ray Dalio-The latest readings from the “bubble indicator.”

As you know, I like to convert my intuitive thinking into indicators which I write down as decision rules (principles) that can be back-tested and automated to put together with other principles and bets created the same way to make up a portfolio of alpha bets. I have one of these for bubbles. Having been through many bubbles over my 50+ years of investing, about 10 years ago I described what in my mind makes a bubble and use that to identify them in markets—all markets, not just stocks.

I define a bubble market as one that has a combination of the following in high degrees:

  1. High prices relative to traditional measures of value (e.g., by taking the present value of their cash flows for the duration of the asset and comparing it with their interest rates).
  2. Unsustainable conditions (e.g., extrapolating past revenue and earnings growth rates late in the cycle when capacity limits mean that that growth can’t be sustained).
  3. Many new and naïve buyers who were attracted in because the market has gone up a lot so it’s perceived as a hot market.
  4. Broad bullish sentiment.
  5. A high percentage of purchases being financed by debt.
  6. A lot of forward and speculative purchases made to bet on price gains (e.g., inventories that are more than needed, contracted forward purchases, etc.).

The chart below shows the bubble gauge for the average of the most bubbly companies as defined in 2020. Readings for those companies are meaningfully down.

The charts below show the performance of a basket of emerging tech bubble stocks (what we call the “bubble slice”) versus the S&P 500. Prices have meaningfully declined and have given up most of their post-COVID gains.

The Popping of the Bubble Stocks: An Update

https://www.linkedin.com/pulse/popping-bubble-stocks-update-ray-dalio/


7. Just 35% of S&P 500 Stocks and 20% of Nasdaq Trading Above 200day Moving Average

WSJ

Best Read of Weekend…..WSJ-Once-popular trades fall out of favor as investors brace for further volatility

https://www.wsj.com/articles/markets-2022-slide-has-already-changed-investor-behavior-11652002203?mod=hp_lead_pos2


8. It’s Not 1999….See P/E Multiple Comparison

Seth Golden https://twitter.com/SethCL


9. No Recession at Kentucky Derby….Record Wagering.

Zerohedge-Wagering from all-sources on the Kentucky Derby Day program totaled $273.8 million, a 17% increase over 2021 and up 9% from the previous record in 2019 of $250.9 million. Wagering from all-sources on the Kentucky Derby race totaled $179.0 million, up 15% over 2021 and up 8% from the previous record of $165.5 million set in 2019. This year’s wagering record includes $8.3 million of handle wagered in Japan. -CDI

 

Here are the Kentucky Derby payouts:

21 – Rich Strike WIN: $163.60 PLACE: $74.20 SHOW: $29.40

3 – Epicenter PLACE: $7.40 SHOW: $5.20

10 – Zandon SHOW: $5.60

$2.00 Exacta 21-3 $4,101.20

$1.00 Trifecta 21-3-10 $14,870.70

$1.00 Superfecta 21-3-10-13 $321,500.10

https://www.zerohedge.com/markets/kentucky-derby-day-wagering-hits-record-high-underdog-rich-strike-wins


10. The Top 5 Strengths People Wish They Had…

Psychology Today

Ryan M. Niemiec Psy.D.

Here are the top five strengths, starting with the fifth highest. Participants chose out of 24 universal strengths found across human beings (they could also choose “none of the above”).

5: Forgiveness

People wish they could be more forgiving. This makes perfect sense. The mental burden of holding onto resentment, anger, and hurt feelings can be overwhelming. Science informs us that forgiveness takes time. It is rarely “one and done.” This means we need to be patient with our forgiveness. We need to make it a practice of letting go, over and over.

·  Science-based strategy from my Character Strengths Interventions book:

o After someone offends you, think about how the offender is a complex human being who needs to experience positive growth and transformation, rather than seeing them as “all bad.”

·  After someone offends you, think about how the offender is a complex human being who needs to experience positive growth and transformation, rather than seeing them as “all bad.”

4: Creativity

People want to be more creative. They want to come up with more ideas. Their minds are often obstacles: “What will people think of what I created?” “What if I fail?” “How much will I lose?” I like that this strength was nominated so high because it reminds us that there is great value for our mental well-being if we can open ourselves to new ways of doing things, think of new solutions to our problems, and take novel action.

·  Science-based strategy from my Character Strengths Interventions book:

o Develop divergent thinking. This means that when you have a problem, come up with multiple alternate solutions instead of searching for one “correct” solution. After you name a problem, brainstorm a list of ideas for potential solutions.

·  Develop divergent thinking. This means that when you have a problem, come up with multiple alternate solutions instead of searching for one “correct” solution. After you name a problem, brainstorm a list of ideas for potential solutions.

3: Perseverance

People wish they did not give up so easily. The truth is – it is challenging to be perseverant. When we are trying to reach a goal, life happens: we feel mental fatigue, we feel physical fatigue, we have negative judgments, people trying to stop us, and daily life getting in the way. But, perseverance can overcome those obstacles. It is that inner voice that says, “keep going….keep swimming…don’t give up.” 

·  Science-based strategy from my Character Strengths Interventions book:

o As you work on a project, pay attention to how you have put forth good focus, effort, and energy with the task/project. Reward yourself when you “try your best,” instead of what most people do, which is to reward yourself when the goal is reached.

·  As you work on a project, pay attention to how you have put forth good focus, effort, and energy with the task/project. Reward yourself when you “try your best,” instead of what most people do, which is to reward yourself when the goal is reached.

2: Bravery

People want to be braver. I hear this and see this – almost constantly, in my work as I interact with people across the globe. It is challenging to be brave enough to move out of one’s comfort zone, challenge the system or the status quo, speak an unpopular opinion, and face your fears. No one said bravery is easy. But we say that it is a pathway to being more authentic and helping your neighbor.

article continues after advertisement

·  Science-based strategy from my Character Strengths Interventions book:

o As you consider using your bravery strength, focus on the outcome of the courageous act. For example, think of the person you would be helping or remind yourself of the goodness of the action you’d be taking.

·  As you consider using your bravery strength, focus on the outcome of the courageous act. For example, think of the person you would be helping or remind yourself of the goodness of the action you’d be taking.

1: Self-Regulation

The most significant percentage of people said the main character strength they wished they had more of to help with their mental health is self-regulation. People want more self-control. This takes many forms – to have more control of your feelings, impulses, bad habits, and words.

People want more discipline in their life, but vices, old habits, and problem behaviors are ingrained, amorphous, hidden, confusing, and often victorious.

·  Science-based strategy from my Character Strengths Interventions book:

o Start a daily self-monitoring log, using your smart-device or computer. Keep track of how you are feeling mentally each day. Track your food and drink intake, your activities, and the people you interact with. Make note of patterns that show up before you feel a certain way.

·  Start a daily self-monitoring log, using your smart-device or computer. Keep track of how you are feeling mentally each day. Track your food and drink intake, your activities, and the people you interact with. Make note of patterns that show up before you feel a certain way.

These findings come from new research I conducted in preparation for a scientific paper I’ll be publishing later this year. I wanted you to have a sneak peek at a few of the many fascinating findings. Lots more to come!

https://www.psychologytoday.com/us/blog/what-matters-most/202205/5-surprising-mental-health-strengths-people-wish

·  Science-based strategy from my Character Strengths Interventions book:

o After someone offends you, think about how the offender is a complex human being who needs to experience positive growth and transformation, rather than seeing them as “all bad.”

·  After someone offends you, think about how the offender is a complex human being who needs to experience positive growth and transformation, rather than seeing them as “all bad.”

4: Creativity

People want to be more creative. They want to come up with more ideas. Their minds are often obstacles: “What will people think of what I created?” “What if I fail?” “How much will I lose?” I like that this strength was nominated so high because it reminds us that there is great value for our mental well-being if we can open ourselves to new ways of doing things, think of new solutions to our problems, and take novel action.

article continues after advertisement

·  Science-based strategy from my Character Strengths Interventions book:

o Develop divergent thinking. This means that when you have a problem, come up with multiple alternate solutions instead of searching for one “correct” solution. After you name a problem, brainstorm a list of ideas for potential solutions.

·  Develop divergent thinking. This means that when you have a problem, come up with multiple alternate solutions instead of searching for one “correct” solution. After you name a problem, brainstorm a list of ideas for potential solutions.

3: Perseverance

People wish they did not give up so easily. The truth is – it is challenging to be perseverant. When we are trying to reach a goal, life happens: we feel mental fatigue, we feel physical fatigue, we have negative judgments, people trying to stop us, and daily life getting in the way. But, perseverance can overcome those obstacles. It is that inner voice that says, “keep going….keep swimming…don’t give up.” 

·  Science-based strategy from my Character Strengths Interventions book:

o As you work on a project, pay attention to how you have put forth good focus, effort, and energy with the task/project. Reward yourself when you “try your best,” instead of what most people do, which is to reward yourself when the goal is reached.

·  As you work on a project, pay attention to how you have put forth good focus, effort, and energy with the task/project. Reward yourself when you “try your best,” instead of what most people do, which is to reward yourself when the goal is reached.

2: Bravery

People want to be braver. I hear this and see this – almost constantly, in my work as I interact with people across the globe. It is challenging to be brave enough to move out of one’s comfort zone, challenge the system or the status quo, speak an unpopular opinion, and face your fears. No one said bravery is easy. But we say that it is a pathway to being more authentic and helping your neighbor.

article continues after advertisement

·  Science-based strategy from my Character Strengths Interventions book:

o As you consider using your bravery strength, focus on the outcome of the courageous act. For example, think of the person you would be helping or remind yourself of the goodness of the action you’d be taking.

·  As you consider using your bravery strength, focus on the outcome of the courageous act. For example, think of the person you would be helping or remind yourself of the goodness of the action you’d be taking.

1: Self-Regulation

The most significant percentage of people said the main character strength they wished they had more of to help with their mental health is self-regulation. People want more self-control. This takes many forms – to have more control of your feelings, impulses, bad habits, and words.

People want more discipline in their life, but vices, old habits, and problem behaviors are ingrained, amorphous, hidden, confusing, and often victorious.

·  Science-based strategy from my Character Strengths Interventions book:

o Start a daily self-monitoring log, using your smart-device or computer. Keep track of how you are feeling mentally each day. Track your food and drink intake, your activities, and the people you interact with. Make note of patterns that show up before you feel a certain way.

·  Start a daily self-monitoring log, using your smart-device or computer. Keep track of how you are feeling mentally each day. Track your food and drink intake, your activities, and the people you interact with. Make note of patterns that show up before you feel a certain way.

These findings come from new research I conducted in preparation for a scientific paper I’ll be publishing later this year. I wanted you to have a sneak peek at a few of the many fascinating findings. Lots more to come!

Topley’s Top 10 – May 06, 2022

1. 2022 Worst Starts Ever History

https://lplresearch.com/


2. Bond Market Massively Oversold-Bespoke Investment Group

The sell-off in bond prices over the last six months has been extreme to say the least.  There are a number of ways we could highlight the carnage for bond investors, but one way is to look at how far bond indices are trading below their 200-day moving averages.  As shown below, the Bloomberg US Aggregate Bond Market Total Return index is currently 8.5% below its 200-day moving average.

Going back to 1988 when daily price data begins, the 200-DMA spread is currently 2x more negative than any prior extreme oversold reading.  Click here to learn more about Bespoke’s premium financial markets research.

https://www.bespokepremium.com/interactive/posts/think-big-blog/bond-market-massively-oversold


3. 1999 Median Price to Sales Nasdaq 21.9x vs. 11.6x 2022

Invesco

https://www.invesco.com/us/en/insights/topic/featured-insights.html


4. Copper Pulled Back and Closed Below 200day Moving Average but Broader Commodities Index Breaking Out.

JJC-Copper closes below 200day moving average

CRB-Broad Commodities Index about to break out

www.stockcharts.com


5. Gold to Copper Ratio

Nasdaq Dorsey Wright-As some may know, a rising copper-gold ratio typically signals expectations for global economic health are on the rise and vice versa. Over the last year, the copper-gold ratio has consolidated in a range and the ratio is currently at the bottom of this range. The copper-gold ratio and the 10YR Treasury Yield have had a strong correlation over the years. After getting disconnected from their usual relationship, yields have rallied strongly higher since the end of 2021 and are now back at relatively similar levels to the copper-gold ratio. Now that yields have risen back to normalized levels relative to the copper-gold ratio, it’s a bit more difficult to have a strong indication one way or the other of how the assets involved will go from here. This has been one of the worst starts to the year for bonds and there is clear momentum behind rising yields both gold and copper have more mixed technical pictures, but each’s ETF still has acceptable fund scores. 10YR Treasury Yields have also had trouble breaking north of 3% after failing in both 2013 and 2018, so that is another variable to keep in mind. Like 10YR yields, the copper-gold ratio itself has also struggled to breach above its current levels, so these two data points can be seen as possible tailwinds for gold in the future. However, yields would need to see weakening moving forward and, as mentioned earlier, we have seen no signs of this happening yet.

www.dorseywright.com


6. Natural Gas 12month Fund +100% YTD


7. Software Index Charts

Software ETF Barely Holding Previous YTD lows

Software Longer-Term Weekly Chart holding above 200 day moving average

www.stockcharts.com


8. You Though UBER was a Drive Sharing Company or Hedge Fund?

How Uber Lost $5.5 billion on 4 SPAC & IPO Stocks: Grab, Didi, Aurora, Zomato. How it Got There, How They Imploded It’s funny, almost.By Wolf Richter for WOLF STREET.

This morning, Uber reported a net loss of $5.93 billion for Q1, and its shares initially tanked 11%, no biggie compared to the 32% dive that Lyft shares are currently undergoing following its earnings report and outlook last night.

In its earnings report, Uber disclosed $5.5 billion in losses on its stakes in four companies that recently went public via SPAC or IPO, and whose shares have gotten outright thackamuffled. These are the losses Uber reported today on its holdings of these four now infamous stocks that have been beautifying my column, Imploded Stocks:

  • Grab: $1.9 billion loss (biggest SPAC deal ever)
  • Aurora Innovation: $1.7 billion loss
  • Didi: $1.4 billion loss (biggest listing mess ever)
  • Zomato: $462 million loss.

Read full story on how uber ended up a bad hedge fund manager https://wolfstreet.com/2022/05/04/uber-lost-5-5-billion-on-four-spac-ipo-stocks-grab-didi-aurora-zomato-how-it-ended-up-with-them-and-how-they-imploded/

Uber chart breaks thru previous lows to downside

www.stockcharts.com


9. Property Taxes on U.S. Homes Rise $328B

MSN News

Michele Lerner – 6h ago

Unsurprisingly, the spike in home values meant that property tax collections increased in 2021, compared with 2020, according to information compiled and analyzed by Attom, a real estate data analysis firm. Attom’s researchers reviewed property tax data for nearly 87 million homes in the United States and found that $328 billion was levied, up 1.6 percent from the $323 billion in 2020. Despite the price increases on homes in 2021, this was the smallest rise in property tax bills over the past years and down from the 5.4 percent increase between 2019 and 2020.

The discrepancy between the home price increase of 16 percent in 2021 from 2020 and the much smaller increase in property tax bills is likely a reflection of the lag in tax assessments, according to Rick Sharga, executive vice president of market intelligence at Attom. In other words, homeowners may see their property taxes rise higher in 2022.

The average tax bill on single-family homes in the United States increased at the smallest rate in the past five years, up 1.8 percent from $3,719 in 2020 to $3,785 in 2021. The effective tax rate, which refers to the average annual property tax expressed as a percentage of the average estimated market value of homes, was 0.9 percent in 2021, down from 1.1 percent in 2020. Because home values rose much more quickly than tax rates, the effective tax rate declined.

Where property taxes are highest

In New Jersey, the average single-family home tax was $9,476 in 2021, the highest in the nation. Other states among the top five highest include Connecticut ($7,464), Massachusetts ($6,777), New Hampshire ($6,698) and New York ($6,617).

Where property taxes are lowest

The state with the smallest average tax bill was West Virginia at $901 in 2021. Other states among the five with the lowest property tax bills included Alabama ($905), Arkansas ($1,195), Mississippi ($1,243) and Louisiana at $1,248.

Most expensive homes sold in the D.C. area in 2021

D.C.-area property taxes

In counties near Washington, D.C., the average property tax bill was $9,526 in Arlington, Va.; $8,942 in Fairfax County, Va.; $6,837 in Montgomery County, Md.; $6,243 in Washington, D.C. and $4,741 in Prince George’s County, Md.

The effective tax rate in those areas range from a high of 1.01 percent in Prince George’s County to 0.93 percent in Fairfax County, 0.85 percent in Arlington County, 0.79 percent in Montgomery County and 0.55 percent in D.C.

https://www.msn.com/en-us/news/us/property-taxes-on-us-homes-rose-to-24328-billion-in-2021-report-finds/ar-AAWWrHz


10. Leaders Must Be Readers-The Daily Stoic

A leader will be forced into countless situations that they have never been in before. Trying, painful, stressful, baffling dilemmas and difficulties unlike any they have known. Nothing could have prepared Kennedy for the Cuban Missile Crisis, but it’s a good thing he had read B. H. Liddell Hart a few years before—it was Hart’s wisdom that helped Kennedy rationally and calmly deal with that unprecedented moment. Nothing could have prepared Churchill for the outbreak of WWII… except of course, the decades he had spent as a historian, which intimately acquainted him with the strategic insights and moral clarity required to bravely fight on.

“One common characteristic of virtually all great leaders I have known is that they have been great readers,” Richard Nixon would write later in life. “Reading not only enlarges and challenges the mind; it engages and exercises the brain. Today’s youth who sits mesmerized by a television screen is not going to be tomorrow’s leader. Television watching is passive. Reading is active.”

Great advice… that a reader of history also knows that Nixon did not quite live up to. In all, Nixon watched over 500 movies while in office in less than 6 years. Might he have been better served by engaging and exercising his brain? Might he have been better off if he’d had more of his assumptions challenged and fewer of his paranoid delusions indulged?

Marcus Aurelius does not become Marcus Aurelius without having read Epictetus at his teacher Rusticus’s urging. Seneca would not have been Seneca without Attalus introducing him to the works of the Stoics, but equally, he would not have been Seneca without his diligent reading of Epicurus, which actively challenged his mind and his assumptions. How did he bravely face death at the hands of Nero’s goons? He was aided by his reading of Cato’s life, just as Cato faced his death by reading Socrates’.

A leader must be a reader. We must learn from the experiences of others. We must be challenged. We must exercise our brains. We must prepare ourselves for the things we’ll only be able to experience once, by learning from the experiences of others.

It’s not just the best way, it’s the only way.

https://dailystoic.com/

Topley’s Top 10 – March 25, 2022

1.5 Out of 6 Days 1%+ Return….What happens next?

In the table below we have aggregated forward returns for the prior 4 occurrences to see how the index faired following a period in which 5 out of 6 days were north of 1%. The last time the index saw this occur was in November of 2020, while each of the other three dates followed significant downturns in the market. Looking at the forward returns, we observed that 1-week later the index pushed higher on average, while 2-weeks later the index appeared to pullback slightly in 2 out of the 4 occurrences. Looking out 1-month and further returns were positive on average and generally positive on individual occurrences, except for 3-months following the October 1974 date. 6- and 12-months out, SPX gained 16.97% and 26.67% on average lending one to think that the long-term outlook is positive following 5 out of 6 days being north of 1%. While we don’t know for sure we could see the index move higher from here, the historical tendency is nothing to be ignored.    

https://www.nasdaq.com/solutions/nasdaq-dorsey-wright


2. Top 100 Corporate Pensions Most Funded Since 2008

Zerohedge blog

 

https://www.zerohedge.com/markets/forget-retro-fitted-narratives-nomura-warns-equities-are-still-flows-positioning-story


3. Netflix and Disney have Given Up Nearly All of their Pandemic Gains

 

Barrons

https://www.barrons.com


 4. Fertilizer Price Index Up 3x…Breaks Out to 20 Year Highs

Commodities:  Next, fertilizer prices and shares of companies in that sector have been surging.

Source: @AndreasSteno

The Daily Shot https://dailyshotbrief.com/the-daily-shot-brief-march-23rd-2022/


5. With Huge Spike in Used Car Prices….Here is Perspective of Prices Since 1980

Jack Ablin Cresset–The price of a new automobile, adjusted for inflation, is more than 43 per cent cheaper than it was in 1980, according to Bureau of Labor Statistics data. Services costs, for work that generally couldn’t be outsourced, rose more than 26 per cent relative to inflation over the same period. The favorable blend of restrained inflation and higher productivity helped lower America’s inflation rate from a whopping 12.5 per cent at the end of 1980, to a scant 1.4 per cent by 2020. Today’s 7.9 per cent inflation rate is the highest reading since the early 1980s.

Graph 3, Market Update, 03.15.2022

https://cressetcapital.com/post/globalization-40-years-on-adjustment-not-reversal/


6. Poll of 132 Oil and Gas Firms….Why are you restraining growth?

https://twitter.com/JosephPolitano


7. Canada Increasing LNG Output by 300,000 Barrells …Canada has Cleanest LNG


8. Large Investors Own 6% of U.S. Homes….Small Investors 27%…..Traditional Homeowners 67%

Large investors (own 10+ homes) purchased 6% of the homes in the country in January.
Small investors (<10 homes) purchased 27%.
Owner occupants purchased 67%.
The total investor share (33%) is a 5% larger market share than the average over the last decade.

No alternative text description for this image

https://www.linkedin.com/in/johnburns7/


9. Rising Rents Huge Component of Inflation.

Pew Research

https://www.pewresearch.org/fact-tank/2022/03/23/key-facts-about-housing-affordability-in-the-u-s/ft_22-03-23_housingaffordability_2a/


10. How to Decide What to Work On

Working hard all day doesn’t matter if it’s on the wrong tasks. The most critical factor in your productivity is what you decide to work on.

The question of what to work on is under-discussed. There’s plenty of advice on getting work done: setting up good habits, creating productivity systems, project management and planning. Yet, there’s relative silence for the crucial decision of which projects to pursue.

Choosing what to work on is hard because you can’t know in advance how any project will turn out. If you knew what perspective was most worthwhile, the right choice would be obvious. It would simply be a matter of doing the work. But these choices exist outside of any particular vantage point. We don’t have this information, and we have to choose anyway.

Ruling Out, Ruling In

A fundamental distinction is between having too many ideas or too few.

Too many ideas creates the problem of prioritization. You need to find reasons to disqualify projects. Evaluate your current activities and cull those that don’t make the cut.

Too few ideas can leave you feeling stuck. You want things to be better, but nothing pops out as worth pursuing. As a result, you put half-hearted efforts into tasks you’re not sure will work.

The “right” quantity of ideas isn’t a given. Instead, it’s a mental threshold for what’s worth pursuing. Dialing it up forces you to focus, and dialing it down lets you explore more options.  Plans often generate ongoing or future commitments. Thus, there’s often a lag between when you realize your threshold is off and when you can adjust it. Whether you’re set too far in one direction may feel obvious, even as you struggle to change it.

Both reason and intuition factor into your settings here. Feeling burned out or bored can cause you to adjust. But so can looking at your calendar and realizing, actually no, you can’t take on another client.

Coming Up With Ideas

The origin of ideas often seems mysterious. How can you force yourself to have a creative spark?

Except, in practice, most ideas—even groundbreaking ones—tend to be derivative or incremental. Even ideas that look original usually start out as a permutation on something already extant. Given background and context, even the most radical suggestions look like incremental steps.

This suggests that the best way to have better ideas is to expose yourself to more ideas. Which ideas? The ones used by people who are accomplishing things in roughly the direction you’d like to go.

Find people who are achieving the sorts of success you’d like for yourself then ask what type of projects they pursue. If you can extract the general idea behind these projects, and why they worked, you’ll narrow the space of possibilities considerably.

Making the Choice

A threshold for action is a crude way for filtering your projects. Advice to “do less” or “do more” misses the crux of the issue. Which efforts should you drop? Which ones should you undertake?

Having adjusted your threshold, and hopefully immersed yourself in a range of possible idea templates, now you need to cross over from a notion to a commitment.

A commitment can come from either direction. You can lower your threshold for action, generate a new idea and decide to pursue it. Or you can tighten your standards and commit to focusing on a pursuit you are already engaged in. Either way, the decision remains.

I find it useful to separate deciding from executing. The act of deciding needs to be realistic, perhaps even somewhat pessimistic. Executing that decision needs an almost irrational confidence and headstrong spirit. Failure to separate the two tends to result in impulsive choices and irresolute action.

For instance, the decision to start a business needs to be clear-eyed about the risks, your plan, and your odds of success. However, once you start that business, you need to be zealously committed to doing everything you can to make it work.

One way to help manage these two conflicting mental states is to separate them in time. Make a decision, and don’t let yourself change it for a month. The delay forces you to stop second-guessing yourself when you need to work. The nearby offramp helps you avoid worrying that you’re committing indefinitely to a potentially ruinous choice.

Finding a Path and Walking It

Much of life boils down to figuring out a path for yourself and then getting yourself to actually walk it.

It’s easy to dismiss either half of the problem. If the path seems obvious, you might think everyone who fails to walk it is simply lazy. Or perhaps you can’t find the path, so it seems everyone walking forward is a delusional striver.

But both halves of the problem interact. We often fail to stick to our plans because we’re not confident in our chosen path. And we fail to find paths forward because we don’t try enough things to find our footing.

Decision and action are always combined. The challenge is taking the next step.

Scott Young https://www.scotthyoung.com/blog/