Category Archives: Daily Top Ten

1. Warren Buffett vs. S&P 25 Year Chart

Slight lag vs. S&P

From Abnormal Returns Blog www.abnormalreturns.com

2. History of Returns Post 5 Months of Gains

3. Returns During Fed Pause Phases

From Dave Lutz at Jones Trading
Stock performance is typically varied during the pauses, but positive on average, Bloomberg notes.

4. PARA Takeover Bids…Stocks Still Negative YTD 2024

5. Starbucks Stock Now Negative 5-Year Return

6. Defensive Utility Sector +5% One Month

XLU 50day thru 200day to upside beginning of April

7. Gold vs. Yen

Gold’s Rise Against the Yen

Source: Bloomberg From Zerohedge www.zerohedge.com

8. Active Managed ETF Growth

Active ETFs Activate: On the other hand, active ETFs have taken off. Goes to show, you can either bemoan and suffer from a new dynamic such as the rise of passive investing and ETFs, or ride that trend.

Source: mahmood noorani

9. Russian energy giant Gazprom reported its first annual loss in 24 years amid Western sanctions

Business Insider
A sign advertises Russia’s natural gas giant Gazprom, in Moscow, Russia. Alexander Zemlianichenko/AP

Russian energy giant Gazprom posted its first annual loss since 1999.
The West’s ban on Russia’s energy exports, combined with macro factors, dragged profits.
The oil company also projected fewer investments for 2024.

Russian energy producer Gazprom Group reported its first annual loss in 24 years, with restricted energy flows to Europe a leading factor in dragging down earnings.
Gazprom, which is majority-owned by the Russian government, saw a net loss of 629 billion rubles, equivalent to about $6.84 billion last year, marking a sharp drop from 1.23 trillion rubles in 2022, according to an earnings report published Thursday and first reported by Bloomberg.
It marks the first annual net loss for the energy giant since 1999, largely due to restricted flows to Europe and lower fuel prices following the West’s sanctions over Moscow’s war against Ukraine.
The market reacted by sparking a 4.4% drop in the company’s share price, the largest decline in more than a year.
Gazprom’s report also revealed a 40% drop in gas revenue to 4.88 trillion rubles ($52.6 billion USD). International Energy Agency data indicates that gas flows to Europe hit their lowest levels since the early 1970s.
The financial loss was also driven by broader energy market factors, including plunging gas prices, lackluster demand, and overflowing inventories.
Meanwhile, Gazprom has outlined investments totaling 2.57 trillion rubles for this year, indicating a reduction of nearly 16% compared to its projections for 2023.
Once a booming market for Russia’s gas exports, Europe has placed hefty restrictions on the country’s energy outflows to the continent since the war in Ukraine started. Russia has managed to reroute much of its energy flows to other countries such as China and India.
https://markets.businessinsider.com/news/commodities/russia-oil-gas-energy-flows-gazprom-sanctions-ukraine-war-putin-2024-5?_gl=1*eglwm7*_ga*MTcwNTA0MjU4My4xNjYxMzU3MTY0*_ga_E21CV80ZCZ*MTcxNDY3NTUxMS4xMDUuMS4xNzE0Njc3OTQxLjYwLjAuMA..

10. Warren Buffett’s warning about AI 🧐

SAM RO, CFA
The See’s Candies exhibit at Berkshire Hathaway’s 2024 annual meeting. (Source: Sam Ro)
OMAHA, Neb. — Warren Buffett, CEO of Berkshire Hathaway, has mixed feelings about artificial intelligence (AI).

“It has enormous potential for good and enormous potential for harm,“ Buffett said at Berkshire’s annual shareholders meeting on Saturday.
He shared a personal experience with AI that had him shook.
“Fairly recently, I saw an image in front of my screen,” he said. “It was me, and it was my voice and wearing the kind of clothes I wear. My wife or my daughter wouldn’t have been able to detect any difference. And it was delivering a message that in no way it came from me.”
He explained: “When you think about the potential for scamming people… Scamming has always been part of the American scene. If I was interested in investing in scamming— it’s gonna be the growth industry of all time.”

Warren Buffett speaks at the 2024 Berkshire Hathaway shareholder meeting. (Source: CNBC)
Buffett drew comparisons to the emergence of nuclear weapons.

“We let the genie out of the bottle when we developed nuclear weapons, and that genie has been doing some terrible things,“ he said. “The power of that genie scares the hell out of me. And I don’t know of any way to get the genie back in the bottle. And AI is somewhat similar. It’s part of the way out of the bottle.”
Warren Buffett and Charlie Munger bobble heads. (Source: Sam Ro)

In the context of investing, analysts have mostly spoken bullishly about AI thanks to the potential for improving productivity across many sectors. TKer has written about this narrative here, here, and here.
Asked later about how Berkshire’s own businesses could be disrupted by AI, Buffett noted the technology would affect “anything that’s labor sensitive” and that for workers it could “create an enormous amount of leisure time.”

Greg Abel, vice chairman of Berkshire’s non-insurance businesses, added that “we’re in the early innings” of understanding the impact.

Buffett has taken this tone before 👂

Buffett, arguably the most successful stock market investor in history, is well-known for his persistent bullish long-term view of the U.S. economy and stock market.
“I understand the United States’ rules, weaknesses, strengths,” Buffett said on Saturday. “I don’t have the same feeling generally around the world. And the lucky thing is that I don’t have to.”
But he’s no stranger to expressing caution on matters with significant downside risks — especially in regards to technology.

For example, Buffett has been vocal about his concerns about cyber attacks. Here’s some language I shared in the March 5, 2023 issue of TKer:

“There is, however, one clear, present and enduring danger to Berkshire against which Charlie and I are powerless. That threat to Berkshire is also the major threat our citizenry faces: a ‘successful’ (as defined by the aggressor) cyber, biological, nuclear or chemical attack on the United States.“ – Buffett in 2016
“I don’t know that much about cyber, but I do think that’s the number one problem with mankind.” – Buffett in 2017
“Cyber is uncharted territory. It’s going to get worse, not better.” – Buffett in 2018
“I think cyber poses real risks to humanity.” – Buffett in 2019

As you can see, this dire tone from Buffett is not new.
What’s important is that it has never stopped him from being bullish on stocks for the long run.

Zooming out 🔭
Emerging technologies like AI come with risk, as they have the potential to scale up bad behavior in the same ways they’ll scale up good behavior.

Broadly speaking, you can never be certain about how risky anything is. And even worse, there are limits to how much you can hedge a risk before you eliminate the potential for a reasonable return.
Unfortunately, this is just the nature of investing in stocks. And it speaks to why returns in the stock market are relatively high — investors demand a high premium for the uncertainty tied to taking on the risk.

“Nothing’s sure tomorrow,” Buffett said at last year’s meeting. “Nothing’s sure next year. Nothing is ever sure in markets or in business forecasts or anything else.”

We can only hope that history repeats, and the good outcomes far outweigh the bad outcomes — as they always have.

https://www.tker.co/p/warren-buffett-artificial-intelligence-warning Found at Abnormal Returns Blog www.abnormalreturns.com

TOPLEY’S TOP 10 May 02 2024

May 2, 2024

Matt Topley

Daily Top Ten No Comments

1. Market Leader Semiconductor Index had -17% Correction

Semis -17% before bounce rolled over at 50-day

2. U.S. Electricity Generation

3. Natural Gas Fund $140 to $14

4. Trade Natural Gas at Your Own Risk

5. NFLX -15% Correction

6. These Corrections Have Broken Excessive Optimism Sentiment Streak

Excessive Optimism Streak Broken by Ed Clissold of Ned Davis Research, 5/2/24

Key Takeaways

The NDR Crowd Sentiment Poll exited its excessive optimism zone for the first time in 20 weeks, the third-longest run on record.
Long optimism streaks have become more common and in clusters.
S&P 500 returns have been mixed after optimism periods have ended.

https://www.advisorperspectives.com/commentaries/2024/05/02/optimism-streak-broken-ned-davis-research

7. Yield Spreads Not Widening

Jack Ablin Cresset
The yield differential between high-yield bonds and US Treasuries is the narrowest since 2007, according to Credit Suisse data. This suggests that lenders are more comfortable with lower-quality borrowers, believing that higher inflation makes debt repayment easier.

8. Wages vs. Inflation Post Covid

https://ritholtz.com/

9. 81% of Americans Unfavorable View Toward China

10. Richard Branson’s Best Advice on Hiring the Right People Is a Master Class in Leadership-INC

EXPERT OPINION BY MARCEL SCHWANTES, INC.

Forget the impressive resume and the college degrees. Branson looks for something else when hiring his best people.

Richard Branson is famous for his innovative ideas and adventurous spirit. Branson’s signature blond hair and love for risky stunts make him an unconventional leader who isn’t afraid to challenge the status quo.
The founder of the Virgin Group has shared various leadership lessons over the years, including his advice on whom to hire and place in leadership roles. He told Forbes years ago:
I’m quite involved in hiring for leadership and I look to hire my weaknesses. Personality before [resume]. A person who has multiple degrees in your field isn’t always better than someone with broad experience and a wonderful personality.

What exactly is a ‘wonderful personality’?

That’s the million-dollar question. Some confuse skills for traits or vice versa. While you can argue that traits are inherent qualities that define a person’s personality, behavior, and attitudes, most leadership experts will tell you that they can be learned.
That said, the most desirable (personality) traits you’ll want to look for in a leader can skillfully be applied on the job to achieve great results. So what are they? What will lead to effectiveness and success on the job these days?
According to Harvard Business School professor Linda Hill, one of the world’s top experts on leadership, there are eight essential qualities to look for. She tells Harvard Business Review, “Leadership is a process of self-development. No one can teach you how to lead; you need to be willing and able to learn how to lead. Mostly we learn from our experiences and facing adversity.”
Of those eight qualities Hill has studied (which you can review in the HBR article), I’ll cover three here that I think Richard Branson would certainly consider for his own leaders:

1. Authenticity

Merriam-Webster announced late last year that “authentic” was its word of the year for 2023. It’s an overused buzzword that has lost its meaning, sure, but considering the current era of artificial intelligence and disinformation, where the distinction between what’s real and what’s fake has become increasingly ambiguous, it’s not a bad choice.
What does the word mean for leadership? I’ll break it down like this: Being authentic in human interaction means showing up with your best self. Unfortunately, sometimes, we choose to hide our true intent or motives to achieve a specific outcome. We wear a mask and try to impress others by becoming who we are not.
You might have heard the phrase “fake it till you make it.” However, this approach leads to short-term gains. It can have severe consequences that damage your reputation and relationships.
Perhaps we put up a front and avoid our authenticity because we’re afraid. We might fear failure, feel ashamed of our true identity, or feel that we’ve been playing a role in life.
By being real with yourself, dropping the masks, and walking in the path of authenticity, you’ll soon notice a drastic difference in who you attract and how others treat you, especially employees.
How to be more authentic
The brave thing to do is to first ask for feedback from trusted peers. Hill recommends asking, “Can you give me some sense of what I should keep doing, start doing, and stop doing?”
My own advice as a leadership coach is to be genuine and open about your emotions. This can be shown through statements like, “I’m not sure what direction we should take as a team in this situation. I need some guidance from you (team members).” This creates an environment of honesty and authenticity, which should be modeled and encouraged by leaders in organizations. Being emotionally honest and authentic sets an example for your team members to do the same, leading to stronger connections and more sincere conversations.

2. Adaptability

Do you adapt well to change and adjust easily to challenging situations? This is an important question you should ask yourself as a leader. Adaptability is a hallmark trait of people with high emotional intelligence. They recognize when to stay the course and when it’s time for a change. In other words, when one strategy is not working, high-EQ leaders evaluate and determine a different course of action. In practical terms, leaders with high EQ know how to handle unhappy customers, disgruntled co-workers, or bosses above their line of sight not pleased with their work.
How to boost your adaptability
It’s important to engage in activities that require you to be adaptable, says Hill. This means taking on tasks that may be outside of your usual area of expertise. For example, Hill suggests that if you work in finance, you could try working with the marketing team to broaden your skills. Basically, challenge yourself in new environments with diverse groups of people.

3. Resilience

Similar to adaptability, resilience means being able to adapt to challenging situations in life. Resilient leaders demonstrate unwavering emotional stability under stress, effortlessly adapt to ambiguity, and handle setbacks with poise.
We know that setbacks and failures are inevitable, so today’s leaders and innovators rely heavily on resilience to overcome adversity. Mistakes are a natural and important part of the learning, growing, and innovating process and can be flipped into advantages when embraced.
How to become more resilient
Working with a coach. Coached individuals are better equipped to manage and thrive during change and uncertainty because coaching strengthens their resilience. How leaders handle stress also plays a crucial role in determining their overall resilience. To enhance yours, some effective techniques include:
– Setting clear and specific goals
– Sharing worries, anxieties, and concerns with others
– Getting enough rest
– Balancing work and leisure time
– Practicing meditation
Going back to the beginning, it raises questions about which of these “traits” Richard Branson would value the most when identifying top leaders. He is known for hiring leaders whose strengths complement his weaknesses, but I find it hard to believe that any of these traits could be considered a weakness in one of the world’s most innovative and charming billionaires.
Now accepting applications for Inc.’s Best Workplace awards. Apply by February 16 for your chance to be featured!
Like this column? Sign up to subscribe to email alerts and you’ll never miss a post.

https://www.inc.com

TOPLEY’S TOP 10 May 01 2024

May 1, 2024

Matt Topley

Daily Top Ten No Comments

1. Earnings Surprises Highest Since 2021

Equities: In the current earnings season, EPS surprises have been the highest since 2021 (so far).

Source: Morgan Stanley Research; @carlquintanilla
The Daily Shot Brief https://dailyshotbrief.com/

2. History of TSLA Drawdowns

Tesla Axes Supercharger Team-Bloomberg

https://www.bloomberg.com/news/articles/2024-04-30/tesla-axes-supercharger-team-in-blow-to-other-/automakers?srnd=homepage-americas&sref=GGda9y2L

3. Starbucks Trading Below $77 Pre-Market…-30% from Highs

Starbucks heading for 2022 levels….50 week will be below 200 week today

4. United Health UNH has More Revenue than Alphabet and Microsoft this Year…CEO Before Congress Today

UNH Sideways for 2 years

Morningbrew

HEALTH

Congress to question if UnitedHealth is too big to fail

If you’ve ever shaken your fist and yelled at a bill from UnitedHealth, you may have more in common with members of Congress than you think.
Lawmakers in Washington are prepared to grill UnitedHealth CEO Andrew Witty in two congressional hearings today, months after a cyberattack on a subsidiary of the healthcare giant, Change Healthcare, rattled the industry and left pharmacies, doctors, and hospitals in the dark. Change processes roughly half of all Americans’ medical claims.
Congress wants Witty to clarify how UnitedHealth handled the breach of patient data. But beyond that, it wants to investigate whether the company—the nation’s largest private health insurer—has grown too big and taken on too much risk.
Healthcare with a hefty profit
However big you think UnitedHealth is, it’s bigger than that:

With a market cap of nearly $450 billion, it’s the fourth-largest company in the US by revenue this year, beating out Alphabet and Microsoft.
The company is eyeing a $24.7 billion profit in 2024.
One analyst estimated that more than 5% of US GDP flows through UnitedHealth’s systems daily.

That could all end soon. Throughout most of UnitedHealth’s light-speed growth and acquisition spree, it’s drawn little scrutiny from regulators. But the winds are changing: The DOJ launched an antitrust investigation into the company in February, and today’s hearings show lawmakers are digging in. According to the Washington Post:

Sen. Ron Wyden, chair of the Senate committee interrogating Witty today, plans to ask about the company’s practices, like prior authorization.
At a hearing earlier this month, Rep. Buddy Carter said the company “needs to be busted up.”

As if that wasn’t spicy enough…some lawmakers are asking the SEC to investigate suspiciously timed stock sales by UnitedHealth execs that occurred shortly before news of the antitrust investigation went public.—CC
https://www.morningbrew.com/daily

5. Presidential Election Years and S&P Returns

Nasdaq Dorsey Wright

6. U.S. vs. Europe Stocks…Pre-2009 vs. Post 2009

7. The Increase in U.S. Treasury Issuance

8. Inflation for Vehicle Repair….Add to home and car insurance inflation

Wolf Street The Consumer Price Index for motor vehicle maintenance and repair leaped in March and was up by 8.2% from a year ago, and by 37% from four years ago. CPI reflects cost increases that consumers face. For fleets, cost increases, including for collision damage repairs, were similar.

https://wolfstreet.com/2024/04/29/sagging-used-car-prices-spiking-maintenance-repair-costs-and-a-post-bankruptcy-propaganda-coup-turn-toxic-for-hertz/

9. U.S. Spending on Home Renovations

From Irrelevant Investor Blog

https://theirrelevantinvestor.com/2024/04/24/animal-spirits-a-healthy-pullback/

10. Average Wealth for Americans Under 40

Emily Peck Axios

https://www.axios.com/2024/04/29/us-millenial-wealth-pandemic-economy

TOPLEY’S TOP 10 April 30 2024

April 30, 2024

Matt Topley

Daily Top Ten No Comments

1. Tesla +35% in 5 Days….Retail Investors Bought $15B this Year

The retail crowd bought the dip in Tesla this year in a big way.
Retail investors bought a net $15.2 billion of Tesla this year through Dec. 16, according to Vanda Research data.
That’s a record for Tesla, the firm said, well ahead of the $5.6 billion of net buying over 2020 and 2021 combined.
Tesla dethroned Apple as the most-purchased stock by retail investors this year.
Investors betting against Tesla had a lucrative 2022. Investors shorting the stock are sitting on a collective $15 billion of gains this year, according to S3 Partners. Shares of Elon Musk’s electric vehicle-maker are down about 60% this year.
WSJ By Jack Pitcher

https://www.wsj.com/livecoverage/stock-market-news-today-12-21-2022/card/retail-investors-bought-more-tesla-than-ever-this-year-mMHQNpikCWBq4e3QELJm

2. How Big Data Centers Are Slowing the Shift to Clean Energy: 70% of Global Internet Traffic Passes Thru Virginia Data Center Alley

WSJ

The cutting edge of technology is driving the power grid back to the 19th century.

An explosion of so-called hyperscale data centers in places such as Northern Virginia has upended plans by electric utilities to cut the use of fossil fuels. In some areas, that means burning coal for longer than planned.
These giant data centers will provide computing power needed for artificial intelligence. They are setting off a four-way battle among electric utilities trying to keep the lights on, tech companies that like to tout their climate credentials, consumers angry at rising electricity prices and regulators overseeing investments in the grid and trying to turn it green.

Ground zero for the fight is Northern Virginia’s “Data Center Alley.” About 70% of global internet traffic passes through the area’s data centers. A spider web of power lines connecting data centers to the grid crisscross neighborhoods and parks. More are coming.

https://www.wsj.com/business/energy-oil/how-big-data-centers-are-slowing-the-shift-to-clean-energy-44ef4145?mod=itp_wsj

Precedence Research

https://www.precedenceresearch.com/hyperscale-data-center-market

3. China Large Cap Outperforming U.S. in 2024…FXI 12.35% vs. S&P 7.81%

4. Nike Holding Above 2022 Sell-Off Lows

5. Dominos Pizza New Highs

50 week thru 200 week on long-term chart

6. Venture Capital Valuations Still Above 2019 Levels

Cambridge Associates

2024 Outlook: Private Equity & Venture Capital

7. 800 ETFs Have Closes Since 2020

Bloomberg Katie Greifeld
Top-Heavy The nearly $9 trillion US ETF industry is famously top-heavy, with BlackRock Inc. and Vanguard Group accounting for about 60% of US assets. A similar dynamic is unfolding in the booming active ETF market.
Morningstar Inc. published a report this week that showed that 74% of the nearly $630 billion in US active ETFs is controlled by the top 10 issuers in a field of about 320 firms. In fact, Dimensional Fund Advisors and JPMorgan Asset Management are responsible for about 36% of total active ETF assets alone, data compiled by Bloomberg show.

https://www.bloomberg.com/news/newsletters/2024-04-26/binc-s-interest-rate-exposure-wzrd-and-chai-to-shut-down?utm_content=markets&cmpid%3D=socialflow-twitter-markets&utm_medium=social&utm_source=twitter&utm_campaign=socialflow-organic&sref=GGda9y2L

8. Global Tik Tok Users 1.6B

What’s the Big Data Blog

https://whatsthebigdata.com/tiktok-statistics/

9. Cancer Mortality Rates Rolling Over

Food for Thought: Cancer mortality rates

Source: Our World in Data
The Daily Shot Brief https://dailyshotbrief.com/

10. Putin’s Losses

https://www.the-sun.com/news/11217826/putin-ukraine-russia-losses-tanks-soldiers-aircraft-intelligence/

TOPLEY’S TOP 10 April 29 2024

April 29, 2024

Matt Topley

Daily Top Ten No Comments

1. GOOGL New Highs

2. U.S. Banks $400B in Unrealized Losses

3. 43% of U.S. Market Cap Reporting Earnings this Week

Twits note the breakdown of earnings in the weeks to come.

4. Another Small Cap vs. Large Cap Stock Chart

Small cap stocks are about as cheap as they get versus large caps, says Callum Thomas at Topdown Charts, who provides the image below. “All those stories and narratives about Large Growth are already in the price, and then some. Longer-term contrarian minded investors should take note,” says Thomas.