Category Archives: Quarterly

Topley’s Top 10 – January 21, 2022

1. 25 Million New Brokerage Accounts ..Retail Goes All In…

Michael Batnick Points Out the Retail Frenzy …2020 and 2021 Flows Dwarf 2018-2019

2. After Record S&P vs. Emerging Gap in 2021…..Emerging Markets Outperform to Start 2022

Emerging markets at record low fundamental valuations vs. U.S. ….Bounce to start year.

3. Short-Term Bonds Not So Safe….Inflation Adjusted Yields -6-7%

How Safe Assets Became Investors’ Biggest Risk–ByAllison Schrager

4. Bond Bombs.

AGG…50day thru 200day to downside….gap down on price.

BSV Short-Term Bond Index…

5. TIPS-Inflation Not Helping

TIPS Roll Over

Corporate Investment Grade….50day thru 200day to downside.

6. Long Gold vs. High Yield?

“Dave Lutz at Jones The biggest ETF tracking junk bonds suffered the third-largest daily outflow in its 15-year history as credit markets sold off amid prospects for higher interest rates. Investors pulled $1.3 billion from HYG Tuesday, the most since February 2020 – It has tested the $85.25 support level 4x in the last month, going to be very key for a hold there.”

This chart shows Gold versus High Yield Bonds reversing in December…Watch for breakout.

7. The only time in its history NFLX has been cash flow positive is when Covid shut down everything. And now it has pulled 5 years of demand forward


8. Brevan Howard “Massive Crypto Push”

Brevan Howard Launches First Digital Assets Fund in ‘Massive’ Crypto Push

The firm’s inaugural crypto strategy started trading earlier this month with a sizeable amount of internal capital

By Michael Bodley/January 18, 2022, 4:00 pm EST

  • The firm’s co-founder, Alan Howard, has made crypto investments with his personal wealth for several years
  • BH Digital, the asset manager’s crypto division, has 25 employees and continues to grow

Hedge fund firm Brevan Howard has launched its first dedicated crypto fund with 10 teams of portfolio managers and bold fundraising aspirations, according to two people familiar with the matter.

The flagship vehicle, BH Digital Multi-Strategy Fund, started trading earlier this month with a sizable amount of internal capital, sources said. The plan is to start broadly raising outside money in the second quarter — and expectations are that fundraising haul would amount to at least several hundred million dollars and perhaps more than $1 billion.

Sources were granted anonymity to discuss sensitive business dealings. A spokesperson for Brevan Howard declined to comment.

The fund is the inaugural vehicle of BH Digital, the new Brevan Howard unit dedicated to the global macro firm’s crypto investments. The division now has 25 employees overall and is scaling. It represents one of the largest — if not the largest — commitments by a legacy asset manager to digital assets.

“Brevan is making an absolutely massive push into crypto,” one source said.

9. Coffee ETF +100% From Dec. 2020

10. The Do’s and Don’ts of Tough Conversations

By Sarah Clark | September 20, 2017 | 

Imagine for a moment that you’re about to sit down with an employee to discuss exciting new changes to your company. Perhaps you’re bubbling with enthusiasm, sure that she’ll feel the same as you. Then you break the news and you’re met with a blank stare, a passive sigh or even an angry rebuttal.

No matter how prepared you might think you are, some conversations just won’t go the way you think they will. But that doesn’t mean you should give up and leave all tough conversations to work themselves out. After all, in an online survey of 1,000 employees, 91 percent said that communication issues drag executives down. The data revealed that most leaders were missing critical opportunities to engage that could position them as more trustworthy to their employees.

As someone who’s been managing others for more than 25 years, I’ve seen the value of honest, open communication between an employee and employer, but I’ve certainly stumbled along the way. Although these communication mishaps aren’t my proudest moments, they’ve taught me valuable lessons as a manager, including how to repair relationships and have more constructive conversations. I’ve picked up on a few important do’s and don’ts on my journey, such as:

1. Do throw the script away.

Preparing for a tough conversation is imperative to its success. There’s a big difference between jotting down notes and drafting a script, though. The latter won’t do you any good.

A difficult conversation tends to go best when you think about it as just a normal conversation,” says Holly Weeks, author of Failure to Communicate. Because your counterpart doesn’t know his or her lines, the conversation can become awkward and artificial. For a more natural, productive conversation, opt for a few bullet points to address, and be flexible about the ensuing conversation.

2. Don’t dance around the issue.

It is important for you, as a manager, to be as explicit as possible during difficult conversations. Begin by declaring what you hope to achieve during this meeting and asking the employee to do the same. Then tackle the topic at hand, as well as the thought process behind it.

3. Do put yourself in the other person’s shoes.

As humans, we all possess preconceived notions, but holding onto those assumptions during tough conversations is a mistake. For example, a few years ago, I led a team that we needed to restructure. We needed to go much deeper in areas where we were the best and for which we were known as the experts, but this also meant letting go of some things that weren’t as important. So I had to have several conversations with employees on how their roles would shift. One conversation was a huge learning experience for me.

I was so confident in the direction of our group that I failed to explain fully one employee’s role and how it was changing. I assumed she would understand the importance of the shift because she was a senior leader, but I failed to articulate how she fit into the bigger picture specifically. Because of this, she didn’t understand her importance to the company and the value she added.

It takes two people to have a conversation, so consider your counterpart’s perspective. Think through the issue at hand from your point of view. Then reflect on what your employee thinks the issue is. If you can’t answer the second question, ask him or her directly. When you work to empathize with your employee, she’ll be more open to having a productive conversation.

After speaking with my employee about the structural changes, I picked up on her social cues and asked her to tell me about how she was feeling. That’s when I realized I needed to put myself in her shoes. So I explained how shifting some of her workload would actually allow her to dive deeper into her area of expertise. After I did so, she became one of the biggest champions in the department for these changes.

4. Don’t get defensive.

It might be tempting to act defensively or even make yourself the victim during a difficult discussion, but you should avoid both of these tactics at all costs. Deflecting blame or making statements such as, “This is really difficult for me!” or “I feel terrible about this!” during a difficult conversation only makes you appear dismissive of your employee’s needs. Instead, acknowledge your role in the discussion and how you’ll work through the issue in collaboration with your employee.

5. Do show a little compassion.

Difficult conversations might not be pleasant, but compassion helps you deliver difficult news in an honest, fair manner. Ultimately, my restructuring conversation was successful because I responded to the employee’s needs with compassion. Once I understood why she was concerned, I was able to sympathize and respond accordingly. Keep in mind that it’s important to not only respond to employees’ concerns as they crop up, but also to stay ahead of them to reassure your employees that they’re valuable teammates.

Having a tough conversation with your employee is never easy or fun—especially when that employee reacts differently than you’d anticipated. But it’s still important to reflect on these experiences. After a draining conversation, take some time to consider what went well and what did not, as well as what you can do differently in the future. In conjunction with transparency, active listening and the right attitude, self-reflection will help you tackle difficult conversations head-on.

Sarah Clark

Topley’s Top 10 – January 20, 2022

1. S&P 500 correction now 5.5%, biggest since November 2020.

Jim Bianco Research

2. Small Cap -16% from Highs

IWM small cap 50day going thru 200day to downside on chart

3. Short-Treasury ETF Only Back to October Highs

TBF ETF hit resistance at October high

4. Here’s what surging bond yields say about S&P 500 returns in next 6 months

William Watts–Marketwatch

“We have found that the current yield as a percentile of its recent range, along with the pace, or rate of change it has shown over the recent path has a big impact on the forward returns” for the S&P 500 SPX, -0.97%, wrote Jeff deGraaf, founder of Renaissance Macro Research, in a Wednesday note (see chart below).


“The lower the level of rates and the faster the collapse in those rates, the better for stocks out [six months] forward. The higher the level and the faster the surge in rates, the worse the returns for the SPX going out” six months, deGraaf wrote.

With the 10-year yield having broken above resistance at 1.77%, the pace of the advance has pushed RenMac’s yield impact model into its highest historical decile, “and one that pressures forward equity returns historically,” he said, as shown in the bottom third of the chart.

5. Peloton Insiders Dump Half A Billion Dollars In Stock Before Crash


Company executives and insiders unloaded $496 million worth of stock in 2021, right before and during the decline that began in early 1Q21. The stock sales mainly were done above $100 and were part of 10b5-1 plans.

Insider selling began as Peloton became a household name during the pandemic as millions of people canceled their gym memberships and bought a bike or treadmill. Growth prospects looked great during the first year of the pandemic as demand was pulled forward. Executives and insiders knew demand would not last forever as shares traded at rich multiples, even at one point trading at $170 per share in early 2021.

PTON $180 to $31

6. Grayscale Bitcoin and Ethereum Trusts -50% Corrections from Highs

GBTC Bitcoin Trust

ETHE Ethereum Trust

7. Traders Bet That Oil at $100 Is a Question of When, Not If

Bloomberg Andrew Janes and Serene Cheong

Demand is roaring, with spot market cargoes being snapped up at sharply higher premiums. It’s the same in the product space. Middle-distillate stockpiles at the Asian energy hub of Singapore have fallen to the least since 2013. The world is short of diesel, and even jet fuel — the oil product hit hardest by the pandemic — is coming back strong as long-distance air travel starts to resume. With the exception of a major virus outbreak in China (see below) or a scary new strain emerging, it’s hard to see a demand reversal.

No Supply Buffers

Global crude stockpiles finally fell back to pre-pandemic levels in early-January, according to oil analytics firm Kayrros, with drawdowns led by sharp declines in China and the U.S., where inventories are at the lowest since late-2018. The tightening supply backdrop has pushed oil’s market structure deeper into backwardation, where prompt oil costs more than longer-dated contracts, further reducing the incentive to store crude for later sales.

The market currently has no supply buffers, making it more susceptible to price spikes driven by supply shocks, according to Amrita Sen, chief oil analyst at industry consultant Energy Aspects Ltd. “When you have buffers, small outages like what we have seen over December and January matter a lot less,” she said in a Bloomberg TV interview. “But we don’t have that luxury.”

See also: Dwindling OPEC+ Spare Capacity Sets Oil Up for Sizzling Summer

OPEC+ Struggles to Pump More

OPEC+ has officially been restoring output at the rate of 400,000 barrels a day each month. But in reality, the alliance isn’t managing to get close to that target. African members, in particular, are struggling to ramp up production, with OPEC only adding 90,000 barrels a day in December as a supply boost by Saudi Arabia was offset by losses in Libya and Nigeria. Even Russia, part of the wider alliance, has said it may only be able to deliver about half of its scheduled supply increases over the next six months.

Those supply issues look set to be a major factor pushing oil toward the $100-a-barrel mark. Iran could prove to be a wildcard, however, if the long-running nuclear talks come to fruition and pave the way for a resumption in official crude exports. But the market impact might not be that large, given that a lot of shipments from the Islamic Republic — as well as Venezuela — are already finding their way to China despite American sanctions.

U.S. Shale Response

While U.S. oil output has been increasing it’s still not enough to cool the price rally. Supply from the Permian Basin — American’s most prolific shale patch that spans Texas and New Mexico — rose to a record in December. Low production costs make the Permian the most appealing to drillers eager to cash in on rising prices, but higher overheads in other areas and supply-chain snarls have so far stifled a faster ramp-up in activity.

The number of working oil rigs in the U.S. has climbed back close to 500 from below 200 in the second half of 2020, according to data from Baker Hughes, but is still more than 200 below levels in March of that year. Shares of U.S. energy companies are surging as oil rallies, but the big question — which will be critical in determining if crude gets to three figures — is whether shale drillers will use the extra cash to boost production this year.

8. New Business Applications Have Been Unprecedented Since Start of Pandemic

United States: New business applications have been unprecedented since the start of the pandemic.

9. Scientists find potential cure for arthritis pain — by using electricity to regrow cartilage

STORRS, Conn. — A new method of regrowing cartilage by zapping the bone could bring pain relief to millions of people who suffer from arthritis. The technique, which researchers at the University of Connecticut have successfully tested on rabbits, uses small electric shocks to stimulate cartilage growth.

Normally, pads of cartilage cushion these areas, but they can become worn with age or through injury, causing the bones to rub and making everyday activities like walking incredibly painful. Currently, treatments involve replacing damaged cartilage with a healthy piece taken from elsewhere in the patient’s body or from a donor.

However, healthy cartilage is in short supply and removing it from other parts of the body could cause more problems. To address this, scientists have explored ways of getting the body to regrow its own healthy cartilage, but attempts have failed so far.

Now, scientists have discovered the missing ingredient for the cartilage to grow back properly — electricity.

“The regrown cartilage doesn’t behave like native cartilage. It breaks, under the normal stresses of the joint,” says co-author Dr. Thanh Nguyen in a university release.

Building a new ‘scaffold’ for arthritis patients
The researchers designed a “scaffold” — a technique doctors commonly use to repair or reconstruct missing or injured body tissue.

The new scaffold is made of a biodegradable material doctors use to stitch up surgical wounds, called poly-L lactic acid (PLLA). The substance is piezo-electric, meaning it produces a little burst of electricity when squeezed.

This way, when the patient starts walking and the joint moves, the movement generates a weak but steady electrical field, encouraging cells to grow into cartilage.

“Piezoelectricity is a phenomenon that also exists in the human body. Bone, cartilage, collagen, DNA and various proteins have a piezoelectric response. Our approach to healing cartilage is highly clinically translational, and we will look into the related healing mechanism,” says lead author Dr. Yang Liu.

Healthy cartilage started growing back and the test subjects did not need any other ingredients or stem cells, which can cause nasty side-effects. The team recently tested the scaffold in the knee of an injured rabbit, who could then exercise on a treadmill.

“This is a fascinating result, but we need to test this in a larger animal,” Dr. Liu says.

The researchers are hoping to study animals treated with the scaffolding for up to two years to make sure the cartilage is durable. Dr. Liu adds that young animals heal more easily than older ones. If the piezoelectric scaffolding helps older patients heal as well, their invention will truly be a bioengineering breakthrough.

The findings are published in the journal Science Translational Medicine.

South West News Service writer Tom Campbell contributed to this report.

10. How to Get (and Stay) Focused

Nir Eyal-Psychology Today
Here’s how to make the most out of your time and life.

  • Stop focusing on the problem and focus on finding a solution.
  • Learn to indulge in moderation.
  • Understand your triggers in order to get and stay focused.

This post is part 2 of a two-part series. You can read the first article here. Now that you have a clear picture of what causes people to lose focus, it’s time to learn the tools to overcome distraction. The following three tools can be used to help you regain your focus:

Complain Better

Emotional Intelligence 2.0 author, Dr. Travis Bradberry, argues that frequent complaining is a detrimental habit that can – and should – be broken. Complaining releases the stress hormone cortisol which negatively affects mood, reduces energy levels, and can ironically lead to more of the uncomfortable emotions we seek to escape through distractions.10

It’s time to learn how to complain better. Instead of complaining by focusing on the problem, Bradberry suggests adopting a “solution-oriented” approach.

Next time you feel the urge to complain about a looming deadline or difficult task, stop to consider the real source of the problem. For instance, ask yourself whether a solution to the problem of not wanting to do a task can be found in changing your perception of the work. If so, changing your mind proves much easier and healthier than trying to avoid it. A little self-awareness through introspection can go a long way.

Schedule Your Indulgences

In a 1992 study, researchers found that participants who cited being unable to lose weight despite dieting underestimated their daily caloric intake by 47%.11 These same participants overestimated their daily activity level by 51%. This study suggests that we have a tendency to overestimate behaviors we know to be good for us – how much we exercise, how healthy we eat, how often we clean our homes. We do the opposite when it comes to behaviors we know have detrimental effects – alcohol consumption, sugar intake, and monthly entertainment spending.12 While frivolous indulgences are satisfying in the short-term, they tend to move us away from what we really want. An episode of TV can feel relaxing and satisfying. But what happens after one, two, three…? One episode feels good. A whole series can fill you with regret. When it comes to indulgences, there’s nothing wrong with enjoying yourself. However, the key to moderation is intent. By setting aside time for the things likely to distract you, you ensure to control them instead of letting them control you. Instead of watching television or scrolling social media whenever the urge strikes, put that activity on your calendar, just as you would timebox any task. By planning ahead, you give yourself the peace of mind knowing you’ll soon have time for something fun, without being taken off track when you want to stay focused.

Master Your Triggers

In a George Mason University study, researchers found that distractions have a negative impact on the quantity and quality of our work.13 During the study, 54 participants were asked to outline and write essays on three different topics. Researchers found that interruptions negatively affected both the quality and quantity of work produced. This study supports research that distractions eat up time as well as decrease quality of work. According to one University of California study, it takes approximately twenty-three minutes to get back on track after being distracted.14 Triggers to distraction come in two categories – Internal Triggers and External Triggers. Getting and staying focused requires understanding and mastering both.

External Triggers: Cellphones, work colleagues, and even our kids, can all take us off track when we planned to focus. These triggers in our environment are called “external triggers.” External triggers are relatively easy to control – turn your phone off, logout of social media, put a sign on your computer monitor telling colleagues you’re busy, and so on. Internal triggers, on the other hand, are more difficult to recognize and correct. Internal Triggers: Internal triggers come from within. They are uncomfortable emotional states you seek to escape. Understanding the internal triggers driving you to distraction is critical to staying focused. When do you feel the urge to check your phone? Do you check it when you feel lonely? Bored? Anxious? Overwhelmed? If so, what’s the source of these negative emotions? Reflecting on why you get distracted and learning healthier ways to respond is an integral part of developing sustained focus. While you may be unable to control what you feel, you are able to put practices in place to help guide what you do in response to the desire to escape into distraction. Is your habit of falling out of focus when you feel a negative emotion helping or hampering your ability to stay focused? If you are honest about why you become distracted and understand your negative emotions, you can respond in a healthier way in line with your values and goals.

Becoming indistractable requires an understanding of why you lose focus and learning the skills to do as you say. Establishing healthy habits, breaking out of your unproductive routines, and making time for what matters help you stay focused. By learning not to complain, scheduling indulgences, and understanding your internal triggers, you can harness the power to stay focused.

Nir’s Note: This article was written in collaboration with the team.

Topley’s Top 10 – January 19, 2022

1. History of Nasdaq -10% Pullbacks

Dorsey Wright–There have been a total of 177 pullbacks for NDX since the end of 1992 (not including the current drawdown). The average peak to trough drawdown for those instances sits at -10.66% with a median of -9.68%. It took the Nasdaq 100 Index just over 19 days on average from each peak to reach the trough. Less than half of the pullbacks ultimately led to a 10% correction, with the average decline from the date of each pullback to each trough sitting at -4.53%. The index averaged just under 60 days between each 5% pullback, which would lead to six such events each year.

2. What Did 1999-2002 Internet Bubble Crash Look Like?

I don’t think we are in internet 1999 crash situation but interesting stuff from Barry Ritholtz

Barry Ritholtz–One of the things that made the March 2000-October 2002 period so pernicious was that the recoveries that followed every single drop subsequently failed. Starting in December 1999, there were drops of 15.5%, 10.7%, 31.6%, 21%, 13.9%, 26.8%, 27.1%, 28.2%, 48.9%, 44.8%, and 50%. Each one of these moves lower led to buyers jumping in to take advantage of discounts, only to see the a subsequent rally that failed. New lower lows occurred, with fewer dip buyers each time. This is how we eventually work our way towards what technicians call a sellers’ exhaustion.

3. Investors Buying Banks and Commodities

From Dave Lutz at Jones Trading

POSITIONING– Latest BofA Fund Manager Survey highlights that investors have dipped into cash to up allocation to commodities (ATH) & equities; investors shifted from credit to commodities, growth to value, tech to banks.

Banks OW surges to highest since Oct’17.  Investors are very long equities, particularly in the EU, as well as cyclical banks, commodities, and industrials while they shun bonds, defensives (utilities, staples), and EM. Tech OW slumps to lowest since Dec’08, ACC to latest BofA Fund Manager Survey.

4. RPV Pure Value vs. RPG Pure Growth YTD 2022

Before Tues…RPG +7% vs. RPG -7%

5. Retail Sales Inflation Adjusted -2.5%….Inflation Kicking in to Consumer Spending?

@Charlie Bilello Free Money Lessons

US Retail Sales ended the year on a weak note, falling 2.1% in December before adjusting for inflation and -2.5% in inflation-adjusted terms. This was likely due in no small part to reduced travel and leisure activity from the exponential spread of the Omicron variant. But there are also signs that consumers may be starting to hold off on discretionary purchases given the sharp rise in prices and wages that are now failing to keep pace with inflation.

Powered by YCharts

6. Retailer ETF Fails to Make New Highs.

RTH ETF 3 attempts at new highs fail

7. Top 10 Mega Cap Names 34% of S&P

“Passive ETFs” Are Hiding The Bear Market by Lance Roberts of Real Investment Advice, 1/18/22

8. Artificial Intelligence in Healthcare Growing 41% CAGR

North America AI in Healthcare Market size exceeded USD 1.15 billion in 2020 and is predicted to witness over 44.2% CAGR from 2021 to 2027.

Artificial intelligence (AI) is the broad-ranging division of computer science involved in developing smart machines competent in executing tasks that ordinarily need human intelligence. AI technologies are enhancing ongoing developments in the medical field, modern business, and everyday life practices in healthcare. Artificial intelligence in healthcare can support healthcare providers in multiple sectors of patient care and organizational management processes. Different applications of healthcare AI such as early diagnosis, lessen therapeutic errors, increase patient safety, and decision support are accelerating the market demand.

9. Fear and Greed Index Only Neutral So Far……..

10. Absolute Success vs. Relative Success

written by JAMES CLEAR


One way to answer this question is to say: Luck matters more in an absolute sense and hard work matters more in a relative sense.

The absolute view considers your level of success compared to everyone else. What makes someone the best in the world in a particular domain? When viewed at this level, success is nearly always attributable to luck. Even if you make a good initial choice—like Bill Gates choosing to start a computer company—you can’t understand all of the factors that cause world-class outcomes.

As a general rule, the wilder the success, the more extreme and unlikely the circumstances that caused it. It’s often a combination of the right genes, the right connections, the right timing, and a thousand other influences that nobody is wise enough to predict.

As a general rule, the wilder the success, the more extreme and unlikely the circumstances that caused it.

Then there is the relative view, which considers your level of success compared to those similar to you. What about the millions of people who received similar levels of education, grew up in similar neighborhoods, or were born with similar levels of genetic talent? These people aren’t achieving the same results. The more local the comparison becomes, the more success is determined by hard work. When you compare yourself to those who have experienced similar levels of luck, the difference is in your habits and choices.

Absolute success is luck. Relative success is choices and habits.

There is an important insight that follows naturally from this definition: As outcomes become more extreme, the role of luck increases. That is, as you become more successful in an absolute sense, we can attribute a greater proportion of your success to luck.

As Nassim Taleb wrote in Fooled by Randomness, “Mild success can be explainable by skills and labor. Wild success is attributable to variance.”

Both Stories are True

Sometimes people have trouble simultaneously holding both of these insights. There is a tendency to discuss outcomes in either a global sense or a local sense.

The absolute view is more global. What explains the difference between a wealthy person born in America and someone born into extreme poverty and living on less than $1 per day? When discussing success from this angle, people say things like, “How can you not see your privilege? Don’t you realize how much has been handed to you?”

The relative view is more local. What explains the difference in results between you and everyone who went to the same school or grew up in the same neighborhood or worked for the same company? When considering success from a local viewpoint, people say things like, “Are you kidding me? Do you know hard I worked? Do you understand the choices and sacrifices I made that others didn’t? Dismissing my success as luck devalues the hard work I put in. If my success is due to luck or my environment, then how come my neighbors or classmates or coworkers didn’t achieve the same thing?”

Both stories are true. It just depends on what lens you are viewing life through.

The Slope of Success

There is another way to examine the balance between luck and hard work, which is to consider how success is influenced across time.

Imagine you can map success on a graph. Success is measured on the Y-axis. Time is measured on the X-axis. And when you are born, the ball you pluck out of Buffett’s Ovarian Lottery determines the y-intercept. Those who are born lucky start higher on the graph. Those who are born into tougher circumstances start lower.

Here’s the key: You can only control the slope of your success, not your initial position.

In Atomic Habits, I wrote, “It doesn’t matter how successful or unsuccessful you are right now. What matters is whether your habits are putting you on the path toward success. You should be far more concerned with your current trajectory than with your current results.”

You can only control the slope of your success, not your initial position.

With a positive slope and enough time and effort, you may even be able to regain the ground that was lost due to bad luck. I thought this quote summarized it well: “The more time passes from the start of a race, the less the head-start others got matters.”

This is not always true, of course. A severe illness can wipe out your health. A collapsing pension fund can ruin your retirement savings. Similarly, sometimes luck delivers a sustained advantage (or disadvantage). In fact, one study found that, if success is measured by wealth, then the most successful people are almost certainly those with moderate talent and remarkable luck.

In any case, it is impossible to divorce the two. They both matter and hard work often plays a more important role as time goes on.

This is true not only for overcoming bad luck, but also for capitalizing on good luck. Bill Gates might have been incredibly fortunate to start Microsoft at the right time in history, but without decades of hard work, the opportunity would have been wasted. Time erodes every advantage. At some point, good luck requires hard work if success is to be sustained.

How to Get Luck on Your Side

By definition, luck is out of your control. Even so, it is useful to understand the role it plays and how it works so you can prepare for when fortune (or misfortune) comes your way.

In his fantastic talk, You and Your Research, the mathematician and computer engineer Richard Hamming summarized what it takes to do great work by saying, “There is indeed an element of luck, and no, there isn’t. The prepared mind sooner or later finds something important and does it. So yes, it is luck. The particular thing you do is luck, but that you do something is not.”

You can increase your surface area for good luck by taking action. The forager who explores widely will find lots of useless terrain, but is also more likely to stumble across a bountiful berry patch than the person who stays home. Similarly, the person who works hard, pursues opportunity, and tries more things is more likely to stumble across a lucky break than the person who waits. Gary Player, the famous golfer and winner of nine major championships, has said, “The harder I practice, the luckier I get.”

In the end, we cannot control our luck—good or bad—but we can control our effort and preparation. Luck smiles on us all from time to time. And when it does, the way to honor your good fortune is to work hard and make the most of it.


Topley’s Top 10 – January 17, 2022

1. 2021 State of Venture Capital…VC Funding Jumps 106%

by Barry Ritholtz

I have noted that it seemed like VC money was everywhere, and now we have the data to confirm that. According to CBI’s State Of Venture 2021 Report, global venture funding was up 111% in 2021 hitting $620.8B. As the chart above shows, the US accounted for more than half of that, growing 107% in 2021 to reach $311.2B in investments.

We looked at fintech companies in Faster / Better / Cheaper, and as it turns out, that sector accounted for the largest amount of those VC dollars globally at $132B, or 21% of total venture funding. (This is an all-time high).

Not surprisingly, Silicon Valley led the US in VC funding in 2021, with more than $100B invested (Q4’21 was a record $29.3B); New York was 2nd at $65 billion, followed by Boston ($31B), L.A. ($24B), Seattle (~$7B), D.C. (~$5B), and Denver (~$5B). The U.S. led in global exits in 2021, followed by Europe and Asia.

If you are interested in these sorts of things, the rest of the deck is worth checking out . . .

Source:State Of Venture 2021 Report Chris BendtsenCB Insights January 12, 2022

2. Commodities ETF Breaking Out.

COMT Commodity ETF New Highs…50day thru 200day to upside back in Sept.

3. Did you know that 22% of all U.S. Dollars were created in 2020 alone? Read that again. 1/5th of all U.S. Dollars were created in 2020.

The Free Press Report-On December 2020 there were $15.4 trillion dollars in the world. At today’s date, there are $20.9 trillion dollars. In layman’s terms this is described as printing money.

In practice the Fed creates digital dollars to buy government bonds in the secondary market, known as quantitative easing. The buying of government bonds keeps bond prices high and yields low.

Assuming the interest payment on the $28.5 trillion of Federal debt is 0.07% this implies the yearly interest payment is $18.9 billion. But what if we assumed the interest rate started to move? We mapped the potential annual interest obligations out below:

  • 1% – $270 billion
  • 2% – $540 billion
  • 3% – $810 billion
  • 4% – $1.08 trillion
  • 5% – $1.35 trillion
  • 6% – $1.62 trillion
  • 7% – $1.89 trillion
  • 8% – $2.16 trillion
  • 9% – $2.43 trillion
  • 10% – $2.70 trillion
  • 15% – $4.05 trillion
  • 20% – 5.40 trillion

The United States is in big trouble if interest rates move. A move to a measly 3% interest rate implies the yearly interest payable would be around $810 billion — a 4,185% increase from the current rate.

But what if inflation gets out of control, bonds are sold off and interest rates move back to the levels we saw in the 80s? Annual interest payable on $28.5 trillion in debt would be in the trillion dollar range.

4. Inflation and Biden (or any President)

Dan Stratemeier

Managing Director-Equities, Event Driven Strategies-Jefferies LLC

6. Russell 2000 Small Cap and Nasdaq 100 Experience Record High Correlation to Start the Year

Dorsey Wright–The Russell 2000 (RUT) and Nasdaq 100 (NDX) are experiencing their highest correlation since 2012. In fact, with a current correlation (through 1/12) of 0.76, it ranks in the 98th percentile of all (daily) observations going back to 1994.

7. 60 Day Returns Nasdaq 100…Mega Cap -.38% vs. Smallest Stocks -14%

The image below shows the 60-day returns of Nasdaq-100 stocks by market cap. We can see that there is a clear performance bias favoring the largest stocks in the index. The 10 largest stocks are down -0.38% on average over the period while the 10 smallest stocks are down -14%. Meanwhile, the top half of stocks by market cap have outperformed the bottom half by nearly 5%

There has been an even more pronounced relationship between recent performance and earnings. Stocks with lower price-to-earnings (PE) ratios have outperformed those with high PE ratios or negative earnings. The chart below groups the stocks in the Nasdaq-100 by PE. The 10 lowest-PE NDX stocks, which have an average PE ratio of 13, have gained an average of 4.47% over the last two months while the 10 highest-PE stocks, with an average PE ratio of 382, are down more than 13% over the same period

8. Netflix -26% from Highs…Trades Back to August 2020 Levels.

9. Bets against Beyond Meat have made the plant-based food company the most shorted stock on the Russell 1000 Index

Natasha Dailey

Getty Images

  • About 37% of Beyond Meat’s available shares are shorted, new data show.
  • That makes the plant-based food maker the most heavily shorted company on the Russell 1000 Index.
  • Short sellers made $735 million in 2021 betting against Beyond Meat as the stock sank.
  • Bearish bets against Beyond Meat stock are piling up, with famed short-seller Jim Chanos also reportedly joining in.

According to the latest data from financial analytics firm S3 Partners, short interest in the plant-based food company is now about 37% of available shares, or $1.38 billion. That up from 26% in early October, and it means Beyond Meat is the most shorted company on the Russell 1000 Index, according to Bloomberg.

Betting against the company was a profitable position last year, considering short sellers made $735 million in profits, Ihor Dusaniwsky of S3 Partners told Insider in an email. In the new year though, short sellers so far have lost $126 million as Beyond Meat stock has rallied 10%.

Now Chanos, the short seller best known for predicting Enron’s collapse, is betting against Beyond Meat because he said it’s stopped being a growth company, he told The Financial Times. His firm, Kynikos Associates, did not immediately respond to Insider’s request for comment.

In 2019, Beyond Meat became the first plant-based meat startup to go public, and it had an explosive IPO. Last year, the meat-alternative company briefly became a meme stock as it rallied alongside other popular retail-trader names like AMC and GameStop.

But while shares have risen so far in 2022, the stock price has lost about 43% of its value in the last 12 months. Meanwhile, the Russell 1000 Index, which includes the top 1,000 US companies by market value, rose 20% over the same time period.

Beyond Meat stock sank 20% in November after posting a wider-than-expected loss for the third quarter and issuing a weak sales outlook. The company predicted continued labor problems and caution among customers amid the ongoing COVID-19 pandemic. Beyond Meat did not immediately respond to Insider’s request for comment for the story.

Bets against Beyond Meat have made the plant-based food company the most shorted stock on the Russell 1000 Index | Markets Insider (

10. Design Your Environment

Farnam Street Tiny Thought

Environment is the hidden force that guides behavior. One reason it’s so effective is that it speaks to your subconscious mind and not your conscious mind.

Default behaviors love the path of least resistance. Not only does our environment choose that path but it pushes us in that direction.

Most of the time when we think of ‘environment’ we think only of our visible environment. Consider your house. Seeing a bag of chips on the counter makes eating healthy harder. In the same way, removing chips from the house altogether makes eating them harder. To get a bag of chips you have to get in your car and go to the store.

If we limit our understanding of environmental influences only to what we can see, we miss a large part of its powerful force. Let’s look at hidden environmental forces that shape our behavior.

We become what we consume. What you read today becomes the raw material of your thoughts tomorrow. High-quality inputs offer high-quality raw materials to assemble in the future. A person with an environment with rich sources of information makes better choices than someone consuming low-quality sources of information. Not only do they have better raw material, but they also have a broader perspective and a calmer mind. The same applies to food. What we eat today is what we become tomorrow. All things being equal, the person that eats healthier will live longer and avoid more problems than someone who does not.

Who we spend time with matters. My grandfather, like many, used to tell me you are the average of the five people you spend the most time with. A lot of wisdom, like this, gets easily dismissed because it’s not entirely accurate. That’s unfortunate because it’s very useful. By choosing who you spend time with today, you change your trajectory tomorrow.

Another bit of wisdom hiding in plain sight is that people tend to hang around people like themselves. That explains why if your friends watch TV every night, you eventually will too. You can take this in all sorts of directions. If you spend a lot of time with people who are kind and thoughtful, you will act that way too. If you spend time with people who share a certain politics, you eventually see things similarly. It also explains why, if you start spending time with people who are unlike you in certain ways you want to cultivate, you will become like them. All of this happens without conscious awareness.

By choosing who you spend time with you are also choosing who you want to be. This is the environmental force at work on your subconscious and your biological instincts.

Here are three lessons you can take from this:

1. Curate your information diet to be rich and diverse. Follow people who think differently than you. Read old books. Remember that what you put into your mind today is the raw material you have to work with tomorrow.

2. Surround yourself with people whose default behavior is your desired behavior. If you want to run more, join a group that runs every day. Spend less time with people whose default behavior isn’t your desired behavior.

3. Design your environment knowing it will influence your future self. You can easily make undesired behaviors harder and desired behaviors easier.

Understanding the invisible influence of your environment allows you to turn your desired behaviors into your default behaviors.

Topley’s Top 10 – January 13, 2022

1. Last Time Fed Raised Rates….2 Double Digit Corrections

Ben Carlson A Wealth of Common Sense

The Fed. In 2018 we had two double-digit corrections in the U.S. stock market:

On Christmas Eve of that year we were basically in bear market territory. At the time no one really knew why the market was falling. There wasn’t a good reason.

After the fact most people agreed it was the Fed hiking rates:

The 3 Biggest Risks to the Market Right Now

2. Equity is Expensive but Cheaper than Bonds…Gundlach

From Dave Lutz at Jones

3. Where Does a Rise in Real Yields Start to Hurt Stock Investors?

Market watch The chart

Where does a rise in real yields start to hurt stock investors? A team of strategists at UBS, led by Bhanu Baweja, said that when yields rise more than 40 basis points over three months, “the impact on the market becomes material and goes nonlinear.”

“This is the range we regard as the rough threshold of real-rate pain
for the market. An incremental 10bp rise in real yields from here causes
the market to drop by about 0.8%, ceteris paribus. But what if other
things are not equal? A 5.2-point rise in PMIs will negate the hit to the
market from a 50bp rise in real yields,” said the strategists in a note to clients.


BY Barbara Kollmeyer


4. Bitcoin and Stocks are Increasingly Correlated Barrons

5. Covid Favorite Carvana 54% From Highs

New Lows and 50 days through 200 days to downside

WSJ GM Takes Aim at Carvana, Vroom With Used-Car Website By

Mike Colias Follow

The Detroit auto maker is rolling out CarBravo, a new business that helps dealers put their used-car lots online

6. The Video Game Industry Dwarfs the Box Office

Video games vs. the box office

The chart above gives some context on just how big the video game biz is. Last year the video game industry was pegged at somewhere around $180bn by Newzoo. That’s roughly ten times what the global movie industry brought in at the box office last year. Ten times. Admittedly last year the movie industry was still dealing with a pandemic hangover, but even in its best ever year the box office only brought in $39bn.

Video games may not carry the cultural impact of movies yet, but as a market they are in a completely different league.

Mobile making moves

Mobile games, that is games played on a smartphone or tablet, have grown so quickly over the last decade that they are now bigger than console and PC games combined.

Zynga’s pivot to mobile is a great example of a company that’s been flexible to its rapidly changing surroundings. Mobile games almost killed the company off, now they’re the reason it just got bought for $12.7bn.

7. The Housing Shortage Explained in One Chart

Steve Tuttle Fox Homes

8. Lowest Apartment Vacancy Rate in 4o Years

From Zerohedge

Most new tenants are locked into a multi-year lease and have no intention of moving. Another issue for renters is the low housing supply, and surging prices have kept them on the sidelines. Prices are expected to continue rising in 2022.

In a separate report, Pew Research Center found rental homes and apartments across the country are experiencing the lowest vacancy rates in four decades. Despite the Covid-fueled migration patterns, a record low number of households moved between March 2020 and March 2021 because of low housing inventory.

“Rents are rising, and the discounts and concessions of 2020 are likely a thing of the past. Moreover, demand for housing continues to outpace the supply,” Bloomberg said.

9. Tuning out! Viewership at scandal-plagued CNN plummets by as much as 90% from last year in both overall audience and in advertiser-coveted 25-to-54 demographic.

  • CNN saw a sharp decline in viewership the first week of 2022 with a nearly 90% drop both overall and in the critical demographic coveted by advertisers
  • The network averaged just 548,000 viewers during the week of January 3, a precipitous drop to the nearly 2.7 million viewers from the same week in 2021
  • CNN in the last year has been plagued by high-profile scandals, most notably the firing of its top-rated prime time star Chris Cuomo
  • Critics have slammed network boss Jeff Zucker over the declining ratings, which began in 2021, with some accusing him of ‘protecting perverts and pedophiles’


PUBLISHED: 14:07 EST, 12 January 2022 | UPDATED: 17:49 EST, 12 January 2022

10. A Super Reader Who Gets Through Hundreds of Books a Year Explains How to Read Way More

Economist, blogger, and super reader Tyler Cowen’s advice on how to get smarter by reading way more.


How to get smarter isn’t mysterious and it isn’t complex. The answer has been the same for millennia. Read more (though it’s true these days we do now have lots more delivery methods for insightful words). The trick isn’t in figuring out what you need to do–it’s in actually managing to do it.

Which is why I’m always on the lookout for great, unexpected ideas to squeeze more reading into our lives. Previously, I’ve uncovered ideas like hijacking your impulse to check social media to advance your reading goals, shaming yourself with a little math, and letting your book-buying impulses run wild. But when I came across a recent Financial Times article by Pilita Clark promising tips from “super readers,” my ears perked up in anticipation of more good advice.

Is it possible to read hundreds of books a year? Apparently, yes.

The whole article is worth checking out if you’ve vowed to read more in 2022. But one particular “super reader” Clark spoke to stuck out. “All pale before Tyler Cowen,” she writes. The economist, blogger, and author “has claimed that on a good night he can get through ‘five whole books.'”

That sounds impossible, but if you’re familiar with Cowen’s blog Marginal Revolution, which offers an absolute avalanche of wildly eclectic book recommendations and commentary, you know that it appears to actually be true. How does Cowen manage to get through hundreds of books a year? Another blog, Driverless Crocodile, has done us all the favor of gathering up much of what Cowen has publicly said about his reading habits.

While it’s unlikely us mere mortals will manage three digits’ worth of titles in 2022, here are some of Cowen’s best tips to at least significantly increase the pace you get through books this year.

· Be ruthless. Not captivated by a particular book at a particular time? Then on to the next. “Just stop reading, put them down,” Cowen advises. A boring intro, bad design, or hard-to-read font is enough to persuade Cowen to chuck a book. There are countless amazing books out there. Don’t settle for less than good.

· Go ahead and skim. At least in the case of nonfiction, if you already know the material, feel free to skip ahead. “When you go to read actual books you’re like, ‘I know that, I know that, I know that,’ and you keep on going, and you read much more quickly. And that’s really the way to read a lot,” says Cowen. (This also creates a virtuous cycle in which the more you read, the more you’ll know, and the more you can skip.)

· Read to solve problems. “The best reading is focused reading, when you’re trying to solve some kind of problem,” Cowen believes. You could aim to answer a specific question, investigate a given author, or scratch an itch of curiosity. “You want to start with a problem or question when you’re reading,” he insists.

· Read in clusters. This naturally follows on from the point above. If you arrange your reading around questions or areas of exploration, you’ll end up reading multiple books about the same topic. That allows you to “do a kind of cross-sectional mental econometrics and see which pieces start fitting together,” says Cowen.

· Read fiction. Gathering a stack of non-fiction titles to explore a topic is great, but don’t neglect fiction. “Reading fiction is important to understand the cross-sectional variation in humanity, to understand how difficult generalizations can be, to just get a sense of how different social pieces fit together, and to get a sense of different historical eras — and plus, reading fiction is often just plain flat-out fun,” explains Cowen. Amen to that.

· Read books about topics you know nothing about. “Every area you don’t give a damn about you probably should read at least one book in. Because the very best book in that area is superb, and you’re not going to know what it is. So if tennis is something you don’t know anything about, well, read Andre Agassi’s memoir. That’s a wonderful book. You don’t have to know about or care about tennis,” claims Cowen.

· Have fun. “Take reading seriously, develop a passion for it, and view it as part of your practice as a knowledge worker to get ahead, but along the way, having fun doing so,” Cowen concludes.

Happy (and bountiful|) 2022 reading!