Dave Lutz Jones Trading European stocks just marked their best quarter in a year as traders remained optimistic about the economy and that interest rates would come down soon. The spotlight is turning to corporate earnings to drive the next leg of the rally in the region’s shares. Analysts expect profits to rebound 4% in 2024 after slumping last year, according to data compiled by Bloomberg
4. Silver Following Gold Break-Out
SLV moves above Dec 2023 levels.
5. Gold Miners Have Been Lagging Gold but Technicals Changing
10. 8 Things I Managed to Get Right When I Retired
Psychology Today Meg Selig
What did that path look like? Here is a rough account of my retirement journey:
1. I had enough money. I was fortunate to build my retirement on a solid financial foundation. I say “fortunate” because I was not money-savvy during most of my early life. Just by luck, my various jobs in education and counseling were all part of the same healthy public school retirement system. When I was ready to retire after over 32 years in education, a traditional pension was waiting for me. Thanks to my union, the National Education Association (NEA), I was able to escape the burden of money worries that contribute to anxiety and depression among retirees and workers alike.
2. I had a sense of purpose. While I loved my last, longest, and best job as a counselor at our local community college, I had an intense desire to write a book on successful habit change. I already was teaching a short personal development course inspired by the loss of a wonderful aunt who had died from lung cancer because she couldn’t stop smoking cigarettes. I figured it was now or never for my writing ambitions. But would it work out? Freelance writing is a chancy business. I’m not a risk-taker nor particularly entrepreneurial. What would I do with myself if I had no job or meaningful preoccupation? I sensed that, for me, a sense of purpose would be essential to a happy retirement. (As it turns out, many retirees feel the same way.)
3. I retired gradually. To hedge my bets, I decided to continue to work part-time at the college after retirement. I checked with my supervisor; luckily, he was happy that I could still be a resource for the counseling department even after I took the retirement plunge. I would be able to teach short courses part-time, plus I could help out during registration. I worked part-time for about four years while I labored on the book that would become Changepower! 37 Secrets to Habit Change Success. Nowadays, retiring gradually is often dubbed a “phased retirement.” A Yahoo! Finance article predicts that phased retirements will be the wave of the future; if so, I was just slightly ahead of my time.
4. I stayed in touch with my work friends. I still meet regularly with my beloved colleagues from the college. And “beloved” is not too strong a word to describe how I feel about my fellow and sister workers. Two colleagues and I have had monthly lunches together for at least 10 years. My wonderful supervisor of over 20 years throws a yearly holiday party that I would not miss for the world. Here, I reconnect with lovely people, catch up, and reminisce.
5. I had a little bit of luck—OK, a lot of luck. With the help of another colleague, I succeeded in finding a publisher for my book. The cream in the coffee was that the publisher linked me to the blogging opportunity here at Psychology Today, a creative outlet that I’ve enjoyed for 14 years and counting. At that point, I retired from part-time work at the college and became a full-time author.
6. I created a helpful structure for my days. Some people nearing retirement probably have a rosy picture of sleeping late and then doing whatever they want whenever they want. More power to them. But oddly enough, research indicates that a predictable and pleasant daily structure is linked with both happiness and mental health. My weekday schedule was built around my goals of health, purpose, pleasure, and relationships. For the curious, it usually includes breakfast, 20-30 minutes of exercise, business details and email, lunch with friends or with the New York Times crossword puzzle, writing, watching Jeopardy, dinner, reading, or TV.
7. I am grateful to have a solid support system of family and friends. I have a supportive partner who loves to cook. He cooks dinner! Think of the time I save. Although my family lives elsewhere, we speak frequently and visit regularly. I Zoom with my granddaughter once a week. I have regular lunches or coffees with close friends.
8. I make room for volunteer work, fun, and mini-adventures. While our interest in big travel has waned as we’ve aged, we still enjoy one-tank trips to various spots near home and are dedicated in-town tourists.
2. History of S&P Returns After Back to Back 10% Quarters
From Dave Lutz at Jones Trading Bespoke notes the S&P just had the second straight quarter of double-digit percentage gains. That hasn’t happened in 12 years.
10. Stephen A. Smith says opportunities are ‘the only thing that should be equal,’ not outcome
Opinion by Alexander Hall
Stephen A. Smith, an ESPN commentator known for his hot takes on sports and politics, sounded off on the idea that many Americans, including those in politics, expect equality of outcome rather than opportunity.
During an appearance on the PBD Podcast hosted by Patrick Bet-David, Smith called upon Americans to accept the fact that “people who produce more ultimately end up more successful than those who don’t.”
He went on to observe, “We just have too many people in this world, especially on Capitol Hill as well, that want to give this impression or want to literally go about the business of changing that and making things equal. The only thing that should be equal is opportunities. But what you receive from your level of production is on you.”
His speech on meritocracy began earlier in the podcast when he said, “One of the things that I have a problem with when I look at things that are transpiring in this country, you can’t in the same breath talk about capitalism, talk about how it’s equal opportunity that we want, but everybody doesn’t deserve the same, it’s about your level of production. Some people are high-end earners, some people are high-level producers and stuff. And you know, they’re getting treated, they might earn more than somebody that just don’t have that skill set. That’s the world we’re living in.”
By contrast, the commentator argued that there are “a lot of people here that want to act as if ‘You know what? We’re after a different culture. We want everything the same for everybody.’” To those people, he declared, “You’re lying. You are lying.”
Smith then recalled he and his mother’s humble origins: “I grew up in the streets of Hollis, Queens, New York City. My mother was on welfare for a little while. And it killed her, killed her.”
“Wow,” Bet-David replied.
The sports commentator added “She was sick to her stomach that we had to get government cheese and bread and all of this stuff, and she got the hell off of it as soon as she possibly could. And I know that when she sent me out there to work, she didn’t send me out there to be like just anybody. She sent me out there to be the best that I can be. Why? So I can earn more for myself than the average typical person, and most people in a capitalistic society believe in that.”
Smith went on to reiterate his earlier critique, “When you have folks walking around, like everybody is supposed to be the same — that’s nonsense. You’re lying to the American public, you’re lying to yourself, it’s not true. And in the end, people who produce more ultimately end up more successful than those who don’t.”
He added, “Jimmy Johnson, the former coach of the Dallas Cowboys said it best, ‘I will be very consistent in my inconsistencies. Those who produce will be treated better than those who don’t.’ And I appreciated his candor. Whether you like it or don’t, that’s the reality.”
At an aggregate level, companies in the S&P 500 Index excluding financials are holding cash at levels that are near 10-year highs. This could fuel stock buybacks, M&A activity or dividend payments. For instance, over the last few months, there has been an increase in M&A activity among some larger oil and pharmaceutical companies, deals that could help drive long-term earnings growth. Companies have also been increasing their dividend payouts, which contribute to total stock returns. Recent high-profile examples are Meta and Salesforce announcing their first-ever dividends, which bode well for capital allocation discipline.
Capital expenditures will no doubt be on the rise to meet the needs of technology companies, including the large investment in data centers required for AI, but also for the infrastructure investment needed to support the reshoring of supply chains. This investment should translate into steady cash flow growth for a broad array of companies across many sectors.
3. Funds that Systematically Trade Options has Grown 51% in One Year
Dave Lutz Jones Trading Goldman says AUM of funds that systematically trade options has grown 51% year-over-year…
4. Another EV Stock Falling…Battery Maker CATL -15% One-Year
5. Uber Ride Since Covid
Vitaliy N. Katsenelson We bought Uber a few months before the pandemic. (I wrote about it here). Uber’s stock went up 30% right after we bought it and then declined around 80% within months (the shutdown economy was not good for the ride-sharing business). As the economy started to reopen, the stock went up a lot (we almost doubled our money on the original purchase). Then it more than halved. Two years later, it has tripled from that point.
Barrons By Paul R. La Monica Even if you assume that TMTG revenue ended the year at $6.8 million—double its first nine months—the stock would be valued at a price-to-sales ratio of more than 1,200. Meta, by comparison, trades at nine times 2023 sales, while Snap goes for four times trailing revenue. Shorting the stock looks tempting, but that is also risky. Short sellers borrow stock and sell it, aiming to buy it back at a lower price. Annualized borrowing costs are now steep, however, averaging 150%. And with nearly 12% of shares held short, the stock is vulnerable to a squeeze, whereby a stock can pop as short traders are forced to liquidate shares. According to research firm S3 Partners, DWAC/DJT shorts have lost $158 million so far this year, including $93 million in March.
Chartr Blog While artificial intelligence dominates the headlines of business and tech newspapers around the country, America’s energy industry has been quietly thriving. Indeed, 3 weeks ago the US Energy Information Administration (EIA) reported that the US had produced the equivalent of 12.9 million barrels of crude oil and condensate per day last year, 28% more than the world’s previous top producer, Russia, and 33% more than even the oil-rich Kingdom of Saudi Arabia.
And, it’s not just oil.
Thanks to hydraulic fracturing (or fracking), a wave of previously inaccessible, or at least uneconomical, oil and gas reserves are now being extracted at record speed. Indeed, as recently as 2015, America’s liquefied natural gas (LNG) never left the country: now it’s a key component of one of the country’s most geopolitically important exports.
Uncomfortable truth: While America’s fossil fuel output is breaking records, sensors in the world’s oceans are also reading temperatures that we’ve never seen before, leaving researchers and scientists “astounded”. www.chartr.com
8. Market Keeps Rising But Most Investors “Expect Correction” and $6 Trillion in Cash
From Callum Thomas Blog @Callum Thomas (Weekly S&P500 #ChartStorm) Correction Risk? Yet, interestingly enough, apparently most people expect a correction. Perhaps they expect it to be a small bump in the upward sloping road — a dip/pullback to buy, rather than something to hedge.
1. Market Returns Around End of Fed Rate Hiking Cycle
JP Morgan Guide to Markets
2. Record High Liquidity
Torsten Slok, Ph.D.Chief Economist, Partner One way to measure liquidity is to add bank reserves and money market assets, see chart below, which shows that there is record-high liquidity to push stock prices higher and credit spreads tighter. In particular, once the Fed starts lowering interest rates, some of the $6trn in money market funds is likely to find its way into stocks and credit.
3. Small Cap Stocks Not Joining Rally Yet.
Micro Cap Stocks +2% 2024
Small Cap Stocks that make money IJS-S&P small cap 600 -1.5% 2024
4. Apple Biggest Underperformance vs. S&P Since 2013
5. Tesla vs. S&P Chart
6. S&P Global downgrades outlooks on five regional US banks to ‘negative’
By Reuters The S&P Global logo is displayed on its offices in the financial district in New York City, U.S., December 13, 2018. REUTERS/Brendan McDermid/File Photo Purchase Licensing Rights, opens new tab March 26 (Reuters) – Ratings agency S&P Global on Tuesday downgraded five regional U.S. banks to due to their commercial real estate (CRE) exposures, in a move likely to reignite investor concerns about the health of the sector. The ratings agency downgraded First Commonwealth Financial (FCF.N), opens new tab, M&T Bank (MTB.N), opens new tab, Synovus Financial (SNV.N), opens new tab, Trustmark (TRMK.O), opens new tab and Valley National Bancorp (VLY.O), opens new tab to “negative” from “stable,” it said. “The negative outlook revisions reflect the possibility that stress in CRE markets may hurt the asset quality and performance of the five banks, which have some of the highest exposures to CRE loans among banks we rate,” S&P said. Representatives for the banks did not immediately respond to request for comments outside business hours. As of Tuesday, S&P had negative outlooks on nine U.S. banks, or 18% of those it rates, it said, adding most of those ratings “relate, at least in part to sizable CRE exposures.” The company rates a range of banks of varying sizes. S&P Global downgrades outlooks on five regional US banks to ‘negative’ | Reuters
KRE Regional Bank ETF vs. S&P sideways along lows.
But starting in mid-January, the year-over-year increases of the listing price shrank and then started hobbling along the 0% line, and in the most recent week, the listing price was below a year ago (-0.6%), as sellers face more competition from other sellers and fewer buyers. This year-over-year weakness in the listing price is an indicator that the median sold price through the spring selling season will also see year-over-year weakness. In its note sent out two days ago, Realtor.com explained: “It marks the first week of year-over-year price declines since July 2023, attributed to mortgage rates hovering around 7% and an ongoing increase in available for-sale homes, notably an upsurge in affordable listings spotlighted in the February Realtor.com Housing Trends Report. With mortgage rates nearly returning to 7% in February, many potential buyers are postponing their purchasing plans in hopes of securing lower rates. Consequently, lower buyer competitions exerted downward pressure on prices.”
Prices were below their 2022 peaks in 9 metros of the 20 metros in the Case-Shiller index (% from their respective peak in 2022, month of peak):
Jack Ablin Cresset Magnificent Seven insiders have unloaded nearly $13 billion of stock over the last six months, the most selling in over a year. Michael Dell unloaded nearly $340 million of his eponymous stock earlier this month. This marked increase in insider selling may be an indication that the recent tech stock rally, fueled by excitement over generative AI, might face headwinds.
9. Daniel Kahneman Father of Behavioral Economics Dies
Morningbrew
Daniel Kahneman, the father of behavioral economics, died yesterday at 90 years old. He’s best known for applying psychology to economics and uncovering biases and mental shortcuts that make people act irrationally, as he chronicled in his best-selling book Thinking, Fast and Slow. Kahneman, along with his long-time collaborator and friend Amos Tversky, developed “prospect theory,” or loss-aversion theory, which earned him the Nobel Prize in Economics in 2002 (which he shared with fellow economist Vernon Smith). The idea is that people value losses and gains differently, so we feel more bad about losing $100 than we feel good about making the same amount. He applied this theory to investors, who had previously been considered rational decision-makers. It shows up elsewhere, too—for example, golfers putt better when they’re facing the loss of a stroke than when they might gain one. A few other biases he identified that are probably buried in your brain (whether or not you learned them in Psych 101):
The “peak-end rule” that people remember an experience primarily based on how they felt at its most intense moment and the final part of it. It’s why you consider a whole vacation good if the last day was good—or the opposite.
The conjunction fallacy where people erroneously think the probability of two things being true is more likely than just one thing, which the famous “Linda the Bank Teller” problem illustrates.
For further reading: Kahneman and Tversky were the center of Michael Lewis’s 2016 book, The Undoing Project.—MM
Kierkegaard’s rules for a more authentic, meaningful life.
Søren Kierkegaard, a Danish philosopher, theologian, and poet is considered by many to be the father of existentialism. His work focuses on individual experience and the importance of personal choice and commitment, and his philosophy offers insights into living authentically and finding fulfillment amidst the distractions and pressures of the modern world.
In the course of Kierkegaard’s writings, instructive themes emerge for how to navigate life’s complexities with integrity and purpose. Here are four:
1. Cultivate Self-Awareness and Introspection
Kierkegaard emphasized the importance of self-awareness and introspection as foundational to understanding one’s own existence and making authentic choices. He argued that true self-knowledge requires a deep and honest examination of one’s thoughts, feelings, and motivations, involving questioning assumptions and beliefs inherited from culture and upbringing, a theme echoed in his fascination with Socratic self-knowledge.
In early autobiographical reflections, Kierkegaard acknowledged an enjoyment of attention and recognition as a personal weakness, exemplifying the kind of self-scrutiny he advocated. In The Sickness Unto Death, he explored despair as arising from a lack of self-awareness and the failure to live up to one’s own ideals. Kierkegaard’s struggle with melancholy and sharp self-critique is evident in his journals and correspondences, where he often reflected on his own shortcomings and the nature of existence. Introspection following his broken engagement with Regine Olsen contributed to many of his profound insights about the self and its complexities. Elsewhere, he examined the role of self-awareness in authenticity.
2. Embrace Uncertainty and Ambiguity
Kierkegaard’s philosophy also challenges us to embrace uncertainty and ambiguity. He contended that life’s complexities cannot be reduced to simple answers or solutions. Instead, we should be willing to live with paradox and contradiction, remaining open to new ideas and perspectives. This openness requires a willingness to change our minds in the face of new information, a stance that stands in contrast to the search for absolute certainty. Kierkegaard critiqued a purely aesthetic or contemplative conception of self-knowledge and emphasized the importance of engaging with life’s uncertainties actively and responsibly.
Kierkegaard employed a writing technique he called “indirect communication” to illustrate the complexity of existence and the limitations of direct knowledge. He did so in several ways, especially by publishing writings in which fictitious authors engaged in dialectical dialogue, each representing distinct perspectives and worldviews. He also used irony and paradox to provoke readers to think beyond surface-level understanding. And he used a technique he called “double reflection” in which he presented ideas in a way that required readers to reflect not only on the content of the text but also on their own existence and relationship to the ideas presented.
Kierkegaard often refused to conform to societal expectations, as seen in his critique of the established church and resistance to an academic career. He challenged prevailing views of his time, advocating for a personal leap of faith rather than adherence to systematic or institutionalized belief systems.
3. Take Responsibility for Your Life and Choices
A central tenet of Kierkegaard’s philosophy is the imperative to take responsibility for one’s own life and choices. He argued that individuals cannot blame their circumstances or external factors for their problems. Instead, they must own their thoughts and actions, acknowledging their weaknesses and flaws. This process of self-improvement and growth is essential for overcoming despair and achieving a state of self-acceptance. Kierkegaard’s emphasis on the teleological view of the self and the quest for narrative unity highlights the ongoing nature of this responsibility.
Kierkegaard’s insistence on personal responsibility was a recurring theme in his work. He believed that individuals must take responsibility for their own existence, choices, and the meaning they ascribe to their lives. One might contend that his decision to pursue a writing career over a more conventional path was a kind of existential reflection of this theme. His works, including Either/Or and The Concept of Anxiety, explore the necessity of making choices and the ethical implications of those choices.
4. Accept Your Own Mortality
Finally, Kierkegaard urges us to embrace our own mortality, recognizing that life is fleeting and impermanent. Accepting the uncertainty of life and the inevitability of death can lead to a sense of peace and contentment that transcends fears and anxieties. This acceptance encourages living in the present moment, fully engaging with the richness of life’s experiences. Kierkegaard’s perspective on faith and the presence of God deeply shaped his conception of acceptance, as he suggested that a deeper sense of purpose and meaning can be found in our utter dependence upon God.
Kierkegaard’s reflections on the finite nature of existence are central to his thought. In Concluding Unscientific Postscript, he discussed the significance of an individual’s subjective relationship to truth, including an awareness of mortality. Kierkegaard’s health issues and early deaths in his family, including of his father and several siblings, influenced his preoccupation with mortality and the urgency of living authentically. Kierkegaard’s personal experiences with loss and contemplations of death are reflected in his philosophical works, where he emphasized the importance of living in the present and making meaningful choices in the face of life’s transience.
Kierkegaard’s philosophy remains profoundly relevant, providing valuable insights into the human condition.
PIPER SANDLER-The team found that, without exception, each of these selloffs has been primarily driven by one of three things: rising unemployment, rising bond yields or some kind of global exogenous shock. Sometimes, it has been a combination, as was the case during the two equity-market corrections that occurred during 1980. So, which is most likely to trigger the next 10% correction? According to Kantrowitz and his team, rising yields are the biggest threat to tranquil markets. Rising yields also caused the most recent correction, which ended on Oct. 27 with the S&P 500 down 10.3%.
Over the past two years, equities’ sensitivity to higher yields has reached near-record levels last seen near the peak of the dot-com bubble on a rolling 26-week basis. This suggests stocks could still react negatively if long-term bond yields continue to climb, even though equities have been largely immune to the rebound in yields since the start of 2024.
“We’ve written a lot about how rate-sensitive equity markets are today. As such, the biggest risk that we see to equities in 2024 would be a rise in rates,” Kantrowitz and his team wrote.
Businesses always seem to take longer to succeed than a new owner expects. Seth Godin once said that overnight success in startups takes about six years, and Seth is an optimist. Thus we all look for shortcuts. Execution shortcuts would be hidden strategies to achieve the endgame sooner, without losing 40 to 60 percent of the financial potential along the way.
The short answer is that there is no magic. But there is consensus from the experts that human dynamics are more the key and the problem, rather than any particular business strategy or tactic. The classic book, The Execution Shortcut, by Jeroen De Flander, a well-respected writer and speaker on business strategy execution, offers some good insights and examples.
If you aspire to get a better return from your strategy, De Flander and I agree that you must learn to position your strategy to capture the head, heart, and hands of your constituents. They need a full sense of awareness of where you are going, to care deeply about it, and to maintain the highest energy to drive it. Here are 10 ways he offers for a professional to enhance his/her strategies:
Facilitate small choices that get you closer to the finish line. Provide prioritization guidelines to align day-to-day choices with the big choices. To make the right big choice, everyone needs to know whom to focus on, and how to offer unique value to constituents in the chosen segment. When to say no is also a critical part of any strategy.
Keep the big choice clearly visible in all your actions and communications. People shorten and package messages all the time, causing message distortion that can hide the core of your big idea. So don’t pass messages down the line. Talk directly to every key constituency often, and make your messages as sticky as possible.
Draw a finish line so key people know the real objective. Capture the core of your strategy and show everyone in an inspiring way what strategy success looks like. Everyone works harder when they know who’s winning and the distance to the end. The right finish line also motivates and gives purpose to those traveling the execution road.
Define lead indicators, and regularly re-measure distance to the finish line. Everyone needs a limited set of lead indicators to provide feedback and allow recalibration based on things learned along the way. Remove old signposts to prevent confusion, and work to prevent information overload.
Share strategy stories for stickiness and heart connections. Story wrappers add context and emotion to the strategy to make people feel and remember the core message.People want to see what kind of small choices they have to make to contribute to the big choice.
Climb the micro-commitment ladder with full engagement. Don’t settle for small commitments on big things. Go after big commitments on small things. The highest rung on the commitment ladder is “Yes, I will get it done no matter what.” This is the only level that represents full ownership of the task, and execution responsibility has really shifted.
Go beyond self-interest to boost belief in others. The key to success is belief. Celebrating small successes along the road makes people believe they can achieve big success at the finish line. Success is a self-fulfilling prophecy, causing people to dig deeper, recover faster, and keep going longer.
Constantly tackle complexity as your business grows.Complexity is the biggest performance killer in organizations. Embrace simplicity to create the most productive working environment. Be constantly on the lookout for best practices and tools to improve your strategy execution.
Experience the power of habits to automate decisions.Each overt decision we make demands mental strength, and when there are too many decisions to take, our reserves run out. Remember how draining your first day on a new job was. Quickly the small decisions become habits. Group habits become your company culture.
Find your seven-day rhythm. A daily rhythm or schedule creates habits faster but is unrealistic in most business environments. A seven-day rhythm provides regular repetitions and follows a more normal business flow. Be sure to connect decision horizons and find a spot for strategy in everyone’s weekly agenda.
We have all seen businesses and new ventures with great ideas that never seem to reach the finish line, while others with more mundane solutions seem to take some hidden path to success. In my experience, like that of De Flander, the difference is almost always related to the leader and their execution strategy, more so than to the solution provided.
The next time you talk to a potential client or investor, spend more time on your execution dynamics and less time on the product pitch. I suspect it will be a shortcut to at least the initial phase of your new venture, and probably long-term business success as well.
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