@Callum Thomas (Weekly S&P500 #ChartStorm)All-in on AI: Speculators have been stampeding into tech stocks. The combination of AI hype, passive flows favoring the big end of town, and the prospect of peak rates has powered up speculative fervor.
IWC Micro-Cap ETF bounce but 4 Lower Lows in a Row…Long Way to Go.
4. Massive Surge of Inflows into Smallcap Last Week.
Dave Lutz Jones Trading The End of Last Week saw massive inflows into US Smallcap Value Names, with KRE (Regional Banks) up 10%
5. More than Tech Now Rallying-80% of Names Above 200-Day
Equities: Market breadth has improved dramatically. Here is the percentage of S&P 500 stocks trading above their 200-day moving average.
Source: The Daily Shot
6. 72% of Large Firms Had Cyber Attack this Year
Barrons Attacks have become a fact of corporate life. An estimated 72% of firms with annual revenue over $5 billion were attacked in the past year, according to Sophos, a cybersecurity software firm. The number of attacks in the third quarter was up 95% from a year earlier, says cyber specialty insurer Corvus. Hackers could reap $1 billion in ransoms this year, more than the years 2018 through 2020 combined, according to estimates from crypto data firm Chainalysis.
10. Update on Drinking in America—Professor Galloway Blog
Halved Between 2002 and 2018, the share of college students who don’t drink alcohol jumped from 20% to 28%, and, overall, Gen Z drinks 20% less alcohol per capita than millennials did at the same age — which was, in turn, 20% less than Gen X consumed. Among high school students, 39% drank alcohol in 2011; just 23% drink today. Think about that: In just a decade the number of high school students who drink has been almost halved. Youth drinking is declining despite another broad shift, the shrinking gender gap — older Americans are drinking more as a cohort, as a generation of women who grew up when drinking was more acceptable for them ages. The trend is global: In Japan, where drinking binges are ingrained in the work culture, as a means of establishing trust, 60% of the population now believes that after-work drinking is “no longer necessary.” Youth drinking in the U.K. has been falling for two decades.
Drinking hasn’t vanished from youth experience in the same fashion as mix tapes or call waiting, but the cultural impact of the shift is greater than the numbers suggest. Concert promoters report dramatic declines in alcohol sales at shows with younger audiences, and they’ve started stocking more no- and low-alcohol options at concessions. Alcohol giant AB InBev projects no/low brands (variants of traditionally alcoholic beverages without alcohol) will make up 20% of sales by 2025. High-end mocktails and drybars are on trend, and millions of people participate in Dry January every year.
2. 60/40 Portfolio Had Best Month Since 1990 in November.
Blackrock 60/40…50day thru 200day to upside.
3. Concentration Update S&P Top 10 Stocks Make Up 35% of Index.
The concentration in the S&P500 continues to increase, and the ten largest stocks now make up 35% of the index, the highest level since the last tech bubble in 2000,
Torsten Slok, Ph.D. Chief Economist, PartnerApollo Global Management
4. Coverd Call ETFS—Defensive Strategy $26B in Flows 2023
Dave Lutz Jones Trading COVERED CALLS TOMORROW– Investors on the hunt for regular income have this year poured almost $26bn into exchange traded funds that sell options tied to stocks, inspiring a wave of copycats and raising questions about their effects on market volatility. The funds, known as covered call ETFs, have surged in popularity to contain roughly $59bn in combined assets, up from only $3bn three years ago, according to the FTCovered call ETFs sell options on underlying equity holdings to generate income in the form of premiums while also limiting the magnitude of gains and losses. Typically seen as a defensive strategy, they’ve enjoyed continued success in a year when US markets have boomed. About half of this year’s new money into covered call ETFs has gone to the $30bn JPMorgan Equity Premium Income ETF (JEPI), an S&P 500 index-focused product that has grown to become the largest actively managed ETF.
5. Regional Banks-Chart Update.
KRE 50day crossing 200day to upside.
KRE Longer-Term Chart….Rallying to 200-week moving average
6. Russell 2000 Small Cap Still Not Even Back to August 2023 Levels.
7. PDD Holdings New Chinese Stock Leader +78% YTD….Revenues +90% + Year Over Year
PDD vs. BIDU chart
8. More Strong Labor Market Data
In recent months, we have seen a significant increase in the number of men age 55 to 64 joining the workforce, see chart below. Torsten Slok, Ph.D.Chief Economist, PartnerApollo Global Management
9. Range Rovers Become Thief-Magnets, Causing Prices to Tumble-Bloomberg
The second-hand luxury SUVs have dropped 9% in value since May
Jaguar Land Rover considers bespoke insurance for car owners
Tim Coen, a property investor, loved his Range Rover Sport but decided it was time to go green. He wanted to trade in the gas-guzzling sport utility vehicle for an electric Porsche.
There was a snag, however. A string of Range Rover thefts in the UK has caused insurance premiums to skyrocket. While the Porsche was being built, his coverage provider said it wouldn’t re-insure the Range Rover. He searched online and the cheapest quote he could find was £48,000 ($60,100).
The eye-watering cost has sent the SUV’s resale value tumbling. The Leeds-based entrepreneur, who runs investment firm North Property Group, paid £103,000 for his Sport SVR two years ago. He checked its value online three months ago and it was supposedly worth £75,000. Now, it would only fetch about £45,000, according to the same site.
Coen, 34, can’t even sell it — he would need to fork out an extra £25,000 to pay off the finance because of the drop in valuation.
“I was trying to be a bit more eco-friendly, but now I’m probably not because I’ve got two cars rather than one,” said Coen, whose previous Range Rover was stolen in London in 2020.
He isn’t the only one to have seen the value of his vehicle go into reverse. The average price of a used Range Rover has fallen 9.3% since May to £35,224, versus declines of 5.7% for all luxury SUVs and 2.8% for all cars, data from car site Auto Trader shows.
Range Rover prices fell 2.8% in November alone, Auto Trader said, the steepest drop since insurance costs spiked. The declines follow a surge in second-hand car prices during the pandemic, when new-vehicle production slowed due to semiconductor shortages and other supply chain crises.
Delving into the continuous process of individual growth in your relationships. Ilene Strauss Cohen Ph.D.
KEY POINTS
Personal development is not a destination but a continuous path. Individual growth requires commitment, effort, and patience. We develop the most through our important relationships.
Many individuals seek quick solutions and universal advice to overcome their challenges. However, personal development is not a destination but an ongoing journey of self-improvement and self-discovery. It’s not a process that can be expedited through a handful of therapy sessions but rather a lifelong pursuit of becoming the best version of oneself. After all, what could be more important than that?
Personal development is a continuous process that makes life all the more enjoyable. We are constantly evolving beings, each with our unique set of challenges. These challenges can be viewed as opportunities for growth and learning rather than problems to be solved and eradicated.
Personal development encompasses enhancing one’s skills, abilities, awareness, and overall quality of life. This improvement can manifest in various ways — from learning new languages to developing emotional intelligence. While external factors like career advancement or relationship transitions can stimulate personal development, it is primarily fueled by an internal drive for self-improvement.
However, where can we develop ourselves the most? Believe it or not, it is through our most important relationships. That, combined with our internal drive for self-improvement, is one of the best ways to improve ourselves. We should not understand individuals in isolation but as part of their family system. A family is an emotional unit that significantly influences an individual’s behavior and development. For instance, understanding one’s familial relationships can help identify patterns of emotional reactivity, a crucial aspect of personal growth. By recognizing these patterns, individuals can strive towards greater emotional maturity and reduced reactivity to the dynamics of their family systems. You can also become aware of who you want to be within your most important relationships.
article continues after advertisement
Consider Beth, a young professional who often conflicts with her colleagues. She had a short temper and found it challenging to handle criticism, constantly engaging in heated exchanges. Realizing the need for change, Beth decided to focus on personal development. She began by seeking to understand her emotional reactivity and its roots in her early family relationships. Beth realized her defensiveness and inability to handle criticism were patterns she had learned in her childhood home, where expressing disagreement was often met with hostility. With this insight, Jane committed to changing her behavior. She started practicing active listening, responding rather than reacting, and developing empathy towards her colleagues. Over time, she noticed a distinct change in her interactions, reflecting her growth and maturity within her professional relationships.
Brain Plasticity and Personal Development
Recent research on brain plasticity has given us a new perspective on personal development. Brain plasticity, or neuroplasticity, is the brain’s ability to reorganize itself by forming new neural connections throughout life. This neuroscientific concept suggests that our brains are not rigidly hardwired as once thought but are dynamic and adaptable.
Brain plasticity means that our habits, behaviors, and thought patterns can change over time, reinforcing the idea that personal development is an ongoing process. With consistent effort, we can reshape our brains to develop new skills, adopt healthier habits, and overcome limiting beliefs.
The Lifelong Journey
Personal development is not a destination but a continuous path through self-awareness of what needs to change. It requires commitment, effort, and patience, along with a willingness to see what we are up against in our most profound relationships. Here are some steps to help you on your journey:
1. Self-awareness: Begin by understanding yourself better. Recognize your strengths, weaknesses, values, and beliefs. Assess how you respond to different situations and what triggers certain behaviors in you. This understanding is the first step towards positive change. Keep a journal to record your thoughts, feelings, and reactions, and review it regularly for patterns and areas of improvement.
2. Understanding Your Family System: By viewing yourself as a part of an interconnected system, you can identify how your family dynamics have shaped your behaviors, emotions, and thought patterns. Understanding and addressing these familial patterns can lead to improved communication, healthier boundaries, and reduced emotional reactivity within the family system. Working on yourself involves acknowledging the interactive nature of personal development within your family context.
article continues after advertisement
3. Goal Setting: Identify what you want to improve or achieve. Ensure your goals are SMART – Specific, Measurable, Attainable, Relevant, and Time-bound. Once you’ve set your goals, devise a clear plan of action to bring them to fruition. Detail the steps you need to take, resources you may require, and potential obstacles you may encounter. Regularly assess your progress and adjust your plan if necessary, understanding that flexibility is critical to achieving your goals.
4. Skill Acquisition: Learn and develop the necessary skills to achieve your goals. This could involve formal education, online courses, reading, or practicing a specific skill. Suppose your goal is to improve your public speaking skills. Start by identifying areas you wish to enhance, such as articulation, body language, or audience engagement. Next, look for resources that can aid in your development. This could involve signing up for a public speaking course, reading books on the topic, or watching online tutorials.
5. Reflection and Evaluation: Regularly reflect on your progress. Consider what’s working, what isn’t, and how you can adjust your approach. For example, your goal might be to improve communication within your romantic relationship. After implementing changes for a month, you might reflect on what progress has been made. You may notice that while you’re having fewer arguments, you still struggle to express your feelings clearly. This reflection indicates that while the changes have been beneficial, there’s still room for improvement. The evaluation might lead you to seek resources focused explicitly on expressing emotions effectively. Remember, reflection and evaluation are ongoing processes crucial for continuous growth and development in any aspect of life.
6. Persistence: Change takes time. Stay committed to your personal development journey, even when it gets tough. Consider finding a therapist or joining a support group to help you stay persistent in your growth. Try not to give up and remember it is okay to take breaks. Development doesn’t happen in a straight line; there will be setbacks, and that is typical.
Personal development is a lifelong journey. It’s about being open to change and growth, understanding your family system, leveraging the power of brain plasticity, and consistently working towards becoming the best version of yourself. Remember, every step, no matter how small, brings you closer to your personal growth goals. And no matter how much work you have done on yourself, we all go backward at times, and the critical part is that you get yourself back up.
The accompanying chart plots this ratio, courtesy of data provided by Rob Arnott, founder of Research Affiliates. You will notice that, from its low at the top of that bubble in 2000 to its high in 2006, the ratio nearly doubled—from 0.37 to 0.73. Over that period, the average small-cap value stock produced a 22.2% annualized gain (before transaction costs), according to data from Arnott, versus a 0.1% annualized gain for the average value stock. That’s equivalent to an annualized margin of more than 22 percentage points, which is extraordinary.
2. Large Stocks vs. Small Stocks Outperformance Record Levels.
@Charlie Bilello Large vs. Small: The S&P 500 is outperforming the Russell 2000 by 13.7% in 2023. In the last 30 years, large cap outperformance has only been higher two times: 1998 (31.1% spread) and 2021 (13.9% spread).
3. High Dividend Stocks are also at Record Low Valuations Versus S&P
Prime Minister Justin Trudeau’s government is cracking open the history books for its latest attempt to address a severe housing shortage in Canada.
The government is moving forward with a catalog of pre-approved home designs to reduce the cost and time it takes to build housing. The idea dates back to the 1940s when thousands of soldiers returned from the Second World War and needed a place to live.
“We are living in a housing crisis, but it’s not the first time Canada’s been here,” said Housing Minister Sean Fraser at a news conference on Tuesday.
The new program will differ from the wartime strategy in some key ways, however. Between the 1940s and 1960s, a catalog of simple designs allowed for as many as a million wood-frame detached homes — known as “Victory Houses” or “Strawberry Box” homes — to be built across the country.
This is how to be strategic and achieve your goals:
What Strategy Isn’t: Fluff, not facing the challenge, mistaking goals for strategy and bad strategic objectives are all signs of a bad strategy. You’re basically crossing your fingers and hoping the universe is in a really giving mood.
What Strategy Is: “Good strategy works by focusing energy and resources on one, or a very few, pivotal objectives whose accomplishment will lead to a cascade of favorable outcomes.” Yes, this phrase sounds like something a LinkedIn influencer would say while trying to sell you a webinar. But it makes sense and it works.
Diagnosis: Be honest about what obstacles you’re facing. Without that, strategy is just business improv. And nobody – I repeat, nobody – wants to see accountants and middle managers doing improv.
Guiding Policy: How can you apply your strengths to the weaknesses of the obstacle and create leverage to overcome them? You need to focus. Trying to do too many things, avoiding tough choices and thinking you’re going to please everybody might be why you cry in the shower.
Coherent Action: If your strategy is all goals and no action, it’s not a strategy; it’s a daydream with bullet points.
So how do you get started? You need to know what you want to achieve. This can be a problem for a lot of people. But it’s not that hard – in fact, it’s quite easy. Quick story:
It’s 1890 and multi-millionaire Andrew Carnegie is holding court at a cocktail party. People are hanging on his every word. Frederick Taylor approaches. He was famous as an expert on helping people organize their work. Carnegie looked at him and said, “Young man, if you can tell me something about management that is worth hearing, I will send you a check for ten thousand dollars.” Ten grand then was about $300,000 today. It was probably more of a status challenge than a real offer. Everyone turned to look at Taylor…
“Mr. Carnegie,” Taylor said, “I would advise you to make a list of the ten most important things you can do. And then, start doing number one.” A week later, Taylor received a check for ten grand.
Sounds ridiculous, right? This is the most basic advice in the world. Every corny self-help book recommends this. Why in the world would Carnegie – an amazing businessman by any measure — see this as valuable? The list wasn’t that valuable. But actually making the list was incredibly valuable. We talked about the importance of tough choices. And making a list forces you to decide what’s important and what’s possible. Taylor’s list got Carnegie to reflect on what mattered most to him – and to consider ways of getting there.
Business fads come and go. Self-help tricks come and go. We love shiny new things. But what’s important is making choices that don’t make future-you want to time travel back and slap some sense into present-you. So make a list. Consider what’s important to you. Think about the obstacles. Discover where the obstacles are weak and where you are strong to create points of leverage. And then…
Former Apple executive Guy Kawasaki recently interviewed an author he credits for “fundamentally changing my life.” The author is Stanford psychology professor Carol Dweck, who wrote the influential bookMindset: The New Psychology of Success.
Dweck popularized the concept of the growth mindset, which describes people who believe their skills and abilities can be developed. On the other hand, those with a fixed mindset believe they’re born with a certain amount of skill or intelligence, and that’s it.
Dweck says that mindsets fluctuate–a person can have a growth mindset most of the time, but shift to a fixed mindset when faced with setbacks. For founders to build successful teams, they must learn to identify those people who exhibit a growth mindset most of the time, because those hires will lift the entire team’s success.
After two decades of working with top CEOs and entrepreneurs who credit the growth mindset for getting them to the top, I’ve learned to recognize five signs that reflect a person who is always learning and always growing.
1. They’re learn-it-alls.
Microsoft CEO Satya Nadella credits Dweck’s book for helping him shift his mindset from fixed to growth. The change in his approach led Nadella to make major transformations at Microsoft. It also changed the way he hires.
Nadella looks for learn-it-alls and not know-it-alls. How can he tell? By hiring people who are not afraid to fail.
Job candidates with a growth mindset are the first to acknowledge mistakes they’ve made because they view failures as opportunities to learn and improve. They don’t wait for the question, “Tell me about your greatest weakness?” or “Tell me about a time you failed?”Instead, they bring it up themselves because they know setbacks are setups for success.
2. They seek out mentors.
“People with more of a growth mindset take on mentors and seek them out to enhance the likelihood that they can use their growth mindset successfully,” says Dweck.
I recently had dinner with a founder who built a business from the ground up and sold it for $100 million. The founder also brought along his mentor, a former CEO who had acted as this founder’s informal advisor for 20 years.
What I found remarkable is that–despite the founder’s success–he was still asking his mentor questions at the dinner table. That’s the growth mindset in action–always learning, always seeking feedback.
3. They admit to mistakes and learn from them.
Ray Dalio is a billionaire who founded Bridgewater Associates, the world’s largest hedge fund. Dalio famously owns up to financial mistakes he’s made over the years.For example, he bet a depression would take down the U.S. economy in 1982. He was wrong; stocks went on a bull run, and Dalio’s firm lost money.
But Dalio turned the mistake into a learning opportunity and openly discusses how the event changed his mindset, how he makes financial decisions, and the qualities he looks for in new hires. Dalio’s mistakes made him a more successful investor, and today he’s a strong advocate for turning mistakes into opportunities to grow and improve.
4. They’re insatiably curious.
Dax Shepard hosts the immensely successful podcast Armchair Expert, consistently ranked as one of the most popular podcasts on Spotify.
Shepard is a voracious reader who invites his favorite authors on the show. When Tim Ferriss asked Shepard which book he would gift others, Shepard immediately launched into a discussion of Ron Chernow’s book Titan, a biography of John D. Rockefeller.The question that Ferriss asked is a good indicator of a growth mindset. If you’re a founder, ask potential hires for their book recommendations. You’ll quickly find out if they’re insatiably curious, a key sign of a growth mindset.
5. They surround themselves with smarter people.
Warren Buffett is one of the most intelligent investors on the planet. Yet, he often credits his success to hiring people who are smarter than he is.By smarter, Buffet is not referring to a person’s IQ. He simply acknowledges that some people know a lot more about a particular topic than he does.Very few people can set aside their egos and admit that someone knows more than they do. But that’s why so few people truly exhibit the qualities of a lifelong learner. Once you identify growth mindset people, hire them, hold them close, and keep them around.
Source: @Callum_Thomas using Market ChartsFinancial Conditions Breakout: One positive is that the Bloomberg Financial Conditions Index has broken out to the highest (most easy/stimulative) point since early-2022. And it has been this sharp turnaround in financial conditions that has fueled the rally in stocks (falling bond yields, weaker USD, tighter credit spreads, lower oil price).
…but. The Fed has its final meeting of 2023 next week, and while the market has already made up its mind that the Fed is done with rate hikes, it will be interesting to see if the Fed gives the OK to this easing — there is the potential they may see it as too much too quick, and seek to talk back some of the easing in financial conditions.
5. Russell 1000 Growth (IWF) P/E 32 vs. Russell 1000 Value (IWN) P/E 14
IWF vs. IWN 2023..Growth straight up in face of rising rates
6. Grayscale Ethereum Almost a Double Since October 1
7. Institutional Investors Pull $31B from China Stocks and Bonds
WSJ The amount of money that institutional investors have in Chinese stocks and bonds has declined by more than $31 billion this year, through October, the biggest net outflow since China joined the World Trade Organization in 2001, official Chinese data show. By Lingling Wei
8. India building world’s largest renewable energy project in salt deserts bordering Pakistan-AP Press
The solar and wind energy project will be so big that it will be visible from space, according to developers of what is called the Khavda renewable energy park
Workers tighten screws on the support structure for solar panel installation at the construction site of Adani Green Energy Ltd’s renewable energy park in the salt desert of Karim Shahi village, near Khavda, Bhuj in Gujarat. (AP)
Rising from the bare expanse of the large salt desert that separates India from Pakistan is what will likely be the world’s largest renewable energy project when completed three years from now.
The solar and wind energy project will be so big that it will be visible from space, according to developers of what is called the Khavda renewable energy park, named after the village nearest to the project site.
At the site, thousands of laborers install pillars on which solar panels will be mounted. The pillars rise like perfectly aligned concrete cactuses that stretch as far as the eye can see. Other workers are building foundations for enormous wind turbines to be installed; they also are transporting construction material, building substations and laying wires for miles.
When completed, the project will be about as large as Singapore, spreading out over 726 square kilometers (280 square miles). The Indian government estimates it will cost at least $2.26 billion.
Shifting to renewable energy is a key issue at the ongoing COP28 climate summit. Some leaders have voiced support for a target of tripling renewable energy worldwide in any final agreement while curbing use of coal, oil and natural gas, which spew planet-warming gases into the atmosphere.
What makes this heavy industrial activity peculiar is that it’s taking place in the middle of the Rann of Kutch in western India’s Gujarat state. The Rann is an unforgiving salt desert and marshland at least 70 kilometers (43.5 miles) from the nearest human habitation but just a short army truck ride away from one of the world’s most tense international borders separating the two South Asian nations.
Philadelphia Inquirer by Nate File and Massarah MikatiSince the pandemic began, gun sales and permit issuances have risen sharply in Philadelphia and Pennsylvania, matching nationwide trends. In 2021, the city issued 52,230 new license-to-carry-permits, an increase of more than 600% from the year prior. In both 2020 and 2021, there were more than a million gun sales or transfers across Pennsylvania.
But a significant group within this class of new gun owners are people who are not excited to carry such powerful weapons. They are not gun enthusiasts or Second Amendment hard-liners, and many of them don’t fit Pew’s demographic profile for the typical American gun owner. Over and over, this group articulated their growing fear for their safety in Philadelphia, and how they felt like buying a gun was the only way left to protect themselves.
The kids and I listened to the first 25 minutes of this episode on ego versus mastery orientation in the car, and it sparked a great conversation.
“Why do kids love to learn? Because learning is fun. Why do kids go out on the golf course [and] want to play until the sun is set and they’re out there all night? Because it’s an amazing sport. It’s super fun. It’s just a fascinating…, get lost in the game. So, at what point in educational development do kids start to dislike school? Happens around third grade. What happens in third grade? We start giving kids grades.
So what happens is there’s a shift from a mastery orientation to what’s called an “ego orientation.” … When you ask people with an ego orientation, “Hey, why do you do what you do?” what you’ll often see is, “Well, I like to beat other people” or “I want to prove something. I need to prove myself to other people.” Or it’s some version of image management — like you’re trying to show off and prove yourself to others.”
