Topley’s Top 10 – August 02, 2023

Daily Top Ten No Comments

1. Average Quarterly Returns by Presidential Terms

Dorsey Wright

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

2. Caterpillar New Highs

www.stockcharts.com

3. PFF U.S. Preferred ETF…75% Financials

50day thru 200day to upside.

4. Shortage of Single Homes for Sale….AMH American Homes for Rent +25% Year to Date

AMH 50day thru 200day in late May

5. Blackstone Real Estate Interval Fund Continues to See Withdraw Requests….9 Months Running

BREIT Hit By Ninth Consecutive Month Of Redemptions; Plans Pivot To AI Data-Centers BY TYLER DURDEN ZEROHEDGE

Blackstone has limited investor redemption requests from its $68 billion real estate trust for high-net wealth investors for eight consecutive months while storm clouds continue to gather over commercial real estate markets.

According to a letter obtained by Bloomberg, Blackstone Real Estate Income Trust (BREIT) recorded investor outflows of $3.7 billion in July — the lowest redemption requests since the run on the fund began in November 2022. However, BREIT only returned about $1.3 billion, or approximately 34% of what was requested — as it continues to gate redemption to prevent massive outflows. 

“This structure was designed to both prevent a liquidity mismatch and maximize long-term shareholder value.

“A shareholder who began submitting repurchase requests when proration began has received approximately 94% of their money back and the semi-liquid structure is working as intended,” according to the letter.

BREIT has been working through redemption requests for the last eight months. We have provided a detailed account of the panic out of BREIT as CRE markets come under pressure in a high-rate environment: 

Remember when BREIT received a $4 billion bailout cash infusion from the University of California earlier this year?

Late January, Blackstone President Jonathan Gray told Financial Times that BREIT was experiencing a “backlog” of redemption requests. 

Redemption requests surged in Spring:

Bloomberg said BREIT had sold CRE assets to raise capital: 

BREIT has sold $12 billion of real estate assets since the beginning of 2022, generating $2.5 billion of profit during its ownership, according to Blackstone. Recent transactions include an $800 million sale of a Texas hotel, and a $2.2 billion deal to offload a self-storage business.

https://www.zerohedge.com/markets/breit-hit-nine-consecutive-months-withdraws

6. Meanwhile Global Bonds 17th Consecutive Week of Inflows

Irrelevant Investor Blog

https://theirrelevantinvestor.com/2023/08/01/a-generational-change/

7. Follow-Up From Yesterday….Hedge Fund Short-Covering the Most Aggressive Since 2016

Equities: Hedge funds’ short-covering this summer hasn’t been this aggressive since 2016.

Source: Goldman Sachs

Source: @markets  Read full article

https://dailyshotbrief.com/

8. TIPS Bond ETF has not Traded Above 200-Week Moving Average Since September 2022

9. Income Needed to be Happy in Your State

10. Mark Cuban says he avoids wasting time at work, and that meetings are the main culprit-Business Insider

In a June conversation, Mark Cuban called out the No. 1 time waster in the office.

  • Cuban says he will only take meetings and phone calls if there’s “no other way.”
  • Earlier in his career, Cuban would run standing-only meetings to ensure they ended faster.

Get the inside scoop on today’s biggest stories in business, from Wall Street to Silicon Valley — delivered daily.

If you’re a believer that most work meetings could be condensed into emails, you’re in very wealthy company.

Billionaire investor Mark Cuban called out meetings and phone calls during a June conversation with author Chris Voss on the streaming platform Fireside. Cuban does his best to avoid meetings and phone calls as he believes they hinder the productivity of the workplace. 

“I try to only do meetings if I have to come to a conclusion or there’s no other way — same with phone calls,” Cuban said to Voss. “It kills so much time.”

When he does attend meetings, the “Shark Tank” star said, most get bogged down with small talk and take away from talking through the important points of the agenda. His sentiment toward meetings remains unchanged from the early days of his career when he’d run standing-only meetings.

“It’s amazing how quickly meetings get over with if no one has a chair or someplace to sit,” he said in the interview.

He’s not the only exec who thinks meetings are a waste. Earlier this month, Shopify bosses introduced a plug-in for employees that would track the dollar amount spent during a meeting. According to the company’s COO, it was an attempt to cut down on meetings so workers could “get shit done.”

Now, as an executive, Cuban has more control over his own schedule, and he takes advantage of it. For him, emails are the preferred form of communicating about work.

“I can respond to those in the middle of the night. Or I can respond to those on my schedule as opposed to have to arrange everything around other people,” Cuban said.

Despite his success and wealth, Cuban remains dedicated to continuing to work. In an October 2022 interview, the billionaire said retirement isn’t for him just yet because “he’s too competitive.”

https://www.businessinsider.com/mark-cuban-avoids-meetings-and-phone-calls-at-work-2023-7

Topley’s Top 10 – August 01, 2023

Daily Top Ten No Comments

1. Hedge Funds Cover Shorts

Bloomberg Lu Wang Pro managers who make both bullish and bearish equity wagers last week slashed positions on both sides of their book, also known as de-grossing, according to data compiled by JPMorgan Chase & Co.’s prime brokerage unit. The rush to tweak positions was frantic enough to push total client stock flows to the highest level since the retail-fomented short squeeze in 2021.

https://finance.yahoo.com/news/hedge-funds-throwing-towel-stocks-201254115.html

2. Dow Dividend Payers vs. Non-Dividend

Bespoke-Dogs of the Dow for the Dog Days of Summer

With the Dow coming off of a historic winning streak last week, below we check in on performance of the index versus the Dogs of the Dow. The Dogs of a Dow is a stock-picking strategy that invests in the index members with the highest dividend yields at the end of a year holds them through the end of the next year.  On a total return basis, the Dow’s recent winning streak has been a benefit to both the overall index and the Dogs alike. That said, the gains to the former have brought the index up near 2022 highs on a total return basis while the Dogs of the Dow has much further to go given the overall weakness of dividend-oriented equities recently.

In the table below, we show the returns of this year’s Dogs of the Dow and all other individual Dow members.  The Dogs of the Dow are host to some of the stocks with the worst performance this year like Verizon (VZ) and Chevron (CVX), however, there are also a couple of big winners like Intel (INTC) which has returned nearly 42% YTD or JPMorgan Chase (JPM) which has nearly posted a 20% return. However, the biggest gains in the index have come from non-Dogs.  In fact, the largest gains this year have been from those with the lowest or no dividend yields at the end of last year like Boeing (BA), Salesforce (CRM), or Apple (AAPL).

https://www.bespokepremium.com/interactive/posts/think-big-blog/dogs-of-the-dow-for-the-dog-days-of-summer

3. Share of Banks Tightening Lending Standards

Axios-Courtenay Brown

Banks report toughest loan standards in years (axios.com)

4. Demand for C&I Loans

Dave Lutz at Jones Trading Bloomberg reports The Fed’s survey of senior loan officers at 2pm may show the long-anticipated stiffening of lending conditions is finally playing out amid restrictive monetary policy and new capital requirement rules. The shift in the credit cycle may cut inflation-adjusted GDP in the US and Europe by 1%-2% by the end of 2024, Citi said

5. Energy Stock ETF Close to New Highs

www.stockcharts.com

6. U.S. Annual CO2 Emissions

7. Bitcoin Still at Center of Crypto Universe

www.chartr.com

8. Average Monthly Student Loan Payment $200

Torsten Slok, Ph.D. Chief Economist, Partner Apollo Global Management  There are a total of 45 million people with student loans, and the average monthly student loan payment is around $200, so resuming student loan payments in October will subtract roughly $9bn from consumer spending every month, or roughly $100bn a year, and this will mainly have an impact on younger households, see chart below.

9. The Median Starter Home Price is 46% Higher than 2019

@Charlie Bilello Example: the median price of a starter home in the US is 46% higher than 2019 levels. The monthly mortgage payment needed to purchase one of these homes has more than doubled over that time period.

10. What is the Function of Worry?

The Daily Stoic One of the most timeless lines in all of the Stoic writings comes from Epictetus, “What upsets people is not things themselves, but their judgements about these things.”

It’s a powerful idea. And it’s made all the more transcendent by the remarkable fact that nearly every other philosophy has come to the exact same conclusion. We recently talked to Sam Harris on the Daily Stoic podcast. While Harris’ work is heavily influenced by Eastern philosophical traditions, on the podcast, Harris talked about one of the overlaps between his work and the Stoics:

With mindfulness, you’re not doing anything but noticing what is happening. Everything—thoughts, sensations—arises by itself. And it’s in that recognition that you see that the problem you thought you needed to solve a moment ago isn’t even there. The problem of your anxiety or of disappointment—these are thought-based delusions. That’s not to say that there aren’t challenging experiences. Things like physical pain don’t magically go away once you learn how to meditate. But so much of our suffering in response to something like physical pain is because of our psychological contraction around it and our anxiety about it and our fear that it won’t go away and our fear of what it means.

The Stoics had this very much in hand—the whole issue of, what is the function of worry? Either you can do something about the problem right now or you can’t. If you can do something about the problem, do whatever that is. And if you can’t, worry doesn’t add anything to your capacity to do anything—it just makes you miserable twice over.

East, west, north, and south—worry is pointless. As Marcus Aurelius writes in Meditations, “Today I escaped from anxiety. Or no, I discarded it, because it was within me, in my own perceptions—not outside.” Remember this the next time you get anxious, the next time you’re stressed or overwhelmed with worry—these are thought-based delusions. I can discard them. I can let it go.

Don’t let these things make you miserable twice over. Change your judgment about these things.

https://dailystoic.com/

Topley’s Top 10 – July 31, 2023

Daily Top Ten No Comments

1. Oil Prices +14% One-Month

2. Gasoline One-Week Gain

https://www.bloomberg.com/news/articles/2023-07-30/five-key-charts-to-watch-in-global-commodity-markets-this-week?sref=GGda9y2L

3. Amazon Reports this Week

AMZN sitting right below 200-week moving average on long-term chart….Still $50 from highs.

©1999-2023 StockCharts.com All Rights Reserved

www.stockcharts.com

4. Fed Funds Rate Highest Since 2001

Barrons

https://www.barrons.com/articles/sizing-up-moves-by-the-fed-the-ecb-and-the-bank-of-japan-d13bf9fc?mod=past_editions

5. FRDM Freedom 100 Emerging Markets

FRDM outperformance (No China) versus traditional emerging market index….Chart is FRDM vs. EEM

www.stockcharts.com

https://www.etf.com/FRDM

6. World’s Leading Economic Power-U.S. vs. China

Asian Countries Largely Favor U.S. as Leading Economic Power.

Japan 64-22 for U.S.

India   53-14 for U.S.

S.Korea 83-8 for U.S.

From Barry Ritholtz Big Picture Blog

https://ritholtz.com/2023/07/sunday-reads-334/

7. Hedge Funds Giving Up on China

The Daily Shot Brief China: Hedge funds have been cutting their exposure.

Source: Goldman Sachs; @dailychartbook

https://dailyshotbrief.com

8. U.S. Leading World in AI Investments

Capital Group

Capital Group www.capitalgroup.com

9. 1 in 4 U.S. homebuyers want to move to a different city—here’s the No. 1 place they’re looking

Mike Winters@MIKEWINTRS CNBC

With mortgage rates at 20-year highs, more people are looking to relocate from high-cost coastal cities to places in the South and Southwest, with Las Vegas as the top destination.

Nearly 26% of property search queries on online real estate brokerage Redfin.com are for cities where potential homebuyers don’t live, based on data for the three months ending June 2023.That’s the highest percentage since 2017, when Redfin first started tracking migration data.

Homeownership costs seem to be driving the trend, as the majority of homebuyers are from cities with some of the highest home prices in the country, such as New York or Los Angeles.

Based on an analysis of 100 metro areas, the following 10 cities had the highest net inflow of property searches on Redfin’s website. Net inflow is the number of people looking to move into a city minus the number of people looking to leave. 

1.               Las Vegas: 5,700

2.               Phoenix:5,300

3.               Tampa, Florida:5,000

4.               Orlando, Florida: 4,900

5.               Sacramento, California: 4,800

6.               North Port-Sarasota, Florida: 4,700

7.               Cape Coral, Florida: 4,100

8.               Dallas:4,100

9.               Miami: 3,700

10.            Houston:3,600

For all cities on this list, the largest number of potential out-of-town homebuyers are from either Los Angeles, Seattle, New York or Chicago, according to the study. This makes sense, as those are some of the cities where the most homebuyers seemingly want to leave.

Here are the 10 metros with the largest net outflow of property searches, which measures the number of search queries interested in leaving a metro area minus the number of search queries about moving to that same city.

1.               San Francisco: 28,100

2.               New York City: 24,200

3.               Los Angeles: 20,900

4.               Washington, D.C.: 15,700

5.               Chicago: 4,900

6.               Boston: 4,400

7.               Seattle:3,900

8.               Hartford, Connecticut: 3,500

9.               Denver: 2,300

10.            Detroit: 2,300

The search patterns suggest homebuyers are looking to leave large coastal hubs for cities in low-tax states that have considerably cheaper home prices.

For instance, most out-of-town buyers looking for properties in Las Vegas are from Los Angeles. The median cost of a home in Las Vegas is $412,500 as of June, nearly half the $975,000 median cost for homes in Los Angeles, according to Redfin’s data.

For the purposes of the study, a person browsing Redfin counts as a migrant if they’ve viewed 10 properties in another city over the three months ending June 2023. The net inflow and outflow rankings were compiled based on the total number of migrants.

https://www.cnbc.com/2023/07/30/1-in-4-us-homebuyers-want-to-move-to-a-new-city.html

10. Farnam Street -Clear Thinking

Tiny Thought

Contrary to what we’re led to believe, clear thinking is often the result of the position you are in at the time of the decision. 

Even a genius looks ordinary if circumstances force them into a bad position. 

The best position themselves to win before the game even starts. Tom Brady couldn’t show up on Sunday and perform if he didn’t put in the reps first. By studying film, eating healthy, stretching, and practicing, he puts himself in a position to win. It’s not just sports, the best in business do the same thing. 

An underrated element of doing your best is the position you are in when you need to perform. 

History is littered with successful people who positioned themselves to win and took advantage of the storm. 

You can position yourself to win no matter the circumstances. There is always something you can do to improve your current position. 

Eating well, saving money, sleeping, preparing for your next job, taking on more responsibility at work, removing people from your life who drag you down, reading and learning, etc. 

When you master your circumstances, every path is a winner. When your circumstances master you, things quickly go from bad to worse. 

Over a long enough time horizon, positioning beats predicting. 

(Click here to share on Twitter)

 www.fs.com

Topley’s Top 10 – July 27, 2023

Daily Top Ten No Comments

1. Six-Month U.S. Treasury New Highs 5.57%

2. Vanguard Extended Duration ETF …Sideways Above Previous Lows

3. Fed Interest Rate Expense Update

Zerohedge Blog Total federal interest expenses should rise by approximately $226 billion over the next twelve months to over $1.15 trillion. For context, from the second quarter of 2010 to the end of 2021, when interest rates were near zero, the interest expense rose by $240 billion in aggregate. More stunningly, the interest expense has increased more in the last three years than in the fifty years prior.

https://www.zerohedge.com/markets/government-cant-afford-higher-longer-much-longer

4. Small-Cap Value Chart

VBR 50day thru 200day…Double return of S&P Last 30days.

www.stockcharts.com

5. Small Cap Index Russell 2000

Three shots at making new high in last 12 months.

www.stockcharts.com

Still Well Below 2021 Highs.

www.stockcharts.com

6. Rolls-Royce…3X in 10 Months

www.stockcharts.com

7. One Month Regional Banks +23% vs. S&P 5%

KRE +23% vs. SPY +5% One Month

www.yahoofinance.com

8. Volatility Index Making Run at New Lows as Fed Raises Rates

www.stockcharts.com

9. GE Back to Life +73% Year to Date

10. Forget college admissions — some parents are shelling out up to $4,000 just to get their daughters into sororities

Meanwhile here is the Ukraine Sorority


There’s an admissions coach for everything these days. Kwan Wei Kevin Tan 

Jul 25, 2023, 5:17 AM EDT

  • Some parents are shelling out up to $4,000 to get their daughters into sororities, per The WSJ.
  • A sorority consultant said admissions are just as competitive as those for top colleges.

Get the inside scoop on today’s biggest stories in business, from Wall Street to Silicon Valley — delivered daily

If you thought getting your kid into a top college was going to be your last big admissions challenge, think again.

Some parents are shelling out up to $4,000 just to get their daughters into their dream sororities, according to a report by The Wall Street Journal published Monday.

The Journal spoke to several sorority consultants who offer admissions advice and coaching services to aspiring members. These consultants coach aspiring sorority members on what to wear, how to behave, and how to manage their social media presence.

Stacia Damron, the founder of the sorority-consulting company Hiking in Heels, told The Journal that sorority admissions are just as competitive as those for top colleges. 

“My boyfriend went to Stanford, and he said this is more complicated than getting a Stanford M.B.A.,” Damron said.

Damron told The Journal that her fees go up to $4,000 for an on-call service during peak recruitment periods. According to the Hiking in Heels website, as of 2022, a premium package cost $1,495 while an elite membership cost $2,975. Her 2023 rates are not currently available on the site.

Sorority recruitment, also known as a sorority rush, typically starts in the fall semester, though some college sororities recruit in the spring semester as well. And sorority consultants like Damron have been seeing increased demand from aspiring members.

“The demand for help preparing for sorority recruitment has dramatically increased since 2019,” Damron told Insider.

Damron said there were two key reasons for the increase in demand.

Firstly, sororities have beefed up the selection process during the COVID pandemic, throwing in extra tasks such as recorded video assignments and essay questions to make up for the lack of in-person interaction. This was on top of traditional requirements such as recommendation letters and registration forms, Damron said. 

Secondly, parents and their daughters are learning more about the recruitment process and just how competitive it is from TikTok videos.

“The information is more accessible, and potential new members and parents are learning that there’s more to the process and that preparation begins months earlier,” Damron said. 

But hiring a consultant isn’t a guarantee that clients will get into their dream sororities. Dani Weatherford, the chief executive of the National Panhellenic Conference, told The Journal that out of the 125,000 sorority applicants last year, 20% to 25% got rejected or withdrew their applications.

“Much like an SAT prep class can’t guarantee a perfect score, there’s no recruitment coach that’s truthfully able to guarantee or promise a bid. The decision ultimately remains with the sororities,” Damron told Insider.

To be sure, $4,000 is far cheaper than the sums some people are forking out to get admitted into top universities. Allen Koh, who runs the educational consulting firm Cardinal Education, told Insider in November 2020 that he charges up to $350,000 for his most intensive consulting package. 

Parents Are Spending Thousands to Get Their Daughters Into Sororities (insider.com)

Topley’s Top 10 – July 26, 2023

Daily Top Ten No Comments

1. Did the Market Experience a Non-Recissionary Bear Market?

Ben Carlson Blog

https://awealthofcommonsense.com/2023/07/a-textbook-non-recessionary-bear-market/

2. 80% of S&P Reporting Earnings by August 4th

JP Morgan Private Wealth.

3. Companies that Beat Earnings So Far are Not Rallying

4. S&P Equal Weight Outperforms Cap Weigh S&P for Last Month

Cap Weight S&P Dominated this Year Up Until Last Month…RSP Equal Weight +6.9% vs. SPY +5.2%

www.yahoofinance.com

5. Nasdaq 100 Free Cash Flow Yield is the Lowest in 20 Years

Bloomberg by Ryan VlastelicaThe Nasdaq 100 Index closed with a free cash flow yield of 2.41% on Monday, near its lowest level in more than 20 years, and down from a 2022 peak of nearly 4.2%. The drop in this metric comes amid a gain of more than 40% in the tech-heavy benchmark this year.

https://www.advisorperspectives.com/articles/2023/07/25/ai-set-for-test-with-microsoft-alphabet-earnings

6. Commodities Rallying for First Time in 2023

$CRB commodity index held low for 3rd time this year.

7. Europe Right on Previous Highs…No Breakout Yet

www.stockcharts.com

8. Industries with the Most Distressed Debt

Found at Barry Ritholtz Blog

https://ritholtz.com/

9. 40 Out of 50 Hydrocarbon Discoveries Since 2010 are Offshore

WSJ By Bob Henderson

https://www.wsj.com/articles/global-hunt-for-crude-sends-offshore-oil-stocks-soaring-8e4f77a9?mod=itp_wsj&ru=yahoo

10. Hiring Employees with Emotional Intelligence Is a Game Changer for Company Culture—Here’s Why

By Em Cassel  Success.com

About a decade ago, Google launched an initiative to determine what makes the perfect team. 

“Code-named Project Aristotle—a tribute to Aristotle’s quote, ‘the whole is greater than the sum of its parts,’” according to re:Work, the initiative studied 180 teams company-wide to determine why some succeeded and others floundered. 

It wasn’t easy. A data-driven company to its core, Google researchers initially struggled to find connections between the teams that were thriving. Some of the best teams were full of friends who saw one another outside of work; others, The New York Times reported, “were made up of people who were basically strangers away from the conference room.”

Over the course of several years, unexpected findings emerged from Project Aristotle. The best teams didn’t have the smartest people or even the hardest workers—among other characteristics, such as dependability and clear goals, they were teams where members listened to one another, respected each other and felt safe to take risks. They were teams where everyone felt “psychologically safe.” In other words? They were teams where members had a high emotional intelligence.

The importance of emotional intelligence at work

Emotional intelligence, also known as EQ or emotional quotient, is just what it sounds like: the ability to understand and manage your emotions, and the emotions of people around you. 

“The simple way to think about emotional intelligence is being smarter with feelings,” Joshua Freedman, co-founder and CEO of the EQ network Six Seconds, explains. Everyone has feelings, of course—emotional intelligence is about accessing and interpreting those feelings. “We can be smarter and say, ‘Alright, let me assess and understand this,’” Freedman says. “‘Let me accurately get this data. And use this data to help me solve problems.’”

In the workplace, a high EQ is more important in some roles than others. Victoria Neal, an HR knowledge adviser with the Society for Human Resource Management, says it’s especially necessary in management and leadership roles. “Who do you want to work for? Do you want to work for a manager that treats you compassionately, who listens to your ideas, values you as a coworker and colleague?” she asks, rhetorically. It’s a no-brainer—of course people prefer to work with someone who cares about them, takes their feelings into account and manages their own emotions rather than resorting to yelling or finger-pointing.

But it’s also important in other interpersonal roles where teamwork, communication and group problem-solving are key. “Essentially, the more relational and emotional complexity a role has, the more you need emotional intelligence,” Freedman says. Positions in sales, for example, require a high level of self-motivation and resilience, and there’s an important relational aspect to the work, since those in sales need to interact and connect with people. Similarly, Freedman says that if you’re managing people remotely, or trying to instigate or support change, those roles require more emotional work and therefore higher EQ.

Many of the issues we may run into in the workplace, both day-to-day and long-term, are, at their core, emotional: motivating ourselves and others, collaborating across boundaries, approaching and solving problems we haven’t solved before, fostering innovation, connecting with customers, etc. “And what we know from research is that… the more of these skills people bring to the workplace, the more effective they are individually, the better teams perform and, particularly for managers, the greater engagement and performance they create in their teams,” Freedman says. 

How to determine emotional intelligence during the hiring interview

While these skills can be taught—“we have a lot of evidence that shows that,” Freedman notes—not all organizations may have the resources to take that on. That makes it important to hire employees who already have strong emotional intelligence. 

So how do you make finding these workers a key part of your hiring process?

Freedman says it starts with the job description, where you should be thinking about how emotional intelligence fits into your organization, your culture and the specific role. “I think that’s really important in terms of who you’re attracting to begin with,” he says. 

Ask behavioral questions

During the interviewing process, Neal recommends asking behavioral interview questions such as, “What do you think makes an ideal coworker?” or “Tell me about a time you were challenged at work, and how you overcame it.” She encourages interviewers to ask tough questions about failure, rejection and conflict—ask about a time a project failed, for example, or when a team member wasn’t doing their part. How did they handle it? Do they own their weaknesses? 

“If something bad happens—that’s not really what they’re evaluating somebody on,” Neal says.  Instead, you want them to talk about the next step after that: Okay, this went badly, so how did they fix it? “Make it behavioral, make it open-ended and then really delve in there and ask follow-up questions,” she continues.

Assign an EQ assessment

In addition to the interview, Freedman recommends having prospective employees take an EQ assessment. “You absolutely can ask questions about the kind of emotional domain—things like resilience and optimism, and situations you may have found emotionally challenging or stressful, and listen for how candidates respond to that,” Freedman says. “And you’re not going to be as accurate as an assessment.” 

Incorporate EQ in your talent strategy and company culture

Freedman also encourages companies to think about emotional intelligence in the whole process of their talent pathway, not just at the interview stage. “If you really want the benefits, selection is a great step—and it should be part of the larger talent strategy,” he says. It’s something to consider across the spectrum of talent at your organization, from who you’re recruiting and how you do your selection all the way up to how you build your culture and assess performance. 

Neal agrees: Getting the most out of EQ requires a holistic approach. Yes, it’s great to focus on EQ in new candidates. But if you hire someone with a high EQ who’s then being managed by someone with a lower EQ… well, you can start to see how conflicts might emerge, and you might find yourself interviewing new people for the position you just filled.

She encourages hiring managers to not be dazzled by the technical skills and work experience of a potential employee—or at least, not to be so dazzled by those factors that they ignore the importance of EQ. Because, sure, maybe that candidate is incredible at what they do. But if they’re driving your team away, or they can’t maintain a team or deal with colleagues, you’ll have to contend with financial and cultural costs associated with constantly changing team members and dealing with workplace conflict issues. 

“Your leadership needs to guide people; your senior leadership needs to establish the culture within the company,” Neal says. “If the culture isn’t collaborative or inclusive, and you get the opposite… you’re not going to get your best out of people, and people aren’t going to want to stay. That’s where you start getting the revolving door, as a hiring manager.”

Make emotional intelligence part of your core strategy

Luckily, you don’t have to do it all at once. The important thing is that you make a concerted, company-wide, continued effort to emphasize emotional intelligence. “A lot of organizations think, ‘Oh, we should do something on emotional intelligence,’ and they kind of treat it like a checked box,” Freedman says. “If you want the value, really look at the business case for your organization and get aligned on: How is this part of your competitive advantage? How is this part of your value creation?”

“We’re not just saying, ‘This is something we should add into the mix,’” he adds. “This is part of the core strategy of how we protect ourselves, stand out in the marketplace and deliver value to our stakeholders.” 

Neal notes that there are roles out there for people who may have a lower emotional intelligence. “Culturally, EQ is really important, but I think there [are] jobs where it is not as critical as, say, leadership roles or team roles,” she says. These positions tend to be more individual or independent; roles where there’s less need to interact with others. Engineering, computer science, product testing, data entry—depending on the specific requirements of the job, all of these fields (and plenty more) can work just fine for employees with a lower EQ. 

And if you’re reading this as a candidate and wondering if you can work on your EQ, Freedman says the answer is: “Absolutely.” 

“I think taking your own emotional intelligence assessment, really looking at where you are in these capabilities and setting your own growth plan in place, is probably a good idea as you’re thinking about your career progression,” he says. “We see that there’s a pretty strong correlation between emotional intelligence and career level, so if you want to become a senior manager, this is going to be really important stuff.”

https://www.success.com/hiring-employees-with-emotional-intelligence/