TOPLEY’S TOP 10 May 09 2024

1. For All The Young People …Ben Carlson on Buying that $70,000 Truck

A Wealth of Common Sense Blog

Now let’s do the personal finance thing and look at how much these savings could be worth over the long haul.

Let’s say you say just 75% of the monthly savings so you can blow the rest of the money on anything else you’d like.

Here’s what it looks like if you bank those savings in the stock market every year for 30 years and earn 7% on your investments:

2. The Size of Aggregate Earnings Beat Q1 2024 was Best in 3 Years

From UNIO Capital

3. Stock Buybacks About to Break-Out to New Highs

4. Private Equity Sitting on $3.2 Trillion of “Unexited” Companies.

But the revival hasn’t come fast enough: Behind the scenes, the private equity shops saddled with bulging portfolios — and the banks and exchanges that make millions helping companies go public — are still scrambling to come up with alternative exit strategies.

Some are turning to private sales of shares, while others are establishing new semi-public exchanges to tempt companies to market. Inside at least one buyout firm, executives want to rejig long-accepted investment frameworks to address the new reality.

The reasons: A return to true health in the IPO pipeline could take until next year, and a record $3.2 trillion was tied up in aging, closely held companies at the end of 2023, Preqin data found. That’s a problem for private equity, which relies on the cycle of raising money to make acquisitions, exiting via a sale or IPO and then returning money to investors — before ultimately asking for more funds to do it all again.

By Bailey LipschultzSwetha Gopinath, and Vinicy Chan

5. UBER -22% from Highs

6. FXI Large Cap China ETF +15% 2024 But Trend Still Down Versus vs. FRDM

Large Cap China vs. FRDM (emerging minus china and other freedom lacking markets)

7. 10-Year Treasury Yield Down From Fed Meeting….4.70 to 4.50

8. Tech Jobs Leaving California for Texas

Torsten Slok Apollo
The share of tech jobs in California has been declining and the share of tech jobs in Texas has been rising, see chart below.

9. Coindesk….Nearly All FTX Creditors Will Get 118% of Their Funds Back in Cash, Estate Says in New Plan

The new reorganization plan must first be approved by a Delaware bankruptcy court.  By Cheyenne Ligon

Bankrupt cryptocurrency exchange FTX has proposed a new reorganization plan that would see a whopping 98% of its creditors get back 118% of their claims – in cash – within 60 days of court approval, according to new documents filed Tuesday evening.

Under the plan, other non-governmental creditors would get back 100% of their claims plus up to 9% interest to compensate them “for the time value of their investments.” The arrangement is still subject to approval by the Delaware bankruptcy court overseeing the bankruptcy case.

The proposed payouts are higher than earlier estimates from the FTX estate, which said in October it expected to pay back only 90% of customer funds. In January, current FTX CEO John Jay Ray III revised that estimate, telling the court he expected to be able to pay customers back in full.

Though the crypto market has rebounded since FTX’s collapse and subsequent bankruptcy – irking many of FTX’s customers, who have missed out on the opportunity to profit from the run-up in crypto prices while their funds are stuck in bankruptcy limbo – the estate denies that the market recovery is the driving force behind its massive pile of cash.

In a Tuesday press release, the FTX estate said it expects to have between $14.5 and $16.3 billion in cash available for distribution by the time a plan is approved by a Delaware bankruptcy court – the result of a year-and-a-half of scraping together the company’s scattered assets around the world and liquidating them.

“As previously disclosed, had a massive shortfall at the time of the Chapter 11 filing in November 2022 – holding only 0.1% of the Bitcon and only 1.2% of the Ethereum customers believed it held,” the press release stated. “Accordingly, Debtors have not been able to benefit from the appreciation of these missing tokens during these Chapter 11 cases.”

Other sources of value, including investments made by FTX and Alameda Research – such as its 8% stake in AI startup Anthropic, which was sold piecemeal to institutional investors for $884 million in March – have been liquidated to generate cash to pay back the claims.

FTX’s new reorganization plan would also settle a host of claims from regulators and government agencies, including the Internal Revenue Service (IRS) and U.S. Commodity Futures Trading Commission (CFTC).

The IRS agreed to resolve its $24 billion in claims in return for a $200 million cash payment and a $685 million subordinated claim that will only be paid out after all creditors and other governmental entities.

The CFTC and other unnamed governmental claimants agreed to subordinate their claims as long as FTX users and investors were paid in full with interest. There are also plans for a special fund created to make “supplemental restitution” to certain customers and creditors, though the details of this agreement have not been finalized, according to the press release.

A hearing to discuss the proposed plan is scheduled for June. The specter of Sam Bankman-Fried

Former FTX CEO and convicted fraudster Sam Bankman-Fried previously attempted to use the estate’s ability to pay back customers in full as evidence that the collapse of his exchange had “zero” harm to its customers.

Before his sentencing in March, Bankman-Fried’s lawyers argued that their client should receive a light sentence, in part because customers would get all their money back.

Ray, along with dozens of FTX creditors, wrote to the court arguing that the estate’s ability to claw together enough to money pay back his victims – the result of “tens of thousands of hours … spent digging through the rubble of Mr. Bankman-Fried’s sprawling criminal enterprise to unearth every possible dollar, token or other asset” – doesn’t mean his conduct wasn’t criminal.

Bankman-Fried was sentenced to 25 years in prison. He plans to appeal his sentence and conviction.

10. Jerry Seinfeld Just Said Lifelong Success, Happiness, and Fulfillment Comes Down to Just 2 Words

Money, fame, and ‘things’ are great, but to Seinfeld, the pursuit of this matters most.
Jerry Seinfeld. 
The other day, I walked into a room and said to my wife, “You know, we did a really good job on these floors.” Well-fitted, wide-plank oak boards. Artful racking. Smooth, even finish. Laying the floor took considerable time and effort and wasn’t particularly fun, but in that moment all I thought about was how good it looked.
And how good that made me feel.
I don’t always like doing, but I really like having done, especially if I’ve done well.
Which, according to Jerry Seinfeld, is the key to happiness and fulfillment:
… the only thing in life that’s really worth having is good skill. Good skill is the greatest possession. The things that money buys are fine. They’re good. I like them. But having a skill….
It’s a very Zen Buddhist concept: Pursue mastery. That will fulfill your life. You will feel good.
I know a lot of rich people. They don’t feel good, as you think they should and would. They’re miserable. Because, if they don’t master a skill, life is unfulfilling.
Granted, those two words — pursue mastery — do sound a little Zen.
But not if you unpack it. Imagine you want to achieve, to accomplish, to be something.
Say your goal is to build a thriving business. Most people focus on measuring results and outcomes. Want to know your revenue for the month? Easy: Add up your sales. Want to know your safety record for the month? Easy: Add up your recordable accidents.
Results, though, are lag metrics. They show what happened — or, in the case of a goal, what you wanted to happen. Lag metrics are easy to set and simple to track. But they’re useless in terms of predicting, much less influencing, the future.
That’s where lead metrics come in. Lead metrics are predictive of achieving a long-term goal:

  • Want to increase revenue? Increase ad spending. Make more sales calls.
  • Want to improve safety? Require hard hats on the factory floor. Enforce lock-out/tag-out procedures.

Seinfeld’s lag metric was to become a successful comedian. Early on, he realized the path to becoming a better comedian was to write better jokes. The performance, the lag metric, was the end product. Good jokes were the foundation. As he recently said, “I have never succeeded at anything that wasn’t my material. Not one time.”
Having good jokes meant writing good jokes, every day. Having good jokes meant consistently — relentlessly — pursuing mastery.
So he hung a calendar on the wall, and every day, once he had accomplished his lead indicator — writing one new joke every day — he put a red X over that date.
As Jerry told Brad Isaac:
After a few days, you’ll have a chain. Just keep at it and the chain will grow longer every day. You’ll like seeing that chain, especially when you get a few weeks under your belt.
Your only job is to not break the chain.
The goal — the lag metric — informs the process for achieving that goal. A lag metric tells you what you want to happen; a lead metric describes how you will get there.
That’s the beauty of lead metrics. They’re reasonably predictive. Do the work and you will achieve some level of success.
Which makes lead metrics much more important than lag metrics, because doing the work, day after day — pursuing mastery, day after day — is the only way that success will follow.
Try it. Pick a goal. Pick a lag metric. Then reverse engineer the lead metrics that will get you there.
If you want to hit $30,000 in sales per month, use your current results to determine how many additional leads and sales calls you need to generate and make. Then create a daily process, and commit to checking off the boxes on your calendar.
If you want to improve safety, focus on lead metrics that predict success. Mandatory equipment. Refresher training. Even how long it takes a manager to respond to an accident report, since a rapid response indicates a commitment to finding and eliminating root causes. Then track those lead metrics, because they give you a much better chance of hitting your lag metric.
Choose lead metrics that predict success, and then track your performance to those metrics — because success is achieved by doing the right things, day after day after day.
By pursuing mastery.
And while you might not always love the process, you will love the result, especially in terms of how it makes you feel.
Because happiness and fulfillment comes not from what you get at the end of the long journey towards mastery… but from how it makes you feel.
About yourself.