Topley’s Top 10 – October 23, 2020

1. Mutual Fund and ETF Stock Fund Flows Have Been Straight Down Since 2016…..Negative $200B+ 2020

Do vs. say-From Advisor Perspectives

Although there is extreme speculation occurring by some cohorts of investors—especially within the options market—the same can’t be said about all behavioral measures of sentiment. Case in point would be equity mutual fund and exchange-traded fund (ETF) flows. As you can see in the chart below, there has been a steady cumulative downdraft in flows since the beginning of 2015—belying the extremes witnessed more recently in the options market. I will speculate that there may be an age/demographic bias at play; with younger traders/investors betting on a rising market (or at least a rise in the stocks on which they’re betting with call options), and older investors less sanguine.

Fund Flows’ More Somber Message

Source: Charles Schwab, Investment Company Institute (ICI), as of 8/31/2020.

Mixed Emotions: Sentiment Telling Divergent Stories–by Liz Ann Sonders of Charles Schwab, 10/20/20

2. For Information Purposes Only….Jeremy Grantham’s GMO has the Most Bearish Predicted Forward Returns.

GMO 7-Year Asset Class Forecasts: 3Q 2020

by GMO Asset Allocation Team of GMO, 10/20/20

As of September 30, 2020

Download pdf here.

Source: GMO
The chart represents local, real return forecasts for several asset classes and not for any GMO fund or strategy. These forecasts are forward-looking statements based upon the reasonable beliefs of GMO and are not a guarantee of future performance. Forward-looking statements speak only as of the date they are made, and GMO assumes no duty to and does not undertake to update forward-looking statements. Forward-looking statements are subject to numerous assumptions, risks, and uncertainties, which change over time. Actual results may differ materially from those anticipated in forwardlooking statements. U.S. inflation is assumed to mean revert to long-term inflation of 2.2% over 15 years.

Copyright © 2020 by GMO LLC. All rights reserved.

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3. First Term Presidents.

Tom McClellannoteswhen there is a 1st term president from a different party than the last one, the stock market typically does worse the first two years.1st termers then catch up in years 3 and 4. The reason is 1st termers typically spend

From Dave Lutz at Jones Trading

4. S&P 500 Around Close Presidential Elections

Deutsche Bank


Holger Zschaepitz


Just to put things into perspective: Around close Presidential elections, stock prices typically level out ahead of election and rally after, chart by DB shows.

2:38 AM · Oct 22, 2020·Twitter Web App

5. The Fourth Industrial Revolution—AI, Robots, DNA, Smart Things, etc….All About Intangible Assets.


October 21, 2020 9:00am by Barry Ritholtz

 Today’s must read column is by Sarah Ponczek of Bloomberg News: Epic S&P 500 Rally Is Powered by Assets You Can’t See or Touch discusses several consequential issues impacting investing today.

Begin with this observation:

“Take all the physical assets owned by all the companies in the S&P 500, all the cars and office buildings and factories and merchandise, then sell them all at cost in one giant sale, and they would generate a net sum that doesn’t even come out to 20% of the index’s $28 trillion value . . . Back in 1985, before Silicon Valley came to dominate the ranks of America’s biggest companies, tangible assets tended to be closer to half the market’s value.”

What is left after you remove all of those physical assets? Intangibles, the things “you can’t see or count.”

Make a list of all intellectual property owned by these companies, and it includes: patents, algorithms, trademarks, software code, payment processing platforms, brands, logistical expertise, advertising platforms, user networks, ecosystems, supply chains, drug formulas, reputations, and good will.

The digital world is intangible.

The premium of the market relative to its hard assets is at a record: The S&P 500 trades at more than 12X its tangible book value. Detractors describe this as a bubble, similar to the dot-com boom & bust of the 1990s; Advocates note this is a reflection of a deep change in the way companies operate, a lasting trend that explains shifting valuations.

I find myself in the latter camp: The rise of P/E multiples over the past 30 years can in part be explained by these secular changes. Tech companies require less capital, less physical goods, and less labor to create intangible products. And, they have the benefit of scale, with practically zero additional cost for each new marginal unit produced. When we discuss valuations and multiples expanding, this is a key driver. (And yes, I am confirming my priors here).

At a certain point, big tech prices will completely decouple from reality, eventually leading to a crash. This happens every cycle. But the shift in hard versus soft assets, and the valuations we assign to them might be permanently changed.

Epic S&P 500 Rally Is Powered by Assets You Can’t See or Touch
Sarah Ponczek
Bloomberg October 21, 2020

2019 Intangible Assets Financial Statement Impact Comparison Report
AON/Ponemon Institute
April 2019

6. Chinese Exchanges Hit 25% Global Share of Equity Fundraising (IPOs)

China Is Experiencing a Boom in Share Sales-Local markets are outshining global peers, aided by the country’s economic recovery

7. Stimulus Checks—Pay Down Credit Cards and Shop Online.

Wolf Street –But not all these funds got spent. Some of them went to paying down credit-card debts, including the biggest plunge on record in April when the stimulus checks arrived. By the end of August, credit card balances had dropped 7% from March. Consumers who’d used their stimulus money to pay down credit cards have some room to spend more later. The paydown of credit cards essentially came to a halt in June, July, and August with the slowdown of the stimulus and extra unemployment money:

Sales at ecommerce sites and other “Non-Store Retailers” (mail-order operations, stalls, vending machines, etc.) edged up 0.5% from August, to $83.8 billion, the second highest ever, and up by 23.8% from September last year, after the huge spike during the lockdown. Despite speculations that ecommerce sales would drop sharply after brick-and-mortar stores reopened, this is not what happened:

Stimulus & Debt-Deferral Economy: Americans Splurged. Huge Price Increases Boosted Auto Sales. Liquidation Sales Pumped up Department Stores–Depicted by my 13 whiplash-charts.By Wolf Richter for WOLF STREET.

8. Where Did the Bailout Money Go?

WASHINGTON — As companies furloughed millions of workers and stock prices plunged through late March, Treasury Secretary Steven Mnuchin offered a glimmer of hope: The government was about to step in with a $4 trillion bazooka.

The scope of that promise hinged on the Federal Reserve. The relief package winding through Congress at the time included a $454 billion pot of money earmarked for the Treasury to back Fed loan programs. Every one of those dollars could, in theory, be turned into as much as $10 in loans. Emergency powers would allow the central bank to create the money for lending; it just required that the Treasury insure against losses.

It was a shock-and-awe moment when lawmakers gave the package a thumbs up. Yet in the months since, the planned punch has not materialized.

The Treasury has allocated $195 billion to back Fed lending programs, less than half of the allotted sum. The programs supported by that insurance have made just $20 billion in loans, far less than the suggested trillions.

The programs have partly fallen victim to their own success: Markets calmed as the Fed vowed to intervene, making the facilities less necessary as credit began to flow again. They have also been undercut by Mr. Mnuchin’s fear of taking credit losses, limiting the risk the government was willing to take and excluding some would-be borrowers. And they have been restrained by reticence at the central bank, which has extended its authorities into new markets, including some — like midsize business lending — that its powers are poorly designed to serve. The Fed has pushed the boundaries on its traditional role as a lender of last resort, but not far enough to hand out the sort of loans some in Congress had envisioned.

9. Bitcoin Back in Spotlight…….1 Month Chart Spike.

Billionaire hedge fund manager Paul Tudor Jones has turned more bullish on bitcoin, calling it the best inflation hedge.

“I like bitcoin even more now than then. It’s in the first inning and has a long way to go,” Jones said on CNBC’s “Squawk Box” on Thursday. He first revealed his bitcoin investment in May and he said Thursday he holds a small single digit investment in the cryptocurrency.

“The reason I recommended bitcoin is because it was one of the menu of inflation trades, like gold, like TIPS breakevens, like copper, like being long yield curve and I came to the conclusion that bitcoin was going to be the best inflation trade,” Jones said.

Paul Tudor Jones says he likes bitcoin even more now, rally still in the ‘first inning’–Yun Li

The recent rally for the progenitor to the cryptographic currency craze comes as PayPal Holdings Inc. PYPL, +5.50% on Wednesday announced plans to accept cryptocurrency and allow its use for merchant payments.

PayPal said that users on its platform will be able to purchase bitcoin  BTCUSD, +0.51%, as well as other sister cryptos like ethereum ETHUSD, +4.66%,  bitcoin Cash BCHUSD, +4.82%  and Litecoin LTCUSD, +4.37%.  

That news has helped to drive the value of bitcoin to just under $13,000, marking its highest level since around January of 2018, when the appetite for blockchain-backed currencies was just off its apex.

Bitcoin prices surge to highest since 2018 — here’s why–By Mark DeCambre

10. Ten Books On Health That Increase Your Eating And Body Awareness

Lifehack Reads

Lifehack Reads is the curated collection of our favorite books, carefully categorized and sorted by our Editorial Team. Read full profile

Having better health and a better body doesn’t always come down to counting calories and exercising. Your body is unique in so many ways. That’s why there isn’t a one-size-fits-all method for being fit, healthy, and active. Instead, the nutritional world has thousands of books on health to inspire people to live a healthy life. Many of these books encourage others to pick up various habits to improve your quality of life.

With that in mind, we’ve compiled a short list of books on health that question traditional ways of thinking and introduce something new to veterans and beginners alike.

1. Best Book on Health for General Health

The first book on our list is How to Be Well by Dr. Frank Lipman. In this book, he shares 6 core aspects of living a happy and healthier life. From there, he explains in clear and actionable advice on how you can improve and strengthen yourself every day.

If you’ve been in the nutritional world for a while, the book will cover nutritional practices as you’d expect. However, this book extends beyond those sciences and covers other areas, too. You’ll find advice on better sleeping, moving, everyday toxins, stress management, and even finding a sense of meaning.

From those 6 core aspects, the guide offers over 100 simple steps to improve those categories overall. Best of all, these changes aren’t massive. The guide is meant to be fun, simple, and easy to implement.

It’s suggested that you try not to read the entire thing in one sitting. The goal of this book is that you read a little and implement what you’ve read before going back to reading more.

Buy the book here.

2. Greatest Book on Supplement Use

Another aspect of better health that many have gone through is supplements. Supplements are a nice way of covering specific vitamins that your current diet is lacking in. However, you don’t want to be walking into a pharmacy and picking up every kind of vitamin. There are dozens of them and some may not provide much benefit to you.

This is where this book comes in—Fortify Your Life. In it, you’ll meet the integrative health physician Tieraona Low Dog, M.D. who will walk you through the supplement world. You’ll learn about key vitamins and minerals, reading product labels, and bring up common nutrient deficiencies you may be experiencing right now.

Dr. Low keeps a level head throughout the entire book, distilling all of the purported health claims and attractive labels into hard facts. She talks about the industry and educates you on what will benefit you the most.

For example, one of the most common vitamins that physicians recommend is vitamin D (specifically D3) or an omega-3. The problem is that most physicians aren’t familiar with top brands. Dr. Low Dog can help you pick out which brand will be best for you.

Buy the book here.

3. Best Book on Health for Science-Based Health Advice

The title of this next book stands out a lot—How Not To Die. Even if it’s a little dark, the author, Dr. Greger, provides practical advice on how to not die. After all, according to Dr. Greger, we may be living longer, but we’re also living more of those years dealing with sickness.

In this book, he sets strict guidelines on how we should be dealing with illness and backs it up with sound and practical advice. The book aims to help you address the root causes of diseases rather than just treat the symptoms once you have them.

In terms of the advice in this book, Dr. Greger provides lifestyle factors like having whole foods and a plant-based diet. He also covers methods in preventing, stopping, and reversing death caused by heart and lung diseases, some cancers, and diabetes.

All of these sound great and best of all, these are all backed by scientific research. It’s a more reliable book compared to other longevity books. You can expect a plethora of citations citing back to various studies. All Dr. Greger did is take that information and put them into a comprehensive, easy-to-read book that you can act on immediately.

Buy the book here.

4. Greatest Book on Workout Recovery

Even if you’re not training to be an athlete, you may have heard “recovery” buzzing around on forums and in the gym. It’s gained in popularity, and it makes sense. Who wouldn’t want to recover quickly from a workout session and keep at it the very next day?

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What If You Can Get in Shape at Home?

Just as much as working out and eating healthy is good, recovering properly from physical activities is important. In the book Good To Go, award-winning science journalist and competitive athlete Christie Aschwanden provides an entertaining and enlightening experience to the recovery side of training.

Overall, the book looks at why people care so much about this and some of the recent trends of recovery techniques, such as cryotherapy, floating, and infrared sauna bathing after training. Aschwanden provides analyses on whether they work or not.

On top of that, the book examines other recovery trends among athletes themselves like Michael Phelps’s “cupping” ritual or Tom Brady’s infrared sleep gear.

Even if you’re not an athlete, recovery techniques are flooding the market and this book provides practical advice and insight into whether these will work for you or whether you should move on.

Buy the book here.

5. Best Book on Health for Nutritional Details

Turn on the local news and you’ll find that a new health study has emerged that flips everything you know about health on its head. That or you’ll find a study that’ll suggest eating a certain way will put you more at risk of diabetes, obesity, or other cardiovascular problems based upon what you’ve eaten for breakfast.

This is one of the biggest problems in the health industry, and this is why so many are confused. One study supports a way of eating or health method while another goes against it entirely. What do you choose?

Well, one choice that’ll make your life easier is through a recent book: Nutrition in Crisis. In it, eminent biochemist and medical research Dr. Richard Feinman cuts through all of the noise and explains the intricacies of nutrition and human metabolism—all while avoiding scientific jargon.

Digging further, the book offers an unsparing critique of the nutritional establishment—an establishment that demonizes fat and refuses to acknowledge low-carb diets and ketogenic diets despite the fact there are now decades of evidence that suggest the exact opposite.

On top of that, the book contains essential tools to help you navigate through the world of nutrition with a level head and not be deterred by what you see in magazines or on the news. These are all explained in simple terms with a witty and wry tonne. It’s a refreshing and realistic take to the health world.

Buy the book here.

6. Greatest Book on Stress Management

Stress is a natural part of life by this point, and it’s something that we face every day. In light of this, there are hundreds of sources of information on dealing with stress. Out of these sources, The Power Source is a book you should look at. It’s written by celebrity trainer Lauren Roxburgh.

In it, Roxburgh explains a method to destress in a way that not many cover in their books or articles—using the pelvic floor. Roxburgh claims that many problems can be alleviated by unlocking the pelvic floor and improving your overall physical and mental health.

The pelvic floor is located at the root of your pelvis and Roxburgh believes that this determines the firmness of your core. The reason your core is important is that it is the point that determines how you manage stress and how much energy reaches the rest of your body—be it positive or negative.

What this book provides are methods to strengthen your pelvic floor along with four other “power centers” in your body. This is done through simple exercises, recipes, and simple at-home relaxation therapies. Through this, you’ll have better control over your own stress.

Buy the book here.

7. Best Book on Health for Beginner Plant-Based Eaters

Plant-based foods are starting to become more and more popular with companies emerging and creating plant-based beef. While there are people who are skeptical about the whole craze, this book sheds a lot of light on this phenomenon: The Plant-Based Boost.

Reach My Goal!

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In the book, renowned dietitian and nutritionist Melissa Halas explains to readers how incorporating plant-based foods in your diet can improve performance and achieve fitness goals. Whether you are an omnivore and working to eat less meat or a vegan, this book serves as a guide to help you with meal prepping to snack strategies to implement.

Furthermore, you’ll find several evidence-backed benefits of eating plant-based proteins and healthy fats. You’ll even find how various fluids and electrolyte strategies that’ll help you stay properly hydrated.

Buy the book here.

8. Greatest Cookbook

You may think cookbooks have fallen by the wayside with many sites offering hundreds or even thousands of recipes. However, there is still some charm of cracking open a physical textbook and following the recipe. On top of that, many cookbooks provide very niche focuses these days. That much is clear when it comes to the cookbook mentioned here: The Clean Plate.

What’s nice about this cookbook is that it delivers flexible and straightforward recipes for you to get into—well over 100 recipes in fact. These include soups, smoothies, entrees, snacks, and desserts, too.

Since many people can get recipes online, cookbooks also gravitate towards adding more information than your standard recipes. I picked this one since what it adds on top of the recipes is outstanding.

On top of the recipes, this book on health also provides tips from nutrition experts and offers meal plans based on common health concerns, such as heart health, adrenal support, and candida. These meal plans are based on what doctors and other nutritionists typically provide for those with those kinds of conditions. The cookbook also provides alternatives for vegans.

Buy the book here.

9. Best Book on General Healthy Eating

As mentioned before, the nutritional world is complicated with hundreds of studies being for and against certain foods and methods. For those not picking up nutritional books, it’s fair to say you could have some rough relationships with particular foods or even about certain health practices.

Eat To Love is a Buddhism-inspired book providing you with a healthy eating guide and time-tested techniques to help you with your eating relationship. This book talks about intuitive eating, meditation, and mindfulness to look at various prejudices around eating a certain way.

All in all, this book will help you with eating in a more nourishing, liberating, and enriching way.

Buy the book here.

10. Greatest and Easiest Book to Read

What’s nice about this list is that all of the information is condensed into easy-to-read, actionable advice. However, we won’t deny that there aren’t any complicated health books or information out there. Beyond that, there are many myths around the health industry, and it’s hard to tell what is real and helpful or what’ll waste your time.

The upside is that this book, Dressing On The Side, isn’t a complicated book to read. Registered dietitian Jaclyn London writes this book with ample research and wit to the point it sounds like you’re talking to your best friend. The overall premise of the book is to make the nutritional world fun and entertaining while providing valuable information that it’ll debunk many kinds of diet myths.

Every chapter in this book will provide you with a few bullet points of what you’ll achieve from the chapter. From there, the book will jump right into a well-thought-out discussion. These discussions are engaging and interesting and provide you with practical advice that’s backed by science. Overall, the goal is to help you have life-long habits and strategies that can lead to lasting change.

Buy the book here.

Final Thoughts

The nutritional world is filled with all kinds of thoughts and ideas. It goes to show that finding success health-wise can be done in so many different ways. In the end, you should do what makes you feel good, and I believe picking up some of these books will help you feel even better about some of the views and opinions floating around the nutritional world.


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