1.Growth Advantage Over Value Continues in 2018.
S&P 500 Growth Index +1.78% vs. S&P Value -3.62%
Large cap value stocks have been underperforming since August 2006.
2.Value vs. Growth Last Interest Rate Rising Cycle.
Here’s the chart showing how the Russell 1000 Growth and Value indexes performed from the end of 2000 through June 2006:
This may be the best time for value over growth stocks in 17 years
The value approach did its job as a defensive play during the last cycle of rising interest rates. This time around, inflationary pressure brought about by rising rates as demand for workers increases could force the Fed to be more aggressive. It’s too early to say how far the trade-war saber-rattling between President Trump and China will go, but if you fear a trade war, you also fear inflation.
3.U.S. Dollar Pulls Back to its 30 Year Average.
4.Oil-Demand Outstripped Supply by 2m Barrels in Feb.—Add in Weak Dollar Above.
Around the world, demand for oil during the last 12 months has been surprisingly strong. Not only has it outstripped supply by an average of 700,000 barrels per day (bpd), but in February, the number swelled to more than 2 million bpd!
Here in the U.S., an identical trend is unfolding. Demand is so strong that crude oil inventories have been falling sharply for months. According to data from the DOE, the nation’s crude inventory has dropped 20% year over year…
5.381 Factor Based ETFs Launched in 2017 Alone…
6. 90% of All Searches are Conducted Via Google Platforms.
7. International students account for 81% of the full-time graduate students at U.S. universities in electrical engineering and 79% in computer science
U.S. tech giants hiring more foreign workers on H-1B visas
Prominent U.S. tech companies obtained more H-1B visas in 2017 than in 2016, according to a new study by the National Foundation for American Policy using fresh data from U.S. Citizenship and Immigration Services. At the same time, several of the largest India-based companies saw a decrease in approved petitions for the second year in a row.
The big picture: Total petitions for H-1B visas for the 2019 fiscal year fell by about 9,000, mostly due to a decreasing numbers of H-1B petitions from India-based firms. However, the study shows there is still a strong demand for H-1Bs in the U.S.
Behind the numbers:
- Foreign students: International students account for 81% of the full-time graduate students at U.S. universities in electrical engineering and 79% in computer science, per the report. That could be a contributing factor to the high number of H-1Bs used by U.S. tech companies, hoping to retain high-skilled workers trained in the U.S.
- The other side: Shivendra Singh, Vice President of NASSCOM, which represents India’s IT industry, told Axios that India-based companies are using fewer H-1Bs due to changes in needed skills, more local hiring by U.S. companies, and the use of new technologies that require “more non-STEM, managerial-type talent that is more readily available in the U.S.”
- Yes, but: Dan Stein, president of the Federation for American Immigration Reform, which advocates for lower legal immigration levels, tells Axios that “these trends reflect an effort to eliminate large-scale abuses of the program… Not surprisingly, higher approval standards would produce an approval bias in favor of U.S.-based corporations.”
- What to watch: NFAP’s study highlights that Tesla, Uber and General Motors were all approved more than 100 H-1B petitions last year. Visa demand by these companies is likely to increase with the rise of new autonomous vehicle technologies.
8-9. Read of the Day….What if the Future is Better Than We Think?
Posted January 9, 2014 by Ben Carlson
“Humanity is now entering a period of radical transformation in which technology has the potential to significantly raise the basic standards of living for every man, woman and child on the planet.” – Peter Diamandis
I’m a fairly optimistic person, but it can be difficult at times to keep a glass-is-half-full mentality when the majority of the news these days is mainly negativity or viral Internet stories.
There are some well-educated people out there making the case that economic growth in the future won’t be able to keep up with the averages we’ve become accustomed to in the past.
This could lead to much lower returns in the financial markets and a decreased standard of living. Wealth inequality continues to widen the gap between the haves and have-nots, creating even more ammunition for the coming disaster.
It’s easy to get sucked into this line of thinking because usually the PhDs presenting the case have complex models and a narrative to back up their claims. In an uncertain future, sometimes it’s easy to default to a pessimistic view on where things are heading.
But what if just the opposite is true?
What if people are underestimating the potential of future worldwide economic growth and innovation.
Bill Gates shared a few positive developments in his recent look back on 2013:
- We got smarter and faster at fighting polio.
2. Child mortality went down—again.
3. The poverty rate went down—again.
4. Rich countries re-committed to saving lives.
Along those same lines, Zack Beauchamp outlined his reasons that 2013 was the best year in human history:
- Fewer people are dying young, and more are living longer.
2. Fewer people suffer from extreme poverty, and the world is getting happier.
3. War is becoming rarer and less deadly.
4. Rates of murder and other violent crimes are in free-fall.
5. There’s less racism, sexism, and other forms of discrimination in the world.
In the book Abundance: The Future is Better Than You Think, author Peter Diamandis makes the argument that we are underestimating the potential for future progress to solve the world’s biggest problems.
Here are some interesting points from the book to consider:
- According to the United Nations, poverty was reduced more in the past fifty years than in the previous five hundred.
- A week’s worth of the New York Times contains more information than the average seventeenth century citizen encountered in a lifetime.
- Anyone who has a smart phone has better mobile phone capabilities than the president of the U.S. did 25 years ago and better access to information than the president did 15 years ago (think Google).
It’s impossible to predict what can happen when exponential growth takes hold because it means improvements build on themselves much like compound interest on steroids.
Here’s a chart from the book that shows how population and technological growth has absolutely exploded in the past couple of centuries:
Diamandis argues that most people can’t even begin to imagine where the continued technological progress will take us because it’s hard to wrap your head around exponential growth.
And not in some distant future hundreds of years from now. Back to the Future II could be here sooner than we think.
He says that by the 2030s we could see major breakthroughs in all of our biggest issues. These are some of the possible problem solvers:
- Cheap, ample sources of reusable energy (solar)
- Smarter agriculture (genetically engineered seeds and cultivated meat from stem cells)
- Robot technologies (to drive our cars and take care of the elderly)
- Clean water around the globe (portable water purification systems)
- Better healthcare (doctors will use lab-on-a-chip technologies to run hundreds of diagnostics in a matter of minutes from a drop of saliva or blood through your smartphone)
- Philanthropy (look up the Giving Pledge)
- Interconnected household devices (everything with a plug will be more efficient and connected by IP address over the Internet which you can control)
- Education for all (learn anywhere in the world with Wi-Fi Internet access)
The benefits from areas such as improved education could also lead to increased freedom and democracy in oppressive countries, although this one could take some time.
What are the implications for you and your wealth?
It’s hard to tell right now whether all of these predictions from Diamondis will work out.
But if even a fraction of what he is forecasting comes to pass, this could mean (1) higher standards of living around the globe, (2) a rising middle class of consumers to purchase products, save and invest, and (3) technologies coming to light that were once only reserved for the movies.
Not to mention the fact that many of these breakthroughs could help bridge the wealth gap and bring billions of people out of poverty (Many see a situation where the rich continue to get richer off of the technological progress but Diamondis makes the case that it will actually have a much greater impact on the poor than the rich).
There could be new industries, sectors and companies to invest in and higher global economic growth with a new class of consumers on board to buy goods and service.
It’s easy to fall into the trap of assuming everything is terrible in the world. Reading this book made me realize how great we have it now and how amazing life could potentially be in the future.
We are not without problems in the world right now. Things could get worse before they get better.
The point is that no one has any idea about the shape of the future especially when it comes to forecasting economic and technological developments.
I choose to believe that people will continue to want to better their lives, innovate, get smarter, help others and keep the growth engine moving in the right direction.
No actionable investment moves from this information…just something to consider.
10. What a Good Leader Does to Ensure Growth and Opportunity
Incompetent leadership is the biggest problem in most businesses today. Little surprise, then, that GOOD leadership is the key to turning those problems into successes.
Before we dig into the virtues of good leadership, however, let’s compare the two side-by-side so their contrasts are clear:
· Ignore problems
· Avoid difficult discussions
· Discourage debate
· Act cagey and secretive about company decisions
· Use passive-aggressive behavior
· Cling to power and authority
| Good leaders…|
· Address problems head-on
· Communicate effectively
· Encourage team conversations
· Are open, vulnerable, and authentic
· Commit to straightforward relationships with clear expectations
· Delegate as needed for the good of the company and the team
In sum, good leaders lead by example, providing an environment where team members can flourish and grow. They are efficient, purposeful, powerful, and professional.
As Author Andrew Grove spells out concisely in his book, “High Output Management,” much of that work is done through meetings:
“…a big part of a manager’s work is to supply information and know-how, and to impart a sense of the preferred method of handling things to the groups under his/her control and influence. A manager also makes and helps to make decisions. Both kinds of basic managerial tasks can only occur during face-to-face encounters, and therefore only during meetings. Thus, I assert that a meeting is nothing less than the medium through which managerial work is performed. That means we should not be fighting the existence of meetings, but rather using the time spent in them as efficiently as possible.”
Your job as a leader is to delegate, motivate, sell, recruit, and hire. And yes, that’s done largely through well-structured meetings (we’ll get to that in a second), but it’s more generally focused on two things: inward-facing and outward facing responsibilities.
You must support the internal operations of your business while simultaneously addressing external challenges and opportunities.
A good leader manages both of these impeccably, never neglecting staff or customers.
Let’s get more granular, though, and dig into the specific actions a good leader should take for both inward-facing and outward-facing success.
Internally (business-facing), a leader does these things:
- Leads weekly 1-on-1 meetings (called Goal, Set, and Review meetings)
These should be held every Monday and take about 30 minutes per person.
- Runs a Weekly Alignment Meeting every Monday
The structures of both this meeting and the Goal, Set, and Review meeting mentioned above are outlined in ETR University’s “Management Rhythm’s Blueprint”course.
- Supports every team member every day, helping them remove obstacles and improve skills
At the heart of this is your commitment to providing them with an environment in which they can flourish, rewarding them for being proactive, and coaching them for high performance.
- Establishes, grows, and supports company culture
A good leader is keen to reward positive behaviors with public recognition and praise. When you have done the work of recruiting, hiring, and training great team members, they will be ready to flourish. Let them fly!
- Holds the team to high standards
To ensure that the team meets these high standards, have a clear baseline for what you expect and what you will not tolerate.
As an example, here is a great list from Bedros Keuilian, the CEO of Fit Body Boot Camp (FBBC):
FBBC does not tolerate:
- Poor work ethic
- Time theft
- People who flake
- Passive-aggressive behavior
- Pessimists and skeptics
- Doing the bare minimum
FBBC expects and gives:
- High standards
- Team work
- A “can do” attitude
- High speed of implementation
- Hard work
- Attention to detail
Make these expectations known to the entire team so they can’t play ignorant.
That brings us to our next point…
- Communicate consistently and effectively with your team
Proper communication provides clarity and prevents rumors. This goes for the bad as well as the good. If your company is going through tough times, you must not hide this from the team.
If you do, it will only make things worse. After all, it’s human nature to create stories that fill in the gaps. Consistent and effective communication keeps you in control of the truth.
Plus, all communication leads to feedback. All feedback leads to better communication. Better communication leads to strong team-building. This is the flow of the feedback system that accelerates and gets better with more communication.
A great place to start: Send a weekly email or video to your entire staff letting them know the state of the business. Give them an opportunity to provide feedback or send questions that you can answer directly.
Now that you’ve mastered inward-facing responsibilities, let’s see how a good leader tackles external-facing ones.
Externally (customer, talent, and competitor-facing), a leader does these things:
- Creates a company vision
- Openly and regularly strategizes about new opportunities (and how the entire team can take advantage of them)
- Constantly keeps an eye on new and existing talent
This includesidentifying top-notch candidates for new jobs, recruiting high-achieving professionals, and supporting internal staff with ongoing educational options, benefits, compensation, and growth opportunities.
- Increases the awareness of the business in the marketplace via well-crafted marketing
- Regularly sells the business and its products/services to the marketplace
A good leader will also be willing to change sales tactics and audiences as needed to secure more revenue. A lot of these iteration ideas will come from team members.
Here’s the bottom line:
Good leaders—the kind of leaders that foster innovation within and inspiration without—only build 7 or 8-figured businesses when they’re balancing inward and outward-facing responsibilities.
As an entrepreneur, I know how hard it is to step away from a lot of these things. I know I still need to.
But delegation is critical for success. A good leader—even one who is amazingly talented—can’t do everything. Instead, that leader coaches others to succeed.
Let the ego go. You’re not the superstar player anymore. Don’t become enamored of the celebrity CEO, the bigwig mogul, the industry magnate.
Those guys struggle—they constantly lose talent and alienate customers.
But the best CEOs are more than willing to drop the “i” in “team.” These are the inspirational leaders who work behind the scenes to support their teams.
There are many well-known leaders who have learned this through years of company ownership.
Richard Branson, founder of Virgin, once said, “In business, know how to be a good leader and always try to bring out the best in people. It’s very simple: listen to them, trust in them, believe in them, respect them, and let them have a go!”
Sheryl Sandberg, the COO of Facebook, echoes, ”Leadership is about making others better as a result of your presence and making that impact last in your absence.”
This approach to leadership isn’t new. In fact, it’s centuries old.
Fifth-century philosopher Lao Tzu wrote, “A leader is best when people barely know he exists, when his work is done, his aim fulfilled, they will say, ‘We did it ourselves.’”
There’s a reason this kind of leadership has last millennia. At the end of the day, a business or an organization is not about you—it’s not a pathway to adoration or a following. As a leader, you’re tasked with building something much bigger than yourself, a business that positively impacts the lives of both your customers and your team members.
So print out the lists I gave you above. Tape them to your computer or desk. Read them over every day.
Lift people up; let them flourish; communicate with kindness and clarity; push for the best in everyone.