Topley’s Top Ten – December 27, 2019

1.Since 1928 the S&P is Up Just Over 50% of Trading Days But that Translates to a 18,000% Return.

Happy holidays from Bespoke!  Please see the bottom of this email for a great membership deal.  Also, tune in to CNBC between 12:15 PM ET and 1:15 PM ET today to see Bespoke’s Paul Hickey.

52.3%.  That’s the percentage of all trading days throughout the S&P 500’s history since 1928 that have been up days for the market.  Even though just barely more than 50% of trading days have been up days, it has translated into a price change of 18,157% for the S&P 500.

Casinos are wildly profitable using a similar format.  They only have to win slightly more than 50% of all bets made to make a tremendous amount of money.  The beautiful thing about investing in the stock market is that you get to be the casino for once!

2019 has been a great year for the S&P 500 with a gain of more than 28%.  As shown below, the index only needed to trade higher on 59.3% of days to generate a 28% gain.  But positive days occurring 59.3% of the time in a trading year is actually very rare.  Only five other years since 1928 have seen up days more consistently with the most recent coming in 1995 when 61.9% of all trading days were positive. 

(Past performance is no guarantee of future results.)

Our 2020 Outlook report is a must-read heading into the new year.  Really. 

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2.Private Equity Snapshot …. From 2006 to 2017, the number of PE-backed companies increased 106% while the number of publicly traded companies fell 16%.

PRIVATE EQUITY Private Equity’s Not Looking Back
A chart showing steadily increasing PE deal counts and values

Ian McKinnon

U.S. private equity deals have climbed steadily upward in both quantity and value, according to PitchBook. IT, healthcare, and B2B sectors made up the majority of deals. From 2006 to 2017, the number of PE-backed companies increased 106% while the number of publicly traded companies fell 16%. In 2018, the number of private equity deals finally rose to pre-recession levels. It’s just one indicator that private markets are “mainstream,” according to McKinsey.

3.Oil and Gas Stocks Price to Sales Ratio at Record Lows.

Twits note Energy service stocks never looked so cheap – Price to sales ratio now below times that preceded major bottoms, and One of the few industries trading at 1x annual revenues.   OSX was the only sub-index trading very heavy on Tuesday.

From Dave Lutz at Jones Trading

4.Russian Stock Market +30% Lockstep with Oil Prices.

RSX Russian ETF vs. Oil

5.Crude Oil Implied Volatility Plunging.

The Daily Shot

6.Oil Prices Up But Unleaded Gas Still Well Below 2019 Highs.

7.2019 Winners and Losers

LPL Blog

8.Is America’s Love Affair with Driving Coming to an End?


miles than they did before 2007-09 recession

Americas Love Affair With Driving Takes a Back Seat-By David Harrison

9.Women Becoming the Majority of University Students in the Middle East….Iran Moved Above 50% This Year.

10.9 Key Principles of Learning a New Skill

The science of learning new skills for mature brains.

Source: Zjarral1 [CC BY-SA 4.0 (]

Learning new skills can be a great way to keep an aging brain in shape. How can adults learn new skills more effectively? Learning techniques vary depending on the skill and the person.

Deliberate practice is purposeful; it knows where it is going and how to get there. Purposeful practice is not just performing the same activities over and over without immediate feedback on the outcome. Evidence has shown that deliberate practice can produce impressive results (Ericsson et al., 2018).

Here are some general rules you can follow in your pursuit of mastering a new skill (Ericsson  & Pool, 2016).

1. Set learning goals. Having a clear goal in mind before you begin your journey is essential. Without knowing where you want to get to, you cannot plan. Having narrow and precisely defined goals and questions are far better than broadly defined goals and questions.

2. Start small. Purposeful practice is all about putting a bunch of baby steps together to reach a longer-term goal. The key thing is to take the general goal (get better) and turn it into something specific that you can work on with a realistic expectation. Set yourself deadlines. This way, you will know if you are starting to fall behind or have plateaued.

3. Get feedback on mistakes. You have to know whether you are doing something right and, if not, how you are going wrong. Determine your weaknesses and figure out ways to address them. The joy of seeing yourself to improve at something is very encouraging.

4. Stay focused. Deliberate practice is deliberate. That is, it requires a person’s full attention and focus on a specific goal.

5. Use mental representations. A mental representation (standard) shows you “what you are supposed to be doing.” Mental representations make it possible to monitor how one is doing, both in practice and in actual performance. For example, in music, mental representation allows expert musicians to duplicate the sounds of a piece that they want to produce while they play.

6. Get out of your comfort zone. Getting out of your comfort zone means trying to do something that you couldn’t do better. Doing the same thing the same way is a recipe for stagnation. When you run into an obstacle, improve gradually, until another barrier arises.

7. Mindset matters. People often shy away from learning a new skill, such as learning to play a musical instrument at a later age. The biggest hurdle for adult learning is attitude, such as a lack of confidence. Eventually, that lack of confidence may become a self-fulfilling prophecy, as the cognitive skills slowly decline through lack of use.

8. Sustain motivation. Maintaining the focus and the effort required by purposeful practice is hard work. When you quit a project that you had initially wanted to do, it is because the reasons to quit eventually outweigh the reasons to continue. So, to maintain your motivation, you can both strengthen the reasons to continue and weaken the reasons to quit.

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9. Exploit the power of neuroplasticity. Neuroplasticity has been shown to be integral to adult learning and development. The power of neuroplasticity suggests that we are not stuck with the brain we were born with, but have the capacity to willfully alter our minds and bring about enduring changes in our mental and emotional state (Davidson and Begley, 2012). However, that malleability decreases with age, making it progressively harder to learn. That means older adults require specific types of training (e.g., self-paced) to learn new skills.

A meaningful life

The take-home lesson is that to keep our minds sharp in older age, we need to engage in new challenges (e.g., learn a new skill). Lifelong learners get great satisfaction and pleasure from exercising their abilities and feel a tremendous sense of personal achievement from pushing themselves to develop new skills.

Shahram Heshmat Ph.D.