Topley’s Top Ten – February 10, 2020

1.Energy Drops to 3.8% Weighting in S&P

Dividend Yields 4-7%  Barrons

Energy Stocks Might Finally Have Hit Bottom. It’s Time for Investors to Get In.  By Andrew Bary

2.Coronavirus Drops the Baltic Dry Shipping Index to All-Time Lows.

Baltic Dry Index – BDI By BEVERLY BIRD What Is the Baltic Dry Index – BDI?

The Baltic Dry Index (BDI) is a shipping and trade index created by the London-based Baltic Exchange. It measures changes in the cost of transporting various raw materials, such as coal and steel.

Members of the exchange directly contact shipping brokers to assess price levels for given shipping paths, a product to transport, and time to delivery or speed. The Baltic Dry Index is a composite of three sub-indices that measure different sizes of dry bulk carriers or merchant ships: Capesize, Panamax, and Supramax.


  • The Baltic Exchange calculates the index by assessing multiple shipping rates across more than 20 routes for each of the BDI component ships.
  • Members contact dry bulk shippers worldwide to gather their prices and they then calculate an average.
  • Many investors consider a rising or contracting index to be a leading indicator of future economic growth.
  • The index can experience high levels of volatility because the supply of large carriers tends to be small with long lead times and high production costs.


3.Money Pours into U.S. Bonds…U.S. Dollar Hits New Highs.

Dollar +2.3% YTD vs. Emerging Markets -5% International Continues to underperform as dollar stays strong

4.Emerging Market Currencies Tumble

5.Coronavirus and Apple…381 of 775 Manufacturing and Supply Chain Locations in Apple’s Global Supply Chain Located in China.

Barrons-Coronavirus Could Bring Tech Supply Chains to a HaltBy Eric J. Savitz

6. Speculative Paper Called Payment-In-Kind or PIK Securities Returns.

Barrons–Case in point: the return of particularly speculative paper called payment-in-kind, or PIK, securities. Instead of paying interest in cash, the borrower simply issues more debt to the investor. During the crazy days of the mortgage bubble that led to the financial crisis, home buyers would take on interest-only mortgages to get into houses they couldn’t afford. With PIK securities, corporate issuers don’t even have to pay interest; they just issue more paper, effectively going deeper into hock.

Such deals, in which backers extract their equity, weren’t uncommon in 2005-07, before the financial crisis, notes Cliff Noreen, head of global investment strategy at MassMutual. The big insurer is a major investor in corporate credit, with $567 billion under management. The return of PIKs reflects investors’ hunger for yield in today’s low interest-rate environment, which includes negative yields abroad.

“As an investor, I believe these are great for the issuer but not the bond buyer,” he writes in an email. In essence, buyers are getting bondlike returns for private-equity-like risks, he adds. Adding to the dangers of what Moody’s notes is a highly leveraged transaction: The bonds are issued by a holding company, not the operating company itself, Noreen points out.

Tesla’s Manic Rally Isn’t the Only Sign of a Market BubbleBy  Randall W. Forsyth

7.U.S. 10 Year Treasury Yield Holds Lows.

8.Economic Growth By President

9.Percentage Change in U.S. Energy Produced Relative to 2010


10.Leaders Go First

Whenever I propose an outlandish idea, I volunteer to go first.

By Mickey Mikitani, Founder, Chairman and CEO of Rakuten, Inc.

“That will never work. It’s crazy!”

I hear it a lot.

Even as CEO, there are plenty of times when someone looked at me and told me that the thing I’ve just said — a deadline, a goal, a new idea — is simply nuts.

I’m used to it. What’s more, I have a tried-and-true plan to combat it. Whenever I propose an outlandish idea, I volunteer to go first.

So when I announced to my Tokyo-based company in 2010 that from this point on, the official language of Rakuten would be English, I listened while everyone said I was making a huge mistake and it wouldn’t work. And then I went first.

All my meetings, all my interactions in the company, were conducted in English. This was not easy. In the early years of using English there was quite a variance in language skills within the company. Many times in the middle of senior level meetings someone would turn to me and say: “This next part is difficult so can I just say it in Japanese?”

Certainly I wanted to hear what my team had to say. But I stayed firm. What good is a bold new idea if I’m not willing to do it myself? If we want everyone in this company to speak English, then that means me, too. Even with my senior leadership team. Even when it is difficult. I gave the “crazy” order and I was willing to go first.

Last year, when we introduced mandatory programming training for all new grads, some of our young recruits were undoubtedly nervous. However, they embraced the challenge head-on with the knowledge that I myself had learned to code during the early days of the company.


This is my standard practice. When I decided it would be a good team bonding exercise to climb Mount Tanigawa (local nickname: Mountain of Death), I went up in the first group. When, some years ago, I decided it would be a good idea for Rakuten to adopt a formal dress code until we improved our e-commerce performance, I was the first to show up in a suit. As Rakuten Mobile began to rollout the radio antenna base stations crucial to the new network launch, I made sure to be on the ground checking new installations at locations across the country.

This willingness to go first — to do the work you ask others to do — is a critical element of leadership. And it is particularly important when you’re asking people to do something that has never been done before. Often, people are apprehensive when faced with a new idea or direction. It’s scary to think that the boss may be leading the company into uncharted territory. So it’s an important inspiration to be willing to get out in front and go first.

This doesn’t only apply to those in the corner office. When new recruits join Rakuten, they are treated to an early lesson on this topic. One which many refer to by an old advertising adage: Eat your own dog food. That means, when you are a part of Rakuten, you should be comfortable using all the services in the Rakuten ecosystem. By playing around with our digital content services like Rakuten TV or our global messaging app Viber, new discoveries can be made. If we want customers to follow us, we must be willing to go first.


Going first is an important inspirational process, but it is also an important yardstick for my own creative process. I have new ideas all the time. As I turn them around in my head, I think of many things. Will this be profitable? Will this provide a benefit to society? Will this reflect positively on the Rakuten brand? But in my process I must also consider: Would I do this myself? Am I willing to be Customer No. 1? Next time you have a business idea, perhaps you can ask yourself the same questions.

There are many benefits to going first. It allows me to gain critical firsthand intelligence. It helps inspire others in the company to embrace something different and challenging, regardless of how unusual it can initially seem. And of course, when the idea is successful, it allows me to be the first to say: I told you so.

This article was originally published on and also appeared on

— Published on February 3, 2020