Topley’s Top Ten – November 19, 2019

1.The S&P 500 is up nearly 25% in 2019 and history shows the momentum could carry over to next year

Yun Li@YUNLI626

Gina Francolla


  • Going back to 1928, there have been 17 occasions when the S&P 500 has scored an annual gain bigger or equal to 25%.
  • And 71% of the time, the S&P 500 is positive in the following year with an average gain of 7%, a CNBC analysis using FactSet data found.
  • The S&P 500 has only had five negative years following a 25% annual return since 1928.

The record-breaking rally has brought the S&P 500′s return this year to nearly 25%, and if the gains hold up for the rest of the year, the market could have more room to run in 2020 if history is any guide.

Going back to 1928, there have been 17 occasions when the S&P 500 has scored an annual gain bigger or equal to 25%. And 71% of the time, the S&P 500 is positive in the following year with an average gain of 7%, a CNBC analysis using FactSet data found.

The S&P 500 was up 24.5% for the year through Friday’s close. Futures were pointing to some more gains on Monday.

The average is skewed by a 36% loss in 1936 around the Great Depression. Looking at the average performance in the “modern” era from 1950 forward, the average annual performance is a gain of 11.25% for the S&P 500 after a banner year.

The S&P 500 has only had five negative years following a 25% annual return since 1928.

Wall Street strategists and investors have said it’s all coming down to President Donald Trump and the China trade war if the market can close out the year with solid gains. The market has been moving on any development in the U.S.-China trade war for nearly two years.

Optimism on a trade resolution has risen recently after the two countries reached a truce and started working up a so-called phase one deal. White House economic advisor Larry Kudlow said the two countries were “getting close” to reaching a trade deal, sending stocks to new all-time highs.

To be sure, next year could be unpredictable due to the upcoming presidential election. Wall Street is already worried about the ascent of Massachusetts senator Elizabeth Warren and her wealth tax proposals. Notable investors including billionaire Paul Tudor Jones and longtime investor Leon Cooperman have warned of a market correction, should Warren take the White House.

2.Stocks Making New Lows By Sector…Energy Huge Laggard.

From Nasdaq Dorsey Wright.

3.U.S. Rig Count The Number of Active Drilling Rigs in U.S. -26% in 6 Months

US Rig Count, displays the number of active drilling rigs throughout the United States. The indicator is closely watched as a precursor to oil production in the US oil and gas production industry. Throughout the mid 2010s, US rig counts reached a low of 404 active drilling rigs in May 2016 following significant decreases in oil prices from previous years, then started to rebound as oil prices started to rise again and improvements in drilling technology made previously uneconomical oil deposits viable.

US Rig Count is at a current level of 806.00, down from 817.00 last week and down from 1081.00 one year ago. This is a change of -1.35% from last week and -25.44% from one year ago.

4.Hedge Funds Have Cut Short Bets on Crude Oil by 41%

COVER BIDHedge-fund managers unwound bets that crude will fall at the fastest pace in 16 months as the prospects for a trade war truce and a slowdown in shale drilling helped futures rebound – Oil short-sellers slashed their bearish positions on West Texas Intermediate crude by 41% in the week ended Nov. 12. 

While U.S. explorers are still pumping crude at a record clip, drilling has plunged to the lowest level in more than two years as companies come under increasing pressure to cut spending, with many strapped for cash. That means an eventual slowdown in output.

From Dave Lutz at Jones Trading

5.Investors Portfolio Construction Goals Are Defensive.


6.Demand for Airplanes

Airplanes Aren’t Selling Like They Used To

Soft demand at the Dubai Air Show suggests the aerospace cycle may have run its course, especially for the biggest planes.

Brooke Sutherland

7.U.S. Population Growth Falling to New Lows.

The decline in population growth in the United States continues, see chart below. This is at the core of the secular stagnation hypothesis put forward by Larry Summers.


Let us know if you would like to add a colleague to this distribution list.

Torsten Sløk, Ph.D.
Chief Economist
Managing Director
Deutsche Bank Securities

8.Quantum Computing.

  • Spin qubits have potential for reduced thermal constraints, greater stability, and smaller physical size.

What is Quantum Computing

Binary encoding of data is fundamental to computing, with bits comprising zeroes or ones represented electrically as “on” or “off” states. Quantum computing reimagines that approach, replacing bits with qubits that can simultaneously manifest multiple states as they are generally defined in classical physics. Quantum systems that represent data using qubits and quantum phenomena such as superposition and entanglement potentially enable computing at unprecedented levels of massive parallelism.

Work by Intel Labs on quantum computing draws on ongoing internal research, paired with collaborative relationships and investment across global academia and industry, as well as Intel’s leadership in silicon fabrication techniques. Research has been ongoing for decades, growing from a theoretical level with thought experiments throughout much of the 20th century, with the first functional hardware components for quantum computing developed only in the past several years.

9.Patent Applications in the U.S. Flat Lining.

10.6 Stoic Tips to Being a Great Friend

When we think of great Stoic figures like Marcus AureliusCato and Epictetus, we tend to focus solely on the individual. Their perspective, their observations. But how did these brilliant thinkers treat those around them? We know from historical accounts that Marcus ruled the people of Rome with reason, and Cato earned the respect of his troops by sleeping in the trenches with them. Even so, out of all the Stoics that we read today, there’s only one who gave us such comprehensive insight into how they spoke and acted towards their dearest friends.

Seneca’s Letters from a Stoic are nothing more than a series of deep conversations he had with a close friend, each letter covering a different topic or merely expanding upon what was said in earlier letters. The collection of correspondence certainly gives us more insight into Seneca himself, but it also raises as many questions as it answers. What does it mean to be a good friend? How does one go about maintaining meaningful friendships, and discarding the ones that aren’t in our best interest to keep?

Lucky for us, philosophers like the Stoics mentioned above have already wrestled with these ideas. Here are several tips from our Stoic forefathers on how to have more genuine, meaningful, and timeless friendships.


“If you consider any man a friend whom you do not trust as you trust yourself, you are mightily mistaken and you do not sufficiently understand what true friendship means… When friendship is settled, you must trust; before friendship is formed, you must pass judgment…Ponder for a long time whether you shall admit a given person to your friendship; but when you have decided to admit him, welcome him with all your heart and soul.”

 — Seneca, Letters from a Stoic 

The ability to judge situations and people is an evolutionary gift. It wouldn’t be beneficial for us to immediately trust every person we meet, as this would surely lead to being taken advantage of. 

Choosing a friend should, in many ways, be similar to the way you answer your door. When you hear a knock, you don’t open for just anyone. For some, you leave it closed. For others, you may open the door, but guard it nonetheless. Finally, there are those you let in. Only those who have consistently demonstrated their trustworthiness should be allowed to enter. Whether it’s your home or your heart, the same rules apply.

It’s important to note that we get better at making accurate judgments with time. Stoics called this oikeiōsis, which can be translated as “appropriation” or “familiarization.” We all begin life with an untainted understanding of what is good and bad. We seek what is pleasurable and avoid what is painful. The Stoics believed that with time, we could learn to refine our sense of good and make more accurate assessments about the natural world. Of course it will take time and we won’t always judge correctly. The friends that we properly judge, though, will remain in our lives forever.


“He who regards himself only, and enters upon friendships for this reason, reckons wrongly. The end will be like the beginning: he has made friends with one who might assist him out of bondage; at the first rattle of the chain such a friend will desert him. These are the so-called ‘fair-weather’ friendships; one who is chosen for the sake of utility will be satisfactory only so long as he is useful…He who begins to be your friend because it pays will also cease because it pays. A man will be attracted by some reward offered in exchange for his friendship, if he be attracted by aught in friendship other than friendship itself.”

 — Seneca, Letters from a Stoic

We all know what the fair-weather friend looks like. You share a common interest that you engage in together. You communicate here and there. It looks like friendship, it feels like friendship, but when the hardships of life come storming about, these same friends are nowhere to be found. 

We need people we can rely on in times of crisis. It’s why trust is such an important prerequisite to friendship. Not to mention, if we use someone for the sake of their utility or merely as a means to some end, we aren’t living up to our guiding principle of Summum Bonum. Meaning, we aren’t living up to the values that are supposed to be imbedded in everything we do. 

The Stoics would undoubtedly be in favor of seeking friendship because it is inherently good, not because it’s useful. A good friend is always there when someone needs them. They don’t shy away from tragedy or think themselves better than the person who needs their comfort. A good friend is there, period. Not only should we look for this quality in our current group of friends, but also in ourselves. 


“Above all, keep a close watch on this— that you are never so tied to your former acquaintances and friends that you are pulled down to their level. If you don’t, you’ll be ruined. . . . You must choose whether to be loved by these friends and remain the same person, or to become a better person at the cost of those friends . . . if you try to have it both ways you will neither make progress nor keep what you once had.” 

— Epictetus, Discourses

One of the hardest aspects of friendship is recognizing when it’s time to let go. Sometimes a dear friend may still be trustworthy and loyal, but their actions towards others and the world around them no longer align with your morals. 

In such a case, we’re faced with two choices. Either we maintain the friendship at the cost of our personal growth, or we end it at the cost of our friendship with that person. In the former scenario, we choose to keep ourselves from progressing. In the latter scenario, we make a difficult choice in support of our values.

The Stoic response to this situation would utilize the idea of preferred indifference, which in the context of friendship would look something like this: you should be neither overly upset or overly joyous at the loss of a friend. Instead, you should be indifferent; fine either way. For the friends we keep, we get to enjoy what is hopefully a lifetime of companionship. For those we decide to let go, we are doing so in support of our values and personal growth. 

What does this mean? That we are free to embrace and cultivate any friendship we like, so long as it doesn’t compromise our morals.


“Nothing will ever please me, no matter how excellent or beneficial, if I must retain the knowledge of it to myself. And if wisdom were given to me under the express condition that it must be kept hidden and not uttered, I should refuse it. No good thing is pleasant to possess, without friends to share it.” 

— Seneca, Letters from a Stoic

If you think about some of the happiest moments in your life, chances are those memories involve people you care about. Maybe it’s the night you asked the love of your life to marry you, or the day you secured your dream job and celebrated with friends and family. No matter the occasion, one thing is for certain: the best things in life are meant to be shared.

Next time you’re about to do something (or anything really) try bringing a friend. It doesn’t matter if it’s going on a big vacation, or simply binge-watching a new show Netflix. Listen to the joy in their voice as you invite them and fully embrace the experience that you’re about to share. You’ll find that Seneca, as per usual, was right about this as well.


“Whenever you kiss your child, sibling, or friend, don’t layer on top of the experience all the things you might wish, but hold them back and stop them, just as those who ride behind triumphant generals remind them they are mortal. In the same way, remind yourself that your precious one isn’t one of your possessions, but something given for now, not forever…” 

— Epictetus, Discourses 

The concept of Memento Mori is well-known to the Stoic community. We wear necklaces that bear the saying, and keep skull-shaped coins in our pockets, and for what purpose? To remind us that our time is limited—that what we do matters. While the mantra is designed to remind us of our own mortality, we often forget that this also applies to everyone we know. 

Ask yourself, would you treat your friends the same way you do now if you knew that they wouldn’t be here tomorrow? It’s not that we don’t treat our friends well because we’re mean-spirited. But we certainly lose sight of the shortness of life; we overestimate how much time we have left with the people we care about. The way we treat others in each moment could be the last thing we ever do.

We’re all good at applying memento mori to ourselves and our own life, but it’s in our best interest to keep this in mind during interactions with friends as well. If we can remember to treat our companions as if they could be gone at any moment, we’ll be far less inclined to take them for granted. 


“Love the discipline you know, and let it support you. Entrust everything willingly to the gods, and then make your way through life – no one’s master and no one’s slave” — Marcus AureliusMeditations, 4.31

At the center of Stoic thought is the idea that we have to understand what we can and cannot control. Perhaps the most difficult thing to accept is that we can’t control other people. We’ve all had those friends who always want to be in charge and boss people around. They’re the ones who make the plans and change them as they please. In group settings and competitive environments, they’re almost unbearable to be around—almost

Being in pursuit of balance, we should never play this game. We should never seek to control other people, nor should we allow ourselves to be controlled. Instead, we should be mindful of the way we conduct ourselves and accepting of the way that others are. Some of the greatest pain we feel comes from our desire to change things about a person we can’t possibly change. What should we be doing? Leading by example and allowing our character to serve as a guide for our friends who don’t always act with our same level of self-control. 

Who we choose to spend our time with is a reflection of our character and our ability to judge others. As you begin to assess those around you and the friends you spend time with, reflect on who helps you grow and who holds you back. Who can you call at three in the morning on a weekday and they’ll be at your door in a moment’s notice? Who can you depend on to lift your spirits when you feel like there’s no way up? 

Whatever your answer may be, friendship is one of life’s greatest gifts. To have people to depend on in times of crisis and share wonderful memories with is valuable in and of itself. Whether we realize there are friends we need to let go, or friends we need to work harder to keep, one thing is for certain:

There is work to be done.