Topley’s Top Ten – September 17, 2019

1.Hedge Funds Record Low Exposure to Small Cap Value.

Twits note how much funds hate value

From Dave Lutz at Jones Trading.

2. Mid-Cap Value Hitting New Highs.

VOE-Vanguard Mid-Cap Value.

5 Year Mid-Cap Growth VOT +54%  vs. Mid-Cap Value VOT +33%

3.Small Cap Low Volatility Had Outperformed Small Cap Value Handily With Similar Fundamentals.

Small Cap Low Volatility XSLV +64% vs.Small Cap Value VBR +30%

Small Cap Low Volatility Price to Book Lower than Small Cap Value

XSLV Fundamentals.

VBR Small Cap Value Fundamentals.

4.The U.S. Political Landscape is Leading Concern Among Investors.


5.Heightened Political Risk is Global….Global Economic Policy Uncertainty in Chart.

Thomas Quinn FIS

6.Vanguard Updated 10 Year Projected Returns.

7.The U.S. Economy Hasn’t Grown Above Average Since 2005….

From Abnormal Returns Blog

Chart of the day

The US economy hasn’t grown at an “above average” rate since 2005.  (Marginal Revolution)

8.WeWork will reportedly shelve its IPO in a ‘last-minute decision’ after weak investor interest

Theron Mohamed
Sep. 17, 2019, 05:03 AM
Getty Images

WeWork has delayed its initial public offering, according to Reuters.

The shared-workspace group was gearing up for an investor road show this week and a public debut this month, but it made a “last-minute decision on Monday to stand down,” Reuters said, citing people familiar with the matter.

SoftBank, a key investor for WeWork, discussed kicking in $750 million to $1 billion to support the IPO, but WeWork determined it would still have raised less than the $3 billion needed to unlock a $6 billion credit line, Reuters reported.

Read all of BI’s WeWork coverage here.

WeWork has delayed its initial public offering, according to Reuters.

The shared-workspace group was gearing up for an investor road show this week and a stock-market debut this month, but it made a “last-minute decision on Monday to stand down,” Reuters said, citing people familiar with the matter.

WeWork postponed over concerns that not enough investors would participate in its listing, the sources told Reuters. It says it still plans to complete it this year.

“The We Company is looking forward to our upcoming IPO, which we expect to be completed by the end of the year,” WeWork told Markets Insider in a statement. “We want to thank all of our employees, members, and partners for their ongoing commitment.”

The group’s largest investor, the Japanese conglomerate SoftBank, discussed kicking in $750 million to $1 billion to support the IPO, the sources told Reuters. WeWork, however, reportedly determined that a listing would have raised little more than $2 billion even with SoftBank’s help. That would be short of the $3 billion it needs to unlock a $6 billion credit line. The bank financing is also contingent on an IPO by the end of this year.

WeWork has faced growing concerns about its path to profitability, the sustainability of its business model, and its corporate governance. The doubts have led the company to slash its targeted public valuation to as low as $10 billion to $12 billion, according to Reuters, a far cry from the $47 billion private valuation it secured in January.

The group reported a net loss of about $1.6 billion last year, almost matching its roughly $1.8 billion in revenue. Its strategy — signing long-term leases for properties and then dividing them up, renovating them, and offering short-term rentals — could suffer during an economic downturn.

CEO Adam Neumann’s control of WeWork, large stock sales, property deals, and family members’ involvement in the business have also raised flags, leading the group to announce sweeping changes to its governance last week.

9.5 Easy Ways to Boost Your Brain Health

Stop wasting money on brain supplements and try these science-backed tricks

Source: brain-1845962_1920 pixabay TheDigitalArtist

Brain supplements are big business. In 2015, the supplement market specifically targeted toward boosting brain health was worth an estimated 2.3 billion dollars. By 2024, that number is expected to increase by 500 percent, reaching an estimated 11.6 billion dollars.

More and more, people are turning to supplements to enhance their memory, alleviate depression and anxiety, increase their attention and focus, support longevity, and prevent dementia. Among the most popular of these supplements are carnitine, ginkgo, ginseng, fish oil, turmeric, and most recent to enter the market, CBDoil.

But do any of these supplements actually work?

Unfortunately, supplements are loosely regulated and good-quality research studies on their effectiveness are hard to come by. But the studies that have been conducted continue to find no evidence in support of their effectiveness. For example, a study published in The Lancet Neurologyexamined ginkgo biloba use among 2,854 older adults with memory complaints over the course of five years. In the end, the group who took ginkgo twice a day had the same number of Alzheimer’s cases as the group who took a placebo.

So rather than wasting your hard-earned money on ineffective supplements, try these five tips for boosting your brain health. Not only are they backed by science, but they’re also easy to do and cost way less than supplements (many are even free).

1. Think Fork, Not Pill

Supplements in pill form may be ineffective, but there are lots of benefits to adding them to your diet the natural way—through food. Research showsthat better brain health is associated with a diet rich in green leafy vegetables, walnuts, berries, and fatty fish.

For instance, a 2012 study on thousands of adults found that those who took fish oil pills to get their omega-3s performed just as well on a short-term memory test and had just as many dementia diagnoses as those who took a placebo. But another study found that people who got their omegas the natural way—by eating a diet rich in fatty fish like salmon—did have a lower risk of dementia.

Certain vitamins and minerals do seem to be effective in boosting brain health, but you have to take them via a fork, not a pill (a great cookbook that includes recipes with brain-boosting ingredients is Fat for Fuel)

2. Get Your Sweat On

We all know exercise is great for your body, but it’s just as good for your brain.

study published in the Journal of Alzheimer’s Disease found that a lack of exercise in older adults put their risk of developing dementia on par with adults who were genetically predisposed to the disease. So even if you are not genetically predisposed for dementia, you could be putting yourself at risk if you are leading a sedentary lifestyle.

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But protecting against dementia isn’t the only benefit of exercise. Regular heart-increasing activity helps the brain work more efficiently, no matter your age or condition. And this doesn’t mean you have to hit the gym hard to boost your brain health. Less strenuous activities, like walking, yoga, tai chi, are also effective as long as they get your heart rate up. Skip counting steps and instead focus on getting a minimum of 150 minutes per week of elevated heart rate activity (this is where a fitness tracker like Fitbit comes in handy).

3. Train Your Brain

Your brain is like a muscle if you don’t use it, it’s strength will start to fade. Regularly exercising your brain—through the use of brain teasers, crossword puzzles, or learning a new language—is a great way to keep your brain in shape.

Now, not all studies support the effectiveness of brain training, but there are enough out there that do, suggesting this is a viable option (it also suggests we need a lot more studies conducted on this topic). For example, a 2018 study had healthy adults perform a training exercise that focused on attention, processing speed, visual memory, and executive functioning. One group performed this training exercise for 15 minutes per day, seven days a week, for three weeks. The other group skipped the training altogether. In the end, the brain-training group demonstrated significantly better attention and response times.

Instead of spending your free time mindlessly binging on Netflix, consider doing tasks that give your brain a workout.

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4. Get a Pet

There are lots of studies showing how having a pet provides mental health benefits.

For example, a 2016 meta-analysis analyzed 17 academic studies and found that people with long-term mental health problems significantly benefited from owning a pet. As the researchers put it, “Pets provided a unique form of validation through unconditional support, which they were often not receiving from other family or social relationships.”

And another study conducted on children found that for children with a dog, 12 percent tested positive for anxiety, compared to 21 percent of children without a dog.

So the next time you need to boost your mood, spend some time with a furry friend.

5. Grab Zzzz’s

Sleep is arguably the most important and most underappreciated factor when it comes to brain health. We live in an age where CEOs, TV show hosts, and presidents brag about being able to function on just a few hours of sleep, but the data suggests that skimping on sleep is akin to starving your brain.

Study after study shows that getting seven to eight hours of sleep is necessary for all aspects of proper brain functioning, including memoryattention, learning, and creativity. You would never starve yourself of food before going to the gym. Why would you starve your brain by skimping on sleep?

Getting more sleep is easy, free, and essential for mental as well as physical health. If you take away one piece of advice from this post, it’s that you need to make sleep a priority and try to get seven to eight hours each night. For an excellent read on why sleep is important and how to get more of it, check out Matthew Walker’s book Why We Sleep.

And what if you absolutely can’t squeeze in more zzz’s? Try taking a nap. One study found that an hour-long midday nap boosted cognitive performance better than 200 mg of caffeine (equal to two espressos).

10.6 Reasons Salespeople Win or Lose a Sale


Why does a salesperson lose a sale?

It’s a question I’ve studied for years, as part of the win-loss analysis research I conduct.

There’s a tendency to assume that the salesperson lost because their product was inferior in some way. However, in the majority of interviews buyers rank all the feature sets of the competing products as being roughly equal. This suggests that other factors separate the winner from the losers.

In order to identify these hidden decision-making factors, more than 230 buyers completed a 76-part survey. The research project goals were to understand how customers perceive the salespeople they meet with, explore the circumstances that determine which vendor is selected, and learn how different company departments and vertical industries make buying decisions. We had six key research findings:

#1: Some Customers Want to be Challenged

What selling style do prospective buyers prefer? The survey shows 40% of study participants prefer a salesperson who listens, understands, and then matches their solution to solve a specific problem. Another 30% prefer a salesperson who earns their trust by making them feel comfortable, because they will take care of the customer’s long-term needs. Another 30% want a salesperson who challenges their thoughts and perceptions and then prescribes a solution that they may not have known about.

From a departmental perspective, under 20% of accounting and IT staffers want to be challenged, while 43% of the engineering department does. Over 50% of marketing and IT prefer a salesperson who will listen and match a solution to solve their specific needs. The sales department equally preferred having a salesperson listen and solve their needs and being challenged; HR was equally split across all three selling styles.

There’s an interesting explanation for selling styles preferences, which is based on whether the buyer is comfortable with conflict. Seventy-eight percent of participants who preferred a salesperson who would listen and solve their specific needs agreed with the statement: “I try to avoid conflict as much as I can.” Conversely, 64% of participants who preferred a salesperson who challenges their thoughts disagreed with the statement and are comfortable with conflict.

#2: It’s Really a Committee of One

Whenever a company makes a purchase decision that involves a team of people, factors including self-interests, politics, and group dynamics will influence the final decision. Tension, drama, and conflict are normal parts of group dynamics, because purchase decisions typically are not made unanimously.

One critical research finding is that 90% of study participants confirmed that there is always or usually one member of the evaluation committee who tries to influence and bully the decision their way. Moreover, this person is successful in getting the vendor they want selected 89% of the time. In practicality, it can be said that a salesperson doesn’t have to win over the entire selection committee, only the individual who dominates it.

#3: Market Leaders Have an Edge

In most industries a single company controls the market. Compared with their competitors, they have a much larger market share, top-of-the-line products, greater marketing budget and reach, and more company cachet. For salespeople who have to compete against these industry giants, life can be very intimidating indeed.

However, the study results provide some good news in this regard. Buyers aren’t necessarily fixated on the market leader and are more than willing to select second-tier competitors than one might expect. In fact, only 33% of participants indicated they prefer the most prestigious, best-known brand with the highest functionality and cost. Conversely, 63% said they would select a fairly well-known brand with 85% of the functionality at 80% of the cost. However, only 5% would select a relatively unknown brand with 75% of the functionality at 60% of the cost of the best-known brand.

Not surprisingly, the answer to this question differed by industry. The fashion and finance verticals had the highest propensity to select the best-known, top-of-the-line product, while manufacturing and health care had the lowest.

#4: Some Buyers Are “Price Immune”

Price plays an important role in every sales cycle. Since it is a frequent topic during buyer conversations, salespeople can become fixated on the price of their product and believe they have to be lowest. However, decision makers have different propensities to buy, and the importance of price falls into three categories. For “price conscious” buyers, product price is a top decision-making factor. For “price sensitive” buyers, product price is secondary to other decision-making factors such as functionality and vendor capability. For “price immune” buyers, price becomes an issue only when the solution they want is priced far more than the others being considered.

Study participants were asked to respond to different pricing scenarios, and their responses were analyzed to categorize their pricing tendency. From a departmental perspective, engineering would be classified as price immune; marketing and sales as price sensitive; and manufacturing, information technology, human resources, and accounting as price conscious. From an industry perspective, only the government sector would be classified as price immune. Banking, technology, and consulting would be price sensitive, while manufacturing, health care, real estate, and fashion are price conscious.

#5: It’s Possible to Cut Through Bureaucracy

The most feared enemy of salespeople today isn’t solely their archrivals; it’s buyers’ failure to make any decision. This is because every initiative and its associated expenditure is competing against all the other projects that are requesting funds. Do the departments have different abilities to push through their purchases and defeat their company’s bureaucratic tendency not to buy?

The answer is yes. Based on the research results, sales, IT, and engineering have more internal clout to push through their projects as opposed to accounting, human resources, and marketing. Therefore they’re better departments to sell into from the salesperson’s perspective.

#6: Charisma Sells in Certain Industries

Imagine three salespeople who’ve pitched products that are very similar in functionality and price. Which would you rather do business with:

  • A) A professional salesperson who knows their product inside and out but is not necessarily someone you would consider befriending
  • B) A friendly salesperson who is likable and proficient in explaining their product
  • C) A charismatic salesperson who you truly enjoyed being with but is not the most knowledgeable about their product

While top selection in every industry was the friendly salesperson, the media and fashion industries selected “charismatic salesperson” more than most, and the manufacturing and health care industries had the highest percentage of “professional salesperson” responses.

Many salespeople behave as if buyers are rational decision makers. In reality, human nature is complicated, and a mix of factors — some rational, some not — determine how buyers evaluate sales reps and who they select. Ultimately, it is the mastery of the intangible, intuitive human element of the sales process that separates the winner from losers.

Steve W. Martin teaches sales strategy at the University of Southern California Marshall School of Business. His new book is titled Heavy Hitter I.T. Sales Strategy: Competitive Insights from Interviews with 1,000+ Key Information Technology Decision Makers.