Disclaimer: The "What's up Friday?" Newsletter has been different the past few weeks due to a temporary change in setting and time. We will be back to the original format the week of July 8th.
The western culture for developing nations is an influence like drugs on an addict, video games on a child, and social media on a teenage girl. You walk through the marketplace of a poverty-stricken area and you’ll see a lack of structure, style, and care. The evidence of global consumerism, wastefulness, insecurity, and the lack of customs and cultures is proven. When did we lose ourselves to this “ill condition”? The advancements of education and technology have produced wonders in the fields of education, discovery and exploration, entertainment, health, and protection; creating clarity for our human consciousness. But at the cost of what? A forever-dividing inequality, the deterioration and destruction of our ecosystem, the loss of life (humans and other organisms)... The only viable solution is for the haves to spread their wealth to the have-nots and wanna-be-haves under the contingency of the given wealth being used in an ethical, moral, efficient, and beneficial way. The test of time will be between the point when the haves will be able to give after experiencing the short-term euphoria wealth brings and getting bored of it, and the limits of clean air, drinking water, and sanity that the Earth generously gives us.
What do I want from you? What do I want from school? What do I want from life? They say it’s best to write out what you want. What you need. What’ll inscribe meaning and purpose and fulfillment into your life. Like a fucking genie will grant three wishes if you rub its teapot. So here I write: There’s no such thing as neutrality or minimalism. It’s either left or right. Everything or nothing. Life is full of extremes, and balance seems as far fetched as world peace. We’re all hustlers and sellers. We’re all needy and wishful. We either beg for survival or we beg for unnecessary amounts of wealth. We forget about our upbringings; the miracle of being brought into this world (though some are luckier than others), and instead we omit “gratefulness” from our vocabulary and ask what the definition of “altruism” is. We are consumed by noise as we consume everything around us. Insanity is a norm, and the quiet and solo-functioning are categorized. There’s no privacy, no place to disappear, no restraint for possession. But blame it on me. I am a part of the problem; I cannot deny my contributions. So, what do I want from life or from school or from “you”? Whatever it’ll give me, expectation is a fool’s game.
I sometimes feel stuck underwater. Two voices fighting to win over my choice and decision. Pleasure over discipline. Want over need. Emotions over stability. I can’t seem to find everlasting strength in my mindset. I have good and bad days. The good days are filled with productivity and self-control. I accomplish everything I planned for myself in that day. I am better than the day before, and I go to sleep happy. Other days I seem to lose myself. I sleep in, I eat junk, I do nothing... I waste a full day; a day that I will never get back. My life is directed by time, and produced by ambition and a will to be better than who I am. The contents of my life are filled with thought and good deed. Striving to find the path that will lead to my purpose. My sense of distraction is a good book, and I reluctantly rather sit alone than in the company of strangers. The world in the depths of my head is more exciting to me than the one I see through the blue of my eyes.
Control. You can’t control a delayed flight that causes you to miss your connecting flight. You can’t control the actions and reactions of others, or the words they say or don’t say. Control what you can and let go of what you can’t. I can control my emotions because what I feel is always an outcome of what I think. Nobody else controls your life. Two ways to view life: as a tiny person in a big space, or a big person in a tiny space. Changing the way you view your environment allows you to take things into perspective by miniaturizing your surroundings to have more control. Only control what you can. Be a master of your environment. You can’t change the fact that you were born with a deficiency, an infirmness, a weakness. You can only change what you have control of. Instead of dwelling on it, embrace it and spend the time to improve yourself in other ways. A better way of interacting with reality is by focusing on what can be controlled moment to moment, adjusting our orientation as we figure it out, letting the externalities play their part. Sometimes you just have to let things go and realize as much as we like to think about it... we are not in control.
Let’s explore a bit. Here’s a controversial statement, it may be true or not. Because people go through the same experiences and their bodies communicate the same feelings, what I go through is not more special or different than what somebody else goes through. I just view it in a different light based off of my beliefs, what I have learned and the memories I carry. There is the occasional black swan event, the rare and unexpected, and that may make your situation unique, but we are merely the same with our common-held beliefs and our essential needs.
Reality. We all want something great. Something shiny and valuable. Something worthwhile and desirable. Something special and scarce. Something different from the rest. We want it because we strive to become unique. We want to distinguish ourselves from the billions; to make ourselves be known. Everybody imagines themselves special, privileged, exempt. Everybody is identical in their secret unspoken belief that way deep down they are different from everyone else. What happens to one happens to most of us. Our lives are not so different-even though we like to think so. Only if you knew you were a unique world within yourself, you wouldn’t work so hard to prove to the world that you exist.
The Alchanati Campbell and Associates Team
Your mindset. Such a key component in the human structure. Not the skeletal structure or the “epithelial tissues that line our internal organs” structure, but the structure of our well-being, success, and happiness. The most important things in life are internal, not external. “The clearer my mind is, the clearer I see, the clearer I respond.” Our whole experience of existence is really what’s going on in our mind. All of our emotions are created by our thoughts. Suffering is our mind not dealing with feelings in a positive way. People distract themselves because they cannot live with their minds. Our whole life is our attitude towards it. To change your emotions, change your thoughts. Be 100% present in body and mind in everything you do. Even if you lived in the skin of your idol, you would still feel uncomfortable. Why? Because even though your outer appearance changed, you still have the same mindset.
The Market. United Technologies acquires Raytheon for $74 billion. Morgan Stanley says oil demand will continue slowing. Crude oil fell to a 5-month low due to oil inventories surging to their highest levels in 2 years. There is a very strong probability that the Feds will cut rates before the end of 2019. If rates are cut, it creates a marketplace where it is cheaper to borrow money. When it is easier to borrow more, you start accumulating more debt, with the riskiness of not being able to pay it back. But if the Fed starts cutting rates now, what tools will they have when a downturn occurs? Americans sleep, on average, less than seven hours a night. It is proven that missing one night of sleep impairs memory. The “flipping” of homes dropped 39% in the last 12 months. The Smiley Company, the global empire licensing empire of the smiley face, makes more than $500 million per year. Endurance: the ultimate limit of long-term human endurance is 2.5 times our resting metabolic rate (the rate at which your body burns energy when it is at complete rest). Central American Migrants are starting to travel to Europe instead of the US. Economies are largely driven by consumer spending. In the US, consumer spending is 70% of GDP. Global sustainable investment reached $30.7 trillion at the start of 2018, an increase of 34% over the past 2 years. Europe has the highest proportion (82%) of asset owners already active in the ESG space. In Asia, it's 76%. The most direct approaches to identifying a recession: wait for the National Bureau of Economic Research to announce a recession or wait for GDP to decline over two consecutive quarters. There has been 2,108 cases of Ebola in Africa since August 2018.
Tax Advantages and Tax Deductions. SALT stands for state and local taxes. The federal government allows taxpayers to deduct real and personal property taxes, income taxes, and general sales taxes. This avoids taxpayers from being taxed twice on the same income. Other deductions can come from charitable giving and mortgage interest.
2019 Internet Trends. The current number of internet users is 3,800,000,000. China is the largest market of internet users. E-commerce sales growth is slowing. Google makes the most money from online advertising, at close to $30 billion in Q1 2019. In 2018, the daily hours spent with digital media per adult user in the USA was 6.3 hours (2008 was 2.7 hours). There is a steady decrease in watching television and an increase in watching digital videos.
The Labor Market in 2050. Current estimates suggest that over the coming decades, slower population growth and lower labor force participation will constrain the supply of labor in the US. The standard economic model for the labor markets says that levels of employment and earnings for different demographic and education groups reflect the interaction of supply (number of workers) and demand (jobs created by employers) forces in the market. Automation and globalization affect these heavily. Any new technology can replace some groups of workers while creating new demand or complementing others. For older less-educated workers, these replacements can be damaging. In the last 40 years, the labor market has changed due to a stagnation in earnings, rising inequality, and declining labor force participation of less-skilled workers. The population growth will continue to slow, people will age longer, and diversity will increase with Asian and Hispanic races being a larger majority of the total. Two policies that would need to innovate to these changes are reforms in social security and Medicare that encourage longer working lives and later retirements, and immigration reforms that raise current levels of immigration.
Can’t Stop, Won’t Stop Working. Almost 40% of Americans lack confidence they will ever save enough money to retire. Millions worry whether they are saving enough to live on once they stop working. People are living longer. Healthcare and medical care are becoming more expensive. The Employee Benefits Research Institute is telling millennials to save 10% of each paycheck. If you are older and haven’t started saving for retirement, the percentage will be 15-20%. The more income you make + the more you contribute to savings = the lower the probability you run out of money in retirement. If you make less money, you have to contribute a bigger percentage.
The First Housing Bubble. Amsterdam, 1713-1750. This bubble was caused by a shift toward investing in real estate which increased housing prices, and the higher prices triggered more purchases of houses (the momentum effect: higher prices can cause additional higher prices). But there were no mortgages available (or housing loans)… so where did the money come from? During the 1600s and 1700s, the Dutch government was issuing huge amounts of government bonds (to pay for wars) to Dutch investors. When the interest payments became too much to pay, the Dutch government reduced the number of bonds sold and investors started buying real estate instead.
Millennials. They have less trust in employers. They have less trust in the stock market. Millennials and Generation Z are expressing uneasiness and pessimism towards their careers, their lives in general, and the world around them. They express a strong lack of faith in traditional societal institutions including mass media and social progress. They aspire to travel and help their communities more than starting families or their own businesses. They want to travel, earn high salaries, be wealthy, buy homes of their own… Millennials who entered the labor market around the recession, or during the years of slow growth that followed, experienced less economic growth in their first decade of work than any other generation. They have lower real incomes and fewer assets than previous generations. They worry about climate change, natural disasters, income inequality, distribution of wealth, unemployment, crime, corruption, terrorism, political instability… Only half believe that leaders of their current governments are committed to helping improve society or behave in an ethical manner. Their behaviors are profoundly disrupting business and society alike. They start and stop relationships with companies for very personal reasons. Nearly 64% of millennials said they would be physically healthier if they reduced the time spent on social media, and that it would make them happier.
Book Summary. “Open” by Andre Agassi. Take it more than one point at a time. Work for everything. No matter what happens, hold your head up. And for God’s sake enjoy it, or at least try to enjoy moments of it. Control what you can control. What you feel doesn’t matter in the end; it’s what you do that makes you brave. The tennis bag is a lot like your heart- you have to know what’s in it at all times. To be inspired- that is the secret. Hard work is the answer, the only answer. Only the strong survive. A win doesn’t feel as good as a loss feels bad, and the good feeling doesn’t last as long as the bad. I marvel at how unexciting it is to be famous, how mundane famous people are. They’re confused, uncertain, insecure, and often hate what they do. Money can’t buy happiness- but we never believe it until we see it for ourselves. Dangerous to surrender to fear. Fears are like gateway drugs. You give in to a small one, and soon you’re giving in to bigger ones. Don’t worry about whether she likes you. Worry about whether you like her. Love is how we grow up. We must care for ourselves, which means we must be careful in our decisions, careful in our relationships, careful in our statements.
The Alchanati Campbell and Associates Team
There are many ways to live a life. The first, live every day like it’s your last. The second, live with a long-term horizon with planning and delayed gratification; believing you’ll live to 120. The third, plan and work hard now to enjoy in your mid-life. The fourth, plan for tomorrow, live for today. The fifth, work hard and plan not for you, but for your kids and their kids; creating a legacy. The sixth, a hybrid of those listed above or something not listed at all. As you can see, there is no right way to live as long as your living is producing positive results. Nobody knows when their final day will be. You don’t want to live in fear. You don’t want to be reckless in shortening your life. You don’t want to hold off on pleasures, avoiding the possibility that you may not be able to experience what you want in the future. You don’t want to not plan for the future, causing you to outlive your money or not being able to support yourself with security and well-being. You don’t want to be a hyper-consumer, falling weak to self-gratification at every moment that you get. So, what “do” you do? Financially, you are disciplined. You plan, save, budget, invest, prepare for retirement, spend when it’s necessary, indulge sparingly and responsibly, delay gratification, educate yourself on financial literacy... Socially, build strong lasting relationships. Have a circle of competence, find love, keep in contact with people you value, be vulnerable in building personal relationships, don’t fall for social pressures or influences, trust your inner voice and be confident in yourself, do what makes you uncomfortable... Personally, find meaning or a purpose, focus on your strengths and specialties, work on improving yourself, do what’s best for you, work hard, be true to yourself... Besides that, I have no idea.
The Market. Starting to save toward college costs can help limit how much a student will have to borrow. One way to save is putting funds into a 529 education savings plan, a tax-advantaged way to save toward education expenses (withdrawals are exempt from federal and state income taxes if you use the funds for qualified expenses). The biggest benefit of 401(k)s isn’t the tax advantage, it’s the forced savings nature. It turns out that you remember things better when they are unfinished. “China does not want a trade war, but it is not afraid of one and it will fight one if necessary.” Trump will no longer claim India as a developing nation, which will eliminate the exception that allows the country to export products to the US duty-free. 98% of US financial advisors are using social media for business and/or personal use. Every day, there are more than 1 million new caused by curable sexually transmitted infections among people aged 15-49 years.
Poker and Hedge Funds. There is a correlation between skill in poker and skill in hedge fund management. Hedge fund managers who have won at least one poker tournament significantly outperform managers who have no wins. Skilled poker players are better at hedge fund management. Fund managers experience an economically significant increase in net inflows after winning in a poker tournament.
A Two-Front War. That’s where the U.S might be heading in regard to trade. We all know about the persisting trade issues between the U.S. and China. Now, the U.S. is picking a fight with Mexico. President Donald Trump announced tariffs of 5% on all Mexican imports unless Mexico takes drastic measures to stop the flow of Central American migrants illegally entering the United States through Mexico’s northern border. These tariffs would go into effect on June 10th and have the potential to slowly increase to 25%. You might be wondering: didn’t the United States just reach a new trade agreement with Mexico and Canada? Isn’t this the whole purpose of a trade agreement? While you might be correct, Donald Trump doesn’t seem to care much because, in his words, “they need us”.
Slowing Economic Growth. Slower population growth and slower labor force participation will constrain the supply of labor in the US. What happens to the US economy will determine whether there is a notable global connection or not. The private sector added just 27,000 jobs in May-the fewest since the economic expansion began. Nonfarm payrolls rose 75,000, missed estimations of 175,000. A financial crisis is caused by too much borrowing and then a wave of defaults and liquidations.
Procrastination. Procrastination is not a time-management problem, it’s an emotion-management problem. If we know our emotions, we can deal with them as opposed to avoiding them and the tasks that provoke these emotions. Procrastination is a voluntary delay of an intended act despite the knowledge that this delay may harm us. People with anxiety often do everything they can to avoid the perceived external threat and shut off, leading to depression. Putting off these aversive tasks saves us from the unpleasant emotions associated with it (boredom, frustration, fear, anxiety). Don’t tell yourself “what’s wrong with you? Pull yourself together!” The lack of self-compassion might be exactly what’s causing your procrastination in the first place. Research suggests that taking a softer, more compassionate view of our own behaviors may be the key to breaking out of this self-perpetuating spiral. Focus on the right tasks at the right time. Write down any tasks or ideas that pop into your mind quickly so you can get them out of your mind.
Book Summary. “The Millionaire Next Door” by Thomas J. Stanley. One of the reasons that millionaires are economically successful is that they think differently. The large majority of the rich live well below their means. The journey to wealth is much more satisfying than the destination. Many people who live in expensive homes and drive luxury cars do not actually have much wealth. Wealth is what you accumulate, not what you spend. Wealth is more often the result of a lifestyle of hard work, perseverance, planning, and self-discipline. Building wealth takes discipline, sacrifice, and hard work. The wealthy believe that financial independence is more important than displaying high social status. We do not define wealthy, affluent, or rich in terms of material possessions. Frugal, frugal, frugal. It is easier to purchase products that denote superiority than to be actually superior in economic achievement. All too often young people are indoctrinated with the belief that those who have money spend lavishly and if you don’t show it, you don’t have it. If one lives below one’s means, one doesn’t have to be concerned with the possibility of being forced to reduce one’s standard of living. What is risk? Having one source of income.
WHAT'S UP FRIDAY? is a weekly newsletter that will give you a summary of "What's up?" on Wall Street, in the US and around the World written by The Alchanati Campbell and Associates Team. What makes us unique is we focus on long-term knowledge; knowledge that will still be useful to you 10 years from now.