Alchanati Campbell & Associates
What's up chaos and uncertainty? The world is so full of it, but I've found myself clarity
With all of the chaos and hate filling the air that we breathe, we take this week to reminisce on the good, because there is good in everything, and we take a minute to remember those who passed in the Pittsburgh Synagogue massacre, flight Lion Air 737 crash, the Yemeni Civil War and all other bloodshed that keeps you up at night. We want you to sleep well tonight so let's get to it:
The Market. Student loan debt is 7.5% of US GDP. Fears of an easing in corporate earnings growth is a big factor in the stock market volatility. The top 20 financial firms now control a record 43% of assets, $40.6 trillion. The US economy remains one of the world’s most powerful employment-creation machines. Tightening labor-market conditions are helping wage growth. More jobs and higher wages are attracting more people back into the labor force. There is no negative sentiment towards bonds- even when bonds are showing signs of an end to their 30-year bull market. Manufacturing fell to a 6-month low as orders and hiring cooled.
Be inspired, the best of us are, what’s your inspiration? I tore myself away from the safe comfort of certainties through my love for truth, and truth rewarded me. The only way to get people to do great work is if they love what they do. The masks we wear – or don’t wear – shape the way we interact with the world around us, and they determine the space in front of us. Don’t work for your money, have your money work for you. When we strive to become better than we are, everything around us becomes better too. What makes a human life have meaning or significance is not the mere living of a life but reflecting on the living of a life. Your whole life is your attitude towards life. You can either sit around and watch everything from a distance or you can be the one to act and have everyone watch you.
Wages are back. It's November, which puts the October equity beatdown officially behind us. It also means it is time to stop shaving for a month, and apparently, the U.S. jobs report got the memo. For the month of October, nonfarm payroll employment grew by 250,000 jobs, easily beating estimates. Moreover, the unemployment rate remained astronomically low at 3.7%, the lowest in nearly 5 decades. Given that jobs are increasing, and unemployment is decreasing, it’s easy to see that there may be a lack of workers. Thus, it’s a good sign that wages increased by 3.1% over the past year, the largest year-over-year gain in nearly a decade. Also, wages are growing ahead of inflation which hovers around 2%.
In a world of increasing chaos, it is easy to get overwhelmed and lost in it all. It's important to remember to always P.A.C.E. yourself. Positive attitude changes everything. – Alex Martino (Part of The Alchanati Campbell and Associates Team)
The sunk cost fallacy. You are reading a bad book. For the past few days, you have endured through 100 pages. You are considering abandoning the book; however, you are compelled to continue because you’ve already read so much. What should you do? If you truly dislike the book, the 100 pages that you have read are a sunk cost and should have no effect on your decision making going forward. This phenomenon is something economists call the “Sunk Cost Fallacy”. In basing a decision on previously invested capital (in this case, time) one ignores the costs of engaging in a particular behavior. For an investment firm, this could be holding a bad stock because the firm is a legacy shareholder; for the reader, this could be reading a terrible book because they’ve already read 100 pages. By acknowledging sunk costs, firms and readers alike can more clearly see the costs and benefits of their decisions.
Peter Thiel's “competition is for losers” is something I live by. Living every day as an improvement upon yesterday is a better way to live. – Daniel Covelli (Part of The Alchanati Campbell and Associates Team)
The grass could always be greener. For the last 15 years, Brazil has had a leftist government. That all changed on Sunday when Brazil elected Jair Bolsonaro as president. When president-elect Bolsonaro takes office on January 1st, he is expected to begin enacting his far-right political plan, one that is very similar to US President Trump’s plan when he first took office in 2016. In fact, Bolsonaro openly admires Trump so much so, that many political analysts and colleagues describe him and Trump to be extremely likeminded. Bolsonaro’s plan covers many of the same issues that include: pulling Brazil, the country with the largest section of the Amazon rainforest, out of the Paris climate accord, restructuring and pulling out of free trade agreements both with neighboring countries and China and moving Brazil’s embassy in Israel to Jerusalem. Many of these issues are expected to cost Brazil billions of dollars, and political analysts are uncertain if the president-elect will follow through.
I believe in learning and sharing accurate knowledge so I and the people around me can make informed decisions about the world around them. – Matthew Campbell (Part of The Alchanati Campbell and Associates Team)
A trade deal with China? Yesterday, November 1st, our president announced on Twitter that he “had a long and very good conversation with President Xi Jinping of China” “with a heavy emphasis on Trade”. What does this mean? Well, many analysts think this is Trump trying to raise investor confidence and boost the stock market in anticipation of the midterm elections. Trump told reporters yesterday, as he was leaving the White House, that “I think we’ll make a deal with China”. Currently, the US has imposed tariffs of $250 billion on Chinese goods and stated another potential $17 billion to be added soon. In nearly every case, barriers to trade are a net negative on each country’s economy, and weigh on economic growth, according to David Ricardo's comparative advantage theory. Why is the trade war weighing so heavily on China? Well, China’s historically has exported around twice as much as they import, making them an export-heavy country. To put this in relation to the US, they import around 2.4t worth of goods, and export around 1.6t, which means they are an import-heavy country.
The 2 main components of what I am inspired by are: 1. To be part of tomorrows change, and 2. To leave a positive mark on the world. I believe that nothing is more powerful than a group of people, working towards the same goal, and what they will be able to achieve. – Brent Gordon (Part of The Alchanati Campbell and Associates Team)
How to make friends and influence others. If you want to gather honey, don’t kick over the beehive. Talk about your own mistakes before criticizing others. Don’t criticize them; they are just what we would be under similar circumstances. A great man shows his greatness by the way he treats little men. The only way I can get you to do anything is by giving you what you want. The deepest urge in human nature is the desire to be important. If you tell me how you get your feeling of importance, I’ll tell you what you are. Give honest and sincere appreciation. Arouse in the other an eager want. The ability to get the other person’s point of view and see the things from that person’s angle as well as from your own.
Everything I am and hope to be is due to my ambition to be my best self, the love that surrounds me daily and the appreciation I have towards the experiences and memories I carry and the life I was given. – Camden Alchanati
The Alchanati Campbell and Associates Team
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.