Alchanati Campbell & Associates
Greatness, more tariffs on China, learning how to buy stocks the smart way, and creating habits to change the way you think.
Strive for greatness. The level of proficiency in your specialty or talent or niche that puts you above all the rest. The feeling of being more than you can comprehend. The truly great cannot be defined or categorized. They are well-known in their space, looked up to for their contributions, and valued for their presence and being. They don’t need to prove anything. Their work says it all. There is nothing comparable. Greatness is something of dreams, aspirations, goals, and objectives. It’s an achievement of its highest kind. How does one become great? If you want to be really great, work on the details. Focus on one thing and master it. “Anybody could do that, but I did.” “If you can’t, you must.” Face adversity head-on and overcome it.
The Market. Trump raises tariffs on more than $200 billion worth of Chinese goods. Uber went public today at a $75.5 billion valuation but decreased 7% in its opening debut which caused its most recent private investors to be underwater. In the past two trading days, the S&P 500 lost $528 billion in total market value due to fears from the trade war. New immigration reform has caused international student enrollment to decrease. Delays in tackling climate change could cost companies about $1.2 trillion worldwide in the next 15 years. Investors have a pivotal role to play in moving the world to a low-carbon future. World anger levels are at a new high. The 3-month and 10-year yields inverted again. Curve inversions are leading indicators of recessions because they imply the market expects central bank easing to offset a looming slowdown.
Customer utility. The goal: Maximizing utility and giving people what they desire. People seem to reliably seek out a few things that make them unhappy. People are either addicted or seek other things besides happiness. As consumption of a good or service increases, the marginal utility obtained from each additional unit of a good or service decreases. Utility is the satisfaction one gets from consuming a good or service. Total utility is the total amount of satisfaction. Marginal utility is the extra satisfaction from an additional unit of the good. Customer utility changes in trends and generational shifts, but the same basics of microeconomic theory will be used.
How do investors determine which company to invest in? How do they determine if they should buy a certain stock? The answer is NOT one size fits all and requires intense critical thinking to be as effective as possible. That being said, most decisions usually incorporate some analysis of financial data, and many use that data to forecast the value of the firm. How do they do this? A common method is a Discounted Cash Flow. Essentially, you determine all future cash flows for a company and discount them back to the present day (money is worth more today than it is tomorrow).
The art of thinking. There is no real structure that you are forced to operate within unless your life depends on it. You can create your own rules if you build the right supporting systems. Our environment controls far more of our behavior than we realize. Creating better habits and opportunities begins with deliberately shaping your surroundings. The real purpose of life is to create a story in which you can constantly define what it means to be better tomorrow than you are today. That’s what we are programmed for. Happiness, productivity, presence, and fulfillment all find their roots in your ability to proactively control where you direct your mental energy. Take control of your attention. You don’t have to be an expert scientist, artist or psychologist, but you should know the fundamentals in all of the major disciplines if you want to optimize your thinking. Over a long enough timeline, if you seek to reduce uncertainty, you can optimize your exposure to luck. Success is often random, but that doesn’t mean it can't be designed.
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.