Investing Principles and Rules

Posted on January 26, 2022 by admin

Value investing is one of the most preferred ways to find strong companies and buy their stocks at a reasonable price in any type of market.

Value investors, such as Warren Buffett and Monish Pabrai, use fundamental analysis and traditional valuation metrics like intrinsic a value to find companies that they believe are being undervalued intrinsically by the stock market.

A stock is not just a ticker symbol; it is an ownership interest in an actual business with an underlying value that does not depend on its share market price.

Inflation eats away at your returns and takes away your wealth. Inflation is easy to overlook and it is important to measure your investing success not just by what you make, but by how much you keep after inflation. Defenses against inflation include:

Buying stocks (at the right prices),
REITs (Real Estate Investment Trusts), and
TIPS (Treasury Inflation-Protected Securities).

The future value of every investment is a function of its present price. The higher the price you pay, the lower your return will be.

No matter how careful you are, the one risk no investor can ever eliminate is the risk of being wrong. Only by insisting on a margin of safety – by never overpaying, no matter how exciting an investment seems to be – can you minimize your odds of error.

Knowing that you are responsible is fundamental to saving for the future, building wealth and achieving financial freedom. It’s the primary secret to your financial success and it’s inside yourself. If you become a critical thinker and you invest with patient confidence, you can take steady advantage of even the worst bear markets. By developing your discipline and courage, you can refuse to let other people’s mood swings govern your financial destiny. In the end, how your investments behave is much less important than how you behave.

Every investment is the present value of future cash flow. Everything Money

Three things to know is that it’s important to understand and acknowledge that a stock is a piece of a business. Thus, it becomes essential to understand the business..

Principle #1: Always Invest with a Margin of Safety – Margin of safety is the principle of buying a security at a significant discount to its intrinsic value, which is thought to not only provide high-return opportunities but also to minimize the downside risk of an investment. No matter how careful you are, the one risk no investor can ever eliminate is the risk of being wrong. Only by insisting on a margin of safety – by never overpaying, no matter how exciting an investment seems to be – can you minimize your odds of error.
Principle #2: Expect Volatility and Profit from It – Investing in stocks means dealing with volatility. Instead of running for the exits during times of market stress, the smart investor greets downturns as chances to find great investments. The guru of value investing Benjamin Graham illustrated this with the analogy of “Mr. Market,” the imaginary business partner of each and every investor. Mr. Market offers investors a daily price quote at which he would either buy an investor out or sell his share of the business. Sometimes, he will be excited about the prospects for the business and quote a high price. Other times, he is depressed about the business’s prospects and quotes a low price. The market is a pendulum that forever swings between unsustainable optimism (which makes stocks too expensive) and unjustified pessimism (which makes them too cheap). The intelligent investor is a realist who sells to optimists and buys from pessimists.
Principle #3: Know What Kind of Investor You Are – Graham advised that investors know their investment selves. To illustrate this, he made clear distinctions among various groups operating in the stock market.1 Active vs. Passive Investors Graham referred to active and passive investors as “enterprising investors” (requires patience, discipline, eagerness to learn, and lots of time) and “defensive investors.”1 You only have two real choices: the first choice is to make a serious commitment in time and energy to become a good investor who equates the quality and amount of hands-on research with the expected return. If this isn’t your cup of tea, then be content to get a passive (possibly lower) return, but with much less time and work. Graham turned the academic notion of “risk = return” on its head. For him, “work = return.” The more work you put into your investments, the higher your return should be.

Because the stock market has the emotions of fear and greed, the lesson here is that you shouldn’t let Mr. Market’s views dictate your own emotions, or worse, lead you in your investment decisions. Instead, you should form your own estimates of the business’s value based on a sound and rational examination of the facts.

References:

Americans Anxious about their Financial Situation

Posted on January 25, 2022 by admin

According to the Mind over Money survey by Capital One and The Decision Lab, 77% of Americans report feeling anxious about their financial situation.

Financial decisions are some of the most stressful, complex and impactful choices we make. More than three in four Americans (77%) report feeling anxious about their financial situation, according to a new Mind over Money survey by Capital One and The Decision Lab.

Financial worries include a broad range of issues from savings and retirement to affording a house or child’s education.

The study found that financial stress caused:

Feelings of fatigue (43%)
Difficulty concentrating at work (42%)
Sleep interferences (41%)

Stress is also linked to worse financial attitudes and practices. Even when controlling for household income and FICO scores, Americans who experience higher level of stress are:

Less likely to save on a regular basis
Less likely to plan their spending
Less likely to feel in control
More impulsive with how they spend their paycheck
Less likely to agree that success comes to those who work hard

Right Money Mindset

The right money mindset may improve Americans’ financial decision making, mitigate effects of stress according to Mind over Money survey. Research shows that a change of perspective can have a positive impact on your financial wellbeing.

A smarter money mindset for people must include creating a positive financial outlook by implementing healthy financial rituals. Money is less stressful when you’re able to see your current situation a bit more clearly. Tips include:

Practice These Tips to Develop a Smarter Money Mindset

1. Make important decisions under low stress – Next time you have to make a financial decision—like booking a vacation—you could try to schedule the decision at a time when you’re naturally more relaxed and have the cognitive bandwidth to consider the long term impact of your decisions. You can’t choose to be less stressed right now, but you can choose to put off your decision until a moment when you’re less stressed.

2. Focus on values over features – One of the more interesting findings is that thinking more abstractly makes you better with money. Unfortunately, in your daily lives, you can often get bogged down in details. For example, you get lost comparing products to each other and lose track of how the products compare to your core values and goals. Next time, you find yourself absorbed in comparing different products, you can ask yourself: “How will this purchase affect my long-term goals? Is it consistent with what I want in life?”

3. Use goal-directed accounts – To help focus on your long-term goals, one simple way to do this is to set up goal-directed banking accounts. For example, you can name an account after a big life goal such as “buying a house,” and then use this account for your savings pool.

4. Don’t punish yourself for the past—be kind to yourself when reviewing purchases – Stress can push us to make decisions based on whatever feels most satisfying at the moment. In some cases, these decisions can lead to regret, which can lead to further feelings of stress, and so on, creating a vicious circle. Next time you are thinking about past purchases, and there is one you are not happy about, you can try to accept it, acknowledge that it was a mistake, and formulate a plan to avoid it next time. However, try not to stress too much about it—because the stress itself can make you less likely to do better.

5. Use the good times to shift your habits to support your mindset change – Research shows that stress causes us to engage in more habitual behaviors instead of deliberate ones. However, since stress can’t always be avoided, forging good habits when times are better can protect us when things get tough. Examine your habits critically when you are in a relaxed state. In particular, think about what positive changes to your habits are most likely to carry over to your actions when you encounter stress again.

6. Focus on what you can control instead of what you can’t – While you cannot immediately change your financial situation, you can change the way you think about it to improve the decisions you make about your finances. The next time you are faced with a financial decision, try not to get caught up thinking about what you wish you had—instead, you can try to focus on what is within your control and what you can change.

7. Go from problem to solution oriented – When you’re under a lot of financial stress, it is easy to get caught up in the problem and all its details. Our research has demonstrated that part of feeling in control (which predicts financial anxiety) is knowing how to overcome the problem—and this has to do with identifying clear solutions. The next time you’re faced with a difficult financial situation, try to spend your bandwidth coming up with strategies to overcome it. This may not only help you take action faster, but it could help you feel more in control of the situation (which in turn could reduce your financial stress!).

8. Keep your goals in front of you – To overcome present bias, you can try keeping your goals salient so that whenever you are confronted with a decision, you will be forced to consider how it will affect your financial goals. For example, you can write your goals out on a piece of paper and stick it by your bedside or your door or you can put it as a screensaver on your phone—these small reminders will ensure that your goals are always top of mind, especially when making financial decisions.

9. Share your goals with people who might have similar goals – Research has demonstrated that people are more likely to follow through on their goals when the goals are shared publicly with others. Under financial stress, making your goals more social, especially with others who might share them, can help to make them more real. By surrounding yourself with people who know and share your goals, you are creating a virtuous circle that will make your goals easier to achieve.

10. Do something kind for someone – Shifting your focus from yourself to other people can go a long way in changing your mindset, reducing stress and making you feel good about yourself while helping others. The next time you feel yourself getting overwhelmed by a financial decision, you can try to shift gears and see what you can do to help out a friend, family member or stranger. Most people have their own challenges—seeing that reality can be a powerful reminder that you are not alone. Now that you’ve shifted your focus, you can go back to your problem with a different perspective.

Keep your goals in front of you: People have a tendency to discount better future rewards for short-term gains and gratification. To overcome this, you must try to keep your financial goals front and center, like making them a screensaver on your phone or posting them on your refrigerator.
Focus on the values and don’t sweat the details: People get lost comparing products to each other and lose track of how the products compare to our core values and goals. Next time you get absorbed in comparing a whole aisle full of different coffee makers or TVs, you can ask yourself: “How will this purchase affect my long-term goals? Is it consistent with what I want in life?”
Don’t punish yourself for the past—be kind to yourself when reviewing purchases: Next time you are thinking about past purchases you are not happy about, try to accept it, acknowledge that it was a mistake, and formulate a plan to avoid it next time.

Financial education program are needed to help you plan out your goals in life—and think through how your financial behaviors connect to those goals. You can work towards achieving your financial well-being.

References:

The Mind over Money Study was conducted by The Decision Lab on 1,011 nationally representative US adults over the age of 18. The study took place between March 10 and March 11, 2019.

Mindset Matters

Posted on January 23, 2022 by admin

“Mindset is everything because it touches, impacts, and influences quite literally every aspect of your life.”

Your mindset is the filter through which you see the world. It is comprised of your beliefs, attitudes, emotions, and perceptions that inform your thoughts, habits* and decisions. Mindset encompasses both your conscious and unconscious thoughts as well as how you view yourself. It, your mindset, determines how you spend your time, who you spend your time with, what decisions you make, and where you invest your resources (time, talent and treasure).

Your mindset is an important part of your toolkit for success. Like glasses, they can either obscure your path or bring clarity to the road ahead. Thus, taking an active approach to understanding and crafting a positive mindset is important. Most people don’t realize that they’ve been programming their mindset through their experiences and perceptions. If you constantly feed your mindset with negative perspectives, your outlook will be negative. Garbage in, is garbage out.

On the other hand, cultivating a healthy wealth mindset will help you stick to your financial goals and you find ways to increase your earning potential. And, there are two key inputs that shape your mindset: the environment (or people) you spend time with and the media (written and verbal) you consume daily.

There’s an old saying in financial circles that you’re the average of the five people you spend the most time with. If you want to be fit, hang out with friends who exercise. If you want to think big and aspire to build wealth and change the world, then you must consume inspiring positive media and hang out with people who have great purpose and big audacious goals.

Just as you are the average of the five people you spend the most time with, the same is true for your ideas and aspirations.

A wealth mindset is a set of beliefs, habits, and behaviors that separates the wealthy from the rest. A wealth mindset will guide you to make the most of the money you have. It is essential to effectively and successfully save for the future, invest for the long term, build wealth and achieve financial freedom. A wealth mindset means spending less than you earn, making wise investments in assets, and looking for ways to improve financial well-being with minimal risk.

A wealth mindset matter matters because 60 percent of Americans live paycheck to paycheck, according to Dave Ramsey. And as of 2018, 175 million Americans actively use credit cards. A majority of these credit card holders engage in impulsive spending behavior, wasting money they don’t have on items they don’t need.

“Wealth is a mindset!”, writes Shynna Key, author of “Wealth Is a Mindset”. She encourages you to “keeping it real” with your current financial position, identifying challenges, and taking responsibility for changing the way you view wealth. She opines that you must begin by examining “…what we have been taught as it relates to money and wealth. Though finances are a very private area for most to discuss, it is a crucial topic that will help us to understand the root of our financial ‘woes’ as well as the fruit of our financial ‘favor’; which is essential to our overall growth of wealth.”

“If you correct your mind, the rest of your life will fall into place.” – Lao Tzu

To accumulate wealth and achieve financial freedom, you must first be and think like the wealthy. By doing so, you will develop the habits and take the necessary actions to attract the resources to you. You must be someone first; someone who has what he or she needs in order to take the inspired action. To become a wealthy, you must be an individual who thinks and manages money like the wealthy. For example, “the average wealthy person spends 10 times more time planning their finances than the average middle-class individual”, explains Thomas J. Stanley, author of “The Millionaire Next Door”.

Money and wealth can buy freedom…financial freedom. Very few wealthy people became wealthy overnight. Building wealth is a deliberate process that requires patience and planning.

If you want to be wealthy, you’ll need to develop a wealth mindset. Start by defining your financial goals: how much money do you want to have in a year’s time? Five year’s time?

To realize your financial goals, you’ll need to develop a wealth mindset, create and follow a plan, and continue to learn and grow. And remember, the road to wealth is bumpy and filled with detours and misconceptions.

In many ways, the health of your finances, as well as your physical health, depends on your mindset and emotional well-being. Thus, it’s important to make it a priority and to take time for you. When you focus on purpose, potential, curiosity and collaboration, you will experience increased energy and well-being. Because, what you focus on…expands!

“We are what we think. All that we are arises with our thoughts. With our thoughts, we make the world.” – Unknown

References:

https://wealthfit.com/articles/wealth-mindset/
https://wealthconnecters.com/wealth-mindset
https://www.audible.com/pd/Wealth-Is-a-Mindset-Audiobook/B07MWHKS46
Draper, Taylor, “Mind Matters”, Costco Connection, May 2021, pg. 17.
https://bydeze.com/why-mindset-is-everything/
https://nevadapartners.org/2021/05/21/12-real-differences-between-a-wealthy-mindset-vs-a-poor-mindset/

“Be kind, for everyone you meet is fighting a hard battle.” – Socrates

* Habits are consistent, unconscious patterns. They constantly express our character and result in our effectiveness or ineffectiveness. Habits are deeply ingrained and we are constantly pulled in their direction.

Tai Chi

Posted on January 22, 2022 by admin

“We are what we think. All that we are arises with our thoughts. With our thoughts, we make the world.” – Unknown

Originally developed as a martial art, Tai Chi is typically taught as a series of slow, low-impact movements that integrate the breath, mind, and physical activity to achieve greater awareness and a sense of well-being.

Tai chi is an ancient Chinese tradition that is currently practiced as a graceful form of exercise. It involves a series of movements performed in a slow, focused manner and accompanied by deep breathing. Each posture flows into the next without pause, ensuring that your body is in constant motion.

Tai chi has many different styles. Each style may subtly emphasize various tai chi principles and methods. There are variations within each style. Some styles may focus on health maintenance, while others focus on the martial arts aspect of tai chi

Tai chi is low impact and puts minimal stress on muscles and joints, making it generally safe for all ages and fitness levels. In fact, because tai chi is a low-impact exercise, it may be especially suitable for an older adult who otherwise may not exercise.

Although tai chi is slow and gentle and doesn’t leave you breathless, it addresses the key components of fitness — muscle strength, flexibility, balance, and, to a lesser degree, aerobic conditioning. Here’s some of the evidence:

Muscle strength. Tai chi can improve both lower-body strength and upper-body strength. When practiced regularly, tai chi can be comparable to resistance training and brisk walking. It strengthens both the lower and upper extremities and also the core muscles of the back and abdomen.
Flexibility. Tai chi can boost upper- and lower-body flexibility as well as strength.
Balance. Tai chi improves balance and can reduce falls. Tai chi also improves muscle strength and flexibility, which makes it easier to recover from a stumble.
Aerobic conditioning. Depending on the speed and size of the movements, tai chi can provide some aerobic benefits.

When learned correctly and performed regularly, tai chi can be a positive part of an overall approach to improving your health and overall well-being. The benefits of tai chi include:

Decreased stress, anxiety and depression
Improved mood
Improved aerobic capacity
Increased energy and stamina
Improved flexibility, balance and agility
Improved muscle strength and definition

While more research is needed to determine the health benefits of tai chi. Some evidence indicates that tai chi may also help:

Enhance quality of sleep
Enhance the immune system
Help lower blood pressure
Improve joint pain
Improve symptoms of congestive heart failure
Improve overall well-being
Reduce risk of falls in older adults

During the past 50 years more than 500 trials and 120 systematic reviews have been published on the health benefits of Tai Chi, according to National Institute of Health. Systematic reviews of tai chi for specific conditions indicate:

There is excellent evidence of benefit for preventing falls, osteoarthritis, Parkinson disease, rehabilitation for chronic obstructive pulmonary disease, and improving cognitive capacity in older adults.

There is good evidence of benefit for depression, cardiac and stroke rehabilitation, and dementia.

There is fair evidence of benefit for improving quality of life for cancer patients, fibromyalgia, hypertension, and osteoporosis.

Further systematic reviews of general health and fitness benefits show:

There is excellent evidence of benefit for improving balance and aerobic capacity in those with poor fitness.
There is good evidence for increased strength in the lower limbs.
There is fair evidence for increased well-being and improved sleep.

There is abundant research and scientific evidence supporting the health and emotional well-being benefits of Tai Chi, according to the National Institute of Health.

“Health is our greatest possession. Contentment is our greatest treasure. Confidence is our greatest friend.” Lao Tzu

References:

China’s Challenges According to Jamie Dimon

Posted on January 21, 2022 by admin

China’s Communist Party leaders believe that America is in decline. They believe this not only because their country’s sheer size will make them the largest economy on the planet by 2030 but also because they believe their long-term thinking and competent, consistent leadership have outshone America’s in so many ways, writes Jamie Dimon, CEO, JP Morgan in his 2020 annual letter to shareholders.

The Chinese see an America that is losing ground in technology, infrastructure and education – a nation torn and crippled by politics, as well as racial and income inequality – and a country unable to coordinate government policies (fiscal, monetary, industrial, regulatory) in any coherent way to accomplish national goals. Unfortunately, recently, there is a lot of truth to this, in the next 40 years, according to Dimon.

In recent years, China has been dealing with many challenges to its economic expansion, including pandemic-related curbs, an energy crunch, and an unprecedented crackdown on private enterprises. These challenges and the Communist government’s reaction led to 4% growth in China for the fourth quarter, according to JP Morgan.

Additionally, the government actions against COVID-19 have also kept domestic demand for goods and services suppressed, putting a lid on imports.

However, Dimon opines that “China will have to confront some serious socioeconomic and geopolitical issues”:

The Chinese lack enough food, water and energy to support their population;
Pollution is rampant;
Corruption continues to be a problem;
State-owned enterprises are often inefficient;
Corporate and government debt levels are growing rapidly;
Financial markets lack depth, transparency and adequate rule of law;
Income inequality is higher than in the rest of the world; and
Their working age population has been declining since 2012.
Capital outflows has caused the regime to tighten capital controls.
Lower rates make Chinese financial markets less attractive to global and domestic capital.

Additionally, China will continue to face pressure from the United States and other Western governments over human rights abuses (especially against the Uyghur population), democracy and freedom in Hong Kong, and activity in the South China Sea and Taiwan. The Uyghurs are an ethnic Muslim minority in China that have allegedly endured forced labor and other human rights violations.

Autocratic and authoritative leadership works well when you can manage top down and you are starting from a very low base. China’s recent success definitely has its leadership feeling confident.

Regardless of Chinese Communist Party’s opinions regarding its inevitable economic rise, only 100 million people of its more than 1.4 billion population in China effectively participate in the nation’s one-party political system. No other developed nation has such low participation. Growing middle classes almost always demand political power, which helps explain why autocratic leadership almost always falters in a larger, more complex economy.

Under autocratic leadership, a major risk is the allocation of economic assets (capital and people), which are, over time, used to further political interests, leading to inefficient companies and markets, favoritism and corruption.

In addition, autocratic leadership diminishes the rule of law and transparency – damaging the ability to create a well-functioning financial system (this certainly restricts the internationalizing of the RMB).

Disruption of trade is another risk China faces. The United States’ trade issues with China are substantial and real. They include:

Theft or forced transfer of intellectual property;
Lack of bilateral investment rights, transfer of ownership or control of investments;
Onerous non-tariff barriers;
Unfair subsidies or benefits for state-owned enterprises; and
Lack of rapid enforcement of any disagreements.

China will only comply with international trade agreements and only do what is in its own self-interest. Near term, we should expect challenge and conflict to characterize the relationship between China and the West over a range of economic, human rights and strategic issues.

There may, however, be areas where we will simply never agree. As the two largest economies in the world, China and the United States should continue to have a long-term interest in collaborating where we can on critical global issues, including climate change, global health and stability on the Korean Peninsula.

China does not have a straight road to becoming the dominant economic power. To put this in perspective, America’s GDP per person in 2019 was $65,000 and China’s was $10,000. Even if we do a rather poor job at managing our economy (growing at 2%), our GDP per person in 20 years would be $85,000. And if the Chinese do a good job managing their economy, their GDP per person in 2040 would still be under $35,000. While China is well on its way to becoming a fully developed nation, it may face more uncertainty and moments of slower growth in the future (like the rest of us) than in the past.

For the near term, if China and the United States can maintain a healthy strategic and economic relationship, it could greatly benefit both countries – as well as the rest of the world.

Another factor is the Chinese currency, the renminbi (RMB). The renminbi cannot be freely moved around the world; it can leave China only in limited amounts and can be invested only as the Chinese see fit. Thus the renminbi is a long way from replacing the U.S. dollar as the world’s reserve currency.

The Chinese currency is subject to their internal politics, laws and regulations. While the Chinese have done a good job building their economy and are slowly moving toward a more transparent society and financial system, they are a long way from having a currency that is fully “convertible” like the U.S. dollar.

References:

Commercial real estate bust.

While the U.S. economy is likely to grow 6% in 2021 and 4% in 2022, the highest rate in decades, analysts project.

China’s economy has been faltering despite it’s exceptionally strong trade surplus and it’s authoritarian government’s heavy hand on COVID-19.

Better Workouts Include the Brain and Body

Posted on January 20, 2022 by admin

Movement is Medicine: ‘We can use our bodies as a tool to affect the way we think and feel, like a hotline to the mind.” Caroline Williams, researcher and author of ‘Move: How the New Science of Body Movement Can Set Your Mind Free’

“Movement affects your brain; but your brain also affects movement.”

Regular physical activity is an important part of a healthy mind, body and lifestyle. Not only is exercise good for your muscles and bones, but it is also an important part of keeping your brain healthy too. Exercise doesn’t only mean working out or playing sports, it just means moving your body and being active. A few other examples of exercise are: dancing, walking, biking, swimming, or throwing a Frisbee.

What happens in the body and brain during exercise: As your heart rate increases during exercise, blood flow to the brain increases. As blood flow increases, your brain is exposed to more oxygen and nutrients. Exercise also induces the release of beneficial proteins in the brain. These nourishing proteins keep brain cells (also known as neurons) healthy, and promote the growth of new neurons. Neurons are the working building blocks of the brain. As a result, individual neuron health is important to overall brain health.

Studies have shown that the connection between your brain and your body is a “two-way street” and that means physical movement can effectively change your brain for the better, explains Srini Pillay, M.D., Assistant Professor of Psychiatry at Harvard Medical School.

Your brain plays a major role in your physical and emotional well-being, and it directly affects your ability to exercise. Your brain was designed for survival and avoiding danger (fight, flight or freeze). Regular aerobic exercise can reduce anxiety by making your brain’s “fight, flight or freeze” system less reactive.

One way to trick your brain is doing a Gatorade swish, which misleads your brain into thinking your body is getting a jolt of energy from a sugary beverage, even if it isn’t. The act triggers the brain, which naturally wants to preserve energy for survival, into releasing dopamine to help jump start exercise based on the false promise is sugar, Dr. Jennifer Heisz, explains in Move Your Body; Heal Your Mind.

Movement can improve your cognitive functions and mental health. Regular physical activity and movement benefit more than just the body. They actually augment brain function. Movement supplies brain cells with oxygen, promotes the production of new brain cells, and aids in creating new synapses.

Regular exercise such as aerobic, resistance, flexibility, and balance exercises can reduce depressive symptoms. Exercise can be as effective as medication and psychotherapies.

Regular exercise may boost mood by increasing a brain protein called BDNF that helps nerve fibers grow.

Mindfulness during exercises and workout.

“A 12 minute walk alters metabolites in our blood, molecules that affect the beating of our heart, the breath in our lungs, the neurons in our brain.” explains Annabel Streets, “52,ways to Walk: The Surprising Science of Walking for Wellness and Joy, One Week at a Time.

Physical activity is ignored by experts who are too focused on addressing mental health issues from the neck up. “It’s low hanging fruit,” she says, “brain chemist, thought, behaviors might take years to address on the couch.” Dr. Ellen Vora, a New York psychiatrist.

“The brain is always working against you to not expend energy, but we can override it,” says Dr. Heisz.

Exercise can be turned into a powerful meditation practice states Anita Sweeney, author of “Make Every Move a Meditation: Mindful Movement for Mental Health, Well-Being, and Insight”. Exercise can be turned into a powerful meditative practice by focusing the mind on a single thought, object or sensation during exercise can help bring clarity and peace of mind. For example, focusing on your left foot hitting the pavement can help you focus.

Exercise is essential for those seeking better emotional well-being and better mental health. Both physical exercise and meditative movement are activities that you can do to improve the way you feel.

Studies have found that people who exercise daily are at greatly reduced risk of developing Alzheimer’s disease and dementia. Rudolph Tanzi, Kennedy professor of neurology and cofounder of the McCance Center for Brain Health at MGH, states, “It’s hard to imagine anything better for brain health than daily exercise, and our findings shed new light on the mechanism involved: protecting against neuroinflammation, perhaps the biggest killer of brain neurons as we age.”

References:

Inflation – The Elephant Affecting the Economy

Posted on January 19, 2022 by admin

Historic inflation and interest rates hike fears are sinking many high growth technology stock prices. Inflation in 2021 was the consequences of rapidly rebounding demand in a supply-constrained world.

The fear of inflation and the the fear of subsequent Federal Reserve interest rate hikes are creating concern and panic among some investors. Rising interest rate and skyrocketing inflation worries are pressuring stocks. And by the Fed signaling raising rates in the future, it unsettles and sends both Wall Street and Main Street into a panic.

But, what is inflation?

Inflation is when consumer prices rise, goods and services become more expensive, and money loses value. Inflation reduces your purchasing power, eats away at your investment returns, and chips away at your wealth. Currently, Americans are experiencing the pernicious effects of inflation, especially in the areas of escalating food and energy prices.

2021 was one of the worst years for inflation that Americans have seen recently, with a 7% increase, the highest since 1982. For consumers, this means $1 at the beginning of the year was roughly worth only $0.93 at the end. While the impact might seem small when examining it on a dollar level, it represents a change in the purchasing power of retirement savings from January 2021 to December 2021. The Wall Street Journal’s Gwynn Guilford writes: “U.S. inflation hit its fastest pace in nearly four decades last year as pandemic related supply and demand imbalances, along with stimulus intended to shore up the economy, pushed price up at a 7% annual rate.”

American economist and Nobel prize laureate Milton Friedman opined that: “Inflation is always and everywhere a monetary phenomenon.” In other words, inflation is invariably a case of too much cheap money and capital chasing too few goods, services and assets.

In the last twenty years, the United States witnessed a large accumulation of federal public debt under Presidents Bush, Obama, Trump, and Biden administrations. Federal debt climbed from 55% of GDP in 2002 to 105% in 2019. Additionally, the U.S. has also endured a decade plus of loose monetary policy overseen by the Fed which has pumped up asset prices.

As a result of the escalating public debt and loose monetary policy, the Federal Reserve most important immediate task, of its dual mandates, must be to get inflation under control and reduced. Since 1977, the Federal Reserve has operated under a mandate from Congress to “promote effectively the goals of maximum employment, stable prices, and moderate long term interest rates”—what is now commonly referred to as the Fed’s “dual mandate.”

The Labor Department stated that the consumer-price index — which measures what consumers pay for goods and services — rose 7% in December from the same month a year earlier, up from 6.8% in November. That was the fastest growth in inflation since 1982 and marked the third straight month in which inflation exceeded 6%.”

Three sectors–energy/materials, financials and technology–may be viewed as inflation beneficiaries or, at the very least, inflation-agnostic assets:

Energy and materials are commodity-based, and oil, gas, and most commodities rebounded from prices that had fallen to a fraction of their pre-pandemic levels.
Financials, especially banks, are often viewed as inflation hedges since interest rates historically climb when inflation heats up. This reflects the eroding effect of higher prices on a currency’s value in the future, which is remedied by rate hikes on debt.
Technology is a more nuanced winner in the inflation game. The large tech players and most software companies have tremendous economies of scale. As their revenues scale, their costs, particularly labor, do not grow at nearly the same degree, cushioning profit compression from wage escalation.

In a book called “The Great Inflation”, the authors wrote, “Inflation is not an Act of God…inflation is man-made and can be started, prevented, regulated and stopped by human action.”

“To think that a stimulus of this magnitude wouldn’t cause inflation required believing either that such a huge adjustment was possible within a matter of months, or that fiscal policy is ineffective and does not increase aggregate demand. Both views are implausible”, says Jason Furman, former chair of President Obama’s Council of Economic Advisers.

Thus, slowing down in aggregate federal debt growth per capita, tightening monetary policy, and raising interest rates could be effective tools in stemming runaway inflation.

“If I was Darth Vader and I wanted to destroy the US economy, I would do aggressive spending in the middle of an already hot economy… What are you going to get out of this? You’re going to get a sugar high, the higher inflation, then an economic bust.” — Billionaire investor Stanley Druckenmiller, July 23, 2021

References:

Sugar – Detrimental to Your Immune System Health

Posted on January 18, 2022 by admin

The ‘worst food ingredient for your immune system’— sugar. Most Americans consume between 19 and 25 teaspoons of added sugars daily.

Metabolic disorders, like obesity and diabetes, have surged in the U.S. over the past several decades. Experts believe that sugar consumption is the major cause of obesity and chronic diseases, such as type 2 diabetes.

According to many immunologist, having diabetes means your body is in a chronic low-grade inflammatory state, which stresses the body’s innate immune system and makes it slower to jump on pathogens, like COVID19, when they enter the body. Chronic inflammation is an unhealthy and abnormal immune reaction in the body and added sugars are a key diet component known to exacerbate this type of inflammation.

When it comes to your immune system, it important that you understand that what you eat does matter a lot. And no ingredient is more detrimental to your immune system and physical health than added sugar.

From marinara sauce to peanut butter, added sugar can be found in even the most unexpected products. According to the Food and Drug Administration (FDA), added sugars include sugars that are added during the processing of foods (such as sucrose or dextrose), foods packaged as sweeteners (such as table sugar), sugars from syrups and honey, and sugars from concentrated fruit or vegetable juices. They do not include naturally occurring sugars that are found in milk, fruits, and vegetables. The Daily Value for added sugars is 50 grams per day based on a 2,000 calorie daily diet. For most Americans, the main sources of added sugars are sugar-sweetened beverages, baked goods, desserts, and sweets.

Wow! Experts say excess added sugar is a TICKING TIME BOMB for your health! #SicklySweet pic.twitter.com/xVBPFnaWSw

— AMA Media (@ama_media) January 19, 2022

The American Heart Association (AHA) states individuals should limit their sugar intake to six to nine teaspoons each day, which is roughly the same amount of sugar in a single can of sugary soda: eight teaspoons.

Sugar is not just bad for your teeth. Too much sugar can contribute to chronic diseases, can affect the pH levels within the body, and can impact heart health and brain health. Basically, sugar can affect the health of both your mind and body.

In the US, added sugars account for up to 17% of the total calorie intake of adults and up to 14% for children, according to AHA. The 2020-2025 Dietary Guidelines for Americans recommend that you limit your added sugars consumption to 10% of total calories, making the current average consumption by Americans significantly higher than recommended.

Eliminating excess added sugar from your diet can not only help end this cycle of increasing metabolic disorders, but it can reverse it completely. Dialing back your sugar consumption is one of the most effective ways to improve your immune system and your overall health.

Preventative care, especially when it comes to an insidious disease like diabetes, it is recommended that the first step you take in your nutrition journey is to ask your health care provider to perform a fasting hemogoblin A1c test, even if your fasting blood glucose is normal.

Hemogoblin A1c tests measure average blood sugar over the previous three months, so even if your blood sugar is normal the day you see your doctor, the test can catch underlying issues.

According to Dr. Heather Moday, a board-certified allergist, immunologist and functional medicine physician, once you have an idea of where you stand on the blood sugar spectrum, you can take the steps below for better health:

Cut back on added sugars. – This means eliminating candy, soda, cake and those seasonal flavored lattes from your diet. These foods and drinks don’t provide any nutritional value, and they contain massive amounts of sugar.
Read the labels. – It is essential to check the amount of added sugar in every item in your pantry. The average American takes in about 17 teaspoons (71 grams) of added sugar a day, but the American Heart Association recommends no more than six teaspoons (25 grams) of added sugar a day for women, and nine teaspoons (36 grams) for men.
Eat more fiber. – If sugar is bad, then fiber is the good. Fiber not only keeps your digestion regular, it also helps slow the absorption of sugar into your bloodstream, which protects you from sugar spikes. Lack of fiber is another reason why sodas, fruit juices and sugared coffee drinks are so detrimental to your health. They contain a ton of sugar and none of the blood-sugar-protecting fiber that fresh whole plant-based foods have. The best high-fiber foods are black beans and lentils, steel-cut oats, avocados, buckwheat, pears, raspberries, barley and flaxseeds.
Chose nutrients over calories. – Instead of worrying about cutting calories, focus on adding more nutrient-dense foods to your diet, with lots of proteins and healthy fats. You don’t need to go low-carb, just choose the “right” carbs. In fact, eating carbs in the form of vegetables, beans, whole fruits, and nuts and seeds — all mineral- and vitamin-rich foods — is a great way to keep those hunger pangs at bay.

Sugar does occur naturally in all foods that contain carbohydrates, such as fruits and vegetables, grains, and dairy. Consuming whole foods that contain natural sugar is okay, according to Harvard Medical School. Plant foods also have high amounts of fiber, essential minerals, and antioxidants, and dairy foods contain protein and calcium. Since your body digests these foods slowly, the sugar in them offers a steady supply of energy to your cells.

However, problems do occur when you consume too much added sugar — the sugar that food manufacturers add to products to increase flavor or extend shelf life. “Excess sugar’s impact on obesity and diabetes is well documented, but one area that may surprise many men is how their taste for sugar can have a serious impact on their heart health,” says Dr. Frank Hu, professor of nutrition at the Harvard T.H. Chan School of Public Health.

Bottomline is that too much added sugar can be one of the greatest threats to cardiovascular disease and metabolic health. And, your consumption of added sugar must be drastically reduced or eliminated from your diet to improve both your cardiovascular and metabolic health.

The goal isn’t to completely eliminate dessert or sweets from your life, but to bring your added sugar intake into a healthier range.

References:

The Purpose of Education

Posted on January 17, 2022 by admin

“Education must enable one to sift and weigh evidence, to discern the true from the false, the real from the unreal, and the facts from the fiction. The function of education, therefore, is to teach one to think intensively and to think critically. We must remember that intelligence is not enough. Intelligence plus character–that is the goal of true education.”

– Dr. Martin Luther King Jr., Excerpted from Morehouse College Student Paper, 1947

Dr. King believed “…education has a two-fold function to perform in the life of man and in society: the one is utility and the other is culture. Education must enable a man to become more efficient, to achieve with increasing facility the ligitimate goals of his life.”

Moreover, he stated, “Education must also train one for quick, resolute and effective thinking. To think incisively and to think for one’s self is very difficult. We are prone to let our mental life become invaded by legions of half truths, prejudices, and propaganda. At this point, I often wonder whether or not education is fulfilling its purpose. A great majority of the so-called educated people do not think logically and scientifically. Even the press, the classroom, the platform, and the pulpit in many instances do not give us objective and unbiased truths. To save man from the morass of propaganda, in my opinion, is one of the chief aims of education. Education must enable one to sift and weigh evidence, to discern the true from the false, the real from the unreal, and the facts from the fiction.”

“The function of education, therefore, is to teach one to think intensively and to think critically. But education which stops with efficiency may prove the greatest menace to society. The most dangerous criminal may be the man gifted with reason, but with no morals.”

Each year on the third Monday of January, the nation observes Martin Luther King, Jr. Day and reflect on the work that still needs to be done for racial justice and equality in America.

MLK Day is the only U.S. federal holiday designated as a National Day of Service to encourage all Americans to volunteer to improve their communities and to improve themselves.

Dr. Martin Luther King, Jr. was a man of deep and abiding faith, compassion, and dedication. He reminded us all that “human progress never rolls in on wheels of inevitability,” and that “the time is always ripe to do right.” He challenged all Americans to live up to the ideals enshrined in our founding documents – that we are all created equal, endowed with unalienable rights to life, liberty, and the pursuit of happiness.

In 1963, Reverend Dr. Martin Luther King, Jr., stood on the National Mall and shared a dream that has continued to inspire a Nation: To bring justice where there is injustice, freedom where there is oppression, peace where there is violence, and opportunity where there is poverty.

As we remember and celebrate Dr. King’s life and legacy, let’s recommit ourselves to embracing the standard he set, to honoring the legacy that lives on, and to solving the challenges that remain.

“If you can’t fly then run, if you can’t run then walk, if you can’t walk then crawl, but whatever you do… you have to keep moving forward.” Dr. Martin Luther King, Jr.

References:

Cathie Wood Dislikes Investing in Chinese Stocks

Posted on January 16, 2022 by admin

“Pouring billions of dollars into China now is a tragic mistake.” George Soros

Cathie Wood, the CEO of Ark Invest, has slashed her company’s investment exposure to China in 2021. Her actions came as Beijing’ tightened its authoritarian grip on domestic businesses and the economy. These actions has rattled global investors, wiping trillion of dollars off the value of Chinese stocks and triggering fears about the future of innovation in China, especially with China experiencing serious economic slowdown and real estate turmoil.

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Wood revealed that her Ark Innovation ETF has significantly reduced its exposure to China. Sweeping regulatory changes have made the investment environment riskier in,China, according to a Financial Times report. Additionally, the Chinese government has been accused by the U.S. and the international community of committing genocide specifically against the Muslim Uyghurs and other minorities which has resulted in several countries boycotting the 2022 Beijing Winter Olympics because of these allegations.

Almost every week late last year, China announced a regulatory crackdown aimed at reasserting its absolute control of its economy. The crackdowns included a banned on the ride-share company Didi from app stores a day after it listed on the New York Stock Exchange.

With Chinese authorities apparently focusing on social issues and social engineering at the expense of capital markets, Wood said, “We own very, very few stocks there [in China] because they’re unpredictable. They are grappling with what most governments are grappling with: the gap between rich and poor.”

Furthermore, Chinese authorities have been cracking down on cheap credit in an effort to cool the country’s real estate market that has been driven by speculation. These actions has caused China’s Evergrande Group, the world’s most indebted property developer, and other large property developers to default on bond payments. Wood is concerned that 75% of consumer savings in China is held in real estate, and real estate values have fallen in recent months. Her analysis: That the Chinese government is willing to risk the decline in real estate values and wipe out real estate investors in order to address the wealth gap.

Angel investor and entrepreneur Jason Calacanis commented: “I think the mad king is circling his wagons because he feels threatened. I’m talking about [Chinese President] Xi Jinping.”

President Xi Jinping’s has talked about “common prosperity” as a policy goal in China, and called on high-income Chinese enterprises to “return more [of their profits] to society”. These policies have been particularly focused on cracking down on the power of big private companies, such as e-commerce giant Alibaba and ride-hailing app Didi. Beijing’s policies have prompted investors to sell Chinese assets in 2021.

Moreover, Chinese companies in the technology, education and gaming sectors have faced an onslaught of draconian new rules relating to data privacy and workers’ rights in recent months. Chinese authorities have told the companies to “break from the solitary focus of pursuing profit or attracting players and fans.” Within the past several months, China barred online gamers under the age of 18 from playing on weekdays and limited their play to just three hours on weekends.

Cathie Wood is also circumspect about China’s demographics. China has been confronting the lowest fertility rates it has experienced in seven decades as well as a material gender imbalance. This is a growing concern to the Communist authoritarian government.

“I think President Xi is very unsettled that China’s three-child policy is not working. And that’s very forecastable,” Wood said.

Multinational U.S. companies have come under increased pressure both within China and internationally as they aim to comply with Xinjiang-related trade sanctions while simultaneously overlooking Chinese government’s crimes against humanity while continuing to operate in China. These companies issued marketing statements condemning the murder of George Floyd in the U.S. while turning a blind eye and remaining mute regarding genocide and mass murder in China.

Billionaire investor George Soros said BlackRock’s and other U.S. businesses who are investing billions of dollars into China now is a “mistake” and will likely lose money for the asset manager’s clients, according to an opinion piece in the Wall Street Journal.

“Pouring billions of dollars into China now is a tragic mistake,” Soros wrote in the op-ed. “It is likely to lose money for BlackRock’s clients and, more important, will damage the national security interests of the U.S. and other democracies.”

References:

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