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TOPLEY’S TOP 10 April

05 2024

April 5, 2024
Posted by Matt Topley

1.Equities Shine Over Bonds-

Bespoke
Helped mainly by the massive gain since late
October, the S&P 500’s one-year trailing total
return through the end of March clocked in at
an eye-watering 30.5%, or nearly triple the his-
torical average of 11.8%. While the rally over
the last year has been well above average, it
followed a period of weak returns in the prior
year. When you combine the last two years,
the S&P 500’s annualized gain of 9.7% is nearly
a full percentage point below the long-term
historical average. Looking out over the last
five and ten years, annualized returns have
been well above average, but over the prior
twenty years, the S&P 500’s performance has
been sub-par.

Equity market returns may have been below

average over the last two and twenty years, but
you won’t find many equity investors looking to
trade shoes with investors hiding out in long-
term (LT) US Treasuries. The chart below
shows the annualized total return of the Bank
of America/Merrill Lynch index of 10+ Year US
Treasuries over various timeframes. Over the
last year, LT Treasuries declined 4.8% versus a
long-term average annualized gain of 8.1%. If
you think that’s bad, check out the two-year
annualized decline of 13.1%…in Treasuries!
That’s a 25% haircut! Even over the last five
years, LT Treasury returns have been negative
to the tune of 1.6% annualized. To find – not
better than average – but simply positive re-
turns, you have to go out to the ten-year win-
dow, where the total return is just 1.6% annual-
ized and still seven percentage points less than
the historical average. While technically not a
lost decade, it’s been a loser of a decade for
sure.

2.Best and Worst ETFs Q1

Nasdaq Dorsey Wright

3.Buybacks Huge Part of De-

mand for Stocks.
The Daily Shot Brief Equities: Goldman sees
share buybacks driving demand for stocks this
year.

Source: Goldman Sachs; @WallStJesus

4.FANG+ Stocks Held Above

50day Since Nov 1 2023

5.$21 Trillion in T-Bill Issuance

Past 12 Months-B of A Re-
search

6.S&P Metals and Mining ETF

Closing in on 2022 Highs.

7.Growth vs. Value

Barrons Active funds now have 56% less expo-
sure to value investments than to momentum
factors—a 15-year low, according to Subraman-
ian. “Funds looking for cheap stocks based on
low price-earnings valuations is at a “max un-
derweight,” she adds. “A brain drain and asset
drain, with 40% fewer funds, from active fun-
damental to passive and private suggest mar-
kets may be less e"cient and o#er more alpha
potential.”

Value has had its share of false starts. But Sub-

ramanian writes that value is historically cheap
at a time investors could become more attuned
to the price they are paying for stocks.

Over the last decade, roughly 150 active large

value funds have gone extinct, Morningstar’s
Director of Manager Research Russel Kinnel said
via email. That could mean a bigger opportunity
for those stockpickers who stuck with value if
this turnaround materializes.

Write to Reshma Kapadia https://www.bar-

rons.com/articles/value-stocks-bank-of-amer-
ica-financials-etfs-dfa41ba4?mod=hp_LEAD-
_1_B_3

Russell 1000 Value cheaper than Growth but

IWD broke out of 5-year holding pattern

www.stockcharts.com

8.55% of Americans Don’t

Have CC Debt.
Ben Carlson According to the Fed, 45% of
American households have credit card debt.
That number has been relatively stable over
time:

https://awealthofcommonsense.com/au-
thor/sodoi7/

9.Old School Heist $30m

Tens of millions stolen from money storage fa-
cility in one of the largest cash heists in South-
ern California

ANDREW BLANKSTEIN AND MINYVONNE BURKE

Thieves stole tens of millions of dollars from a

money storage facility in what is being called
one of the largest cash heists in Southern Cali-
fornia.

The robbery happened on Easter Sunday at a

GardaWorld facility. NBC Los Angeles reported
that it occurred in the 15000 block of Roxford
Street in Sylmar in Los Angeles’ San Fernando
Valley.Burglars breached the building as well as
the safe where the facility stores money, Los
Angeles Police Department Cmdr. Elaine
Morales told the Los Angeles Times.While the
Times reported that as much as $30 million
was taken, multiple law enforcement sources
familiar with the matter told NBC News they
are trying to assess exactly how much money
was taken.

Morales did not respond to a request for com-

ment on Thursday, and a spokesperson for the
LAPD would not confirm details in the Times’
article.The LAPD and the FBI are conducting a
joint investigation, the LAPD spokesperson said.
The FBI and GardaWorld were not immediately
available for comment.

GardaWorld says on its website that it is a

“long-standing security partner of choice to
some of the most prominent brands, Fortune
500 corporations and governments.” Its mission
is to protect its clients’ assets and opera-
tions.The company has 425 branch o"ces
across 45 countries, according to its website.
An employee at GardaWorld told NBC Los An-
geles “the place is pretty secure.”

“They check that the alarm is set up, so, just to

think that they were able to go through the se-
curity system and get away with all that money,
it’s a shocker,” said the employee, who asked to
remain anonymous.The alleged heist is said to
be one of the largest in Southern California and
comes two years after the multimillion-dollar
theft of jewelry and gemstones from a Brink’s
tractor-trailer while the driver was inside
asleep. A second driver was away from the ve-
hicle for nearly 30 minutes getting food inside a
rest stop. Some have said thieves took 22
bags worth less than $10 million while others
believe it was roughly $100 million. No arrests
have been made. On Sept. 12, 1997, $18.9 mil-
lion was stolen from the former site of the
Dunbar Armored facility on Mateo Street in Los
Angeles. The robbers were eventually caught,
the Los Angeles Times reported.

https://www.aol.com/news/tens-millions-
stolen-money-storage-184252654.html

10. Mammal.ai Prof G Blog

https://www.profgalloway.com/mammal-ai/

TOPLEY’S TOP 10 April

04 2024

April 4, 2024
Posted by Matt Topley

1.Disney Chart Action.

DIS broke above red downtrend line going back
to 2021

Disney running right up to 200-week moving

average

2.This Chart Shows Toyota vs.

Tesla Performance
Toyota 11x Earnings vs. TSLA 60x earnings.

3.Biotech ETF Risk On Mea-

sure.
XBI pulling back to lower trendline

4.Follow Up to Yesterday’s
Gold Comments…Gold Stocks
vs. Gold Bullion
Marketwatch By Mark Hulbert

Gold bullion — physical gold has outperformed

gold-mining company shares over the past
three years by one of the largest margins in
decades. Gold recently hit a new all-time high
above $2,200 an ounce, while the PHLX
Gold/Silver Index XAU is below where it stood
three years ago — as you can see in the chart
below.

https://www.marketwatch.com/story/buy-
gold-or-gold-miners-you-dont-have-to-dig-
deep-to-hit-paydirt-98428d04?
mod=mw_quote_news

5.Vanguard High Dividend ETF

Breaks Out of 2-Year Side-
ways Pattern

6.Spotify Breaks Above 2021

Levels.

7.Unleased O"ce Space His-

tory
From Barry Ritholtz Blog

https://ritholtz.com/

8.Most Baby Boomers Staying

in Current Home.

9.1 in 3 Homes Purchases are

Cash.
From Irrelevant Investor Blog https://theirrele-
vantinvestor.com/

https://theirrelevantinvestor.-
com/2024/04/03/animal-spirits-the-never-
ending-travel-boom/

10.The War Within

By Dina Isola

Investors need not waste time worrying about

what they can’t control, like market volatility
and its many causes, because there is a greater
threat to their financial success and it comes
from within.

The internal battle we face is a war between

our primitive minds and our current reality,
where some of these primal survival skills are
outdated, if not useless. The cognitive biases
that kept the species alive, can lead to making
less than optimal financial decisions – espe-
cially if we are unaware of them.

According to James Clear (Atomic Habits),

much of our behavior is rooted in reducing un-
certainty, relieving anxiety, and winning social
acceptance/approval. At the heart of these in-
clinations is the goal of propagation of the
species. Our cognitive biases encourage us to
be part of a tribe to stay safe (and alive) in or-
der to multiply. But for a modern-day investor,
the greatest success comes from taking risk,
and going against the crowd’s greed or fear. Un-
derstanding these cognitive biases is crucial to
overriding them and not mistaking them as “gut
instincts.”

The Last Experience Might Not Be Replicated

Our ability to not repeat mistakes is the Recen-

cy E"ect at work, which is how we learn not to
touch a hot stove. We associate the last experi-
ence in a given situation as one that will be
replicated. But, not all situations have as cer-
tain an outcome as this. When it comes to in-
vesting, this bias leaves investors believing that
the next experience they have will be the same
as their last (for better, or for worse). This can
lead investors to be overly fearful, sitting in
cash at the worst time; or, investing aggressive-
ly, thinking the next new high is on the horizon.
However, just because it happened last
time isn’t a strategy.

Fear is Instinct, Not Intuition

Survival instincts have us place more emphasis

on negative thoughts and perceived threats.
This Attentional Cognitive Bias even shapes the
way we remember experiences. We are more
likely to remember the magnitude of the pain of
loss than the highs from the joy of a win. When
combined with the Recency E#ect, it is a po-
tent cocktail that keeps once-bitten shy in-
vestors perpetually sitting on the sidelines,
waiting to re-enter, and never able to jump
back in. The result is missed opportunity and
wasted years that could have been spent com-
pounding investment results to build wealth
overtime.

Surrounded by Information and Agreement

Clouds Judgment

A cognitive bias made particularly potent in our

modern era is Availability Heuristic, which
places greater importance on information that
is readily available (e.g., virally spread) regard-
less of its merit. In addition, algorithms serve
up a daily diet of content that echoes what we
already believe. And this Confirmation Bias cre-
ates confidence that we are right because
there is a whole tribe of people in agreement.
This is how irrational exuberance takes hold,
leading investors to gorge en masse on stocks
that cost more than they are actually worth.

Dial Back on Emotion

The only way to handle our modern day invest-

ment challenges is to dial back on the very
thing that helped keep us alive – our emotional
response to stimuli. Fortunately, there is data
going back to the 1920s that shows how di#er-
ent types of investments have performed over
various time frames (with stocks being the
strongest performer). We can look to volatile
times in the market’s history and see now that
these were buying opportunities for long-term
investors. While past performance is no guar-
antee of future results, probability is all an in-
vestor can look to.

Still, on an emotional level it can be di"cult to

make the decision to invest. This is where au-
tomation and technology can be used to estab-
lish a systematic investment plan to buy every
month, regardless of market performance. Au-
tomation frees investors from the angst of de-