A Philosophy For Life

The List to Live By [Morning Reckoning] August 29, 2024 [WEBSITE]( | [UNSUBSCRIBE]( A Philosophy For Life Asti, Northern Italy August 29, 2024 [Sean Ring] SEAN RING Good morning Reader, When scrolling through X (formerly Twitter), I usually hunt for juicy financial, economic, or political information that will inspire a newsletter piece. Last night, I came across a person I had never met who wrote the most immediately helpful thread I’ve ever seen. This thread was so brilliant that I created a bookmark list called “Best Advice” so I would never lose it. I knew right away that I must share it with you. But before I do, let’s meet our contestants. [Tim Denning]( a blogger with 77,000 followers, published the list I’m about to show you from Kevin Kelly, a confidante of Tim Ferriss. I didn’t know who Denning or Kelly was, but I’m a big fan of Tim Ferriss. I found all of Ferriss’ books helpful. Kevin Kelly is one of Tim’s friends and is, in his own right, an excellent writer and futurist. He is the founding executive editor of Wired magazine. His chapter in Ferriss’ Tool of Titans didn’t hit me that hard when I read it. Now, I think the man is a genius. After you read this, you’ll probably feel the same way. Now, let’s delve into Kevin Kelly’s unique philosophy of life, a perspective that is sure to intrigue you. 1. “Don’t take it personally when someone turns you down. Assume they are like you: busy, occupied, distracted. Try again later.” Right off the bat, we’ve got a huge winner. Jim Camp, of negotiation fame, wants his clients or negotiating adversaries to say “No.” That way, he knew where the negotiation boundaries were. When you’re always trying to “get to yes,” you’re not living in your client’s world. You’re living in your world. But more than that, you become more tenacious when you get used to hearing no. There’s always something more to talk about. And that’s how deals get done. Indeed, try again later. 2. "Over the long term, the future is decided by optimists." My good friend, colleague, and Paradigm’s options expert Alan Knuckman constantly hammers me with this. And I must admit, he’s right. It’s changed my way of thinking when it comes to trading and investing. I’m not as jittery. I have faith that things will turn out alright. Now, that doesn’t mean you should ignore danger signs. But it does mean you probably won’t overreact to bad news. That’s an essential skill when the U.S. markets tend to go up over time. It would have been a different story if we had been in Japan over the last 35 years. [🚨🚨Altucher Issues MAJOR Alert!🚨🚨]( [Click here to learn more]( Heads up… I just issued a major alert for one tiny stock. If I’m right, this could be the biggest winner I’ll recommend in 2024. But you can only access it if you act immediately. [Click here right away.]( [LEARN MORE]( 3. "The purpose of a habit is to remove that action from self-negotiation." Think of it like this: a habit is an algorithm. The point of creating one is to automate a process. If you do something enough times, your mind automates it into a habit. Then you don’t have to “decide” to do it anymore. Decision fatigue is a huge energy suck. Now, you can create the habits you want by repeating positive actions and turning them into uplifting algorithms that’ll happen like magic. 4. "Perhaps the most counter-intuitive truth of the universe is that the more you give to others, the more you’ll get.” Imagine. Manifest. Share. That’s the magic formula. Everyone imagines. We all daydream about how things could be. Some take that forward by manifesting whatever that product or service is. We physically bring it from the inside to the outside of our heads, from our brains to the real world. Then, we share, sell, or barter what we made with other people. The more you do that, the more you’ll get. 5. “You don’t want to be famous.” Luckily, I got this one early. I always wondered why people wanted other people to follow them around snapping pictures all the livelong day. Kelly suggests reading the biography of any famous person. You may not like what you read. Kelly also says you can’t hit the reset button once you have fame. The attention you should seek should be from your loved ones, not some strangers in a parking lot snapping pictures of you. 6. "Most amazing or great things are done by people doing them for the first time." If you’re running a business, Kevin thinks you should hire people based on their natural abilities and then train them for the skills needed to be good at the job. If their mindset is right (growth), the rest is teachable. 7. "Almost anything money can do, friends can do better. In so many ways, a friend with a boat is better than owning a boat." Hear! Hear! Money is great, but what you can experience with the boys, girls… or posse… is much better than counting the gold in your vault. Your “stuff” won’t matter in your dying hours, but your friends and memories will. 8. "Being enthusiastic is worth 25 IQ points." I’d add, “Being a Negative Nancy is worth minus 25 IQ points.” Enthusiasm makes you optimistic, and we talked about that above. But being negative closes your mind to the possibilities. So, find a way to get excited about your project, whatever that is. Or get another project. 9. "Pros are just amateurs who know how to recover from their mistakes gracefully." It took Edison 10,001 attempts to make the lightbulb work. What did he say about that? “I have not failed. I’ve just found 10,000 ways that won’t work.” That’s enthusiasm, optimism, and grace all in one quote. Even if you favor Nikola Tesla, this advice is worth hanging on the wall. 10. “Eat beans and rice for a year.” This is his most unique piece of advice. Kevin says this because “any time you have to risk something in the future, you won’t be afraid of the worst-case scenario.” I remember quitting my broking job in London in 2006. The first thing I bought at Tesco, my local supermarket, was a can of Heinz beans. It tasted fine, and I knew I’d be alright. 11. “When crisis and disaster strike, don’t waste them.” Without problems, there would be no creation or solutions. Learn to thrive on problems, to welcome them. Every time you solve a problem, you get better. 12. “Finite games are played to win or lose. Infinite games are played to keep the game going. Seek out infinite games cause they yield unlimited rewards.” This is why you quit your job to run an online business. The goal is freedom, not money. You stay in the game longer than trying to hang on to a job by your fingernails. 13. “Your behavior, not your opinions, will change the world.” It’s all about what you do, not what you say. That’s why merit-based systems thrive. 14. “The greatest teacher is called ‘doing.’” Get kinesthetic, baby! Take things apart and put them back together again. Hilariously, I’m not allowed to convert my driver’s license here, so I’ve got to do the whole course, including the theory, with eighteen-year-old kids. You know what? I love it. I’m learning all about cars, which they didn’t make me learn in New Jersey in the early 90s. I know an albero del motore is Italian for “crankshaft.” I’m learning to speak Italian better because I have to take this class. Watching videos isn’t always the best way to learn. 15. “Your growth as a mature being is measured by the number of uncomfortable conversations you are willing to have.” I once knew a Wall Street managing director who got drunk before he told his number one he wasn’t getting a promotion this year. He couldn’t bear to have the conversation. His underling decided to stay home the next few days and not come to work. Then, he vowed never to work for that MD again. Those drinks cost the MD $500,000 because his bosses were so incensed they took it out of his hide. Master discomfort. Know what it feels like. Accept it. And then do it anyway. 16. “Very few regrets in life are about what you did. Almost all are about what you didn’t do.” My million-dollar mistake was not buying a flat in London in the early 2000s. My billion-dollar mistake was not buying Bitcoin when my crazy libertarian friends told me to. Sure, I’m not proud of some of the things I’ve done, but those things don’t keep me up at night. 17. "When you die, you take absolutely nothing with you except your reputation." I watched the podcast [Inside of You with Michael Rosenbaum]( a few months ago. His guest was John Rhys-Davies, who played Sallah in the Indiana Jones films. He shared a thoughtful anecdote. Rhys-Davies was teaching an acting class and asked the class who Sir Laurence Olivier was. No one raised a hand. Then someone sheepishly asked, “Was he a writer?” Rhys-Davies said, “If they don’t know who Olivier is, what chance do they have of remembering me?” He knew he had been right to put his energy into his family. Wrap Up I hope you found that as helpful as I did. It’s a list to live by. Have a wonderful long weekend. You deserve it! All the best, [Sean Ring] Sean Ring Contributing Editor, The Morning Reckoning feedback@dailyreckoning.com X (formerly Twitter): [@seaniechaos]( [Elon Musk’s Final Masterpiece: X-9840]( After revolutionizing the payment processing industry with Paypal…The space exploration industry with SpaceX…And the auto industry with self-driving Teslas… Elon Musk is now set to revolutionize MONEY with his [“Project X-9840...”]( A project he said could change “Your entire financial life.” [Click here to see the details because there’s not much time to prepare](. Elon has said he could flip the switch “as early as mid 2024.” [LEARN MORE]( In Case You Missed It… Nvidia Earnings: Buy, Sell, or Hold? Greg Guenthner, Editor [Greg Guenthner] GREG GUENTHNER Good Afternoon Reader, I’ve been thinking about throwing my laptop out the window and sailing away to a deserted island this week to skip the NVDA earnings circus. That’s probably not a practical idea. I can try to run — but there’s no way to avoid the most popular tech stock on the market revealing exactly how much the AI boom has grown over the past three months. It’s going to be another noisy week as the three-ring financial media kicks off wall-to-wall NVDA earnings coverage — the greatest show on Wall Street. Step right up to witness AI chip madness! Revel in the aftermarket reaction! Listen to the amazing conference call! Unfortunately, there’s no cotton candy (unless you make your own). But CNBC will gladly treat you to plenty of performative hype surrounding the earnings event of the year. We might as well embrace the chaos. It’s already been a wild month. Just a few weeks ago, we were watching the market fall apart and the VIX spike to levels not seen since the Covid crash. Investors panicked and started selling. But then the selling stopped almost as suddenly as it began — and stocks ripped higher for two straight weeks. If that wasn’t enough excitement, Jerome Powell stepped up to the mic in Jackson Hole on Friday and promised rate cuts in September. The good times rolled right into the afternoon as the averages went out near their weekly highs — and less than 1% from all-time highs set a little more than a month ago. In the span of just a couple of weeks, we went from the end of the world to the beginning of the next great bull run, spinning the heads of just about every trader on the planet. If this incredible recovery felt unusually fast, you’re absolutely correct. My friend Michael Batnick over at Ritholtz Wealth [ran the numbers]( and it turns out that the Nasdaq takes 32 days on average to rally 10% after falling into correction territory. This time around, it took only eight. As Michael notes, this is the fastest 10% rally ever following a corrective move. The bulls are back in town — and we need to adjust to this lightning-fast recovery as the final week of summer trading looms large. Update: “The Dip” Strikes Back! Two weeks ago, I highlighted the S&P 500’s short-term downtrend and the idea that it would need to close the Aug. 2 gap and extend to approximately 5,450 to break out of its funk. If a sharp rally does materialize here, I noted, plenty of buyers should gobble up shares and shove the markets back to all-time highs. To be clear, I didn’t expect it to happen so fast! I figured a retest of the Yen panic lows was probably in our future. The 200-day moving average near the April swing lows at 5,000 looked like a reasonable landing area, which matched up well with the bottom of our downtrending channel. As we now know, the market wasn’t as vulnerable as it appeared. Instead of choppy, volatile conditions, we were treated to a near-perfect “V-recovery” that effectively erased the early August drop in just two short weeks. Assuming we’re out of the weeds for now, here’s our unofficial drawdown tally: The VanEck Semiconductor ETF (SMH) fell almost 30% from its July highs. The Nasdaq 100 dropped 15%. The S&P 500 fell nearly 10%. And the Magnificent Seven stocks — measured by the Roundhill Magnificent Seven ETF (MAGS) — dropped 22%. Despite the sheer speed of the recovery, we could argue that these drawdowns were all deep enough to induce plenty of anxiety amongst the “stocks only go up” crowd. They also offered significant momentum resets that can potentially set up the next big move higher. But right now, I’m much more interested in what certain groups aren’t doing while the averages inch closer to their respective all-time highs… A Magnificent Letdown During the fastest snapback in history, one might expect the mega-cap leaders to retake control of the market. But that hasn’t been the case. In fact, the Mag 7 stocks have trailed the broader S&P 500 so far this quarter, according to BMO’s Brian Belski, via MarketWatch, who notes the mega-cap kings are set to underperform the index for the first quarter in almost two years. For the record, this data is nearly a week old. But we continue to see this trend playing out as NVDA’s earnings creep closer. Semiconductors failed to gain traction on Monday as the VanEck Semiconductor ETF (SMH) finished the day down more than 2.3%, compared to a drop of just 0.3% in the S&P. While its comeback off the August panic lows was impressive, SMH would need to rally more than 16% from Monday’s close to top its July highs (Remember, the S&P is now less than 1% from its all-time highs). It’s the same story for the Mag 7 names. Yes, they’ve rallied off their respective lows. But the Roundhill Magnificent Seven ETF (MAGS) still needs to run up another 11% before challenging its August highs. For the record, I don’t believe this semiconductor/Mag 7 underperformance is tipping NVDA’s hand. In fact, it will probably have no bearing at all on the earnings reaction we’ll witness tomorrow afternoon. On the flip side, I also don’t think the market’s short-term performance will live or die by NVDA’s results. But I do think we’re seeing the resurgence of that pesky rotation trade we’ve discussed this summer. While mega-caps and semis are underperforming, the rate-sensitive names are popping higher, including tech-growth names, small-caps, and biotechs. The Yen panic acted as a hard reset for this rotation theme. But these stocks are now roaring back to life as September approaches. The best part? You don’t have to make any wild bets on NVDA earnings to make a buck off these trends. Instead, bet on these rotation trades remaining in play as the bulls continue to pile back into the market leading up to the September cut. Best, [Greg Guenthner] Greg Guenthner Contributing Editor, Morning Reckoning feedback@dailyreckoning.com Thank you for reading The Morning Reckoning! We greatly value your questions and comments. Please send all feedback to [feedback@dailyreckoning.com.](mailto:dr@dailyreckoning.com) [Sean Ring] [Sean Ring, CAIA, FRM and CMT]( is a former banker and financial educator and is the editor of the Rude Awakening. Sean has trained interns and graduates from Goldman Sachs, Morgan Stanley, Citi, Bank of America, Standard Chartered Bank, DBS (Singapore), the Abu Dhabi Investment Authority (ADIA), Bank Indonesia (the central bank), HSBC, Barclays, RBS, and BlackRock. He knows the global economy is being corrupted by forces that most people can't understand and has used his unique and worldly experiences to help people navigate the markets. [Paradigm]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2024 Paradigm Press, LLC. 1001 Cathedral Street, Baltimore, MD 21201. By submitting your email address, you consent to Paradigm Press, LLC. delivering daily email issues and advertisements. To end your The Daily Reckoning e-mail subscription and associated external offers sent from The Daily Reckoning, feel free to [click here.]( Please note: the mailbox associated with this email address is not monitored, so do not reply to this message. We welcome comments or suggestions at feedback@dailyreckoning.com. 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