Nifty..

Nifty Again tricky for the day can be shorted at 7800.

A close above 7860 changes the trend on the buying side.

Sell in May and Go Away?-By John Mauldin

“Sell in May and go away” is market wisdom that actually came from Britain, based on market patterns there. My friend Art Cashin has often noted that the financial market cycle is actually related to the agricultural cycle, when farmers had to borrow in spring but could then sell their crops in the fall. I would posit that we are no longer subject to the agricultural cycle; but, even so, the sell in May (buy in late October) cycle seems to have pertained for the past 20 years. Again, on average. You can see in the chart below from the Stock Trader’s Almanac (courtesy of my friend Jeff Hirsch) that since 1950 (the black line for those of you who are looking at color) average performance was essentially flat for the period between May 1 and November 1.

Jeff notes, by the way, that this advice still works in election years.

The green line is interesting. It shows the seasonal pattern for the years 1988–2015. For those 28 years, you would have done well to revise the market wisdom and sell on August 1, buy in mid-October. That said, the “ride” from May through mid-August has been rather bumpy. As in, fasten-your-seatbelt bumpy. Which may be another indication that the impact of the agricultural cycle on financial markets is fading.

But any way you look at it, that nervous feeling you have about the market now is quite justified by the historical data.

On the other hand, I’m sure that my friend Barry Ritholtz and others of the bullish ilk (which technically I am, just more selectively so) can point to numerous years when “sell in May and go away” was really bad advice – as in you left a lot of money on the table by not being in the market. So what’s the point of timing if you can’t know how things will go from year to year? Well, let’s see what the data tells us.

First, let’s look at a chart courtesy of my friend Jeff Gundlach at DoubleLine, one which came to him from another friend, Jim Bianco. (It’s a small world, and we all “borrow” from each other. I do try to note whom I am lifting things from; and anyone can freely come to me and asked for a cup of sugar without having to worry if I’m going to ask for it back. It’s all just part of the pay-it-forward world in which we financial analysts live. The guys who are selfish and don’t freely share their sugar miss out on a lot of fun.)

Anyway, what Jim shows us is that early estimates of earnings have been falling dramatically in real time since 2012, which is another way of saying that analysts are wildly optimistic at the beginning of a forecasting period and get their asses kicked (that’s a technical economics term) by the end of it. Their records in 2015 and 2016 have been particularly embarrassing (or at least should have been).

Falling earnings – especially when they go negative, as they have for the last few quarters – are not typically associated with rising markets. Not that it can’t happen, but that’s not the way to bet the horse race. There was a reason that Majesto came off the line at 56-1 in yesterday’s Kentucky Derby while Nyquist was at 2-1. (Hat tip to short trader and horse aficionado Doug Kass, who called the Derby in advance and who also suggested that if Nyquist got past the Derby, he might be a good bet for the Triple Crown. Please note, gentle reader, this does not qualify as investment advice. Just a tip, is all.)

But price-to-earnings ratios, when quoted in the papers and or encountered in company reports, can be misleading. Companies highlight what is euphemistically called “adjusted earnings per share before extraordinary items.” The concept being that in the preceding quarter or year there were extraordinary expenses that are nonrecurring and will not happen again, so you shouldn’t hold them against the company’s actual earning power or future value.

Except that if you pay attention over the long term, these “extraordinary items” keep popping up every year, year after year after year. And amazingly, company financial officers manage to find more “extraordinary items” each year that they want investors to ignore. There is a significant difference between the P/E ratio when figured on adjusted (that is, more or less real) earnings, which in the trade we called EBITA, versus the earnings that I call EBBS – or more colloquially, “earnings before the BS we want you to ignore.”

The Wall Street Daily gives us the following handy little chart. It shows that for the past year or so we have had a local extreme between the two accounting methods. Guess which accounting methodology a reputable analyst and advisor is going to want you to look at? Seriously, if you don’t know the answer to that question, find yourself a qualified investment advisor and vow to never even think about managing your own portfolio again.

Few weeks ago we talked about the general decline in productivity over the last 50 years. And a drop in productivity is a precursor to a general decline in the growth of the economy. The following chart from Bureau of Labor Statistics data suggests that this year US worker efficiency (productivity) will show its worst back-to-back quarterly decline since 1993. That is not a good indicator of future rising profits.

Here is the stark reality. Overall, profits in the economy cannot grow faster than the economy itself does. The profitability of individual companies can, of course, vary widely. Companies that are “hot,” that have a new cool toy and are taking market share, and that perhaps even have brilliant management, can see their earnings rise far above average GDP growth. But, taken as a whole, corporate profits are a function of GDP growth. And as I detailed last week, we are going to be lucky to see 1.5%, let alone 2%, growth for the next five years. That performance is basically all presaged by productivity and worker participation rates, both of which are ugly. And that’s not even taking into account that we are due for a recession within a year or so. Just saying…

So if you are in index investor and you think you are going to continue to get historically average returns, PLEASE take some time to review the fabulous data on the website of my friend Ed Easterling at Crestmont Research, and see what happens to people who want to get average returns. You should not even consider managing your own money until you have absorbed the free research on Ed’s site. At least then you’ll go about investing in today’s environment with your eyes wide open.

What you will see is that today’s price-to-earnings ratio is rather remarkably high. We are not at all-time highs like we were in 2008 or 1929, but if the S&P 500 or other similar indexes were a mountain you were climbing, you would need to be wearing an oxygen mask.

Where Are We in the Cycle?

The table below is from Doug Short, as reproduced by Michael Lebowitz at 720 Global. Check out Michael’s reportfor a full explanation of the table. It’s very bearish.

Says Michael:

The current P/E is 55% above the historical mean and surpasses 92% of all P/E data. Only multiples from the 2000 and 2008 bubble periods were higher than today. Doug Short created a simple model that averages four common equity valuation techniques. Based on his analysis, the market is 76% overvalued as compared to the average dating back to 1900. According to his analysis, current valuations are only surpassed by the exuberant markets leading into the depression of the 1930s and the tech crash of the early 2000s. Suggesting that equities are at lofty valuations and prices is not an overstatement….

The possibility of a recession while equity valuations are extreme is deeply troubling. Since 1929, there have been 14 recessions. All but one, in 1945, coincided with a period of negative returns for stocks. Included in this data, as shown in the table [above], are periods when stock valuations ranged from greatly undervalued to extremely overvalued. Data and Table courtesy Doug Short.

I went to Doug’s letter at Advisor Perspectives and read his commentary and decided that you should actually see the analysis of the four valuation techniques that Michael talked about. Below we have Doug’s average of Robert Shiller’s cyclically adjusted price-to-earnings ratio (CAPE), Ed Easterling’s Crestmont P/E, Nobel laureate James Tobin’s Q ratio, and Doug’s own monthly regression analysis of the S&P 500.

By almost any measure, we are at very high valuations. I’m not saying overvalued; I am saying very high. As in there is not a lot of room for valuations to go much higher without some serious growth and actual earnings. But as we saw from the data earlier, earnings estimates are chronically too high, and the prospect for future earnings is not reassuring.

This overall picture is not exactly encouraging if one wants to look past the summer into October.

Next, let’s look at two charts from J.P. Morgan Asset Management. What they show is that we are rapidly approaching the third-longest expansion period of the past century. The graph to the left shows that we have been in the weakest recovery since World War II – which everybody knows. And the chart on the right shows that recoveries have been getting weaker over the years, with the current recovery the weakest by far. My personal opinion and my reading of the enormous body of research available is that this weakness is associated with the present massive debt of the US. If you look at the same data for Europe and Japan, you see the same trend.

The chart below reiterates what I said last week: the long-term drivers of economic growth are increases in the working age population and productivity. In the chart, “growth in investment in structures and equipment” is substituted for productivity, which is just another way of looking at it. The results are the same: future economic growth is likely to be weak.

Finally, let’s look at a few charts from my longtime friend Steve Blumenthal’s letter, On My Radar. (Personal note: Steve and I are quite close. He is one of the nicest human beings I have ever met. He’s one of those guys you can trust with your wife and your life. I have watched him grow as a writer and analyst – and money manager – for almost 20 years now, and he makes me proud. Happily, he has no objection when I steal – I mean borrow – from him.)

Steve works closely with the noted firm of Ned Davis Research. I see their work from time to time, and I’m always impressed by it; but their work can be a little pricey, and they (justifiably) tend to keep their data close to their chest. So I am going to pull the following chart from Steve’s already-public letter of few days back .

What sort of returns can we expect over the next 10 years? If you take the median P/E ratios of the last 16 years, as the chart above does, you see that follow-on 10-year returns don’t get your heart palpitating all that much. We are now at a starting median P/E ratio of 22, which, looking back over the last 16 years, suggests forward 10-year returns of 2% or lower. Ugh.

Let me quote from Steve’s letter for this next part:

Median P/E reached 22.7 at the end of April. That is higher than any point looking at median P/E data from 1964 to present with the exception of the crazed pre- and post-tech bubble period.

The next chart is courtesy of Ned Davis Research. The traffic light and arrows are my notations as I attempt to simplify the chart. What I like about this chart is that it does a good job estimating overvalued, fair value, and undervalued levels on the S&P 500 Index. Kind of an investor reality road map.

With the S&P 500 Index at 2065.30, it (by this measure) means that the market is overvalued by 3% (red light) by historical measures. In the chart, NDR uses a 1SD (standard deviation) move above fair value (it uses the 52.2 year median P/E of 16.9 to determine fair value) to identify the market as overvalued at 2003.69.

In English, a one standard deviation move is a movement away from a historical trend – it is something that doesn’t happen very often.  In the case of median P/E, a 1SD move has happened about 10% of the time since 1964. Two SD moves happened about 2% of the time since 1964 (tech bubble).  The point is they mark periods of extreme.

Fair value is determined to be 1534.60 (yellow light).  Most of us would be happy with adding more to equities at that level, and we’d be ecstatic to get really aggressive should the S&P 500 correct to 1065.50 (the green light).

Again, this is saying that we are in the most expensive quintile or decile or however you want to measure it, in terms of historical valuation averages.

What Would Stan Do?

Possibly the most successful and legendary trader in the history of the world is Stan Druckenmiller. He and George Soros were partners for years, and Stan’s personal story is inspiring and a little bit intimidating. You simply cannot discount his sense of timing. There is an investment gathering (held earlier this week in New York) called the Sohn Investment Conference (run by investment guru Ira Sohn) that pulls together some of the greatest traders and hedge fund managers in the world every year. The concept is that you need to bring one idea to the table. Long, short, sideways – it doesn’t make any difference: what’s your best idea? The conference is widely attended and followed.

(I had a friend of mine take copious notes, which he allowed me to forward to my Over My Shoulder readers. OMS is where I post great third-party pieces that I think my readers need to pay attention to. It’s sort of like looking over my shoulder as I read – but only having to read the important stuff. The service is, in my humble opinion, justifiably popular. Click on the link above if you want to know more.)

Stan was his usual pull-no-punches self. Basically, Druckenmiller said, “Sell your equity holdings.” CNBC has a good summary:

“The conference wants a specific recommendation from me. I guess ‘Get out of the stock market’ isn’t clear enough,” said Druckenmiller from the conference stage in New York. Gold “remains our largest currency allocation.”

The billionaire investor expressed skepticism about the current investment environment due to Federal Reserve’s easy monetary policy and a slowing Chinese economy.

“The Fed has borrowed from future consumption more than ever before. It is the least data-dependent Fed in history. This is the longest deviation from historical norms in terms of Fed dovishness than I have ever seen in my career,” Druckenmiller said. “This kind of myopia causes reckless behavior.”

He believes U.S. corporations have not used debt in productive investments, but [have] instead relied on financial engineering with over $2 trillion in acquisitions and stock buybacks in the last year. This is finally showing up on the books of companies as operating cash flow growth in U.S. companies has gone negative year-over-year, while net debt as gone up, according to the investor.

Druckenmiller was negative on China’s economy going forward and believes recent attempts at further stimulus in the Asian country will not work and “aggravated the over-capacity in the economy…. Higher valuations, limits to further easing... the bull market is exhausting itself,” he said.

So What Do I Think?

Not that you should pay any attention to me after reading what Stan thinks, but in a fit of hubris I will give you my personal two cents. Please note, the following does not constitute financial advice. For that you need to consult your financial advisor, unless of course, you are a financial advisor, in which case you need all the help you can get at this point to figure out what you’re going to do for your clients.

True bear markets, the ones that cause gut-wrenching pain and take years to recover from, are always and everywhere associated with recessions. In contrast, the 1987 crash, 1994, 1998, etc., all showed relatively quick recoveries. Those are extremely difficult to time.

I look at the grand global macroeconomic scheme, and I find making a recession call to be very difficult. Slow growth? Absolutely. But that is different from a recession. Could we see a recession (as none other than Donald Trump has suggested) in the near future? Maybe. There is always another recession. And I sincerely think we will have a recession within the next two years, simply because the current recovery is so long in the tooth and near exhaustion, not to mention the exogenous shocks that could come from Europe and China.

And that brings me to a story (doesn’t it always?). In late 2006, I was on The Larry Kudlow Show with Nouriel Roubini and John Rutherford. Larry and John were aggressively bullish, and Nouriel and I were arguing that there was a recession and hence a bear market in equities coming.

Technically, I was right. A recession started in 2007 along with the collapsing bear market. But my timing was a tad off. That is, if by “a tad” you mean six months. Because for the next six months the market proceeded to rocket up another 20%. This was October, and evidently the “buy in October” crowd was operating at full throttle. However, I wasn’t making a market timing call; I was simply pointing that the negative yield curve was shouting at us that there would be a recession in the coming year. As in screaming, double exclamation points, at the top of its throat shouting.

So, noting that my timing is not particularly adept, let me offer the following thoughts.

Sell in May and go away has on average been good advice. Given that we have very high valuations in early May, I think it is appropriate to adjust your portfolio. Also, given that we don’t know if we’re going into a recession (a development that would cause you to go completely negative or even short), I think it makes sense to just make your portfolio “neutral.”

In essence, make your equity portfolio in general neutral and then poke your head up again in late September or early October and look around at the macro situation.

This is a general market call and not a specific equity call. The bulk of my personal portfolio is in funds that have the ability to go long or short. I trust their management to figure out what to do. I am pretty well diversified in that portfolio. I can tell you right now that some of those funds are going to knock the ball out of the park and some are going to be more than a little disappointing. The problem is that I can’t tell you which ones will go which way in advance. But they all have the potential for making money in a sideways and/or down market.

That said, I do own a few stocks that I am not going to hedge and that I have no intention of selling. These are specific companies that I would tell you to buy today (if it were legally possible for me to do so), even in the face of all the information above. I am a long-term investor, and I think the prospects for these firms are very good.

So, when you look at your portfolio, you have to ask yourself, would I be happy if my equities were down 20 or 30%? There is a difference between an index fund and specific equities. I look at an index fund as a place to park money and perhaps do a little trading, not as an investment. The equities I do own are those that I fundamentally believe will be far more successful than the general market will be. I will admit that I don’t own many such stocks, but I believe in the ones that I do own. Other than those stocks, I generally let other managers do my investing for me. Yes, I do the occasional trade when I see something just stupid crazy, but in general I do my homework on managers and not equities. Doug Kass tells me to short Apple, by the by, but I don’t necessarily agree on that one.

And that brings me to my last point. I am not telling you to short the market here. Shorting is for professionals and big boys. People who decide they want to short the market can get their private parts handed to them faster doing that than any way I know. I know a lot of professionals who make a good living shorting various stocks; but none of them bet the farm, and all of the successful ones have systems that tell them when to cover their trades.

To summarize, the data suggests to me that the upside just isn’t there for being in the market from May through September. Again, the market could rip 20% to the upside, and you’d come back and tell me I was an idiot.

However, given the high valuations and the historical lack of performance in the May through October period, I think that going neutral makes a lot of sense now.

How do you do that? Well, it’s a little tricky. If you have an advisor (and 97% of you should), go to him or her and ask about the wisdom of going neutral. I get that there are special situations (like those I mentioned above) and that you also have tax considerations. Selling a stock with a 100% gain just to give Uncle Sam a chunk is painful. But there are ways to neutralize the downside in your portfolio. This of course means that you have foregone any upside, but we all have to make a decision.

Your decision today is what you should do with your portfolio over the next few days. In fact, that is what your decision should be every day. You should look at your portfolio and say, do I want to own that stock today? Would I buy it at today’s price? Honestly, if you don’t reevaluate your portfolio regularly, then you should get somebody to do it for you. Pay a reasonable fee and go back to doing what you really want to be doing. Bottom line: somebody should always be paying attention to your investment portfolio. You worked too hard to accumulate that portfolio to ignore it.

Nifty..

Sell 7770-7800

Stop-loss 7820

What’s in a Multiple?

What’s a company worth? Seasoned investors know that finding the answer to that question is more art than science. One way to do so is from the bottom up, to calculate a firm’s intrinsic value using a discounted cash flow methodology. The other is to come at the question from the top down, by using a relative valuation approach via market multiples. While there are many types of multiples, each reflects the market’s evaluation of a company’s expected operational performance, and can be used to cut across times, sectors, and markets.

Investor expectations about future revenue growth and profitability both play a key role in driving multiples. Investors obviously prefer high levels of both. But if there’s only one to be had, which combination do investors value more highly? Superior growth and low profitability? Or lower growth and high profitability? Credit Suisse recently analyzed the performance and multiples of companies with market capitalizations of more than $1 billion (excluding financial firms and utilities) between 2004 and 2015, to find out.

Not surprisingly, the bank found that companies with above-median projected growth in revenue and above-median projected profitability traded at an 11.5x EV/EBITDA multiple, compared to just 7.5x for firms with below-median estimates for future revenue growth and profitability. (For reference, the median projected revenue growth was 5.4 percent and the median profitability was 6.5 percent cash flow return on investment.)

But back to the question of revenue growth versus profitability. It turns out that firms with below-median forecasted growth but above-median projected profitability earned higher EV/EBITDA multiples (10.2x) than faster-growing but less profitable companies (8.7x). Furthermore, increases in expected profitability had more of an effect on valuations than did an increase in expected sales. Regardless of whether a company is expected to grow above or below the market median, if it manages to improve profitability above median levels, the effect is dramatic—an additional 2.7 times enterprise value relative to the company’s forward cash flows. That was more than twice the effect that improving revenue growth—an additional 1.2 times EV/EBITDA—awarded to those companies that managed to climb into above-median revenue growth territory. Those that were able to vault over the median in both categories saw multiples rise by 4x EV/EBITDA. In short growth matters more when you combined it with superior return on capital.

Source: Credit Suisse HOLT Corporate Advisory

It’s interesting to note that the current preference for profitability over growth is a relatively recent phenomenon. Between 2004 and 2007, companies with above-average revenue growth expectations traded at higher valuations than those with high profit expectations. During the financial crisis, there was no clear pattern to investor preferences, but high-profitability companies began to deliver higher premiums in 2012.

One possible rationale for the shift: Over the past decade, it’s been easier to keep returns on capital up than to produce drastic increases in sales. Fewer than one-third (29 percent) of companies that produced above-average revenue growth between 2004 and 2009 did the same between 2010 and 2015, while nearly two-thirds (64 percent) of companies that were highly profitable in the first five-year period remained so in the second.

Investors, in other words, can be fickle. So how should that affect executive decision-making? For executives making resource allocation decisions, it’s clear that both profitability and growth matter. But understanding exactly what drives investor sentiment about a company is important not only in choosing between competing strategies — those promising faster growth or superior profitability (or, in an ideal world, both) — but also what to buy and how to buy it. Knowing how expectations of future growth and profitability drive valuations can help companies decide on the right price to pay for potential targets as well as secondary decisions, such as whether equity or cash purchases make more sense. In other words, multiples matter for more than just bragging rights.

Nifty..

Sell Nifty @ 7795-7827

stoploss 7865

Critical Things Ridiculously Successful People Do Every Day.

Having close access to ultra-successful people can yield some pretty incredible information about who they really are, what makes them tick, and, most importantly, what makes them so successful and productive.

"Whenever you see a successful person, you only see the public glories, never the private sacrifices to reach them." – Vaibhav Shah

Kevin Kruse is one such person. He recently interviewed over 200 ultra-successful people, including 7 billionaires, 13 Olympians, and a host of accomplished entrepreneurs. One of his most revealing sources of information came from their answers to a simple open-ended question:

“What is your number one secret to productivity?”

In analyzing their responses, Kruse coded the answers to yield some fascinating suggestions. What follows are some of my favorites from Kevin’s findings.

They focus on minutes, not hours. Most people default to hour and half-hour blocks on their calendar; highly successful people know that there are 1,440 minutes in every day and that there is nothing more valuable than time. Money can be lost and made again, but time spent can never be reclaimed. As legendary Olympic gymnast Shannon Miller told Kevin, “To this day, I keep a schedule that is almost minute by minute.” You must master your minutes to master your life.

They focus on only one thing. Ultra-productive people know what their “Most Important Task” is and work on it for one to two hours each morning,without interruptions. What task will have the biggest impact on reaching your goals? What accomplishment will get you promoted at work? That’s what you should dedicate your mornings to every day.

They don’t use to-do lists. Throw away your to-do list; instead schedule everything on your calendar. It turns out that only 41% of items on to-do lists ever get done. All those undone items lead to stress and insomnia because of the Zeigarnik effect, which, in essence, means that uncompleted tasks will stay on your mind until you finish them. Highly productive people put everything on their calendar and then work and live by that calendar.

They beat procrastination with time travel. Your future self can’t be trusted. That’s because we are time inconsistent. We buy veggies today because we think we’ll eat healthy salads all week; then we throw out green rotting mush in the future. Successful people figure out what they can do now to make certain their future selves will do the right thing. Anticipate how you will self-sabotage in the future, and come up with a solution today to defeat your future self.

They make it home for dinner. Kevin first learned this one from Intel’s Andy Grove, who said, “There is always more to be done, more that should be done, always more than can be done.” Highly successful people know what they value in life. Yes, work, but also what else they value. There is no right answer, but for many, these other values include family time, exercise, and giving back. They consciously allocate their 1,440 minutes a day to each area they value (i.e., they put them on their calendar), and then they stick to that schedule.

They use a notebook. Richard Branson has said on more than one occasion that he wouldn’t have been able to build Virgin without a simple notebook, which he takes with him wherever he goes. In one interview, Greek shipping magnate Aristotle Onassis said, “Always carry a notebook. Write everything down. . .. That is a million dollar lesson they don’t teach you in business school!” Ultra-productive people free their minds by writing everything down as the thoughts come to them.

They process e-mails only a few times a day. Ultra-productive people don’t “check” their e-mail throughout the day. They don’t respond to each vibration or ding to see who has intruded into their inbox. Instead, like everything else, theyschedule time to process their e-mails quickly and efficiently. For some, that’s only once a day; for others, it’s morning, noon, and night.

They avoid meetings at all costs. When Kevin asked Mark Cuban to give his best productivity advice, he quickly responded, “Never take meetings unless someone is writing a check.” Meetings are notorious time killers. They start late, have the wrong people in them, meander around their topics, and run long. You should get out of meetings whenever you can and hold fewer of them yourself. If you do run a meeting, keep it short and to the point.

They say “no” to almost everything. Billionaire Warren Buffet once said, “The difference between successful people and very successful people is that very successful people say ‘no’ to almost everything.” And James Altucher colorfully gave Kevin this tip: “If something is not a ‘Hell Yeah!’ then it’s a no.” Remember, you only have 1,440 minutes in a day. Don’t give them away easily.

They follow the 80/20 rule. Known as the Pareto Principle, in most cases, 80% of results come from only 20% of activities. Ultra-productive people know which activities drive the greatest results. Focus on those and ignore the rest.

They delegate almost everything. Ultra-productive people don’t ask, “How can I do this task?” Instead, they ask, “How can this task get done?” They take theI out of it as much as possible. Ultra-productive people don’t have control issues, and they are not micro-managers. In many cases, good enough is, well, good enough.

They touch things only once. How many times have you opened a piece of regular mail—a bill perhaps—and then put it down, only to deal with it again later? How often do you read an e-mail and then close it and leave it in your inbox to deal with later? Highly successful people try to “touch it once.” If it takes less than five or ten minutes—whatever it is—they deal with it right then and there. It reduces stress, since it won’t be in the back of their minds, and it is more efficient, since they won’t have to re-read or re-evaluate the item again in the future.

They practice a consistent morning routine. Kevin’s single greatest surprise while interviewing over 200 highly successful people was how many of them wanted to share their morning ritual with him. While he heard about a wide variety of habits, most nurtured their bodies in the morning with water, a healthy breakfast, and light exercise, and they nurtured their minds with meditation or prayer, inspirational reading, or journalling.

Energy is everything. You can’t make more minutes in the day, but you can increase your energy to increase your attention, focus, and productivity. Highly successful people don’t skip meals, sleep, or breaks in the pursuit of more, more, more. Instead, they view food as fuel, sleep as recovery, and breaks as opportunities to recharge in order to get even more done.

Bringing It All Together

You might not be an entrepreneur, an Olympian, or a billionaire (or even want to be), but their secrets just might help you to get more done in less time and assist you to stop feeling so overworked and overwhelmed.

Nifty

Sell Nifty and add @ 7835

Stoploss 7875 close only

How China views Europe, according to web searches. (Portugal, they're coming for you)

Nifty

Nifty Range Narrowing day by day!!

Now the break out range is 7900-7800

Daniel Gros: An unfounded fear of deflation.

Central banks throughout the developed world have been overwhelmed by the fear of deflation. They shouldn't be: The fear is unfounded, and the obsession with it is damaging.

Japan is a poster child for the fear. In 2013, decades of falling prices prompted the Bank of Japan to embark on an unprecedented monetary offensive. But while headline inflation increased for a while, the factors driving that increase - a competitive depreciation of the yen and a tax increase - did not last long. Now, the country is slipping back into near-deflation - a point that panicked headlines underscore.

But, contrary to the impression created by media reports, the Japanese economy is far from moribund. Unemployment has virtually disappeared; the employment rate continues to reach new highs; and disposable income per capita is rising steadily. In fact, even during Japan's so-called "lost decades," per capita income grew by as much as it did in the United States and Europe, and the employment rate rose, suggesting that deflation may not be quite as nefarious as central bankers seem to believe.

In the US and Europe, there is also little sign of an economic calamity resulting from central banks' failure to reach their inflation targets. Growth remains solid, if not spectacular, and employment is rising.

There are two problems with central banks' current approach. First, they are focused on consumer prices, which is the wrong target. Consumer prices are falling for a simple reason: energy and other raw material prices have declined by more than half in the last two years. The decline is therefore temporary, and central banks should look past it, much as they looked past the increase in consumer prices when oil prices were surging.

Instead, central banks should focus on the rate of revenue increase, measured in nominal gross domestic product (GDP) growth; that is, after all, what matters for highly indebted governments and enterprises. By this measure, there is no deflation: The GDP price index (called GDP deflator) in developed countries is increasing by 1-1.5 per cent, on average. In the eurozone, it is rising at 1.2 per cent. This may fall short of the European Central Bank's target of "below but close to 2 per cent," but not by a margin substantial enough to justify the ECB's increasingly aggressive use of monetary instruments to stimulate the economy.

Moreover, nominal GDP growth exceeds the long-term interest rate. When, as is usually the case, the long-term interest rate is higher than the GDP growth rate, the wealthy may accumulate wealth faster than the rest of the economy - a point made by the economist Thomas Piketty. But today, nominal GDP growth far exceeds average long-term interest rates (which, in some countries, include risk premia of up to 100 basis points) - even in the eurozone, where nominal GDP growth is expected to reach about three per cent this year. This means that financing conditions are as favourable as they were at the peak of the credit boom in 2007, and much better than they have been at any other point in the last 20 years.

One might expect this evidence to compel central bankers to rethink their current concerns about deflation. But they remain committed to pursuing their inflation targets, convinced that even a slight bout of deflation could initiate a downward spiral, with falling demand causing prices to decline further. This is their second mistake.

Of course, a deflationary spiral is possible, and its consequences could be serious. If real interest rates were significantly positive, demand could plummet, pushing down prices to the point that it becomes impossible for borrowers to service their debts. Such a spiral contributed to the Great Depression in the US in the 1930s, with prices falling, in some years, by some 20-30 per cent.

But we are nowhere near such conditions today. In fact, nominal interest rates are at zero, while the broadest price indices are increasing, albeit gently. Given that financing conditions are so favourable, it is not surprising that domestic demand has remained robust, allowing unemployment to return to pre-crisis lows almost everywhere.

The eurozone is the only large developed economy where unemployment remains substantial, and thus the only economy where the case could be made for a downside risk of deflation. But even in the eurozone, GDP growth is slightly above its (admittedly very meagre) potential, so that the remaining output gap is being closed gradually.

Furthermore, the only reason why unemployment remains high in the eurozone is that the labour-force participation rate has continued to increase throughout the recession; and, indeed, employment is returning to pre-crisis levels. This is the exact opposite of what the deflation hawks warn about. The popular "discouraged worker" hypothesis holds that a slide into deflation is costly, because a long recession induces workers to leave the labour force altogether. That is simply not the case in Europe today.

The evidence is clear. Developed-economy central banks should overcome their irrational fear of a deflationary spiral, and stop trying desperately to stimulate demand. Otherwise, they will find themselves with massively expanded balance sheets, and very little to show for it.

Frontier Markets: The Great Hope for Growth?

How do you spot a nation with high potential for economic growth? Look for countries with very low per-capita GDP and where both institutions and the workforce are undergoing a transformation. Important emerging markets such as China and India met these criteria in the past, paving the way for high growth rates for more than a decade for each. But growth in emerging markets has slowed considerably as of late, and investors looking for high potential growth are increasingly turning to frontier markets to find it.   Smaller and less liquid than their emerging market counterparts, the 34 frontier markets in the S&P Dow Jones Indices Frontier Market Index have at least two of the following characteristics: a market capitalization greater than $2.5 billion, domestic trading that exceeds $1 billion a year, or a market capitalization to GDP ratio of at least 5 percent. Credit Suisse’s Demographics Research team recently analyzed twelve frontier economies looking at demographic, economic and social factors that investors need to pay attention to if they want to turn to those markets.   Population Growth. High population growth leads to a larger working-age population, which under the right circumstances can provide a powerful boost to GDP. Population growth rates have declined in all 12 markets since the early 1980s, but some are more robust than others. Nigeria and Kenya boast roughly 2 percent annual growth, while populations in Bulgaria, Croatia and Lithuania have been shrinking by as much as 1 percent a year. For every 100 working-age Bulgarians there are 30 people over the age of 65, a ratio similar to that of aging developed countries, while in Kuwait there are only 2.6 older people per 100 working-age persons.     Youth Unemployment. In all the 12 frontier markets, youth unemployment rates are high relative to the general population, especially in Europe and the Middle East, where 44 percent of young Croatians and 22 percent of young Lebanese and Bulgarians are unemployed. While African and Asian frontier economies currently lag behind Europe and the Middle East in secondary and post-secondary school enrollment, Kenya, Morocco, and Vietnam are all spending more than 6 percent of GDP on education. Paradoxically, many of the twelve countries with the highest youth unemployment rates also have the highest levels of literacy and education.   Health. Good health is critical for productivity and growth. While Nigerians have a healthy life expectancy of only 47 years, in Croatia and Lebanon the average healthy life expectancy is close to 70. Many African and Asian frontier markets lack the access to sanitation facilities necessary to improve living conditions and bolster economic growth. Nearly 40 percent of people living in Bangladesh and Pakistan and more than two-thirds of those in Nigeria and Kenya lack access to proper sanitation facilities, making them more vulnerable to the spread of communicable diseases.   Urbanization. Urbanization can make frontier economies more productive, as cities encourage economies of scale in production and distribution, and firms tend to benefit from knowledge transfers and a larger, more diverse labor pool when they are surrounded by lots of other companies. Countries in the Middle East are the most urbanized, but the fastest urbanization is occurring in Asia and Africa. In Bangladesh and Pakistan, a significant portion of the population lives in so-called mega cities with more than 10 million residents.     Ease of Doing Business. Though Middle Eastern countries fare well on many measures of economic potential – in addition to their health and education advantages, they also have better food availability and lower crime rates than many other frontier markets – they fall behind in this area. Out of 189 countries, Kuwait and Lebanon were ranked 101st and 123rd in “ease of doing business” by the World Bank.   For all their collective potential, the many differences among frontier markets suggest varying opportunities, as well as challenges, for investors. In wealthier, more developed Middle Eastern and European frontier economies, well-educated and relatively healthy populations are major advantages, but officials must figure out how to put more young people to work. African and Asian countries have a significant amount of catching up to do in terms of health, education, and infrastructure, but investment in those areas could help them reap a demographic dividend from their young populations. Weighing each country’s potential strengths and weaknesses is critical to investing wisely. Investors who gloss over these differences and base their decisions on the “frontier markets” label alone do so at their own peril.