Login


Contact Info

4400 MacArthur Blvd, Suite 850
Newport Beach, California 92660
888.277.1974

Contact Us


Bill’s By The Number$

1. INVEST FOR THREE-YEARS – Since 1926, 84% of the rolling 3-year periods for the S&P 500 index (i.e., the 92 separate 3-years beginning 1926-28, then 1927-29, . . . 2017-19) have produced a positive return. The S&P 500 consists of 500 stocks chosen for market size, liquidity and industry group representation. It is a market value weighted index with each stock’s weight in the index proportionate to its market value (source: BTN Research).

2. YEAR FOUR IN THE WHITE HOUSE – This year (2020) is the 4th year of Donald Trump’s 1st 4-year presidential term. The S&P 500 has been positive on a total return basis during 19 of the last 23 “presidential 4th-years,” i.e., 4th-years dating back to 1928, including 17 of the last 19. The average performance for the S&P 500 during the last 23 “presidential 4th-years” has been a gain of +9.9% (total return) (source: BTN Research).

3. UP/DOWN – The S&P 500 has been up 40 of the last 50 years, i.e., 1970-2019, gaining an average of +10.6% per year (total return). The stock index has produced an average annual gain of +18.1% (total return) during the 40 “up” years while losing an average of 14.8% (total return) during the 10 “down” years (source: BTN Research).

4. THEIR FOOTPRINT HERE – There are 172 Chinese companies listed on major US stock exchanges (source: U.S.-China Economic and Security Review Commission).

5. EACH AND EVERY DAY – The US Treasury bond market was open for 250 trading days in calendar year 2019, during which the government sold $2.55 trillion of notes and bonds, a total of $10.2 billion per trading day (source: Treasury Department).

6. THEY CHANGED THEIR MIND – The Fed reversed its course in 2019, flipping from 9 rate-hikes implemented over a 3-year period (with the last rate hike completed on 12/19/18) to 3 rate-cuts last year (with the first rate-cut implemented on 7/31/19). The “policy pivot” from “up-to-down” occurred over 7 ½ months, the shortest time period from “up-to-down” or from “down-to-up” for the Fed since July 1995 (source: Federal Reserve).

7. I DON’T AGREE – The 4 new rotating voting members of the Federal Open Market Committee (FOMC) in 2020 are the regional Fed bank presidents from Cleveland (Loretta Mester), Philadelphia (Patrick Harker), Dallas (Robert Kaplan) and Minneapolis (Neel Kashkari). Mester cast 2 dissenting votes in 2016 while Kashkari cast 3 dissenting votes in 2017. Harker and Kaplan, both regional Fed presidents since 2015, have never cast a dissenting FOMC vote. The # 1 FOMC meeting this year is set for January 28-29 (source: Federal Reserve).

8. ALL THE PEOPLE – The population of the United States was projected by the Census Bureau to be 330 million as of 1/01/20. 50 years ago (in 1970) our nation’s decennial census, i.e., occurring every 10 years, measured the population at 203 million. 100 years ago (1920), our population was 106 million (source: Census Bureau).

9. LESS BIRTHS, MORE DEATHS – The “natural increase” in the US population in 2019, i.e., births in excess of deaths, was just 957,000 (3.792 million estimated births in excess of 2.835 million estimated deaths). Just 10 years ago (2009), the “natural increase” in the US population was 1.710 million, i.e., 4.136 million births in excess of 2.426 million deaths (source: Census Bureau).

10. MORE THAN DOUBLED – The US field production of crude oil was 12.9 million barrels per day as of Friday 12/27/19, the final Friday of the last decade. The US field production of crude oil was 5.5 million barrels per day as of Friday 12/25/09 or 10 years earlier (source: Department of Energy).

11. ALL THE OTHER STUFF – Administrative costs make up 34% of total US health care expenditures (i.e., expenses not related to direct patient care) including medical billing, the scheduling of appointments, and hiring of an office staff (source: Annals of Internal Medicine).

12. CLOSED FOR GOOD – More than 9,300 American retail stores closed in 2019, exceeding the all-time record of 8,139 store closures from 2017 (source: Coresight Research).

13. THEY DON’T WANT IT – From the first quarter of 2017 to October 2019, US exports of plastic waste to China, i.e., recycled plastic, has declined 89% (source: Institute of Scrap Recycling Industries).

14. NEW LAW – President Trump signed on Friday 12/20/19 the “Setting Every Community Up for Retirement Enhancement Act of 2019” (aka the SECURE Act). The legislation increases the required minimum distribution age from 70 ½ to 72 for Americans who turn 70 ½ after 12/31/19 (source: Congress).

15. TOP DOGS – 2019 Heisman Trophy winner Joe Burrow of LSU was born on 12/10/96. Lamar Jackson of the Baltimore Ravens, favored to be the 2019 NFL MVP, was born on 1/07/97, or a month after Burrow (source: NFL).

 

– Broker/Dealer Use Only, Reproduction Prohibited without Express Permission –
Copyright © 2020 Michael A. Higley. All rights reserved. Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

1. FOR THE YEAR – The S&P 500 gained +31.5% (total return) during 2019, its best performance since 2013 and the 13th year in the last 25 years that the $28.1 trillion index has returned at least +15% (total return) for the calendar year. The S&P 500 consists of 500 stocks chosen for market size, liquidity and industry group representation. It is a market value weighted index with each stock’s weight in the index proportionate to its market value (source: BTN Research).

2. LONG-TERM – The S&P 500 has gained an average of +10.6% per year (total return) over the last 50 years (i.e., 1970-2019). The index has been positive in 15 of the last 17 years. Over the long-term, the S&P 500 has been up during 40 of the last 50 years, i.e., 80% of the time (source: BTN Research).

3. BOND INDEX – The taxable bond market was up +8.7% in 2019 (total return) and has gained +5.9% per year (total return) over the last 30 years (1990-2019). The Bloomberg Barclays US Aggregate Bond Index (created in 1986), calculated using publicly traded investment grade government bonds, corporate bonds and mortgage-related bonds with at least 1 year until final maturity, was used as the bond measurement. The index is a major benchmark for US bond investors (source: Bloomberg Barclays).

4. MOST OF THE TIME – The +8.7% total return for Bloomberg Barclays US Aggregate Bond Index in 2019 was its best calendar year result since 2002. The widely followed bond index, created in 1986 with backdated history calculated to 1976, has produced a negative total return for the calendar year in just 3 years of the last 44 years, i.e., only 7% of the time (source: Bloomberg Barclays).

5. UP vs. DOWN – The split between “up” and “down” trading days for the S&P 500 over the last 50 years (i.e., 1970-2019, encompassing a total of 12,613 trading days) is 53% “up” and 47% “down.” The split during calendar year 2019 (there were 252 trading days last year) was 60/40 (source: BTN Research).

6. TIME IN THE MARKET – Since 1950 (i.e., 1950-2019), the S&P 500 index has been up 54% of 17,613 trading days, 60% of 840 months, 66% of 280 quarters and 73% of 70 years (source: BTN Research).

7. MISSING THE BEST – The total return for the S&P 500 over the last 10 years (2010-2019) was a gain of +13.6% per year (total return). If you missed the 10 best percentage gain days over the last 10 years (i.e., 10 days in total, not 10 days per year), the +13.6% annual gain falls to a +9.2% annual gain (source: BTN Research).

8. AVOID THE WORST – The total return for the S&P 500 over the last 10 years (2010-2019) was a gain of +13.6% per year (total return). If you avoided the 10 worst percentage days over the last 10 years (i.e., 10 days in total, not 10 days per year), the +13.6% annual gain rises to a +18.8% annual gain (source: BTN Research).

9. TWO YEARS RUNNING – The same stock was the top performer in the S&P 500 in each of the last 2 years, gaining +144% in 2019 after gaining +80% in 2018 (source: BTN Research).

10. POPULATION – Between 7/01/18 and 7/01/19, the Census Bureau estimated that the US population grew from 326.688 million to 328.240 million, an increase of just +0.48%, i.e., less than ½ of 1% growth rate between 2018-2019. That’s the lowest year-over-year growth rate in the United States since 1918 or 101 years earlier (source: Census Bureau).

11. LIVING LONG – The life expectancy at birth of an American baby in 1970, i.e., 50 years ago, was 70.8 years. The life expectancy at birth of an American baby today is 78.6 years. Thus, life expectancy in the United States has increased 7.8 years over the last half century, i.e., American life expectancy at birth is increasing at the rate of 1 ½ years every decade (source: Center for Disease Control).

12. TEN-YEAR NOTE – The yield on the 10-year Treasury note ended 2019 at 1.92%, down 0.76 percentage points from 2.68% on 12/31/18. The 10-year note yield was 2.57% on Friday 8/05/11, the day that the rating agency S&P downgraded the USA from a top-rating that our nation had held for 70 years (source: Treasury Department).

13. HOUSING – The average interest rate nationwide on a 30-year fixed rate mortgage was 3.74% at the end of 2019. The record low national average was 3.31% as of 11/22/12 or just over 7 years ago (source: Freddie Mac).

14. OIL PRICES – The price of oil ended 2019 at $61.06 a barrel, up +34% from its 2018 close of $45.41 a barrel. Oil was $26.21 a barrel as of 2/11/16 and was $147.27 a barrel as of 7/11/08 (source: CME Group).

15. OVERSPENDING – The national debt of the United States was $23.201 trillion as of the close of business on Tuesday 12/31/19, an increase of $10.9 trillion over the last 10 years (source: Treasury Department).

 

– Broker/Dealer Use Only, Reproduction Prohibited without Express Permission –
Copyright © 2020 Michael A. Higley. All rights reserved. Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

1. BACK AND FORTH – In national elections going back to 1928, the United States has elected 7 Republican presidents (beginning with Hoover and ending with Trump) and 7 Democratic presidents (beginning with FDR and ending with Obama) (source: BTN Research). 3/04/19 # 13

2. JUST A SELECT FEW – The US Supreme Court receives approximately 7,000 requests each year to hear cases that have already been adjudicated in a lower court. The nation’s top court accepts just 100-150 cases for their review from the 7,000 petitions (source: Supreme Court). 4/01/19 # 14

3. TRADE SCHOOL, NOT COLLEGE – There are 30 million full-time jobs in the United States today (19% of all jobs nationwide) that pay at least $55,000 per year and don’t require a bachelor’s degree from college (source: Georgetown University Center on Education and Workforce). 4/08/19 # 8

4. NEWBORNS – Our nation’s “general fertility rate,” defined as the number of births per 1,000 women between the ages of 15-44, was just 59.0 births in 2018, a record low for birth data that has been tracked nationally since 1909 or for the last 110 years (source: National Center for Health Statistics). 5/27/19 # 14

5. JUST THREE – The top company in the Fortune 500, an annual evaluation based upon total revenues for the previous calendar year, has been held by just 3 different companies over the 64 years that the magazine has published the rankings (source: Fortune). 6/03/19 # 3

6. NOT A SECOND TIME – There have been just 2 US presidents in the last 75 years who were elected to a first term in office who failed to win their re-election bid for a 2nd term – Jimmy Carter in November 1980 and George H.W. Bush in November 1992 (source: BTN Research). 6/17/19 # 14

7. SHIFTING AWAY FROM CHINA – US manufacturers have moved some of their supply chains away from China in 2019, increasing imports from Taiwan (up +22% YTD through 5/31/19), from India (up +12% YTD) and from South Korea (up +12% YTD) (source: Commerce Department). 7/22/19 # 13

8. A LOT IN A FEW – Of the 532 bank failures that have occurred in the USA during the 15 years ending 7/31/19, 51% (270 failures) have taken place in just 4 states – Georgia, Florida, Illinois and California (source: FDIC). 8/05/19 # 10

9. REAL ESTATE – Builders began construction on 876,000 single-family homes in the United States in 2018, the 7th consecutive year of increasing housing starts, i.e., 2012-2018. The peak in housing starts (1.716 million) took place in 2005 (source: Joint Center for Housing Studies of Harvard University). 8/26/19 # 13

10. WE’RE ALMOST EVEN – The USA has 121 companies in the Fortune Global 500 rankings for 2019 compared to 119 companies from China. 20 years ago (1999), the USA had 181 companies in the Fortune Global 500 rankings while China had just 5 companies. The rankings are based upon annual revenues (source: Fortune). 9/16/19 # 8

11. EACH AND EVERY DAY – The world consumes 101 million barrels of crude oil per day, with the United States consuming 21 million barrels of the global daily total (source: Department of Energy). 9/30/19 # 13

12. IN ONE MORE GENERATION – If China’s $14.2 trillion economy grows at +4% per year into the future and if the USA’s $21.5 trillion economy grows at +2% per year into the future, China’s economy will become the largest in the world in the year 2041 or 22 years down the road (source: BTN Research). 11/04/19 # 4

13. THEY PAID MORE THAN HALF – The top 3% of US taxpayers in tax year 2017 (the latest year that tax data has been released), paid 52% of the $1.6 trillion paid in federal income tax for that year, i.e., in a random sample of 100 taxpayers, the top 3 individuals based upon adjusted gross income paid more federal income taxes than the other 97 taxpayers (source: Internal Revenue Service). 11/11/19 # 7

14. WAY BEHIND – After adjusting for the impact of inflation, an average millennial in 2019 has a net worth 41% less than the net worth of a similarly aged adult 30 years earlier in 1989. Millennials were born between 1981-97 and are age 22-38 in 2019 (source: Federal Reserve Bank of St. Louis). 11/18/19 # 9

15. NEVER BEFORE – The USA exported more barrels of crude oil and petroleum products in both September and October this year than it imported, the 1st time that our nation’s oil exports have exceeded its imports based upon monthly records maintained since 1949, i.e., last 70 years.                                                                                                (source: Energy Information Administration). 12/02/19 # 5

 

– Broker/Dealer Use Only, Reproduction Prohibited without Express Permission –
Copyright © 2019 Michael A. Higley. All rights reserved. Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

1. ELECTION YEAR 2020 – 17 of the last 19 presidential election years have produced a positive total return for the S&P 500 stock index. The only “down election years” dating back to 1944 were in 2000 and 2008. The S&P 500 consists of 500 stocks chosen for market size, liquidity and industry group representation. It is a market value weighted index with each stock’s weight in the index proportionate to its market value (source: BTN Research).

2. PRETTY GOOD JOB – A year ago (12/17/18), Barron’s published the year-end 2019 forecast for the S&P 500 made by 10 Wall Street strategists. 4 of the 10 predictions had the S&P 500 finishing 2019 at 3100, up from its 12/31/18 actual close of 2507. The S&P 500 closed last Friday 12/13/19 at 3169 (source: Barron’s).

3. NOT EVEN CLOSE – A year ago (12/17/18), Barron’s published the year-end 2019 forecast for the yield on the 10-year Treasury note made by 10 Wall Street strategists. All 10 predictions had the yield increasing from its 12/31/18 actual close of 2.68%, with 5 of the 10 forecasting a yield of 3.2% or higher. The yield on the 10-year Treasury note closed last Friday 12/13/19 at 1.82% (source: Barron’s).

4. WHERE HAVE YOU BEEN? – 61% of 1,010 Americans adults surveyed in November 2019 indicate that the stock market has had “no impact” or “not that much impact” on their personal finances, suggesting they hold limited to no equity investments. 18% of those surveyed thought the stock market had declined YTD, when in reality the S&P 500 is up +28.9% YTD (total return) through Friday 12/13/19 (source: Peter G. Peterson Foundation).

5. MOST DO NOT – Just 1 in 9 households in Germany (11%) have money invested in the stock market today (source: Bundesbank).

6. ALMOST A MILLION BUCKS – If the nation’s aggregate net worth of $113.8 trillion was spread equally across all 122.7 million US households, every American household would be worth $927,000 (source: Federal Reserve).

7. JUST OUR INTEREST EXPENSE – The government paid $376 billion of interest expense on our nation’s outstanding debt during fiscal year 2019, i.e., a $1 billion per day (source: Treasury Department).

8. MIND BOGGLING – Our national debt is $23.1 trillion as of Thursday 12/12/19. If the United States was to pay down the national debt by $1 million a minute, i.e., $1.44 billion a day, it would still take 44 years to extinguish $23.1 trillion of debt (source: Treasury Department).

9. NOT THIS YEAR – Through last Friday 12/13/19, just 4 banks had failed YTD and required a bailout from the Federal Deposit Insurance Corporation (FDIC). Since the FDIC was created in 1933 during the Great Depression, there have been just 3 years – 2005, 2006 and 2018 – when there were no bank failures during the calendar year. 157 banks failed in 2010, an average of 3 per week (source: FDIC).

10. RATE HIKE CYCLE – The Federal Reserve began a rate hike cycle on 12/16/15 (4 years ago today), eventually raising short-term interest rates 9 times with the final rate hike taking place on 12/19/18. Each of the 9 rate hikes was 0.25 percentage points, a total increase of 2.25 percentage points over the 3 years. Over the entire 3-year rate hike cycle, i.e., 12/16/15 to 12/19/18, the S&P 500 gained +28.6% (total return) in aggregate, an annualized +8.7% per year (source: BTN Research).

11. POPULATION PROFILE – 13.7% of the US population (44.7 million individuals), approximately 1 out of every 7 people, was born outside the United States (source: Census Bureau).

12. FEWER FUTURE TAXPAYERS – The number of babies born in the United States has declined in 10 of the last 11 years, i.e., 2008-2018. There were 524,521 fewer babies born in 2018 (3.79 million) than were born in 2007 (4.32 million) (source: National Vital Statistics Reports).

13. IS COST A FACTOR? – There are fewer college students in 2019 (18.9 million) than there were 8 years ago in 2011 (20.4 million) (source: Census Bureau).

14. FREE – Tennessee offers tuition-free community or technical college to any of its high school students who graduate before age 19. Students must maintain at least a 2.0 GPA and complete 8 hours of community service each term. The state has 13 community and 27 technical colleges (source: Tennessee Promise program).

15. FIRST DOWN – In the 100-year history of the National Football League, there have been just 2 quarterbacks to rush for 1,000 yards in a single season – Atlanta’s Michael Vick had 1,039 yards rushing in 2006, and Baltimore’s Lamar Jackson has 1,103 yards rushing during the current 2019 season with still 2 games remaining this year (source: NFL).

 

– Broker/Dealer Use Only, Reproduction Prohibited without Express Permission –
Copyright © 2019 Michael A. Higley. All rights reserved. Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

1. DOWN BUT STILL A BULL – The bull market for the S&P 500 is 129 months old as of today. During the bull run, the stock index has overcome 14 drops of at least 5%, including 6 drops of at least 10%. The S&P 500 consists of 500 stocks chosen for market size, liquidity and industry group representation. It is a market value weighted index with each stock’s weight in the index proportionate to its market value (source: BTN Research).

2. HAS NOT HAPPENED YET – 65% of 500 global money managers surveyed in October and November 2018 (i.e., a year ago) predicted that the US stock bull market would end in 2019. The current bull market run is just 3 months short of 11 years in length as of today. The survey included investors in 28 countries worldwide (source: Natixis Investment Managers).

3. ONE MAN’S OPINION – Retired money manager Bill Gross predicted in November 2019 that the US stock market will be “flat to down 10%” in 2020, similar to a forecast Gross made 7 years ago. The 11/26/12 issue of Time magazine ran an article titled “Why Stocks are Dead” which documented Gross’ gloomy equity forecast. The S&P 500 closed at 1406 on 11/26/12. The S&P 500 closed at 3146 on 12/06/19 (source: Financial Times, Time).

4. SOME DO IT ON THEIR OWN – 61% of 1,000 workers surveyed in January 2019 are working with a financial advisor(s) or expect to work with an advisor(s) as they prepare for their eventual retirement (source: Employee Benefit Research Institute).

5. OFFSHORE DRILLING – Drilling for oil is not permitted in the waters off of 19 of 23 US states whose borders touch the Pacific Ocean, the Gulf of Mexico or the Atlantic Ocean. The only 4 states where oil exploration drilling is permitted is off the coastline of Texas, Louisiana, Mississippi and Alabama (source: Bureau of Ocean Energy Management).

6. MAKE IT OFFICIAL – The Federal Reserve implemented an official annual inflation target of 2% on 1/25/12 (about 8 years ago). Then Fed Chairman Ben Bernanke announced the change, moving the Fed from a “desired target range” for inflation to a “2% target inflation rate” (source: Federal Reserve).

7. A LITTLE SURPRISING – The Fed has had 8 “tightening cycles” in the last 50 years (i.e., since 1969), including the most recent cycle that included 9 rate hikes through 12/19/18. During 6 of the 8 “tightening cycles” over the last 5 decades, the S&P 500 was “up” on a total return basis, including the last 4 cycles (source: BTN Research).

8. ARE WE TWICE AS HEALTHY? – The United States spends 18% of its $21.5 trillion gross domestic product (GDP) on health care expenditures, more than double the 8.6% of GDP spent by 35 other major economies throughout the world (source: Organization for Economic Cooperation and Development).

9. SOURCE OF PAYMENT – 42.6% of the cost to deliver a baby for the 3.95 million births in the United States in calendar year 2016 was paid for by Medicaid (source: National Vital Statistics System).

10. THE YOUNG AND THE OLD – There were 3,791,712 births in the USA in 2018, an average of 10,388 per day. An estimated 10,100 Americans turned 65 years old each day in 2018 (source: Center for Disease Control, Government Accountability Office).

11. WAS PRIVATE, NOW PUBLIC – The cost of tuition, fees, room and board at an average public 4-year college for the current 2019-2020 school year is $21,950. The cost of tuition, fees, room and board at an average private 4-year college for the 1999-2000 school year, i.e., 20 years ago, was $21,475 (source: College Board).

12. THE NEW-HOME PREMIUM – The median sales price of a new home sold nationwide in October 2019 was +17% more expensive than the median sales price of an existing home sold nationwide in October 2019, i.e., $316,700 for a new home vs. $270,900 for an existing home (source: Census Bureau, National Association of Realtors).

13. HOW OLD? – The average age of House members during the 2019-2020 session of Congress is 57.6 years, exceeded by the average age of 62.9 years for Senators (source: Congressional Research Service).

14. EVEN WHEN YOU’RE SLEEPING – If you were paid $1 a minute for an entire year you would make $525,600 for the year, i.e., $60 per hour x 24 hours a day x 365 days in the year (source: BTN Research).

15. PRIORITIES – LSU is the # 1 college football team in the nation as of 12/01/19 in both the AP writers’ poll and the coaches’ poll. LSU’s head coach Ed Orgeron makes $4.0 million a year. Louisiana governor John Bel Edwards makes $130,000 a year as the state’s top politician (source: Council of State Governors).

 

– Broker/Dealer Use Only, Reproduction Prohibited without Express Permission –
Copyright © 2019 Michael A. Higley. All rights reserved. Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

1. THROUGH NOVEMBER END – The S&P 500 has gained +27.6% YTD (total return) through Friday 11/29/19, nearly 3 times the index’s average return of +9.8% per year over the last 50 years (1969-2018). The S&P 500 consists of 500 stocks chosen for market size, liquidity and industry group representation. It is a market value weighted index with each stock’s weight in the index proportionate to its market value (source: BTN Research).

2. UP AGAIN – The bond market has had just 3 down years in the last 40 years, i.e., 1979-2018. The bond market is up +8.8 YTD (total return) through last Wednesday 11/27/19. The Bloomberg Barclays Aggregate bond index, calculated using 6,000 publicly traded government and corporate bonds with an average maturity of 5 years, was used as the bond measurement (source: BTN Research).

3. CLOSING HIGHS – The S&P 500 index has set 233 all-time closing highs during its ongoing bull market that has reached 10.7 years in length, including its most recent record close set last Wednesday 11/27/19. That ranks 2nd among all bulls since 1950, trailing only the 308 all-time closing highs set during the 9+ year bull market that ran from October 1990 to March 2000 (source: BTN Research).

4. THE RISK OF JUST ONE STOCK – 56 individual stocks within the S&P 500 are up at least +50% YTD through the close of trading last Friday 11/29/19, including 11 stocks that are up at least +75% YTD. There are also 13 stocks that are down at least 30% YTD, including 4 stocks down at least 50% (source: BTN Research).

5. NEVER BEFORE – The USA exported more barrels of crude oil and petroleum products in both September and October this year than it imported, the 1st time that our nation’s oil exports have exceeded its imports based upon monthly records maintained since 1949, i.e., last 70 years (source: Energy Information Administration).

6. LIGHTS ON – 38% of US electricity next year (2020) is forecasted to be generated by natural gas, 22% from coal, 20% from nuclear power plants, 7% from hydropower (water) and the remaining 13% from wind, solar and other suppliers (source: Department of Energy).

7. NO RELOCATION NEEDED – For the 12 months ending 6/30/19, just 9.8% of Americans changed their residence, the lowest percentage of Americans moving over the course of a year based upon annual records maintained since 1947 (source: Census Bureau).

8. THE KIDS INHERIT AND THEN THEY SELL – There are 79.5 million owner-occupied homes in the United States as of 9/30/19. By the year 2037, 21 million of the 79.5 million homes (26% of all current homes) are projected to have a change of ownership as the “Baby Boomer” generation dies. “Baby Boomers” were born between 1946-1964, making the group age 55-73 in 2019 (source: Zillow).

9. WILL THIS CHANGE? – Americans have had a “Baby Boomer” serving as President for the last 27 years, i.e., 1993-2019. “Baby Boomers” are the 78 million Americans born between 1946-1964 (source: BTN Research).

10. HEALTH INSURANCE – The average American employee paid $453 per month for his/her family’s health insurance coverage through an employer sponsored plan in 2018. The $453 amount represents 28% of the total cost of the insurance coverage, i.e., the employer paid $1,164 per month (source: Commonwealth Fund).

11. TARIFFS – The USA is scheduled to implement a new 15% tariff on $156 billion of Chinese imports as of 12/15/19 or in less than 2 weeks. If enacted, nearly all imports from China will subject to a tariff (source: CNBC).

12. LONG-TERM GUESS – When President Franklin D. Roosevelt proposed the Social Security retirement program in 1935, FDR’s financial people projected that total Social Security expenditures would reach $1.3 billion in 1980 or 45 years into the future. The actual Social Security outlays in 1980 were $149 billion. Thus, the analysts’ 1935 estimate represented less than 1% of actual 1980 Social Security expenditures (source: Social Security).

13. THE NEXT TEN-YEAR GUESS – Actual Social Security outlays for fiscal year 2019, i.e., the 12 months ending 9/30/19, were $988 billion, 24% of the nation’s total outlays of $4.1 trillion. In August 2019, the Congressional Budget Office projected that Social Security outlays for fiscal year 2029 will be $1.82 trillion, 26% of the nation’s estimated outlays of $7.0 trillion for fiscal year 2029 (source: Congressional Budget Office).

14. CLOSED FOR GOOD – 9,271 American retail stores have closed YTD through 11/29/19 (last Friday), exceeding the all-time record of 8,139 store closures from 2017 (source: Coresight Research).

15. FUTILE – As of games played through 11/29/19, the Cincinnati Bengals (0-11) remain the only winless team among the league’s 32 teams. The last winless team – the Cleveland Browns (0-16) in 2017 (source: NFL).

 

– Broker/Dealer Use Only, Reproduction Prohibited without Express Permission –
Copyright © 2019 Michael A. Higley. All rights reserved. Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

1. THE HOME STRETCH – There are just 25 stock trading days remaining in calendar year 2019 spread across the next 5 ½ weeks. There will be 252 stock trading days during all of 2019 (source: BTN Research).

2. MORE BONDS THAN STOCKS – The US bond market, including government issued debt, corporate debt, municipal bonds and asset-backed debt, totaled $43.7 trillion as of 6/30/19. The US stock market, including all publicly traded companies, had a total capitalization of $31.5 trillion as of 6/30/19 (source: Securities Industry and Financial Markets Association).

3. IF THEY ARE RIGHT – 55% of 3,400 high net-worth individuals surveyed in October 2019 anticipate a “significant drop” in financial markets before the end of 2020 (source: UBS Investor Watch).

4. BIG BEARS – Since the end of World War II (1945), the S&P 500 has had 3 bear markets that suffered losses of at least 40%. The 3 bears are: (1) 48% drop in 1973-74; (2) 49% drop in 2000-02; and (3) 57% drop in 2007-09 (source: BTN Research).

5. USE TIME TO YOUR ADVANTAGE – $522 invested at the beginning of every month for 40 years earning 6% per year will accumulate to $1 million. $1,021 invested at the beginning of every month for 30 years earning 6% per year will accumulate to $1 million. The calculations ignore the impact of taxes and are for illustrative purposes only and are not intended to reflect any specific investment alternative (source: BTN Research).

6. START SAVING NOW – A child born in 2019 that begins kindergarten in the fall of 2024 would attend college between the years of 2037 and 2041. If that child attended an average public in-state 4-year college and if the annual price increases for public colleges that have occurred over the last 30 years (+5.3% per year) continued into the future, the aggregate 4-year cost of the child’s college education (including tuition, fees, room & board) would be $238,989 or $59,747 per year (source: College Board).

7. TOO MUCH PARTYING – Just 2 of every 5 students (41%) that began college in the fall of 2015 completed their college studies and received at least a bachelor’s degree within 4 years of first enrolling (source: College Board).

8. THEY HAVE NO CHOICE – 46% of working Americans surveyed expect to remain in the workforce beyond age 65. Of the 46% of Americans continuing to work after age 65, 47% of them (i.e., 47% of the 46% or 22% of all working Americans surveyed) will continue to work only because they haven’t accumulated sufficient assets to retire (source: Northwestern Mutual 2019 Planning & Progress Study).

9. HOW DO YOU PLAN FOR THIS? – 31% of 3,064 working women surveyed in the 4th quarter 2018 indicated that they have been or are currently serving as a caregiver to a friend or family member during their working careers, forcing them to use sick days, vacation days or time-off from work to assist a loved one (source: Transamerica Center for Retirement Studies).

10. GLOBAL DEBT – The world’s economies have a combined size of $106 trillion today. The world’s economies have combined debt of 240% of the $106 trillion amount ($255 trillion), a record total that includes government debt, household debt and borrowing by non-financial companies (source: Institute of International Finance).

11. WHAT THEY PAY – The average tax rate (including federal income taxes, payroll taxes, and excise taxes paid as a percentage of income) for the bottom 20% of US taxpayers has fallen from 9.1% of before-tax income in 1979 to 1.7% of before-tax income in 2016. The average tax rate for the top 1% of US taxpayers has fallen from 35.0% of before-tax income in 1979 to 33.3% of before-tax income in 2016 (source: Congressional Budget Office).

12. RECORD AMOUNT – In July 2019, a Maryland jury awarded the family of a baby born with brain damage in October 2014 a settlement of $229.6 million, the largest medical malpractice verdict in our nation’s history. 34% of US physicians have had a medical liability lawsuit filed against them during their careers (source: AMA).

13. BACKSTOP – The Pension Benefit Guaranty Corporation (PBGC) was forced to take over an average of 5 ½ failed private pension plans each month over the last 5 fiscal years, i.e., 2015-2019 (source: PBGC).

14. CITIES – California and Texas each have 3 of the 10 largest cities in the USA, including Los Angeles, San Diego and San Jose in California and Houston, San Antonio and Dallas in Texas (source: World Population Review).

15. NOTHING ELSE TO DO – 42-year old Tom Brady is in his 20th NFL season this year, all with the Patriots. If Brady returns for another season, he will tie the NFL record for pro seasons with one team currently held by Jason Hanson, placekicker for the Detroit Lions for 21 seasons from 1992-2012 (source: NFL).

 

– Broker/Dealer Use Only, Reproduction Prohibited without Express Permission –
Copyright © 2019 Michael A. Higley. All rights reserved. Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

1. NEXT YEAR – Since 1928, the S&P 500 has gained +12.9% (total return) during election years when the nation’s sitting president ran for reelection. Since 1928, the S&P 500 has gained just +4.5% during election years when the sitting president is not seeking reelection. The S&P 500 consists of 500 stocks chosen for market size, liquidity and industry group representation. It is a market value weighted index with each stock’s weight in the index proportionate to its market value (source: BTN Research).

2. BIT OF A LAG TIME – The last official recession in the United States lasted from the end of December 2007 to the end of June 2009, i.e., 18 months in duration. The official declaration that a recession was underway nationwide was made on 12/01/08 or 11 months after the recession began. The official declaration that the recession had ended was made on 9/20/10 or nearly 15 months after the recession’s official end date (source: National Bureau of Economic Research).

3. A SLOWDOWN – 90% of the world’s economies are projected to grow more slowly in calendar year 2019 than they did in calendar year 2018. The US economy grew by +2.9% in 2018 and to date has grown by an annualized +2.3% in 2019 (source: International Monetary Fund).

4. POWER OF THE PEOPLE – Consumer spending by Americans makes up an estimated 70% of our $21.5 trillion economy. Consumer spending by Chinese citizens makes up an estimated 40% of their $14.2 trillion economy (source: Department of Commerce).

5. NOT LIKELY – The probability of a Fed rate cut following its 2-day meeting on December 10-11 is just 1% as of last Friday (11/15/19) after reaching a high of 66% in August 2019 (source: CME Group).

6. FOUR MORE WEEKS – To prevent the US government from shutting down on Thursday this week (11/21/19), Congress will need to pass another “continuing resolution.” The legislation will keep the government open through 12/20/19. The action would prevent our 4th shutdown in just the last 2 years (source: Congress).

7. SEVEN YEARS LATER – As recently as 2012, Greece was unable to issue sovereign debt at any interest rate, i.e., they were locked out of the world debt market. Last Friday, 10-year Greek sovereign paper carried a current yield of 1.44%, below that of the USA’s 1.83% current yield on its 10-year paper (source: Financial Times).

8. AREN’T YOU DONE YET? – 30% of 1,019 working adults surveyed in September 2019 believe their career advancement has been stunted because “Baby Boomers” continue to work later in life and are delaying their retirement. “Baby Boomers” are the 78 million Americans born between 1946-1964 (source: LinkedIn).

9. WAY BEHIND – After adjusting for the impact of inflation, an average millennial in 2019 has a net worth 41% less than the net worth of a similarly aged adult 30 years earlier in 1989. Millennials were born between 1981-97 and are age 22-38 in 2019 (source: Federal Reserve Bank of St. Louis).

10. WHAT’S THE REASON? – The number of operating oil rigs in the United States fell to 806 as of last Friday 11/15/19, the 12th weekly decline in the last 13 weeks. The number of operating oil rigs in the United States was 1,083 as of the end of calendar year 2018 (source: Baker Hughes).

11. IT’S A BUSINESS – American private health insurance companies spend on average 12.2% of premiums collected on administrative costs, i.e., if the private health insurers pay out benefits of less than 87.8% of premiums, they will be profitable (source: Donald Berwick, Obama administration health care official).

12. HOUSEHOLDS – Of the 123 million households in the United States as of 9/30/19, an estimated 30 million are homeowners with no mortgage, 50 million are homeowners with a mortgage and 43 million are renters (source: Census Bureau).

13. SMALL GROUP, BIG NUMBER – Just 6% of the 45 million Americans that have student loans hold 33% of the nation’s $1.50 trillion of outstanding student loans. This group is comprised of borrowers with at least $100,000 of outstanding student loan debt (source: Brookings Institute).

14. NOT IN NORTH DAKOTA – 23.5% of the homeless population in the United States live in California (source: U.S. Department of Housing and Urban Development).

15. NEVER BEFORE – 3 former Heisman Trophy winners played in the same backfield at the same time for the first time ever in NFL history on 11/10/19. The Baltimore Ravens trio of Mark Ingram (2009 Heisman winner), Robert Griffin III (2011) and Lamar Jackson (2016) completed the feat against the winless Bengals (source: NFL).

 

 

– Broker/Dealer Use Only, Reproduction Prohibited without Express Permission –
Copyright © 2019 Michael A. Higley. All rights reserved. Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

1. WASHINGTON AND WALL STREET – There will be a Republican in the White House during calendar year 2020 while control of Congress will be split – Republicans control the Senate and Democrats have a majority in the House. Over the last 80 years (1939-2018), the S&P 500 has gained +11.1% per year (total return) when control of Congress was split, regardless of the party in the White House. The S&P 500 consists of 500 stocks chosen for market size, liquidity and industry group representation. It is a market value weighted index with each stock’s weight in the index proportionate to its market value (source: BTN Research).

2. LONG STREAK – If the S&P 500, up +25.5% YTD (total return), remains positive for all of calendar year 2019, it will be the 20th consecutive “presidential 3rd year” to be positive, i.e., 1943-2019 (source: BTN Research).

3. DOUBLE IN LENGTH – The current bull market for the S&P 500 reached a new closing high for the index on Friday 11/08/19, extending the bull run to 10.67 years in length. The average length for all 11 bull markets that have taken place since 1950, including the current bull, is 5.33 years (source: BTN Research).

4. NEW PAPER – The US issued $28 billion of new 30-year debt last week. The bond carries a 2.375% coupon with an 11/15/2049 maturity. 30-year Treasury debt has been traded since 1977 (source: Treasury Department).

5. BONDS, NOT STOCKS – 72% of the investment portfolios of US life and health insurance companies at the end of 2018 were invested in bonds while just 2% of their assets were invested in stocks (source: NAIC).

6. PLAN FOR THIS IN YOUR RETIREMENT YEARS – Medicare covered 59.9 million Americans in 2018. The average Medicare beneficiary spends $455 per month ($5,460 annually) on out-of-pocket health care costs, including premiums paid for Medicare and for supplemental insurance, along with the cost of doctors, hospitals and prescription drugs (source: Kaiser Family Foundation).

7. THEY PAID MORE THAN HALF – The top 3% of US taxpayers in tax year 2017 (the latest year that tax data has been released), paid 52% of the $1.6 trillion paid in federal income tax for that year, i.e., in a random sample of 100 taxpayers, the top 3 individuals based upon adjusted gross income paid more federal income taxes than the other 97 taxpayers (source: Internal Revenue Service).

8. THAT WOULD HURT – Individual income taxes paid by American taxpayers would have to increase by +57% in order to eliminate our $984 billion deficit from fiscal year 2019 (source: Treasury Department).

9. WOULD YOU LIVE THIS WAY? – For the recently completed fiscal year 2019, i.e., the 12 months ending 9/30/19, the US government had total tax receipts of $3.462 trillion and total outlays of $4.447 trillion, analogous to taking in $1 of tax revenue but spending $1.28 (source: Treasury Department).

10. OLD AND STILL OWING MONEY – In 2016, 46% of American homeowners ages 65-79 had outstanding mortgage debt on their primary residence, almost double from the 24% of this age bracket that had mortgage debt 30 years earlier (source: Joint Center for Housing Studies of Harvard University).

11. BUYING HOUSES AGAIN – Over the decade from 9/30/06 to 9/30/16, the number of homeowners in the United States declined by 0.2 million from 75.6 million to 75.4 million. Over the last 3 years from 9/30/16 to 9/30/19, the number of homeowners in the United States increased by +4.1 million from 75.4 million to 79.5 million (source: Census Bureau).

12. EVERY DAY – An estimated 10,800 Americans will turn 65 years old each day next year (2020), i.e., 1 every 8 seconds. This group represents the 10th year of 19 years of “Baby Boomers” turning age 65. An estimated 11,500 Americans will turn 65 years old each day in the year 2029 (source: Government Accountability Office).

13. NO COLLEGE DEBT – Military veterans who have served at least 3 years of active duty after 9/10/01 qualify for the “Active Duty GI Bill,” i.e., the veteran’s tuition and fee payments at an in-state college are paid in full. Different rules and payouts apply for veterans with less than 3 years of duty or if a private college is selected. Contact the Department of Veterans Affairs for details (source: Department of Veterans Affairs).

14. POLITICS – On 12/19/98, the House of Representatives voted to impeach President Clinton. On 2/12/99, the Senate acquitted President Clinton of 2 separate articles of impeachment (perjury and obstruction of justice) when they failed to achieve the necessary two-thirds majority, i.e., 67 votes, on either charge (source: Congress).

15. THEY DESERVE IT – The NCAA’s Board of Governors voted on 10/29/19 to permit student-athletes to benefit from the use of their “name, image and likeness” no later than January 2021 (source: NCAA).

 

– Broker/Dealer Use Only, Reproduction Prohibited without Express Permission –
Copyright © 2019 Michael A. Higley. All rights reserved. Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

1. AFTER TEN MONTHS THIS YEAR – During the first 4 months of the year through 4/30/19, the S&P 500 was up +18.25% (total return), an average return of +4.28% per month. Over the last 6 months, i.e., May-October, the S&P 500 has gained +4.15% in total, not per month. The S&P 500 consists of 500 stocks chosen for market size, liquidity and industry group representation. It is a market value weighted index with each stock’s weight in the index proportionate to its market value (source: BTN Research).

2. BIG YEAR FOR BONDS – The bond market was up +8.9% YTD (total return) through last Thursday 10/31/19, a result better than any annual performance for the bond market since 2002. The Bloomberg Barclays Aggregate bond index, calculated using 6,000 publicly traded government and corporate bonds with an average maturity of 5 years, was used as the bond measurement (source: BTN Research).

3. OWNERS AND RENTERS – The 111.2 million households that existed in the United States on 9/30/09 were split 68/32 between 75.2 million owners and 36.0 million renters. The 122.7 million households in the United States on 9/30/19 were split 65/35 between 79.5 million owners and 43.2 million renters (source: Census Bureau).

4. IN ONE MORE GENERATION – If China’s $14.2 trillion economy grows at +4% per year into the future and if the USA’s $21.5 trillion economy grows at +2% per year into the future, China’s economy will become the largest in the world in the year 2041 or 22 years down the road (source: BTN Research).

5. A HUNDRED YEAR HIGH – U.S. field production of crude oil was an estimated 12.6 million barrels a day in October 2019, the highest single month recorded in our nation’s history based upon data maintained since January 1920 (source: Department of Energy).

6. PROCRASTINATE – 37% of 2,003 Americans surveyed in the 1st quarter 2019 had less than $5,000 accumulated in pre-tax retirement accounts (source: Northwestern Mutual Planning & Progress Study).

7. A REASON UNION WORKERS COST MORE – 70% of union workers participate in a defined benefit pension plan. Just 13% of nonunion workers participate in a defined benefit pension plan (source: Department of Labor).

8. SUPER MARIO – Mario Draghi ran the European Central Bank (ECB) for the 8-years from 11/01/11 to 10/31/19, replaced by Christine Lagarde as of 11/01/19 (last Friday). During his stint as Europe’s top banker, the ECB never raised short-term interest rates. During the same 8-year period, the USA’s Federal Reserve raised interest rates 9 times between 12/16/15 and 12/19/18 (source: Federal Reserve).

9. THREE IN-A-ROW – The Fed lowered short-term interest rates last Wednesday (10/30/19), its 3rd consecutive meeting that has resulted in a rate cut. That’s the first time the Fed has reduced rates over 3 straight meetings since 12/16/08 or nearly 11 years ago (source: Federal Reserve).

10. EXPECTED TO RISE – 74% of bond money managers surveyed in the 3rd quarter 2019 anticipate that default rates for corporate bonds in North America will increase over the next 12 months (source: International Association of Credit Portfolio Managers).

11. DELAYED AGAIN – 72% of eligible United Kingdom voters went the polls on 6/23/16 (the referendum passed 52%-48%), voting to have the UK leave the European Union as of 3/29/19. The initial exit date was delayed until 4/12/19, delayed again to 10/31/19, and then last week delayed a 3rd time to 1/31/20 (source: BTN Research).

12. LESS THAN A YEAR AWAY – The 2020 presidential election will take place on 11/03/20. 139 million Americans voted in the November 2016 presidential election, equal to 60.2% of our nation’s voting-eligible population. The state with the highest percentage of voters who participated in the 2016 election was Minnesota, with 74% of its eligible voters going to the polls (source: U.S. Elections Project).

13. BUCKEYE BRAINS – The state of Ohio has correctly backed the winner of the US presidential election in the last 14 races for the White House, i.e., 1964-2016 (source: USConstitution.net).

14. SIX BEST YEARS OF MY LIFE – Less than 1 of every 3 Americans who are at least age 25 (31% of this group) have completed college, i.e., they have at least a bachelors’ degree (source: Census Bureau).

15. RALLY CAPS – The Washington Nationals won 12 games during the 2019 postseason, winning 5 of the 12 games while facing elimination. In all 5 elimination games, the Nationals trailed, yet rallied to win each of the 5 games. In the 7th game of the World Series, the Astros led the Nationals 2-0 going into the top of the 7th inning before the Nationals rallied to win. Ted Lerner, the team’s principal owner, turned 94 years old on 10/15/19 (source: MLB).

 

– Broker/Dealer Use Only, Reproduction Prohibited without Express Permission –
Copyright © 2019 Michael A. Higley. All rights reserved. Email mick.higley@mahbtn.com for subscription information.