Grow Your Portfolio the Intelligent Way

10 Punk Rock Rules for Success

  • 10 Punk Rock Rules for Success
  • ETF Talk: This Fund Tracks Consumer Staples
  • Patience Is No Virtue for the Fed
  • Unencumbered by Prejudice

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“I just wish to shine brighter, and if it burns my body to a crisp, I’m happy to go right now.”

That bit of high-intensity wisdom comes from a man who I admire deeply; singer, songwriter, spoken-word artist, author, actor, radio and TV show host, publisher and true renaissance man, Henry Rollins.

Henry made his mark on pop culture as the frontman for the quintessential punk rock band Black Flag, and then later via the Rollins Band, and he turned that experience into a multi-faceted and eminently interesting career fit for a true polymath. His career continues today, mostly through writing and one-man spoken word shows that combine the intensity of a punk rock concert with the intellectual stimulation of a Ted Talk.

If you are a long-time reader of The Deep Woods, you probably know that I am a huge music fan and a huge fan of renaissance men (and women) who are able to do many different things in life and to do those things very well. In fact, I have an entire website and podcast appropriately called Way of the Renaissance Man, which is dedicated to extracting wisdom and knowledge from these types of individuals so that we can apply that wisdom and knowledge to our own lives.

A couple of years ago, another polymath I admire, entrepreneur, investor and business inspirer Evan Carmichael compiled a list that he called “Henry Rollins’s Top 10 Rules for Success.” You can watch the video on YouTube. I recommend doing so, as it will give you a sense of the intensity and focus Henry puts into just about every breath he takes.

Here is a list of those top 10 rules (complete with sage advice straight from Henry himself), rules that I also try to live by, and rules that can help everyone — regardless of what stage they are in life — achieve just that little bit extra that makes life glorious.

Rule 1: Be Driven

Rollins says he uses childhood anger and fear of failure to fuel his sense of drive. “I descend from the sky and land on things really hard, and I go at everything with that amount of fury,” Rollins says. Now that is a definition of drive that we all can admire.

Rule 2: Work Hard

Rollins says that no matter what he does, he goes at everything “fully engaged, and that intensity has served him quite well.” He also credits his punk rock roots for that work ethic, as everything in the early days was a sort of do-it-yourself exercise in just trying to make it from week to week.

Rule 3: Keep Moving Forward

Continue to consistently work hard and always move forward in life. “I keep moving forward boldly because I have nothing to lose,” Rollins says. Of course, regardless of whether you think you have nothing to lose, life requires constant movement, or we fall into stagnation. “I like to work… It’s about activity and challenge,” he adds.

Rule 4: Just Do It

He tells the story about starting his own book publishing company, which was the essence of punk rock “DIY.” “You just do it; you don’t even think about it… and without hesitation I’m making my own book company. Stop me. I dare you,” Rollins recalls.

Rule 5: Take Your Shot

The “shot” for Rollins came when he was asked to audition as the singer for the iconic punk band Black Flag. He took a train from his home in Washington, D.C., to New York City and sang every song the band had. About 10 minutes after the audition was over, he was offered the job as the frontman of his favorite band. Now that is taking advantage of your “shot” in life.

Rule 6: Communicate Emotionally

“I feel a genuine need to communicate with an audience,” Rollins shares. That’s the way he describes his interaction with a crowd, because he sees it as the best way to genuinely connect with others. “It’s about communication, warning, broadcasting, emitting and trying to leave something of myself with the audience,” Rollins says. This rule is one of my favorites, because it’s also what I attempt to do each week in this publication.

Rule 7: Try Out Different Things

“Yeah, I’ll try that. I mean, why would I hold back?” This also is one of my favorite rules, as it encapsulates the fearlessness with which life should be approached. If there is something you want to do in life, try it out. The worse that can happen is you don’t like it, or you aren’t good at it. So what, at least you challenged yourself to stretch out and experience life in a different way.

Rule 8: Manage Yourself

“The repeating factors of my life have been application, discipline, focus, repetition,” Rollins says. These keys for Rollins are also largely the keys to success of many high achievers. The reason why is because application, discipline, focus and repetition are how you really get good at something. No matter how much natural talent you might possess, you never will be extraordinary at a skill unless you apply yourself with the requisite discipline, focus and repetition required to achieve the highest levels of whatever it is you do.

Rule 9: Learn from Your Past

“The past holds all of your mistakes and humiliations. The future holds whatever you can make it,” Rollins says. He doesn’t think you should ignore the past, but he doesn’t think you should dwell on it and be miserable. Instead, you should learn from it and move on. “The future’s ready for you to not make those mistakes,” Rollins adds.

Rule 10: Have Passion

Here is the key rule to life that both Rollins and I embrace, as it’s really at the heart of your existence. Because whatever you do, and whatever time you have to do it, why not live it all the way? Forget about half-hearted effort or “just okay” results.

Have the passion to attack life like a punk rock front man — with all the intensity and hard-core aggression that meets life head on and that embraces the struggle. Because in the end, all we have is how we lived.

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It’s Almost Time to Get Buck Wild in Las Vegas!

The time to get intellectually wild is almost here. Yes, I am referring to this year’s FreedomFest conference and this year’s theme: “The Wild West.”

This conference has been called “The World’s Largest Gathering of Free Minds,” and for good reason, with more than 2,000 attendees and some 250 speakers and workshops.

I cordially invite you to join me, as well as some of the world’s most renowned and celebrated heroes of the liberty movement such as Penn Jillette, John Mackey, Congressman Justin Amash, Dr. Mark Skousen, Glenn Beck, Charles Murray and scores of others on July 17-20, at the Paris Resort, Las Vegas. Use the promo code EAGLE50 for a special discount offer of $50 off the “Full Conference Pass” price of $595 per person… So that’s $545 per person/$845 per couple.

Come find out how those of us who love liberty celebrate this virtue, and how we get buck wild in Las Vegas!

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ETF Talk: This Fund Tracks Consumer Staples

The Consumer Staples Select Sector SPDR® Fund (NYSEARCA: XLP) is an exchange-traded fund (ETF) that can give a prospective investor access to the part of the global economy that features consumer staples.

Specifically, XLP tracks the Consumer Staples Select Sector Index, which, in turn, attempts to provide an effective representation of the consumer staples sector of the S&P 500 Index. The companies that make up the XLP portfolio mainly come from food and staples retailing, beverage, food product, tobacco, household product and personal product industries in the United States.

The stocks included in XLP typically are well-known to even the most novice investors. As a result, the ETF creates an aura of familiarity and stability between investors and the fund’s holdings.

Furthermore, the added benefits that come from XLP include an expense ratio that is among the cheapest in the sector, with a stable asset base and strong liquidity to keep transaction costs low. Among the fund’s top holdings are Procter and Gamble Company (NYSE: PG), Coca-Cola Company (NYSE: NO), PepsiCo Inc. (NASDAQ: PEP) and Walmart Inc. (NYSE: WMT). Other top XLP holdings consist of Costco Wholesale Corporation (NASDAQ: COST), Phillip Morris International Inc. (NYSE: PM), Mondelez International Inc. Class A (NASDAQ: MDLZ), Altria Group Inc. (NYSE: MO) and Colgate-Palmolive Company (NYSE: CL).

While these companies mainly are in the personal & household sector (27.49%), this ETF has holdings in companies that are in the food & tobacco sector (26.98%), beverages (26.08%), food & drug retailing (14.80%) and diversified retail (4.48%). The fund currently has more than $12.1 billion in total net assets and an average spread of 0.02%. It also has an expense ratio of 0.13%, meaning that it is less expensive to hold than some other ETFs.

In terms of XLP’s MSCI ESG Fund Quality Score of 6.89, it ranks in the 86th percentile within its peer group and in the 54th percentile within the global universe of all funds in the MSCI ESG Fund Metrics coverage.

This fund’s performance has been mixed in the long term. While it has only been down 3.62% over the past month, it remains up 10.13% year to date.

Chart Courtesy of stockcharts.com

While XLP does provide a way to profit from the world of consumer staples, the sector may not be appropriate for all portfolios. Thus, interested investors always should do their due diligence and decide whether the fund is suitable for their investing goals.

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.

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In case you missed it…

Patience Is No Virtue for the Fed

As kids, we were taught that “patience is a virtue.” For the most part, that’s true, as sometimes you must wait for the good things in life.

Yet when it comes to monetary policy, the Federal Reserve now just contradicted this childhood notion of virtue, as the central bank removed “patient” from its interest rate lexicon. More specifically, in its recent Federal Open Market Committee (FOMC) statement, Fed Chairman Jerome Powell and his colleagues retracted its “patient” stance on interest rates and replaced it with “act as appropriate.”

Here’s the money quote from the dovish outlook from the FOMC:

“The Committee continues to view sustained expansion of economic activity, strong labor market conditions and inflation near the Committee’s symmetric two percent objective as the most likely outcomes, but uncertainties about this outlook have increased. Considering these uncertainties and muted inflation pressures, the Committee will closely monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain the expansion, with a strong labor market and inflation near its symmetric two percent objective.”

So, the lesson for kids in this new era of Fed policy might be: “Acting appropriate is a virtue.”

Now, the Fed didn’t take much action, as the Federal Open Market Committee left interest rates unchanged at the current federal funds rate between 2.25% and 2.5%. The decision to do so, however, was not unanimous. While nine of 10 members of the rate-setting committee voted to maintain the federal funds rate at current levels, St. Louis Fed President James Bullard dissented, as he wanted to lower rates. Interestingly, this was the first dissenting vote on the FOMC since Powell took the reins at the FOMC in February 2018.

As for markets, basically we got what we expected. I say that, because since the beginning of the month, equities have soared on the growing notion that “patient” would be jettisoned in favor of the first rate cut in years. Yet the market didn’t expect a rate cut at this meeting. Rather, the market now is pricing in a 25-basis-point interest rate cut at the July FOMC meeting, and up to three additional rate cuts by the end of the year.

If we step back for a moment to about this time last year, today’s Fed talk seems like a serious flip-flop. Recall that last summer, the market was talking about the economy running too hot and inflation finally blossoming after many years of dormancy. Today, that’s basically an alternate universe.

“This summer, it’s all about trade war instability, potentially slowing job growth, uncertain consumer spending and slowing manufacturing data,” said Tom Essaye of the Sevens Report. “Today, rather than a too-hot economy and rising inflation, markets are expecting — indeed pricing in — one of the most poignant shifts in monetary policy in the last half decade. That shift is the expectation of a new interest-rate cutting cycle by the Federal Reserve,” Tom added.

Tom is hands-down my favorite macro analyst, and he’s usually spot on when it comes to understanding and explaining the wider context of markets. Both Tom and I suspect that we are on the precipice of a new rate cut cycle, one that will have profound implications for investors over the next year or so (depending on duration).

We’re not there yet, but as of this writing, the July Fed Funds Futures contracts are pricing in a 100% probability of a 25-basis-point rate cut at the next FOMC meeting. If that is the first move in a new rate cut cycle, then I will be rotating capital in many of my newsletter advisory services, Successful Investing and Intelligence Report, to take advantage of the sectors that will benefit most from rate cuts. Perhaps more importantly, I will be avoiding the market sectors that have underperformed during past rate cut cycles.

To find out just how I plan to help subscribers navigate this new Fed “impatience,” I invite you to check out my Successful Investing and Intelligence Report advisory services today.

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Unencumbered by Prejudice

“I have been blessed all of my life; I have never been encumbered by the prejudices of sight.”

–Anonymous

Today’s beautiful sentiment comes courtesy of reader Marc S., who sent this to me last week, along with some kind words about this publication. Now, what makes this quote so powerful is the context. You see, Marc is a former airline pilot, and on one flight, he had a passenger tell him the very words from the above quote. As Marc writes, “This was said by a blind man, blind from birth, elegant in dress and stature, a black man, with a depth of conversation I shall enjoy remembering till I pass.”

I love this man’s sentiment, as it reminds us that not only should we think of our shortcomings as blessings, but we can also use our own circumstances to combat the ugliness and irrationality of prejudice. Now that, dear reader, is flat-out awesome!

Big thanks to Marc for sharing this wisdom with us and for the kind words about The Deep Woods.

Wisdom about money, investing and life can be found anywhere. If you have a good quote that you’d like me to share with your fellow readers, send it to me, along with any comments, questions and suggestions you have about my newsletters, seminars or anything else. Click here to ask Jim.

In the name of the best within us,

Jim Woods

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