Box breathing is a powerful but simple relaxation technique that aims to return breathing to its normal rhythm after a stressful experience.

Box breathing is a simple but powerful technique to calm your mind and body by following a four-second pattern of inhaling, holding, exhaling, and holding.

It is also known as square breathing or Navy SEAL breathing, as it is used by elite soldiers to enhance performance and concentration under stress.

Box breathing can help you lower your heart rate, blood pressure, and anxiety levels, as well as improve your mood, focus, and mental clarity

You can vary the length of each phase according to your preference, but make sure to keep them equal and consistent. You can also use a visual cue, such as a box or a square, to help you follow the rhythm.

To practice box breathing, you need to find a comfortable and quiet place, sit upright, and relax your shoulders. Then, follow these steps: – Breathe out fully to the count of four, emptying your lungs completely. – Hold your breath for another four seconds, keeping your chest still. – Breathe in slowly and deeply to the count of four, filling your lungs with air. – Hold your breath.

References:

1. https://www.medicalnewstoday.com/articles/321805

The U.S. economy is growing with much of recent growth fueled by government deficit spending and Artificial Intelligence boost to productivity.

Real GDP rose at a solid 3.3% annual rate in the fourth quarter, and consumer spending was strong in December meaning the first quarter is off to a good start. New home sales came in above expectations and initial jobless claims remain low, although orders for durable goods came in low due to weak demand for aircraft.

All eyes are now on Friday’s jobs report, which we expect to show a gain of about 170,000 while the unemployment rate holds steady. But the strength in employment seems fragile. If we exclude job gains in government, health & education (which are largely funded by government), and leisure & hospitality (still recovering from lockdowns), job growth looks exceptionally weak.

In the last seven months of 2023, payrolls excluding those categories rose only 3,000 per month, the kind of weakness we might expect before a recession. In other words, much of recent growth is fueled by government deficits.

Meanwhile the stock market continues to rally, with the S&P 500 closing at a new record high last Thursday. That’s great, but we aren’t exactly sure what the market sees, writes Brian Wesbury, First Trust Chief Economist.

If the economy remains healthy and keeps growing, it’s very hard to imagine the Federal Reserve cutting short-term interest rates by the 125-150 basis points the markets appear to expect. In turn, less rate cutting than the market expects should be a headwind for equities in 2024.

What would get the Fed to cut rates by 125-150 bps? Either a sharp drop in inflation or a decline in economic growth. While lower inflation is good, can a sharp drop happen without a weak economy? Either way, we don’t think the stock market would like that outcome because they would likely signal lower corporate profits.

Artificial Intelligence and other new and rapidly advancing technologies provide a miraculous boost to productivity. This could keep growth strong, or even accelerate it, while bringing inflation down. In other words, profits up and interest rates down.

References:

1. https://www.ftportfolios.com/Commentary/EconomicResearch/2024/1/29/a-stock-market-conundrum

The U.S. economy is being fueled by productivity growth due to artificial intelligence and fiscal spending.

According to a report by Goldman Sachs Research, AI could increase US productivity growth by 1.5 percentage points annually, assuming widespread adoption over ten years. The report estimates a growth boost to GDP from AI of 0.4 percentage points in the US by 2034.

The US Bureau of Economic Analysis reported that real gross domestic product (GDP) increased at an annual rate of 4.9 percent in the third quarter of 2023, primarily reflecting rising consumer spending and inventory investment.

AI productivity growth and fiscal spending are the primary contributors to the growth of the US economy. However, other factors could have played a role as well.

“The worst sort of business is one that grows rapidly, requires significant capital to engender the growth, and then earns little or no money. Think airlines. Here, a durable competitive advantage has proven elusive ever since the days of the Wright Brothers. Indeed, if a farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville down.” – Warren Buffett, 2007 Chairman’s Letter for Berkshire Hathaway.

Invested capital is the amount of money that has been invested in a business for purchasing inventory, equipment, property, leases, and funding the difference between accounts receivable (i.e., how much money is owed by customers to the business) versus accounts payable (i.e., how much business owes vendors).

Return on Invested Capital (ROIC) is a financial ratio that shows a company’s ability to allocate capital. The standard formula to calculate ROIC is to divide a company’s after-tax net operating profit by the sum of its debt and equity capital.

Once the ROIC is calculated, it is evaluated against a company’s weighted average cost of capital, commonly referred to as WACC. If a company’s WACC is not immediately available, it can be calculated by taking a weighted average of the cost of a company’s debt and equity.

The cost of debt is calculated by averaging the yield to maturity for a company’s outstanding debt. This is easy to find, as publicly traded companies must report debt obligations.

The cost of equity is typically calculated using the capital asset pricing model, or CAPM.

Once the WACC is calculated, it can be compared with the ROIC. Investors want to see a company’s ROIC exceed its WACC. This indicates the underlying business successfully invests capital to generate a profitable return. In this way, the company is creating economic value.

References:

1. https://www.suredividend.com/high-roic-stocks/
2. https://www.stratechi.com/fcf-and-roic/

Life is all about relationships, health & wellness, purpose, being grateful and mindful, and learning:

• Relationship refers to the state of being related or interrelated to others. It refers to the connection or bond between two or more people.
• Health is the state of complete physical, mental, and social well-being, while wellness is the active process of achieving it. Wellness has six dimensions: physical, intellectual, emotional, environmental, social, and spiritual.
• Purpose refers to having a definite vision and goal and being determined to achieve it. It is your “why” for life.
• Being grateful is a positive emotion that entails focusing your time and attention on what you appreciate. The intent is not to block out difficulties but to approach those difficulties from a different perspective.
• Being mindful is a state of active, open attention to the present moment. It involves observing one’s thoughts and feelings without judging them as good or bad.
• Learning is acquiring new knowledge, skills, and behaviors through experience, observation, and reading. It is a relatively lasting change in perspective and behavior resulting from experience, observation, and reading.

Reference:

1. Psyche Wizard