Making Resolutions Stick and The Least Trusted Banks of 2012                           January 5, 2013, v3, n1

For individual stocks we will have extensive rankings on our website later this month, but for now I'll list some highlights.  The stocks with the highest FundamentalStrength as discussed in financial social media in 2012 include:

1.  Netsuite (N),
2.  JPMorgan (JPM),
3.  USG Corporation (USG)
4.  Alaska Communications (ALSK), and
5.  Carrizo Oil & Gas (CRZO).

The lowest FundamentalStrength group (most negative perceptions) includes:
1. Lam Research (LCRX),
2. Schlumberger (SLB),
3. Cummins (CMI),
4. Blue Nile (BLUE), and
5. Pitney-Bowes (PBI). 

"The one thing that offends me the most is when I walk by a bank and see ads trying to convince people to take out second mortgages on their home so they can go on vacation. That's approaching evil."

~ Jeff Bezos

For banks we see Citizens Republic Bancorp (CRBC) as the most trusted bank.  JP Morgan was the least trusted bank of 2012 due to both the "London Whale" and Libor scandals.  PNC Financial Services (PNC) was just above JPM in the trust rankings (that's not a compliment). 

One of the technology companies with the highest Innovation Perceptions of 2012 is Triquint Semiconductor (TQNT), while one of the lowest Innovation Perceptions technology companies is Telefónica, S.A. /Telef (TEF), the premiere and incredibly slow Latin American telecommunications service provider.  No surprise about Telefonica if you've ever tried (and repeatedly failed) to connect to the internet in Spain or Latin America.

We'll publish the complete list for 2012 on our website in 2 weeks.  But now, back to resolutions... 

Ah, the unconscious.  The unconscious is what drives national church leaders to become addicted to crystal Meth and covertly gay Senators to publicly denounce homosexuality on the floor of the Senate.  And in our case, we will use the unconscious to our benefit.  To create a resolution that leverages your unconscious, it doesn't have to be do-able.  The two rules for keeping a resolution are to make the goal something you:

   1. Truly and desperately want to do (desirable), and
   2. Would be horribly upset if you didn't do.

To get anything, you've got to both deeply want it and desperately not want to be without it.  Wanting something creates a biological squirt of dopamine in your brain's reward system.  This squirt increases your confidence, energy level, and excitement towards goal-achievement.  But some days you feel grumpy, busy, or burned out, and it will be difficult to muster the enthusiasm.   On those days you need to remember the aversive consequences of not doing it (the punishment), which is negatively motivating - it creates a dread sensation that motivates you towards your goal in order to avoid the bad outcome.  

Remember, we can change how we think.  You may love chocolate cake and shovel it in your mouth at every opportunity, but if you are trying to lose weight, this behavior has to stop.  So you can try to avoid chocolate cake, but that's not a permanent solution.  Ultimately you've got to think and feel yourself into 1) despising chocolate cake, and 2) loving a healthier alternative (a sugar-free coconut-almond pastry, for example).  How could you possibly despise chocolate cake?  Look up pictures of arteries filled with atherosclerotic plaques on the internet, then imagine those in your favorite relative who died too early of a stroke or heart attack.  Truth be told, I swore off high fructose corn syrup and trans fats during a medical school anatomy class.  During the human dissection I reached into my cadaver's abdomen to identify the aorta.  As I squeezed it, I felt it crunch between my fingers.  That was disease.  Her aorta was full of calcified fat deposits, likely deposited secondary to trans-fat related inflammation and the build-up of fat from excess high-fructose corn syrup consumption.  It was such deposits which had ultimately broken free to cause the stroke that killed her.  I thought of her children, left without their mother.  And I felt viscerally, "not me, no more junk food."  Coca-Cola didn't taste sweet anymore, and I didn't enjoy it.  Mine is an extreme example, but it worked. 

1. Remind yourself of who you DON'T want to be under any circumstances. 
2. Then remind yourself of who you DO want to be and how satisfying it will be to succeed. 

If you have trouble keeping your New Year's resolutions, then take minute to look inside yourself and communicate with your unconscious.  Ask yourself these two questions about a resolution:

How awesome will my life be when I complete this goal? (Think BIG, grandiose downstream implications).

______________________________________________________

Why would I feel a horrible burning hole of loss if I didn't complete this resolution in 2013?  (If you can't answer why, then it won't stick, so try harder) 

_____________________________________________________

If nothing meets those criteria, then 1) You're off the hook, you don't need any resolutions but more likely, 2) You should alter your thinking and feeling about the resolution.  There is data to make every bad habit of ours appear intensely appalling.  Take TV watching - do you want to watch less?  If so, consider that every hour of TV-watching decreases your lifespan by 22 minutes according to this study.  This research is distorted, but nonetheless, it's motivating.  Every time you sit in front of a TV, you may be reducing your lifespan to before your granddaughter's high school graduation.  She's going to miss you...

As noted above, our short-term trading results were impressive in 2012.

Trading recap from last newsletter:  Last newsletter's one-week buy on Decker Outdoors (DECK), maker of Ugg boots, paid off as the stock rose 10% over the week.  The one-week short on the Chinese ADR Trina Solar (TSL) was volatile but ended the week in our favor, down 3%.

Week ahead:   We have a one-week short on the Solar ETF (TAN).  We have a one-week buy on Nike (NKE).  (See Disclaimer).

Check out the Thomson Reuters MarketPsych Indices for monitoring market psychology for 30 currencies, 50 commodities, 120 countries, and 40 equity sectors and industries in social and news media. 

We have a number of Spring 2013 speaking engagements in New York, London, San Francisco, Toronto, and Boston - we will provide locations and venues for public talks as the dates come closer.

Let us know about your experiences with psychology in the markets - we look forward to hearing from you!

We have speaking and training availability.  Please contact Derek Sweeney at the Sweeney Agency to book us: Derek@thesweeneyagency.com, +1-866-727-7555

Happy Investing!