The first thing that has to be said about backup plans is that there is a definition of a backup plan that your bank uses for its purposes, and a quite different definition of a backup plan that you’ll want to use for your purposes. Trust me – you don’t want to experience the bank’s “backup plan”. When a bank talks backup plans, it usually means (at least as a first step) your banking relationship being transferred to “Credit & Asset Management” or some equally ominous sounding department that is typically interested in only one thing – getting the bank’s money back as quickly as possible and then sending you on your not-so-merry way. That’s the bank’s idea of a backup plan – commonly referred to in the industry as the “secondary exit” when described in credit papers. As you may have already guessed, this secondary exit usually means selling off your assets and placing your business into liquidation.The first question that the bank asks when considering an application for credit is “Is there an underlying, viable, sustainable business here?” Or, to put it into terms that we have been using throughout this series; “Is this business bankable?” In answering these questions, a great deal of analysis is done and your business is assigned a “PD” or Probability of Default based on the estimated ongoing viability of the business. The PD, expressed as a percentage, is an estimation of the likelihood that you will default on your loans within the next 12 months. If you default, the bank has already calculated what they need to know about what to expect from their “backup plan”. Another measure called the LGD or Loss Given Default would have been calculated for your business and is an estimate of how much the bank stands to lose (also expressed as a percentage) when they move from default to recovery – selling off your assets.The backup plan I’m talking about here is the one you need to have prepared for your business. Preferably, your backup plan will kick into effect long before you start defaulting on your loan repayments. Otherwise, the bank’s backup plan tends to take precedence over yours.So how do you go about putting this backup plan together? There are really four “steps” to putting it all together, and the great thing is, the first step is already nearly done for you. That is, it’s already nearly done if you’ve taken my advice from the first few articles in this series and you are now the proud owner of a business plan that includes a sound risk management plan.Step one is all about measuring the things that you need to measure in order to keep tabs on the key risks you’ve already identified in your risk management plan. Needless to say, it does absolutely no good to identify risks your business might be exposed to and then come up with ways to mitigate those risks if you’re not going to measure key elements of your business (internal factors and external factors) to see whether or not you’re being exposed to those risks on an ongoing basis. So step one is simply to regularly measure how your business is going against the potential risks you’ve identified in your business plan in the “risk management” section.Step two is the evaluation of the things you’ve been measuring. In other words, you need to be able to critically analyze the data you’ve collected and understand the implications of them for your business. This is the most important step in your backup plan, because without it, you cannot progress to step three and four and finish the backup plan. Not to mention, you’re left with a load of useless data that you’ve been collecting to mitigate identified risks to your business and you have no clue what it all means. Proper evaluation is required to see how you’re traveling at avoiding or minimizing the risks, but it also allows you to do step three, which gives you the practical, “what to do” part of your backup plan.Step three is to adapt your business plan in whatever way necessary to improve your business, make your business more successful and ensure the long-term survival of the business as a whole. In short, step three is about “reinventing” your business regularly based on the evaluation (step two) of the data you’ve been measuring (step one) to ensure that you NEVER have to revert to the bank’s backup plan, no matter what. The U.S. Marines have a motto that reminds their troops how to perform in any situation, even in the heat of battle – “improvise, adapt, and overcome”. Now, in business, as I imagine would be the case in war, I think it’s always better to do a lot of planning to reduce the amount of improvising necessary. But you get the point – things don’t always go to plan – that’s why you need the backup plan.These first three steps sound pretty straightforward, pretty simple. But getting it right couldn’t have more profound implications for the survival of your business. And properly thinking out what to measure, how you interpret the data collected, and how to constantly improve how you do business will definitely make your business more bankable. Simple? Maybe. Easy? No way. Even the best business minds in the world know that the first three steps don’t make for a complete backup plan if you don’t include one more step…Step four is to seek out expert advice. You will not be able to run a lasting, successful business without creating relationships with trusted advisers that can help you out from time to time. In fact, having established relationships with key advisers that you trust and are willing to “share” your business with comes in handy in almost every aspect of what I’ve been talking about in this series – from putting together a business plan to creating and updating your backup plan. A business owner that thinks he knows everything he or she needs to know without the assistance of some expert advice from time to time is fooling himself and no one else. He certainly won’t come away from an encounter with a bank without giving them at least one reason not to back his business. Connections with and, to an extent, reliance upon key advisers in key areas should never be considered a weakness but an advantage. Competent, trusted advisers can help even the most talented business owners keep a proper sense of perspective on the “forest” and the “trees” simultaneously.Consider some key areas where a trusted adviser could be helpful:Accountant- Do you have an accountant that can help you understand the numbers, what they mean, what the key drivers of your business are and how to act to improve the bottom line? Or do you have “some guy” that you talk to once a year when you need your taxes done?Solicitor – Do you have a lawyer that knows your business, your industry and your individual situation to the extent that he can look out for you and proactively keep you up to date with legal issues that could potentially impact upon you and your business? Or do you have a solicitor (that you only go to when something has become an emergency) that you know only because he did the conveyancing on your last property purchase?Financial Planner – Is your financial planner creating opportunities for you and growing your investment or retirement portfolio in a manner consistent with your appetite for risk and the plans that you have agreed to in regular consultations? Or is your planner just the guy that helped you set up your self-managed super fund that now consists of a term deposit and the commercial premises you operate your business from?Business Banker – Do you have a business banker that is like a business coach; that understands how to run a business and understands how you run your business in particular? Is he proactively looking after your needs whether or not it means he’ll sell you another product? How often does he call you? Visit your premises? Do you have a business banker or a glorified bank teller?Of course, you don’t really need a backup plan if these four steps sound all too hard. Remember, the bank has a backup plan prepared if you don’t already have one. But the bank won’t back your business if they think that they are going to have nothing to rely on other than selling up your collateral. They want to see that your business has made plans to adapt to adverse circumstances and that you are not so set in your ways that you cannot think of alternative ways to run your business if a problem arises.
How to Make Your Laser Pigmentation Treatment More Effective?
Skin pigmentation is a nasty issue affecting the lives of many women every single day. Luckily, with the help of modern technology, controlling skin pigmentation is easy and reliable. There are many effective pigmentation treatment options, but laser treatment is considered one of the most popular. Here is a list of things that will make laser treatment for your skin hyper-pigmentation extremely effective.
Choose The Right Clinic
There are a lot of factors that can affect your treatment, but the most important one is the clinic that you choose for your treatment. Consider everything before committing to one. Look up ‘top Dermatologist near me’ and start your clinic search from there. Read customer reviews about the clinic, especially on third-party websites. This will give you proper insight into things that you can’t really test beforehand, for example, the professionalism of the staff or post-treatment support. Secondly, don’t choose the cheapest option. If a clinic is offering rates that are significantly lower than the rest of the market, that’s a giant red flag. Stay away from these kinds of places. Sure, it could be true that they are just good and want to help as many people as they can, but you don’t want to test this hypothesis with something involving lasers and your skin.
Pre-Treatment Preparation
Laser pigmentation treatment is a complete process that requires some pre-planning on your part. You can’t just wake up and head for the treatment; you need to do some preparations. The first of these measures is getting thoroughly cleaned. Your skin should not have any lotions, oils, or ointments on it. The next thing to think about is sun exposure. Make sure to minimize it as much as you can before the treatment. One thing that not many people know about, is that the dermatologist would like to recommend some medications a few days before the laser treatment. Do not skip these medicines, as they help in improving the overall outcome of the treatment. Follow the instructions of your dermatologist as the instructions are for your safety and to ensure that you get the best possible treatment.
Recommended Reading: Pigmentation Treatment in Mumbai – Cost, Before and After Results, Laser Treatment
Post-Treatment Care
After the laser skin lightening process, you may experience redness, swelling, mild irritation on the treated area for a few days. Ask your dermatologist about the possible downtime and how to speed up the recovery process. You can use post-laser gel on the treated area for up to ten days after the treatment or until your skin is completely healed. This is to help keep your skin hydrated and to speed up the healing process. Things that you should completely avoid are sun exposure, strenuous exercise, and aggressive washing or exfoliation. This is to prevent scarring, which will defeat the whole purpose of the treatment in the first place.
SPDN: An Inexpensive Way To Profit When The S&P 500 Falls
Summary
SPDN is not the largest or oldest way to short the S&P 500, but it’s a solid choice.
This ETF uses a variety of financial instruments to target a return opposite that of the S&P 500 Index.
SPDN’s 0.49% Expense Ratio is nearly half that of the larger, longer-tenured -1x Inverse S&P 500 ETF.
Details aside, the potential continuation of the equity bear market makes single-inverse ETFs an investment segment investor should be familiar with.
We rate SPDN a Strong Buy because we believe the risks of a continued bear market greatly outweigh the possibility of a quick return to a bull market.
Put a gear stick into R position, (Reverse).
Birdlkportfolio
By Rob Isbitts
Summary
The S&P 500 is in a bear market, and we don’t see a quick-fix. Many investors assume the only way to navigate a potentially long-term bear market is to hide in cash, day-trade or “just hang in there” while the bear takes their retirement nest egg.
The Direxion Daily S&P 500® Bear 1X ETF (NYSEARCA:SPDN) is one of a class of single-inverse ETFs that allow investors to profit from down moves in the stock market.
SPDN is an unleveraged, liquid, low-cost way to either try to hedge an equity portfolio, profit from a decline in the S&P 500, or both. We rate it a Strong Buy, given our concern about the intermediate-term outlook for the global equity market.
Strategy
SPDN keeps it simple. If the S&P 500 goes up by X%, it should go down by X%. The opposite is also expected.
Proprietary ETF Grades
Offense/Defense: Defense
Segment: Inverse Equity
Sub-Segment: Inverse S&P 500
Correlation (vs. S&P 500): Very High (inverse)
Expected Volatility (vs. S&P 500): Similar (but opposite)
Holding Analysis
SPDN does not rely on shorting individual stocks in the S&P 500. Instead, the managers typically use a combination of futures, swaps and other derivative instruments to create a portfolio that consistently aims to deliver the opposite of what the S&P 500 does.
Strengths
SPDN is a fairly “no-frills” way to do what many investors probably wished they could do during the first 9 months of 2022 and in past bear markets: find something that goes up when the “market” goes down. After all, bonds are not the answer they used to be, commodities like gold have, shall we say, lost their luster. And moving to cash creates the issue of making two correct timing decisions, when to get in and when to get out. SPDN and its single-inverse ETF brethren offer a liquid tool to use in a variety of ways, depending on what a particular investor wants to achieve.
Weaknesses
The weakness of any inverse ETF is that it does the opposite of what the market does, when the market goes up. So, even in bear markets when the broader market trend is down, sharp bear market rallies (or any rallies for that matter) in the S&P 500 will cause SPDN to drop as much as the market goes up.
Opportunities
While inverse ETFs have a reputation in some circles as nothing more than day-trading vehicles, our own experience with them is, pardon the pun, exactly the opposite! We encourage investors to try to better-understand single inverse ETFs like SPDN. While traders tend to gravitate to leveraged inverse ETFs (which actually are day-trading tools), we believe that in an extended bear market, SPDN and its ilk could be a game-saver for many portfolios.
Threats
SPDN and most other single inverse ETFs are vulnerable to a sustained rise in the price of the index it aims to deliver the inverse of. But that threat of loss in a rising market means that when an investor considers SPDN, they should also have a game plan for how and when they will deploy this unique portfolio weapon.
Proprietary Technical Ratings
Short-Term Rating (next 3 months): Strong Buy
Long-Term Rating (next 12 months): Buy
Conclusions
ETF Quality Opinion
SPDN does what it aims to do, and has done so for over 6 years now. For a while, it was largely-ignored, given the existence of a similar ETF that has been around much longer. But the more tenured SPDN has become, the more attractive it looks as an alternative.
ETF Investment Opinion
SPDN is rated Strong Buy because the S&P 500 continues to look as vulnerable to further decline. And, while the market bottomed in mid-June, rallied, then waffled since that time, our proprietary macro market indicators all point to much greater risk of a major decline from this level than a fast return to bull market glory. Thus, SPDN is at best a way to exploit and attack the bear, and at worst a hedge on an otherwise equity-laden portfolio.