Nevin Manimala

NEW DELHI: The statistics ministry has sought quarterly goods and services tax (GST) data and information on tax paying units to improve the quality of both National Accounts Statistics and state-level accounts.

The ministry of statistics and programme implementation (MoSPI) has reached out to the finance ministry for GST data on tax collections along with summary information on units, classification-wise, that have paid taxes for use in compilation of national and state-level accounts, officials familiar with the development told ET.

“We have asked finance ministry for GST data on output, input and revenue,” said an official. “They are aware of our request but are waiting for the GST data and system to stabilise.” Independent economists said the move will make proxies cleaner, reduce data collection costs and help obtain higher quality statistical data.

“GST should be leveraged for national statistics because it will improve data by making it quick, timely and robust,” said D K Joshi, chief economist at top credit rating firm Crisil. “Besides reducing costs, the response burden will also go down substantially. This process should be initiated as soon as possible,” he said.

Once a list of units registered under GST is provided to MoSPI to update business registers, these can be used to conduct various statistical surveys, experts said.

At present, the statistics released by MoSPI are based on administrative sources, surveys and censuses conducted by the central and state governments and non-official sources and studies.

To address privacy and competition related concerns, MoSPI has suggested that the finance ministry share data without naming any companies. “They are dealing with data of companies which is sensitive from competition point of view,” said the government official quoted earlier. “Also, firms might not be comfortable one government department sharing their details with another.”

Keeping in view the legal provisions and practices in other countries like Australia where tax data is shared with statistical agencies, it was suggested that similar protocols be worked out by the central board of indirect taxes and customs to share tax data with statistical agencies.

Investors typically have a vague idea of what they’re getting themselves into by buying stocks but don’t quite understand the mechanics behind market corrections. The mainstream media isn’t helping investors make good decisions because creating fear drives viewership. Investors’ memories are short, and market pullbacks are normal.

Personal finance writers and financial advisors often push suboptimal strategies that feel good, like excessively large cash allocations and dollar-cost averaging. By understanding what is statistically likely to happen, you can know what to expect when the market dips and answer other portfolio strategy questions, like whether you statistically do better waiting for pullbacks in cash or investing money immediately.

The stock market doesn’t go straight up.

On any given day, stocks have roughly a 53 percent chance of rising and a 47 percent chance of falling. Over any given 3-month period, stocks rise 68 percent of the time, dropping the other 32 percent of the time. Over a typical 12-month period, the odds of making money in stocks rise to roughly 75 percent. However, if you are in the market for a long enough period of time, there is a 100 percent chance that you will experience temporary price declines at times.

Source: Thomson Reuters

After bottoming in early 2009, stocks have rallied massively but have not gone straight up. Recent history shows seven declines of 9.8 percent or more in the S&P 500 (SPY) since the bear market bottom (the current downturn is +/- 6 percent as of the time of writing this). Staying the course each time was the right move. By knowing what to expect from the market, we can sleep easier and make better investment decisions. In fact, we can make an educated guess about how often market corrections will occur in the future based on past data.

How often are corrections likely to occur?

Guggenheim Funds did a research piece this August on every stock market decline from 1946 on. They found that pullbacks, or declines of 5 percent or greater, occur about 1.5 times per year. Market declines of 10 percent or greater (corrections) occur roughly 0.5 times per year. Lastly, market declines of 20 percent or greater (bear markets), occur on average about every seven years.

Source: Guggenheim Funds

A couple of things jump out when comparing the recent data to the historical data. The first thing to notice is that market declines of 10 percent or greater seem to be becoming more common than they were in the past. I attribute this to the rise of quantitative trading. Markets are reacting (or overreacting) to new information quicker than they have in the past. On the flip side, markets seem to be recovering faster from declines. It’s not immediately clear whether the increase in the number of roughly 10 percent or greater declines is statistically significant. However, as an investor, market corrections have implications for you.

The most obvious move is to move money countercyclically when you can. Pullbacks of 5-10 percent have only taken a month to recover on average. When the market does pull back, avoid selling into it, if possible. If you live off of your investments, you can draw money from your bond allocation for your living expenses when pullbacks happen, as they do, roughly 1.5 times per year. This way, you aren’t fighting the traffic of other panicky and overleveraged people selling stocks into the slightest downturn.

Statistically, you usually only have to wait a month to recover. Also, if you happen to get a liquidity boost like an annual bonus when the market is down, you typically won’t have to wait very long to make money off the bounce-back to the upside. Surprisingly, however, the data does not back up waiting in cash for a pullback.

Should you wait for a pullback to buy stocks?

Not usually.

Talking heads on CNBC love to claim that they are “waiting for a pullback” to buy. After all, it seems like the most natural and prudent thing to do. While there is a time and place to wait for price declines (and/or interest rate declines) to buy assets, the strategy of waiting for pullbacks to buy stocks is grossly overused. In the same vein, financial advisors like to push the use of dollar-cost averaging as a way to reduce risk and increase return. However, neither of these methods has been shown to outperform simple buy-and-hold over time.

Vanguard did an amazing white paper on this phenomenon a few years ago, entitled “Dollar-Cost Averaging Just Means Taking Risk Later.” I always like to link to sources, but I actively encourage everyone who has the time to read the white paper (it’s only 8 pages). In the paper, Vanguard found that lump-sum investing – not waiting for a pullback, outperformed dollar-cost averaging/waiting to invest roughly two-thirds of the time. Here’s what they had to say about waiting:

Clearly, if markets are trending upward, it’s logical to implement a strategic asset allocation as soon as possible because it should offer a higher long-run expected return than cash.

Stocks clearly go up over time, so even though they are likely to pull back, the odds are that they will be pulling back from a higher price than the price you paid. Additionally, being invested allows you to collect dividends and interest, which you can either reinvest or use for lifestyle purposes.

Many, many personal finance writers and financial advisors push waiting for pullbacks, but the data does not back their claims up. Dollar-cost averaging has a place, for example, if you contribute to a 401(k) with each paycheck you are dollar cost averaging. This is acceptable because you aren’t letting the money pile up in cash while waiting for a decline to time the market.

Where dollar-cost averaging does not have a place is the practice of letting cash sit only to take the risk later. Unless you have a solid macroeconomic reason that markets are likely to decline, stocks are the place to be. Right now, I see the potential for higher interest rates to drag on GDP (especially around the residential real estate market) but see no cause for panic in the greater economy.

Takeaway

Over time, stock returns converge with company fundamentals and risk moderates relative to the original amount invested. The old adage “that time in the market beats timing the market” is backed by statistical research. However, market pullbacks are common, and understanding how they work helps guide our decisions to buy and sell stocks. Knowing what to do (and what not to do) when the market pulls back helps you achieve your goals and get to where you want to be.

Did you enjoy this article? If so, then scroll to the top and follow me!

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

One of VSiN’s goals in pro football coverage this season is to encourage handicappers to spend more time studying red-zone performance. There are team skill sets related to maximizing offensive opportunities in close, or to repelling touchdown tries on defense. Those are often the difference-makers for bettors in games with tight point spreads.

Some of you may be skeptical about the importance of red-zone statistics. It’s true starting a new series of downs at the 4-yard-line after a big play isn’t as difficult as starting at the 20.

But, third-and-2 is a lot easier than third-and-9, yet third-down rates on offense and defense are among the most important indicator stats in football. It’s easier to rack up nice yards-per-play numbers on soft defenses or on fast tracks in domes. It’s easier to punt for distance in Denver.

It’s harder to make all of your field goals in the winter in swirling winds. Complications are always in play.

Smart analysts accept that no stat is perfect. They use a wide variety of indicators to make good faith evaluations of team strengths and weaknesses.

Problems in the red zone are one of the defining offensive characteristics of both the Giants and Jets so far in 2018.

Bottom five red-zone offenses

RANK TEAM TD% 28th Raiders 45% 29th Giants 44% 30th Jaguars 39% 31st Texans 35% 32nd Jets 30%

The Jets don’t just trail the league, they’re way behind other bad red-zone offenses! It would take six touchdowns in their next six red-zone trips just to reach a percentage better than Oakland’s. The current league midpoint is around 56 percent. The Jets are obviously a long way from average. Giants are closer to average than they are to the Jets, but still the fourth-worst offense in pro football at this skill set.

But, there is some good news here. The Jets have a 3-3 record anyway. It’s not uncommon for a rookie quarterback to struggle to find the end zone in close. Smart signal callers do get things figured out. In fact, this is one of the great stats for monitoring how well or how quickly a young QB is doing that. If Sam Darnold improves as he learns, the Jets have a chance to maintain their current run at the .500 mark for the full season.

Also worth noting is the Jets have performed well in terms of quick strikes on offense, and impact plays via defense or special teams. New York scored 34 and 42 points the past two weeks despite scoring TDs on just two of nine red-zone tries against the Broncos and Colts.

Things are much more complicated for the 1-5 Giants. Despite having a veteran quarterback, a head coach who used to be an offensive coordinator, and a few rushing or receiving weapons, the G-Men’s outlook feels bleaker because of offensive-line woes. And, even if they improve enough to play .500 ball the rest of the way, that only yields a 6-10 final record.

We encourage you to start monitoring this stat on a game-by-game basis. NFL box scores at espn.com show red-zone performance. You can search teamrankings.com for season-to-date percentages.

The Jets draw the much tougher red-zone test this week. Sunday, they’ll play host to a Vikings team that ranks No. 2 in red-zone defense. While Monday night, the Giants catch a break in visiting the porous Falcons, who rank 30th in close on that side of the ball.

In its most recent biennial election, for which voting ended last month, AGU membership chose 57 new leaders to serve 2-year terms in 2019–2020. Union officers, Board members, section officers, and student and early-career representatives to the Council were elected. Here the AGU Leadership Development/Governance Committee takes a look back at the voting this year and how 2018 stacked up in comparison to prior elections.

See the accompanying Eos.org article entitled “Lozier to Be AGU President-Elect/AGU Leadership Transitions” for election results and an overview of the leadership transition that’s now getting started.

Electronic Voting

Members voted electronically, and access to voting was provided to all eligible voters for a period of 30 days. All members who joined or renewed their membership by 13 August 2018 were eligible to vote in this year’s leadership election.

Survey and Ballot Systems, Inc. (SBS) conducted the voting. SBS, which offers election planning and management services, provided unique login links and other support services for eligible voters throughout the election. On 27 September, the company certified the results, which were then reviewed by the AGU Leadership Development/Governance Committee.

Participation Rate Tops 20%

The total number of ballots validated in the election was 9,141. The number of eligible voters was 45,491, making the participation rate 20.09%. This is slightly lower than in AGU’s last election in 2016 in which the participation rate was 21.13%.

SBS provided all voters the opportunity to rate their satisfaction with the 2018 voting process. In response to this election, 4,259 comments were received. This is a good indication of voter engagement, and 89.5% of voters continue to be satisfied or very satisfied with the voting process. Voters provided many comments and suggestions, which AGU will analyze and discuss over the coming weeks. Voter feedback is very important, and comments received in 2016 were instrumental in helping the Leadership Development/Governance Committee plan for the 2018 election.

Getting the Word Out

The election was supported by articles in Eos.org and other communications throughout this year. The Leadership Development/Governance Committee published the proposed slate in Eos.org on 7 June and the final slate on 17 July.

A special election website was created to aid members with the voting process. Promotion of the election included the AGUniverse newsletter, Eos print ads, Eos Buzz ads, the AGU home page carousel, Facebook, Twitter, and emails. The election vendor sent reminder emails to eligible voters throughout the election, as did section leaders.

Notifications

After reviewing the election report provided by SBS, the committee kicked off the process to notify candidates and announce the results. The process required that all 114 candidates be notified before the election results could be publicly announced. Each of the 23 sections participating in the 2018 election provided a single point of contact to receive results and contact candidates. Leadership Development/Governance Committee members contacted Board candidates and the student and early-career candidates. Results were released online on 10 October 2018.

The Leadership Development/Governance Committee expresses its gratitude to all candidates and to all AGU members who voted.

—Leadership Development/Governance Committee: Margaret Leinen (Chair; email: [email protected]), Robert A. Duce, Luis Gonzalez, Hans Lechner, Catherine McCammon, Jim Pizzuto, Sabine Stanley, George Tsoflias, Vaughan Turekian, Tong Zhu, Chris McEntee, and Cheryl Enderlein