Thursday, 7 May 2020

Dry Lockdown

With no sports, there's not much to write about these days, but I hope everyone is coping with the current situation and aren't too badly impacted financially.

It may not be a common point of view, but for me personally, this 'lockdown' isn't the worst thing. I'm fortunate that my primary income stream isn't impacted, in fact it's effectively increased as I'm not having to spend time or money commuting, although secondary and tertiary income streams have dried up completely.

With no temptations in the form of bars, pubs and dine-in restaurants, I have been dry for over eight weeks now, smashing a record that goes back almost 20 years. Spending on alcohol and petrol totalled zero in April, which must be a first since I turned 15, so there's an additional saving there! I suspect the unplanned dry run will come to an end in a couple of weeks time at my Mum's funeral.

Like many of us I suspect, I have had a lot more time to read over the past few weeks. I mentioned finishing "The Hot Hand" last week, and have devoured Michael Lewis' "The Fifth Risk" since then - highly recommended, as are all of Lewis's books.

I have a tendency to get distracted, and often have several books in progress at any one time, with the result that any one book takes months to complete, and often requires starting over because I've forgotten what I've already read - which is of course terribly inefficient. I justify this to myself by having books of different genres on the go at the same time. It's not unusual for me to have a novel, a book on markets or investing, a sports related book, a social economic book and a historical book all in-play at the same time. An isolation resolution is to be more disciplined with my reading.

The importance of reading has been known for centuries, with innumerable quotes about it. Some of the most successful men of our time have emphasised the importance of reading. Bill Gates reads 50 books a year, and Warren Buffett spends five to six hours a day reading five newspapers and 500 pages of corporate reports. (The latter might be a little dry). 
“In my whole life, I have known no wise people (over a broad subject matter area) who didn't read all the time -- none, zero. ..." - Charlie Munger
“Everybody can read what I read, it is a level playing field.” - Warren Buffett
“Reading is still the main way that I both learn new things and test my understanding.” - Bill Gates
My latest read is "Latticework" by Robert G Hagstrom which I acquired a while ago (it was written in 2000) and for some reason is a copy signed by the author.
In this engaging and challenging book, Robert Hagstrom outlines a new approach to investing based on the ideas of two highly successful investors: Charlie Munger of Berkshire Hathaway and bill Miller of Legg Mason. Both Munger and Miller believe in the latticework approach to investing, one that is based on a working knowledge of a variety of disciplines. Latticework is a true liberal arts approach to investing. It carries the reader from Ben Franklin's vision of education to St. John's College with its Great Books program to the cutting-edge Santa Fe Institute, a multi-disciplinary research center which brings together scientists from a variety of fields to address complex adaptive systems, including markets and economies. In helping readers develop the worldly vision they need to succeed financially, Latticework also points the way to a richer, fuller, more rewarding life.
Before opening it, I saw a question asking "Why does Robert Hagstrom have such a poor investment track record?".

"Poor" here is of course a relative term, but the answer provided was interesting:
Firstly, simply because you understand something doesn’t necessarily mean you will nor can apply it, especially in a (somewhat) competitive manner. I think of pro athletes and their coaches - I think you can see what I’m getting at.
Professors and pundits are another example, and it's the same in sports investing, where experts in the field of probability and statistics whom you would think should easily be able to parlay their expert knowledge into actual financial gains often can't. There's an art to the science, and not everyone has that artistic touch.

April was a record setting month for the spreadsheet, in both actual terms and percentage increase, although still down on the year to date and May hasn't started too well. As I mentioned before, considering we are in the midst of a global pandemic, that I am only down by 8.04% from February 19th and 3.82% year to date is quite surprising. I've done a little trading on some stocks that I am familiar with. Tesla continues to be my best performing individual stock, although CEO Elon Musk's comments don't always help, but there are some good opportunities in solid companies after large one day drops which are often over-reactions. 

I'm certainly pleased that I didn't decide to retire earlier this year with the goal of travelling. I'd have been sat at home with no steady income and no travelling opportunities, rather than sat at home getting paid for honestly not doing very much! It may be too much to hope for, but when this is all over, there may also be redundancy packages offered, which would be absolutely perfect timing for me, but we shall see. 

My July trip to Queensland to watch Crystal Palace has not surprisingly been cancelled, which is a little disappointing, and it'll probably be a few months before I am able to make any more travel plans.

So far as sports are concerned, still no news on when the ones I am interested in might resume, and in what fashion they might resume. For those seasons in flight, I'd suggest that the authorities forget the idea of it being an annual season, and say extend 2019-20 to a 2019-21 season. Finish the schedule when it is safe to do so, and if there are a few weeks left early next Winter or Spring, do like we did in the War (not that I am quite old enough to remember it) and come up with a one-off tournament, perhaps UK wide to add a little interest and the opportunity to visit new grounds. The Covid Cup has a ring to it.

Unfortunately it may well be a while before sports (as well as bars / pubs) as we know it come back.

Finally, many thanks to Ben who sent me the study on strategic and psychological momentum I referenced last month and was too cheap to spend $35.95 on. That will be my equivalent of Bill Gates' '500 pages of corporate reports'.

Stay safe. 

No comments: