I ended the last post with a few lines about the end of season College Basketball tournament colloquially known as 'March Madness' and following the weekend's Sweet Sixteen (Round of 16 for most of us) and Elite Eight (Quarter-Finals for most of us), the excitement level in my house has risen dramatically with my wife's hometown Aztecs reaching the Final Four (Semi-Final for most of us) for the first time in their history, and as favourites (~1.8) to win their Saturday game against the Florida Atlantic Owls, they have a decent chance of making Monday's Championship Game (Final for most of us).
Tuesday, 28 March 2023
Aztecs, Owls, Hurricanes and Huskies
Friday, 24 March 2023
Retirement, Death, Anniversaries and NCAAB
It's been almost one month since my last update, and a lot has happened. The meeting in Phoenix I mentioned last month was delayed, I aged another year as did this blog, but most tragically of all one of my team at work passed away at the young age of 56.
My trip to South Africa seems to have marked the end of an era and seems a long time ago now. I returned with a pretty firm retirement date of March 2021 in mind, but after a first quarter loss of 10.2% (a record) and a poor start to Q2, that date is looking unlikely. We'll see. One of the consequences of COVID-19 may well be an appreciation of what is really important in life, and while accumulating money is certainly important, it's only important to a point. It can't buy time.
As bad as March was, perspective is maintained by seeing that I am simply back to where I was last June, and last June I was pretty happy. In other words, things could always be a lot worse.
That 'firm retirement date' is still anything but. I had my annual review and while the percentage pay raise is fairly meaningless with my working days running out, the bonus, stock options and RSUs were of interest. As I've mentioned before, I'm in the rather enviable position of working from home most of the time, with 'working' consisting of a handful of Teams meetings with my afternoon calendar usually free by noon or early afternoon. The upside of walking away is minimal, but if / when they realise I don't do a lot and send me on my way with a severance package, I'll be quite happy. Speaking of walking, and the target of 2,023 miles in 2023 may need to be raised as I am already at 586 miles, putting those free afternoons to good use.
Sunday, 26 February 2023
League Cup Final Profile
It's a rare League (Carabao) Cup Final profile for today's Manchester United v Newcastle United match with the Draw priced as third favourite.
Berkshire Hathaway Annual Letter 2023
The annual letter from Warren Buffett to shareholders in Berkshire Hathaway Inc was published yesterday. It's always published on a Saturday, presumably to allow time for shareholders to read 144 pages of wit, humility, wisdom and numbers over the weekend.
One of my best individual holdings continues to be Warren Buffett's Berkshire Hathaway which I bought a little over two years ago and has quietly increased by a little over 37% in that time. It's not a jazzy holding, but it's a very solid one, and as regular readers will know, I'm a long time fan of Warren Buffett and his philosophy, although changes at the top for Berkshire Hathaway are unavoidable fairly soon with straight-talking vice-chairman Charlie Munger turning 99 yesterday.
The Class 'A' shares are currently priced at $461,705 and just one would be a rather significant percentage of my savings, but you only need to own a single 'A' or 'B' share to be eligible to attend the AGM in Omaha in person.
While I have no plans to do so, the 'B' share is currently priced at a rather more manageable $304.02 and the AGM is a popular event with around 40,000 investors attending in person, and hotel rooms in town priced at more than triple the usual rate.
It’s crucial to understand that stocks often trade at truly foolish prices, both high and low. “Efficient” markets exist only in textbooks. In truth, marketable stocks and bonds are baffling, their behavior usually understandable only in retrospect.
And this one on stock buybacks, which appears to be targeted at a certain US Senator:
The math isn’t complicated: When the share count goes down, your interest in our many businesses goes up. Every small bit helps if repurchases are made at value-accretive prices. Just as surely, when a company overpays for repurchases, the continuing shareholders lose. At such times, gains flow only to the selling shareholders and to the friendly, but expensive, investment banker who recommended the foolish purchases.
The key point here is the clarification that the repurchases need to be made at value-accretive prices. In October, it was reported that Meta, formerly known as Facebook, conducted a $45 billion buyback initiative at $300 a share. The only slight problem with this was that the stock dipped below $90 not long after!
The world is full of foolish gamblers, and they will not do as well as the patient investor.Patience can be learned. Having a long attention span and the ability to concentrate on one thing for a long time is a huge advantage.Don’t bail away in a sinking boat if you can swim to one that is seaworthy.There is no such thing as a 100% sure thing when investing. Thus, the use of leverage is dangerous. A string of wonderful numbers times zero will always equal zero. Don’t count on getting rich twice.You have to keep learning if you want to become a great investor. When the world changes, you must change.
Some good advice there for all of us.
Saturday, 25 February 2023
Sir Bernard Ingham
‘All right, Prime Minister,’ Ingham told her, ‘If that’s what you’re going to say I’m going to go outside and commit suicide.’ So she didn’t, and he didn’t.
My parents, I think jokingly, often said they would never forgive him for converting their normal - I use the term loosely - son into a 'football crazy' boy!
Sunday, 12 February 2023
Big Foot
With Superbowl LVII this weekend wrapping up the NFL season this evening, attention turns to baseball with Spring Training for the 2023 MLB season starting in less than three weeks. The Regular Season opens on March 29th, but significant changes to the 162 game schedule means that the usefulness of some of the data from previous seasons is, at best, questionable.
For comparison, the NBA currently has 30 teams (six divisions of five teams) and the NHL has four divisions of eight teams.
Friday, 3 February 2023
Points, SGPs and January
We had no luck for the small road 'dogs in the NFL Championship games last weekend, and as The Guardian summed up the Philadelphia Eagles v San Francisco 49ers game:
Well, we were all expecting a closer game, but the 49ers had ridiculously poor injury luck with their quarterbacks and far too many costly penalties, so we ended up with a rout instead. That happens sometimes.The Kansas City Chiefs v Cincinnati Bengals game was much closer, but we lost that one by a single point. C'est la vie. On to the Superbowl where the Eagles will play the Chiefs on Sunday week in Glendale, Arizona and wrap up what has been another profitable season in this sport. I am actually scheduled to fly to Phoenix for a work meeting later this month, but unfortunately a few days after the game so I shall miss out on the excitement that accompanies the event and my company will miss out on paying ridiculous sums of money for my hotel room.
ESPN had an interesting article covering the rise in interest in SGPs, Same Game Parlays which some of you may enjoy reading.
The days of placing a bet before a game and rooting for your team to cover the point spread are waning. The modern American betting market is full of player props, in-game betting and same-game parlays. Not even the long odds and the bookmakers' cushy margins are causing bettors to shy away from them. As we approach Super Bowl LVII, SGPs are as popular as ever.
This season, 46% of customers who bet on the NFL with a Kambi sportsbook placed a same-game parlay and 28% of all pre-game bets placed during the regular season were SGPs.
January is now in the books, and the EPL Draws had a profitable month (+1.19 units) with three winners from nine selections. In Spain's Segunda División, the similar Draw strategy had an even better month, with 19 selections generating 8 winners and 3.8 units of profit, while in the Bundesliga, the laying systems in the top division had a small profit, unfortunately more than offset by the loss in the Second Division resulting in a net loss of 2.21 units, although still (slightly) profitable overall on the season.
The US winter sports continued to be a challenge in the new year, with the NHL and NBA systems all taking losses overall, although the NBA Totals System managed a small profit in January. Unfortunately February has started with four successive losses, so any hopes that the tide may have turned have been rapidly squashed.
Why the NBA has changed so much this season is debatable but the game is changing fast as reported by Axios last month:
Now for the boring, personal stuff. The bigger picture for January was quite positive, with my spreadsheet showing a 2.73% overall gain, and I'm now back to within a few hundred pounds of where I was at the end of October! Tesla was up 40% after a dire few months, Bitcoin was up almost 47% and Lloyds Bank close to 18% and the only real negative was that my company stock price was down. It's annual review and bonus month in February, so hopefully any options and RSUs will be awarded at lower strike prices. Retirement is proving elusive.
While the 40% gain for Tesla sounds impressive, the price is still about 50% off its high. As Ben Carlson puts it:
Dry Veganuary was successful, and while I wasn't strictly vegan during the month, consuming a little fish and cheese, I did avoid any meat or poultry all month and this, combined with walking / running 227.9 miles, resulted in a weight loss of 16.8 lbs, and my weight is now back to where it last was 4,100 days ago! Not sure how long it will stay here given the upcoming travel and a certain amount of catching up on my social life after a quiet January, but rest assured, you will know in four week's time.
The correlation between weight gain / loss and calories ingested continues to be strong, with exercise making just a small difference. Consume fewer than 2,200 calories a day and I'll lose weight; more than that and I'll gain weight. And curiously the correlation between alcohol consumption and weight is strong too...Saturday, 28 January 2023
Cursed Profits and 17 Years of Benford
Three winners out of four last weekend for the 'Curse' / Unders selections, although with both rested teams winning their games, 'curse' may be a little too strong a word. Hopefully some of you were along for the ride.
Saturday, 21 January 2023
NFL Playoffs; Rest and Grass
Some of you may recall the post from last October which looked at whether receiving a bye was a gift or a curse, but as a reminder it's that weekend of the year in the NFL where the number one seeds from the regular season resume after a couple of weeks off. The sample size of games where one team has 7 or more days of rest than their opponent is not large of course, just 45 games, but I noted then that:
Another major sport that rewards its top regular season performers with a bye week is the NFL, and here the data since 2002 shows that the rested team underperforms with just a 36.4% record ATS.
The two rested teams this weekend are the Philadelphia Eagles (v New York Giants) and Kansas City Chiefs (v Jacksonville Jaguars) who are giving about 7.5 points and 9 points respectively.
Both games are being played on grass, and while Unders is historically the bet on this surface in playoff games, in games where the home team has an extra week of rest, this has been the outcome in 64.3% of 28 such previous games.
The Eagles v Giants game is also a divisional game and by now, we should all know about opposing the favourite in such games.
Monday, 16 January 2023
Emotional Market
Although the sample size isn't huge, backing Away (or Road) underdogs in NFL playoff games is historically not the worst idea in the world with a 53.2% winning record against the spread and at least two winners in every season since the data begins in 2001.
The Miami Dolphins closed as consensus 14-point underdogs against the Buffalo Bills, making them the largest underdogs ever in a Wild Card game.
Since 2001 only two teams had been bigger playoff 'dogs, and while the value is usually on the smaller 'dogs, I took a chance that the market may have been wrong on this one.
ESPN continued:
The game attracted the lopsided action on Buffalo, with the bulk of the money on the heavily-favored Bills minus the points and on the money-line (-1,000).
The Dolphins covering was good for the sportsbooks as well as those of us feeling contrarian about this game and not getting emotional.
One more Wild Card game to go tonight - Dallas Cowboys (-3) at Tampa Bay Buccaneers and all five so far have gone Over.
Sunday, 15 January 2023
Superbowl Favourites in the Playoffs
With the NFL's Wild Card Weekend in progress, courtesy of SportsOddsHistory here are the fates of the Superbowl favourite at the start of the playoffs. I've converted the US odds to decimal, but the original is in the link above.
Tuesday, 10 January 2023
Milestones and Mountains
A rare comment on the blog earlier this year, from Hkibuzz who wrote:
One more year of the blog in the bag. Thank you for your entertaining and instructive posts, and all the best for 2023
I only managed 74 posts in 2022, which was down on the long term average but slightly up on the 2021 total, and the total number of posts all-time since 2008 is now closing in on 3,000.
The number of hits is also likely to reach a significant milestone this year with three million probable by June or July.
If I make it to March, and I have every intention of doing so, the coming of Spring will mark 15 full years of the blog. If this was a marriage, I'd be looking at a crystal gift to mark the occasion.
Thanks to Hkibuzz for the comment, which are always appreciated, and I'm always on the lookout for any general betting / investing blogs to add to the blog roll so if you have any recommendations please let me hear them.
The number seems to dwindle year by year, as the challenges of coming up with interesting topics as well as staying motivated when losing money prove insurmountable. It's easy to be enthusiastic about a project when things are going well, but a few losing weeks will soon change that.
I'm slightly annoyed that my bet on Georgia -13.5 wasn't matched in the College Football National Championship game last night given that TCU lost by 58 points, (7-65), but hindsight is a wonderful thing.
TCU were big outsiders to even make the College playoffs, not even quoted among the top 17 teams.
I wrote about the NFL Regular season yesterday, and in a further reminder that results will always vary slightly, the corresponding numbers from the Killer Sports database are:
Underdogs vs. spread:143-119-6 (54.6%)
Road teams vs. spread: 130-129-6 (50.2%)
Unders: 146-114-5 (56.2%)
Pretty close, and one interesting observation is that Unders had its best season ever (since 1989), and of these 34 seasons, three of the top four for Unders have occurred since 2017. The Unders on grass (as opposed to artifical turf) pitches was 59.4% and an incredible 69.6% (39-17-1) in the NFC this season.
In other (personal) news, with 900 miles covered on foot since the start of September, it's hard to believe that two years ago on this day, I was in a little discomfort after breaking my leg in three places. Yeah, yeah - don't go to those three places again...Anyway, I just quizzed my wife with "what happened two years ago today?" (she hates it when I do that), and when I told her, she said "oh yeah, remember when the ambulance guy thought you were my Dad?"
I'd actually erased that part of incident from my memory for some reason, but clearly it made an impression with Mrs. C and was actually quite funny. Clearly the gentleman in question had left his glasses at home that day.
Last summer's goal was to hike up Snowdon, something that I had long delayed after losing a friend in an accident there back in 1972.
The news wasn't delivered in the most compassionate way. I can still remember my Dad reading the newspaper at the breakfast table and, prompted by the Purley reference in the report, asking me: "Do you know a John Twyford?, presumably not imagining for a moment that I did.
After responding in the affirmative, adding that he went to the same youth club as myself, and asking why he would ask, he paused for a moment and then said "Well he's dead. Fell off a mountain." That's how we dealt with things in those days I suppose.
This year we're targeting Scafell Pike in early July and if the weather permits, Helvellyn, which I last ascended exactly 50 years ago, although I'm hoping for better weather this time around, and I might be more prepared.
Monday, 9 January 2023
NFL 2022 Small Road Dogs
Tuesday, 3 January 2023
X-Axis and Tesla Woes
In my first post of 2023, I touched on a couple of topics that have subsequently become more relevant.
This was my first down year since I started tracking these things in 2009, with my net worth total declining by 11.6%. At my age, this number is all about investment performance, with income from employment pretty much irrelevant.
This is a topic covered by Nick Maggiulli today, accompanied by a nice chart illustrating my point rather neatly:
I'm at the extreme right of the x-axis above, and clearly while saving over 20% of my income doesn't hurt, how my investments perform is far more impactful to my net worth.Interestingly, Nick's year seems to have been very similar to mine, although he is far younger. In this article he writes:
In fact, 2022 was the first year ever where I saw a decrease in my net worth from the year prior. To be specific, my net worth dropped by 11% in 2022 though my portfolio was down over 20%. What prevented my net worth from declining by 20% like the rest of my portfolio did? My ability to save money to offset my investment losses.
As I mentioned in my post, a reasonably large percentage (about 20%) of my portfolio is made up of investments in my company, which performed relatively well last year, although my main retirement account was down almost 20%.
That's four consecutive mentions of 20%, make that five, which must be something of a record!
The second topic I mentioned was that of Tesla, and I suggested that:
"he [Elon Musk] seems to be having some kind of mid-life crisis and his political views, unpleasant to the majority of people, and certainly to his customer base, have likely reduced the demand for Tesla cars."
The stock ended the day down by 12.24% after the company:
"delivered fewer vehicles in 2022 than it initially targeted, capping a year during which the stock suffered its worst annual performance as demand appeared to soften and Covid-related production disruptions persisted."
Not the start to the new year I was hoping for, but a tremendous buying opportunity, or is the stock headed for under $100 shortly? Time will tell.
Ken Block
2023 hasn't started well with the terrible news that Ken Block was killed yesterday in a snowmobile accident in Utah at the age of just 55, leaving behind three children. Ken was more recently famous for his rally driving and stunt videos, but was a business partner of my wife's brothers founding DC Shoes in 1994, a venture that worked our rather nicely for them.
Monday, 2 January 2023
Eyeballs on 2023
2023 is not only the second consecutive year that is a harshad number and it is also an Eyeball Year since its binary representation only contains two zeroes and they are consecutive.
As for the year just gone, much of what I wrote in my review of 2020 a year ago remains true.My job isn't really work these days. It's all meetings and management and if I can do it full-time from home, and by full-time I often mean for two to three hours a day, then I might as well hang in there until the next bonus and stock options are doled out at least, which is next month. Were my job hacking away at a coal face, my attitude to retirement might be a little different.
Of course the stock market will crash at some point, but predictions have been out there for at least eleven years now, and if you'd moved to cash at that time, I'm pretty sure you wouldn't be too happy.
The stock market probably won’t give us “average” returns. Depending on the time frame you use the long run annualized return for U.S. stocks is something in the 8-10% range.
The strange thing about investing in stocks is any given year rarely gives you anything close to that range of returns.
In fact, going back to 1928 there has been one single year of returns that fell between 8% and 10% (1993 when the S&P 500 was up 9.97% in total on the year).
Most of the time the stock market is up big or down big on the year. From 1928-2022, 70% of all years have seen double-digit gains or losses.
A great example of how averages, at least in the short-term, are often not very useful.