coiled spring – or cautionary tale – a strange year

Mrs Ermine and I recently celebrated a year of lockdown with a bottle of wine. A strange year, but there’s something to celebrate, which is that we are still here. I will drink to that.

This is one that a lot of the the rich world got wrong, ballsed up in spades, with the UK in the top ten with a death rate of 1 in 530. There aren’t any really big-picture commonalities that can be drawn, though the intelligencer’s high-level takeaway isn’t bad. We have become soft in the West from having it easy for a long time, so we didn’t really believe shit was happening to us. That’s bad when you are up against an exponential.

We have continued to just think that something bad isn’t happening to us, and that there’s an out somewhere — that, of course we’re going to solve this next month. It’s always been one month away. And as long as the solution is always one month away, the urgency isn’t there. And I do believe that this is a symptom of a bunch of nations and societies that really haven’t had to deal with adversity on our shores in a really long time. We are uncomfortable with making the hard decisions that have to be made.

Europe including the UK, the US, and for some reason South America made a pig’s ear of responding to Covid. You have to scroll down a long way down to South Africa to get out of Europe and America on the JHU table ranked in deaths/100k.

Yes, we have a route out in the vaccination programme, a win for science. It’s also a win for the one thing that Boris’s crew did get right – dropping a lot of money, and in not trusting Trump/Merck  in the Oxford vaccine production.

Anyway, we are still here, and we cleaned most of the green slime off the  camper van in the hope of being able to use it sometime next month. Even if only to go and eat lobster – except that it seems to be closed season so we will have to make do with fish and chips by the beach.

Fish and chips by the beach
Fish and chips by the beach

The NT opened only a third of the car park, so while we got there early the car park was already rammed. I asked them if they were going to open the other two, but apparently not. Helpfully they said it would be open for Easter, it was to do with the grass being ready. I had assumed they were doing it to limit numbers on the beach. Anyway, this is the south coast. There are beaches enough, indeed the next one westwards had a council car park where you could park all day for £2 as opposed to £6 for a day. The view was still superb, the fish and chips tasted better after so long and people were spread out.

Stock market gives Covid the middle finger

The Ermine sticks a snout at my ISAs, and it appeared they have still been creeping up. Didn’t really look like what I expected this time last year. It is now much more defensively biased and there is a fair amount of gold, on which I have taken a soaking in £ values. But the other stuff seems to have outstripped the loss of lustre. The change in the gold price leans away from the obvious possibility that our great British Pounds have become rather less Great, they are relatively spiffing of late. Maybe World + Dog thinks Brexit is the greatest thing to happen since sliced bread? Or they think Covid is on the run? Goldwyn had it to a T Nobody knows anything. I don’t think it’ll be over by Christmas, but I’m a nobody…

I can’t say that’s what I expected, but given I have a rammed Premium Bonds allocation and NS&I ILSCs and next year’s ISA contribution in cash I have far too much GBP exposure, so being wrong in that way is not a hardship. I’d rather be wrong than poor. I still worry what is coming our way though, and with the markets up in the sky what the hell do you buy to diversify that? Gold is one place. There have been other oddities. What’s up with BlackRock world mining? Have we all decided to start digging shit up from the ground then?

BRWM. Eh? It’s mining, FFS

Years ago, there was a quote from a City wallah to the effect of I’ve no ‘king idea what we’re doing up here mate. No, me neither, bud. In fact, generally the only rational response is to stand there with your gob open and go WTAF?

I am getting older, and perhaps not allowing for that.

I recently had to do one of those finametrica attitude to risk things, as a CYA exercise I guess. Less extreme results this time than last time. Perhaps that is as things should be, after all, a tenth of my three-score years and ten has rolled by since the original result. The ISA is now much higher than it was, buoyed by a rising stock market and swelled by the transfer of my old AVC/SIPP during my lean years of earning very little. To a first approximation I have achieved my financial goals, and I am reminded of Warren Buffett’s observation of the likely lads of Long Term Capital Management. “Too much cock, boys

to make money they didn’t have and didn’t need, they risked what they did have and did need. That is foolish. That is just plain foolish. It doesn’t make any difference what your IQ is. If you risk something that is important to you for something that is unimportant to you it just does not make any sense.

The Belle Curve has it put in a different way

My job as a wealth manager is to help clients hold on to their wealth and to preserve and grow it to keep pace with inflation. My number one priority is to ensure that money is there to meet their goals, when they are ready to spend it.

I don’t need to hit it out of the park. Just as well at current valuations, eh? Perhaps I have more in common with Warren’s last outing. He sounded pretty much out of ideas. I am not the desperate Ermine of 2009, needing to chart a route out of work as soon as possible. I need to look closer at preservation, and that is a different mindset.

Preservation is about asset class diversification. You give up return for security

The trouble with FI/RE is your younger self sets a course at the start of the journey. You have time on your side to ride the markets, and you need win, because over a working life you’d rather the mythical magic of compound interest double your savings in real terms over 40 years, and it builds a certain mindset. If you happened to be a feckless Ermine who started all this stuff far too late in life then you need a lot more punch, and the win that feckless blighter had was starting in the hole of the GFC, which coincidentally was also what made my job a bit shit hence the breakout requirement.

Trouble is, your younger self sets the direction, and what was right in the morning in the afternoon becomes a lie, not just in the psychological sense. I was playing that hungry younger self, this time last year, looking for opportunities in the noise and hum. I took them, more actively than most, and shorting the market in March/April to boot, and I have been fortunate, the numbers are decently bigger now than the end of December 2019. Obviously I am chuffed that it worked, but there’s a bigger Warren Buffett-style question I should be asking myself

“Self, what are you doing on the bleeding edge of the coalface shorting, when you are grizzled of fur? OK, so you have win, but you have to ask yourself whether you should have been on the playing field at all?”

Let’s hear it again from The Belle Curve. Now obviously I don’t employ a wealth management firm, so I am not sure I classify as being able to stay rich, I have never worked in finance or the upper echelons of IT, but I am reasonably well off, and I am with Joseph Heller. But Blair has some words of wisdom. She doesn’t help people climb the mountain. What she does is help them stay near the peak, and that appears to be a very different ballgame.

Few things compare to the high of making millions off a concentrated bet; whether that bet is on a single stock, building a business, or working for a successful start-up. I imagine the brain responds to this high in the same way it does to addiction. The temptation to chase the next high is all-encompassing. I talk to investors all the time who can’t stop chasing that high.

Hmm. Am I that guy? I recall reading TA’s Do Not Sell post into the teeth of the March selloff last year and thinking to myself “F*ck that for a game of tin soldiers, there’s win to be had”. Not only did I sell a load of crap, I shorted some of it, along with some of what I retained which was taking on water. Sure, I made errors along the way, like selling BRWM, only to rebuy it, fortunately still bent somewhat out of shape. But in the round it paid off handsomely, as I cleared a couple of numerical thresholds which are more a product of having ten fingers than actual significance, but nevertheless good for the fur.

I have now well over twice as much in my ISA as the capital assets I left work with1.  Inflation makes that less riveting than it sounds, but it’s still worth having. I saved a capital amount starting three years before I stopped working that is over half the capital amount backing 23 years of DB pension savings. You aren’t meant so save for retirement that way, but all’s well that ends well etc. However, it’s got to stay well, and here perhaps I have something to learn.

I have to look in the mirror and wonder if this grizzled mustelid is doing the walk of shame as far as Warren’s LTCM comment. I didn’t need that boost last year. Maybe I should have listened to TA, much as it went against the grain. Self, be like Joe Heller, not the hedge fund manager in Kurt Vonnegut’s poem. I’d imagine by now it’s worked well enough for TA, if you did nothing than you are probably better off than before Covid in a balanced equity portfolio. Update: TA is 20% up on the deal. Chapeau that man. I am up a fair bit more, but I sweated buckets for it and in retrospect took a shitload of risk for it. Shorting anything always comes with a ‘here be dragons’ warning. TA just wiped his brow, went away with all this noise and hum  and sat on his backside watching Netflix.

Sadly I know some ex colleagues who are well pissed off with the markets, I put my foot in it with one of them because I figured pretty much everyone with market exposure has come out well of the last year. Not necessarily. If you did something in the crossfire, it depends what, and how long you took to get back on the horse after you fell off if that happened.

I was balls-deep in equities before March last year. Some of that is because I have a DB pension, which is a very bond-like asset, and it is enough that if I scale the annual income by 16 to roughly get the capital value behind it,  I will never tip the balance to the classic 60/40% equity:bond ratio because I didn’t save up enough in my working life.

However, if it leads to intemperate behaviour, then maybe I need less of that. I now have a large slug of gold, and because the shorting happened outside the ISA I have a fair amount of cash. I have as much premium bonds as I can have, still the old NS&I ILSCs and some random savings accounts earning sod all.

Much of that is because I took some money off the table selling rubbish and moved it into gold, and my cash was lifted by short-selling some of the ISA which indirectly moves money out of the ISA. Since then the markets have lifted the ISA in the same way as for TA , turning it into a sort of double win. TA will probably leave me in the dust over the Roaring Twenties with buy and hold. The Big One is gonna come, and TA is a young fellow, he can probably ride the suckout and hold on for the uplift. Me, not so much. Roaring Twenties be damned, as the Germans say

Gott läßt sich keinen Baum in den Himmel wachsen

the Lord sees to it that the trees do not grow into the sky.

I am closer to the Permanent Portfolio than I was before last year. All in all it was interesting reading the purity of purpose in my seven-year younger self – investing is all about return, about getting ahead. It was then, for me.

I could be more aggressive with the security of the DB pension floor to my income, but I am still a relatively young retiree and the value in my ISA holdings is in defending me against longer term hazards like inflation, so I should perhaps be more respectful of its value to me, and take less risk. It’s instructive to look back nearly 10 years at my younger self when I wrote about the PP last

Nine years ago I was using an older version of excel and there was less balance

Back then, I was in the final straight to retire. Fixed interest is the rescaled annual amount of my DB pension at 60 after tax (because I don’t giveashit about what I don’t see, it isn’t useful value to me). It was over half my networth. It has more or less stayed the same in real terms, but I have forced that beggar back to 30% of my asset allocation. Which is OK for a deadbeat who is considered ‘economically inactive’ by Her Majesty’s government. Yes I have earned lousy amounts here and there, but never amounting to more than 10% of my erstwhile salary, and most years less. The magenta part of the Pac-Man swelled, not only to match the cyan pie, but also to fund my life over nine years, spaff more on a house and fund the other 33% in gold and cash. At current valuations, it’s not inconceivable that it falls to half, but the problem is in calling when 😉

It is easier to derisk after having taken a win from one last Covid crash hurrah than if it had all gone titsup. While I am less exposed to the markets now, all that cash exposes me to inflation and currency risk. An obvious move would be to take half of it and buy gold over a period. I would still have less than Harry in cash and gold, but the balance would be better. Harry Browne was a 1970s USA guy. I am also not in the USA, and 50 years have rolled by. The West is not cock of the rock and insulated from China and Russia, it was still in the ascendant in his time (the UK was further along the Imperial downslide than the US is now).

There’s some hazard in having gold as the only non-fiat currency store of value – surely there are others, but I can’t think of any that I trust. I did give a short consideration to Monevator’s ‘should you own bitcoin in your portfolio‘ and thought – intellectually the answer is probably yes, but bollocks to all that. I should probably own a BTL or two but, well, bollocks to all that as well. I’d rather do bitcoin than go there.

the Vanguard Borg

I should take a leaf from AlCam’s book and switch out of Charles Stanley to Vanguard’s ISA for my standby ISA account. I shouldn’t increase iWeb any more – they are attractive because there are zero fees if you don’t hold OEICs and you don’t trade, which suits my general activity pattern well. CS charges 0.35% as a platform fee, which begins to irk me as the account increases in size. Vanguard charges 0.15%. There’s nothing racy in there. I hold a L&G world exUK fund in there and a L&G FTSE250 ex ITs fund. I favoured L&G over Vanguard to diversify away from Vanguard – I have a lot of VWRL and had way too much VUKE. I can accept the risk of Vanguard going titsup now because the great lump of VUKE is gone. Vanguard offer a serviceable replacement for the L&G Dev World exUK fund and a FTSE250 fund albeit without the ex-investment trusts tilt.

Main and standby is good enough ISA protection for me. Finimus has the go-to post on why you can’t rely on platforms  client-money segregation rules. In engineering having 1+1 redundancy is usually the main win. You can do more to spread the risk, but complexity gets out of hand and you end up with a maintenance liability.

Your broker going down is a tail risk, very unlikely but the results could be devastating. From a gut feel Vanguard going down is less likely to me than CS going down. I will make sure in future that I don’t buy more Vanguard ETFs in iWeb, though I won’t liquidate VWRL. I am sure somebody else does an ETF like VWRL, though the substitute is not obvious on Monevator’s list. I don’t want a fund because iWeb charge platform fees on funds. Scratch that – having just checked to see if I can substantiate this, which was true when I opened my account, I can’t back it up from iWeb’s charges list. In which case the obvious course of action in iWeb is to go buy Ishares HSBC FTSE All-World Index C GB00BMJJJF91 and be done with it. Vanguard slightly frightens me – so many people believe in it and it is huge. The win for a bad actor taking it down is enormous.

Vanguard are a better and cheaper bet that Charles Stanley, with similar advantages of the flexible ISA offering and regular investing. So rather than putting cash into CS next month, I will open with Vanguard. I can defray part of the market risk by selling the L&G funds in CS and buying the equivalent ETFs in Vanguard on the same day. There’s a lot more than one year’s ISA contribution in CS but at least that takes out some of the risk. I can then do an ISA cash transfer at my leisure.

Covid makes spending and working very different

It’s reduced my spending overall. There was a flurry of spending at the beginning, to hedge some of the worst eventualities which didn’t come to pass. They also hedge Brexit to some extent, which is very clearly making the price of some things rise – oddly electronic gizmos from Amazon seem to have risen, and food is rising. We bought a lot of wine, but still have most of it in stock 😉  But overall outgoings are very clearly down.

Monevator has occasionally given me stick about a rabidly anti-work stance, basically the whole point of getting to FI was to get the monkey of The Man off my goddamned back. Work is overvalued in our society. It’s way overrated as a source of meaning in life, to be honest if you’re going to look for meaning from a belief in God or a meaning in work, I’d take the former any day. At least it gives you hope in adversity2. Whereas a belief in the meaning of the grind of the 9 to 5 is empty IMO – a form of terror management theory writ large. Even a Grand Fromage is typically forgotten about two weeks after they take the nameplate off the door.

The Protestant Work Ethic is a mashup of meaning and money. Niall Ferguson made a cogent case that it was what until recently made the West cock of the rock economically3. Not absolutely sure how you make sense of the more recent decline and the rise of the East, I am a little bit more with Oswald Spengler there, that there is a cyclical nature to empires. Let’s hope it’s not Jared Diamond and catabolic collapse eh? The problems Obama called out  eight years ago don’t seem to have got any better. MAGA doesn’t seem to have improved the State of the Union that much.

We once had a positive view of a world with less work

In the twisted wreckage after the Great Depression, Keynes dreamed of a better way – Economic Possibilities for our Grandchildren

I feel sure that with a little more experience we shall use the new-found bounty of nature quite differently from the way in which the rich use it today, and will map out for ourselves a plan of life quite otherwise than theirs. For many ages to come the old Adam will be so strong in us that everybody will need to do some work if he is to be contented. We shall do more things for ourselves than is usual with the rich today, only too glad to have small duties and tasks and routines. But beyond this, we shall endeavour to spread the bread thin on the butter-to make what work there is still to be done to be as widely shared as possible. Three-hour shifts or a fifteen-hour week may put off the problem for a great while. For three hours a day is quite enough to satisfy the old Adam in most of us!

The old boy did well in the what will happen. Compared to the 1930s his narrative of economic and material plenty has largely come true. But he achieved an epic fail in the why of work. It’s hard to know where we lost the plot, but if the peak human breeding age is about 30-35, then there’s no escaping that fact that those grandchildren have definitely come of age and entered the workforce, and they stick their head up above the parapet and go WTF? Where are my fifteen hour weeks, then?

One can argue that for a narrow section of the workforce, that has arrived, paradoxically amplified by the coronavirus pandemic. There be many workers who change the state of information. They don’t turn metal on a lathe or unload ships or build stuff. If what you do falls into that category, then working from home wins. I would say that if you’re doing that for an employer and you find it successful, then watch your back. If you can do it at home, then it’s susceptible to geographic arbitrage, and it can probably be done in a country with a much cheaper cost of living, to your detriment. Be careful what you wish for, and all that. I expect to see a big hollowing out of lower-end white collar jobs in the years to come. Pandemics accelerate change, because they squeeze the focus onto the essential to the detriment of the cosmetic. We didn’t hear so much about the Kardashians last year 😉 McKinsey say this is also acting on businesses, again amplifying the difference between the best and the rest.

Keynes was right about work in one way IMO

I gave thirty years and arguably the best years of my life to the god of Work. Unlike many others, I didn’t have a great attachment to it.

I never had a problem with keeping myself occupied since giving it up, but one thing I have missed in the pandemic is creative activity with others. I would do this in the area associated with recreation before, but in one of the clubs we decided to cease operations until a secure way  of meeting is possible and it’s not, at the moment.

I am an introvert, I see in others quite serious distress at relative isolation, because the community of people I know are generally fortunate enough to be able to work remotely. Which may have its ups, but it seems to also have its downs. True home/remote workers probably compensated for the remoteness in the leisure or other non-work areas of life, like I did, though as a retiree you have more time to do that.

I recently physically built an instance of the design I made to qualify it worked, with somebody else. Physically assembling it was basically technician work for both of us, but there was an element of  the case for working with your hands in it. We didn’t even really have the right tools4, so needed to improvise with a bench vice and a bunch of cardboard boxes, but there was something satisfying in assembling this component, making the connectors, and sparking it up and having all components report back as present and correct. I had been spending too much time in the virtual world spinning the parts on a screen to make them fit and optimise things at home, and it was good to do something real with real stuff and real people for a change. It was a good win for half a day.

There’s probably more of this work than I want to spend time on it, so I needed to think and prioritise, chase the higher value-add. Keynes was right. One day a week to one and a half is about right – although the pattern is different. Some of this work is CAD, and I am on the maker side of the maker/manager divide.5 It doesn’t fall neatly into days, or even half days, Sometimes I have to have at it, then take a walk. Strange things happen in the downtime, and things which were intractable before become obvious after.

You’d get sacked in a heartbeat doing that in a company. Where the hell is that Ermine? What do we pay him for if he’s not there? However, as a maker, the productivity of the time in such an unscheduled way goes way up.

On the other hand, working one day a week doesn’t earn enough to build a life – I’d be in the precariat renting a single room if I had 30 years of that behind me. I can do that now because I don’t need the money, other than to feel valued and to buy commitment 6. I can work Keynes’ pattern, but in an economy designed for a 24/7 requirement. Because: FI. There’s no other way for most people.

I am also doing a recreational creative project with somebody else. This is an entirely virtual operation. It was a chance to get my head round how to use Git, bitbucket and Cloudcannon to redevelop a website while making the technology usable to somebody who has had no background in software engineering. There will never be a revenue stream from this, but it is developing something bouncing ideas off other people, and that is something valuable, even to somebody identified as a lone wolf on leaving primary school. I am introvert, but not an island.

I am also privileged I can avail myself of these incidental upsides precisely because I don’t need to make them pay my costs of living. In What’s Wrong with the Way we Work. the New Yorker indicates that the cult of finding meaning at work started in the 1970s

“management must develop a better understanding of the more elusive, less tangible factors that add up to ‘job satisfaction.’ ”

Hmm, respect, enough pay to live well on, and not too much time lost to it seems a good place to start, eh? How did we let twats like Steve Jobs tell us rubbish like this

You’re not going to believe Usain Bolt telling you it’s easy to win the 100m Olympics, so why believe the DWYL-LWYD lie from Steve Jobs? No doubt it worked for him, but you shouldn’t infer the general from the particular. Not without at least some statistical analysis.

Work can offer you some of that peripheral claptrap, but only after it gets to pay your rent and put food on your and your family’s plate. The trends weren’t heading in the right direction before the pandemic, never mind after it.

Keynes was cheerful sort. Current visionaries, not so much.

Work is the fundamental problem. We have designed systems where you need to work to satisfy Maslow’s hierarchy of needs

In theory we have a welfare state that addresses the bottom of the pyramid, but you have to ask yourself why if you go around the streets of London or Oxford or many other towns and cites you see people who have clearly fallen between the cracks. There’s no law saying this has to be so – Asimov’s Solarians and Keynes’s grandchildren were imagined in worlds where you didn’t have to work to meet these bottom needs. But it was why the twenty-something Ermine signed up for working five days a week – to be able to get out from under my parents’ roof and get food on my plate. I could have occupied myself better elsewhere, there’s plenty enough to interest a curious mustelid. However, not being able to make the rent concentrates the mind.

Steve Jobs was telling us all to get into the green and blue bits up top, all the other stuff will take care of itself.But he had the self-same blind spot that many people who don’t have to fuss with the lower parts of the pyramid have. He spent his time up in the world of ideas, and that’s where a lot of the successful folk in our economy end up. The people who have the money are focused on the top end, and just like Al Capone, if you want some, then go where the money is. Hence all the poncey services to help the ultra-rich feel great about themselves, with their yachts and stuff. But that goes a long way down the line. Why is Facebook minting it? Ask yourself – does any human being really need Facebook’s services, in the way you need water, or shelter? I don’t use Facebook in any big way, indeed I don’t use social media in a big way  – it was fun to learn about but after a while I came to the conclusion life was better without that stuff 😉

I’ve survived so far, in a way that I wouldn’t without water, or trying to use a cardboard box as shelter rather than a house. Facebook addresses the upper two tiers of the pyramid. Go where the money is. If you want to make money, compete at the top, and if your business has the capacity and smarts, then you see this as being all there is. That fellow made a cogent case for it, though he lost the plot at the end

Consumers in the Purpose Economy have too many options in every marketplace and want you to give them a reason to buy your product. Simply, they want you to help them find meaning in their lives. We are entering a world where meaning is the most valuable currency. What a time to be alive.

Same category error as Steve Jobs, mate. Meaning isn’t the most valuable currency for everyone. If you see people sleeping in boxes and cars, they couldn’t giveashit about meaning, because they’re down at the red end of Maslow’s pyramid.

In this article by Bloomberg about trends, two out of the three trends are putting more people down at the red end. Talented folk ask why does Joe Public love sweatshops?

I used to fulminate at the radio in the 1970s that that sonoabitch Arthur Scargill was governing the country, with his damn flying pickets stopping other people working and turning my lights off. Which he did, and I am still of the opinion that that sort of thing needed to be crushed. I have absolutely no problem with people withdrawing their labour, but getting in the face of other people working in industries that used the product (power generation) and threatening them with GBH to stop working isn’t  good. Nor is dropping concrete blocks on taxi drivers when you’re trying to reduce strikebreaking. And yes, for the record, the violence wasn’t only on the miners’ side, though it did seem like they had the lion’s share.

It always puzzled the young Ermine why there was such resistance to closing pits when the selfsame Scargill went on the radio to talk about how bloody dangerous the job was. He was right. Britain industrialised earliest and this was powered by coal, but it’s hard to disagree that the history of mining disasters in the UK is horrific. Wikipedia has 60 UK coal mining disasters listed. Coal mining fits the sweatshop moniker to a T.

All these white collar folks go tsk tsk, work is the route out of poverty, education, training, yada, yada. Really? You and I with our soft uncallused hand can say it’s easy, but it isn’t, and the rising water’s coming for us now anyway. There’s an argument my job went bad because of globalisation, though a humdinger of a financial crash didn’t help any.  What do the good folk at Bloomberg have to say?

The unskilled worker is the next pandemic.

Let me just step back. First of all, I think that it’s pretty clear if you have high degrees of unemployment, there are basic economic impacts that are not good for the nation. It puts an incredible strain on the economy. It usually only gets addressed through higher taxes on a smaller and smaller tax base. It increases the gaps between the haves and have-nots, which historically has caused more social unrest if it goes on for a period of time. We saw high levels of unemployment like in the Depression create hopelessness and despair in individuals, in families, and their communities.

I think [unemployment] happens as quickly as automation displaces people from work without concurrently retraining them and retooling them for other types of work.

Ah, that old error again. concurrently retraining them and retooling them for other types of work. That’s OK if the other work is at a similar level and hopefully needs at least some of the same skills. I’m sure there are some ex-miners that went into high finance, but if you drive through the Welsh valleys 35 years after Thatcher won that fight and Scargill lost, there are still pockets where regeneration didn’t happen. Hope went to die and got buried.

When I was a child playing on the bombsites and slum clearances where they eventually built Goldsmith’s College halls of residence I had to watch out, there were builders all over the place who would give kids hell. 40 years on and at the end of my working life and the canteen at the Athlete’s village of 3000 flats  of the London Olympics only needed a maximum capacity of 200 for a much larger build. The market for unskilled7 work has been falling for decades.

Less risk. More spending

is what I want to do with my post-covid world, if and when I get there. I can’t really do much about the more spending at the moment, but I can change the risk. Changing a mindset isn’t easy, however, but if and when the next crash comes along, I need to think to self

What would Warren do?

and this last time, to be honest, Warren sat in an empty exhibition hall looking scared, telling us all that in the long run it’ll come good, while thinking to himself ‘but I don’t have a long run!’

Warren’s the blue team, he’s had a slightly tough pandemic relative to the S&P500

I’m not writing the old boy off yet. WB is better at this game than I. But I don’t want to try play the next curveball.

I’ve had a lot of luck in the stock market. Singlehandedly it stamped on the absolutely dreadful luck I had in the housing market, and then some. Whenever I listen to people talk about property is my pension or even smart folks over the Pond talking thusly

Real estate is actually my favorite asset class to build wealth because it is easy to understand, is tangible, provides utility, and has a solid income stream.

and an Ermine thinks to himself WTAF? Property was the greatest source of hurt in my entire personal finance life, and it grabbed me by the nuts at an early age and wouldn’t bloody well let go until 20 years later. I’d rather gnaw a leg off than rely on that. I don’t consider property as an asset at all. When we moved down here we went for a detached house, because I don’t want to hear the neighbours’ grandchildren squealing or Coronation Street on t’telly as they get mutton jeff. Mrs Ermine wanted more garden. I want to hear my own stuff, and if Mrs Ermine is away, then I want to play music at 1am without feeling bad about its impact on other people’s beauty sleep. So I spent more, but I considered the extra as frivolous lifestyle inflation, not an investment in property.

Whereas everybody else leans in, rubs their hands together and thinks ‘money tree’ when they spend money on bricks and mortar.

But I should also listen to the whispers in the wind. I have heard a few times now from people of a certain age that they got slaughtered in the stock market last year and are very pissed off. The advantage the younger Ermine had against being hammered by property was youth, in particular the ability to keep working. These greybeards don’t have that advantage.

There’s a lesson in here. Safety first for a grizzled pelage, though where you get safety in the current financial arena frothed up by money created out of nothing is a difficult question. It is why I have shifted it in the direction of gold, and RICA, RCP and VWRL, and I may sell out of some of the individual shares from the old HYP. It looks more like a greybeard’s asset allocation – and indeed the eponymous writer on Monevator took a lot of shit from young pups who said “investment trusts – pah – just buy a single world tracker and be done with it”.

They don’t know his hopes and fears, which is right, you shouldn’t put an old head on young shoulders. Conversely, you should take the young head off the old shoulders when you are grizzled of fur the return of capital matters more than the return on capital. Most people end up dialling down risk when the markets are in a hole and they have just lost their shirts. Spinning the dial towards risk-off when the markets are up in the sky is not a terrible time to do it…unless you need the return, of course.

TA will probably lean back in his chair bingewatching Netflix and double his money in the next year as the coiled spring doctrine of the UK economy does its stuff. I probably won’t be swinging for that ball, other than what’s already in equities. That’s OK. I don’t need it.

Now if Monevator posts another dark transmission like this one, from deep in the trenches of The Big One, then I don’t know. An old sailor still hears the call of the sea. Perhaps I should dabble in my residual SIPP with a few grand, after all, there are big wins to be had in the teeth of a storm, and it’s ringfenced from my main investments.


  1. financial assets ignoring property, though that has been inflated a bit too. I don’t care what Monevator says, property is not an financial asset in my world, though I can see the argument for an income stream as it stops you paying rent. Do I contradict myself? Very well, then I contradict myself, (I am large, I contain multitudes) 
  2. I’m not taking a position here ;) 
  3. there’s a school of thought that accumulated assets from Imperial plundering may also have had something to do with being king of the castle, though our Niall would probably say the the PWE made all this imperialism a lot more effective and directed. 
  4. fitting 250 screws by hand without a power screwdriver or even a Yankee screwdriver, or even damn it – a ratchet one gets old very quickly… 
  5. Farnam Street has a more accessible translation of that article for people who aren’t makers, particularly those who are managers and unaware of the divide. 
  6. Succinctly summarised by Monevator as “including, I say again, the feeling that getting some cash for doing something generates in a capitalist society, like it or not.” I may have outrun the getting meaning from work in a spiritual sense side of things, but the fellow has some point. I am just not going to work minimum wage, because I am a peacock like that. I pitched for a pay rise, not because I need the money or can spend it, but to feel valued enough to put in the time. How absolutely barking mad is that? Walt Whitman again. 
  7. By no means all building work is unskilled, but particularly historically, a lot of it was more brawn than brains. I didn’t see any hod carriers on the Olympics site, but it seems the job still exists. They were the guys my primary school self had to watch for, because they were often up on the scaffolding with the time to look for miscreants on the way back.