Welcome to the Weird

It’s the dog days of summer, the lazy time but late enough that you can smell the change in the seasons, the rich scents of decaying plant matter signalling impending Autumn. The robin seems to have moulted and is now a bright orangey-red and singing again.

There’s a fractious feeling about. The Ermine thinks back to my mid-teens. We didn’t have a TV in 1975, but you could see the iconic photograph of the last Huey out of Saigon in all the papers. Harold Wilson, bless his cotton socks, had kept Britain out of that misbegotten enterprise.

Saigon 1975 and Kabul 2021
Saigon 1975 and Kabul 2021

I’m kind of with Al Jazeera in this particular instance – Blinken may say that this is not Saigon, but if it walks like a duck and quacks like a duck… Looks like Pilger had a point that the wide boys who promoted the Project for a New American Century got something wrong. Rummy didn’t do badly on the limits of epistemology

there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns—the ones we don’t know we don’t know. And if one looks throughout the history of our country and other free countries, it is the latter category that tends to be the difficult ones.

but knowing something is the case and acting coherently on that knowledge are different things. “You have the clocks, but we have the time…”

Apparently it was all about whupping OBL’s ass, not all the other stirring sound and fury. It’s a shit situation and there are no good answers, other that perhaps the inference that winning hearts and minds through military means in far-flung places with very different approaches to living is a really tough ask, and probably beyond the capabilities of the Imperium at this stage of its decline.

The Big Short

Markets are weird, too. Valuations are up in ths sky. There’s much froth and excitement about fintech and apps bringing the little guys in to the markets. When was the last time we saw that show – ah yes, the heady dotcom days. Michael Burry, he of the Big Short’s observation

Greatest Speculative Bubble of All Time in All Things. By two orders of magnitude. #FlyingPigs360.

seems apposite.

I took a look at the FCA’s Strengthening our financial promotion rules consultation H/T Monevator and thought to myself I am the drunk offering directions here:

“If you want to get there, you don’t want to start from here, mate”

I cast a cynical eye at the attempts by the FCA to save our blessed citizens from the blandishments of bitcoins and the cons of cryptocurrencies and think to myself this is like Centralia, guys. The fire’s burning deep underground and it’s been going for some time. Let’s deconstruct the vexed problem of fixing people who think a 30% annual ROI is only just about remarkable.

Once upon a time, we knew that you don’t get ‘owt for n’owt

The consultation opens batting

Consumers need to be able to understand and assess:

• the features of the investment
• the costs they are likely to incur
• the risks they might take and the benefits they could derive from the investment
• whether the investment will meet their needs

So what’s the problem? Let’s take a look at point three. Consumer research by the FCA warms you up, in a couple of points down, paragraph 1.15

consumers often can’t tell the difference between these different types of investments and tend to focus more on the promised returns. For example, FCA research found that consumers only start to recognise that a financial promotion for an investment product is probably ‘too good to be true’ when the promised rate of return is around 30% or more.

If people think anything up to a 30% p.a. return is commonplace then they are sadly deluded. The broad stock market pays about 4% p.a., though not at current valuations. And to get that piddling return you have to take a rollercoaster ride on the instantaneous value of your capital. And this is one of the better games in town.

Let’s take a look at one of our crypto investors, Anonymous Coward Noor, who has lost £14k on bitcoin. On the face of it, £14k is not a huge amount of money to lose – a young working Ermine with a mortgage managed to lose much more than that in one year on that Great British Investment where you Can’t Go Wrong, otherwise known as buying a house. I managed to lose about that much in today’s money in the dot-com boom-bust. I recognise all these things from back in the day

There’s never been so much amateur money sloshing around stock markets, nor such interest in arcane and impenetrable financial jargon. If it feels as if everyone is talking about their stock options and crypto wallets, it’s because they are. And at the vanguard of this new, online-centred investment community are young people, women and minority groups.

Speculating, flipping and gambling

These are flippers. Any time you are flipping an asset, you gotta ask yourself where is the money you hope to make coming from? It’s all very well to say buy low, sell high, but it’s a tough thing to do repeatedly, and if you look at the market in the round it is a zero-sum game, particularly with non-productive assets like bitcoin and gold. Forex is another example on a non-productive asset that you can flip the bejesus out of. Your gain is coming from someone just like you. A moment’s reflection will show that not everybody is going to buy low and sell high by flipping. If you are in a South Sea Bubble situation where the underlying asset is trending upwards then listen to the chartists’ mantra that the trend is your friend and ride it, just watch your back. If the trend is strong enough, you can secure your position by half-splitting when the price has doubled. But people don’t do that, because they look at the gains and they know that this time it’s all different.

The challenge here is picking something that will double in price in a useful period. For the average equity appreciation of 4% p.a that’s 18 years, which explains why it’s hard to get people interested in this as a make money fast scheme. You’ve only got three periods that long in your lifetime before you cark it, assuming you don’t start investing as you draw your first breath. You can see why people are drawn to the Dark Side of speculation…

Sell the sizzle

It’s perfectly possible to make a reliable income day trading. Sell the sizzle, not the steak – courses and books showing people how to day trade and give them some system to believe in. Stand up in front of them and tell them they will get rich. Everybody wants to hear that, all it needs is a good story and they’ll bite your arm off in a rush to pay.

Speculation is a great way to make money fast. It’s a terrific way to lose money fast. The problem is that the opportunities for success in speculation are narrow windows of time, and you have to recognise the opportunity, get in early enough and get out soon enough. It’s also stressful as hell and expensive to run. That’s about it for the good news. The bad news? The best way to make a small fortune is to start with a big one.

Everybody is interested in the money they are making. I found it much more valuable to focus on the money I was losing. And to avoid flipping. For me, the temptation to flip an asset is a bad sign that the opportunities are ending. I was shorting stocks last year. Shorting has a damned expensive cost of carry for civilians. I was slightly anomalous in that I started shorting what I had in the ISA, though I did move to uncovered shorts for a while.

So I’m not panning these young folk for speculation. Speculation has its time and place, but that time and place is very, very localised. Personally, I have never gained speculating on the upside, it all happens too slowly, so the cost of carry kills you – I’ve never tried after the dot-com bust. But I did eventually get ahead on the downside on a few occasions, and sometimes I have used it to manage an excessive risk exposure – for instance my Sharesave in The Firm plus the five-year embargoed Employee Share Incentive shares which ended exposing me highly to The Firm’s share price.

Compared to speculating on the upside, I have done well investing on the upside. You buy, and sit on your ass. Compared to most FIRE folk my investing career has been very short – about 12 years. But the trick to getting ahead there is to start at peak earning capacity and hit it hard starting with a bear market. That was a matter of luck, good to actually start then, and because the crash was what ruined my job. There is some judgement in starting at all when everybody is screaming run like hell. Other than Monevator, bless him.

Smartphones are the new cigarettes

There are a thousand beautiful ways to start the day that don’t begin with looking at a phone. And yet so few of us choose to do so.


The problem these young ‘uns have is firstly that they are young. So they know everything and are sure of themselves, and they were under-age when this movie was shown before (2009, 2000, 1986, 1982…).

The next vector of Epic Fail is that they are doing this all on their smartphones, on platforms incentivised to make them trade and churn their portfolios, the ping and ding and light up in flashy symbols Do Something Now. Now Now Now. It’s like having the lights of a Vegas casino in your pocket, following you around like a lost dog and whining piteously ‘feed me attention, please’. You need a boring trading platform, one that lets you think out what it means, in your own time. The trouble is, platforms make money when you trade, so there’s a perverse incentive.

Speculating is exciting and fun while it’s going with you, but kills you quickly when your view of the world is at variance with the world’s view of the world, and it’s far too easy to get hung up on the sentiment but but but, I’m right, dammit. You may well be right in the big picture, but it’s not a fair fight. Once you’ve placed your bet and been shown wrong, let it go, don’t fight the tape. I was wrong about BRWM, I shouldn’t have sold it when I did, I ended up rebuying it for more than I sold it for. You can lose some. It is your aggregate position that matters. The change in my networth shows the exercise was worth doing.

But all the time I was frightened of getting flattened by the market roaring back. I didn’t believe it was going to happen, never mind so soon or so fast. But you have to post sentries at the watchtowers. I spent most of my energy watching for the dragons rather than focusing on the gains. Speculators should do that. Be very afraid. You are doing something hazardous. Concentrate on not losing money in the aggregate.

There are many ways of speculating. You have to gain enough experience to find what works for you and your temperament/skillset, or discover you have no talent and then ideally quit the game. Some become full-time chartists and day traders. I tried that in the 2000s, but I came to the conclusion that it was either hocus pocus or I had no aptitude for it, and the logical course of action was to leave all the heads and shoulders, Fibonacci wotsits and triple crosses to people that were madder, more deluded or had magickal skillz that I just didn’t have.

I don’t know much about the characteristics of bitcoin or what meme stocks these young ‘uns  are speculating on with Robinhood. As a short speculator I evaluated my position once a day when the markets were open. Sounds like even on the long side these guys are getting pinged and dinged to death on their platforms, and they are habituated like Pavlov’s dogs that when your smartphone dings you Must Do Something. That is not conducive to good decision-making.

Finfluencers are a thing

Oy vey. Nothing screams the end of the bull market is nigh more than amateurs yelling you can’t go wrong in the markets. You can always go wrong in the markets. And it seems our favourite non-chemical drug du jour, that damn smartphone combined with the peer pressure of social media has given rise to the finfluencer, where the young and beautiful tell the young and not so beautiful they they can be rich, young and beautiful if they buy this or buy that.

Take a look at the slightly back-of-house advertising take on finfluencers if you want to disabuse yourself of believing in the product… It’s just as well that I am not a Kiwi, because the NZ regulator would consider a grizzled Ermine as a finfluencer. I am not young and beautiful, guys, other than in snow-white mythical Ermine form.

Young and beautiful, but only in mythical mustelid magnificence, Kiwi finance regulator

Paypal to the rescue

How can we make this dire situation better? Looks like you fellow Brits champing at the bit for bitcoin can be grateful because you will soon be able to buy Bitcoin on your Paypal app, and Paypal can lend you the money too. The good news part of this story is that Paypal may be sociopathic but it is competent, and has a decent track record in handling money without losing too much of it over the side in heavy seas.

The bad part of the news is we are probably at about 1999 in the dotcom boom. The FCA has a consumer survey on BTC that reads pretty much how we all felt about tech stocks then.  It’ll go up like gangbusters, until it doesn’t. This time there’s the added boost of social media. They really ought to rename it antisocial media, because there are so few things about the human condition that are improved by giving gossip a megaphone while automatically sectioning the gossipers off into their own little echo chambers, but whatevs.

This isn’t going to end well for the little guys, though Paypal will make bank. You can already see the issue if you want to buy something priced in dollars using Paypal. I wanted a 12V fused distribution panel priced in dollars that came in about £34 via Paypal, but paying through Paypal in native dollars using my Starling card got it below thirty sods with Starling doing the currency conversion. Starling are good with foreign currency conversion, using Mastercard’s forex rates and not loading the transaction otherwise. Before this experience I had thought Paypal was OK though not fantastic, but I will get Starling to do this job from now on

We can see why Paypal wants to do this if they are making that much on the turn Winking smile They’re selling shovels in a gold rush. The FCA survey tells us that 14% of our BTC buyers did it with borrowed money. Kerching

they go mad in herds, while they only recover their senses slowly, and one by one.

Listening to your own herd is what social media is designed to do.   Charles Mackay observed the problem in 1841 1

In reading the history of nations, we find that, like individuals, they have their whims and their peculiarities; their seasons of excitement and recklessness, when they care not what they do. We find that whole communities suddenly fix their minds upon one object, and go mad in its pursuit; that millions of people become simultaneously impressed with one delusion, and run after it, till their attention is caught by some new folly more captivating than the first. […]

Money, again, has often been a cause of the delusion of multitudes. Sober nations have all at once become desperate gamblers, and risked almost their existence upon the turn of a piece of paper. To trace the history of the most prominent of these delusions is the object of the present pages. Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one.

Social media foments that sort of delusion, because of the echo chambers. If you are going to speculate, focus on anything that is telling you the end is nigh, rather than your fellow acolytes telling you it’s all different this time and this time next year, we’ll be millionaires. Your smartphone and its platforms aren’t paid to give you contrary opinions. Beware the herd – if you must speculate, speculate alone, and on your own terms and in a crowd of one. Even then, Dunning-Kruger is not on your side, be open to the possibility that you are wrong. If the clever dude Socrates came to the conclusion that he knew that he knew nothing then you owe it to yourself to at least ask what exactly is so special about you. Young people hate that sort of ambiguity, bless ‘em. They aren’t alone in the prejudice.

So how did we get here, FCA?

Part of the problem is the rapacious nature of capitalism and that fact that the West has no real idea of what its values are, other than kissing the ass of the Great God Money2.

In this way we have lost sight of the fact that success in 21st century Britain is quite peculiar. We have engineered a system where many can’t afford a roof over their heads on decent terms, they work in increasingly  precarious situations in firms that tell them We are a Team not  Family and we set half our young ‘uns off on their travels to make their fortunes by first telling them they are 30k in debt and rising thank you very much. With that sort of  start in life it’s not surprising that they feel they could use a stroke of luck to get ahead of all this. And are a bit cynical about what the fuddy-duddies that are supposed to be their elders and betters have to say about the world in general and money in particular. They have some point that it’s all different this time, the problem is that it’s not all different in that way.

The other problem is that when everybody is talking about finance and how great it is, and how [insert asset class here] can only go up, that is one of the very few reliable indicators about the future of that asset class, and the direction is not Buy More of it. Let’s hear it from the FCA’s Rathi

There is evidence too that, as with the GameStop episode, more people see investment as entertainment – behaving less rationally and more emotionally, egged on by anonymous and unaccountable social media influencers.

Hmm. Where do you start to try and fix this? Not starting from here would be good – let’s go back to 2005-7, and smash the plans for Apple’s iPhone, roll back the US common carrier protections for platforms so that the lawyers would have wrestled Zuckerberg to the ground when he mooted Facebook, that megaphone of concentrated lies sprinkled with cat videos.

Let’s hear it from MacKay again, citing Pope re the South Sea Bubble

At length corruption, like a general flood,
Did deluge all; and avarice creeping on,
Spread, like a low-born mist, and hid the sun.
Statesmen and patriots plied alike the stocks,
Peeress and butler shared alike the box;
And judges jobbed, and bishops bit the town,
And mighty dukes packed cards for half-a-crown: Britain was sunk in lucre’s sordid charms.—Pope.

The FCA is absolutely right to be worried about this, but in practice there is very little they can do. There are no effective capital controls on t’internet, so there is nothing stopping Facebook running ads for some crew in an unregulated tax haven, say the British Virgin Islands for example, promoting the bejesus out of their BTC proxy investments. Facebook will claim they are only common carrier and your BVI fly-by-nights presumably take Paypal, bitcoin and Western Union3. In theory the British in British Virgin Islands mean we could do something about that specific nest of vipers, but quite frankly we prefer not to, because it’s useful to some rather influential folk to hide their wedge from the taxman.

Bitcoin is the modern Tulip-bulbs

BTC’s volatility against the value of Stuff is one of its greatest practical liabilities. Zero-hedgers will say that there’s no inherent value to fiat currencies or gold, and this is true, not having any inherent value is not necessarily a problem for  a medium of exchange, but day-to-day volatility is bad. In the morning you have BTC enough for a loaf of bread, then Elon Musk opens his piehole and by nightfall you have enough for a crusty roll at best.

BTC is worth what somebody is willing to pay for it. You can make the investment case for something like that – after all it’s not hugely different from buying shares in FBK or GOOG, although at least in those cases you can see a balance sheet and an income stream. Monevator makes a cogent case that you should own bitcoin in your portfolio. I have done well slipstreaming Monevator’s ideas, but this particular one I will leave alone. I’m not saying I know better, and Monevator has a better idea of when to get in and get out than I do, but

Greatest Speculative Bubble of All Time in All Things. By two orders of magnitude. #FlyingPigs360.

If the answer is BTC, the question is wrong IMO. A man is rich in proportion to the number of things he can afford to let alone. I can leave it be.

Ermine to FCA. You are stuffed, leave them kids alone

In the end I didn’t bother to opine in the FCA’s survey. The great advantage da yoof, such as the Guardian’s AC Noor, have over everybody else is that they are young, and don’t have capital assets. As long as they don’t borrow the money from guys with thick necks and henchmen with baseball bats, then going bankrupt is the way many will deal with it all going titsup.

The FCA is now going to spend a shitload of money to try and educate maddened crowds not to buy BTC on their smartphones with borrowed money. You can’t stop a young ‘un hell bent on pissing his cash away on the latest thing. Way back in 1989 that was a young Ermine and the asset class housing. Wise heads in the office did suggest that Lawson’s termination of double MIRAS might be inflating a heady market, but I had already left the city I grew up in (London) running ahead to rampant housing inflation and I wanted to get on the runaway train before I couldn’t. Bad move.

If at first you don’t succeed, try again, so I repeated the exercise then years later in the dotcom boom that turned into a bust. There are some things you have to learn the hard way, and the madness of crowds you have to learn from the inside. Even then the learning is of a meagre and fleeting kind, you are after all a social animal, and somewhere in your ancestry there are probably a fair few that did well from the principle if all the others are running like hell in one direction, run like hell in that direction away from the tiger. It takes determined vigilance to retrain the learning. Every investor is a contrarian until a bear market sinks their wealth.

It was intriguing to observe what the FCA won’t count as your networth to qualify as a sophisticated investor. The FCA’s CEO already observes that the bar is much lower in the UK than other developed markets

We have a very liberal regime in the UK when it comes to defining an investor as ‘sophisticated’. The threshold to self-certify as a high-net-worth individual here is £250,000 net assets, or £100,000 annual income – and a few clicks of a mouse. In other comparable markets, such as Australia, Canada or New Zealand, it can be as high as £2.5m, with a much more rigorous process for certification.

I would agree with him. A HNWI bar of £250k is too low IMO. It appears that Mr FCA is also of the view that Monevator is wrong. Your house is not part of your networth, and neither are your SIPP/pension savings. That’s what the FCA sez

  • Net assets for these purposes do not include:
  1. (a)the property which is my primary residence or any money raised through a loan secured on that property; or
  2. (b)any rights of mine under a qualifying contract of insurance; or
  3. (c)any benefits (in the form of pensions or otherwise) which are payable on the termination of my service or on my death or retirement and to which I am (or my dependants are), or may be, entitled; or
  4. (d)any withdrawals from my pension savings (except where the withdrawals are used directly for income in retirement).

Right. That’ll learn ya. Do not count your house as part of your networth.

Welcome to the weird

The developed world has so far managed to keep the wheels running and the lights on through the pandemic. But for all that, it still smells like there is trouble in Paradise. I’ve gone for BTC in this post because it’s an easy target, but like he of The Big Short I don’t think that BTC is the only overvalued asset out there, valuations generally are high, which is either a sign of irrational exuberance or a sign that some other financial pathology stalks the market.

I could use a paw from this handsome fellow
I could use a paw from this handsome fellow

I still need a jolly good stockmarket crash, although I can’t really moan about the 2020 one which did me a bit of good. I am much more defensively positioned now than I was at the entry into that crash. I don’t need to sock it out of the park now, but I don’t really understand how to get a decent return on current market valuations, other than sit on the equity holdings I already have. One way or another, I have ended up with more cash than I am comfortable holding, and there’s only so much gold I want to be holding.

VWRL valuations give the lie to Michael Burry’s #FlyingPigs360

I find it hard to extend a claw and press the buy command on VWRL. Researching this post I am cheered to discover that the PE ratio for VWRL is 16 which though high I don’t find distressing compared to the SPX which is bonkers at 35, twice its median. I find this counter-intuitive – 60% of VWRL is the US market, and since VWRL is market-cap weighted and the SPX is the 500 largest firms of that market I would have thought even if the rest of the world had a more reasonable PE of, say, 12 the 60% US weighting would drag VWRL up to more than 20.

There’ll be opportunities when the next bear market shakes this down, hopefully in months not years, but until then, welcome to the weird world of finfluencers, meme stocks, BTC and stratospheric valuations in US markets.

  1. Charles McKay’s book is a terrific read, and it’s available for free on Project Gutenberg, including in Kindle format with illustrations, lumbering in at 33Mb. 
  2. yes, I do get the irony ;-) 
  3. The rule of thumb if it takes Western Union or bitcoin it’s a scam isn’t a bad one to run with. It’s a particular case of the more general principle that bearer instruments are attractive to criminal elements because of their anonymity and lack of a centralised register, which are specific qualities of BTC, though physical cash and gold are very close. 

26 thoughts on “Welcome to the Weird”

  1. Super post.
    Totally recognise the “I find it hard to extend a claw and press the buy command on VWRL.”
    I reckon that whilst you bide your time your cash pile may well grow further – apparently, on average, UK pensioners spend less than their income and, the gap grows as they age.
    Welcome, welcome the show must go on!

    Liked by 1 person

    1. > UK pensioners spend less than their income

      Particularly at the moment. There’s only so much lobster a fellow can eat. I’ve also saved some cash against some future works to do on the house and vaguely toying with getting a wood burner again, although I note the hue and cry about PM2.5, so it’s worth throwing some money at getting something sealed intake, although I think that is mandatory now. But if I end up in future with a heat pump which has a piss-poor maximum output capacity then I could be grateful for it…

      Now is not the time to do elective work on the house, until Britain’s materials and building industry works out its supply chain and skills. The one thing that was urgent was fixing the drains, that we did ourselves, after applying a plumbing pump to the kitchen outfall and lifting a patio slab, to find the previous owners had buried the gully under said paving slab, presumably because they thought drains don’t look pretty. They’re not meant to look pretty, FFS, but it’s easier to rod them when you can get at the gully. Berks.

      The trouble with cash is the foul anti-money laundering regs in the UK that means yomping it across accounts to lose less of it is hard. I was looking at HL’s active savings, but stopped when they told me that meant they would make a SMS code mandatory on logging in even to look at my SIPP. So I am looking at Raisin, which seems to be the same sort of thing but from Starling bank, where I don’t have to open a bazillion accounts with banks ever six months. Still depressing when they try and big up promoting things like that as if it were like saving was in the past. My aim here is to lose slightly less value as time goes by, which doesn’t justify all the promotional ballyhoo – you can’t even achieve half the value of inflation.


      1. After NS&I ILSC’s (no new ones have been available for years now and even with RPI swapped to CPI – they are still IMO the best) I have always liked and used fixed rate bonds. But, like everything else cash-like, they are not as good as they used to be. I still have some that pay upwards of 2% for a few more years. Some folks like premium bonds. Middle men will always take their cut first – so please keep us posted on how it goes with Raisin.

        Drains and people – what can I say!

        PS I reckon the DWZ game might be rather tricky!

        Liked by 1 person

      2. I still have the ILSCs a fearful but prudent mustelid salted away at work for an emergency fund. So far the emergency never came. And I have as much Premium Bonds as I am permitted. All part of the old policy of holding three year running costs to be able to ride out a bear market, though now with a pension perhaps I should revisit that. Having realised VWRL is not as frothy as SPX I might be able to make myself put something into VWRL in a couple of months.

        Interesting that ERN derived the value of OMY to about 4%, which isn’t hugely off the actuarial reduction on my DB scheme. I had always assumed that was from the simplistic calculation that they expected people to die after 20 years from a age 60 NRA, but it was interesting that ERN gets a similar answer via a totally different method.


      3. The P/E for this Vanguard ETF that “… seeks to track the performance of the Standard and Poor’s 500 Index (the “Index”)” is also “not as frothy”, see: https://www.vanguardinvestor.co.uk/investments/vanguard-s-and-p-500-ucits-etf-usd-distributing/portfolio-data
        I’m not sure what is going on hereabouts – it might be to do with averaging vs an instantaneous S&P P/E readout. Perhaps somebody can enlighten us a bit further?

        IMO, ERN’s post’s remain amongst the very best albeit that the so-called SWR is unknown and unknowable in advance.


  2. What’s a man to do though?
    Here I sit, near my target amount. So close that a decent days growth would put me over. Technically I should be able quit my job that I really don’t want to do ever again and waste my time on me rather than earning more.

    I’m only there because the markets are high, although that is true for almost everyone.
    Is this time different? Are these market highs the actual peak, or just another high on the way to other heights.
    But even if I pull the plug on work I need to stay invested in the markets for the whole 4% thingy to do it’s magic.
    Do I have to stick it out for longer? For how much more? 10% more than target, 20%. Pull a big wedge out to cash, but does that fly in the face of asset allocation (and who wants bonds at this time)
    As I approach my 50s (yes I’m lucky, but a big part of my luck was figuring out that I needed to save in my mid 20s) do I want to stay, chained to a desk, doing dull things and looking out of the window at a nicer world.

    Liked by 1 person

    1. Maybe reading Burkeman’s heads up that you only have 4000 weeks on earth may help 😉 Sure, he’s pushing his book, but it makes you take stock.

      I retired in my early fifties, and I have no regrets. Apart from if I had sorted my shit out earlier then the runout might have been less tough than it was, but the direction of travel is earlier rather than later.

      If you’ve been in the markets for 30 years you probably have staying power through bear markets!


    2. My view is that I wasn’t ready until I had a few years of running costs in cash – and that I could mentally live with 20-30% swings in the value of the rest of my portfolio. COVID saw my portfolio dip by around 25%, and I simply kept dripping money into it. It has now made back all of those losses plus 15%.


    3. Re the Burkeman link.
      It took me several goes to work my way through this – as I kept getting bored and going off to do other things. And I do mean bored and not distracted. For someone writing about time management he sure likes to use a lot of words and drag thing out. Probably just me as I guess I still have a penchant for bullet points.


    4. I retired on my 55th birthday and haven’t regretted it. I’ve been actively investing all my adult life and don’t find the 4% thing too scary. With my main wodge of money (a SIPP from a transferred DB scheme) I invest actively in active funds. Take a look at https://www.saltydoginvestor.com/ . They provide the information I need to be in the right sector at the right time. e.g. UK smaller companies for the last 6 months or so, property seems to be the new sector emerging. Also, never ever be investing in anything below its 200 day MA. Never. Just get out and look for the new opportunities (if there are any – if not just sit on cash earning nothing).


  3. > rampant hosing inflation

    > but I don’t really understand you to get a decent return
    how to get?


  4. Thanks for another post and enjoyable read.

    May I ask please, when you say you hold cash having filled up premium bonds, is it actually just “cash” you’re holding it as or is there a fixed income/bond type instrument you’ve parked it in?

    I’m put off dripping in too much money into equities at current valuations. Is it a case of having to take the inflation devaluation hit from holding cash in my sipp if I’m not prepared to invest in equities currently or are there alternatives that people are using at the moment?


    1. I’m sorry to say it’s cash. Some of this came from the shorting episode, some of it is that the pandemic means I spend less, and I am also earning though at a lowish level. I am spending less than I have coming in

      Alternatives to cash in the bank I have include premium bonds, I have a fair amount of gold ETFs. I do have a little bit of a Vanguard US bonds fund but I couldn’t really make myself do more of that, I’d rather do VWRL. I have been accumulating VMID on the principle that UK valuations aren’t as off the scale as US ones, because: Brexit but it should be in the price by now.

      Financial repression means there aren’t that many decent alternatives around. Yeah, I know, the sound of the world’s teeniest violins given the general level of bad stuff going down, but there we are.


  5. Wonderful read as always.

    Mrs LCIL & I keep drip feeding VWRL into our ISA holdings each month. I’m too time poor to do research to think we can do any better than that (& frankly, I’d rather spend my time doing other things).

    I’ve stuck mainly with the Vanguard Target Retirement Funds in my SIPP for the same reason, though here I should probably look to being more risky if things do crash in the coming couple of years as I’ve still got another 10 years of investing ahead of me before I can walk away from paid work.


  6. Nice article. Re: smartphones though, they really have rapidly morphed into incredibly needy devices, constantly to hand, making you anxious and distracting from living a fulfilling life. (pocket narcisist?) The useful functionality is undeniable, but I can’t concentrate without all notifications off as just the first condition. Makes you think though what people will tolerate. I remember being totally mystified by what people got out of that tamagotchi craze back in the day, where a useless object wasted your time all day by irritating you at regular intervals. Maybe the smartphone designers and various companies selling products via these devices used that free pyschological experiment to work out how far they could push it. ( According to wikipedia, the company that made tamagotchi initially marketed them exclusively to teenage girls, so make of that what you will 🙂 )

    Liked by 1 person

  7. Thanks for an interesting read as ever.

    You mention NZ a couple of times and I have to say that, apart from falling foul of the FSC, every conservationists’ hand is raised against you – or at least entrapped to catch you, being as NZ is committed to a pest free 2050 – and I’m afraid a mustelid is definitely on of the species included – https://predatorfreenz.org/.

    Cheers from a locked down, somewhat but not quite there yet with vaccinations, NZ!

    Liked by 1 person

    1. Indeed – Carolyn King’s the Natural History of Weasels and Stoats is excellent, but takes a NZ turn. What’s an imported mustelid to do, when faced with a bunch of birds that have lost the art of flight FFS, the lazy tykes 😉 As for the speciesist extermination plans, well, the mustelids aren’t the only non-native successful species to have taken over NZ 😉

      In the UK there is a cultural negativity to the fine mustelid family due to the penchant for grouse shooting, and the Wind in the Willows didn’t improve the image. It’s better in continental Europe – the Swiss named the stoat their animal of the year and actively conserve mustelids.


  8. That is a truly arresting juxtaposition of the two photos of American choppers abandoning their military cock-ups.


    1. Yes and in both cases we see a CH-47 Chinook helicopter. Almost half a century apart and the same design of helipcopter is still being used (albeit with updated avionics, engines etc). Where’s the progress?

      It’s almost like we’re repeating the same cycle over and over again in some sort of eternal limbo …


    1. It’s about 25% of my ISA portfolio. Though in the round it is a lower proportion of my total asset base, because I have DB pension income and some earned income.


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