SpreZZaturian
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29 september 2016

Death of jobs: leverage and accelerated automation

Topic: high leverage and faster pace of automation make it exponentially more difficult to re-train enough people for new jobs

Solution: Buy Google and gold (many more companies in my newsletter)

Length: very short (a few minutes' read)


Executive summary: Low interest rates and technological progress accelerate the ongoing process of automation, leaving more people needing -but less time for- re-training.

Low interest rates also mean more indebted consumers and governments, and thus less money for re-training the increasing hordes whose jobs are being automated away.

Swedish: Plus en länk till en paneldebatt i Lendifys och Börspoddens regi, om nya investeringsmöjligheter


Leverage and Machines are at the heart of the issue

low interest rates make capital relatively cheaper than labour 

investments in automation have picked up speed due to

  1. accelerating technological development ("Moore's law", or, rather Kurzweil's Law Of Accelerating Returns) is pushing technology over the threshold needed to replace humans in many areas in short order, thus attracting more investments
  2. low interest rates make investments in technology even more attractive

Thus, automation is proceeding faster and in more industries simultaneously than ever before, leaving more people than ever (at best) between jobs.

Low interest rates have fueled the build-up of debt among governments and private individuals. Despite lip service to deleveraging since 2008, debts are much higher today than at the "peak" 8 years ago, leaving less room for debt-financed re-training for new jobs. 


Leverage => more machines, more debt => less jobs, less re-training buffer

The same forces that make automation investments more attractive and all the more people lose their jobs to machines, also work to make it more difficult for people to be able to finance re-training (one, because they are already over their heads in debt*; two, it's happening faster and in more industries at the same time than before, leaving less time to re-train)

* Earlier, people hadn't maxed out on credit card loans, auto loans, mortgages and student loans, which meant the few who lost their jobs to machines had some leeway in time and money to re-train for new employment.

Now, more people are automated away at the same time and they have more leverage and thus no economic room for time off or investing in re-training.


Goldman Sach's take on the subject in a recent podcast of theirs called for new ways of financing re-training, including re-purposing (expropriating?) pension money. I, however, think that ship has already sailed.

So, what to do?

My 2 cents: Make sure you own assets that benefit from the changes, since I expect it to get really ugly first, in a way money printing can't mitigate, before it gets better and we can approach the Star Trek ideal of no money.

The Sprezza (and Star Trek) credo

The acquisition of wealth is no longer the driving force in our lives.

We work to better ourselves and the rest of humanity

You could, e.g., buy stock in automation companies of all kinds (robotics, software etc., including a few dozen companies on the list in my next subscriber letter). You could also buy assets that benefit from low or negative interest rates, increasing debt levels and a possible monetary re-set.

Google, IBM and gold spring to mind.

gold for consumption
palatable?

Please note, however, that I do think it's a little early to start preparing for a complete collapse just yet.

Taggar (blogg): 
24 september 2016

The 25 fountainheads of wisdom and 21 pillars of wealth

Executive Summary: My preferred sources of weekly information flow, I use to take care of my 21 principal asset pillars; and some pointers on how to set up your own.

21

NB: if you are a day trader, none of this is relevant.

NB2: if you are looking for basic information on investment psychology, mindset and methodology check out my Required Reading.

NB3: nothing in this post works as instructions for creating or maintaining detailed sell side level financial accounts research. Here, however is a primer I made some time ago.


First, decide why you want to inform yourself

  • Exactly what is your purpose? Better investments? More fun? Both? Aim for a balanced diet, including some fun - but keep work and play somewhat separate.

Second, decide how to stay up to date:

  • Have it your way. Make sure you find your own favorites, you'll need have a strong internal motivation to keep at it
  • Be pragmatic.  Choose what actually works, rather than try to appear clever.
  • Don't aim to digest it all (but do create a framework that automatically puts you in study mode a certain amount of time every week). I always aim low.

Why do you read?

Don't waste your time studying without a defined purpose; choose your sites and shows carefully and strategically from a clearly defined utility perspective.

Money

or

Girls

Ask yourself how you expect your life to improve by absorbing certain information. To perform better and be promoted at work, to be a better salesman, better trader, better investor, appear clever, witty... Is it money, status, fame, girls or something else that drives you?

Don't mix reading for fun and for pleasure too much, lest you risk confusing when and why you spend time on a certain activity.


The reason I personally choose to stay up to date is to be ready to act when and if the authorities make something truly deranged. In addition, I want to learn new things just for the sake of exercising my brain (staying healthy). I also want to be entertained in thoughtful and inspiring ways.

My focus, regarding financial and economic information, is mainly on downside risk factors, since I don't really need an upside to sustain my lifestyle. Your choice of sources should reflect your particular situation in terms of wealth, lifestyle and available time.

For comparison, my current asset portfolio consists more or less of the following 21 items:

A short stock index position, unlisted Canadian gold assets, a Swedish biotech start-up, a gaming platform company, an algae w-3 oil company, a nuclear facilities consultancy, a place to live, lent out money to friends and business associates, several unlisted investments (a credit rating company, clothes and jewellery, HR software; and 5 other small start-ups in insect protein, venture capital, algorithmic investing, the sharing economy, my blog & podcast assets in my own nano-scale company), a book publisher that I and my partner are winding down, cash, various pension funds (mostly multi strategy hedge funds), some Russian art and a, possibly defaulted, convertible loan to a medtech company.

I have no income and no loans.

No, there is no room for 22 pillars


Deciding on what to read

Don't let availability bias and technology get the best of you.

Control your time and information intake by going off-line, by frequent periods of deep work, by only using a limited number of information and social media apps (well-filtered to avoid irrelevant noise such as cute animal videos and beautiful pictures), by leaving your phone at home.

Systematically go through recommended and popular information sources every year, and assess whether to add them to your flow of information, and whether to discard some of your old sources at the same time.

Avoid keeping sources in the loop if you don't actively use them. Just keeping them there takes mental energy and can cause a bad conscience. However, don't be afraid to build a repository of non-urgent material to read or listen to when stuck on, e.g., a long haul flight.

Pay attention to your keystone habits and the general shape they render to your days and weeks, and make sure they create room and impetus for reviewing the information you have set out to digest.

Do What Works

If not, it will all just pile up as so much bad conscience which would amount to a net negative.

Don't go there.

Nobody will reward you for the amount of information you process, and definitely not for the amount you just let pile up. The only judge is yourself (and your wallet). Do what works and no more than that.

software-program-handwritten-1960s
Positive pile

Inspiration - what I'm reading

Hussman

I start every week (Sunday night or Monday morning) with Hussman's Weekly Market Comment. Dr John P. Hussman combines a beautiful financial prose with deep insights about macro economy and stock market behavior. Be prepared to read at least a dozen of his most recent newsletters before you start to fully understand what he is saying. Also, keep in mind that he is playing a long game; look elsewhere if you think 5 years = long-term.

This week, Hussman noted that the technical support for the market is dropping away:

"Last week, on the most reliable measures we identify, that floor quietly dropped away."

He also commented on the irrelevance of the US Federal Reserve:

"Whatever policy error the Fed might make by raising, or not raising, interest rates here pales in comparison to what activist Fed policy has already baked in the cake."

...and managed to squeeze in some useful teachings about the Phillips curve (emphasis mine):

"See, Phillips studied a century of British wage data during a period when the U.K. was on the gold standard, when general prices were quite stable. So the wage inflation that Phillips observed during periods of low unemployment was actually real wage inflation."


MacroVoices

I make sure to listen to Erik Townsend's podcast MacroVoices every week. It features Erik's own up to date thoughts on stocks, gold, oil, interest rates and other useful investment stuff, but the main event every week is an interview with a prominent financial or economic thinker.

The latest MV interview was a great one with Raoul Pal about Brexit contagion, the USD, the business cycle, gold and much more.

In addition, every week MacroVoices presents a RealVision encore; a replay of a previous interview made on RealVision TV. The most recent encore was a conversation, recorded April 4, 2016, between Grant Williams and Michael Schneider.

Wait, there is more; register and get the MacroVoices weekly research roundup letter, with tons of free research every week.


Goldman Sachs

This really sucks, but as much as I hate to say it, Goldman's podcast is actually interesting and somewhat useful; by the vampire squid and Most Imperial Company in the world. Get ready to tune in every second week for a little less than half an hour.


ZeroHedge

You can call me a permabear all you want, but ZeroHedge is the most up to date, readable and entertaining financial site there is.

If it's news, it's at ZeroHedge - always with their own unique spin on the matter.

Don't try to read it all, there is just too much material, but click ZH whenever you want a quick, insightful comment on an event you don't quite grasp. Just make sure you understand ZH mostly provides the downside persepective to everything, as a counterweight to the rest of the media landscape's pollyannaish spin

In addition to visiting the site every now and then, I subscribe to the "ZeroHedge Frontrunning" daily newsletter to get a quick feel for what's currently going on (down) every morning


Oaktree memos

Every quarter, Howard Marks sends out an important memo with musings about the economy and the financial markets. I read it as soon as it appears in the inbox. The most recent one, "Political Reality" was posted on August 17, 2016.


Various blogs, pods and newsletters

The Felder Report (short, easy to read market thoughts by the hedge fund manager Jesse Felder)

Chris Bailey (lots of charts on stocks and the economy from a long time fund manager and strategist)

HORAN (more charts, including the recent Dogs Of Dow September 9, 2016 update below)

dow-dogs-9-9-2016

Cornucopia (Swedish site with deep and interesting insights about [Swedish] housing and the economy, and way too much information about the military. Check in and browse a few days' worth of posts to find what you're looking for at the moment)


Mauldin (newsletters: Thoughts from the frontline, and Outside the box - but to be fair, I rarely read these anymore, even if I usually think they are interesting when I do)

Barry Ritholtz (very frequent newsletter - I seldom read it or visit his site, Big Picture. It's still good stuff though, if you have the time)


News

The Economist (more or less personalized newsletters with less biased and superficial news than from most sources, except 60 minutes)

Financial Times (Newsletters: Breaking News, Essential Daily Briefing, and The latest Companies by Sector news and analysis, FT Exclusive)

The New York Times (Today's Headlines newsletter)

Börspodden (Swedish podcast about investing)


Technology (futuristic developments in energy, materials, nanotech, AI etc.):

Abundance Insider (newsletter)

KurzweilAI.net (Daily Newsletter)

Singularity Hub (newsletters: daily, weekly)


Fun and hobbies:

Styrkelabbet (Swedish site and podcast about weight lifting. Strengtheory is a good substitute in English)

WaitButWhy (a wonderful, genius-level, site about life, not least this one about procrastination, and this recent one about marriage)

Wall Street Playboys (no-nonsense advice on financial careers and income)

The RSA (Educational YouTube channel)

Minute Physics (Physics snippets YouTube channel. Also check out the much less frequently updated Vsauce YT channel)

Minute Earth (Educational YT channel)

Start Gaining Momentum (self improvement site by Ludvig Sunström)


Disclaimer- there is much more

My full list of people, newsletters and sites that I have bookmarked is of course much, much longer. I'll just might publish it in a comprehensive format later.

BonusThe best book discovery list I've ever come across; by Tren Griffin (check out his site here, including his 12 ideas from Howard Marks' "The Most Important Thing" - one of the best investment mindset books there is)

Bonus 2: My own list of recommendations isn't all bad either. A tip: take notes when reading a book, review the notes periodically, and re-read the best books every few years.


Summary and conclusions

Schedule your daily and weekly habits with room and impetus for focused reading or listening

Clearly define and state your purpose of learning

Decide how and through which information sources to achieve that purpose

Aim for depth and pragmatism, rather than quantity or showing off

Update the list of sources every now and then, keep it manageable

If you are into investing, you have to read the books by Schiff, Marks and Klarman, which you can find here, before setting up your framework of daily information flow. After that I suggest Hussman and Macro Voices.

And, last, never, ever take recommendations on investments from anybody. Never. Ever. See for yourself, do your own work. Genji Gambashi


If you want to help a lost soul gain some traction again, share this article and suggest they subscribe to my free newsletter and read my e-book about 50 investment mistakes in 15 years.

The Retarded Hedge Fund Manager

Taggar (blogg): 
14 september 2016

Keystone habits: How to live like Benjamin Button

Executive summary: How a few strategic keystone habits almost effortlessly can change your life for the better

Case in point, n=1: How I am the best version of me, approaching 50 years (kind of), thanks to regular dog walks and gym sessions

What you should do? Establish just one (low threshold) keystone habit that has the potential to shape and improve your days or weeks with regards to, e.g., investing, research or exercise


How is father time treating you?

Hi,

How are you?

Investments are lagging?

Tired, a little sore, hungover perhaps?

Got a few pounds and inches extra round the waist?

Getting winded walking up stairs? Back's aching every now and then?

Got a cold? Again? And you had one last year as well?!

"It's just part of turning 25/30/35/40/45", you say?


Age is no excuse

I'll turn 45 in a few months (January 2017)

Today (Monday, September 12) I executed my best bench pressing session ever*. In my previous workout session, three days ago (Friday) I had my best deadlifting session ever*.

*the absolute weights don't matter, but if you just have to know; I benched 4 sets of 4 reps, with a short stop at the chest, at 120kg (265 lbs), and the 4*4 deadlifts were performed at 165kg (364 lbs).

In between I did some light partying on Friday and Saturday. The weekend before that, however, I set some kind of a new weekend party record.

In a recent interview (Börspodden, to be released Wednesday September 14, 2016, I think) I was reminded of how I in Tokyo this spring memorized a 14-character random WiFi password from a single reading (without even trying... However, I can't claim to be able repeat the feat reliably).

On top of all this, I am more mindful, focused, kinder, more flexible, healthier*, and exhibit better aerobic capabilities than ever. And, I look like this (September 10, 2016 - NB that my focus is on being healthy not looking healthy)

*I haven't caught a cold in a decade

Sprezzaturian

I am the least humble I have ever been too. Progress on all fronts...


Faster Harder Scooter

The key to a 300+ lbs bench press at 45, when my PB in my 20s and 30s was 20% lower is keystone habits. The same habits explain my improved posture, general health, psychological resiliency, my party recovery rate, my improved cognitive abilities, mental strength, and on and on.

In short, a few keystone habits introduced in my 40s have caused me to experience a Benjamin Button style backwards life trajectory.

Let's take a look at those habits.


Keystone habits

Dog walks

I have a dog, a German Shepherd-Doberman mix that I take for at least 3 walks a day; morning (8 am), afternoon (3 pm) and night (9 pm). No matter how I feel, what the weather is like, or what plans I have, I get to go out 3 times a day, walk a few miles, interact with nature, my dog, other dogs, other people.

The dog walks create a framework for my days, a weekly matrix that's very suitable for other bolt-on habits. For example, I usually listen to educational and informative podcasts during my walks. In addition, I limit my drinking, or at least have a reason to, in order to fit the dog walks into my schedule.

Note: the keystone habit of dog walks also means I get a lot of brain exercise (science podcasts), as well as drink less alcohol.

Weight lifting

I lift weights at a gym every second day. In between dog walks and eating there really isn't much time. That means walks and gym sessions combine to push me to be more effective, or I wouldn't get anything done (blogging, podcasting, writing, etc.).

Partying

It's no fun at all squatting hungover, which means my weight lifting routine sets a limit to the amount of partying and drinking alcohol I can do. That in turn makes it easier to keep a steady sleeping schedule.

I typically initiate my pre-sleep routine around 11 pm, including turning off my phone, washing my face and reading, and then turn off the lights at or slightly before midnight.

Reading and sleeping

-Add reading every day, and keeping a regular sleep schedule to my keystone routines (or possibly second order add-on habits)

Cognition

Some of the research on blogs I read and podcasts I listen to (including The Brain Science Podcast with Dr Ginger Campbell) has inspired me to practice a kind of micro meditation/mindfulness (mmm) during my walks. That has further improved my general feeling of well-being. The mmm habit is a bolt-on that might never have happened without the dog walks. Recently I have started trying longer meditation sessions as yet an extension stemming from the keystone habit of dog walks.

Mobility

Since I've started doing mobility exercises during my walks, I've come to spend more time on them than my typical 2 minutes during the Game Of Thrones Intro once a week.

HIIT

The heavier I lift at the gym, the more crucial the warm-up becomes. Before doing exercise specific warm up sets at spend 10-15 minutes performing High Intensity Interval Training, which has pushed me to my best aerobic shape ever - without even trying.

Superfoods

Do you hate that concept too?

I know! Me too.

Anyway, every day I have a spoonful of natural fish oil* mixed with a specific antioxidant-rich olive oil.

I would say that habit is just as important as walking, sleeping and working out. However, it is a secondary habit I picked up in my mid-30s, in order to accommodate my taxing work and workout regimes. No matter, it demonstrates the synergistic potential of keystone habits.

Food

I used to live on junk food (McDonald's 2-3 times a day in 1994-1995).

With time, however, all the working out, working long hours, walking etc. slowly made me eat better and better; more beans, more fibers, more leafy greens and cruciferous vegetables (picture), less meat, more fish and fish oil*, whole fruits and berries, no juice, more spices like ginger, cinnamon, black pepper, turmeric...

Vegetables, close-up

The keystone habits made it a necessity as well as a delight - in between gym and a dog walk what I want and need is a quick power drink with more or less all the above included.

*ArcticMed, if you are interested. Filtered from Phtalates, mixed with a rare anti-oxidant rich (in particular oleocanthal) olive oil, and Friends Of The Sea certified. Btw, a very recent study (summer 2016) on mice is showing exactly how w-3 is reducing inflammation in a cell.


Reinforce or establish your own keystone habits

Which are your current or potential keystone habits? A day job could work, but it's not necessarily healthy and it could also wear you out and prevent you from adding truly good habits.

You could try subscribing to a food delivery service to eat better which should make exercising easier and possibly lead to better sleep and more energy in a virtuous cycle.

You could try adding an exercise routine, e.g., walking a few extra blocks every day before going home and then "reward" yourself with a healthy power drink.

Signing up for a group sports activity 3 times a week is probably one of the best things you could do to create a framework nudging you toward eating better, sleeping better, drinking less, reading more. If you can stick to it. However, going from zero to three right away probably just won't work.

My preferred way of introducing a keystone habit, or any habit for that matter, is to set the bar extremely low:

If you want to start exercising, running, studying, programming or whatever it might be, set aside just one minute per session. Gradually increase the number and length of sessions, slowly and in very small increments but steadily, until you've reached the desired volume.

Investments

Think about what keystone habits could improve your investment routines. What could make you more informed, more disciplined, sticking to your best practice lists? What could make you focus less on empty tips, on social media chatter, on laid back reading instead of actual research?

Implement those. Just one is enough.


The power of keystone habits redux

- how Ronja and weight lifting turned me into Benjamin Button

Pumping iron and walking Ronja created a framework as well as a need for better nutrition, better sleep, and being more effective.

One thing have led to another, and nudge by nudge I have come to spend my dog walks listening to science news and doing mobility exercises, and my days reading and writing, interspersed by power drinks with whey protein, spinach, kale, cinnamon, turmeric, black pepper, berries, or other healthy meals.

Smarter and more productive by blogging

The framework and constraints (albeit artificial) have made me disciplined and effective, despite my natural inclination toward laziness. That includes not the least my creative endeavors of this blog and my podcast (in Swedish: 25 minuter), which force me to stay up to date and productive during my retirement.

Another way of putting it is that my workouts are better now, since I know and understand more; that my partying doesn't hurt as much, since I am in better shape, eat better, sleep better and I am more mentally resilient. No matter, it all boils down to the healthy regularity introduced by my dog walking and gym going routines.


Summary

  • Establish a keystone habit - just one, or reinforce an existing one.
    • It could be daily pod walks, a "stop sitting" alarm, walking meetings, reading certain newsletters at set days and times every week, exercising every second day, every day, go outside for 10 minutes of mobility work before dinner every day, or something similar.
    • Remember to make it easy (wu wei); the lower the threshold the better. Once the habit is set you can increase its intensity. 
  • With time, let other healthy, useful, productive habits bolt on to your main habit.
  • Perhaps add another keystone habit
  • Enjoy a carefree and healthy lifestyle without even making an effort

Hey! Subscribe to my newsletter or share this article with your social network if you want to make the world better.

Taggar (blogg): 
5 september 2016

Everything is awesome

Theme: Peak everything. Stop living in denial and enjoy it.

The best music is yet to come.

Executive summary: I'm not talking about an imminent stock market crash*. This article deals with the constant advances of human culture, arts and science. We are at all time highs, but have really only started.

awesome

*or am I? Check the summary


Personal peak

I don't want to "look good for 45"*

...

...

I just want to be healthy

...

Well that and a few other things:

We have to end apartheid for one. And slow down the nuclear arms race, stop terrorism and world hunger. We have to provide food and shelter for the homeless, and oppose racial discrimination and promote civil rights, while also promoting equal rights for women. We have to encourage a return to traditional moral values. Most importantly, we have to promote general social concern and less materialism in young people.

Joking aside, apart from being healthy; looking healthy as well doesn't hurt. In addition it can inspire others, which is what most of my current life is about regarding health, wealth, happiness, purpose and productivity, among other things.

*Actually, I'm not 45, I'm just 44 (and a half)

Looking good

-That's not me. It's Christian Bale in American Psycho.

The Retarded Hedge Fund manager Karl-Mikael Syding at Skandia 1994

-That's me (in 1994)


Health and keystone habits

Anyway, over let's say the last five to seven years, I've almost lost all interest in building my body for show, and have become almost completely focused on health and strength instead.

It's working.

Not only do I feel great, today was probably my best weight lifting session ever and the trajectory I've been tracing this summer promises much more to come. I'll soon write a post on how a few simple keystone habits can transform your life by creating a framework that makes everything else easily click into place.


Awesome!

Everything is awesome
July 2016

Other things are awesome too

Never before have humans produced higher quality and value within the realms of, e.g., math, physics, athletes, art and music.

Several factors account for that: There are more of us, a higher proportion exposed (incl. over the Internet) to relevant information and stimulus, we are standing on the shoulders of the giants that came before us (building progress upon progress).

I recently learned that* the second quartile of admitted applicants for Juilliard in the 1980s wouldn't even have gotten in today, i.e., they would have slipped below the fourth quartile, due to a lack of technical skills (and possibly artistic as well).

*something like that. I think I got it from Freakonomics or TED Radio Hour.

I too like listening to old masterpieces, to look at masterly paintings, statues and buildings. I too sometimes get stuck enjoying the same old songs and artists. However, I make it a point to sometimes deliberately discover new favorites. Just this weekend, e.g., I went to see an opera.

 

Can't get no satisfaction?

I actually pity those who cling to the movies, songs and artists of yore (or of their youth); or only deem music and art by long since dead masters worthy of their attention.

They miss out on so much.

I mean, as if Elvis, Beatles or the Stones produced the best pop/rock music of all time. As if Mozart or Bach produced the best classical music ever, or Sergei Rachmaninov was the best piano player ever.

One thing is personal taste and childhood memories, another is actual technical skill. Regarding the latter, there is no contest. Deliberate practice and building on past findings make sure the best today outshine the best of yesterday. You just have to open your mind to it.

vermeer
A Vermeer

Did you know that Hermann Göring, nazi extraordinaire nr 2, reacted as if he discovered evil for the first time, when he learned that his favorite painting (Supper at Emmaus), his treasured and exquisite Vermeer, the painter's best work of all, was a forgery (Telegraph story here) made by the art broker himself?

evil

That story in itself puts into perspective what we like, enjoy or love. Apparently it wasn't the painting Göring liked, but its narrative. That's a story for a different post on feelings, bonding, oxytocin, ownership, the human super ego narrative and much more.


Summary

Everything is awesome. So, be awesome. Don't leave your supposed peak behind you. Summit another one.

Urban Deli Awesome

Break out of homeostasis. Discover. Listen to new music, enjoy new things. You can be certain you haven't experienced the best, because the best is constantly being reinvented. Try painting, or (Big Wave) Stand Up Paddleboarding. I made my first two oil paintings over the course of the last two weeks.

Admittedly, my paintings were joint projects
Admittedly, my paintings were joint projects

The market is crashing. It's just that it might be upward.

Everybody knows money printing can't kick start the economy, given the state with too much debt already. It's been proven now.

The central bankers, however, can't admit defeat so they'll just print ever larger amounts and sitribute it in new and clever ways. More money and more or less the same assets (probably slightly less due to malinvestment) mean higher asset prices. I'm sticking to gold in that scenario, but stocks could very well work too.

Be positiveEverything is awesome anyway, so any other approach would just be ridiculous

Taggar (blogg): 
1 september 2016

3 ways of letting them win (the battle, not the war)

Executive summary: look smart by letting them win

I once wrote a story about how you can get more out of trying to get as wet as possible in the rain, rather than futilely try to stay dry.

In the same vein, I recommend you actively search for arguments you can lose (and execute on those), in order to make friends and influence people long term, rather than just try to win the occasional ad hoc party conversation to feel good in the moment.

purple
Talking point

Length: very short

Topic: A few simple tips for handling arguments, and winning friends and influencing people, at, e.g., parties.

How?: Simply let them win whatever discussion or argument you're having. They winning is not the same as you losing. The truth is still what it is.

Or are you too hot-headed and stupid for that?

angry kitten


Admit you are wrong

Do it swiftly and sincerely - with a smile

Actually, do it even if you aren't sure you're wrong, or if it's kind of a close call.

If you happen to be unequivocally right, the truth will reveal itself sooner or later. But you will never get the chance to correct the know-it-all image you projected if you couldn't admit your mistake.

If you want to be strategic about it, here is level 2:


Let yourself be won over 

There is nothing the other part in a conversation wants more than to persuade you with his or her clever arguments and rhetoric.

Let it happen.

If they are wrong, the worst thing that could happen is you look a little thick in their eyes - but then again, who was the thicker one?

argument
Don't be this guy

In addition, it's often a worthwhile mental exercise to truly try to understand the other side of a discussion. You can't do that if you're busy shouting your own exaggerated arguments.

If they are right, you learned something, and looked smart enough to appreciate their sound logic. In any case, they'll like you. By the way, you're much more likely to be seen as intelligent and pleasant, if you let yourself be 'educated' by the other than if you stubbornly and grumpily stick to your view. I mean, what was your purpose of talking to them in the first place?

First become friends and win their confidence. Then, after many weeks, it's time to spread truths and maybe practice some mansplaining.


Just let it go

(leave them alone)

Unless you are a professional politician, there are almost never any good reasons for pursuing a sensitive argument.

In particular not in a discussion with the friend of a friend at the friend's house party. Nobody benefits from a heated, inebriated and useless WWI style trench warfare. Leave it, change the subject. If needed, clearly state that you won't talk politics, taxes, weight lifting, nutrition/dieting, or whatever the sensitive subject happens to be. Remember to do it with a smile.

ahimsa

I hold certain principles very dearly, not least Ahimsa, the practice of non-violence, and my belief that every man is an island. I am about as open to discussion in these cases as I am regarding the existence of "God", and if I can help it I save that for a sober and quiet talk with a close friend.

Anyway, I have no interest in trying to win over a tax lover, career politician, lefty-commie, ignorant kid or the like that can't see the asymmetry of their beliefs, when we can simply get drunk together, talk about the accelerating technological progress, David Simpson's new book Dawn Of The Singularity, or the unbearable shortness of the skirts at the party.

unbearable

Summary: not two-faced

No, there is nothing insincere or fork-tongued about this.

Know your purpose. Choose your battles.

If you really want to get to the philosophical bottom of an argument, make sure to pick the right time, venue and person for it. An acquaintance at a dinner party, or worse yet, a stranger at a club, is not a fitting opportunity.

Bonus: begin your answers with acknowledging their points: "You are right. I agree that...", before saying anything remotely contrary to their position.


If you're interested in a deep dive of friend winning tactics, check out my summary of Dale Carnegie's iconic book here.

And here are many more of my book and podcast reviews.

If you liked any of the above and want more, make sure to stay up to date on my writings by signing up for my free newsletter here.

Taggar (blogg): 
21 augusti 2016

Never fight nature (the markets or yourself)

Summary: Don't fight the markets or your nature

Length: short

wu wei


The only right way is your way

Yesterday, during one of my long dog walks, I met a 78 year old doctor who apparently was still happily working, and later a 70 year old lady "365 days vacation a year!"

Both looked surprisingly young, healthy and vibrant, despite their diametrically different life choices.

The doctor had definitely thought it through, regarding happiness, brain health, the death of retirement etc., while still able to appreciate my kind of retirement from paid work. He was sharp, curious and looked much younger than his years.

He even quickly and naturally googled me on his phone (78 yo, remember?!), as well as invited me to his daughter's exhibition (which he showed me on Facebook). The daughter, by the way, is one of Sweden's most accomplished business leaders but she gave it up to become a (lion) photographer. She turned out to be married to a young self-made billionaire with whom I have some friends in common.

The dog yard is a really small world.

The 70-year old (celebrated the day before) actually tried to fix me up with a young friend of hers (quite a few years younger than I am) living in the same neighborhood as I do.

Happy, inquiring, friendly,... retired. The opposite of the doctor but still the same.

Maybe they knew early on who they were or wanted to be. Maybe it was a life long struggle. No matter, now in their 70s, and almost 80s, they are as comfortable in their own skin as I hope everybody could be, regardless of age and walk of life. At 44 I am, but I think I got here ay too late.


Pavlovianly outgoing

I'm not a naturally social person. Quite the opposite actually.

Introverted, awkward.

And yet, I enjoy these chance encounters during my dog walks. The dogs sniff each other, and we humans talk about this and that for a few minutes. Often I come away having learned something new.

The thing is I know I'm introverted. Thus, when I feel reluctant to pausing the science podcast I'm listening to, in order to chat with a stranger, I do it anyway.

-BOOH

Breaking out of my Aspergerish homeostasis a little every so often makes it easier and easier - now I'd even say I am more social and extroverted than introverted. I've nudged myself there.

I think it's because, despite my natural resistance, I've often felt revived and stimulated after butting heads with reality and real live human beings. Hence, my body learned that after the investment of chatting came a reward and after many of these occurrences, I pavlovianly* started feeling the reward right away.

Now I look forward to talking to new people, much the same way I look forward to Mondays with Game Of Thrones coupled with my mobility exercises during the intro.

*now it's a word


A river runs through it

Both in life and in investing, I like the idea of recognizing where the water is flowing anyway, and following the stream effectively to where you want to go by making very small adjustments as early as possible.

Identify the right stream, your stream, not the Joneses'; and not the last blind investor fool's on the financial markets either.

The sooner you accept your uniqueness the sooner you can start tweaking it and (almost) effortlessly harness its power to get where you were going anyway in the end, just sooner and happier.

There are many ways to catch a fish,

but the best one is the one that works for you

Do you have a calm and patient disposition, perhaps less social than most? Introverted? Embrace that; use it for long term research or value investing. Your results will speak for you.

The usual fundamentals (sales, profits) don't work any longer? Find new fundamentals (central bankers)

A disciplined and patient approach

demands actual discipline and patience

Are you energetic, outgoing, fast on the trigger? Plug in to the markets, to social media, to parties and trade like the wind!

And as a trader, get a feel for where the markets are flowing this minute, day or week and ride the waves, letting both profits run and cutting losses short with the same equanimity.

Adjust your positions and your trading style to fit the markets as opposed to fighting them. Are good news treated as bad (for the moment), trade accordingly. Has the tide changed, change with it. Perhaps use Lorenz' strange attractors to predict when correlations are going in and out of their sweet spots ;)


The art of doing nothing

Don't comply, don't compromise, don't just try to fit in, don't waste energy trying to satisfy others.

Don't aim for big changes. Instead, build from the bottom up on your needs and wants, gradually but consistently challenging your natural homeostasis in order to become the best you, but still undeniably you.

The approach is called Wu Wei; the art of doing nothing.

Habits work much the same way, their creation as well as their results. Start with a small change, ridiculously easy, to the point of feeling meaningless. After a while it becomes a natural part of you.

E.g., reduce the morning bacon almost imperceptibly and increase the amount of eggs just as little. Sooner or later you are only having eggs and no bacon at all, and couldn't care less. But try to take away the bacon cold turkey and you'll dream of bacon for a long, long time, not enjoying your morning meals at all.

Yes, bacon is really, really bad for you. Google it. Cancer, hell, obesity, witchcraft, space marine journeys cut off from the base...


Not even one

I often talk about the Aim Low/Zero Threshold/Just One (more) approach to life, to tasks, to weight lifting etc. Wu Wei follows the same underlying principle, albeit perhaps taken to the even more extreme "Not even one".

It's still not trivial though.

Constantly checking your smart phone for updates, watching TV for days on end or snacking on crisps or candy because you feel the urge, and it's the path of least resistance, is not a good interpretation of Wu Wei.

Stopping yourself at least one second from automatically checking your phone, to let yourself actively decide to check it, is. Then make it two seconds. Easy, ridiculously easy. Effortlessly. Wu wei.

Not only is it easy, the constant tweaking can produce huge change over time. And the habit itself, of (small) changes, facilitates development and growth in other areas. Before you know it, small changes in anything will be a zero effort decision, and you will grow and have grown more than you'd ever have guessed.


Summary - don't fight nature (the market)

Retirement can mean many different things.

Participating on the financial markets too.

Find the way that suits you, that's the most effortless. However make sure you consistently and metacognitively tweak your habits to smoothly transition toward the best you, rather than a main stream drone.

On the financial markets, remember the market is never wrong; it's all you. Follow it instead of fighting it.


PS: Please help spread the word of positivism and pragmatic self-development by telling a friend or your entire social network about this article, my site and my free e-book, assuming you have already subscribed, downloaded and read it.

Taggar (blogg): 
12 augusti 2016

How to find your purpose

Summary: Ecstatic and Erratic. Thoughts on the self, happiness and finding your own guiding principles.

Length: Short

Exclamation: Fuck "wrap it up at 50"; start it up! Why you should always start living, never wind things down, unless forced to. [inspiration Gary Vaynerchuk]

Need


We all want to be happy, to feel (good), to be healthy.

-So I thought.

I thought the human organism made sure various neurotransmitters invariably led us toward (at least short term) pleasure and joy, through food, sex, sleep etc.

Somewhere along the way, a narrative commenced, a mind, a self awareness, a superego that kept track of the past and projected the future. A self that incessantly re-interprets facts in order to create a coherent story of an individual.

We became concerned with other kinds of fulfillment and deeper happiness than micro organisms (who live fully in the present, following the light, food or reproduction).

Improve and Share

I've thought a lot about what makes me tick.

It was easy identifying helping other people, teaching, guiding, reading, learning about technological progress, relaxing, listening to music, getting drunk, getting laid, even working out, being creative, solving problems with or just hanging out with friends, . But what was the underlying principle?

Improve and Share

I want to be stronger, better, wiser. I want to create, build, compose. I want to improve, repair and enhance (me and the world). And I want to share with others; share my ideas or offer my help, inspire and lead by example. In short, I want to Improve and Share. That's what I want. That's All I Need.

I'm dying to catch my breath

Oh why don't I ever learn?

At our base we need food, sleep and shelter and want to procreate. At the other extreme, self actualization entails a higher order of pattern recognition, to see the self and cater to it, make it fully manifest itself. And, paradoxically, that very mechanism is the same that enabled the primitive organism to see patterns in the environment and detect food, threats and partners.

Don't tear me down

For all I need

Make my heart a better place

I apologize for quoting one of my all time favorites, "All I Need" by Within Temptation. But, hey, that's what this post is about. That, and I love that song; it's almost all I need.


There are a few important snags; such as finding out who you really are (if there even is such a thing as an individual), as well as striking a balance between short term drives and lust, and longer term growth and deep satisfaction.


Who are you?

That is not an easy question. Walter Mischel tried to answer that with his infamous marshmallow experiment ("if you had the discipline to wait for a second marshmallow, you would become successful"). However, he himself had a completely different interpretation than the popular fatalistic version.

Mischel proved that a simple re-framing of the situation "imagine it's not a marshmallow, it's a picture of one" made the majority of kids able to hold out for two later, instead of one now.

Mischel theorized that a set of beliefs, expectations and assumptions that he called "the mind" (that was situation dependent) was more important than some fixed personality.

Another famous "personality" experiment is Stanley Milgram's "fake electrical shocks", where people were told to electrocute strangers (actors screaming). It has later been shown that certain questioning parts of the brain shut down when given an order. It's as if "you're not paid to think" kicks in when an authority (a supreme primate) is calling the shots.

In the Prison Experiment, Philip Zimbardo famously turned students in a role play into sadistic torturers, tormenting their former class mates for no good reason. The general interpretation of Zimbardo's prison experiment has always been that you don't really have a stable personality...

You are the situation, as Lee Ross puts it.

Opportunity makes the thief

We are usually embedded in stable situations (jobs, family etc.) which give rise to the illusion of a consistent personality. But change the context...

In a recent experiment (that I picked up from the book Predictably Irrational by Dan Ariely), research made on students at Berkely showed how their sexual preferences and morals changed significantly when aroused (including age-related issues on both extremes, drugs and gender); changes that were not at all predicted when in a cool, non-aroused state.

Well, no news there, I found out as a young adult that I liked/tolerated a whole different (and somewhat surprising) set of activities when "hot" than when "cool". I accepted that as a fact - and took it into account (a bit like preparing living insects for dinner before starving, knowing that you will starve, and then crave anything to eat).

-Nope, no details.

However, if you are a pervert, take it slowly and gradually and just maybe your partner will transform to your liking with increased arousal. Sociopath!

Who do you marry, really?

So, if your personality is a figment of imagination, an ephemeral narrative, made up by your superego, and only relevant in a fixed context, who do you actually marry up there by the priest?


You don't stay you

And we haven't even begun talking physics and biology. Most cells in the body are replaced within a few months. Brain cells are not, but here atoms are (within a few years, there is not a single material shred left of who you were physically; only your thought patterns and body patterns remain). Actually not even your patterns remain, since every time you recall a memory it is distorted, erased and re-saved anew.

There is a good TED talk on change (Dan Gilbert, March 2014), on how much we change over ten years without even noticing. No wonder friends and spouses grow apart, and joys shift.

Where am I going with this?

Change is constant, embrace it, make it a way of living. Accept it rather than hope you're a finished product.

There is no constant you, maybe not even a very distinctive you at all - rather a kind of loosely predictable (albeit changing) reaction function to various contexts. Accept taking on different roles at different times and different environments instead of trying to force manifesting a consistent you.

I feel good both in the present and in retrospect focusing on growth and sharing, first taking the oxygen mask for myself, then showing and helping others. It's my version of Toyota's Kaizen - continuous improvement.

Tsuyoku Naritai

-I want to be stronger

I want to be healthy, I want to be stronger, I want to be a part, I want to contribute. That makes me happy. That, and all things goth.

What do you want?

Have you thought it through? Or are you just going through the daily motions of sleep, work, food, TV, alcohol and sex, in effect just waiting for retirement (which I guarantee won't make you the least bit happier without better habits)?

dying


Summary

Fuck wrap it up.

Go for it! There is no time like now to start a project, to truly live and be happy. You can't wait it out. Happiness that is.

50 is an excellent time to start a business, a venture to help people, take up a new hobby, learn something. 60 too. Not to mention 70...

Investing requires patience, but living should be done impatiently.

Do you want to be happy? Then take action. Move, change, accept the ephemeral nature of both self and context instead of clinging to a fake consistency.

Taggar (blogg): 
30 juli 2016

How to trade like a retarded hedge fund manager

TRADER

V

RTEADR

V

RETARD


ThemeOne way of investing (portfolio composition, and averaging in and out of long term holdings) 

Alternative theme: There is no secret sauce in investing, so go ahead and try.

Even a retard can do it (apparently, given my career). On the other hand, I have all but given up on the financial markets, but there is no reason why you shouldn't at least give it a go. Maybe you'll like it, maybe you'll be good at it.

Length: Not very long


Have you noticed that "trader" and "retard" are anagrams?

It's not a coincidence I'm a retard cum trader; after my stints as a broker, an analyst and a portfolio manager.

Given my experience from all sides of the market, as well as being a coder, a natural sciences nerd and eventually a finance major, how do I approach the financial markets?

What you take from the market
You took money from the many faced market
  • The most important thing to understand is that investing and trading are more about psychology (your own psychological resiliency to stress) than numbers. Guess how long it took my Aspberger-ish, scientific, coder, not to mention business school brain washed, mind to reach that conclusion...
  • The second most important thing is that investing is about minimizing losses, not maximizing profits
  • Your worst enemies are hubris, greed and envy. Your greatest assets are patience and agility of mind (the willingness to disprove your own theses)

That said, what is my current approach to investing?

Well to make it really tangible, the full extent of my investment portfolio looks like this:

  • Real estate (apartment)
  • Various private Swedish companies
  • Private Canadian gold royalty company
  • Listed assets (Bear certificates and stocks)
  • Cash and loans
  • Debt: 0

It's kind of a retard's version of the Quattro Stagione portfolio I often advocate:

It's one part real estate and living space (no loans), one part high risk private equity investments in software, services, healthcare, retail/fashion etc., one part physical gold, one part publicly traded securities (currently 80% bear certificates and 20% stocks [small cap, high risk and/or secular growth]), and finally one part cash and lent out money to friends.

You could compare it to a more traditional Quattro of Gold/real estate, Stocks, Corporate bonds and Government bonds, although there are many ways to put together an investment pizza. Also note that, in effect, my public and private stock holdings are more or less hedged with bear certificates (the Swedish instrument XACT BEAR with -1.5x leverage to be precise).

You took money from the many faced market, money that wasn't yours to take. Now a debt is owed

The rationale behind my portfolio composition is:

  1. You never know what's going to happen, that's why I choose to be diversified.
  2. Going back to square 1 is almost unacceptable (albeit would be a hefty BOOH!), so I make sure to own my living quarters and with no debt whatsoever
  3. The current monetary and fiscal experiments are unprecedented. It is thus more likely than not that we will eventually experience an epic record setting crash, and financial re-set. Hence the gold, physical gold.* When this goes south in earnest, cash and paper gold will be frozen, confiscated, substituted and in any case be practically worthless. The dice is thrown in this matter, meaning I can't really get out of my physical gold venture for a few years. Good, one less thing to think about. Now I can turn my attention to oil again, which might be a good buy in a few months.
  4. You never know what's going to happen; that's why I own stocks at all. I focus on small and micro caps, unloved deep value/secular growth, or hopium stocks with little or no revenues but theoretically huge market potential. My choice of stocks are rooted in a sort of surrender, where markets in general, and large caps in particular are grossly overpriced. Hence, I invest in stocks without valuation :p
  5. I'm a kind spirit and if I can help friends in need I lend them money (on paper, it's for apartments, houses and cars, but in practice I suspect I'm financing part of their investment portfolios, since they actually do own stocks at all). I do charge interest though. I also keep a little cash lying around, maybe too little right now...
  6. I'm a speculator at heart, and I want to be "right". Thus, I just can't stop myself from shorting the general market using bear certificates. It's expensive, it's hubris, it's not recommended, but it's retarded; it's me.

* please note, that back in early 2015 I was speculating in paper gold (ETFs like GLD and GDX, among others). In July 2016 I have sold all my ETFs and bought shares in a private Canadian company that owns royalty streams in gold mines, i.e., holding the rights to delivery of physical gold directly from the mines. That is several steps closer to actually holding the coins and bars myself.


There really is no need to talk about how I manage most parts of my wealth, so let's just focus on my publicly listed stocks (which to be clear make up but a few per cent of my wealth).

I own stocks in the following companies of which 5 out of 7 have less than 35m USD in market cap.

  • Brain Cool - medtech for cooling down tissue
  • Gaming Innovation Group - gaming and betting platforms, operations and affiliates
  • Opus Group - (vehicle) testing
  • Peptonic Medical - biotech (oxytocin based pharmaceuticals)
  • Simris Alg - nutrition (algae based omega-3 etc.)
  • Stockwik Förvaltning - nanocap investment company
  • Studsvik - nuclear energy related consultancy

I don't recommend anybody copy my portfolio of stocks. They are high risk, volatile, and not least most likely very vulnerable in a stock market crash and market liquidity crisis.

In any case, I am currently (July 28, 2016) thinking about taking my profits and selling off all of my publicly listed stocks. Then again, you never know...


Opus is a case in point on how I typically handle a share holding

I bought my first shares at 7.10-7.30 SEK in January 2015, being adamant that I expected it could fall by 50% in value in a stock market crash. Instead I rode it to 10.70 and down again without doing a thing.

I then added significantly at 4.40-5.50 SEK between August 2015 and February 2016

Then I traded parts of my holding a few times, making some 0.40 SEK per trade, selling at three different occasions at 4.87-4.97 SEK, and buying it between 4.37-4.62 SEK; all based on gut feeling, on large unwarranted daily/weekly moves and an overarching strategy to stay invested in Opus for the long run. I was aiming to lower my average purchase price, as well as stay up to date with the stock.

I had said publicly that I would buy with both hands if/when it fell to 4, which I fully expected it to do in the anticipated stock market rout.

Well, the market didn't crash..., but Opus did. Consequently, in the first half of May 2016, I picked up significant amounts of stock at 4.37, 4.07 and 3.98 SEK respectively, bagged a 0.10 SEK dividend, and sat back and waited. For what? For an opportunity to either buy more even cheaper or to sell some of the excess holding I had accumulated.

In June and July 2016, I sold Opus stock on 10 different dates at prices ranging from 5.00 to 6.40 SEK, thus taking my holding down to a little below my target exposure.

My average purchase price is 4.87 SEK, and I freely admit that the first marginal profit taking at 5.00 SEK was somewhat of a panic relief sale after buying a little too much around 4.00 SEK. Hey, I'm only human!

Now, I want the market and not least Opus to fall again. If not, I'll look elsewhere for value. I still own Opus stock, but long term I want to own more. On the other hand, the run-up from 4.00 to 6.50 doesn't really make sense. As you can tell, I'm conflicted at this point and share price.

No, I won't go through the actual case for Opus. Do your own homework. Trust no one.


Silly me

 

My strategy can be summarized as follows

  1. Find a stock (several in parallel) that you want to own [this can be tricky of course, but this post is not about fundamental analysis or stock screening. This however, kind of is]
  2. Buy a little right away if it's cheap enough (again, it's up to you to define 'cheap')
    1. don't buy all you want, unless it's a certified steal, or the technicals look perfect
  3. Buy more if it falls. Keep buying if it keeps falling
  4. Trade a little around the position if you think the trading patterns allow for it, i.e., sell some of what you buy, even if it's below your average purchase price and your value target, and buy whenever it falls by a lot.
    1. Put in shamelessly out of the money long term buy and sell orders in the market. Sometimes you just get lucky in a choppy, algo-beset market. I've often come home from the gym or a dog walk and found new, welcome, transactions on my account.
  5. Sell to below your desired position, if the stock appreciates a lot for no apparent reason
  6. Sell all; if the stock is no longer a fundamental Buy, get out altogether
    1. Too high stock price
    2. Falling fundamentals

It's so elementary I actually feel silly for spelling it out, but maybe, just maybe, you or a friend of yours could get inspired by exactly that. Unless you're aiming to be a day trader, investing definitely doesn't have to be any harder or more complicated than the above.

retard 27 april
Silly

Actually, it should be less complicated. You should be able to just buy and hold the right assets for several years at a time, instead of wasting valuable time trading stocks back and forth like a rodent in a cocaine or pleasure electrode experiment. However, at this point in the economic and market cycle hardly any public investment makes sense, and that makes it difficult to buy anything for the long term.

The important thing to remember here is, that at every price point I'm buying, I'm ready to hold the stock forever, as long as fundamentals don't change radically. I only buy at prices I think will produce a long term satisfactory return, and I sell to either make room in the portfolio, reduce risk, or if the price has risen above the point where I wouldn't buy the stock (due to too low long term returns).

A trader (human or AI/algo) could buy or sell at any price or valuation points.


What works and what doesn't

I have kind of given up on markets, on what works and what doesn't.

This whole QE era apparently doesn't agree with me. That's one reason I finally left the hedge fund industry, just as I left the sell side in Q1 2000 partly because of the ridiculous IT bubble.

In the year 2000, apart from being tired of being an analyst, I just didn't want to be associated with Buy recommendations on overvalued stocks. And had the bubble kept inflating, I would have been left standing on the station anyway, with my Neutral/Sell recommendations.

In 2014, after 14 years at a hedge fund, it was much the same story again. I couldn't find enough worthwhile investments on the stock market, and I would have made a fool of myself had I been short. That, and I had had enough; and had enough ;)

OOU!

Only half-joking, I used to say, I could just as well be one step behind as one step ahead the markets and do equally well. Talk of losing one's mojo...

 

Anything works?

In a similar vein, today I'm mulling the idea of "anything works":

Firms like Goldman Sachs and McKinsey famously work according to the Up Or Out model. OOU means you are either rising in the ranks or being pushed out a window. Oou! They hire a lot of talent and simply see who survive. It's actually a kind of Ponzi scheme, but all the losers have gone on with their lives (and joined the zombie crowd forever mumbling "I used to be at Goldman. When I worked at Goldman...").

You can apply the OOU model to stock market investing as well. Several very successful hedge funds simply allocate more and more capital to whatever manager is on a winning streak, while losers get less and less and are eventually kicked out. Algo funds do the same, albeit with their models instead of human managers.

In the game of plants

you either win or die

And then there are the infamous examples of ordinary plants doing the trading, based on water and sunlight feedback on winning trades.

Howard Marks talks about first and second level thinking on the markets, where a first level thinker buys a stock after a strong report and a second level thinker sells the same report based on it being strong, but weaker than expected. A first level thinker would also say, money is being printed and interest rates are low, let's buy stocks today too (since that 1% rate differential per annum [!] is worth at least 1% per month)...

vissen

Apart from the fact that first level thinking usually works fine in bull markets; these days, I think it works just as well as anything else, unless or until it doesn't.

You could use first level thinking (or second level if that's your game) on momentum, on P/E, on P/S, on growth, on Philly Fed, on ISM. If it works it works. If not, try another basis for your trading (or "investments" if you want to call it that).

It's not really that I've given up, gone out to lunch or done a Hugh Hendry. I'm just saying that at this point in time; with synchronized abysmal global macro, the turn of a multi-generational debt cycle, and among the highest, if not the highest, stock market valuations in history, all coupled with the positively craziest monetary experiment ever; it's futile to say anything firm about the financial markets.

It's all in flux. So why not try whatever? Personally, I think that's a strategy doomed to fail, but hey, you'll be in good company as you all took money in the short term from the many faced market.

Just make sure you go big enough to be bailed out.


Before I go I just want to mention one more "adaptive" approach to markets that just might work, just as anything else might work:

A friend of mine works at The Algo Quant Group.

lorenz 2lorenz

Among other things, their investment strategy has zero overnight risk, use actual trading pit behavior as the base for their trading strategies, and here's the kicker, utilize chaos theory and Strange Attractors à la Lorenz, to identify when a model is going into or out of a sweet spot of high correlation and predictiveness (e.g., think in terms of the bundles in a 3-body animation chart).

What little I understand from my morning walks with him, it sounds convincing and perhaps a little less risky than pure momentum+OOU.

algoquant

The chart looks impressive, but unfortunately AlgoQuant only has 7 months of history. I'm enticed nevertheless, although I haven't gone into any detail of their set-up. As usual this is emphatically not a recommendation (see disclaimer page)


Summary

  • There is no (one) secret to investing. Anybody can do it. Experiment and see if you find a way. Seth Klarman's book, however, should be a mandatory read before beginning.
  • An investor is not a trader and vice versa (what are you?)
  • Find your own style, trust no one (I, e.g., invest according to long term fundamentals, plus trade a little on top)
  • Winter is coming, be prepared (diversify [Quattro], manage your leverage, protect your principal instead of chasing yield this close to the top.

P.S. I'm seriously considering clearing out all my listed holdings, but in the spirit of diversification I'm trying not to.

Share this article with anybody daring enough to go long the stock market, and tell him or her they don't have to change their mind, but they must seriously entertain the opposite side every now and then. And why not read or forward my free e-book with my best rules of investing. All you have to do is subscribe to my free newsletter to get it.

Taggar (blogg): 
30 juli 2016

Lifting weights 101 - Retard's Guide To The Gym

Summary: the only weight lifting schedule you need; the simplest and most straight forward workout routine you'll ever come across

Length: 1 200 words


  • Day 1: Deadlift 5x5, Bench press 5x5, Pull-up 5 sets
  • rest
  • Day 2: Bench press 5x5, Squat 5x5, Pendlay row 5x5
  • rest
  • Day 3: Squat 5x5, Deadlift 5x5, Press 5x5

And remember to mobilize your hips, back and shoulders every now and then to stay healthy and young.

-That's it. Move on. But first share this article with a friend who can't bench press, squat or deadlift his own bodyweight.

What about nutrition?

Food? My advice is to eat food, real food. Eat a lot but not too much. If you focus on fish, beans, eggs, leafy greens, whole fruits and stuff like broccoli and cabbage first you can probably eat just as much as you like. And after that you'll be too full to eat too much french fries, bread, cereals and pasta.


Working out 101

It's supposed to be fun. It's supposed to be easy. If it's complicated, you're doing it wrong. If you absolutely crave complexity, you can add that after mastering the basics (and performing them consistently).

Make no mistake, sometimes you won't feel like going to the gym, but the choice of exercises should still be simple. The simpler and fewer they are, the less daunting it will feel actually getting to the gym.


Level 1 - Go to the gym

If it's gym day, just go. Go even if you don't feel like it. Don't procrastinate and hope for some motivation, just make sure you get there. Convince yourself you'll only change and walk slowly on the treadmill for a few minutes. If you're lucky, walking slowly soon turns into a faster pace, then a light jog, and so on...


Level 2 - Lift weight bars until you feel tired

Lift reasonably heavy weights a few times (that's a "set"). Do a few sets in one exercise then change to another exercise. Do a few exercises until you feel tired. Do it again a few times a week.

It actually is that simple: a few reps, a few sets, a few exercises, a few times a week until you feel tired. Keep doing that week after week and you'll become reasonably fit. There's no need for esoteric exercises or any other equipment than a standard bar and some weights.


Level 3 - 5x5x5; Focus on these five-ish exercises, doing five sets of five reps each at least once every week

  • Deadlift
  • Squat
  • Pull-up/Chin-up
  • Pendlay row
  • Press/Bench press

Simply make sure you do them all at least once a week, using weights you can manage with good and safe form for about 5 reps per set, 5 sets per exercise. "5x5" refers to your work sets, i.e., the day's heaviest weight (warm-up sets don't count).

NO, you don't need to train your forearms, wrists, abs, shoulders, pecs, calves, ass, triceps, biceps etc. with specific exercises; especially not any involving machines. You can, of course, if you've got the time and energy after focusing on the real lifts.


Level 4 - an actual weekly workout schedule

  • Day 1: Deadlift 5x5, Bench press 5x5, Pull-up 5sets
  • rest
  • Day 2: Bench press 5x5, Squat 5x5, Pendlay row 5x5
  • rest
  • Day 3: Squat 5x5, Deadlift 5x5, Press 5x5

Add in some aerobic warm-up, biceps curls, prone bridges and crunches (abs) as you see fit. Quite naturally, you'll be able to focus more and lift heavier weights on the day's first exercise than the second and third. Plan for that, since that's the reality anyway.


Level 5 - getting jiggy with it

There is nothing magical about 5x5x5, or working out 3 times a week. I don't use the 5x5 principle, at least not all the time. This summer, e.g., I'm getting a little crazy, doing 4x4 in most heavy exercises. And I'm working out every second day, meaning I go to the gym 7 times in two weeks, instead of 3 times a week.

I think 3-4 times a week is optimal, for anybody just looking to get reasonably strong and fit, but 2 could probably do the trick as well, and 5 wouldn't be a complete waste of time.

In addition to lifting weights, I'm doing HIIT (intervals) or fast running on a treadmill for 12 minutes right before every workout, thus accumulating at least 10-12 km of quick running every week. I also add some kind of specific biceps work (seated or standing biceps curls on 2/3 of my sessions, in sets of 5-10 reps each), as well as 25-50 crunches of some kind after every session.

Every now and then I do a heavy pyramid in the bench press or deadlift, instead of a lighter 4x4. And sometimes I do a high rep set, like this 110kg x11 bench press (243 lbs incl. safety springs) or this 140kg x20 deadlift (touch and go).

Most of my work, however, is done in the 4x4 or 5x5, sets x reps, range. That's where I seem to gain strength most effectively. The variation is mostly for fun and motivation, but I also think it stimulates the muscles in a way that might help build volume or strength long term. No, I'm not going to refer a ton of research on the matter. Google it!


Level 6 - mobility (for health, not Van Damme style showing off; though I'm looking forward to "Kickboxer 2016")

Don't overdo it. Don't waste time on doing the splits (unless your sport or profession calls for it). Make sure you actually do the ones you're supposed to do instead.

Focus on a few exercises for improved posture and long term health. I've written about mobility here before, but as a quick recap:

  • Hips - squat, couch, pigeon
  • Upper back - cobras (seals), tube roller
  • Shoulders - morpheus
  • Lower back - hernia prevention 3D jiggling

Novice level: Spend a few minutes a week on each, e.g., in the TV couch, bundled with your favorite show

Pro level: Spend a few minutes at every weight lifting session


Food? My advice is to eat food, real food. Eat a lot but not too much.

:D

If you focus on fish, beans, eggs, leafy greens, whole fruits, and stuff like broccoli and cabbage first, you can probably eat just as much as you like. And after that you'll be too full to eat too much french fries, bread, cereals and pasta. Avoid all heavily processed food and food rich in sugar, like ketchup, mustard, candy, cereals, juice, soda etc.


Summary - KISS

Keep It Simple Stupid

Just make sure you get to the gym at all.

Once there, forget about fancy equipment, esoteric exercises and so on. If you just manage to consistently do some squatting, deadlifting, pressing and pulling for a few hours each week, you'll soon be fitter than most.

Add in some limited high speed running, mobility exercises, biceps curls and ab crunches, and you'll be a picture of health and fitness.

Eat real food, not processed garbage or fast food. Fast food burgers aren't really burgers. Make your own instead.


Don't forget to subscribe to my free and spam free newsletter, read my e-book and share this article with a friend who needs to shape up.

Om du kan svenska kan du kolla in avsnitt 37 och 38 av "25 minuter" som handlar om träning och rörlighet

Taggar (blogg): 
12 juli 2016

The nr 1 priority when committing to long term projects

Length: 1500 words (pretty short)

This article deals with the issue of honoring long term commitments, when constantly bombarded with new options

Executive conclusion: Unless you're driven by pure passion or natural myopia, my best advice is manufactured single mindedness as well as disregarding the "long" altogether:

Find a good enough top priority project, like college or a start-up. Then just take it one day at a time until you're done. Meanwhile, treat the alternatives as if they don't even exist - don't even glance at them. They are HIV/AIDS.

toad project
This toad is your long term commitment

I'll teach you the best road map to committing long-term

Are you a quitter? I myself often feel like somewhat of a quitter, and I often think I just as well could have been on multiple occasions. However, my actual track record speaks differently:

  • I was a hedge fund manager at the same firm for 15 years, and I never thought twice about it (sure, I did mull the idea of quitting the industry altogether, but I was going to stay at Futuris or do nothing).
  • I have a masters degree in financial economics from Sweden's most prestigious business school
  • I've been going to the gym for 30 years straight
  • I was in a relationship for 10 years

I admit that's hardly conclusive evidence. But, for the sake of it, let's assume I have something to say about committing.


The difference between long and short term focus

In my view there are two forms of commitment.

  1. Short term, i.e., being able to filter out distractions for minutes or hours, but less than a day, and focus on a certain task at hand, e.g., reading or thinking - doing deep work.
  2. Long term, sticking to a project like a job, a start-up, a relationship, studies for years or decades without being side-tracked.

Deep Work = learning short term focus

I've written about short term deep work before (here).

You can sum it up with one word: practice

Begin with a couple of minutes and slowly increase your deep work sessions over the course of a few months up to 60-90 minutes or more, only softly interrupted by walking around a few minutes every 30-60 minutes. In time you'll probably be able to perform several 90-minute deep work sittings per day, several days a week (if not all days).


True grit = how to stop being a quitter

Long term persistence or grit might be more difficult to master than deep work. It's hard to say though, since you don't get that many shots at it. Trial and error, or deliberate practice on decade long endeavors aren't easy to perform.

I had the luck of 1) having Aspberger's, 2) being a bullied outsider, 3) having a computer since I turned 10, back in January 1982, and 4) immense patience (albeit possibly a result of combining 1+2+3)

Lesson one

The long, lonely days and nights trying to learn programming on my own as a 10-12 year old and a young teenager was like a never ending boot camp for deep work, patience and grit. I guess lesson one for you is to find a hobby or project you find worthwhile and immerse yourself in it. Don't give up until you have mastered a certain level, be it programming (preferred coding languages discussed in the comment section), playing an instrument or lifting weights. The process of getting there will teach you something about deep work, deliberate practice, grit and mid term commitment.

However, that still doesn't tell you how to commit to 4-5 years of college studies, without letting other majors, friends, parties, travels or internet steal your attention and postpone or derail your plans.


Passion or myopia equals natural grit

For me long term commitment comes naturally, since I don't even think of it as long term commitments - except for right at the beginning. And hardly even then. This is how it works for me:

Right when I think school's out, somebody informs me: "You're supposed to go to college"

Me: "Alright, I'll choose this one", casually noticing it'll typically take 3-4 years to finish

(and then never again raise my head to think about how long time I have left, only putting one foot in front of the other, dealing with whatever small task is right in front of me).

Then I'll just go through the daily and weekly motions of buying books, preparing for lectures, handing in papers and writing exams, with no real thought about the potential alternatives. During my entire time at business school (Stockholm School Of Economics), I never even considered skipping an exam, dropping out, taking a sabbatical or any other version of not following the standard schedule.

In my mind (not that I thought about it even once), college was a fixed thing that you either do or you don't, and I had already commenced the "do" version.

 

TINA

-the mating call of evil and retarded bankers, peddling overvalued stocks; "There Is No Alternative"

I think the lesson here is to disregard alternatives altogether. Just as you're supposed to when on a diet; don't even look at a cookie, candy bar or bacon. Definitely don't have "just one" or "a little bit". Don't look at it, don't buy it, don't contemplate it, don't consider doing a little and then compensating; just don't do it at all.

If you are one of those having trouble committing for the long term, you need to try to achieve a mind-set of "there is no spoon"; there is no alternative - it doesn't even exist. You are at college, study damn it! There are no parties, no travels, no part time jobs, no "just for a little while", no "but perhaps it would be better to". Those realities don't even exist; so you can't even think about them. Just make the best of one day, week, paper, month or exam at a time.

Some introverted people actually need the opposite advice, to get out more and meet people IRL, but I'm not addressing them in today's article.

Place your bets and relax

For me, long term commitment comes naturally, since I don't think about it as a long term commitment. I just begin, and then the alternatives fade away and disappear; and I'm left with a series of scheduled short term tasks arriving at my doorstep every day.

I would never have gotten through business school or managing a hedge fund for years on end, if I had ever thought about the entire project. However, just one more course, month or quarter was always conceivable.

Thus, the trick, if there is one, is to just forget about there even being any alternatives. Place your bets on the roulette wheel and then just sit back and relax.


Every Day Counts

-never wait for the next day to happen; live in this one

Here's a thought: most projects aren't about choosing the optimal project (college, job, travel destination, girlfriend) anyway. It's about participating and living fully in whatever situation you happen to choose. Consequently you should just do it, just choose something good enough and then stick to it.

However, if something truly better comes along, that's impossible to filter out, you need to be able to break out of your homeostasis and go with the obviously superior alternative. In such a case, however, there won't be anything to think about. You'll know right away (though you may be too afraid or stuck mentally to change).

 


Ozzy

Talking about commitment, I went to a Black Sabbath concert last Saturday. Ozzy Osbourne is still their lead singer after 47 years (although he was fired in between). He's cheating though, since he's driven by passion, or possibly poor cash flow.

The best part of the concert for me, was to engage, a handful of times, in the spontaneous mosh pit, where I was standing close to the stage. Despite it being a pure "shoving-only and no fighting pit" I got a nice adrenaline rush out of it every time it got going and I jumped right in. I also enjoyed the opening bands Rival Sons and not least Volbeat.

toad project
Don't just stare at it. Eat it!

Summary

  1. Practice short term deep work to lay the foundation for high quality work
  2. Make a long-term choice and stick to it. The value doesn't lie in making the absolutely optimal choice, but in commitment and execution. Again, it's not the choice, it's the commitment that bakes the cake.

don't look at the entire ugly toad every day

Don't treat your project as long-term; don't look at the entire ugly toad every day dreading how it'll taste, just nibble a little from it every day for several years until you suddenly notice it's gone.

Find your prio 1 and then stop looking

Sure there may be better priorities out there but you're doing yourself a disservice if you spend your entire life mentally scattered, constantly actively searching for ever better activities, friends and partners. Find a good enough prio 1 and get going.

For perspective, to start a 30 year gym career all you have to do is go to a gym and lift some weights. It sure beats spending weeks, months or years looking for the theoretically perfect workout routine before starting.

I've found the perfect routine at least ten times during those 30 years, and counting.

Help a friend get going already, by sharing this article. And don't forget to subscribe to my newsletter with weekly thoughts on how to become happy, healthy, effective and wealthy.

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