Should the average Monevator reader – likely a passive investor – give two basis points about this week’s GameStop-centered mania in the markets?
On the one hand, no.
Even though it made the BBC News. Even after it drew an investing-related comment from your friend who only posts about cats and macramé.
Only a handful of stocks went bonkers this week. They’re immaterial to the indices.
You might argue mass fund ‘de-bulking’ in the face of the volatility caused prices to decline more broadly for the past few days; I’d agree it’s possible.
But we don’t invest with a time horizon of days around here.
These distortions will work out. We’ll hear about a hedge fund or two getting rescued. As for those long GameStop who say they’ll hold at anyprice – they’re probably already dead, in trading terms. They just don’t know it yet.
GameStop might have a brighter future. The initial short squeeze was inspired. But the firm surely wasn’t undervalued by a factor of 50 or more?
You have to know when you’ve won.
It ain’t what you takin’, it’s who you takin’ from
On the other hand, yes, all investors of all stripes should care.
I was going to write a lot more about this today. I said I would in the comments. But I feel like I’ve eaten two KFC buckets worth of information in one sitting.
And if I – an investing junkie – am stuffed, then 95% of you are, too.
So just a few quick discussion points:
You can’t have major dealing platforms imposing and then removing and then reinstating trading restrictions without fallout, even if – perhaps especially if – it was outside their control.
You can’t have hundreds of thousands of ordinary people making headlines around the world for apparently sticking it to gilded hedge funds without creating a narrative that will linger.
You can’t help but notice we’ve had two destabilizing flash situations – the Washington insurrection and now this pile-on – already in 2021. Very different, ideologically, though some of the rhetoric is the same (elites, corruption, control). But both were partly nurtured by algorithms that notice and nudge and readjust and prod us ever more – and ever more of us – in a given direction. This seems all-important, in the same irreconcilable way that climate change does.
Me and The Accumulator can’t agree on how much of the class warfare rhetoric that’s said to be motivating the Redditors is real and how much is window dressing. What’s undeniable is it strikes a chord. The gulf between the wealthiest and the rest looms larger than ever. (See the Oxfam report link below). We can’t say there were no canaries.
There’s no way Wall Street (and the City, or specifically the cluster of streets around Berkeley Square) isn’t in on both sides of these trades.
People complain about vocal shorting. But promoting long positions sustains an entire media industry and is just matter of fact investing. Why is that so different? It’s only in edge cases that shorting actually hurts a good company, aside from banks.
Money ain’t got no owners. Only spenders
Of course, if I have to choose I’m on the side of the ordinary guys.
The biggest hedge fund managers are ridiculously rich on the back of what they do, which is about as socially useful – on a relative ‘per pound of earnings’ basis – as if you and I sat down to have a game of Risk this weekend.
We need some custodians of capital and price discovery, sure. So let’s have ordinary fund managers paid outlandish six-figure salaries fighting the zero sum fight. Not eight-figure oligarchs.
With that said, shorting isn’t evil. And targeting hedge funds for a perceived role in the 2008 financial crisis is way off-base. (It takes respectable bankers to have the influence and debt to blow things up that badly.)
Anyway, I’ll outsource my defense of shorting to the excellent Cullen Roche in the links below, and my musings on where social media and attenuation fits into all this to the chap from ETF Trends.
Both are great reads, among much else good stuff this week.
You come at the king, you best not miss
Now for some good news: after this week’s announcements (again, see the links below) we have five Covid vaccines that work.
Broadly, it seems the tricky-to-handle mRNA vaccines have a very high efficacy and prevent the vulnerable from succumbing to the virus. The more traditional ones are less effective, but prevent serious illness.
So the former into the arms of the vulnerable, and the others ASAP for the rest of us for herd immunity. Hopefully that’s enough to get us out of this mess and away from our screens. (Those screens are getting to everyone!)
Indeed I believe it’s just possible we’re starting to see this working in the UK statistics, following the UK authorities’ commendably advanced rollout.
A BBC report I saw today dwelt on the apparently mysterious persistence of high Covid prevalence in today’s data from ONS random sampling, versus falling official Covid case counts and all the rest.
We should note the statistics do cover different time periods.
But could it also be that fewer people are developing strong symptoms and seeking a test because the vaccinations are now having an effect on the more vulnerable cohorts? Even while the continued spread of Covid means it’s still showing up as amok among those randomly sampled people, who maybe have little to no symptoms?
As our Covid article the other week explained, that’s the sort of thing we’d expect to see first as vaccination begins to have an impact.
Lars isn’t convinced yet, but I want to be optimistic. Of course my guess is as good as yours. We’ll have to see what the experts say.
Fingers crossed. Here’s to saner times – and more normal markets – to come.
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Like many naughty amateur active investors who should know better, I watched the movie The Big Shortwith popcorn, envy, and a grin.
Oh how I wished I was one of the movie’s heroes.
One of those quirky, semi-Aspergic, single-minded and misanthropic hedge fund managers who spotted the fatal flaws in the system that precipitated the Great Financial Crisis.
And who then profited mightily from all the mayhem.
After all, I’m quirky and I might be at home somewhere on the spectrum.
Why shouldn’t I be paid billions for being a single-minded misanthrope who watches share prices instead of football games?
I’d be played by Christian Bale, natch.
You can have Steve Carell.
In truth though, a lot has happened since The Big Short came out in 2015.
And most of it happened this week.
Today it’s hedge fund managers who are watching in awe and fretting about what amateur stock traders will do next.
Specifically about whether said retail traders are about to blow up their hedge funds.
By now many of you will have heard of the poster child for this revolution – GameStop.
That’s ‘poster child’ in the sense of an official warning that you’re about to be electrocuted, nuked, or biologically poisoned if don’t get the hell away.
And that’s ‘GameStop’ as in the US video game retailer that’s listed on the New York Stock Exchange.
As opposed to ‘GameStop’, the safe word that’s stammered by hedge fund managers through their ball gags when they’ve taken enough of a beating.
Here’s a graph of GameStop’s share price action recently:
Kind of hard to read, right? Looks almost flat – until you spot that cliff on the right hand side.
Surely that’s where the action is?
Fair enough. Here’s a chart of GameStop’s share price just year-to-date:
No, that’s not much better.
It’s probably easier if I tell you that GameStop began 2021 priced at less than $18. As I type it’s now around $325.
That’s roughly an 18-fold increase in less than a month.
It’s up nearly 10-fold since this time last week.
Wow.
Game for a laugh
An innocent, easily fooled person who believes that human beings and markets always behave in predictable, simply modeled ways – an economics professor, say – might suppose GameStop has enjoyed some kind of super-fortunate change in its business model since the Monday before last.
Perhaps GameStop found all its stores were located on top of gold mines?
Or it’s recovered a password to a lost wallet stuffed with Bitcoin?
Or it’s devised a way to jam Internet access for everyone forever, so people have to traipse to a GameStop shop to buy a disc in a box like it’s 1999?
No, no, no.
In a reality so unlikely it has even seasoned market watchers rubbing their eyes, re-reading the ingredients list on that Kombucha they’ve been mainlining in their lockdown home offices, and deciding that they really need to get out more, mutant virus or no mutant virus – what’s happened is that thousands of members of a Reddit subforum called WallStreetBets have engineered perhaps the greatest short squeeze of all-time1, transforming GameStop from a potentially doomed video game retailer from another era valued at $2bn into a potentially doomed video game retailer from another era valued at $22.5bn.
Surprisingly to those just tuning in, none of this interruption to normal programming is entirely new.
The gleefully anarchistic punters who populate WallStreetBets have been getting themselves noticed as they chase their favourite stocks via the free trading app Robinhood since at least the beginning of the pandemic.
And the subReddit was amusing itself in spectacularly reckless style for years before then, as this amusing video history recounts:
Monevator has even linked to several relevant stories about all this retail action in our Weekend Reading links over the past year.
Admittedly it’s been more the stuff of opinion columns and wonky commentary.
As opposed to something being of interest to the White House:
There’s also nothing new about the mechanism by which the Redditors drove up Gamestop’s share price – the fabled short squeeze – either.
And if you run a hedge fund I suggest you do, because more than 100% of GameStop’s shares were sold short when WallStreetBets came calling.
Yes, more than the entire issued share capital had been sold short by sophisticated and amply remunerated market participants.
Which is rather surprising, even without a horde of Redditors at your gate.
If you wonder what happens when the music stops and more shares are sold short than exist, ask any seven-year old who has played musical chairs.
It might save you having to ask your billionaire hedge fund mates to bail out your hedge fund to the tune of $2.75bn.
Alternatively, read Matt Levine’s vintage take for Bloomberg.
Levine goes into all the detail – and he’s writing about the little squeeze before the big squeeze – but the gist is:
…that these two factors—a short squeeze and a gamma trap, if you like—combined to push the stock up rapidly on Friday. Something started the ball rolling—the stock went up for some fundamental or emotional or whatever reason—and then the stock going up forced short sellers and options market makers to buy stock, which caused it to go up more, which caused them to buy more, etc.
Matt Levine, 25 January 2021, Bloomberg
Talking of hedge funds, while some stock watchers now call for regulators to step in to stop uncouth youths from stiff arming honest, hardworking capital market oligarchs, the reality is hedge funds have been ripping each other to shreds with orchestrated takedowns for about as long as hedge funds have existed.
Rival funds were probably in the mix alongside the Reddit money pushing up GameStop.
Heck, George Soros and Stanley Druckenmiller – and a bunch of other funds that piled on – broke the Bank of England with what was effectively a short squeeze on Sterling in 1992.
And you didn’t see the Queen running to the regulator whining that meanie hedge funds were trashing the value of her coin of the realm then, did you?
No, like any good market player, Regina1926 just logged into an AOL chatroom via Buck Palace’s dial-up and conceded she’d been pwned.
Flows before pros
Perhaps at this point you’re wondering what the hell you’ve been doing with your life?
Why you have been steadily trickling £500 a month into a balanced passive portfolio in an ISA when you could have been whooping it up on Robinhood? Or at least on Freetrade, the UK’s equivalent?2
The game has changed, right? The power is now in the hands of the little guys – provided there’s enough of them.
As Bloomberg’s Tracy Alloway puts it, today’s market is favouring flows before pros.
And retail punters are the ones with their hands on the money hose.
Not so fast.
I know, I know. It seems a lot of fun to ride meme stonks by going YOLO on calls like a pure autist with his eyes only on the tendies, diamond hands clenched tight, barely bothering to do any DD on the way to the moon!
(Translating from WallStreetBets-ease: It sure looks like it would be an enjoyable – not to mention profitable – enterprise to invest every penny of one’s capital into buying call options on a popular stock represented by an amusing image posted on Reddit, just like a gifted but somehow limited mathematical savant would, refraining from selling any of your securities, and focusing only on the six- or seven-digit returns to come rather than being bogged down with due diligence on said stock, all the while looking forward to some delicious chicken nuggets as a reward.)
We’ve seen this movie before. If following Internet posters into hot stocks was a sure route to enrichment, the Dotcom Bust would have been left with a different name.
We will, we will, rock you
I don’t begrudge the WallStreetBets crowd their fun. It’s been a miserable 12 months, so get it where you can I say.
I may be an active investor for my sins, but I’m not a hypocrite.
I understand the thrill of punting like this (it certainly isn’t investing).
Only with money you can afford to lose, ideally.
Otherwise fine, let’s see this run for a while. I’m enjoying the show.
Right now the day-traders are scanning the lists of the most-shorted stocks in the market in their hunt for new targets.
Some such stocks (sorry, ‘stonks’) are already seeing their prices rise.
Perhaps traders and investors have begun to buy in anticipation of the WallStreetBets eye of Sauron alighting upon them.
Or maybe sophisticated shorters are bailing, covering their shorts, and putting an ‘Out to Lunch’ sign on their door. And who can blame them.
The blast radius is expanding. I even noticed a relatively obscure German battleground stock called Grenke was up 16% yesterday. It’s hard to imagine that’s on the typical Redditor’s radar.
Short fall
This can’t last forever, though. And I don’t even mean regulation.
GameStop isn’t worth $22.5bn. It just isn’t. The company should try to raise capital while it can at this price, because it won’t stay here.
It seems a poor short to me – originally the epitome of a crowded trade, it also has net cash, a billionaire cheerleader, and while you wouldn’t want to start today with a load of shops in malls, games aren’t exactly a fading force – but nevertheless, it won’t be the new Amazon anytime soon.
Eventually fundamentals and prospects will – at least vaguely, in the hand wavey look-into-my-eyes way of the stock market – be reasserted.
That’s not to say a precise intrinsic value will be reflected in the stock price.
But something within – oh, I don’t know – say 200% of what it’s worth.
And you really don’t want to be holding the bag on the way down to there.
Eventually you’ll run out of greater fools to sell to.
Flashy mobs
What I haven’t got much time for is all the FinTwiterrati proclaiming Something Must Be Done, This Isn’t Capitalism Dear Boy.
There’s talk of a disorderly market. Of the breakdown of true price discovery. Of big losses to come in the aftermath.
But as I said, hedge funds have been taking advantage of opponents caught offside forever.
Why shouldn’t retail traders have a go for a change?
Perhaps the only thing that’s truly different is the risk tolerance of the newbies.
A hedge fund that’s short a particular stock can’t afford to see its assets go to zero. It has a fiduciary duty, as well as more practical limits on its losses.
But the WallStreetBets army? They have a cavalier attitude to losing money at the best of times.
Perhaps the mathematics of tens of thousands of coordinated punters being ready to lose $100-10,000 does change things a little bit.
Maybe new risk controls are needed at funds. Maybe the mechanics of options trading need a rethink. Perhaps there will be regulatory tweaks – whether advisable or not.
But that’s something for the zero sum traders to figure out among themselves.
Personally I think the market will take care of it – in brutal fashion – eventually.
The rest of us are best off watching with a bag of peanuts from the gallery. Or at the most having a flutter with some fun money.
I’m an active investor. But I’m the old-fashioned sort who expects to see long-term gains achieved over a few years, or even a few months.
At least a few weeks!
I don’t expect to get rich in an afternoon. Day trading is not and has never been a profitable way to wealth for nearly all who try it.
Bet on the horses. Bet on ‘stonks’, if you must.
But invest for the long-term in stocks.
My unexpected piece of the Gamestop action
Here’s a fun postscript.
I thought I’d be ending this article bemoaning that I wished I had some GameStop shares. Simply so I could sell them.
Well, it turned out I did own some GameStop shares!
It’s around this time every week that Freetrade tells me if anyone followed my affiliate link to bag their free share for signing up via my referral – granting me a bonus share in the process.
Imagine my surprise when I fired up the app to see if anything had come in – only to discover my single largest holding on the platform was GameStop.
It wasn’t my number one holding last week. It wasn’t even yesterday.
Truth be told I hadn’t even known I owned any GameStop shares. (I typically just let my free bonus shares be.)
But there they were. Two of them! Awarded to me when they were priced at less than $5.
Now priced at $330. Up around 70x.
Freetrade handily reminded me that GameStop had been on a bit of run:
What to do next? Should I evaluate the prospects for GameSpot’s future like a serious investor?
Cling onto my shares in a mini-me version of a WallStreetBets’ YOLO trade and ride the company to the moon – or to zero?
Reader, I hit hammered the sell button:
A huge shout out to whoever signed up to Freetrade and randomly granted me this windfall.
And I’ll add something that nobody has said for most of the past five years…
…I hope you got a GameStop share, too.
Sign up to Freetrade via my link and maybe we’ll both get another free share that’s going to the moon. No promises, mind.
A similar squeeze in 2008 briefly made Volkswagen the most valuable company in the world, which is up there, too. [↩]
Affiliate link. Also note that like most other UK platforms Freetrade doesn’t offer the bonkers option trading that’s fueling the US boom. [↩]
Have you ever received a measly CPI-adjusted wage rise and felt like the headline inflation rate bears as much relation to your cost of living as a neanderthal tribe does to the Rich Kids Of Instagram?
CPI inflation and its RPI cousin measure the average change in prices for a representative basket of goods and services bought by UK households. This average figure is highly unlikely to match your spending habits.
In fact, it would be extraordinary if it did.
Perhaps you don’t smoke, or drive, or have a pet. Maybe you’re a vegetarian, or don’t consume prescription drugs at the ‘average’ rate. Or you could spend more on housing or less on food than is assumed by the official inflation rate methodology.
My personal inflation rate is closer to Afghanistan’s national figure than the UK’s.
The reality is that official inflation metrics aren’t designed to reflect your specific situation. And the difference can have a big impact on your investing plans.
Best practice calls for us to adjust our investment contributions and target numbers by inflation. Updating like this keeps your portfolio on track to deliver the purchasing power you need in the future.
Given it’s your own future at stake, it’s far better to correct drift using your personal inflation rate than to use CPI or RPI.
Inflated expectations
Inflation is an insidious money-munching monster. Innocuous differences between your rate and the official statistics can have a disproportionate effect on your lifestyle given time.
For example, the historical UK inflation rate of 3% will halve your purchasing power in 22 years and nine months.
But a personal inflation rate of 5% halves your spending power in 13 years!
With a healthy lifespan, you could be exposed to inflation for more than 70 years over your combined accumulation and deaccumulation phases.
It’s worth working out what you’re really up against.
What is a personal inflation rate?
Your personal inflation rate measures the change in prices that are representative of your precise spending patterns. That’s as opposed to the official inflation figures, which calculate the national average.
Your personal inflation rate accounts for how your situation diverges from the national picture due to your:
Demographic and gender
Level of affluence
Region
Housing choice
Brand preferences
Product and service preferences
Choice of vendors
Ability to switch to cheaper products or take advantage of offers
Ability to substitute – for example to switch to pork if steak becomes too expensive
If you spend more on items with large price increases in comparison to the national average, then your personal inflation will outstrip the official number.
If you spend relatively more on items with low price rises then you will experience a lower rate of inflation.
Remember, we tend to be susceptible to the money illusion. This is our very human habit of valuing our wealth in nominal terms (the figure before inflation adjustments) instead of real terms (our actual purchasing power).
The money illusion gets worse as you age. Your price perceptions are partially anchored by the past. It can be hard for even the money-savvy to update their outmoded notions, such as that a pint of milk should cost 20p or a cinema ticket no more than half a farthing.
The illusion can be broken by knowing your personal rate of inflation.
You can use an online budget tracker or customise your own spreadsheet.
The simplest method is to capture your total annual spend, then calculate its percentage change every year.
For example:
Year 1 total spend = £30,000
Year 2 total spend = £33,000
Percentage change = (33,000 – 30,000) / 30,000 x 100
= 10% annual personal inflation
This crude method has a problem, though. Many people’s annual spending is pretty volatile.
For instance, my annual spend shot up 44% one year, then down 16% the next. I’m not advocating I should have increased my investment contributions by 44% in a year and then slashed them by 16%!
(The technical term for that is “nuts”.)
What’s needed is a personal inflation method that smoothes out our consumption patterns.
Our expenses can be quite benign some years. Other years the consumption gods hit you with spendy thunderbolts like replacing the roof in the same year you get married.
We need to account for that variation.
Two ways to stop your personal inflation rate whipsawing
One method is to track a subset of your everyday expenses and to exclude large and infrequent purchases.
The Everyday Price Index maintained by the American Institute for Economic Research excludes items such as car purchases, appliances, furniture, and housing.
What’s left on your budget tracker will be a reasonable indicator of your inflation rate. It won’t be suddenly blown out of all proportion because you moved house one year.
The second method is to include your large and infrequent purchases, but to notionally spread the cost over time. This enables you to flatten out major expense spikes into a smoother series of annual expenses. You can insert these into your personal inflation calculation.
If you buy a new car worth £10,000, say, and intend to keep it for 10-years then it shows up as a £1,000 expenditure every year.
Obviously this is a guesstimate. Much depends on how much you spend on a car next time.
Inflation hedonists
Official inflation indexes can understate inflation if a consumer product improves in quality but doesn’t drop in price.
You get more for your money, and that shows up in the index as a decline in inflation (according to some methodologies).
But say you pay £1,500 for a laptop, and you spent £1,200 on the equivalent model five years ago. You’ll experience personal inflation even if it’s twice as good as your old laptop.
You can adjust for this ‘hedonic inflation’ by annually noting the prices for similarly-featured, brand new versions of your big-money, irregular expenditures.
The £1,000 per year expense for the car, in the example above, would be upweighted if newer versions of the same model rose in price.
Granted, doing this takes some work. But your personal inflation rate will be more accurate in return for a bit of light Googling.
Alternatively you can assume you’ll stick to your current price point and accept a more basic product than is widely available next time.
That will be an interesting test of your frugal muscle.
Once in a lifetime
You can disregard costs for genuine one-offs for the purposes of personal inflation. Ignore the cost of your wedding or laser eye surgery, and assume you’ll never move house again.
Just make sure those costs are genuine one-offs.
Being sensible about what you ignore will help dampen your personal inflation rate volatility without torpedoing its accuracy.
Personal inflation annual average calculation
Once you have a few years of data, use a geometric mean calculator to reveal your average annual rate of personal inflation.
You’ll now have a good sense of how your personal inflation stacks up against the headline rates.
My average annual inflation rate is 6.38% vs 1.34% for CPI over the seven-year period I have good spending data for.
I’ve stayed ahead of inflation by increasing my income by an average of 8.25% per year. But I’ll have to get a grip on my personal rate if I retire early.
I can’t expect my portfolio to punch the lights out enough to cope with that level of inflation when headline rates are so low.
You can benchmark yourself against the UK inflation rate of your choice by visiting the ONS’ inflation page.
Slice and dice
It can be pretty revealing to chop up your spending data into categories. You can then analyse your inflation rate at a more granular level.
My annualised personal inflation rate for groceries is 4.85%. Knowing this figure has given me fresh impetus to rein in the food bill as it’s one of my biggest spending categories.
Utilities spending has declined by 5.51% annualised over seven years. I even impress myself with that. My gut would have said I’m burning money on heating. My gut is a notorious pessimist.
I’m going to credit this spending decline to the power of annual switching and installing the most efficient boiler that I could. I also installed smart heating controls.
How to use your personal inflation rate for investing
Adjust your key investing numbers by your personal inflation rate on an annual basis:
Investment contributions
Your investment target total
Your target income to achieve financial independence (FI)
Step 1 – Add your end of year one personal inflation percentage to 1.
For example, 5% inflation: 1 + 0.05 = 1.05
Step 2 – Multiply your year one investing contributions by that annual inflation number e.g. 1.05.
For example, £500 monthly investing contribution:
500 x 1.05 = £525 investing contribution per month in year two
Step 3 – Next year, multiply year two’s investing contribution by the end of year two’s personal inflation number.
For example, if year two personal inflation is 4% then:
£525 x 1.04 = £546 investing contributions per month in year three
There are a few US personal inflation rate calculators. They’re liable to be misleading as they try to squeeze you into Moses baskets representing different US inflation profiles.
Remember, relatively small divergences can devalue your wealth many times during a human lifetime. For this reason you’re better off calculating your personal inflation rate by hand.
Don’t blow yourself up
As investors and FI hopefuls we’re rightly warned to fear inflation like a baby chimpanzee is taught to fear snakes. Inflation is the serpent in the garden ready to make off with our nest egg if we’re not wary.
We’re too easily lulled by low official numbers. Meanwhile our goose is being cooked by a personal inflation figure nobody talks about. (Because if you do, people shoot themselves in the head.)
If you already track your spending then calculating your personal inflation rate is easy.
If you’re not tracking your spending – you should be!
Take it steady,
The Accumulator
P.S. – I love this little detail about the RPI basket of goods from a paper on inflation:
Changes in the price of bacon are represented by back bacon and gammon: it is assumed that other cuts of bacon will, on average, move in line with these two items.
Jim O’Donoghue, Matthew Powell and David Fenwick. “Personal Inflation: Perceptions And Experiences.” 2007.
I enjoyed Indeedably’spost this week about his self-imposed silence on hitting a major financial goal:
In the end, I opted not to mention my arbitrary financial milestone to anyone in real-life.
Instead, I joined my kids on the couch for a game of Super Smash Bros, while icing my busted toe with a bag of frozen peas.
The lockdown kitten leapt onto my lap and settled down for a nap.
Shallow and vain creature that he is, he had already forgotten about his fleeting stolen food victory and recent water gun defeat. Now he was content to be friends, for at least as long as I was willing to stroke his fur.
I gave another wry chuckle. We were a fine pair!
It doesn’t get much more shallow, vain, and fleeting than celebrating arbitrary round numbers contained in a spreadsheet.
As a private individual who’s nevertheless run a financial blog for over a decade, I relate.
Money’s too tight to mention
I generally prefer to live financially incognito, here and in real-life. But it does cause some issues.
My Bohemian investor habits for example eventually had some of my friends asking questions – not unkindly – as the years wore on.
Even as they upgraded their hedonic treadmills with the latest bells and whistles, I was still living like graduate student.
Where, a few prodded gently, had it all gone wrong?
De-cloaking to buy my flat mostly alleviated these concerns, albeit at the cost of more questions. I usually change the subject!
(Most of my friends are supremely disinterested about both my investing and this blog, so they won’t read this. I return the favour by not reading their books, playing their games, or listening to their music. Hah!)
Family is even trickier. You’re liable to be offered help you don’t need for one thing, which makes you feel guilty.
I eventually had to share some numbers with my mum to stop her worrying.
Family also bring the issue of whether and how you should help who. I haven’t really got a strategy for that one yet.
Something got me started
Finally, as a writer, there are you lot, the readers.
What should you know? How much context is useful, how much voyeuristic or self-indulgent? Or is it maybe misleading not be more candid?
My co-blogger The Accumulator made a splash when he came out as Financially Independent last year. Lots of congratulations went his way, which was great. And almost nothing snarky – ditto.
But best of all, it was suddenly clear how inspiring and helpful it was for many Monevator readers to see him hitting that goal.
They took it as further evidence and motivation. They could get there, too.
If you don’t know me by now
I do sometimes wonder if I should be more candid about my finances.
I thought it when TA posted about hitting his FI number.
I often think I should when I see people struggling with the slog, and doubting whether this whole saving and investing malarkey really works.
(Spoiler: it really does.)
I even found myself this week alluding to previous investing success in a draft that I’m writing about one of my biggest investing failures.
If you only read about an investor’s bad days, you might well question why you’re reading him or her at all. So maybe it isn’t entirely vanity or insecurity that makes me want to sneak in a few disclaimers? We’ll see.
What about you? How much do you share with your friends, family, and co-workers?
And why?
Let us know in the comments below, and have a great weekend.
