What caught my eye this week.
Today would be embarrassing if Monevator was an old-fashioned print magazine (as opposed to an old-fashioned ‘weblog’!)
I’d be scurrying past the newsstands. Trying to avoid my cover story – already written by Wednesday due to magazine print deadlines – about the bull market disguising how last year’s mega-winners had cratered in 2021.
That post looks less topical this Saturday morning. Because in case you hadn’t noticed – in which case, collect your merit badge from The Accumulator by the door – markets were roiled on Friday by fears of a new Covid variant that seemingly has just been spun-up in someone’s body-lab in South Africa.
This ‘Omicron’ variant has more mutations than a Chernobyl-era chicken, and on the surface a transmission rate that makes Delta look about as speedy as an epistolary 18th Century love affair.
The City fears it’s seen this movie before. So traders have dumped first, and will ask questions over the weekend. At least the potential for a speed bump in that bull market, then.
To only rub salt into the wound, this was also the week I decided that the ‘Covid corner’ section of our weekend links had run its course. Oops!
Turn, turn, turn
In some ways though Friday’s reversal of fortune amplified the point I was set to make. Which was that nothing – ever – lasts forever in the markets.
If you’re a halfway active investor, you’ll remember that lockdown darlings like Zoom Video and Peloton were recently all the rage. Their shares skyrocketed while fund managers and everyday traders were using their products every day.
But as Will Hershey on Twitter recounts via a handy table, such shares – lauded as inevitable winners of a work-from-home revolution – have since crashed 35-70% from their highs.
On the Compound Advisors blog, Charlie Bilello makes the same point, adding:
after a year like 2020, [stock picking] almost seemed easy.
Had you purchased virtually anything in the high growth/tech/IPO/SPAC space, you would have outperformed the S&P 500 by a wide margin.
Right on, Charlie. I walloped the market in 2020.
But in 2021? Not so much!
Anyway, on Friday some of these 2021 reversals then reversed themselves again. At one point Zoom was up over 13% on the day, Peloton soared, and vaccine maker Moderna ended the session 21% higher on the not-unreasonable assumption that it might be busy retrofitting its vaccine for the new party pooper.
Some of those spikes were short-covering, I think. But it was also a reality check for investors that the pandemic was far from over.
Eight miles high
I’ve been following markets closely for 20 years. Even so I’m still amazed at how apparently unshakeable narratives crumble over time.
You had to own dotcom stocks in the 1990s. You were an idiot for believing in the Internet by 2003. UK private investors only cared about small cap oil and gas shares by the mid-naughties. Nobody should own equities in 2008 and 2009 – investing was all a con. The market was pumped-up and inflated by 2015. Retail share trading was finished by 2019 and we were all going to index – and then along came RobinHood and meme stocks. Government bonds could only crash said many Monevator commentators six weeks ago. They’ve since spiked higher. And so on.
Much of this stuff is only apparent if you’re naughty active investor. At the index level you tend to see broader, steadier moves.
That’s certainly not a reason to abandon index tracker funds – indeed for 99% of people it’s another great reason to own them. (If you want to keep enjoying sausages, never visit a sausage factory.)
Nonetheless, passive investors will someday face their own narrative shift. The market will crash and it won’t bounce back for a good while. “Buy and hold is dead!” we’ll hear. We’ve been through that cycle at least twice in the lifetime of this website alone.
And then that in turn will pass. In investing, never say never again.
Have a great weekend everyone!
*Horace, via the dean of value investing Ben Graham.
From Monevator
Why you should think about your legacy and write a will – Monevator
How much should I put in my pension? – Monevator
From the archive-ator: Reasons to rent instead of buying a house – Monevator
News
Note: Some links are Google search results – in PC/desktop view you can click to read the piece without being a paid subscriber. Try privacy/incognito mode to avoid cookies. Consider subscribing if you read them a lot!1
HMRC issues tax scam warning to self-assessment taxpayers – Which
Leaseholders fury at being charged £450,000 for new intercom – MSN
Pandemic-era shortages come for yachts and planes – Axios
WHO names ‘Omicron’ a variant of concern… – BBC
What we know about the new variant [Search result] – FT
Countermeasures mooted as Omicron reaches Europe… – Guardian
…meanwhile markets fall sharply as variant spooks investors – Sky News
Products and services
Investec launches a one-year fixed interest account paying 1.36% – ThisIsMoney
Travel bans are back. Who offers the best Covid travel insurance? – Which
Firms team up to bring 40-year mortgages to the UK – Yahoo Finance
Want to test your testosterone, cholesterol, Vitamin D, and more – all from home? Get £10 off when you try Thriva via my affiliate link – Thriva
Smartphone pensions: should you switch? [Search result] – FT
With Bulb RIP, what should you do if your energy firm goes bust? – ThisIsMoney
Open a SIPP with Interactive Investor and pay no SIPP fee for six months. Terms apply – Interactive Investor
The rise of the many in consumer fintech [US but relevant] – A16z
Buying shares in physical classic cars – ThisIsMoney
Homes for sale with statement staircases, in pictures – Guardian
Comment and opinion
Sir Steve Webb: Annuities deserve a fresh look [Search result] – FT
Fees are your foe – Humble Dollar
A cap-weighted index fund offers wide diversification at a low-cost – Allan Roth
Closing time [On retirement] – Finding Joy
Adversity is the pain you don’t see coming – Portfolio Charts
100% off – Maximum Gratitude, Minimal Stuff
What if the Bank of England isn’t in control of inflation? – David Smith
Career seasons: choosing a job based on the life you want – Ramit Sethi
Finding enough – Indeedably
People are overly panicked about inflation [US but relevant] – The Bellows
Paths to success – Humble Dollar
Keeping up with the crazy mini-special
The golden age of grift – Young Money
This will not last – Of Dollars and Data
The Age of Funcertainty – The Reformed Broker
A billion dollars isn’t cool – The Irrelevant Investor
Wise and timeless words on investor behaviour – Novel Investor
Naughty corner: Active antics
The S&P 500 as seen through various valuation lenses – Factor Research
The US Grayscale Bitcoin Trust is a poster child for inefficient pricing – Morningstar
Betting against Warren Buffett [on time horizons] – Behavioural Investment
Crypt o’ crypto
Is crypto bullshit? – Model Citizen
Tokenize everything – Dave Nadig
Web3 breakdown: Bored Ape Yacht Club [Podcast] – Invest Like The Best
US firm experiments with mortgages on a blockchain – ThisIsMoney
What’s with all the decimal places when you trade crypto? – Bloomberg
Will crypto protect against inflation? – Morningstar
Exploring valuation models for digital assets… – CAIA Associates
…and a rationale for Bitcoin at $120,000 and more – Institutional Investor
How could all the new crypto wealth disrupt US politics? – Joseph Wells
Kindle book bargains
The Everything Store: Jeff Bezos and the Age of Amazon by Brad Stone – £0.99 on Kindle
Talking to My Daughter: A Brief History of Capitalism by Yanis Varoufakis – £0.99 on Kindle
Exponential: How Accelerating Technology Is Leaving Us Behind by Azeem Azhar – £0.99 on Kindle
Happy Sexy Millionaire: Unexpected Truths about Fulfillment, Love, and Success by Steven Bartlett – £0.99 on Kindle
Environmental factors
Scope 3 [carbon emissions] under the microscope [PDF] – Lindsell Train
Breeding heat tolerant corals at the Great Barrier Reef – Guardian
Switching 100% to electric vehicles is no longer a fringe idea – NPR
Off our beat
Work from home works, until you need time off – The Atlantic
“I earned more than 40 million air miles” – Guardian
Scary realistic entry-level CGI faces are nearly here [Video] – via Twitter
Yes, the super-rich are as miserable as Succession makes out – Guardian
The real-life quest to cook all 74 Stardew Valley recipes – Wired
Facebook and Google fund global disinformation… – MIT Technology Review
…while also serving up surreal divisive claptrap – The Atlantic
And finally…
“Focus on being productive instead of busy.”
– Tim Ferris, The 4-hour Workweek
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As a pessimist and a long term index buy and hold investor I note your point how things change and am always watching for passive investing to get its comeuppance
Probably why I have a 30/70 equities/bond portfolio
A prolonged market drop wouldn’t bother me
However so far so good -passive investing still probably the way most investors should go!
xxd09
Timing is awful for me. I’ve been in process transferring a previous workplace pension to my SIPP as cash. Transferring the underlying funds in-situ wasn’t possible because the old provider white label “their” funds
After about 3 weeks of waiting for them to get off their asses, they decided to sell everything on Friday. The most volatile day in months.
I expect the markets to bounce on Monday. Just my luck.
I’ve started buying up an index fund once a month trying to get rid of some cash in a S&S isa. The date previously bought was the 25th so early last week I pressed the button on another buy. Jumped the gun! Maybe I should double dip get a bit more bang for my buck!
I for one am not surprised that there is a new variant and I think that the name “omnicron” is proper sci-fi but the affect on the markets was quite a(n over) reaction with oil down over 10% in a day.
Am I the only one who was expecting the unexpected?
So I’ll sit tight, my SIPP is back to where it was in August but I didn’t worry about its value then as being the end of the world.
I’ll hibernate out this panic, wake me up when it’s the new tax year.
Active or passive lover or swinging both ways. I refer you to possibly your best article dated March 13 2020. Hold tight – it will be ok.
The market reaction on friday was rather outsized across a number of markets such as fixed income and commodities. Not so much equities, which hardly moved in relative terms. It’s odd timing in that this South African variant has been discussed for quite a few weeks and I’ve been at a loss to why there was zero reaction until Friday.
The market struggles to cope these days with more than one macro narrative. It was all about inflation prior to Friday, then Friday morning we had a digital move to COVID. Of course, another round of lockdowns is inflationary, so we’ll have to shift back eventually.
It’s also worth noting it was the day after Thanksgiving. The US was essentially taking a long weekend. Plus it’s the end of Nov: who wants to lose their bonus with a month to go, so dump now, ask questions later.
It emphasises how poor liquidity now is across many markets. Too many momentum investors, too much indexing, too many CTAs. Sellside dealers unable to take risk due to silly regulations. A total dearth of discretionary risk taking from the buyside funds. I don’t think it’s ever been easier to make money than in the last few years but it’s also never been harder to scale that risk taking given liquidity constraints.
If the markets go down then this is a great time to buy. If the markets go up then its great for the value of a portfolio. Its a win, win because an investor with the long view will always do well.
On a side note, the media once again do their best to stir up as much chaos as possible. A plane or planes rammed with fully vaxed and tested travellers is spreading a new version of THE Covid from South Africa around the world! The head of the Health Service in South Africa has stated no one is even in hospital with the new version, but really if it is the case that this new version is so bad then how is it that even vaxed and tested people are passing it on en masse?
The head scratching and mental gymnastics that must be taking place at the minute… laughable.
I’ve stopped watching the news and am close to stopping reading the papers too. It’s almost like they desperately don’t want the pandemic to end. They scour the world for outbreaks and give zero focus to anything that may look positive with regard to the virus. I have never seen the news so bent out of shape and the public so gullible – of course, many of them don’t want the virus to end either. I worked in a food factory right through the original pandemic and, had our workers not turned up every day “risking” their lives, Britain would have starved. All this twaddle about four day weeks and working from home – tell the folks filling the supermarket shelves. I’m sick to the back teeth of it all.
“if it is the case that this new version is so bad then how is it that even vaxed and tested people are passing it on en masse”
That’s why it’s bad, no?
My poor choice of wording, point taken.
Still it does make one wonder about the usefulness of Covid passports when you see the current (panic induced) news about plane loads of nicely compliant people spreading death around the globe?
I don’t expect to win a MacArthur for suggesting it’s too early to be sure it’s an over-reaction. 🙂
If the rate of infectiousness implied by the FT graph holds true everywhere (big if) and it’s at least as serious an infection as Delta, then it seems very possible that pretty soon everywhere is going to look like Germany currently does.
On the other hand if it’s much less serious (more asymptomatic, which could be partly why it’s spreading so quickly) then maybe the pandemic could be over sooner that we thought…
As always lots of ifs and buts, but it doesn’t seem crazy to me that for example the oil price sold off hard given the short-term nature of supply/demand imbalances in that market. (To return to the point of my article, we all remember $0 oil and how some pundits thought it was never going to go above $40 again in Spring 2020, right? 🙂 )
In the equity market at least, the sell-off seemed pretty orderly. Sometimes I am able to reshuffle my holdings pretty recklessly in a big down day but there were very few if any nutty looking dislocations to be found. Again, compared to early 2020 this variant so far is all a known-known (in the absence of it turning out to be much deadlier). We know the drill. So it’s more like Nightmare on Elm Street 7 than a brand new franchise. Let’s just hope it’s not an M. Knight Shymalan outing with a grim twist!
I do think passive investors need to be wary of writing every big move in markets off as ‘those crazy panicking active investors’ or whatnot. The super-power of passive investing is ignoring the noise because you know you have no edge or at least you’ve decided the risk/reward (/hassle) of playing that game as a private investor is not worth it to achieve your goals. The passive super-power is *not* being better able to read the impact of big and small events on markets better than aggregate active investors. 😉
Go back to February 2020 when I started writing about Covid on Monevator and you’ll find plenty of comments from readers that amount to a big yawn. Our own @TA asked me why I was worried about this virus and not the half-a-dozen other nasties that had emerged over the past 20 years that had amounted to nothing. It was a very fair question, and if I told you now my answer would be drained with hindsight bias…
On the flipside, as Nassim Taleb says if you’re going to panic, panic early. 🙂 Trading costs have come come down, and once you get the hang of it (and the stomach for it) it’s far easier/cheaper for private investors to add and reduce exposure even when holding a portfolio of individual shares (versus ETFs, say) than as recently as 10 years ago. I’m definitely not recommending it; most will just churn away their returns like this. But it can be done.
And it’s not necessarily irrational, depending on what your goals and strategy are. As Morgan Housel has written, often we’re all (somewhat) rational as long as you realize we’re all playing different games. 🙂
Finally, with respect to being sick to death of it all, I hear you. I’m thoroughly fed up with the pandemic too, and I think most people feel the same. Unlike some of my friends I get the tube (masked unless the carriage is empty), go to restaurants and cafes, go to the swimming pool, meet friends for drinks, and so on.
So I can’t say I’m suffering much at all right now, but it’s still a pain and kind of annoying to see the ongoing signs. But being fed up with it doesn’t make it go away.
We’ll know when it’s over (pending a super-variant) because it will have drifted into irrelevance. With European countries going into lockdown etc we’re not there yet. Fingers crossed we’re nearer the end of the end than of the beginning though, at least in the UK.
I’m not particularly prone to flailing my arms and wallowing in COVID panic but I think some people are missing the point as to why the variant is of genuine concern.
Yes, it’s unlikely that this variant will cause worse illness, but it could potentially be far more transmissive and vaccine-evading. Even if it proves to be less potent than delta, it could put far more people in hospital just by infecting that many more people and overcoming whatever % of vaccine efficacy.
That could still unfortunately mean unpleasant knock on effects for everybody i.e. restrictions/lockdown if it was left unchecked, even if most people would just get a sore throat or whatever. So there is good reason to be concerned about this variant in my view.
However – it’s perhaps also possible that this virus is not as transmissive as it may seem, and also that it may be relatively impotent in terms of how badly it effects people. Some combination of those two could mean this is (almost) a good thing. But we still probably wouldn’t want to encourage it along if it has any significant level of vaccine escape.
So, as it is, we’re stuck with three wide scales of how transmissive, deadly and vaccine-evasive it is, but some academic work that makes it look potentially quite bad. As such I think it’s totally right that Governments are acting w.r.t travel bans. Just because we’re all fed up with it doesn’t make the problem go away.
It’s a bit of a bugger for me though as I’m in Mexico and I can already feel that country’s name being pencilled in in bright red on a big list of ‘iffy’ places.
Side note – does anyone else really like financial markets for judging how bad a problem is? It’s a revealed preference in money that really works. Newspapers will always dram it up, but when it comes to people actually playing with their money, the truth is there. Same with looking at betting markets when you see some questionable headline about the next election. We’ll know whether this variant is really going to cause a problem if markets suddenly drop by 6%+ next week
My post crossed with TI by the way (as we made a few similar points).
On another note, as someone who has spent far too much time recently reading about the whole area, I really enjoyed the ‘is Crypto BS?’ article. Or at least half of it. He brilliantly outlines why so many people (including me) are turned off about the whole space.
I found myself really wanting to be carried along on the same journey to less crypto skepticism. Unfortunately he then lost me at the tangible examples.
He bought an ETH name service domain. “It makes it easy for anybody to see every transaction involving the connected wallet”. Um, is that a good thing? I think I’d rather not share that information.
He says “experiencing an in-game economy built to integrate with the real economy was eye-opening”. But 1) I and many others don’t play online games at all, and 2) the idea of spending money in one makes it less appealing rather than more. Oh and 3) that existed before crypto anyway e.g. all of those irritating ‘in game spending’ mobile games.
Filecoin, render, Helium. Haven’t we been here before with internet 1.0? The idea of you and me loaning out our computing power and storage space is actually quite old hat e.g. the genome sequencing apps. Not totally useless, but also not very mainstream and again I don’t see how crypto makes it better really.
I most fundamentally disagree though with his outlook on decentralisation. He seems to take a stance that some of this stuff (which he acknowledges already exists) is better just *because* decentralisation. Not only that, but that Govt. and the big tech boys will stand aside in awe as “there is nobody at the top, nobody at the top can hoard the value generated by the network”. That sounds rather naive, especially as he hasn’t outlined any sort of killer app that doesn’t exist already.
Above said. I do agree that there probably is a ‘there’ there of some sort. There are too many very clever people involved working on all sorts of things in the space. I’m sure there will be something at some stage really useful come out of the woodwork.
As an investor though – which horse to bet on? Even if you pick the winning horse, is it the underlying platform that wins, some future Dapp that doesn’t exist yet, or just tediously Microsoft because they exploited the first useful bit of crypto first? Or indeed nobody because whatever transpires is all publicly owned. It seems a very similar problem to betting on internet stocks in 1999, except here there are hundreds/thousands of competing ‘internets’ to further complicate the picture.
Finally, he first acknowledges and then hand-waves this point away because of his level of excitement about the potential, but at present crypto is hugely frothy. Not only that, but it’s largest stable coin with $70bn+ in ‘coin market cap’ has gigantic question marks against it w.r.t to it being a huge financial fraud. I run with the assumption we’ll see a huge implosion at some point with that.
So upshot = I’m very interested, not entirely cynical about the future of the tech (despite the above!), but only see a case for the very wildest of speculation at present (fair enough). I do still want to hear about it though, so pls. carry on with the crypto links!
I also have just read the embedded Venkatesh Rao thread in an effort to try and learn something. Did anyone else try?
I don’t know. Perhaps I’m just awaiting my own personal ‘aha’ moment and for now reveling in my ignorance and salty no-coinerness. But I would summarise that long thread as:
1) Legitimising himself “I don’t even need money anyway, so trust me”.
2) Some very nerdy web architecture stuff, which I’m sure has validity but will be beyond most laypeople.
3) “Ooh, and then I put a random picture up as an NFT and someone paid me lots of money. Then my friend paid me lots of money just for banter. Then ‘they’ just paid me money for nothing because I was there already. Then I draw another picture and it sold for lots of money again! Yay!”
4) But that’s *totally* not why I like it. It’s the future. The best thing is that it’s based on a contract that can *never* be changed. (Umm.. that’s good?).
All that tech, all the uptalk, the revolution, and at the end of the day what has been produced? A couple of pictures sitting in public view and apparently profit from .
I should probably just dive in and open all of this stuff up. I somehow feel that if I saw money arriving for nothing, I might ‘get it’ too! Unfortunately it seems equally likely that I might see my own money disappearing into the literal ether (just like Michael Batnick did the other day..).
Sorry that should be “profit from ”
Has anyone else here just had a play with DeFI in similar fashion and made some money without either risking thousands, YOLO’ing into a memecoin and winning, or leveraging a certain level of pre-existing internet celebrity?
Sorry really bombarding now. I thought I’d just made a typo but I didn’t realise this site seems to filter out anything in chevrons” which I use sometimes to indicate an aside. So I’m not going potty. Or at least not entirely 🙂
Government just gave its briefing. Masks mandatory on public transport and in shops again in England. Compulsory PCR for new arrivals to the UK. But no return to a work from home directive. 16 million booster shots given so far.
https://www.bbc.co.uk/news/live/uk-59443504
I expect adherence/compliance on public transport will be a significant issue.
Given poor adherence, some, especially London based, organisations with flexibility over levels of WFH and an older/more cautious staff population are going to de facto return to if you can WFH then do so.
Just filled up my bonds bucket, three years out. Pension contributions continue (LTA will apply – I thank my lucky stars). Post tax monies now to be diverted to cash from ISA equities – well, shall sit in my offset mortgage “earning more” than it will do anywhere else!
Gives me options as I consider how many years to cover with “offset” cash (1-3yrs?) – with option to buy if any correction (don’t be greedy?)
Probably my most “active” phase vs passive in several years (just felt like things getting overdone). Shame on me – but happy.
COVID? Just had my booster, will wear my mask – let’s get on with it.
BTW – gotta love The Byrds.
Hang in there folks.
@TI “The passive super-power is *not* being better able to read the impact of big and small events on markets better than aggregate active investors.”
A really good reminder to passive investors. Passive, cap weighted, long term buy and hold investing is a winning strategy IN THE LONG RUN. It works, beating most active investors eventually. The Super-power comes simply from the compounding of fees and trading frictions not being accumulated (Sharpe’s Arithmetic of Active Management) and from the absence of behavioural idiocies. That is all there is to it. Not an easy strategy to follow as passive investors are constantly bombarded with distracting noise that tempt us into meddling with the process or even worse, to do something crazy because of our evolved instinct to react when threatened. So constant reminders to stick to the plan are a good thing.
The stock market dropped 3%. So what? That is perfectly normal behaviour. Anyone investing for the long term needs to be prepared to see much bigger falls than that. For accumulators with a long term investment horizon drops are a very good thing anyway.
@far_wide I’m interested in the Defi space to the point of running a simple test transaction on the Ethereum network, and acquiring some Ether last year. Ether is the largest utility token but has to navigate the jump to proof of stake verification, slated in the next few months, so not without some risk. High transaction/gas fees are an issue (that will kill profit on smaller trades) but also a sign of its success. If it makes the jump successfully with a reduction in fees, it should see further growth. Solana and other tokens are challenging Ether with faster/lower cost transactions along with the prospect of functionality being added to BTC through other tokens.
As for Defi, yes it seems very much like the 1990s internet, and can imagine it will take time for the mainstream use scenarios to emerge and be regulated. No doubt the financial industry is not exactly rushing to replace current models either.
I’ve looked into some of the earning/staking Dapps eg Compound finance, but for me the high gas fees and the risk of app failure etc suggest maybe not a great risk/reward scenario for now.
@calculus : You’re one step ahead of me then, but yes I have gained the impression that ETH seems to be the more serious platform where much of the non-scammy work is actually taking place. As you say though, those fees are a huge limiter at the moment.
Re: the tech boom analogy, on reflection, if we exclude (with great difficulty) the froth around btc/memecoins, it’s perhaps earlier than that? At the minute, techies are playing around designing not just functionality but also the actual building blocks e.g. trying to make ethereum cheaper or even replace it. It’s fascinating.
Meanwhile though, the concepts and reality of what is trying to be achieved at present seem very far distant from anything a normal person would want to be involved in as of yet. Have you engaged with any app as of yet where you can see a real future for a mainstream crowd?
Much of it so far seems to revolve around finance. I’ve just been looking at the compound finance app you mentioned and to me it suffers from the same huge elephant in the room that many others do. It’s USP is taking out the middleman and better returns/cheaper rates for everybody. Having been heavily involved in Fintech (P2P) lending though, to me it’s very clear where this leads. In short, you can’t entirely replace people with a set of machine rules. They can certainly help, but not entirely. There will still always need to be a centralised team to update rules as the landscape changes and intervene in more political elements of lending. The potential for fraud is huge, and fraud was a huge problem even in the P2p-scape which was regulated and did have accountable teams. Taking everybody away and keeping it unregulated? Agh!
Plenty of other problems too. You’ll inevitably end up with super funky hi-tech firms run by people who don’t have a clue about good lending. Money can be doled out very easily, and then it can be almost impossible to get it back. This was also a big feature of P2P, with the poor saps investors/lenders paying the price at the end.
Those were the good guys though. Other firms just set up Fintech apps, took peoples money to be invested in property loans and then vanished. Rugpulling is already a big feature of crypto of course, and I don’t see any reason to believe it won’t map directly on to lending aspects.
It’s no coincidence that the P2p players that survived have ended up becoming either remarkably like or very actually, banks! 🙂
Sorry waffling on!
OK, I give in. What is a ‘ MacArthur’ ?
Actually topped up a couple of holdings on Friday, that’s a sell signal for everyone else.
wrt @Andrew’s problem of being out of the market during a big transfer (sorry, a bit late to this comment set), is there a sensible/affordable/comprehensible way for an amateur to hedge against that sort of thing? Without having the equivalent sum as available cash.
@24 A prize for self directing smart people. https://en.wikipedia.org/wiki/MacArthur_Fellows_Program
I was quite active late Thursday. It seems to have worked out OK.
I have always consider crypto to be an activity based on the bigger fool theory and have not changed my mind despite a very large number of fools being sucked in. I have looked into crypto and understand the technology, but consider all the gibberish and hype surrounding it just that.
I recently found out that a couple of clueless nephews have been putting money into Bitcoins or some other crypto currency. They are anti-vaxxers, Brexiters and are highly susceptible to any deranged conspiracy theory going. I can absolutely guarantee that I have far more knowledge about the technology than they do and if there was one thing that would make me run a mile from any investment it would be the fact that those two idiots have jumped in. Maybe this is the tipping point.
I have been doing a lot of reading on Omicron. Although everyone is talking about the uncertainty, from what I have read the consensus of the experts seems to say
1) Omicron is highly likely to be much more contagious than Delta;
2) Omicron is likely to result in more infections for those immunised through vaccines or previous infection than Delta
3) It is likely that those infected, but previously immunised, will go on to develop less severe Covid symptons than they would had they not been immunised.
The real unknown seems to be around the severity of the resulting Covid disease compared with other variants. If we are lucky it will turn out to be no worse than delta. In which case, assuming the other pertinent likelihoods are reliable, we may just see an acceleration of infection and rising hospitalisation, especially amongst the unvaccinated and previously uninfected. If so we are then back to whether the NHS can cope. Maybe we should be stepping up the carrots and sticks for what now are being politely called the “Vaccine reluctants”.
@David C, re @Andrew’s problem, you could buy equity index call options, but like any hedging/insurance you will likely lose some money doing that, but it would cap the risk of being in cash for a while.
@Xeny. Thanks. I was trying rhyming slang around MacArthur Park and wasn’t getting very far.
@far_wide: On mainstream applications, blockchain appears to be able to offer proof of authenticity/ownership and fast documented transaction, so for any transfer of value its more a question of where wouldn’t it be an advantage?
@far-wide. I also read the crypto article to see if it would inform me better, and had a similar reaction to you. The author seemed genuinely to approach it from a mindset of sceptical inquiry, but his conclusions that there is something in it fell back on jargon and vague handwaving about decentralisation etc.. I didn’t read the other article. But I did go on to read the comments on the main piece, and found several of them to be more persuasive against crypto, at least in the sense of having sensible arguments not based on magical thinking. I appreciate that a small dabble in crypto wouldn’t be the end of the world, but my own take is that I’m going to need to do a lot more research to understand the technology and the various issues associated with crypto before even that would make sense. And frankly I don’t have the inclination…
I’m hoping those are nephews on the other side @naeclue or that would be a bitter blow – mine’s have a good decade or more before they are at adulthood and my only worry up til now is that their old man has them following Man Utd but I’m now concerned for the future!
On Covid, not entirely sure the data bears out the success of the Scottish approach in any way but from speaking with friends and acquaintances who have recently been in England (both the Little and London versions) there is a far more lax attitude to mask wearing down there than there is in Scotland.
On the links, I am very glad I can’t comprehend any of the crypto nonsense to make a quick buck as being super rich sounds dreadful.
@E&G, don’t know for sure, but I would not expect the Nats to be any more competent than the idiots in charge down here. Mask wearing has become very lax in London though. I don’t take public transport much, but when I do there are always a good proportion not wearing masks. The same for shops. The policy on transport and in shops is to wear a mask, but it is not enforced. I always wear one out of simple courtesy to those around me and at no hardship for me.
I was in Lisbon a couple of weeks ago. What a difference! Everyone still wears a mask. We jumped on an empty train at one point and forgot to put masks on. When a ticket inspector came through he immediately made us comply. The attitude of the Portuguese must help explain their very low levels of infection. They also have one of the highest vaccination rates in Europe.