What caught my eye this week.
Three years ago this weekend I began to write on Monevator about the new coronavirus, which by late February had gotten the attention of the markets:
Things were definitely feeling freaky by the fourth day of 3-4% declines.
When the US market bounced higher into the close on Friday – perhaps on the expectation that central banks will make some sort of statement about interest rate cuts this weekend – you could almost feel the relief, even though all the main indices still ended the day in the red.
UK government bonds, for the record, are up.
Unstoppable
Just in case you’ve been living in a bunker – which is where we’ll all be in a few weeks, according to some – the cause is the novel coronavirus.
COVID-19, as we groupies have started to call it.
Together with a few geeky friends I’d monitored Covid’s spread via then-obscure health sites and academic services since Christmas. I already had my mother self-isolating. And during a rare meeting with The Accumulator on the first Sunday of February, I’d shocked him by revealing I’d sold a huge portion of my portfolio and was even holding gold.
That all sounds very smart and prescient. But the fuller story is far more muddled.
For starters I’d bought back a lot of my equities just two to three weeks later!
The market wasn’t crashing, you see, and it’s usually right. I started thinking that maybe @TA was correct that this virus could prove to be just another localized SARS-type outbreak.
Notes from Underground
Unlike many people, I’ve a written record here on the blog – especially in the comments – of my thoughts over the weeks and months that followed.
This reminds me what I believed as our understanding of the virus evolved. As opposed to what I wish I did!
It’s a good check on hindsight bias and selective memory.
Some things I was ahead on, such as the long-term disruption caused by repeated lockdowns. I’d argue the way things played out also vindicated an early belief that we should overwhelmingly concentrate on protecting the oldest people. I was right too to get optimistic about shares again as soon as late March, when the fiscal spigots opened. And I correctly favoured technology firms.
But other stuff I got very wrong.
In retrospect I couldn’t get my head around the virus being a dial-shifting issue for years. I kept looking for signs of a speedy resolution – maybe as soon as the end of 2020. My efforts at being an amateur epidemiologist did afford me moments of insight.
But overall I would have done better just to listen to the pros. Although many of them were, like me, too optimistic about the ability of vaccination to halt transmission.
The Plague
Anyway all these debates played out in the comments on this website – and that itself was interesting too.
In the early days we had a free and open debate. Regular commentators took varied views, but I’d say there was mostly an understanding that there were open questions and we were all feeling our way in the face of something personally unprecedented.
But after just a few months some sort of crystalizing took place. Positions hardened. Politics entered the picture in a big way. And like most things in our benighted political times, what began as a health issue became a binary them-and-us stand-off.
At the least I shuffled across one side of that line too.
Being and Nothingness
My aim in recalling all this is definitely not to do any sort of finally reckoning as to who was right about what – let alone who ‘won’ the pandemic.
Too many are doing that now, especially in the US.
The worst of them are almost willfully dismissing or forgetting just how uncertain and afraid we collectively were in those early months of 2020, as we watched hospitals overflowing with the dying from the enforced confines of our own homes.
And it’s rather that which I want to recall.
Trivially, the time has come to remove my ‘Covid Corner’ as a regular section in the Weekend Reading links.
The virus is endemic. And though some would say the pandemic isn’t over, 60 seconds on any High Street shows that nearly everyone who can do so has moved on.
But it’s more what that crisis confronted us with that I want to put a pin in today – before we trundle into the next furore.
Because it’s rare to see your world turned upside down in a matter of weeks as happened in March 2020.
Even if you’ve come to see the lockdowns as a sort of pleasant holiday from reality, say, the fact is that for a period the authorities compelled you and most people you know to stay at home, while at the same time going out could conceivably get you killed.
Normally a country needs to go to war for such existential disruption. Sadly Ukrainians have had a double-dose of it in the past year, but if we’re lucky many of the older among us may never face such a period again.
I think it’s worth some intentional archiving.
Waiting for Godot
For myself, I want to store away the feeling of uncertainty. The spectrum of fear. The collapse into tribalism. The strangeness of shopping and swerving among the other masked figures. The oscillating emotions towards those who broke the rules. The groping for answers.
The specter that seemed to stalk us.
The debates about this or that policy will continue for a while. But in time they will become accepted truisms, depending on how you lean. Like the Thatcher government’s response to the Miners’ Strikes or US involvement in Vietnam.
The nuance will be forgotten. Yet even now scientists can’t convincingly decide if masks made a meaningful difference to transmission, for example.
It’s nuance all the way down.
I’ll end with some great lines from Yeats. I’ve always liked the sound of them. But the past seven or eight years have also shown me the truth of them:
Turning and turning in the widening gyreThe falcon cannot hear the falconer;Things fall apart; the centre cannot hold;Mere anarchy is loosed upon the world,The blood-dimmed tide is loosed, and everywhereThe ceremony of innocence is drowned;The best lack all conviction, while the worstAre full of passionate intensity.
Never waste a good crisis, say the politicians. They mean the chance to bury bad news or to take tough decisions.
But I’d hope a crisis might also teach us to be a little wiser too.
Have a great weekend – and let’s enjoy our freedom to do so.
From Monevator
What are money market funds? – Monevator
What is a mortgage but money rented from a bank? – Monevator
From the archive-ator: the coronavirus crash, as told by our community – Monevator
News
Note: Some links are Google search results – in PC/desktop view click through to read the article. Try privacy/incognito mode to avoid cookies. Consider subscribing to sites you visit a lot.
UK in surprise boost after record tax receipts in January – BBC
Interest rates will rise again, warns Hawkish MPC member – Guardian
Tesco and Aldi limit sales of tomatoes, peppers, and cucumbers – BBC
The tenants facing eviction as landlords raise rents or sell up – Guardian
Hedge fund billionaire extracts billions more to retire – New York Times [h/t Abnormal Returns]
Report: why and when do people change their pension saving? – IFS
HMRC shuts down tax refund company – Which
Just 17 of world’s largest 122 firms have exited Russia since invasion – This Is Money
There are more hedge funds than Burger Kings [Search result] – FT
Products and services
Lender pulls 3.75% mortgage rate less than 48 hours after launch – This Is Money
Practically purrfect pet insurance revealed – Which
Open a SIPP with Interactive Investor and pay no SIPP fee for six months. Terms apply – Interactive Investor
Investec’s 3.75% 90-day notice savings account tops tables – This Is Money
Best places to hold cash in 2023 – Foxy Monkey
Will a water meter save you money? – Be Clever With Your Cash
Coventry BS targets first-time buyers’ with 4% savings account – This Is Money
Open an account with low-cost platform InvestEngine via our link and get £25 when you invest at least £100 (T&Cs apply. Capital at risk) – InvestEngine
Homes with big gardens for kids to explore, in pictures – Guardian
Die With Zero mini-special
Bill Perkins: optimizing for life fulfillment [Great podcast] – Peter Attia
More Die With Zero: the maths behind the mindset – Flamingo Money
Comment and opinion
What does centuries of data tells us about housing affordability in the UK? – Schroders
The Credit Suisse Global Investment Yearbook 2023 – Credit Suisse
What’s the surest route to investing excellence? – Morningstar
Uncertainty, 1923 – Fortunes & Frictions
Rich People’s Problems: I just haven’t got enough money [Search result] – FT
Ray Dalio’s all-weather portfolio – Of Dollars and Data
Short-termism is our default setting – Behavioural Investment
REITs can hedge against inflation, but not during a market crisis – Institutional Investor
Monopoly money and the UK property market – Indeedably
The straight way to wealthy – A Teachable Moment
UK housing market valuation and forecast for 2023 – UK Dividend Stocks
Inequality in the care of ailing parents – Humble Dollar
Interview with Vanguard CEO Tim Buckey [Podcast] – The Big Picture
The tax scandal within the Post Office scandal – Tax Policy Associates
Naughty corner: Active antics
Active managers in ‘extreme denial’ about lagging indices, says Charlie Munger – ETF Stream
Value, growth and intrinsic investing revisited – Intrinsic Investing
Interest rates versus earnings in 2023 – Klement on Investing
By this metric the US stock market isn’t as pricey as you might think – WisdomTree
The hard-knock life of short sellers – Finominal
Plenty still left to extract from the value premium – Alpha Architect
Four-day workweek mini-special
Four-day week: ‘major breakthrough’ as most UK firms in trial extend changes – Guardian
The worker flexibility premium – Axios
Kindle book bargains
The Next Fifty Things that Made the Modern Economy by Tim Harford – £0.99 on Kindle
How to Make the World Add Up by Tim Harford – £0.99 on Kindle
Casino: The Rise and Fall of the Mob in Las Vegas by Nicholas Pileggi – £0.99 on Kindle
The Art of Statistics: Learning from Data by David Spiegelhalter – £1.99 on Kindle
Environmental factors
The struggle for the soul of the B Corp movement [Search result] – FT
Britain’s cheapest heat pumps will go on sale this year – This Is Money
The beautiful flowers that bees can’t use – BBC
TRIG: full-year results – DIY Investor UK
In cods’ shadow, redfish rise – Hakai Magazine
Off our beat
Why Volodymyr Zelenskyy is a more complex leader than most people know – Politico
The Brexit connection to the tomato shortages – Chris Lowndes via Twitter
The BFG isn’t a BFD – Slate
How it all works – Morgan Housel
Mrs Ermine’s seasonal salads – Simple Living in Somerset
And finally…
“You forget what you want to remember, and you remember what you want to forget.”
– Cormac McCarthy, The Road
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I think investec’s 90-day account is offering 3.55% not 3.75% although would love to be proved wrong.
Not sure you can judge if a pandemic is over by the behaviour of those fortunate enough not to be affected so far. Especially given the high numbers still missing from the labour market. I was affected initially by the vaccine itself, and again following covid. I’ve had 48 weeks absence from work (22 months of symptoms) and am trying a phased return starting next week. There are no mitigations being made to make the workplace covid safe (filtration/masking) so if I get it again and it makes me sick again I’m out of work again. Doesn’t feel like a situation that is over or that can carry on repeatedly. Just because someone avoids long covid with infection 1,2,3… doesn’t mean the next one won’t result in these symptoms which go well beyond feeling a bit off colour for a few months.
Chronic illness (and post viral fatigue) has too often been dismissed. Those not suffering from it would do well to advocate for those that are. One day it could be you and it’s a lonely place to be when you realise there is no treatment, just time, hope, and gaslighting by friends, family and society at large.
I agree that Covid is another example of the collapse into tribalism, as Monevator terms it. However, and I’ll say this politely, Brexit was the obvious forerunner, and on that topic I do think this site’s owner has on occasion exhibited that characteristic him/her self. Some of his/her comments about Leavers and Brexit over the years have, in my view, been less than constructive.
I’m on my second spin of the Covid dance as we speak, night sweats last Monday night, tested positive in the morning. Fortunately neither my wife nor son have caught it. Glad that today is my last day of isolation though. The night sweats was the only new symptom for me, otherwise a lingering head cold and done achiness that had now passed. Starting to think about how to ease back into my exercise again having got back into jogging. First dose of the Covid pox last year led me to not running for 6 months, determined not to let it happen again.
^some achiness
@all — Yes, I appreciate the ‘is it over really?’ point which I explicitly state in the piece. I also wrote:
“The virus is endemic. And though some would say the pandemic isn’t over, 60 seconds on any High Street shows that nearly everyone who can do so has moved on.”
My bold here. Originally I wrote ‘medically’ can do so, but decided that was too narrow given the economic *and* psychological fallout.
Re: people who have left the workforce, I agree with the view you see expressed that the experience was positively salutory for a certain cohort, who decided to retire early and won’t go back.
To me this synchronized close encounter with mortality prompting reevaluation was a silver lining to the whole ghastly episode.
p.s. @Fremantle — Get well soon.
Thanks for the links – especially enjoyed the Schroders long term property price v earnings article. I can’t resist a really long term chart.
@TI Thanks, I’m definitely on the mend.
Re There are more hedge funds than Burger Kings
About 43,000 stocks listed globally but even the Vanguard FTSE Global All Cap fund has ‘only’ 7,163 (at 31 Jan). I guess most of the rest are small companies, so weighted to market cap wouldn’t be represent too much of a skew?
> 60 seconds on any High Street shows that nearly everyone who can do so has moved on.
There’s sample bias here, there seems to be a long overhang of walking wounded. You’re not going to see those guys on the High Street so much. It’s hard to parse the ONS figures on this group but the indication I get is that the over 50s that exercised Jeremy Hunt so much for being work-shy are less likely to have had a FI/RE epiphany that work is overrrated as they to be suffering health issues limiting their ability to work.
There seems a lot of long Covid about, which seems debilitating, and the scattergun susceptibility to Covid is probably hard to qualify. Was long Covid a particular feature of the early variants, and did it mutate to achieve an uneasy truce with human hosts so we don’t see new incidences of long Covid so much now?
@ermine — I don’t really have a view on that yet, but there are other ways in which the susceptibility could have declined at the population level.
Crucially vaccination whilst not doing much for transmission might have taken the edge off infection re: long covid etc.
Another possibility is most of the people susceptible to long covid got it when first exposed in the early waves.
Post viral fatigue is nothing new. Perhaps long covid is also an artefact of so many of us getting ill at once, inflating the near term numbers.
@Freemantle – On the theme of getting back to running. I had covid back in 2020 with the mildest of symptoms which lasted for just 2 days. In my day to day life covid had no noticeable after effects. However the after effects showed up in my running data for 3 months. I’ve kept my data going back over 20 years, I’ve had numerous colds, viruses, stomach bugs etc.. but nothing shows up like the after effects of covid. I expect you already know this, but speaking to fellow runners, consensus seems to be to phase back slowly, giving yourself more time than you might feel necessary, otherwise you seem to get a one step forward, two steps backward kinda thing.
In hindsight I loved lockdown in London. Empty streets made cycling to work an absolute pleasure (the City is genuinely gorgeous). Popping into Fortnum and Mason’s for discounted game birds and then meeting friends for a beer or three in the gardens outside the War Office (okay, the MoD). Blimey, I sound like my grand parents!
On the subject of long Covid I read this interesting article today.
https://www.scientificamerican.com/article/long-covid-now-looks-like-a-neurological-disease-helping-doctors-to-focus-treatments/
3 years since covid:
I’ve gained 3 to 4 hours a day through working from home.
Add on to that £100 a week in savings from the commute disappearing.
Much stronger relationship with the kids and more grounded in our community.
Add on a few hundred k increase in net worth and I’d be lying if I didn’t say that covid was the best thing to ever happen to me.
Obviously, the national mood says that you can’t take pleasure in this type of thing but I don’t care.
The mask issue is certainly complex and the linked meta-analysis made for interesting reading.
My own feeling was that things were somewhat settled about higher-grade respirators (FFP2/FFP3/N95 etc), but that there was a significant issue of where and how they were being worn, along with surgical masks and very variable cloth masks. I can recall a lot of people wearing surgical face masks but not covering nose/mouth consistently. I wonder how much behaviours like that have impacted stats/perception on how well masking works.
Huge thumbs up for the “Die with nothing” podcast episode. I’ve listened to that several times in the last few weeks and have reposted it on various forums recommending it for others. Perhaps it’s where I am in life at the moment but it’s had a significant impact on me and my thoughts about FI, spending and investing. Not quite in the same league as finding MMM did years ago but it has the same wake up and smell the coffee feeling.
I’ve realised I’ve been somewhat blinkered for 5 or 6 years. Chasing the FI dream on the thought that I’ll loosen up a bit when the money is less valuable to me. Thinking the value was in its investing and compounding power as opposed to its utility.
The main message for me is the fact there’s an awful lot of experiences in life that are time sensitive, especially when it comes to our children. Some things just won’t be possible in another decade. Seems obvious but it was something I was seeming oblivious to as I was so head down focused on becoming FI.
The result of some pretty hard thinking this last month or so is I’m planning on dialing back my FI timescale. As Perkins put it, “solving for nett fulfilment” rather than speed of FI or total nett worth. I’m not abandoning it or planning on spending if all before I die but I’m definitely more mindful of what my money can do for me now and pay me an enjoyment of memory dividend for the rest of my life rather than a financial one.
Re. die with zero, the Rational Reminder podcast indirectly covered this with their recent episode on financial concepts – the most crucial of which was the time value of money.
Having £1 today is more valuable than the same £1 ten years from now, leading to the related concepts of compounding into the future and discounting back to net present value.
One could say the same for the time value of Life Experiences – positive ones compound into the future especially if they’re shared with others.
De accumulation seems to be a fashionable subject just now
Financial Samurai blog has a calculator for the die with zero buffs
Perhaps Monevator could provide a link
The calculations seem to resolve around how much saved,yearly living expenses and how long you have left
It would seem that if you can currently live off your portfolio keeping the capital intact then there is scope for more spending especially as you get older
xxd09
@xxd09 (#20):
Re: “It would seem that if you can currently live off your portfolio keeping the capital intact then there is scope for more spending especially as you get older”
Totally agree, especially if you are not fussed about maximising any legacy.
However, like a lot of things in life, spotting the symptoms is far easier than actioning the remedy – think eating, drinking, etc!
With the possible exception of GFF, my take is that huge numbers have been (and will continue to be) negatively impacted by the pandemic. Those dead or debilitated from Covid infection being a relatively small proportion of the impact. Also the huge numbers affected by the massive healthcare backlogs (which I agree with ermine are a major contributor to increases in economic inactivity), people whose income or livelihoods were impacted, the young people affected not just by disruption to learning and progression, but a more insidious undercurrent of instability and lack of routine and discipline – everything about life’s routines and structures seems suddenly less dependable.
I’m still waiting for the anticipated (by some) ‘rebound’ into decadence and exuberance, from pent up demand. Apart from travel, I see little evidence.
So yes, we pick up the pieces and move on. But I definitely underestimated how much overhang there would be.
COVID and long COVID has taken a good chunk out of my heart, lungs and mind. That coupled with an horrendous few years job wise. I don’t really recognise my pre 2020 self. I’d probably forgo any portfolio gains to get my previous physical and mental strength back. Adjusting to the new normal has been tough and still work in progress. I don’t think a full recovery is going to happen any more.
People aren’t working much for the simple fact that working in the UK doesn’t pay!
https://www.theguardian.com/business/2023/feb/13/full-time-part-time-work-no-longer-pays-uk-economy
I do wonder if there’s some positive correlation between those touting inflation as transitory and subsequently expecting an accelerating return to equilibrium (aka 2%), or even undershoot, and being somewhat bullish on long covid.
Personally, I’m undecided on the issue of whether long covid is featuring heavily in this post-(acute) covid era. What I’m sure of is that WFH is here to stay and those 50+ early retirees won’t return to the traditional workplace in their droves.
@D “What I’m sure of is that WFH is here to stay and those 50+ early retirees won’t return to the traditional workplace in their droves.”
Absolutely agree on the desire amongst employee’s to stay retired or WFH. Retirement I suspect will remain the similar until there’s a fairly seismic change to people’s wealth (market correction). The government won’t be able to offer a large enough carrot to entice people back, and any stick large enough will be too politically unpalatable to wield.
I’m less convinced that there’s not a desire for employers (management) to get employee’s back to the office. My employer announced a stepping up of return to the office last week. Fair to say there’s somewhat of a division between how management see things and how the average employee see’s things.
It’ll be interesting how this plays out over the next few years. I do sense a split between different employers. Will that result in a polarised WFH or non WFH employer or will everyone end up reverting to the mean and that mean is still being established?
“I do sense a split between different employers.”
I agree here and perhaps culture/leadership might have a hand in it.
If the culture of a company is that people only get their heads down if the boss is peering over their shoulders, these folk aren’t likely to be very productive WFH as they’ll be tempted to do as little as possible.
In the early days of lockdown and WFH, the company I work for used remote tracking tools to monitor things like calls, emails, even keystrokes etc, which led to a couple of shirkers being let go.
The powers that be appear to be happy that the current hybrid working (between 1-3 days in the office, depending on department) is producing the relevant results, so long may that continue.
@Carl and Rhino, so sorry for you both.
C19 had an enormous impact in Australia. 260+ days of lockdown in total. And now it’s barely mentioned. The disconnect is jarring when so many people are dying or impacted by subsequent health issues.
C19 reinforced how glad I am to have a financial safety net.
That said though, my de-accumulation spreadsheet (based on Flamingo money’s simple design but with my own numbers) revealed that I’ve been investing as though I need a fortress for ninety generations.
Luckily I’ve lived large and have no die with zero regrets …. But it’s a timely wake up call to spend more now.
@Rhino, very sorry to hear of your situation. I have a nephew in his thirties who is into his ninth month of long Covid. Unfortunately he chose not to be vaccinated. He is not a mad anti-vaxxer, but has always been very fastidious about what he eats, drinks, his exercise, etc. Similar to Djokovic really. He thought the risk that Covid presented to him as a very fit thirty something was miniscule, “just a bad cold”. I did try to point out the risks of Covid to his long term health compared to the risk of being vaccinated, but probably should have tried harder.
I am hoping that immunisation reduces the risk of long Covid, otherwise long Covid will inevitably hit more and more people. One other long term symptom that does not get much discussion is hearing loss. I know 2 people with significantly impaired hearing following Covid. One who caught it right at the start, the other last Summer after 3 vaccinations, so that risk does not appear to have gone away completely.
@Naeclue – thanks for the kind words. I first caught Covid in autumn 2020 so pre vaccines, I’d recently started a stressful job and failed to take any time out to deal with it or recover – something I regret with the benefit of hindsight as I’m not sure trying to tough it out did me any favours. I just got it again in January, but have had the vaccines en route since then, so it didn’t seem so bad. I have some really odd symptoms now, inability to recover from injuries, joint pain, weird edema in my feet, jaundice, plus the more common fatigue and brain-fog and the related anxiety/depression. I think it has cost me a good few IQ points on the brain front (ongoing) and similar on say some more physical metric like VO2max. Not at all happy with how its all gone! I more concise summary would be I seem to have aged twenty years in two years.
@TheRhino — (Hope you’re still checking back to see this, I was away involved with a family care issue). Just wanted to add to the best wishes of other readers and hope you make a full recovery in time. You’ve long been a commentator on this website, and it’s distressing to know that someone in our community had such fallout from this episode.
I’m sure you’re scouring the Web for helpful stories all the time, but anyway in case it’s useful I do have a friend who recovered from early infection to long Covid to *probably* cured of it over a two year period. I say probably because unfortunately some other issues have since arisen, which may be overriding the long Covid symptoms. But anyway she went from being an avid walker and runner to someone who couldn’t do much more than answer the door at the worst point and back to where she was again, eventually, many many months after she expected to. Please do keep searching and testing yourself and what you’re capable of, and don’t give up!
I do sometimes wonder what happened to some long-time readers/commentators who disappeared in the 2020-era. I’ve always hoped they just found sourdough baking and wandered off. But statistically I expect we did lose a few. And as many of us feared at the time and is as has been said above now manifesting, we’re starting to see the other consequences come through such as delayed treatments, mental health issues, presumably educational disparities in the future, and more.
Again I maintain that society has collectively mostly turned the page, rightly or wrongly. But yours and other stories here are a reminder (as is the economic afterquakes that continue to rumble) that the impact will be with us for years.
Thanks for the mention!
I hope it’s not too late to comment on the Alpha Architect piece on value investing: I noticed over the last year that Vanguard’s world high dividend yield ETFs VHYL and its accumulating sibling VHYG continued to hit new all-time highs in 2022 and again in February, propelled somewhat by the £ fall against the $. This was quite a nice surprise against VWRL, the unfiltered version. My understanding is that filtering for dividends tends to add a value tilt.