What caught my eye this week.
A couple of weeks ago Nick Maggiulli of Dollars and Data fame conceded that lately he’d been writing for the Google’s search algorithm, rather than about what really interested him.
And doing so was destroying Nick’s passion for blogging:
I can’t keep doing this and preserve my creative sanity.
One of the reasons I’ve been able to blog consistently for nearly seven years is because I’ve always chosen what I write about.
I’ve been able to follow my curiosity wherever it has led me. Unfortunately, this year I strayed a bit from that path.
And while I don’t consider it a major mistake, I’m glad I realized what was going on before it was too late.
Happily this change of direction has immediately paid off with one of the best posts he’s ever written (and that’s saying something…)
Exploring why you should never look too far down roads you didn’t take – in life or investing – Nick argues:
I’m here to tell you that this kind of thinking is a mirage. It’s pure fantasy. Because the way you think things would’ve turned out is not the way they actually would’ve turned out.
How you imagine an experience is a theoretical exercise. It’s a mental simulation of your past. But, how you live through that experience in real-time tends to produce very different results.
Nick illustrates his point with a graph that shows why basketball star Magic Johnson’s alternatively lived experience where he chose sponsorship by Nike over Converse – thus supposedly ending up $5bn richer – would have at least felt very different over a long reality, and may never have happened at all.
Anyone who invests actively knows about these lost fantasies all too well.
I wrote about it with respect to my hugely costly Tesla sale a few years ago, for instance.
Others mourn the house they didn’t buy or the job they didn’t take – or outside of the financial realm, the person they didn’t marry or the musical instrument they gave up on despite some talent.
I wouldn’t say that thinking about these missed opportunities is entirely pointless, or even that they’re somehow not real decisions and outcomes.
In many cases they are all too real. Maybe we did make a mistake.
I should have held onto Tesla – and I should have bought my first flat in London in 1998, not 2018!
But it’s that the way we think about them is so often faulty. A lot of the time the motivation is to make ourselves feel bad, not really to learn anything.
In that case it’s better to look forward, not back.
Searching questions
As for writing for the search algorithm instead of for real readers, I see that temptation too.
At Monevator we lost about half our search traffic overnight in summer 2021, due to a capricious-seeming Google change that appears to have nothing to do with the quality of our content.
It’s been hugely frustrating.
There’s a balance to be struck, of course. Google needs to have guidelines, for the sake of a good searching experience.
But I can’t help thinking the tail is too often now having to wag the dog. And nobody starts blogging – or doing any other sort of creative endeavour – to please a robot. (At least not yet!)
I might also add that if you subscribe to get our articles as free emails, then you’re one fewer reader we have to try to recapture again via the harsh lottery of Internet search.
Anyway, do read Nick’s post – and have a great and balmy weekend.
From Monevator
Maximising FSCS protection for your investment portfolio – Monevator
From the archive-ator: Sad story stocks – 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.
Treasury braced for an 8% rise in pensions because of triple-lock [Search result] – FT
Triple-lock could add £45bn to state pensions bill by 2050, says IFS – Guardian
UK rejoins EU science research scheme Horizon – BBC
Housing cost fears reach record levels… – Which
…though mortgage rates just fell for sixth consecutive week – Mortgage Solutions
Vet pricing review, on fears of rip-off charging – BBC
Britons least likely to say work is important to them, study finds – Guardian
UK crypto firms get three-month reprieve on new marketing rules – Yahoo
NHS to begin autumn Covid jabs next week as new variant spreads – Guardian
The puzzling underperformance of performance fees [Search result] – FT
Products and services
Could NS&I spark a rates war on one-year fixed savings? – Which
Monzo’s new ‘call status’ tool aims to stop impersonation scams – Monzo
Twenty ways to save on household bills and living costs – Which
Open a SIPP with Interactive Investor and get £100 to £3,000 cashback. Terms apply – Interactive Investor
How much will Amazon’s same-day Prime delivery cost you? – Be Clever With Your Cash
“Do I really have to tax and import duties on £145 trainers bought from EU site?” [Oh my sweet child. Sit down and let me tell you about this genius idea they had called Brexit…] – 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
Top cash ISAs right now – Money Saving Expert
New mortgage lender Perenna offers 30-year fixed-rate deals – Guardian
Why almost every Omaze dream home winner puts it up for sale – Metro
Warehouse-style apartments for sale, in pictures – Guardian
Comment and opinion
Global stocks = more stocks – Oblivious Investor
Time for the UK to tax inflation [Search result] – FT
Who knows how long we have? – A Teachable Moment
Dollar-cost averaging in a bear market wins again – A Wealth of Common Sense
Compound interest misconceptions – Lazy FI Dad
How to emotionally prepare for retirement – Kindness FP
Rethinking restraint – Humble Dollar
Will I keep spending more and more money forever? – Vox
The trimesters of retirement – Financial Advisor
Life after growth and soul loss – Simple Living in Somerset
Bonds are back mini-special
[All US but relevant or interesting]
Bonds aren’t boring anymore – Quiet Wealth
What ‘escape velocity’ means for a fixed-income portfolio – Morningstar
The bond bear market and asset allocation – A Wealth of Common Sense
Should bond fund investors be going long? – Morningstar
What to do about high interest rates [Mortgage bit US-centric] – M.M.M.
Naughty corner: Active antics
Sing me a song of valuation… – Wisdom Tree
…US small-cap value stocks look very cheap Vs large-cap growth – Validea
A primer on multi-strategy hedge funds [Podcast] – Invest Like The Best
Deep dive into building materials supplier Howdens Joinery – Flyover Stocks
John Lee: my dividend strategy continues to deliver [Search result] – FT
Kindle book bargains
How to Read Numbers by Tom Chivers – £0.99 on Kindle
Freakonomics by Steven D. Levitt – £1.99 on Kindle
Creativity Inc. by Ed Catmull – £0.99 on Kindle
No Rules Rules: Netflix and the Culture of Reinvention by Reed Hastings – £1.99 on Kindle
Environmental factors
Walking away from investing in the face of climate change – DIY Investor
“Disaster”: UK auction secures no offshore windfarms – Guardian
Life and death in American’s hottest city [Vital if miserable read] – New Yorker
Heat denial: influencers question high temperatures – Guardian
Deep freezing coral reefs for the future – NPR
Invasive species cost the world $400bn a year says UN – Semafor
Robot overlord roundup
What OpenAI really wants – Wired
How predictive technology is shaping everything from medicine to investing – I.I.
Off our beat
The decomposition of Rotten Tomatoes – Vulture
Giving $7,500 directly to homeless people worked well in a Canadian study – Vox
A 95-year old cardiologist’s advice on living a long, happy life – CNBC
The mystery of the Bloomfield Bridge [Nerdy] – Tyler Vigen [hat-tip A.R.]
How to choose what advice to take – Art of Manliness
Where on Earth? A geo-location quiz [Interactive, 7/8 to beat!] – BBC
And finally…
“The ease of online dealing makes many people act as if investing was positively scored, but the arithmetic of compounding dictates that it is really negatively scored. Success in investing consists mainly of avoiding big mistakes.”
– Guy Thomas, Free Capital
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DIY Investor has gone permanently to cash, because we are having a climate disaster.
I have read in the last month three or four young people on reddit and elsewhere saying Why would I do anything, given it’s 100% certain that rogue AI will destroy the human race in the next ten years?
It seems to me that the two great truths in life are
1. Life goes on;
2. We have NO foreknowledge of how it is going to go on.
And the consequence of 1 and 2 is: keep doing stuff. Stay invested. I lived for a bit in Highland Scotland and tried to master that weird dancing they do in those parts, and someone told me if in doubt, keep moving, because the more you are moving the easier it is to spin you into the right direction.
Great links on the bonds.
Some other good ones I came across recently :
1) On when yields are fully earned if interest rates continue going up:
https://disciplinefunds.com/2023/08/15/have-bonds-finally-reached-escape-velocity/
2) should you hedge bonds? Pro and cons:
https://www.bankeronwheels.com/etf-currency-risk/
‘Is regret ever useful’ as a G search produces some interesting links.
FWIW, I have always favoured the: we are where we are view of life!
Bon weekend – my cack-handed way of saying congrats to the French rugby team!
I kinda liked Nick’s post, though it crept a little bit down the do what you love/love what you do meme, which is tops for rich bastards with talent and crap for wage slaves. But yeah
If you’re FI and you’re not following your curiosity wherever it leads you, you’re doing something wrong. I wrote for a content mill many years ago. I got a slightly better writer, but the main learning was that this way madness lies. I didn’t escape from the Man to become a slave to a different machine. See matched betting, review sites, and any number of make money fast wheezes. Life is too short to be a slave to the algorithm.
@TI but, somewhere out there, roads you think weren’t taken were also travelled:
https://arxiv.org/abs/astro-ph/0302131
And even if they weren’t, can you know that you really had choice and agency?
https://www.theguardian.com/news/2021/apr/27/the-clockwork-universe-is-free-will-an-illusion
Investment outcome regret is both quite pointless (as too late) and perhaps even counterproductive. Real lessons learned come from better understanding how the decision making process can be improved. Through bad luck, a good process can still yield a bad outcome. So you can’t judge from outcomes alone. They don’t ‘prove’ the process was actually flawed. Similarly, we can’t judge a person’s decisions from how their lives turned out. Plenty of people made all the right calls, and did all the right things, and it still turned out badly for them. Sadly, the world doesn’t owe any of us luck.
@TLI the Stoics would take your thought further and say that we have little to no control over (and therefore should not regret) the outcome of any decision, but only whether the decision was made in accordance with your ability and values. So I suppose “be true to yourself” is the optimal regret minimisation strategy, both in life and investing.
I have blogged intermittently for about 8 years. I have only ever published things I think are interesting/relevant. I do not monetise, but think of it as working out in public some of my thinking and as a calling card, if anyone ever asks, for my consulting work.
I am always wrong about what other people will find interesting, and it is fun to see what others pick up on. Never the post I expect. Reader numbers are trivial, but that does not matter to me (although it is nice when someone notices).
I don’t have the interest or the intellectual bandwidth to try and make the blog a ‘success’. I am probably approaching this all wrong, but who cares.
I’ve been blogging since about 2007, and after I started monetising the thing in 2011, I obviously had to think about search engine optimisation and all that guff, which interests me not one jot.
For me, the happy medium is to (a) write what interests me but (b) keep it within a narrow topic range (so Google understands what the site’s about) and (c) tweak the article after I’ve written it to emphasise the main keywords, relevant internal and external links, etc.
So it’s about 90% writing what I like and 10% thinking about SEO, which is a balance I can live with.
Having read Monevator for as long as I’ve been blogging, you seem to follow a similar approach because your posts don’t read like keyword-stuffed garbage (and if they are super-optimised for SEO, they’re still very readable and full of personality).
@TI. “A lot of the time the motivation is to make ourselves feel bad, not really to learn anything.”
Isn’t that useful though? Yes, you may be not be learning much, but by inflicting pain or feeling bad that may motivate you not to repeat errors. I see that with my kids. If an exam goes wrong, they really beat themselves up. More time is spent berating themselves than actually looking at what was wrong. Doesn’t matter. It generally results in them nailing the next 10+ to avoid feeling bad.
Intellectually, there is also deep value looking at counterfactuals whether something succeeds or fails. It’s important to think in terms of probabilities. The measurement may have occurred but understanding that good decisions have a probability of bad outcomes (and vice versa) is better than thinking modally.
Regarding the bond escape velocity article. In a very roundabout manner it seems to be trying to get toward the basic idea of a forward breakeven yield. Yet such an idea has to be considered in funded terms (i.e. the total return on a position where you sell the cash to buy the bond). Same as for any asset. Looking at returns while ignoring the return on cash (or assuming it is zero) is going to lead to poor investment decisions.
Youth is a blunder, manhood a struggle and old age, regret – Disraeli
@Neverland #10: so very true. Also, as one grows older, awareness of time running out.
@John Kingham #8: that’s an interesting, pragmatic compromise. As a blog post consumer, SEO was something that I’d only been faintly aware of. But, from a consumer perspective, over the past years Google’s gone from a valued tool (a useful way to find useful info) to something very different, namely an increasingly flawed and unreliable gatekeeper. Results are now filled up by ads, and feel less relevant to search queries. Google’s algo tail is, so it seems to me, wagging the content maker dog, and neither the content makers nor the content consumers are happy about it.
@TI & TA: IMHO, for a FI site like this one, with an established and loyal following, a paywall model with no ads and little or no heed to SEO is a logical, and maybe even a preferable, way to go. Based upon what’s mentioned in your articles and replies to posts: I understand that between the 2 of you, you’re putting in 30-70 hrs per week (~2,500 hrs p.a) and, with click through rates on ads being what they are, in some months ad revenue doesn’t always cover all out of pocket costs. With over 100k unique site visitors per month, and over 5k email subscribers, converting top end of say a 1%-3% range of monthly visitors into paid up subscribers looks doable. So say ~2k-3k paid up subscribers ultimately, with perhaps a 3:1 Maven to Moghul ratio (based on a quick, very rough count of the ratio from comments on a random sample of recent threads). To get to that number quickly, however, might first necessitate broadening somewhat the amount of material behind the paywall. Over 99% of existing articles (over 2,000 articles) and ~80% of new material is currently free. For a site with paid options, that’s a lot of free material on a relative basis. Looking at Substack, for example, I’d guess it tends towards a 50%/50% ratio of free/paywall.
Ive never found this site via google. It was linked in a forum i read and ive only ever typed monevator.com into the search bar since as far as i remember. Regardless my auto search is duck duck go.
With the article about regrets im sure i read something very similar linked here in the recent past. Might have been morgan hounsel or someone else but it was saying basically the same thing. Dont regret not buying a 10 bagger or something like bitcoin because you would probably have sold after it doubled.
You feel satisfaction in proportion to progress towards a self-directed goal (and reaching that goal causes the satisfaction to evaporate so you need to set a new one).
If your primary goal is not page views and ad revenue then it should be no surprise that targeting that does not lead to satisfaction. You can’t score goals playing tennis.
Nick Maggiulli’s post basically ends with that conclusion (i.e. be sure what your goal is and stay true to it). You could be pursuing the wrong goal but that is a separate issue.
After 9 years of blogging, I’m posting the same old updates every month – boring and repetitive perhaps, but it’s what I like and enjoy doing! My blog readers have been reading for a while so they must like what I’m writing!
The site might be monetised but the few quid I get covers barely a fraction of my website hosting fees and that’s fine by me – I was never in it for the money, visitors, etc.
I have an SEO analysis thing and it always flags all my posts with a big red flag, as having numerous ‘problems’ and ‘improvements’ to address.
Whatever, I don’t know how to nor do I want to write in any other way – if I started worrying about it, it would just become another chore!
As for the regrets thing, I like to think that I don’t have any (or rather I never dwell on them), any bad decisions I made in the past have led to me becoming the person I am now, I like me and that’s all that counts.
Re: the US small-cap value -V- large-cap growth piece from Validea, worth noting:
– It’s the latest in a long line of upbeat assessments of small-cap, value or both.
– Relative valuation gaps can just keep getting wider and wider. At least, that’s what’s happened so far.
– There’s no magic ‘correct’ ratio between value and growth or small-caps and large-caps.
– Overlaying/blending size and value could perhaps tap a bigger payout than from small size or value separately in more scenarios if mean reversion were to occur.
– Whilst US (and European) smaller companies have gone essentially nowhere for months following the lows of last autumn, Japanese and Asian small-caps have shown recent positive momentum.
– On P/E or P/B bases European and EM small-cap value has recently been even ‘cheaper’ (relative to growth and large,-caps) than for their US counterparts.
Who knows though what any of this means for prices and performance? It could mean the valuation gap grows or that it shrinks.
Ah the Road Not Taken article got me. In December 1997 I was working in the UK for a US software company that made me redundant. The T&Cs for my contract meant that some stock options in the company were exercisable but it was time limited. So in the rush up to Christmas break I was phoning the US broker to sort that out. Could I possibly exercise the options and invest the proceeds in another tech company – I wanted Apple AAPL stock? It wasn’t possible because it was an employee stock account for investing in only one stock, I’d have to open a general brokerage account which had costs and a ton of paperwork to open it as a UK resident. Too much hassle – I got them to send me a USD cheque and cashed it.
I’ve sometimes wondered what that AAPL investment would be worth now if I’d somehow gone ahead and sat on it all this time but the thing is once my younger self got mitts on the cash proceeds, there was not the conviction to do it. It’s easy to look at these what-ifs in hindsight and wonder why you didn’t take that road – never look back!
Thanks as always for the links.
The financial advisor article has rebooted in me the need to think a bit deeper about the Slow go and No go phases of retirement though I want to pretend they won’t exist (maybe need some Thelma and Louise style solution there).
And Ermine’s always excellent ponderings has me link monkeying onto lots of other stuff
Re: Which and Mortgage Solutions articles above: wonder what effect future fiscal repression might have on 2 to 5 year fixed lending rates? Klement covers possibility today:
https://klementoninvesting.substack.com/p/is-this-the-monetary-policy-of-the