Monday 2nd May 2022

So here’s a story for you. My brother and I surfed Snapper Rocks this afternoon. It was a magical day with incredible waves. Then out of nowhere, disaster. My brother got his legs pinned between two cars. He’s what happened in his words: 

“We were parked on a hill in Coolangatta, finished surfing and I was packing the boards in the back of my car when my brother and I noticed a car in front of mine reverse parking. A girl was helping her reverse as it was on a hill. The driver went out to correct her park as she wasn’t in properly, she accidentally in reverse instead of drive and floored it resulting in slamming into the front of my car which I was standing behind momentarily loading boards into. 

The impact was so intense and powerful it pinned me in between the rear of my car and the front of the car behind me. Wedged between two cars for maybe 30-60seconds I somehow wiggled myself out and immediately collapsed on the road and went into shock. 

Initially I couldn’t feel my legs as the pain was intense. I was yelling and crying and thinking the worst. Luckily my brother was there to help, calm me down and take care of the situation at hand until the ambulance arrived and took me to hospital. 

Just want to say a massive thanks to my brother, unsure what would have happened if you weren’t there, also to the general public who called the ambulance and helped out as well. You guys were fantastic.

I don’t hold any remorse or anger towards the driver, as I know it wasn’t intentional. We all make mistakes. 

It definitely puts life into perspective on how fast things can change in a split second. Just super grateful it wasn’t anything worse as it easily could have been. 

The result is severe bone bruising and soft tissue swelling and bruising. No broken bones. Time to rehab and heal the best I can. Hopefully back in the water in no time!”

Life is short and can change in a split second. Time stands still for no one. Last month I was banging on about market contractions being easy to deal with. Situations like this (and other enjoyable experiences) make it simple for me to not focus on things I cannot control. Like market movements… 

 

Tuesday 3rd May 2022

BRK’s annual meeting was live streamed with Warren Buffett and Charlie Munger answering investors' questions. Talking about money and investing is difficult. I’d imagine answering questions and giving advice is another level of challenge. There’s so much emotion, bias and mixed values people have around money, investing, self worth and the like.  

 

Thursday 5th May 2022

The RBA lifted the Australian cash rate by 0.25%. It’s now sitting at 0.35%. Overnight the US also lifted interest rates by 0.50%. Interestingly, the market responded positively to this news. I’m guessing the commentary from the FED around rises no greater than 0.5% at a time was welcome. 

 

Sunday 8th May 2022

From a newsletter I subscribe too and highly relevant at the moment:  

"I’ve realised a new reason why pessimism sounds smart: optimism often requires believing in unknown, unspecified future breakthroughs—which seems fanciful and naive. If you very soberly, wisely, prudently stick to the known and the proven, you will necessarily be pessimistic. No proven resources or technologies can sustain economic growth. The status quo will plateau. To expect growth is to believe in future technologies. To expect very long-term growth is to believe in science fiction. No known solutions can solve our hardest problems—that’s why they’re the hardest ones. And by the nature of problem-solving, we are aware of many problems before we are aware of their solutions. So there will always be a frontier of problems we don’t yet know how to solve."

https://rootsofprogress.org/why-pessimism-sounds-smart 

  

Wednesday 11th May 2022

The price of shares has been moving down sharply the last few days. It’s important to understand the saying ‘people know the price of everything and the value of nothing’ in these times. Price and value are separate things. I best not confuse them. 

The crypto market has also been moving down sharply. The listed company Coinbase is doing it tough. It floated at around $365 around a year ago. Two nights ago it dropped 19.5% in a day. Last night it dropped a further 12.5% and it’s down another 15.5% in after hours trading (as I type) to $61.73. It’s trading on a P/E of 5.03. 

Is the current share price of Coinbase reflective of its long term value? Time will tell. 

It’s also interesting to see the price graphs of a stack of companies over the past 5 to 10 years. The QE, emergency interest rate cuts to basically zero and helicopter money given to people spiked the prices of some companies. Now the QE tap has not only been turned off, but we’re entering a period of QT, interest rates are on the rise and we have high inflation, we’re seeing a natural reversal in listed company prices. 

In many cases it’s as if the covid injected price boom in the market didn’t happen as prices are back to their pre-covid levels of late 2019. A revision to the mean. 

Warren Buffett has a quote attributed to him ‘in the short term the stock market is a voting machine, but in the long term is a weighing machine’. We’re seeing this play out in real time. 

 

Thursday 19th May 2022

The index’s down 4% again overnight which will carry over to the Australian market today. 

Amazon down 7%, Apple down 5%, Tesla down 6.5% and the list goes on. Apparently FED Chair Jerome Powell commented “No one should doubt our resolve in doing that (getting inflation down to 2%)... What we need to see is inflation coming down in a clear and convincing way”. 

I’m taking this to mean, it’ll likely be a rocky road for assets for a while. And as will happen and has always happened throughout human history, assets will return to their ‘rightful owners’. If you’re not sure what I’m referring to, type in ‘rightful owners’ into the search function on the top of my website. An entry from a couple of years ago will explain.   

The All In podcast interviewed Elon Musk two days ago. He gave some great insights into why he’s wanting to buy Twitter and his thoughts on the current recession the USA is likely in, among other things. 

Another podcast I’ve mentioned previously SB Talks, interviewed former RBA Governor Ian MacFarlane for its May episode. His insights around monetary policy, QE and Ben Benacky were insightful to say the least. His suggestion that history will not look favourably on QE is something I agree with.  

 

Sunday 22nd May 2022

Yesterday Australia voted for a change in government. Out with the coalition and in comes the Labour party. I didn’t follow this election cycle at all. After the past two years of criminal mainstream media reporting, I don’t waste my life listening to any of it anymore. If something is important enough, it’ll find me via family or friends. 

My investing strategy remains the same irrespective of who’s in government. 

 

Friday 27th May 2022

New Zealand’s inflation is currently sitting at 7%. The RBNZ increased interest rates a further 0.5% to a cash rate of 2%. Australia currently at 0.35%. 

 

Sunday 30th May 2022

The bits and pieces I’ve heard from the WEC (World Economic Forum) annual meeting are concerning to say the least. My top three concerns in one order of importance: 

1. Yuval Noah Hariri (author of the book Sapiens) - “Covid is critical because this is what convinces people to accept to legitimise total biometric surveillance. We need to monitor what is happening under their skin”. https://twitter.com/MaajidNawaz/status/1527975589235376128?s=20&t=qfVOo7SHjy_iogyulQFEzA 
2. A central banker talking about the public having a direct relationship with the Central bank via digital currencies because there are ‘many advantages’ to this. As opposed to our current set up with commercial banks. The benefits he shared were ‘it’s safe, it feels good’... Seriously. That was it. https://www.instagram.com/reel/CeALZ3Whw6f/?igshid=YmMyMTA2M2Y= 
3. Bill Gates talking about vaccines. Why is Bill Gates talking about vaccines at the WEF? He’s not a scientist. He’s not in great physical shape. Why is anyone listening to him? I know it’s because of his foundation and the influence his money has. Thankfully, I can choose to have higher standards when it comes to health information. https://twitter.com/TexasLindsay/status/1529508024079073280?s=20&t=qfVOo7SHjy_iogyulQFEzA 

Now to be fair, you could say the same thing about me and Project Passive. I’m not a financial professional, why listen to me? 

The difference is I’m not advising anyone on anything. I’m simply sharing my journey working all of this stuff out in real time to keep myself accountable. I’m also not promoting it. I just post it and it’s done. If people find it, great. If they don’t, great. Nothing changes from my end if no one reads it or if everyone reads it.

If Gates was doing something similar in relation to his own health and genuinely sharing his journey, I’d definitely be interested to check it out over time. But he’s clearly not and to me this is concerning.   

 

Tuesday 31st May 2022

Australia’s GDP was 3.3% annualised from the numbers released through to 31st March 2022. 

Episode 200 of the Rational Reminder podcast with guest Professor Eugene Fama is a cracker. After around 50 years in investing research and as an investor it was interesting to hear his views on QE and the inflation we’re all now facing. We’re certainly in uncharted times with this inflation and the introduction of QE.