June 2020 'Play Stupid Games Win Stupid Prizes' - Naval
Monday 1st June 2020
A bunch of restrictions get lifted today around our state of Queensland and all states in Australia. Each state is different, ours being one of the stronger virtue signalling states that feels the need to maintain over the top restrictions.
A friend messaged me this morning the stats about those who opted for early release of their superannuation. So far it’s been spent like this:
Essential items (it’s intention): 22%
Debt repayment (it’s intention): 11%
Discretionary Spending: 64%
Short term people who didn’t need it, yet took it out to spend on discretionary items are doing business and the economy a favour, keeping money moving and people employed, at a cost to themselves long term.
I thought this was funny and accurate!
‘There’s also a group out there living very large on pizza and beer courtesy of tax-free Super. These are the most expensive pizzas they will ever eat!’
A mate sent this to me tonight; from today’s The Australian newspaper, in a column by Chris Mitchell. It's an interesting point of view if accurate.
“Journalists need to re-examine the facts of the pandemic. They might start by admitting the US has done much better than Western Europe. The US has six times the population of the UK but only 2½ times the death rate. Deaths per million in the US last Thursday stood at 309, compared with 808 in Belgium, 580 in Spain, 552 in the UK, 547 in Italy, 438 in France, 418 in Sweden and 343 in Holland. Why the media focus on President Donald Trump?
Around the world each year a bad flu season kills 600,000 people, mostly the elderly. Many die of pneumonia. From the start of the last northern winter to the start of this southern winter 340,000 have died globally of COVID-19, mostly the elderly and many of pneumonia.”
The ASX closed up 1% today.
Tuesday 2nd June 2020
Over night the DOW closed up 0.3% with all the riots and protests and curfews happening around the USA.
It’s impossible to trust the media these days. The lies, deception, click bait headlines; sensationalism and controlling interests are not trustworthy.
The QLD government had to apologise after a 30yo man died last week, the youngest person in Australia to die of 'COVID', didn’t actually have COVID. So we got told he had it, when it turns out he didn’t? Which one is it?
It’s my guess of the 100 or so people who’ve allegedly died due to COVID here in Australia, 20% at maximum actually did. The remainder would have passed from a variety of existing chronic conditions.
A business colleague on our weekly Zoom call tonight shared both of her parents just tested positive to COVID today who live in Spain. They’ve been self-isolating for at least 4 weeks before prior to then have been in contact with people who’ve had COVID and (allegedly) died from COVID.
She’d just got off the phone with them before our weekly call and said only her father felt a loss of appetite for a few days a little while back, otherwise zero symptoms while being in the ‘high risk’ category.
Interestingly both are generally healthy, eat well, exercise regularly and have used nutritional support for a few years now.
The more I hear the less trusting I am of COVID data and the media.
The ASX closed up 0.3% today.
Wednesday 3rd June 2020
A bit of history created in Australia today, Australia is now in a recession. What’s unique about this recession is we know it in real time. Typically we learn only after the fact as it requires two negative economic quarters in a row, but this one is different! Last quarter was -0.3% for Australia and there is no question this quarter (the June quarter) will be far more negative with all the economic shuts still dragging on.
One of my business partners who had a part time position at a University in Brisbane before COVID said:
‘University is cutting cost and not employing industry experts. Before COVID they increased the number of students per class. Now all classes are online which mean all students at one time. I am not sure if this will continue later on’.
It’s an interesting time for higher education.
I got two phone calls today from people close to me wanting to discuss what’s going on with the share market. It’s powering up while we’re in recession. My response is I understand your question but I have no idea on day to day movements. All I know is economic data is generally backward looking and the share market is forward looking. They don't always match up.
I’d planned to expand on the conversations I had with them, but got this text message from an extended family member who’d just learnt she’s dealing with chronic fatigue/post viral syndrome, so it was time sensitive. Plus my fat thumbs don’t type real fast. No time to do both. You get this instead…
'Can I please pick your brain?
Bacopa - would that be like our ginkgo?
5HTP+ - do you know what this is?
LTheanine - do you know what this is?
L Carnitine - is this found in Rev?
DHEA - is this the same as DEA found in our biomega?
Thank you and sorry for all the questions'.
My response:
Bacopa – no, it’s a herb used to help with memory . CopaPrime+ will be the substitute for ginkgo and xxxx enormously with brain function, memory, etc. Its a ‘nootropic’ that’s great for the brain, nerves, etc.
5HTP - helps increase our serotonin. It’s to help people to show signs of depression like symptoms
Yes, some L-cart is in Rev3.
L-theanine is an amino acid derived from green tea. Helps with relaxation and lowering anxiety. It’s in Cellsentials and would be in rev3 too (haven’t checked though).
With the above ones, they’re more for people who are showing depression like symptoms or prone to it/anxiety/etc.
By using Copaprime+, Rev3 powder, Cellsentials and perhaps starting to drink a high quality green tea (not shit from supermarket) you’ll be getting a good boost of these things, that you’re current not getting, other than what you gain by using the CellSentials twice daily.
DHEA is a hormone available by prescription here in Australia. In USA is classed as a supplement, in same way Melatonin is.
My suggestion is if you’re not showing signs of improvement when you got back to your doctor in a month, you could ask her to give you a blood test for it too see where you’re at with it. Set a reminder to do this if you need to when the time comes.
Let me know if I’ve missed anything'.
Responding, helping, assisting people with health challenges and questions like this take up a regular portion of my time these days concurrently with physical preparation coaching.
The ASX closed up 1.8% today. Green galore!
Thursday 4th June 2020
Over night the DOW closed up 2.05%. With the riots and luting happening through the USA, we’re in a global recession yet the market keeps on keeping on. The forwarding looking mechanisms of the market appear undeniable at this point in time or speculation is in overdrive?
I share this more as a record of market behaviour than anything else. I’m not attached the market movement emotionally or otherwise. The only things I focus on are that which I can control and what the market does price wise short term is out of my control. So I don’t play that game.
On this topic, just last week a mate of mine wanted to add more CBA shares and was watching them in the $58 and $59 range but didn’t buy, he though they’d go down future. Today CBA is about $68!
He did the same thing with xxx. It was $4 and he was procrastinating. Today they’re $4.34 (at time of writing).
Attempting to haggle on price with the share market is rarely a good idea. Understanding and removing 'price anchoring' is also useful long term.
The ASX finished up again 0.7% much to the dismay of my friend!
Friday 5th June 2020
Technology isn’t my strong point and I’m three days into (attempting!) to set up www.kdmhealth.blog. So far, I’m a miserable failure at it.
Some how I’ve created a page (home page) that I want, but when I click home in the ‘menu’ it takes me to an entirely different home page. WTF…?
I’m about to find someone to pay who can set it up for me. I enjoy learning and problem solving generally, however in this case, I’m not.
Clearly there’s medicine in it for me though…
The DOW closed flat overnight.
Added to a couple of my holdings today.
According to the US Labor Department another 1.8 million Americans filed jobless claims last week, bringing the 11 week unemployment claims too 42.6 million since COVID19 hit the USA in March. I-N-S-A-N-E…
Saturday 6th and Sunday 7th June 2020
The DOW closed up 3.15% overnight, a huge gain, while parts of our world appear to be increasingly chaotic.
As an example, right now we cannot have more than 50 people at a funeral yet we have 1000’s of people at the famers markets I went to this morning. Cars we’re backed up on Bundall Road to get into the car park. Business was booming there this morning. Then in Australian capital cities we have tens of thousands of people in peaceful protests ignoring the social distancing laws.
In the USA we have rioting/luting of shops (which part of me feels there’s a more sinister side to it after watching this https://www.youtube.com/watch?v=a59q6tVHyJ4) in conjunction with the many thousands of peaceful protestors who are sending a strong message in a civilised way.
Today two good mates in completely separate conversations told they’ve need to switch off the any mainstream media/social media (and both coincidently already have incredibly limited social media presence. Both have never had Facebook for example) because of the crap it’s putting in their head.
It’s crazy, we literally wouldn’t let anyone walk through out house with dirty shoes, yet we often let an incredible amount of pollution pass through our minds. Turn it off. Shut it down. Don’t let it in. It’ll find you if it’s important enough.
Spend time in silence. Spend time around great people. Then, notice what happens…
Tuesday 9th June 2020
The Down up again 1.7% over night and the ASX finished up 2.5%.
It’s incredible to see share prices on the whole leaping forward each day. CBA was around $58 a couple of weeks ago and today it’s $72, up over 5% just today.
My behaviours haven’t changed one bit, continuing to DCA into the market as planned. The buying during March and April in particular has been a wonderful gift. So much so it’s disappointing prices are increasing this much, especially as earnings are as compromised as they are. From a P/E perspective, it probably makes the market more expensive now than it was at its peak in February.
Wednesday 10th June 2020
The DOW finished slightly down over night while the ASX just squeezed in a gain for it’s 7th day of gains in a row.
I’ve had an increase in my physical preparation coaching recently and USANA has been ticking along nicely. I received a phone call from USANA earlier today about a big announcement at the close of this commission week on Saturday at 4pm. I’m excited to find out what’s on offer.
Low cost, low overhead, online business, with strong supply chain in the United States and great leveraged income potential done part-time, is the big winner out of all of this. This is the second major financial crisis since I started in USANA in July 2004, the first being the GFC and I’m impressed again, at how resilient our business model is and the high quality business partners and customers we’ve been able to attract over the past 16 years and counting.
The insane number of amateurs and pretenders who enter the direct sales profession giving it a terrible reputation (simply because the barrier to entry is so incredibly low, which is a huge positive but also an enormous negative) based on their awful behaviours around product and/or income claims and absolutely useless communication methods, is not slowing down unfortunately. I guess most people are desperate for a quick buck or easy win and as a result, failure.
I look forward to the day potential business partners must first start as customers and only move to business partners when they display business behaviours (referrals, sampling and providing education and understanding).
There’s no easy win in building a commercial, profitable enterprise that can work with and/or without you. Like any business or any endeavour in life, it’s requires effort, learning of new skills, patience and leadership. I think it was Tony Robbins who said ‘people over estimate what they can achieve in a year and drastically underestimate what they can achieve in a decade’. He’s summed it up well.
Thursday 11th June 2020
The DOW closed down again over night -1.04%. Fingers crossed this continues. The divide between what’s happening in stock market and what's happening day to day is night and day.
For example, domestic and international passengers through Brisbane Airport in May 2019 vs May 2020:
Domestic passengers May 2019: 1.4 million passengers
Domestic passengers May 2020: 89 thousand passengers (down 93.6%)
International passengers May 2019: 447 thousand passengers
International passengers May 2020: 5 thousand passengers (down 98.8%)
The flow on impact from having our state boarders closed, is huge.
Talked to a mate who lives in Sydney last night. His wife is a GM of a hotel down there; she’s been in the biz for 20+ years. They told me it’d take years for hotels to get back to what used to be normal. The impact has been as severe as you could imagine in this industry.
The ASX closed down 3.1% today.
Friday 12th June 2020
Overnight the DOW closed down 6.9%. Looks like volatility is back. Apparently the FED chair Powell speech was fairly dire in relation to unemployment, getting the country going and the time that will take. Time will tell.
Having too many options is not always a great thing in life. I’ve only got 6 holdings, two of which I don’t actively add too other than reinvesting dividends semi annually. The remaining four, get all the focus.
Today’s focus was xxx; it got added too again for the second week in a row, cheaper again than last weeks purchase. It always feels great to lower the cost base, kind of like a little ‘win’ so to speak. The real win though, simply owning more of the worlds human endeavour.
The ASX closed down 1.8% today.
Saturday 13th and Sunday 14th June 2020
DOW closed up 1.8% over night.
Had a great chat with a good mate who’s done incredibly well financially and more importantly lifestyle wise. He shared with me just how much he’s used visualisation during his entire adult life to create his lifestyle.
I don’t have the vocabulary to express the energy he was displaying while talking about it. It was inspiring to hear.
Of course, there’s more than simply visualisation needed to achieve great things in life, but a strong focus on visualising it coupled with the skills, the vehicle and work ethic to achieve will most likely only help.
Monday 15th June 2020
ASX closed down 2.2% today and $40,000 of Vanguard index ETF’s were purchased today (not by me unfortunately!) by people close to me.
Every Monday I have a phone call with one of my key business partners in USANA. She’s an incredible business partner, who’s independent from me now, which is the point of the entire business model. Over the past 8 years I've probably learnt more from her than she's learnt from me.
We got on the topic of longevity and compounding in business and definitions around what ‘long term’ actually is? Of course, anyone can label ‘long term’ with any duration they wish.
That said, there’s a lot of noise around 10 years being a big deal and in many ways it is. On the other hand, I’ve heard it said Native American’s think in terms of seven generations and the impact decision today may have in this time. I once heard Cameron Quinn say in India it’s believed mastery can take as long as seven life times.
I understand technology helps us fast forward certain knowledge, experiences and connections (look at what mixed martial arts has done to evolve the effectiveness of different martial art styles/systems. More progress in the past 30 years than the past 300+ years), the question is, how much can it actually advance us?
Additionally, the impact casual, part time or full time hours over any time frame also plays an enormous role.
But I do know 10 years isn’t long term to me.
Tuesday 16th June 2020
Overnight DOW finished up 0.62% while it was a huge day on the ASX up 4.3%. Apparently every company in the ASX 200 was in the green today, in a recession with little visibility on earning forecasts and dividends of most major companies cut or suspended.
Interesting times!
It’s probably got a lot to do with this next paragraph…
This article in today’s The Australian https://www.theaustralian.com.au/business/markets/rba-may-have-to-follow-in-feds-rescue-footsteps/news-story/4c7e996ccd889bce6b6316bbb54a4c73 (pay wall) shared two interesting points for me.
- The Federal Reserve yesterday agreed to a $1 trillion dollar stimulus to buy the low-grade bonds (BBB) that are high risk therefore probably averting a meltdown in capital markets. It’s literally taking the ‘what ever it takes’ approach to support the market to a whole new level.
- Australia has over $100 billion dollars in business loans currently deferred and company’s are trading while insolvent because company legislation passed during peak of COVID that company directors temporary relive from personal responsibility while trading while insolvent.
So basically more government intervention to keep zombie companies/business trading. I’m guessing this is over and above the already 60% of the Australian population who are supported by or working for the government.
This constant government intervention on so many levels cannot be a good thing long term.
Wednesday 17th June 2020
Over night the DOW jumped up 2% while the ASX finished up 0.7%.
It occurred to me while training this morning I’ve not shared or demonstrated much ‘balance’ so to speak, in these entries. Balance around how minor this aspect of my life actually is in practice.
I’m into investing, love business and learning about different business models and all things economic, however I could easily spend a life time just surfing. And another lifetime reading and studying. And another lifetime travelling. And another lifetime training Kyokushin or learning boxing or BJJ. And another lifetime physically preparing athletes for competition. And another lifetime focused on health and USANA alone. And another lifetime on all things investing and I haven’t even got to family and friends yet!
It’s insane how limited and valuable our time is or at least that’s how I see it.
I don’t see a huge correlation between wealth and happiness/peace of mind or fulfilment. Sometimes, it’s even the opposite.
That said, by getting money out of the way, so to speak for me at least, give’s me more TIME to live out the experiences I’m looking for in this life. These experiences cannot be bought, I need to earn them and learn them.
We cannot buy our way to being a great surfer, have a deep understanding of Kyokushin Karate, develop flexibility or gain a skilled feel for the athlete training process as a coach. They all must be learnt and earned, simple as that.
Thursday 18th – Saturday 20th June 2020
The DOW and ASX have been either up or down 0.5% the past few days. I just can’t help but feel we’re in for another significant drop sooner than later. Selfishly, I’m hoping so for the buying opportunity, equally though, I don’t wish for more hardship or fear to be elevated in society right now.
USA jobs claims at 46 million while here in Australia we’re at 7.1% unemployment officially (in reality it would be far higher given the definition used for ‘employment’). Numbers wise that’s 277,700 people unemployed in May while in April it was 607,400 unemployed.
It’s right around now I’m setting up the blog and adding each month’s entries.
Tuesday 23rd June 2020
The DOW closed up 0.50% overnight while the ASX closed up 0.10%.
A long time USANA customer and now retired athlete I used to coach called me today. He now runs a large Engineering firm with about 60 staff all up. The engineering sector he’s in is doing it tough.
He said from the experiences of the GFC (many clients simply couldn’t pay them and they wrote off hundreds of thousands of dollars), so as COVID arrived they too some actions including:
- Some full time staff moved to casual
- Other staff got a 15% pay cut
- Gave their biggest client a 20% discount
- The partners took a 40% pay cut
The introduction of 'Job Keeper' program has been a wonderful help but has only delayed the inevitable he suggested and it’ll be slow in his sector for a while he reckons, especially with loans hard to get and immigration literally at zero and interstate migration close to zero too.
He also talked about mental health and the large number of staff impacted in this way.
This makes me wonder, what percentage of people have legit mental health issues versus people who use it to their advantage?
I have no idea, but it’s an interesting question.
It was also interesting to hear some of his staff was upset with a temporary 15% pay cut (note: all staff are back on their full wages now, while the partners are still forfeiting 40% of their pay).
He said ‘I’ve got enough money to sit at home for 6 months, relax and do whatever I want, so why am I working my ring off everyday for 40% less income?’
It’s a good question.
The other piece of information that caught my attention was he bought a new luxury car in February and gave it serious thought as to if he should or shouldn’t, because of the effect it might have on his staff, despite them all being well paid. In the end he did saying ‘if they want they can buy the business off me and buy one themselves’.
In other news, Cricket Australia has today come out saying they lost no money in the stock market as previously reported; instead they’re just short of funds to fund their fixed commitments.
Accounting firm KPMG today announced today they’ll repay some of the COVID pay cuts after better than expected revenue during the COVID crisis.
Wednesday 24th June 2020
The STW (ASX 200 index fund) ETF announced this quarter’s dividend of $0.1113 cents. This is an 85% drop in earnings compared to the same quarter last year of $0.7682 cents. It’s a big deal, especially for anyone reliant on franked dividend income.
It’s for this reason everyone needs to have a safety net in place that suits his/her psychology or behavioural traits.
Having a cash buffer in these times is an enormous relief, however mathematically at any other time (which is most of the time!) it’s an opportunity cost as its value goes backwards with inflation and paying tax on the interest, so is counter productive to wealth creation. It’s wiser to be fully invested with no cash buffer, meaning greater returns and great net asset position. Then having the ability to sell for income (there’s no difference between receiving a dividend and selling shares) when needed irrespective of what the market is doing.
That said, if you have a temperament that cannot handle large drops in prices or the negative noise (and believe me, you’ll have absolutely no idea if you can or cannot until you personally experience it yourself) having a cash buffer, despite the long term opportunity cost, is best for your individual circumstance.
Who knows, we could have a secular bear market for years at some point in the future too.
Anythings possible...
Added to the listed investment company holdings today.
A couple of athletes I know have had sponsorships deals cut and are now on hard times in difference sports. One recently bought a property based on income earnings from sponsors only to have a couple of the sponsors withdraw their support.
Thursday 25th June 2020
COVID cases have been increasing this week in Melbourne, Victoria. Incidentally toilet paper is in short supply again in Melbourne shopping centres as ‘second wave’ fears peak.
Clearly it’s the ‘certainty’ people get from having a strong toilet paper supply as strange as that sounds, is driving this behaviour.
Tony Robbins says there are six human needs:
- Certainty
- Variety (uncertainty)
- Significance
- Love/Connection
- Growth
- Contribution
In times of strong uncertainty it’s no surprise most are looking for certainty and in toilet paper, they find it!
Friday 26th June 2020
VAS and VGS announced their estimated quarterly distributions today.
Here’s the past two years distributions (in cents) using the Australian financial years as start finish dates:
18/19 19/20
Q1 112.74 107.10
Q2 71.06 72.14
Q3 91.59 67.27
Q4 81.14 20.60
Total $3.5653 $2.6711
This is a 25% drop in income as Q3 and Q4 were impacted by COVID.
Now VGS:
18/19 19/20
Q1 30.35 36.98
Q2 39.03 45.09
Q3 48.41 45.42
Q4 72.97 63.83
Total $1.9076 $1.9132
Slight increase, which to me seems like a fantastic outcome considering the global pandemic we’re in. Yes, VAS comes with tax credits at around 60-70% franked where as tax is payable on VGS distributions all things being equal.
This highlights the value of a diversified portfolio and taking it even future, Vanguards VAE (Asia minus Japan) ETF had year on year distributions growth of 31% for the same period.
Performance aside, this limited time frame doesn’t mean much to anyone with a long-term horizon. Plus, it’s all passive income and anyway you slice it, passive income is superior to earned income, in my book, all things being equal.
Saturday 27th – Monday 29th June 2020
Watching, listening and talking to people I feeling the impact COVID is going to hang around longer than any ‘V’ shape curve promotion.
Its clear COVID has accelerated much of society to the online world, shopping, communication, working, researching and the like.
One of the opportunities I see is to look ahead or ‘over the hill’ as Tony my car mechanic says. Project forward 5, 10, 20 or 30 years to what your idea day looks like and what’s required for these ideal days to roll on one after another.
I have a clear picture of this. I’m half way there, but most importantly you’ll need a vision for yours.
One surety of the future is change is automatic but progress is not. I first head Tony Robbins say this and it rings true based on my experiences. Resisting change is like holding your breath, it can’t last and embracing change is far easier than fighting it. Plus it’s healthy for us to learn new skills and adapt as human beings.
With this in mind, do things now your future self will thank you for.
Added to xxx holdings today.
Tuesday 30th June 2020
Circ de Solie has filed for bankruptcy laid off over 3000 staff and cancelled over 40 shows and while shopping this morning I noticed there’s another run on toilet paper at Coles based, on the rise in cases numbers of COVID 2000km’s away in Melbourne, Victoria. I was told it started Thursday last week.
Our state premier today announced our boarder would reopen July 10th.
Last day of the financial year for us here in Australia, which means its spread sheet time!
All listed companies and businesses track and report their financial positions through out the year to partners, shareholders and the public. It’s a wonderful habit for everyone.
Start small and simple or large and complex, it doesn’t matter. Just start with at least working out your net asset position as an example. Calculate it via everything you own minus any existing debts you have = net asset position. Doing this every 3-6 months is a great first step. You can then measure as much or a little as you wish from this point.