September 25th, 2020 – Disappearing Earth, Tech Stocks & Gold Digger

  • I just finished reading Disappearing Earth by Julia Phillips, which was named by the New York Times as one of the 10 best books of 2019. Prior to starting this novel, I knew next to nothing about the Siberian Peninsula of Kamchatka, aside from the fact that it was the name given to the cheap, bottom shelf vodka my friends and I used to drink in college. While saying the vodka was good may be an overstatement, I had no regrets after finishing off this novel. Kamchatka, located in Russia’s Far East just north of Japan, is a land of stark beauty, containing volcanoes, tundra, and verdant forests. It is also an isolated region accessible only by boat or plane that few foreigners visit and where many of its inhabitants still live in remote, ancestral villages. It’s in this setting – untamed, mysterious, and a bit creepy – where two young girls are kidnapped one summer afternoon. The abduction serves as the novel’s launching point to probe the region’s complex ethnic makeup, using various female characters – a nurse, a bored housewife, a customs officer, college students, etc. – to explore the simmering tensions between Caucasian Russians and indigenous populations. But what really makes the novel interesting is how Phillips uses each chapter as a character study, delving into the lives of seemingly everyday women to unearth their complexity. Every character is touched in some way by the girls’ disappearance, resulting in a unified narrative that really holds your attention and concludes in dramatic fashion. Read this novel if you enjoy mysteries that explore the complicated nature of families and small communities.

 

  • In case you missed it, U.S. stocks have surged of late. The Standard and Poor’s 500 (S&P) Index rose 20% from April 1st to June 30th, its best quarter since 1988, while the Dow Jones Industrial Average (DJIA) had its best quarterly performance since 1987, notching a gain of 18%. The real winner, however, has been the tech-heavy Nasdaq Composite Index, which soared 31%, surpassing its pre-Covid highs reached in late-February. And it’s on the performance of the latter index that I want to spend a moment. It’s now twenty years since the Nasdaq reached a similar peak on March 10th, 2000 before falling in dramatic fashion and thereby bursting the dotcom bubble. The frauds and scandals of that time period were legion, as were the losses suffered by investors. Fast-forward 20 years and a handful of tech companies now dominate America’s stock markets and have, in spite of the current recession, gained even more sway. Shares in companies such as Netflix and Amazon have skyrocketed over the last few months, growing to an extent that was not widely predicted only a few years ago. But will tech companies continue their ascent, or will they experience a fall from grace as swift as their late-90s counterparts? I’m not sure. But what I can say for certain is that no investor has ever bemoaned taking a profit. Diversifying your investments with stocks of companies that have not done as well as tech stocks - and are therefore less expensive – could be prudent. As the Roman poet Horace once quipped, “Many shall be restored that are now fallen and many shall fall that are now in honour.”

 

  • Gold Digger. It’s the latest show that my in-laws, wife and I were able to watch together without one of us abruptly standing up and leaving the room during the middle of an episode, making an excuse about needing to go to the bathroom but then never returning, or simply saying, “start without me, I’ll be there in a minute” only to never appear. As the title suggests, the show is about a wealthy 60-year-old woman, Julia Day (played by Julia Ormond), who falls in love with a man, Benjamin (played by Ben Barnes), who is nearly thirty years her junior. What starts off as a drink after a chance encounter at a British museum quickly progresses to a much more serious relationship that few, outside of Julia and Benjamin, actually believe is based on real love and not an elaborate ploy by Benjamin to get at Julia’s money. The twists and turns abound in the show, creating an engaging drama that asks us to consider the unpleasant ways in which society views older women’s sexuality as compared to men’s.

 

October 2nd, 2020 – Stock Market Timing, The Topeka School & Dead to Me Season 2

  • Timing the stock market, or buying stocks when you think they will rise and selling them when you think they will fall, has been an enticing option for investors this year. The case for being bullish on stocks (i.e. believing that they will go up) is strong. In our current crisis, economic data from housing to employment is improving, the Federal Reserve has pledged unflagging monetary support, and the odds of Congress passing another trillion-dollar fiscal stimulus package seem to be increasing by the day. All of that being said, being bearish (i.e. believing that that stocks will plummet in the near term), does not seem particularly foolish. Corporate America’s profits for the second quarter have thus far been mixed, coronavirus is still raging over large swaths of America, and stock markets have risen spectacularly since their late-March lows – all signs that indicate now might be a good time to sell out of your investment accounts and keep your money in cash. So what to do? The S&P 500 is nearly flat for the year. If you’ve sat tight and not tried to time your investments, your account values are probably close to where they were on January 1, despite the chaos. Additionally, in a time as turbulent as ours, investing mistakes can cost you dearly. For example, if you happened to have your money out of the S&P 500 for the best five days of this year, you would have missed out on a gain of 30%. In other words, any armchair expert can tell you to buy low and sell high. Putting that philosophy to work, however, is exceedingly difficult, since there are no clear signals given prior to large stock upswings or declines. My advice is to trust in the financial plan you made during calmer days. If you don’t have one, reach out to a financial advisor who can help. Focusing on your financial goals and the amount of money you need to save to reach them - rather than market signals purporting to show when it is a good time to buy or sell stocks - will eliminate a tremendous amount of stress, not to mention wasted energy.

 

  • I just finished reading The Topeka School by Ben Lerner. This novel received heady praise last year, with one news outlet calling it, “the best book yet by the most talented writer of his generation.” A very bold claim indeed, especially when, after speaking with my wife and many of my female friends, this novel appeared to them to reek of white male privilege. Yet another novel, they said, that gives universality to the worldview of the fortunate. There is no doubt that Adam Gordon, the novel’s protagonist, is from society’s upper crust. His parents, both psychologists, work at a world-renowned psychoanalytic foundation in Topeka, Kansas, while he is a popular teen who also happens to be a highly-regarded competitive debater bound for acceptance to an Ivy League University. The novel, which takes place mainly in the mid-1990s, touches upon a wide variety of issues: toxic masculinity, infidelity, and abusive parents to name a few. Its shifts in perspectives and time periods can take some getting used to, but what Lerner manages to pull off is a very interesting – and extremely layered -   work that at its heart seems to be about raising a boy in today’s America. How do parents teach their sons to become men who use language to communicate and connect rather than as a medium to erase anyone with whom they disagree.

 

  • Season 2 of Dead to Me was released on Netflix recently and it’s just what my wife and I needed to watch. And what I mean is that this show - through the ordeals of its two protagonists, Jen (played by Christina Applegate) and Judy (played by Linda Cardellini) - seems to capture our current situation, and that of many of our peers, better than anything else I’ve watched lately. Granted [spoiler alert, stop reading here if you haven’t seen season one and intend to do so] neither my wife nor I have committed manslaughter, but the lives Jen and Judy lead while trying to cover up their past misdeeds, raise two boys, and hold down jobs, is timely. We – much like Jen and Judy – can feel completely in control one moment, and then in the next feel overwhelmed, confused about what direction our lives may take, yet still remain one another’s main emotional support system. Don’t worry, we fully recognize how good we have it, and the outlandish scenarios Jen and Judy get themselves into are in no way comparable to the mundane existence we lead. But if you are looking for something to watch that really gets at how much two people can come to rely on one another during times of acute stress, give this show a try. It will make you laugh, cry, cringe and gasp in horror, ending with a great cliffhanger that will have you begging for a third season.

 

October 9th, 2020 – You Don't Need Alpha, The Nix & Insecure Season 4

  • Over the course of the last four months, certain investments have seen astronomical returns. Whether it is a high-tech stock such as Tesla, a commodity like gold, or a little-known rubber glove manufacturer based in Malaysia, investors with the prescience, or luck, to have made a large wager in such investments prior to their upswing probably have a pep in their step, not to mention a fatter wallet, right about now despite the global carnage wrought by Covid-19. And while it is impossible to tell exactly how the investment landscape will shift in the future, I promise that there will always be huge winners, no matter what is transpiring in the world. Although many investors do not have the money – let alone the nerve – to place a large amount of their wealth on a potentially hot stock or commodity, the good news is that you don’t have to in order to be successful. And not only is striking it rich on a single investment not necessary to substantially grow your wealth over the long-term, neither is torturing yourself to earn an extra one percent return a year from your investments. To back up my claims, I read an interesting article, You Don’t Need Alpha. The piece, written by a data scientist, illustrates that what matters in investing is not “alpha”, which is the excess return of an investment relative to the return of its benchmark index; rather, it is the amount of money you are able to save consistently. As the author points out, “74% of retirement success can be attributed to [one’s] savings rate.” Yes, I know, saving monthly and watching your investment portfolio grow slowly is boring, if not downright tedious. No one at your next dinner party will have his or her hair blown back by your mutual fund selections. Regardless, if you know that your money is invested soundly, you may want to consider putting cash into your accounts. Even if you gain below average returns on your investments, being a dogged saver, as the article stresses, can help to accumulate a comfortable nest egg. It will just take a while.

 

  • “The things you love the most will one day hurt you the worst.” A cynical perspective on life, or an honest viewpoint? You’ll have to delve into the latest novel I read, The Nix , to discover one author’s stance. But even if the answer to such a philosophical statement is not what you want while reading, you’d be missing out if you choose to pass on this work. Samuel Andreson-Anderson’s mother abandoned him when he was eleven years old. It’s an event that he has buried deeply, avoiding at all costs, even if it means spending most of his time – outside of his non-tenure track position teaching English twice a week at a low-tier college in suburban Chicago – online as an addicted gamer to escape his trauma. That is until his mother returns to his life after she’s caught on video throwing rocks at – and seriously injuring – a Presidential candidate at a campaign rally. With his mother now a national sensation, Samuel spots on opening. Not only to confront her and discover why she left him nearly twenty year earlier, but also to gain access to the hottest news story of the year and get enough firsthand information to write a best-seller, thereby gaining back the prominence he once enjoyed as a young, accomplished writer. As Samuel uncovers the truth about his mother’s life for his book, what emerges is a very funny and poignant rendering of contemporary America that is both unpredictable and extremely entertaining. If you enjoy novels that tackle big, contemporary themes and seek to make sense of our nation’s current, post-truth moment, you’ll want to read this book.

 

  • I just finished watching Season 4 of Insecure and it seems like the show has finally hit its stride. It’s not that the first three seasons were bad. They were actually quite good, but never seemed, at least to me, to sustain much momentum, choosing to focus on its characters’ relationship hang-ups and dalliances instead of their complexities. Season 4, on the other hand, focuses more on the emotional development and growth of its core characters, meaningfully exploring female friendships and the rifts that can emerge between close friends as they age. To recap, Insecure follows the trails and travails of Issa Dee (played by Issa Rae, the show’s co-creator), a single black woman in her late twenties living in Los Angeles who is trying to find her footing professionally and feel romantically fulfilled. And like many of us during that tricky period of our lives, Issa stumbles, repeatedly and hilariously, to make any headway. She’s adrift for most of the first three seasons, cruising through life without making any major decisions. This all changes in season 4, as she fully engages in a new career, gaining self-confidence and clarity on what she wants from life. This shift in Issa’s character leads to conflict with her best friend, Molly (played by Yvonne Orji), and the bulk of the fourth season is dedicated to examining their relationship and depicting how platonic bonds can change expectedly and, in certain instances, irreversibly. Give this show a try if you enjoy a good comedy-drama that really gets at the misadventures one can face while grappling with early adulthood.

October, 16th, 2020 – Investing in Bonds, Successful Marriages & Search Party

  • Over the course of the last few years, many economists predicted that interest rates would rise. That has not happened. In fact, interest rates continue to fall and could potentially drop even further should the pandemic worsen. While low interest rates are a boon for borrowers – as anyone who has recently applied for a mortgage can attest – they pose a conundrum for investors who rely on bonds’ interest payments as a form of income. So with bonds paying very little, why do some invest in them at all? First, bonds can act as a ballast during a financial storm like the one we recently lived through from late-February to late-March of this year. During that bleak period of time, a high quality bond fund may have still lost around 1% of its value, but that amount of damage was nothing compared to the 35% drop investors experienced with stocks. Second, bonds provide what financial professionals like to call “dry powder”. When stocks tank, you, as an investor, have an opportunity to start to buy them on the cheap. The only issue is that you need money in order to be able to do so. Assuming that you are not sitting on a pile of cash, the bond portion of your investment portfolio may provide you with the needed capital, since bonds generally do not suffer as steep of losses as stocks do. One last item to mention is that not all bonds are created equal and there are many types (e.g. corporate, “junk”, U.S. Treasuries, municipal, etc.). Some bonds can be as risky of an investment as stocks and should be used judiciously - if at all. Please reach out if you have questions on investing in bonds.

 

  • What does it take to have a successful marriage? I am not sure. I haven’t been married that long, and there is more than enough time left in my life to screw things up. But even if you were to ask ten different couples who have been married for a more respectable amount of time, you’d probably get ten completely different answers. It’s clear that no two relationships are alike, but do all healthy marriages share at least a few commonalities? In an interesting article I came across in The Profile, the author develops a compendium of successful relationship advice distilled into twenty pointers. There is a lot here, almost too much to soak in during a single reading, but it makes for a useful reference guide if you feel that your emotional connection to your husband/wife/partner has waned during these stressful last few months and you want to make things better.

 

  • Does the world really need another show about millennials, particularly one focused on a cohort that is white, oblivious and cosseted? Probably not. But might we need an unsparing satire about twentysomethings searching for a missing former classmate that reveals uncomfortable truths about our modern-age? Definitely, yes! At least that is how I felt after watching the first season of Search Party. The show’s protagonist, Dory (played by Alia Shawkat), doesn’t have much to hang her hat on. She’s the personal assistant to a wealthy Manhattanite, in a steady (if not boring) relationship with her boyfriend, Drew (played by John Reynolds), and has only a couple of close friends in whom she can confide. Her classmate’s disappearance is the plot device used to jolt her from her stupor and find out what exactly happened with the help of Drew and her closest friends. And while, superficially, the show is about finding the missing classmate, it hooks you not only through its humorous portrayal of a group of very unsympathetic characters, but also because it seems, well, much more real than many other shows of its genre. The show doesn’t strain itself to reveal some larger truth about millennial culture, or try and make you like deeply flawed individuals; its characters are petty people who are more than happy to help search for their classmate just so long as it fits into their schedules and doesn’t require too much work. And while that may seem harsh, think about what you would do if someone you used to know went missing. Would you be sensitive enough to help search for him or her, or would you only feel bad for a short while before getting back to your life and all its demands? The interesting way this show examines the gap that exists between describing how terrible an event is and actually taking meaningful action to do something about it makes it well worth your time.

October 23rd, 2020 – Stock Market Streaks, Optionality & Our Man

  • Given the state of the world, it’s hard to believe that the S&P 500 is up a little over 9% so far this year. Unfortunately, this year is far from over, and given the roller coaster ride that we’ve all been on the past 8 months it is safe to say that anything can happen. But if the S&P 500 stays positive for the remainder of the year, its performance would continue a streak that has seen it produce higher returns in 11 of the last 12 years. Historically speaking, this is an amazing run, but like all good things it will inevitably come to an end. And you, as an investor, should steel yourself for lower returns moving forward. Why? According to an article I read, there have been two other periods of phenomenal returns in the last 100 years. The first lasted from 1947-1964 and the second from 1982-1999. In the aftermath of each of these wonderful runs, the S&P 500 was down 3% from 1965 – 1981 and down 9% from 2000-2009. Although it is impossible to tell when a period of prolonged losses will begin, this information is instructive for a couple of reasons. First, if you are at or near retirement and are trying to gauge what you can expect the stock market will earn, it’s smart to assume that your investments will not return what they have of late. If possible, working a few more years or increasing your savings rate should therefore become a priority if you fear you may run out of money during retirement. Second, and this goes for investors of all age brackets, consider diversification. The statistics I’ve referenced are only for large, U.S. domestic companies. Other assets classes may help to pick up the slack should the S&P 500 falter. Remember, not all asset classes rise or fall in unison, which is why investors should consider diversification.*
    *Diversification does not assure a profit or protect against loss in declining markets, and diversification cannot guarantee that an y objective or goal will be achieved.

 

  • Much like investing, spreading your bets professionally is a smart move. Or is it? In an interesting piece, Mihir A. Desai, a business and law professor at Harvard, speaks about the role of “optionality” in one’s career. For the uninitiated, optionality refers to financial instruments through which an individual is conferred the right to do something, rather than the obligation to do so. As Mr. Desai puts it, “optionality is the state of enjoying possibilities without being on the hook to do anything.” From his perch in academia, he has talked to hundreds of bright, ambitious students about their career goals. He admits to having lost count of the number of times they’ve expressed their desire to “maximize optionality” and, at this point in his career, seems to be a bit fed up. What if, he wonders, his students’ emphasis on creating future possibilities is actually backfiring, short-circuiting their careers before they’ve begun in earnest? As he expounds upon in greater detail, Mr. Desai believes that the focus on obtaining more and more options (i.e. moving from one company to another to gain different stamps of approval) actually hinders the big risk-taking dreams that his students profess to have. Yes, he admits, changing companies to move up the corporate ladder is hardly a pitiable outcome, and may in fact be what many of his students desire in the first place. But for those individuals who truly have a passion they want to explore professionally, diversifying work experiences prior to making the leap may actually cause their dreams to recede into the background. Different jobs, regardless of the opportunities they purport to give, aren’t way stations on the path to your dreams; rather, they are risky digressions that will fundamentally change you. I bring this article up because I know more than a few people who are currently contemplating change. Losses, whether they be professional or of a personal nature, have caused many of us to reflect on what we want out of life. Perhaps this article will help bring things in focus. As Mr. Desai concludes, “if your dreams are apparent to you, pursue them.”

 

  • I just finished Our Man by George Packer. It’s a biography of the life of Richard Holbrooke, one the U.S.’s most prominent diplomats during three of our nation’s most critical entanglements abroad in the last 60 years – Vietnam, Bosnia and Afghanistan. This book is long – nearly 600 pages – but what emerges is not only a highly readable account of these imbroglios, but also one that doesn’t try to hide Mr. Holbrooke’s true self – irascible, indefatigable, self-absorbed, brilliant – and the important role he played to impact the U.S.’s foreign policy decision-making at key moments. This book is about power, diplomacy, and the human spirit as it pertains to America’s adventures abroad since the 1960s. If you are interested in how diplomacy works in its most human form – the bruising collisions of huge egos, the mashing of raw psyches, and the tireless work of career officials who never make it to the treetops of power but nevertheless play a crucial role in our nation’s strength – please read this book. You’ll walk away with an appreciation of the highs and lows of U.S foreign policy and an increased understanding of our nation’s limitations and importance abroad.

October 30th, 2020 – Super Savers, Do You Really Want to be a Landord? & I May Destroy You

  • Have you been saving money during the pandemic? Whether it’s the dinners you’ve been making at home instead of dining out, avoiding professional manicures and pedicures for DIY ones at home, or not having to pay to commute to work, you may have managed to save quite a bit more than you otherwise would have under normal circumstances since mid-March. It’s a cruel paradox of our pandemic economy that people with the biggest financial cushion are the same individuals who have curtailed their spending most dramatically. During the first couple of months of the pandemic, this wasn’t the case. In fact, America’s “personal savings rate” – the portion of one’s disposable income that is saved or invested – went up dramatically across all income levels, low and high earners alike, in March and April. But this increase in savings across all economic levels, largely due to the government’s relief legislation, has since dropped off. In fact, low earners’ spending has gotten back to pre-pandemic levels since May, while high earners’ has continued at significantly reduced levels. These divergent savings rates hold troubling implications for the U.S. economy. For example, in mid-August, according to Opportunity Insights, “reduced spending among the top 25 percent of earners accounted for 57 percent of the estimated drop-off in spending overall.” This finding, which is just one of the many interesting points raised in a recent piece I read, is not meant to make you feel guilty if you happen to find yourself on solid financial footing amid the current economic downturn. Rather, the intent is to highlight just how dependent our economy has become on servicing high-income individuals. Until Covid-19 is tamed, people with money will most likely not feel safe enough to spend as freely as they used to, resulting in potentially long-term negative consequences for an economy highly dependent on consumer spending to grow.

 

  • Buying rental properties is one of the more easy investments for people to understand. Practically everyone has lived in an apartment or house, so there is a comfortability with the costs and requirements associated with maintaining property. And until people start to post pictures on Instagram of their 401(k) balances, the amount of money they have saved will never provide the same level of social signaling to friends and family that real estate does. With mortgage rates at historic lows – and some folks seeing a hefty balance in their bank account (see first point above) – there is a strong argument to be made for financing the purchase of a rental property and becoming a landlord. In an interesting piece, the benefits and drawbacks of doing so are discussed in greater detail. Yes, having someone cut you a check each month to pay off your mortgage sounds amazing, but it’s worth understanding just how dramatically your lifestyle and politics may be altered after becoming a landlord. The author delves into the internal tug-of-war that many landlords confront, and I urge you to read this article to gain a fuller understanding of why shying away from owning rental properties could be in your best interests financially and emotionally.

 

  • I’ve been watching HBO Max’s I May Destroy You, a British comedy-drama written and directed by Michaela Coel. The show, in which Ms. Coel also stars as the protagonist, Arabella Essiedu, recounts her experience of being drugged and sexually assaulted in 2016. To recap, Arabella is a well-known millennial writer who, on a tight deadline to finish a draft of her next novel, joins friends for drinks one evening at a bar before pulling an all-nighter. The next thing she remembers is awakening the following morning in a fugue-like state with much of the evening completely erased from her memory. As the initial shock wears off, Arabella slowly begins to piece together the prior evening’s events, eventually coming to the realization that her drink was spiked prior to being raped. As the show unfolds, it explores the erratic nature of trauma as seen through the actions of Arabella and her closest friends, Kwame (played by Paapa Essiedu) and Terry (played by Weruche Opia), who are also trying to process sexual violations. Information withheld, false accusations, consent obtained under false pretenses, this show examines the blurred lines in which sexual assault oftentimes takes place. It’s a difficult show to watch, but one that provides a thoughtful intersectional perspective on a very troubling topic.