Blessed by the Potato

It’s like the 1918 influenza at the same time as the 1929 stock market crash with 9/11’s grounding of flights, all overseen by Nixon’s paranoia and pettiness. It’s Disaster Voltron.

I’ve been watching the news flow on the coronovirus intently since January. It’s kept me up at night, and made me silently scream that we should be closing the borders. This was not just the flu (though now I think people mostly get that).

There was (and continues to be) a lot of uncertainty, but from where I was sitting the risks looked real enough. I didn’t blog much in part because I’ve fallen out of the habit, and in part because I didn’t want to come across as a fearmonger (and I would definitely have come across that way). I started slowly stocking up through February — an extra bag of oatmeal here, an extra bottle of pasta sauce there, a few extra packs of applesauce — and got a bit of teasing for it from Wayfare. Was nice to not have to panic shop with the crowds when the shutdown order came though. Instead, Blueberry and I hit the library, and turned out to panic-check-out-books, as they made the announcement while we were there at 5:30 that they’d close at 6 and not re-open for 3 weeks.

All through the news out of China shutting down parts of its economy, the market continued to hit new highs. I thought I was on crazy pills, I couldn’t believe it. But I’m mostly a passive investor, and mostly didn’t do anything (something I’m kicking myself over with the benefit of hindsight). As the case counts started climbing outside China, I finally bought a put on the S&P500, expecting that at some point the market would start pricing some risks in (even if the virus itself was contained, the supply chain yada yada).

It was an interesting mental accounting: I didn’t touch my passive portfolio, I didn’t panic sell and liquidate my active portfolio, I just took some money from the gambling pocket and bought this one thing that would pay off if the market went down. That somehow seemed much more reasonable than re-assessing my risk tolerance or making big portfolio moves.

Finally, the market did start going down. When it was down about 10%, I felt relieved. Finally, I thought, people have woken up to this and are taking it seriously. I had no idea what the proper discount on stocks should have been, but I knew it was more than zero. So shortly after that, I sold that single put, making about $2k to offset the much larger losses I was taking elsewhere (and again with the benefit of hindsight, if I had held until today that would have been worth in the neighbourhood of $10k). I felt kinda smart-ish — not Big Short material by any stretch, but hey, I saw some trouble coming and did pretty much the absolute least I could have possibly done to mitigate it. I rebalanced (too early) and bought some stocks in my active portfolio (way, way too early). Then the market fell at an unprecedented rate and, like many of you, I started to feel scared, and sad.

I mean, hey, this is what risk is, and what it feels like. Markets go down sometimes, and I guess it’s better to rip the bandaid off? And there’s no telling if we’re near the bottom, or if the uncertainty and very dark worst-case downsides, combined with just how very, very elevated the market was before this started means that there’s still a lot further to fall ahead of us. On the bright side, I can stop using that metaphor about how it’s hard to explain in words what it feels like to lose real money in investing — there are no more bear market virgins.

Anyway, I was sharing the old “President Madagascar” Shut. Down. EVERYTHING. meme, and I felt some relief when our leaders finally started taking things seriously. By this point, everyone has had “flatten the curve” explained ad nauseam. Schools are out, states of emergency have been declared, and even curling is cancelled.

The question now is what the shutdown gets us and what the plan is going forward. Economically, even a short shutdown will mean 2020 comes in as a recession year. A long one could be a depression (not the Great Depression — but there were economic contractions more severe than recessions before the capital-D Depression, and we may get to re-live that). And that’s part of why the market is still going to have trouble finding bottom.

Healthcare wise, we’re going to flatten the curve and save a bunch of lives. And let’s get one thing straight, we really needed to do this in Ontario. We were already deep in the hole from a capacity standpoint — all of our incredible growth, hundreds and hundreds of new condo towers went up (driving that real estate bubble), and we’ve built um… zero hospitals? Negligible net new beds, anyway (side note: the city’s development charge page lists what development charges pay for, like schools and parks… but hospitals didn’t make the list). We can’t move the surge from Covid-19 into the hallways because we’re already chronically dealing with hallway medicine. We’ve already invented all kinds of tricks to squeeze efficiency out of the system: which, yay, we’re leaders in technology and innovation and have been forced to be by relentless cost-cutting pressures, but it means there’s no margin for something like this.

“Since 1999 overall bed capacity has been virtually constant although the population has increased by 27%.” —OHA Leaders in Efficiency Report

Ok, so we have to flatten the curve.

But then what?

I was hoping we would have a plan to move back to containment mode. Build the testing centres and ramp up our ability to test like, a lot of people. With fast turn-around times. Then find all the existing clusters and do targeted quarantines. Every time a new case shows up, do contact tracing and test everyone, and try to put the genie back in the bottle. Only re-open the borders and flights as we have the capacity to test those who come in (and maybe keep up targeted quarantines for anyone brave enough to fly somewhere). And let everyone else go back to mostly normal activities.

Maybe also do some rapid build-out of hospital surge capacity. Not sure we can match China’s new facility in 10 days, but perhaps we can appropriate a few nearly complete condo towers (or dorms or office towers or whatever space) to add a few tens of thousands of new hospital beds. We still have some domestic industry left — if GM in the states can re-tool to make ventilators on automobile lines, we can possibly get the soon-to-be-mothballed Oshawa plant to do likewise. Another issue there is staffing. I think if we think of this as a true emergency and go on a war footing, we could train up some people to supplement the real health care workers. From what little I know, WW2 field medics had 10-12 weeks of training, from basically a standing start. We have lots of people with some non-specialized health/human anaotomy/medical technology knowledge: researchers, medical physicists, hygienists, technologists, technicians, dentists, veterinarians, as well as medicine & dentistry students and those who are caregivers for chronically ill family members. Given that we know the problem is mostly confined to a single condition, with a ~dozen complications, we could possibly train up some relief for healthcare workers in a few weeks if needed. Some licensing exemptions (or a new emergency licensing standard) would also be needed from the government’s side. But we could probably do it — I think I personally could get up to speed enough to be mostly useful to help the nurses and the other kinds of doctors in a crisis and help them cope with being spread thinner on our expanded number of beds (and also to be ready for the fact that some of them will get sick too).

We need to flatten the curve. And we need to use that time to move the line up. #raisetheline

However, I’m hearing less and less about using this time to get ahead of the need and then open society up again. While the messages are still about temporary closures and postponed events… we don’t seem to be solving the underlying problem. Which means a 3-week school shut-down and province-wide state of emergency will just roll over to a 4, 5, n-week shutdown. Or we pulse it — open things up for a few weeks until we get close to overloading the system, then go on lockdown again to keep things at a simmmer, until we finally get a vaccine or herd immunity. Or we start asking how much lives are worth, really, mostly boomer lives, and just open things and hope that simply rolling past flu season will be enough capacity freed up and, like, see how it works out? Ugh. [If somehow I have missed the plan, someone please link to it in the comments.]

And to circle back to investing, that’s where I get scared. Maybe we can get back to work but just like not cough on each other or lick the elevator buttons? And hope that all the disgusting people we see on the subway and not washing their hands in public restrooms have learned their lesson from a 3-week shut-in and that even with mostly regular activities it’s then slow enough of a spread that we can manage with the system more-or-less as it is? But a lot of people will go bankrupt if we spend the next 6 months in low-power, shelter-in-place mode. A lot of companies will fail, and in that scenario I could likely panic sell everything at the open tomorrow and still come out smelling like roses.

Anyway, it’s not clear. For now, we do what we can to flatten the curve and raise the line and wash our hands and try to stay sane with a 7-year-old bouncing off the walls*.

My one take-away tip is to keep a journal. About the market, about your feelings, about the shut-down in general — write it down. Firstly, it’s an outlet for some very understandable fear. Secondly, it can help you organize your thoughts and stay rational. And thirdly, we are living in what will surely be one for the history books, and you’ll want to remember it.

*And I’ll hodl and reserve the right to continue to kick myself with the benefit of hindsight. Which is really all we can do shy of having better than truly lousy predictive abilities and the lack of a time machine.

After almost two full seasons with my protective headgear for curling, I thought I’d provide a quick update.

Firstly, there have been too many falls and close calls at our club, which reinforces the idea that it’s worth putting something on your head. One of my leads fell in practice, got a concussion, and has to sit out for several weeks (he’s still out of the game as I write this). Just last week, another experienced player fell in a game and paramedics were called (though it looked like she might have hit her head on the ice at the time of the fall, thankfully it was “frame damage” with a sore tailbone being the main complaint).

More and more people out there are wearing something on their heads, whether it’s a bike helmet, curling helmet, or hat with protective elements (and I know I’ve managed to convince at least a handful of curlers to buy a Crasche or Ice Halo). I think we’re moving from the “early adopter” phase to the “mass adoption” phase — it’s no longer remotely strange to choose to wear something protective while you play, and I’d estimate that 20% or more of the adult curlers (and essentially all the kids) at our club are now sporting protection. While I don’t have appreciable hair myself, I am told that it’s exciting that Ice Halo now offers a hat with a ponytail hole.

I’m still wearing all my options in various rotations. It didn’t take long to get over myself and wear the headband-style ones without feeling any sense of fashion awkwardness. Indeed, the Ice Halo HD is the one I most commonly wear, particularly when I play mixed doubles (where I feel I have the greatest chance of a slip as I jump up after throwing to sweep). I also exclusively wear it when I volunteer with the Little Rocks, in that case I want my head protection to be obvious and not hidden within a hat so that I can be a good role model for the kids. Blueberry for her part wears a hockey helmet to Little Rocks.

I’ve found that the Ice Halo HD band has really settled in — I can position it nicely so it doesn’t interfere with my glasses, and the elastic has stretched out a touch so it’s more comfortable and sits in the right spot (without being loose — I’m not afraid it will fall off my head when I really need it). After a month or two (~6-8 games with it?) I no longer had to keep adjusting it from getting too tight.

When I skip in 4-person curling, I tend to go with one of my hat options. I like the Crasche Curler touque because it’s a little warmer and I get cold when I’m just holding the broom, and go for it a bit more than half the time. Unfortunately, while I’ve gotten used to it and figured out how to position it a bit better, it does still catch the arms of my glasses a few times per game, and sometimes will creep up out of position. I only tried it once with only the rear set of pads, and didn’t think it helped much, so I’ve still been using it as delivered. The Ice Halo ball cap is quite comfortable now (though I sometimes still get a mark on my forehead from the snugness, I don’t feel any discomfort when wearing it), and great when I think I don’t want to be warm, as it breathes better than the Crasche. I tend to go for the ballcap or Ice Halo HD when I play a position that involves sweeping on 4-person curling.

When I go to spiels (i.e., play multiple games in a day), I take two of my options with me, because if I get a little sweaty it’s good to have the option to rotate out and let one dry between games.

Back when robo-advisors were new — who are we kidding, for financial services they’re still new — people had lots of concerns about the new services. Chief amongst those concerns were whether investors’ money would be safe if/when one of the firms went under. We predicted that this would be a risk of inconvenience rather than a risk of losing real money: because of the custodian broker relationship, you would still have your assets somewhere (though those have their own risks), but the firm would no longer manage them. But if a firm went under, you wouldn’t lose your assets with them.

What happens if a firm goes out of business? Then the underlying investments — which are held at a “custodian” — can be transferred to another broker on your behalf. You can ask each firm about the details of their custodian arrangement, but as far as we were able to determine, every firm listed holds your investments at a custodian that is a member of IIROC.

So, aside from the usual risk of the investments themselves and completely unforseen events, investing with the relatively new robo-advisors should be no more risky than traditional means.

Well, we have our first robo-advisor failure! Planswell suddenly shut down operations this month, and we’re seeing those predictions play out in practice. Investors’ assets are still held at the custodian, and other than the inconvenience of having to move them and pay a transfer fee, nobody’s assets went up with the firm — the custodian brokerage relationship is working as predicted.

Planswell customers now have to figure out what to do with their assets. One choice is of course to learn to DIY and move to Questrade for ETFs or TD for TD e-series. Otherwise they can move to another robo-advisor if that’s what worked for them and still the right choice. Planswell is suggesting a few that use the same custodian (e.g. Justwealth and Wealthbar), which saves on transfer fees. Note though that if you ask and have enough assets to move, many firms will cover your transfer-out fees.

As for prognosticating, I’ve been surprised so firms have lasted as long as they have. I keep expecting a wave of consolidation — not necessarily abrupt closures like Planswell, but I’m surprised someone (the big banks and Wealthsimple are obvious acquirers) hasn’t been buying up the other firms. Dale has a post up on the slow growth of the robos which may add to the issues and stress in the future.

This is a surprisingly hard post to write (I’m also clearly out of practice on the blogging front), so let’s resort to the Q&A format:

Hey Potato, what’s up?

In The Big C 2: Revenge of the C I let you know that my dad’s cancer is back. Now I’m going to take some time off work (planning for 1 year) to spend time with him while I can, and also to take care of Blueberry and give her other grandparents a bit of a break. Today was my last day at work!

This is mostly a personal finance blog — how did you swing a year off work?

I have money saved, so I’m not worried about feeding myself or paying the rent during the year itself. It will mean pushing off retirement by a few years for one year being out of the workforce (lost compounding, spending more than saving, etc., will mean roughly pushing things back by ~3-4 years for taking a year now) but I actually haven’t done a huge, detailed projection. Indeed, I made the decision without really doing much of anything in the way of formal planning — it just felt right (after several weeks of hemming and hawing and sleeping on it), and I knew I could swing it, which I suppose is the point of all the previous planning and saving and investing. In the end, I wrote up a little one-page summary of the plan and implications, and that was that. My emergency fund will cover a year off, especially if I can pick up a few freelance gigs along the way.

So are you available for projects? Can I hire you?

Possibly! I know it’s not going to take 24-7 to take care of my family, so I will be looking to do some work, but only part-time (not being able to swing full-time with a commute is the reason I had to step back from the day job in the first place). However, I don’t know how cool the ol’ HR department will be cutting a cheque to an independent contractor who’s on leave, which means no grant-writing or other consulting for co-workers. Personal finance projects/writing/doing DIY investment workshops/lunch’n’learns, editing (it’s been a while since I’ve had a novel to edit, NaNoWriMo authors…), or science writing for others should be fine. Hit me up here if you’re interested.

What else will you do with your time?

Some have suggested using that time to learn something new or get a certification — pick up my CFP (which has a practical requirement, so it would require some commitment to switching jobs or picking up a more robust side gig), or get a MD or RN ’cause I spend so much of my time taking care of sick people anyway. I am getting dangerously close to having spent more time in the real world than grad school, so maybe it’s time to go back to learning and test-writing just to make sure I’ll never have a normal work-study balance in my lifetime.

I might also use my non-caregiving time to write another PF book — I’ve had an idea poking around for over a year now, but I’m getting more negative on the idea as I go along, and may have to just let it die. But hey, it is NaNoWriMo, so maybe some fiction…

However, other than a few random thoughts I absolutely have no plan. I figured all that could wait until I was actually off work to figure it out.

Isn’t it scary just leaving the workforce for a while with no plan of what you’ll do and no income stream coming in?

Well it is now. But that’s also why I managed to actually make a decision with no real analysis/spreadsheets/pro-con lists/waffling blog posts — I was just too burned out to go through my usual over-thinking routine. So at the moment I’m too tired to be scared.

Another quarter where I put back on ~3 lbs. The actual experience was even more up-and-down: I spent a lot of time visiting hospitals and stressed so even holding the line was hard. I went on to vacation to PEI, and decided not to worry or track, and managed to pack on almost 4 lbs in 2 weeks on my ice cream diet. Then started getting back on track for a week or two, only to be hit with a big deadline and a week of late nights and a few all-nighters, and put 2 lbs back on again, then started losing again. So crept up a tiny bit slowly, shot up 6 lbs, then lost ~4. So I did the opposite of my goal from last quarter.

I also discovered a really dumb source of the creep part of that phase: I was aiming for balance rather than a deficit. I was sticking to my habit of chewing gum as a replacement for my habit of snacking, but not paying attention to the gum. There was a big sale on Juicy Fruit, so I stocked up. Like, 80 packs over 4 trips to the store stocked up. Aaaand as it turns out, Juicy Fruit is not a sugar-free gum. I was getting ~150-200 calories/day from my gum chewing, which works out to be about the unexplained creep I was finding.

Just a few weeks ago, FitBit decided they didn’t want my business and blew up their app. It started crashing, and taking minutes to log food, if it even would. I had to reset my phone multiple times per day, and they were releasing a new bugfix version every day that just wouldn’t solve the issue — and added a big battery drain and a lost connection to my tracker to boot. Despite many direct bug reports, and many people in various forums complaining about how the latest version was just plain broken, FitBit never seemed to think to just roll the app back until they could fix whatever they were trying to do in the new version. I found instructions online for how to roll back to a previous version (IIRC 5.3 seemed stable if you’re having the same issues), but rather than mess around with that, I ended up switching to Samsung Health.

It has the same core functionality, with a few pros and cons over FitBit. It’s fast and responsive — FitBit was never that fast to search, and often had a bug where it would revert whatever you put in for servings 3 or 4 times before finally taking it. However, Samsung is very inflexible about how you tell it how much you’re eating: servings or bust. FitBit made it really easy to measure your intake: cups or grams, servings or slices or fractions of a whole cake/pizza with a little drop-down. Samsung also puts your calories burned in a separate screen from your calories consumed, making it a bit hard to see how you’re doing on your budget — I really liked how FitBit had them on one screen, with your desired deficit goal included so you could see right away if you on track for the day or not (and with the past week’s data right there too, not another screen away).

My Dad got me an early birthday present in the form of a Samsung smart watch (Active 2 40mm if you’re curious) to replace my FitBit for activity tracking. I like it, though for such a fancy piece of kit it’s kind of ridiculous to me that you can’t customize some things (or they’re too hard for me to figure out). There’s a huge variety of watch faces, and you can choose a variety of data points to display (from heart rate and steps to weather, other time zones, or alerts from apps) in various places in the watch face. You can fine-tune the colours and the background. But I can’t choose 12 or 24-hour clocks, or whether to hide the leading 0 for single-digit hours. The 12/24hr thing might be secretly linked to how the host phone displays time, but the leading 0 definitely isn’t. And I can’t choose to make the font size of the seconds smaller than the hours:minutes unless that happens to be designed into a particular clock face.

Anyway, fall is here, which will bring with it leaf-raking, curling, and only two more weeks of grant season, so I know this next quarter is going to go better!

Of course, fall also brings Thanksgiving. And Birthday. Hamerican Thanskgiving. Potatomas.

Halloween.

November Halloween candy sales.

And I have a house full of Girl Guide cookies that I really hope my little marketing whiz will sell to someone who is not me. But until then, there they are…

Gulp. I should probably up the motivation with some kind of commitment mechanism. Let me sleep on that.