Key thing to remember… you really don’t want an overuse injury with more than a month to go in your lockdown!

Build in orthopedic recovery => especially if you’ve cranked run volume in the last two weeks.

I’ve been taking weekends off from training => just walking, easy hiking with the kids and a few pull ups.

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Home School

This week we are adding online learning from the district. Bit of a mess with me running between three iPads running simultaneously.

One thing I noticed with our oldest, she feel extremely anxious getting a stack of “to do’s” without a corresponding schedule of how she going to complete them. As a result, the first two days were an anxious, nonstop, bleary-eyed sprint to lunch (after which she went back to normal).

I’m going to build in a 15-minute planning meeting with her to start each day and help her create her own schedule.

Make your own playdough was a hit! We mixed primary colors and discussed secondary colors, which they created themselves.

We will have the kids’ BJJ coach coming over to run PE tomorrow. They’re pretty excited, even with the six-foot rule.

Yesterday was fitness bingo for warmup then football. Our oldest throws everything like a waterpolo ball – makes it kinda tough to play catch with her.

We signed up for netbricks.biz => a lego sharing biz. I’ll be washing down the bricks before the kids get rolling.

Top of the blog is Bella acting out her short story. The kids love reciting, and acting, every single thing they write.

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Virus Stuff

I came across a reference to testing data becoming like a Cargo Cult (slide down this twitter feed).

It reminded me of the original commencement address by Feynman. Pure gold! I’ve printed it out so I can re-read it slowly.

• What are we measuring with the testing data? Test results.
• How reliable are the results?
• Have you had any experience with Chinese data?
• How about the reporting of the results? There are countries in the world where people are killed for reporting bad news.
• Why are we measuring the global testing metric? Simply because we can?
• Might there be a better place for us to focus?

The list of potential questions goes on and on. See the twitter feed.

The best tip I saw was… “if you want to have a look at what the virus is doing to a community then have a look at year-on-year all-cause mortality.” Focus on who’s dying, rather than who’s testing positive.

To their credit our state health department is seeking to do just that by breaking out their COVID data by age and county.

I’ve been tracking Colorado and Boulder County – here is my spreadsheet.

We closed our schools two days before the first positive was allocated to Boulder County. I think we will be very glad we were proactive.

China, Hong Kong, Denmark, South Korea and Taiwan => watch these places to see how long your best case lockdown is likely to be.

It was strangely painful to turn off my electronics this past weekend. The payoff was time to take stock.

The only news that got through was the Feds shifting our expectation from an Easter lockdown to an end April date.

Friends, Bill Gates, a man whose sole agenda is the betterment of humanity, is talking about 6-10 weeks.

I’m going to take the “over” on what the Federal Government is telling us. If your state blows up like Wuhan or Italy then you’re looking at two months, minimum.

Whatever is coming our way, it is going to be a big chunk of time.

Many will spend these days wishing time away.

I’m going to do what needs to be done.

I spent this past weekend: (a) taking stock of what we accomplished in March; and (b) thinking about what we can get done in April.

March proved we could:

1. Shop once a week for all our needs – huge time savings
2. Do without childcare, housekeeping, travel and takeout. This is a material slice of my discretionary budget.
3. Have the kids clean the entire house, twice, for ~$25 per week.
4. Have the kids take care of themselves for ~90 minutes. Our oldest is 11 1/2.
5. Meet our kids’ academic needs with ~2 hours of formal instruction, 5 days a week. The academic part of home school is straightforward. What we can’t do right now is create complex social situations with kids and non-family adults.
6. Taught my two oldest kids cribbage – my son skunked me by day three

Notes:

• In our first two weeks, we had ten home school days and four open days.
  • The days with a written schedule were WAY, WAY (!) better. Well worth the effort to break through the inertia and make a plan!
  • Now that we are adding online learning from the school district, we will move to Thursdays/Sundays as “open”.
  • School district home school bingo link for K through Grade Five in English and Spanish. Links for older kids can be found here.
  • The kids love it when I do their assignments with them. Most recently, write a poem then act it out. Huge! Lots of laughs.
  • Axel loving the Hardy Boys books – I bought him a boxed set from CostCo last Christmas. I get a kick out of this as they were how I learned to read.
• To avoid an unacceptable downside in my household, I have retained control of bleach, the stove and boiling water.
• Financially, I am expecting we will get absolutely hammered on our paper balance sheet. I see no way this plays out as…  down 35% then up 20% and steady as she goes.
  • My main focus is making sure we have cash on hand to meet expenses.
  • A 12-month rolling cash flow forecast is on my personal to-do list. This tool is how we managed through the last crisis. In my professional life, I’ve done this for every entity I advise. If it touches your family then you want a cash flow forecast.
• Zombies, Zombies 2 and Alexander’s Rotten Day => all great via streaming
• 1/4 avocado spa treatment for the kids and Monz was a big hit. Photo above
• These cookies were delicious and made by my 8-year old with minimal supervision – pic below, top right corner // lemon loaf (below, left) was made by all three

April => what’s your plan?

1. Stronger Every Week. Total time investment is ~6 hours (total) from Monday to Friday. I start every weekday morning with a win. 8 weeks to go on my plan.
2. Help Bella learn her subtraction facts and become a self-motivated independent reader
3. Move my kids up a grade level in math. They are super motivated by this goal. Kinda like “secret training” for an athlete.
4. Get through a challenging book => here’s mine
5. Wean myself off earplugs => 15 minutes, total, in the last five days => not sure why I enjoy making my life harder but it seems to leave me feeling like I got something done, which perks me up
6. Become unreasonably patient with my kids => the Yoda of home school!
7. Celebrate Lexi’s 1/2 Birthday => give the kids something to look forward to and create a special event for home

We watched The Martian yesterday on Google Play. So great, even with the f-bombs.

The lesson I took away… grieve for a bit then work the problem.

Today is the 14th day of lockdown for the kids and me. As you can see above, lockdown in Boulder is perfectly acceptable. We are happy to stay put.

At this stage, I don’t see the way out.

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This NPR report is similar to the concern my medical mentor expressed: Some Recovered Coronavirus Patients In Wuhan Are Testing Positive Again

The duration of the true lockdown in Wuhan is something I’ve been watching. It’s longer than you think. It’s also a lockdown in a totalitarian state, which is wee bit different than any American equivalent, even with the National Guard deployed

Exponential functions are difficult to intuitively grasp, particularly at the start.

This is why it’s so tough to get people to start saving, begin an exercise program and stop global pandemics…

Positive tests Colorado

• 33/44/72/101/131/160/183/
• 216/277/363/475/591/720/912/
• 1,086/1,430

1. First we see the positive tests pop.
2. Over the last few days exponential growth has moved to our hospitalizations.
3. Unfortunately, the final move is with Colorado’s deaths.

We have friends who decided to go on vacation. We are all safer at home, folks.

How I Handle Bad Deals

In the summer of 1990, I started my career in Private Equity. I lived in London, before it was expensive. So great.

Our cost of borrowing was ~15% and the UK was undergoing a structural transition due to Thatcherism. We did a lot of good deals and a few bad ones.

At first we tried to save our bad deals. Millions of Pounds Sterling went up in smoke, seeking to save British Industry from the early effects of Globalization.

Eventually, we realized this might not be the most effective approach and changed direction with a focus on the following:

Seek a way out => Free up time, and head space, for better opportunities.

Learn from our mistakes => go back to our original investment memo and see why we thought this would be a good risk to take.

Be careful to assess based on information that was knowable at the time you made your decision. Good decisions can go bad. Likewise, you can get lucky and make money despite bad investment process.

Never follow your money => as a class, bad deals make bad deals. It is essential to remember this rule with regard to people.

I have applied these investment lessons within my own life.

With people, I add: don’t sweat the small stuff and treat people “too fairly.”

About “too fairly”

1. The other side rarely thinks you’ve been too fair
2. The goal is to prevent a bad deal from hanging around. When you’ve been “too fair” your heart can let go and move on. This also frees the other side to get on with their lives, which you very much want to have happen.

How’s this relevant?

Many of the people reading this blog are able to withstand the financial shock that’s landed in our laps.

There are tens of millions of people, who are going to be struggling with basic necessities.

There is going to be an expectation for us to forgo luxury spending to support assistance with basic necessities. It’s coming.

Additionally, we are going to have the opportunity to make things better for… your housekeeper, your soccer coach, your music teacher…

Extend offers to prepay for services => especially for people with kids.

Write it all off to the virus.

Free your mind to focus on the good things in your life, as well as future opportunities.

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Quick Hits

Cyber Break => I’m going to turn all my devices off for the weekend. See how I feel on Monday. 

Personal => Yesterday, Ax joined me on my “work capacity” training. He did great with his 15# sandbag. Did the entire workout, below => swings at 8#, rows with 3# DBs.

=> it’s nice to have a fellow savage in the basement.

East Asian vs American Responses to Authority => If total lockdown is required for the USA then it’s going to be a struggle. Having lived in both places, the US and Asia respond “differently” to authority.

Exhibit #1 follows => Polis is our Governor…

This attitude is part of what makes America Great. It a vivid example of how each of our strengths is linked directly to a weakness.

The Principles Instagram feed helps me think better. I’m going to paraphrase a couple:

• Highly believable people, who disagree with you in a way you can hear, are gold!
• Consider the believability of your sources of information => cull and curate so you are being feed the best ideas from believable people in their areas of expertise.

There’s more good stuff in the book.

My medical mentor sent me a note that’s different than the rest of my feed. He works in a network directly involved in treating COIVD-16. He has more skin in the game than the media, the politicians and risk experts who dominate my feed.

Thanks. I tested negative; I’m not sure I fully understand the benefit, though. There are false negatives and our transplant teams are finding the only reliable way to test is a deep nasotracheal swab, which very few tests are.

One has to assume everyone is going to get it and be positive. The social distancing is appropriate and we certainly should be mindful of doing our best.

But do you believe for a moment that all the canned goods, boxes, TP (fruits I’m assuming are getting a thorough washing) that are rapidly going through stores and into our homes are being sterilized?  The pickup meals at restaurants?  This is the largest area that is completely illogical.

If you test negative today, what about tomorrow?  And the next day.

All efforts should be directed to creating more supportive care products when people are ill and isolating those at highest risk until we have an effective vaccine or other treatment method.

Sorry for the rant but all of the focus on testing is misplaced. It’s creating a logistical nightmare for which we have no answers that are helpful.

It’s never been easier to curate your newsfeed.

++

On markets, here’s a link to Howard Marks’ latest. It’s a generic URL so I am not sure how long it will be there.

++

Yesterday, Colorado’s hospitalization rate popped upwards, significantly. My observation of our rate being low is likely to prove incorrect.

Our rate of positives continues to track upwards at ~25% per day (7-day rolling).

To understand the power of daily compounding, here is the increase per day for the last ten days: 29/23/33/61/86/112/116/129/192/174.

Starting this morning, we are under a statewide stay-at-home order.

++

Friends are being fired without notice and told to file for unemployment insurance.

Community

Vail’s mayor is doing better. Welcome news.

The city opened a COVID recovery shelter for the homeless – they set it up at a recreation center that is shut down – volunteers needed for a range of jobs – see THE LINK.

Home School

We ended yesterday blasted! Despite being a little fed up with lockdown, Monz made an outstanding dinner.

By 3pm, patience was in short supply, except for our oldest, who had another strong day and cleaned the entire house, solo.

After school, Axel and I went for a hike.

Whole house in bed by 7:45pm.

Need to slow your kids down after recess? Ten minute movies on Amazon are useful. The Tiny Seed and A House for a Hermit Crab.

Movie night was Spies in Disguise on Amazon.

Cooking class (our 7th so far) was double chocolate cupcakes and biscuits. Chef Monsy is a tough coach! She will allow measure mistakes, spills, you name it – kids are forced to up their game AND do all clean-up, including put away.

Spelling/Writing – we did 24 words at from K-5 level – game was to write a non-fiction story – I joined in and my story included all three kids by name – at the end of the block we shared stories (youngest to oldest) – they loved hearing their names in my story. Lexi did a remix of the Grinch Who Stole Christmas, starring our pet cat => creative girl!

Spelling => numbers up to 20 (my grade one) and a quadrillion (my grade three). My son got a kick out of really big numbers => kinda like a member of Congress. Link to TALEB’s article on the National Bailout.

I discovered the kids have NO IDEA what the Pledge of Allegiance means! They don’t even understand the words. They have said it over a thousand times… geez! We are going to be digging deeper into civics. We started by having my two oldest write it out from memory, for spelling.

The pic below is a “can you see it game.” Great way to have your Grade 1/2 work on their addition/subtraction.

You need to find two numbers. You are given their sum, and their difference as a clue.

For example… We add to 12 and our difference is 4, who are we? 8 and 4. The game had our seven-year old thinking numbers for over half an hour. Useful!

We had an open conversion about “one thing I’m scared of” => got the idea HERE.

Cornstarch + Water + Food Coloring = SCIENCE

1/8th cup water + 5 tablespoons cornstarch. Kids loved mixing their individual bowls together at the end (as you can see above).

We are grateful for Colorado’s climate: exposure to bright sunlight. Get some when you can!

Looking Forward

We’ve started a list of things we’d like to address when we come out of this crisis.

On the list is back-up power and additional cold/frozen storage. A solar array with home storage, perhaps.

It’s not possible to simulate what we are experiencing with this crisis.

Now is the best time to pay attention to how you are feeling, write it down and teach your future self.

Here’s an outline of how I get my future self to take action and avoid repeating my past mistakes.

First, I thought this tweet was excellent:

Are you prepared for:

1. A return to all-time highs in the stock market?

or

2. A decline of 50% in the stock market from here?

You, and your portfolio, need to be prepared for either outcome as possible…(and if we’ve learned anything from 2020, both could happen!)

— Meb Faber (@MebFaber) March 24, 2020

A good overall position has you OK with a range of outcomes.

Don’t waste energy predicting an outcome.

Rather, consider your life across a range of outcomes.

“OK with outcome” can mean a lot of things.

Sleep well at night. I address everything that screws up my sleep patterns.

No risk with Core Capital. There is no amount of potential upside that can entice me to gamble with my ability to control my schedule and spend time in nature. You need to set ego, and the preferences of others, to one side to pull this off. Ego likes to borrow.

Core capital is money you can’t afford to lose. I learned this the hard way in 2008. From 2009 to 2013, I rebuilt my life(style) due to excessive concentration in non-yielding assets, largely purchased for ego.

Taleb makes a great point that everyone has an “uncle point” where we capitulate and crystalize losses. Life can make you uncle (divorce, disease), emotions can make you uncle (fear, sadness, panic), leverage makes it easier to hit our limits… our uncle point is always closer than we think.

Avoid uncle, avoid ruin.

The above are why holding a traditionally “underperforming” asset (like bonds, or cash) can make sense. Sleep better, lifestyle preservation in bear markets, move uncle away and push the chance of ruin well away.

So… where am I at => I wrote about this March 12th – oh so long ago.

Peak SP500 portfolio was 40/20/40 (VTSAX/VTIAX/VBTLX), 60% equities and 40% bonds.

As we set new lows, I leaned into the drops and am now 46/23/31 (69% equity and 31% bonds). I’ve wanted to do this for YEARS but didn’t believe in my ability to time the market. So I set a strategy where the market would time me (see March 12th post).

Some of the bond allocation is sitting in money market funds => money I am likely to need to live on => 90 days worth of core living expenses are in my checking account.

I look at my bond allocation as a reserve for medium term living expenses and to dampen the volatility in my overall portfolio. I don’t want to be a forced seller in a down market.

What do I mean by dampen the volatility?

This comes back to Taleb’s uncle point. The true-optimal portfolio is more conservative than the “optimal portfolio you think you could hold” in a downturn.

Why? Because downturns are more savage than we can imagine.

When I look at assets, I look at everything, including real estate. It helps me manage my emotions.

The real estate market is probably closed. I have a limited ability to sell at a price I would be willing to accept. I continue to hold my real estate assets at an old value. This “old” value made sense 45 days ago (!), crazy how fast the door slammed shut. I always say this!

Cash, bonds, illiquid real estate (held at an inflated value)… mean that my overall balance sheet might be down 10%, in an environment where the headlines are blasting DOW DROPS GREATEST POINTS IN HISTORY.

There is a clear disconnect, which you should point out to yourself in written form, between reality and the headlines.

This makes bad news easier to bear and helps me take the actions I wished for myself in happier times (say, last year).

Other sources of wealth you should point out:

Time => I’m 51, if you are younger than me than you have more of my most precious resource, time! I get around this by re-framing to, “what’s best for my children?”

Options => so many forms of options and many are free (exercise, friends). Turn off your TV and study Taleb => his writing is loaded with option ideas.

+++

I don’t back my ability to think straight right now => nor should you.

We are under a lot of stress.

If you can execute your 2019 plan then you’ll end up better than everyone that’s going to be shouting uncle, and going bust, around you.

If you really have your back against the wall then write-it-down! Please, write it down.

We are going to come out of this and nearly everyone will forget how they feel “right now.”

The reason I’m not in a jam, today, is because I was in a HUGE jam in 2008, wrote it down and learned from it.

It would have been easy to lever up and buy non-yielding assets. I came very close to the following in 2018/2019:

• 40-year old condo in Vail with large monthly HOA
• vacant downtown Boulder multi-unit property with a renovation strategy stuck in city planning, currently closed due to Corona

You might have your own list of misses, and near misses. Write them down!

Sometimes the best decisions are the ones you choose not to do.

+++

Turn that TV off => it is not helping you do what needs to be done.

We need to feel safe to think clearly.

PS – the kids and Monica finished the Safari Collage. It is awesome!

State News

Our governor has established a Colorado National Guard mobile medical testing team. Great move. They were in Montrose yesterday. Thank you.

Denver City and County under a stay-at-home order through April 10th – link is to PDF of the order.

Bit of a snafu with initial implementation when the entire county (just about) lined up at liquor stores to stock up. An amendment was issued shortly thereafter, defining liquor stores as “essential” and the lines vaporized.

Colorado hospitalization rate is 10% of positives, lower than the >=20% I have read elsewhere. This is an important data point because we’ve been following a narrow testing protocol => you need to be sick (first) to get a test (second).

A good article explaining asymptomatic carriers.

+++

Local

The city decided to light our Christmas Star to perk people up. Great idea, the star is on the side of Flagstaff Mountain – LED bulbs, powered by renewable energy, naturally. We can see it from our bedroom.

Local grocery has senior hour 7-8am every morning with plastic screens to protect cashiers from customers.

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Home Life

Kids had 48-hours with limited fresh stuff – they really appreciated the shop. Everyone’s energy is better with fresh food. For now, it is worth the small risk for a weekly-reload.

Here’s the pizza recipe we used during Home School.

We got out of the box for a bike ride. Ax-man stood on his BMX the entire time, full face helmet & body armor.

Came home from a neighborhood stroll and the kids were cleaning the house?! They did the entire thing, top to bottom. Wish I could take them out for ice cream.

Movie night was Onward (Amazon Prime) – Commonsense Media gave it 4-stars, we gave it 3-stars. The premise “visit your dead Dad” was emotionally charged for me. I kept tearing up!

+++

Home School

We’re on a three-one cycle for home school. Yesterday was an “off day” from home school => our project was garage clean out.

Now that the kids have been assessed on Education.Com, we started lessons plans to strengthen gaps. Axel loved the animated lesson plan.

Lexi working on word problems that are a combination of metric system and fractions. Example => The baby grows 125 grams a day, it weighs 8 kilograms, how many days has it been growing? Make a fraction, simplify then multiply or divide to get the answer.

We can’t use iPads for Lexi’s online work because it’s blowing up with messages! I logged her back into messaging once her anxiety settled down and she stopped “accidentally” hurting her siblings. Here’s her home workspace…

The kids use Chrome, signed into my Chrome sync account, this lets me see what everyone is up to.

Note in the picture of Lexi’s office, the screen is visible to the “teacher.”

An hour of math is too long for our 7 year old. I keep an ongoing coloring project going and swap her out after half an hour.

Our youngest tested out of Grade One math so we started Grade Two. We’re using this book right now => cheaper at CostCo than the Amazon link.

Market Thoughts

Grim reading can be found in the financial press.

I bought again, yesterday.

I found myself asking, “Do I really want to do this?” before I clicked submit on Vanguard.Com

Another thought I had, later… “I don’t want to be sitting in bonds after the US Government tosses $3,000,000,000,000 into the economy.”

Next rebalance point is 40% down, just above 2,000 SP500.

Wow.

PS – market up 7% this morning, crazy times

We’ve been sharing laughter, daily.

You might want to start a list of good things in your life.

This year, I had a series of goals:

Get debt free – we repaid our mortgage in January, we have a car loan to go.

Become deeply patient – one of the best ways I know to improve is to put myself in a situation where my choice is: (a) improvement, or (b) insanity. Making rapid progress during the lockdown, even starting to wean myself off earplugs.

Be able to run my own house – personal responsibility is a core value of mine. When we were in the preschool years, I tossed independence and focused on survival. Towards the end of last year, I started the process of weaning the family from outside assistance. Great call.

Prepare for summer mountaineering – I saw “something” coming weeks ago. I ticked off a couple of winter goals and declared victory. I was lost the first weekend of lockdown so bought myself a new plan and got to work.

Finally, I wanted my kids to show more (perhaps, any?) appreciation and help me run the house. They are thriving under lockdown and I’m taking this opportunity to up-skill them.

The kids are kinda clueless about what’s happening outside the house but that’s OK. One of my goals is to give them a wonderful childhood. Soon enough, they will be able to stockpile TP with the rest of us.

In terms of the society I’d like to live inside, we are rapidly moving closer to what I prefer. It’s painful to get there. I’d rather not be going through it.

Fundamentally, we are being forced to “uncoddle” ourselves.

I am being forced to step-up. I like that feeling.

Personal & Home School

Some folks are “joking” about divorces coming out of lockdown. Here’s my take, it is better to reach for improvement than give up.

==

Bella’s cough is gone! It’s been 14+ days since she interacted with anybody in Eagle County. She never showed a fever.

Axel’s Home School letter is live.

I discovered education.com has math assessments. I’m having the kids work through so I can help them fill in their math gaps. My kids are crafty about steering me away from their gaps!

Assessments are high stakes for kids. I isolate them, emphasize we just want to have a look and stress it is an anonymous computer.

I changed up the spelling block on Saturday. Here’s the game:

1. Five rounds of five words
2. Words are at K/1/2/3/5 level
3. Kids aim for 10/15/20 points respectively – they are Grade 1/3/5
4. Points given for correct use of a word in a short story

Writer’s Workshop was a handwritten letter to someone each kid knows, who is under lockdown. We stamped and mail them. I didn’t realize my kids had never sent a letter!

Overall, I am feeling good but the power kept going off on Friday! Sitting in the dark, in the snow… made me feel deep, quivering anxiety. Some part of me was having a tough time.

This kids made some ski runs from our place down to our neighbors. The runs were called: Feel The Byrn and No Name. I heard that Feel The Byrn was a double black, if you did it with your eyes closed.

Teen Beach 2 was popular (on Amazon). The Lost Medallion also popular but too intense for our youngest, so she watched her own show (Arthur, the cartoon series).

Setting up a home working space for our oldest. Her teacher reached out and Grade Five online school is starting next Monday.

Made pizza dough from scratch as a Home School project. Later, converted into pizzas for dinner. Worked great.

Lexi’s dough didn’t rise, nor did she. We gave her a very special feather, it glitters and glows – pic doesn’t do it justice.

First fresh shop of the lockdown happening right now. My wife is handling. One location, hit it big.

Regime Change

I wrote this after Trump was elected (nailed #5, whiffed #6). All those positive factors have swung in the opposite direction. The “rich” are going to feel poor, fearful and depressed.

In all things, people react to changes, not absolute levels.

Global tax hikes are certain for 2021.

I am hearing sensational stories of death and trauma. I don’t watch Cable News and imagine they are full-throttle with color video.

Turn off your TV, it’s not helping you do what needs to be done.

Our protected class (the Top 2% by wealth and our “elites”) will have people close to them die unexpectedly. Many of these folks are 60+ and wondering if they will see Christmas 2020.

We will see a fundamental repricing of risk. I have no idea for how long. Our collective memory is usually three years, max.

Price is emotional.

Virus Updates

The key point I’d like to get across here is delays cost lives and exponentially increase the damage we will sustain.

A hard, local lockdown is much cheaper than waiting and shutting down your state, or country.

Take local action and educate your county’s executive officers. They have the power to act early.

Vail’s mayor tested positive last Friday. I wish him a speedy recovery. He’s in the high-risk cohort, awful to sit and wait.

LA Times on Vail exporting COVID-19  I assume I have friends-of-friends in this article. I was almost certainly in a room with someone on that plane in last three weeks. I can’t say for sure because Eagle County is not doing aggressive contact tracing. I’ve sent the link to a couple friends at Vail Resorts.

Unfortunately, a well-known Vail Entertainer died. A timeline so we remember.

• Rod skied Vail on March 6th.
• He went to his doctor on March 7th.
• He was transferred to a Denver hospital on March 9th.
• Despite my March 13th email to the head of the program, hundreds of kids skied DEVO on March 14th.
• Vail Mountain shut on March 15th.
• Vail’s free bus service ran until March 18th.
• Rod’s death was announced March 21st.

No mention in the article about the date Eagle County public health, our governor or Vail Resorts knew of his positive test result.

Rod may have been on our governor’s mind when he confirmed Eagle County community spread and warned seniors not to travel to the high country (March 11th).

None of this is a criticism. These are very difficult decisions to make.

I hope your local council/government can learn from our experience.

Hearing about a large number of asymptomatic carriers being discovered by community testing in Iceland. Absolutely amazing how fast information can travel these days. That got me thinking:

coming out of lockdown, we will want to rule out asymptomatic carriers: state education facilities will have open spaces, idle scientists, idle clinicians, empty buildings/dorms, good place to scale up community testing @CDPHE @yaneerbaryam @CUBoulder

— Gordo Byrn (@gordo_68) March 23, 2020

Had a follow up Q about who’s idle. A friend of our family was sent home, with his team. He is a surgeon at a Denver hospital and was told he might be away for up to two months.

Our pediatrician lives near us. She’s mixing home school with tele-medicine. Her husband is a heart doc – he’s at home too.

I’m guessing there is a material reserve of skilled people within a short drive of CU-Boulder.

2,600 samples reported backlogged for Colorado at Friday – we are tracking exponentially, while under reporting true positives. To give you a sense of scale, Friday’s positives were 363, excluding the backlog of 2,600 tests. We are seeing about 1-in-10 tests come back positive.

Colorado’s positive test rate still tracking up at 30%. Here’s the last seven days: 160/183/216/277/363/475/591

There could be signs of positive news out of Washington State about their being able to bend the curve.

Cyber-break Sunday went well.

Monday’s stock open sees the market slowly ticking down to my next rebalancing point. Unlimited QE announced by the Fed. Virus confirmed in a US Senator.

The snow-baby is called Scarlett.

Our last day of real school was Thursday, March 12th.

• We went back to get their school books Friday, March 13th – day our district closed and told us to enjoy two weeks of Spring Break
• We moved out of our ski rental Saturday, March 14th
• We started Home School Monday, March 16th, they were craving school/structure by this point.

Key takeaways so far:

Have the kids set the schedule using a template from their normal school. Here’s the schedule Axel set for us today.

Here’s the page from our district about Home School, I set the link to Elementary Education, there’s more on the website. What I noticed is the main focus, initially, is “not forgetting.”

I want to know what I’m going to do each day in lockdown. Starting from scratch requires a kid negotiation that is a complete waste of energy. The schedule gives my wife and me an easy way to tag-out and get personal time.

Get up before the kids and train. You will be FAR more patient and relaxed across the day. Monica is back in “crisis mode” up at 5:30am to exercise. We last did this in 2012/2013 when I got us into a cash crunch.

My kids wrote letter to your kids about the experience. Lexi Grade Five and Axel Grade Three. Lexi spent two blocks of literacy and Axel spent three blocks: outline, draft, type, edit, add photo, publish to PDF.

Schedule FaceTime after school for virtual playdates. Our youngest, 7 years/Grade 1, loves this time. I’m more of a “send me a text” guy. The BoCo moms figured this one out.

“Teacher” turns his phone off when teaching! I made the mistake of leaving mine in another room and my watch was buzzing the entire time, pulling me away from where I should have been focused.

We have a lot of baked good building up. They have done cookies, brownies, scones, granola, cupcakes… We are going to shift to “real” food.

Something I learned from my military friends, we maintain our standards. Everyone gets dressed and showered. Our son likes to lounge in his undies — that is only allowed outside “school time.”

A story about that… when I was riding across America we visited Marine pals at 29-Palms. As we were about to pull up, with a LT-Col in the car, “Gordo, you gotta put a shirt on to come on to the base.” Nice pool there, BTW.

Yesterday, I was stumped by questions in both Grade One and Grade Five math! Be willing to say, “I don’t know, we’re going to have to move on.”

You can eat at snack time and lunch time. Otherwise, water bottle!

Getting out of the house for recess is essential, if you’re allowed. Three rules:

1. stay out of the house!!!
2. six feet from non-family
3. don’t hurt anyone (because dad doesn’t want to go to the ER

Couple more movie links for you: Rise of Skywalker on Google Play (spread across two nights) and Teen Beach, to come Teen Beach 2.

If you have preschoolers then here is the FB link to where my kids went. Some resources there for you.

The first two days were tough for me. All I felt like doing was surfing the internet, eating carbs and drinking coffee. I had an off-and-on headache.

However… I know something about humans… we adapt quickly to bad news and discomfort.

After a week, it’s no big deal and I’m grateful to have gone through the initial discomfort.

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Virus Update

Boulder’s daily rate popped yesterday (0/3/7/11/15/19/27).

Colorado has maintained an exponential rate of growth: (33/44/72/101/131/160/183/216/277/363)

Saving these tweets about testing so I can refer back:

What will go down as the biggest breakdown in the US response to #COVID19 is the lack of test kits. South Korea and the US had their 1st patients on Jan 20 and Jan 21, respectively. Look at the difference in daily testing. By March 4th, SK was ~18,000 per day. pic.twitter.com/466Du8Iq2V

— Eric Topol (@EricTopol) March 17, 2020

Similar plot of South Korea vs US #COVID19 test data today @nytimes; it includes more recent CDC data, the cumulative N of tests 55 days after each country’s 1st patient was diagnosed, confirmed cases, and has a different Y-axis display from mine https://t.co/UHKq5umcSy pic.twitter.com/VGr5e1s3XE

— Eric Topol (@EricTopol) March 17, 2020

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I’ll share personal thoughts on Monday. There’s been good from the lockdown and I want to acknowledge to myself and share with you.

I caught my son’s first Scorpion on video yesterday. I’m still laughing.

I reached out to our neighbors and offered shopping help. We have at-risk people in our community, who probably don’t want to go out in public.

We’re starting to run out of the kids’ favorites: strawberries, bananas and apples.

My preference is to let everything run out to “build a little appreciation” in my offspring.

My wife thinks a more moderate approach is prudent (stay strong with healthy choices).

She’s right – I’ve been enjoying my crunchy salads.

I’ve heard from many of my mentors over the last 48-hours. Thanks people, nice to hear from you!

Let’s pause and consider what wise thinkers might tell us about the issue of Corona.

• Feynman – don’t fool yourself, seek to tear your ideas down
• Taleb – cut the tail, insurance is cheaper than catastrophe
• Munger – invert, invert, invert

1. We see California, France, Italy, Spain… shut down to various degrees.
2. We expect the shutdown to spread across Europe and North America.
3. There will be massive, unknowable impacts from this shutdown.

Taleb => An early, severe over-reaction, would have been a tiny insurance premium to pay.

Hard to disagree.

We are staring into the abyss. What does it look like down there?

Consider the numbers being tossed around:

• US – 317 million people with 51 million 65+
• Cali – 38.7 million people with 5.6 million 65+
• Colorado – 5.6 million people with 800K 65+
• US Accidental deaths per year – about 150,000
• CDC estimates that so far this season there have been at least 38 million flu illnesses, 390,000 hospitalizations and 23,000 deaths from flu

Infect 150 million Americans and think through what might happen (see link above the bullets). Deaths of 1.5 to 6.0 million depending on the actual fatality rate.

• Those deaths are reported to skew towards the 65+ demographic.
• Use the 80% figure from the CDC article (link in prior bullet, slide down to Discussion) and one might expect 1.2 million to 4.8 million deaths for people over 65 years old (2-9% rate within the cohort).
• What does that mean for people under 65 years old? They will get the rest of the deaths, namely 300,000 to 1,200,000 deaths across 266 million people (0.1-0.5% rate).
• My medical mentor reminded me => deaths will skew towards patients with the shortest life expectancy.

There has been talk about this crisis being similar to World War 2 (link to Merkel). This doesn’t feel right to me as it ignores the nature of the deaths (far more, far older).

Corona is its own event, its own crisis.

Think past the deaths.

• We’ve lost 10% of our seniors
• Our capital assets and industrial productivity are unchanged
• Our collective debt has increased via a progressive distribution to all Americans
• Asset values have jumped downwards
• Highly-leveraged people/entities have been cleared from the system.
• There is a global consensus for a better response to outbreaks

We could, and would, handle it.

Earlier in the week I shared Soros’ observation that regulation lags a crisis. Another of his observations, we change reality by interacting with it.

..and there is a lot of interaction…

1. A rolling lockdown moving outwards from hotspots
2. Rapid up-scaling of American medical capacity
3. State and Local education about how to minimize virus spread
4. Massive injections of liquidity into the financial system
5. Closing of international borders

These changes will interact with each other.

There has been some good news locally. From March 14th, our daily cases in Boulder County have gone 0/3/7/11/15/19. No escalation in the number of new daily positives.

This gives us hope that an early lockdown can mean an early return to normal living.

+++

I have a call scheduled next week with my medical mentor. We’re going to talk medicine and markets. I’ll write up my thoughts.

• Tomorrow will focus on what we’ve learned from Corona School. Home school is not easy => no home school is worse.
• I’m taking a cyber-Sabbath on Sunday. Freshen up a bit!
• Monday will discuss the benefits to my family from the lockdown. My 2020 goals have been jumpstarted by this crisis.

I’m grateful to have married a swimmer. Monica excels within the repetitive nature of our lives under lockdown. Elite sport teaches resilience – or weeds out the non-resilient!

My kids are absolutely loving lockdown life.

As for me, I’ve given up on family dinners. By the time 6pm rolls around my earplugs are in and I’m ready to park the kids in front of a show.

Two recommendations for you: we liked Princess Protection Program and 100 Things to do before High School (both movie and the series).

Stay strong, people!

We have missed the window for an Asian result. We need to pull together and beat this thing. Why we missed the window, and who is to blame, can wait.

Turn off the TV. For the next ten days, the news is going to be grim.

Our brains are not equipped to distance from sensational imagery. Take information from the most reliable sources via black and white print, not full color video. You need to protect your ability to think clearly.

Get yourself ready for a 30-day lockdown.

Don’t sit on the couch. Get ready to rebuild!

+++

Virus Spread

Key takeaways of the last 24 hours:

1- Gov. Polis and hotspot medical management have confirmed it is a lack of testing, not a lack of virus, that have Colorado’s numbers low. Self isolate now.

2- Minimum home school period is five weeks. I’m expecting it will run through to end of academic year (10 weeks).

Colorado starting to get it and our messaging has improved a lot over last 24 hours.

Colorado’s guidelines for shopping:

https://twitter.com/CDPHE/status/1240326624257757186

Gov. Polis (doing a great job) is sending a mobile testing team to Pueblo as there has been no testing down there. This confirms my thought that a lack of positives was a lack of testing, not a lack of virus.

https://covid19.colorado.gov/widespread-testing

Front page of the local Boulder paper cyber edition: Positives in a college kid announced – patient had attended St Patrick’s Day parties over the weekend. People are upset at college kids being college kids.

Don’t fight human nature.

Share facts and let the well-trained human responses of fear & panic get people to self-isolate.

Another article about a positive result in our local healthcare system with a hospital employee. The virus is in Boulder’s healthcare system (and will be in yours).

Outstanding letter from the CEO of Vail Health:

https://www.vaildaily.com/news/cook-we-need-to-take-this-seriously-now/

• 56-bed hospital expected to be full in 2-4 weeks, already sending serious cases to Denver (lower altitude). I expect it will be full in ten days.
• 400 tests backlogged, many expected to be positive (NOTE at 3/18 the state had results on 2,328 people who had been tested, 216 positive). Clearing that backlog at the same rate of positives as the rest of the state doubles the positives in Eagle County. Given their strict testing policy, Eagle County has far, far more positives than we can track.
• 70 samples per day being taken, State center overwhelmed so they are shifting to private testing.
• Expectation of a doubling every three days until social isolation taken seriously. Word on the ground is the Vail Village is deserted.

Unfortunately, Eagle County public health makes another poor decision. Our hottest hotspot has decided to export the virus.

https://www.vaildaily.com/news/directive-for-vail-employees-to-leave-is-coming-from-eagle-county/

• Eagle County Public Health asking Vail employees to leave => how can a public official not assume they are infected?
• The argument is they need to reduce dense housing => note that HK, Taiwan and South Korea controlled the virus in societies with extremely dense housing.
• There was no word on exit testing.
• 14-day quarantine, with exit testing is a better solution.

Vail shutting down free bus services (finally). We’ve been told the virus lives for up to 12 hours on metal surfaces (like railings and bus fixtures).

Argument for the bus shutdown delay was they wanted to make it easier for people to get around (not a joke).

State testing is woefully inadequate. Our leadership owns the fact and is asking us to self-isolate. Colorado has ~2,300 patients tested so far. UW Virology did 2,300 tests yesterday. Note – people tested is not total tests. Some people might get more than one test.

Unfortunately, second death in Colorado. To me this implies 2,000 positives now, with a peak over 20,000 positives, if we get our act together. We can look back at my prediction.

Mexico: Their Federal early messaging is even worse than ours (hard to believe). They lack testing, are highly connected to US hotspots and many Mexican states have a healthcare system that’s not used to treating flu, let alone coronavirus. Doesn’t bode well for our Southern Neighbor.

Canada looks better than the US and has (more of) a culture of quickly following advice.

Yaneer (well worth a follow on Twitter) asked us to practice social distancing within households. I am unwilling to traumatize my children. We will focus on breaking the network of transmission between households.

For the duration of the crisis, our youngest/strongest/hottest grown-up (my wife) will be our shopper. The rest of us are going to hunker down. No shopping, yet. I want to track what runs out.

+++

Home School

School suspended by Gov. Polis until April 20th.  Corona-School in session for a minimum of FIVE weeks.

I am assuming that the in-person school year is over, my view. Our district starts online-learning on March 30th. I’ve asked them to share, if they can.

State wide testing suspended => the right thing to do. No equity in education at present.

Yesterday, social studies was a travel video on Hong Kong.

I had the kids write questions while watching and we did a Q&A after (pic is above).  I lived in Hong Kong 1994-2000. This session went well and we will choose another country I know well (South Island of New Zealand).

https://www.amazon.com/Hong-Kong/dp/B00EREZ43S

Kid Cooking yesterday was Avocado Brownies – delicious!

==

Snow Day Ideas (we are on a 3/1 cycle, this is our first non-school day)

• Train with a parent (girls with Mom, son with me)
• Clean house => the kids helped and we got through in an hour
• Wash all sheets, pillow cases, blankets
• Watch “The Swap” on Disney+
• Snow walk and hero shoveling for neighbors
• Another movie TBA

Finance and Markets

I suspect we’re above the bottom. US healthcare is v. good at keeping people alive, testing hasn’t ramped up and our young people are celebrating Spring Break. The #s in 10 days are going to be alarming. NNT’s Oct remark on the VIX has come to pass! Where are the blow ups? Hidden

— Gordo Byrn (@gordo_68) March 19, 2020

Yesterday, bought a little more for my own account. I am ready to buy more if the market falls further. The market dropping a third, from here, wouldn’t surprise me.

A very experienced friend noted the selloff is a risk pricing adjustment – not expected to revert quickly because it is a fundamental change in valuation, not a flash crash. He advised me to temper my FOMO for client money.

WSJ.com updated their US treasury yield curve chart to show negative yields.

+++

Personal

Our youngest has a dry cough that is progressing, runny nose at night, no fever. Energy in all of us is great. Craft idea => turn a tissue box into a cat!

Axel joined my workout this morning. A big moment – Dad training with Dad!

The girls were trained by Coach Monica.

1st rule of helping others => don’t become a casualty yourself!

Remember to turn that TV off.

+++

Defaults

Where is our Bear Stearns?

Where is this downturn’s Madoff?

They are out there but we can’t see them, yet.

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Brownies for breakfast? Why not!