Corona Diary 2 April 2020

2020-04-02 07.52.17

Thursday is when we give the kids a nudge physically. The girls train with Monica and Axel trains with me.

The girls… Five rounds of:

  • 3 minutes treadmill jog/run
  • 10 squats
  • 14 mountain climbers
  • 7 push ups
  • 20 bicycle sit ups

Once you break through the inertia, they love it.

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It’s a highlight of my week as well. Axel did the whole workout below. Kid-sized goblet squat is 8 pounds.

2020-04-02 07.12.21

A favorite home school activity is “read to cat” => Bella loves it.

2020-04-02 09.01.35

We are making progress! Even with a morning workout, our oldest had her daily agenda printed and scheduled by 8:30am. I came down from my post workout shower and she was working on her own, relaxed!

Today’s schedule.

We’re still going through our homemade pizza. I had a personal “victory” by avoiding it.

2020-03-31 18.18.44

Unfortunately, that’s it for good news.


Virus Economics

Second wave of infections in China getting press this morning. I expect the official Chinese data will be discredited. It’s a nation with a large downside for honesty. Truth leaking out via social media.

Friends, this seems obvious. If a handful of arrivals can shut Colorado in a month then there’s no way we can eradicate this virus via lockdown. We each need to prepare for rolling lockdowns until a vaccine is available.

14-day increase of American unemployed is ten million => true number way higher. This matters because it is the bottom up shock that starts the downward economic spiral.

Here’s a vivid example of the top down shock

Vail Resorts will cut loose its hourly workers in hotspots at the end of this week. The reasons are understandable, the resorts are going to have no visitors for months.  The CEO is demonstrating leadership and personal accountability => taking a major personal financial hit.

Article linked below: consider the mention of deferred capex and cancelled dividend payments. This is going to happen, globally.

There is a clear public interest for the state of Colorado to pay (former) hotspot employees to quarantine in place and exit test. This is an example of something “we” could get for the payments we are (collectively) making to the dislocated.

Vail Resorts announces paycuts, furloughs for employees, pause in payouts for CEO, board, shareholders |

Note the linked article places virus arrival in Colorado on Feb 29th. If that was patient zero then I’m impressed with the speed of our reaction. Very hard to change mindset quickly. Boulder schools closed March 13th.

Think about that for a minute.

If true then.. patient zero arrives Feb 29th, the state is shut a month a later.

The locations without problems today should assume they are fooling themselves.


Hedging The Downside

If this week was going to be your new reality through next summer then what steps could you take to help yourself, family and firm?

Vail Resorts shows what makes sense for you, your family and your firm => immediate actions to conserve cash.

This is why governments need to step in => we will send ourselves straight down the drain if we act in our individual self interest.

Now… if “we” are going to pay people to stay at home then “we” should figure out a way to make ourselves more productive.

This is relevant for the successor bailouts that will inevitably follow this first round of support ($2T from the Feds).

Millions of unemployed (10 million applications in the US in 14-days) are going to want something to do.

Globally, there is going to be a huge pool of reserve labor.


Thinking Beyond April

Life is likely to be very different until a vaccine is widely available. I’m starting to manage my expectations in that regard.

We bought a peloton bike to prepare for rolling, ongoing, strict quarantine. A quick review of prior pandemics shows Colorado’s level of quarantine is a loose one.

Florida locked down yesterday / better late than never // given their demographics I expect it will be awful down there – very unfortunate. The economic impact of their delay will be a multiple of what they earned by staying open for Spring Break.

Same deal in Cabo by the way. Just like BoCo peeps getting upset with college kids having St Paddy’s parties, people continue to blame kids for being kids – NYT article on Texas Theta. Frat kids make a convenient scapegoat in a time of heightened fear.

These stories are simply the ones we know about. The virus has been, and is, everywhere. Easy to have guessed the virus would be partying at spring break.

Governor Polis shut our schools through the end of April. In May, my expectation is we will return by appointment and clear out our desks. We are scheduled to end on 5/21.

Yesterday, the district school superintendent shut access to fields, tracks and playgrounds. City has left the parks open, for now. Our quarantine bubble is shrinking. Yours will too.

As at today, I don’t see how we run summer swim league, or any gatherings until there’s a vaccine.

It makes far more sense for us to gradually open the economy before allowing social groups for recreation. I realize this is bad news for individuals but it makes sense for the collective. This new reality is likely to continue for some time.

WSJ reporting the Feds are thinking about grounding flights to/from hotspots. I’d thought that would happen last week (and I was wrong). Governors should immediately restrict ground travel in/out of hotspots.

Colorado running a marketing campaign to get people to avoid traveling into known hotspots => you’d think this would be obvious. Don’t drive into the virus zone, people.

I don’t know if state governors’ emergency power enable them to use the Highway Patrol to turn around vacationers. NPR reporting the Feds have limited powers in this regard.

It is unfortunate, and understandable, that we will have to wait for things to get really, really bad before the public will accept (and demand) strict quarantine.

Why The President Likely Can’t Issue A National Stay-Home Order : NPR


Local Update

Last night (18 days after we closed schools, 32 days after presumptive patient zero landed in Denver), BoCo reported virus positives in four long-term care facilities. This includes our largest senior living complex.

This might put an end to our declining rate of virus positives. Collectively, we should assume the virus is already everywhere.

Coming up on April 6th – routine emergency siren testing in BoCo – give your kids a heads up and mark your calendars. I remember how this made me feel during the floods of 2013… eerie!

Market up 2% as I post this.

Go figure.

Corona Diary 1 April 2020

2020-04-01 09.56.05

I had a tough day yesterday.

From 4pm onwards, I started the mantra… “tomorrow will be better” => I was right.

Amazon appears three-weeks backlogged on non-essential shipments for my zipcode. Give thought to what you need for your May lockdown and order this week.

Government assistance => please take it! A global depression is within our range of possible outcomes. Take the money and direct to people who need it.

Here’s a link from Howard Marks that explains the Bull and Bear cases. I see no way through to the bull case, too complex a situation for everything to run according to plan. Bear case makes way more sense to me, especially as I read news about the virus within the US Navy (our ultimate backstop).

Friends considering “hard assets” for safety => an extra month of food supplies strikes me as a hard asset that could prove useful.

2020-04-01 08.44.17

Home School

Teacher, parents and students => we need to LOWER THE STAKES.

If my kids are tripping then all kids are tripping!

Cut your assigned work in half and focus on what is essential.

I think we’re finding our way through => schedule for today. I wrote that last night and it had numerous modifications by 10am.

Four planning meetings for our oldest today: with herself, with me, with her class and with her teacher. Her anxiety is greatly reduced by having a written plan, with times.

Pizza dough was back yesterday afternoon, along with homemade pesto.

We watched all three Descendants movies over the last three nights => Disney+, I think.

When it comes to writing assignments for elementary school kids, my policy is no wrong answers. Write lots => edit later!

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Above is our youngest’s poem from yesterday.

2020-04-01 06.36.41

Recent financial questions:

What tools do you use for an overall financial plan (e.g., Quicken)?

I built a few spreadsheets/documents: (1) to rebalance across entities; (2) a monthly cash flow tracker by entity; (3) P&L projections so I get tax installments correct; (4) net asset statements for fee-paying entities and to track return on equity over time; (5) a statement of tax IDs/bank accounts/registered addresses/officers; and (6) a single sheet of paper showing every trust, LLC, company and person that touches me.

I have my stuff linked to Mint but that’s more detail than I need. I find that making everything visible is a distraction => my job is to control spending/aspirations, not be a bookkeeper. My watch gets pinged each time money leaves my life as a fraud-prevention measure.

Ideally, you only want to check net assets once a quarter. With recent volatility, that’s not an option. Taleb explains why checking less gives better signal in his first book. => Fooled by Randomness.

Are you aware of any good tools that can include real estate as an asset class?

I built a spreadsheet that takes a gross value through to net realizable cash after all fees, taxes and expenses. The spreadsheet assumes an immediate sale. I make the deferred taxes and fees/expenses very clear to create a bias against selling real estate assets.

The best time to sell quality real estate is never => Buffett, I think.

What are your thoughts of the services offered by Wealth-front, such as:

I use specific ID for all holdings and use tax loss harvesting, occasionally. I don’t use risk parity or smart beta. I could be a lot more aggressive with tax/portfolio strategies but I prefer simplicity.

I have a goal of handing off my work by my 60th. Even keeping it simple, there’s a surprising amount going on.

“You want a system so easy an idiot could run it because, someday, one will.” => not sure who said it first, probably Buffett

Do you think those services are worth 0.25% fees?

In terms of spending money, I think the best money people can spend is an hourly fee relationship with a world class financial advisor, who has nothing to sell you other than sound financial advice.

In terms of making money, stick with the basics, don’t adopt the preferences of others, rarely borrow and fear ruin.

Other things => cultivate inexpensive passions, focus on relationships, get the family thinking about Human Capital (rather than financial capital).

Is your personal strategy as simple as holding ONLY three different ETF’s?

That’s the Vanguard portfolio, yes.

I don’t back my ability to pick stocks, time markets or pick winners as an Angel Investor.

I do a real estate deal every 5 years or so. I like local real estate as it’s a market where I can have superior information and, when I buy, there is limited competition with other players.

Personally, the goal of my portfolio is to support my desire to spend time in nature with my wife and kids. It’s easy to lose track of the larger goal and get wrapped up with small details. I want a strategy that can be largely ignored.

What are your thoughts on Dimensional Funds?  They seem to offer higher returns vs similar index funds, based on (as I understand it) different allocation metrics

I don’t do specialty products as “the house” always skims the excess profit for itself and, as a class, these assets do worse than low-cost index funds, especially when you adjust for blowups and leverage.

I used to work for a world-class private equity firm. The right partnership can make a lot of money for everyone involved. Those sorts of investments are not open to me anymore.


Virus Stuff


Gates wrote an op-ed for Washington Post (link above).

  • Not too late
  • Our open state borders don’t mix well with national virus control
  • Calls for Federal help with shutdown, equipment organization and virus manufacturing
  • Over the weekend, “six-to-ten weeks” has become “ten weeks”

Mexico shut down for April // starting 18 days later than BoCo.

Iceland positives chart paints a picture that makes sense for rate of spread – you’ll need to click to see the chart.

By the time the chart is confirmed, it will be too late for action. Close your schools early, I’m glad we did.

Lexi will be making a mask for Mom to use on her weekly shop. There is near-nil downside from wearing a homemade mask. Click for the graphic.

Stay strong, people!

2020-04-01 05.33.03

Ax looking forward to hitting it with me tomorrow morning.

BJJ black belt coming over to teach PE in two hours!