We rolled through Day 40, yesterday. That’s a big block of time and we’ve used it well.

More guidelines from our governor about the shift from “Stay at Home” to “Safer at Home” => bottom line for us, not much change.

Life won’t just flip back to normal starting on April 27. Here are some of the forthcoming guidelines that @GovofCO presented as we shift to the second level of physical distancing, #SaferAtHome. #DoingMyPartCO pic.twitter.com/9cehVfsYdC

— Colorado Department of Public Health & Environment (@CDPHE) April 22, 2020

Two things caught my eye: childcare coming back on line and group size capped at 10 people.

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Came to a realization about home school:

On any given day, I’m going to get yelled at, listen to bickering and deal with kids crying.

Just the way it is.

One thing for sure => whatever happens, it usually goes better with a limited reaction from me.

Keep grinding!

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Does your kid think out loud, or process by verbalizing her questions?

Know that you have an option to stand by while she figures things out for herself.

Not engaging, not answering, is a tough habit to break but quite useful if you find yourself in a pattern that “drives you nuts.”

I let our youngest answer obvious questions – she loves the role of the wise sibling!

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Our rolling average positives are growing and our testing positivity rate is staying in the high teens.

Typing this on the morning of Day 41, even with our Stay-at-Home order, we have not seen a plateau in positives.

A senior care home down the hill from us (about 3 miles away) has become a hotspot in Boulder County => 30 positives and six deaths reported, as of yesterday.

Eagle County buses are reopening May 4th with a maximum occupancy of 10 passengers, using only the rear door.

Below is a useful graphic from our state government about the process of reopening Colorado.

We’ve been told to expect to move along a spectrum: (a) Stay at Home; (b) Safer at Home; and (c) Protect Our Neighbors.

I like the way they’ve framed the chart. Note the two lines at the bottom of the chart and the arrow pointing both directions.

More graphics to facilitate discussions at home are here.

PE Idea – word of the day – it is an A to Z of activity. Ax-man rolled the entire alphabet at recess.

Teachers packing up the classroom today – Monz and Axel did a drive by – Bella wrote goodbye letters to staff and teachers. We pick up gear on Friday.

Kids are well rested and up early most days. So this morning we planted seeds for indoor sprouting => cucumber, kale, bell pepper, tomato and pumpkin.

Last spring frost is ~May 9th for us.

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Virus Stuff

Seeing discussion about the math underlying estimates of community exposure rates. Two things I learned very early in my private equity career: (a) hardly anyone understands math; and (b) show your work.

Professionally, you leave yourself very exposed when you use other people’s models. I always built my own, as simple as possible.

Some very experienced professionals are going be humbled.

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Central quarantine is getting press – the ability to offer a safe place to recover from the virus, away from family/housemates, so you don’t infect your household.

When a dormitory, meat packing plant or prison blows up with infections => a lack of safe, central quarantine can be a likely factor. See yesterday’s link on Singapore.

I think Denver has built a facility along these lines – basically a field hospital with limited services. More things the state is doing can be seen here.

For asymptomatic folks, exposed and waiting to see what happens, there are a lot of empty hotel rooms around.

Something to watch as we head towards the next academic school year.

Feds announced an executive order suspending immigration. I expected this as a political move, not for virus control.

Probably more useful things for the Feds to focus on => this will play well with their base.

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Slide deck of first principles from Taleb’s writing:

@nntaleb ideas are important for us & future generations. Yet his ideas are not easy to understand. Not for kids. They are summarized on the internet, but in no place are they translated for a 11 year old.

Created below pics for my nephew

Taleb for kids – Randomness (1/11) pic.twitter.com/aPBU4q0RK6

— Thiyagarajan Maruthavanan (Rajan) (@mtrajan) April 21, 2020

Above => Ax-man’s latest work in progress => Baby Yoda!

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Singapore is getting press for virus positives “exploding” but look deeper into whom, and where, the positives are happening. Visiting laborers, living in dorms.

Migrant, disenfranchised labor is something common to many parts of the world, and consciously disregarded by most people. Asia/Middle East use a lot of this labor for their construction industries. Here in the US, it’s our agricultural sector.

Boulder has been pro-active with protecting the homeless, and ourselves, from bottom up epidemics. US seeing outbreaks in prisons and meat packing plants.

Everywhere with dense, dormitory housing is vulnerable.

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I cancelled NetBricks.Org => they’re completely overloaded => reminded me of Yogi Berra => nobody goes there anymore, it’s too crowded

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Sold a little bit of US Equities (VTSAX) yesterday to rebalance after last week’s run up.

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An Israeli friend mentioned to my wife that she’s amazed the US isn’t using it’s military to assist with virus logistics.

This surprises me => in an election year, the Commander in Chief using the military to visibly help the nation would play well. Maybe it’s happening and I didn’t notice.

Here in Colorado the Governor is using the National Guard to assist with testing.

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Week Six of remote learning:

• WAY too much screen time for my kids => I have greatly reduced the use of screens on the days I run myself => Saturdays and any professional days, of which we just had two (Fri/Mon)
• Impact of all this screen time is an inability for me to properly monitor my kids online => example being tweens “facetiming” but really doing joint surfing sessions on youtube watching sex videos.

A reminder why we don’t allow electronics use behind closed doors.

Above => Havoc Journal challenges my blindspots and biases.

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Our governor announced his roadmap for reopening.

As I expected, we’re going to reopen with positives having plateau’d, but not declining for 14 days as recommended in the Roadmap for Governors

I am going to act as if we will have our second lockdown in June.

As a result, I’m not going to sign up for any early summer camps for my kids. Instead, I’ll hire unemployed coaches/teachers to supplement “The Byrn Academy of Personal Excellence”.

I’ve written off all my early camp sign-ups, travel plans and prepayments of any sort. Whenever I get a refund, it’s a pleasant surprise.

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Our school district closed all schools for the rest of the academic year. We heard Texas and Florida did the same.

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The president’s liberation tweets got a fair amount of press.

The liberation episode reminded me of Bush 43 being a uniter, not a divider => famous quote from 2000 election.

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Oil went negative in a squeeze related to the May contract.

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We eat a lot of grapes…

…and (some of us) drink a lot of celery juice (see over shoulder, above).

Eating healthy helps.

So does strength training…

My wife woke up to the sound of her man pounding iron in the basement.

Bench press and hinge lift were featured.

Stay strong.

Key things:

• I don’t need to take a side
• All-sides have valuable input

Kids loved three movies over the weekend:

• Zootopia – a classic
• The Main Event – Netflix kid-wrestler movie
• The Karate Kid – way back classic – “sweep the leg”

Despite five weeks in lockdown, we’re not seeing a material drop in positives in Colorado. COVID is one contagious pathogen!

I’ve looked at virus growth different ways. Slide down for charts, probably won’t work well with a phone. I’m on my desktop for that work.

Here’s a memory game to play.

Write down what you, think you, thought five weeks ago about:

• Rate of growth of positives
• Death rate
• Hospitalization rate
• Where your location could be if you didn’t lockdown

Monica and I played this game over the weekend.

After we played, I went back to check the data.

Despite building a spreadsheet and tracking daily… my memory was out by a factor of 17x. Monica’s memory was out by a factor of 350x.

Colorado was growing at 33% (daily) with an expected hospitalization rate of 20% and a forecast death rate of 1-4%. When we self-quarantined there were 72 positives.

(1.33)^(35) * 72 = 1.6 million total positives

The number was so large, I didn’t believe my HP-12C. So, I made a simple table to check my math => see the Growth Table tab.

The positives didn’t happen => nor were they likely to happen because we would have pooped our collective pants way before it got that bad.

We are at ~10,000 positives in Colorado, with the lockdown in effect. So the actual growth rate was ~15% daily across the period, with hospitalization rates not far off the expectation.

The death rate isn’t clear. It is going to take some time for us to have reliable all-cause mortality information.

The memory game is important because your mind is (1) going to assess your decision based on what happened, not what could have happened.

Your mind is also (2) going to assess your decision based on what is known today, not what was know at the time you made your decision.

Your mind will (3) ignore the fact that life is path dependent.

• Our ability to choose “now” is based on choices we made earlier
• In places where hospitals are overflowing and their health system is breaking down, they will not have the ability to ease up on lockdown. They lost the ability to make a choice Colorado can make now.

Seeing all of the above (1/2/3), by placing one’s memory in the past, is something humans are spectacularly poor at doing.

• Just the way it is.
• This skill will never improve in the general population.
• This is an area where calm, national, leadership can make a difference => see New Zealand and Germany.
• Don’t spend energy railing again human nature.

I don’t explain this 1-on-1 to anyone other than clients, my wife and kids.

I write blogs to educate the collective.

By the way, this is the method I used to beat life-long endurance athletes, far more talented than me, when I started racing elite sport in my 30s,

Iterate based on experience, make mistakes visible.

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Where to now?

Colorado is locked down with daily positives of ~340 per day, 14-day average.

We’re going to open up before we hit “0” and the rate of daily positives will grow.

From yesterday, if we maintain our current rate of growth (4% per day) then daily positives will be ~1,300 by the end of May.

We don’t have a lot of room to maneuver.

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Watch Singapore and Indonesia => this virus doesn’t appear to care about climate.

NY lockdown extended to May 15th => we’re at 35 days, that would take us up to 63 days.

Close Quarters reminder, when you’re getting fed up, don’t overlap. We needed a couple of days with less overlapping. The storms this week threw me off my game!

Our PE teacher, BJJ Black Belt, lives nearby – gave the kids his # in case something goes down and they need immediate back-up – great guy.

Thinking about theft

• I realized that I didn’t have anything I’d miss at home. It’s one of the benefits of focusing on an outdoor life.
• We have an all-risks policy for a couple of items and comprehensive coverage on our Yukon.
• My life operates on the cloud so there isn’t even a concern over losing my hard drive => a legacy worry from early in my career.

Daughters are a gift.

The Trickle Up Depression

I saw some stats on “ability to work at home” by demographic. I hadn’t focused on it.

• Consider the economy in 20% tiers
• Consider wealth across those same tiers
• Consider unemployment rates by 20% tiers

Early in a downward cycle, it is straightforward for the managerial class to make large visible sacrifices. The senior professional class has been making ~$1,500 per hour for the last decade.

As the crisis continues, and you’ve cut your employees, with compensation rates 95-99% lower than your own, you need to start “looking around the table.”

When we get to that phase, you’ll see asset prices step down.

This is what I saw in Asia in the 90s.

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This morning’s training session was #25 in my current plan.

I’m halfway through my 10-week Big Mountain training program and who knows how far through my first stay-at-home period.

The program is challenging and it’s a meaningful achievement to me.

Where are your wins?

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More Chinese data discussion in the news.

Best response… worrying about lying is the least of their leadership’s concerns.

Not just them, I imagine.

Snow day today => yesterday was a beauty – see above.

Our principal is chasing if our kids will have access to their online resources across the summer – iReady, RazKids, Newslea, Google Hangouts, Brain Pop…

Friends in my neighborhood, with a video doorbells, are recording thieves trying their doors in daylight and when they are home. Freaking folks out a bit. So far, a lock is all it takes to have them move along to the next door. Police have increased patrols but the thieves look like clean cut, young adults with corona-masks on – near impossible to spot them.

Emirates airline announced rapid pre-flight testing – great idea – could save the long haul flight industry if this proves effective: Emirates Airline Begins Conducting Rapid COVID-19 Tests For Boarding Passengers : Coronavirus Live Updates : NPR

This reminds me that the Federal response (crappy / awesome depending on your political affiliation) will be overridden by the actions of large corporates acting in their self interest.

I doubt the heartland has the ability to endure another month of lockdown => unemployment is off the charts, think about the people that haven’t been able to apply, who didn’t bother to apply and who rely on those who did apply.

Mind-blowing amount of hardship => 50 million including the dependents? more?

Michigan’s protest – several thousand cars in Lanzing – 25% unemployment, before this week’s additions – calling for a regional approach inside the state – 28,000 cases and 1,900 deaths much worse than Colorado – they have 10 million population vs just under 6 million for us.

Michigan Stay-At-Home Order Prompts Honking, Traffic-Jam Protest : Coronavirus Live Updates : NPR

Once cities, regions, states get themselves settled there will be huge grassroots pressure for isolation. Still not much talk about shutting down interstate travel. Our governor published his game plan yesterday = sounds similar to a video I saw of Merkel in Germany. Focus on keeping transmission ratio under 1.

Kids LOVED this movie last night: The Adventure of A.R.I. : my robot friend

Parents, if you want an idea of how your son wants to be seen by you then pay attention to “the dog with the red bandana” in The Secret Life of Pets 2. Maybe your husband too… 😉

Whether you’re an optimist, or a pessimist, your mind will tell you that you saw it coming!

8) As someone tweeted, hindsight will be 20/20 either way:

“How did you miss the epic rally given the massive stimulus and obvious fact that a vaccine would be developed?”

“How did you get destroyed by having too much length into the worst recession in 90 years?”

— Gavin Baker (@GavinSBaker) April 16, 2020

Australia extended lockdown by four weeks, UK by three weeks.

Singapore saw highest day of positives early in it’s second wave lockdown:

Singapore reported 447 new coronavirus cases on Wednesday — the largest single-day increase since the outbreak began in the country, the Ministry of Health said in a statement. https://t.co/DPLPzdSKAI

— CNN International (@cnni) April 16, 2020

NPR had an answer to my question, yesterday, about thinking better:

How To Manage Coronavirus Anxiety: Life Kit : NPR

A friend asked me about Gold. We did a review pre virus:

• Couldn’t get comfortable with ability to use it in zombie apocalypse – some argue silver coins address this point – silver too heavy for a material holding
• Felt, absent zombie apocalypse, we’d be better off in other asset classes (cash generative local real estate in prime locations, mixed with Vanguard portfolios)
• Didn’t feel gold was the best way to meet the benefits we hear associated with holding gold
• Virus crisis drove the above home to me // specifically, access to CostCo, Walmart and a Home Gym are more useful than a unibomber shack, bag of seeds, shotgun and steel box of gold coins.
• My opinion is skewed by living in the middle of the American Empire – I might feel differently if I lived somewhere else – in that case, I’d focus on an exit strategy rather than building assets (that are easily taken from me).

22 million unemployed – I wonder what the multiplier is for dependents and people unable to apply?

Interesting insight, the two countries that know China best (HK and Taiwan) ignored the WHO, closed borders early and screened travelers aggressively.

Bezos shareholder letter if you’re interested.

https://ir.aboutamazon.com/files/doc_financials/2020/ar/2019-Shareholder-Letter.pdf

Another snow day here! Good accumulations – kids will be building a snow shelter for PE.

My training program had “a hint of speed” today. Ax-man’s first time on a treadmill and the fastest I’ve moved in about a decade!

Finally, even our cat has a schedule these days…

The half birthday party was a great idea. We had a blast.

Stuck at home with a toddler? Buy yourself a wading pool and a bubble machine => these things are going to sell out FAST once the weather warms up.

Florida designated pro wresting as an essential business.

Tour de France postponed – I don’t see how the event happens this year. Time will tell.

Ikon Pass offered an extra $100 for early pass renewals => effectively a price cut. Made it retroactive for anyone that had signed up in advance.

I don’t see any way we get a full season in Colorado (2020/2021). Still, I think I’ll get enough skiing to justify a pass. Some bullets on skiing:

1. Ski passes represent ~5% of my ski season expenditure
2. The largest line item is our seasonal rental => not going to do that next season
3. Mentally, I’ve canceled all my out of state travel plans
4. Will only buy one pass => usually buy at least two
5. I do not expect to sign my kids up for their ski group
6. Absent Corona immunity for my wife and me, I do not expect to use a locker room, visit restaurants or ride any gondolas

1-5 is a lot of money for me => roughly equal to my lockdown cost of living.

Calculations like these are happening across the economy.

I am watching the banks release their consumer and small business lending statistics => with only a few weeks of lockdown I’m seeing big increases in deferrals and arrears.

Howard Marks’ latest => bottom line, nobody knows nothing about the future => you can safely ignore 98% of the media => tailor your feed to a small number of believable individuals => the media companies are filled with noise and constantly contradicting themselves.

A champion athlete did a “lockdown” Ironman (3.8K swim, 180K bike, 42K run) to raise money for health care providers => great idea. Let’s call it “Jan-Strong.” 😉

I’ve asked my school district if my kids will have access to their online resources across the summer. You should find out for your own family. This is an HUGE equity issue for the large number of families that are going to be cash strapped this summer.

My goal is to limit the amount the kids will forget with a FIVE month break from proper school.

Solo? What are you learning? Now is a good time for some online education. I have a buddy studying Hebrew and ukulele! Quite the selection and why not?!

A little bit of daily learning can go a long way, especially with the multi-year time horizons I hear discussed.

I feel like I am getting used to lockdown. I wonder if I’m still lit up cognitively. I wish there was a test I could administer to know if I’m still thinking poorly.

This morning we found out the district will shut down our school for the rest of the year. It is a special situation as we’re using bond funds to rebuild our school over the summer. An extra 4-6 weeks of project time will be very useful in the current environment.

My son was STOKED to hear that home school would continue!

My wife? She was less stoked.

Stay strong!

We’re celebrating Lexi’s 1/2 Birthday today. The kids are going to bake a cake as an extracurricular activity after PE.

Here’s Bella’s COVID letter to Grade Ones doing home school.

The kids watched a Smithsonian webinar on minerals – that was a hit. Fossil Friday, last week, wasn’t as popular (but I thought it was good). Here’s the link for future online events.

Here’s a list of online events from Wide Open School.

A week’s worth of groceries for five, below.

Asymmetries

This is a wonderful concept taught by Taleb in his many writings.

Just explained in a lecture that risk management and “science” are not the same thing. Risk is about asymmetries.
With .1% error rate, few flight attendants would be alive. pic.twitter.com/mTZMi4YKaK

— Nassim Nicholas Taleb (@nntaleb) April 13, 2020

My post at the end of March about trying to fit 2019 annual run volume into April 2020, was an example of an asymmetry.

Even if you think your chance of ruin is small, whatever you gain isn’t worth running a risk of ruin.

An example from finance => recourse borrowings to buy things, you can’t use in lockdown.

An example from weightlifting => middle aged men seeking new one-rep maximums. I keep this in mind during my early morning strength sessions!

These things are all over the place – they aren’t always negative. ‘

• Wearing a mask – near nil cost, huge upside if you don’t end up in ICU.
• 20 minutes a day of walking – near nil cost, huge upside in health outcomes vs nothing.

A final tip that helps me make better decisions: always assume you will make the choice more than once.

If you can be ruined then you will be ruined, eventually.

Virus Stuff

1/ Suppression and lift strategy described in HK and Singapore.

2/ Came across a note about parts of Italy extending quarantine to 28-days, household transmission meant 14-days wasn’t being effective.

3/ 32 days into our own quarantine, I can’t see a plateau in positive test results. I’d expected to see it happen 10 days ago. With our soft lockdown, we are ticking along at 6% daily growth in Colorado.

4/ Reached out to a buddy in Hong Kong, their pools have been shut for 11 weeks, and counting. Summer swim league, local swim teams => looking doubtful for a while.

5/ Thank a politician. Yes, do it. The leader of our State House lives a couple blocks away from us. They’re working their butts off, taking heat from all sides, trying to make things better. I feel very fortunate to have good people, working hard, on Colorado’s behalf.

6/ Burglaries way up in Boulder, already. Combine that reality with a program to create more vacancies in our prison system and I expect community backlash.

Lockdown Life

Here’s a question for your lockdown life: what’s lacking?

Really drill down on your answers.

For me, lockdown is similar to the process I went through to become a better father.

Parenthood involves a feeling of having a lot taken away from me.

How do you deal with those feelings? My lockdown tactics include a written schedule, getting my mind focused on home school and starting a challenging training plan.

In our day-to-day lives, we are often drawn towards novelty or distraction. Vacations, new restaurants, new experiences, new bike routes, new deals… lots of ways to distract ourselves.

Here’s something you might want to consider, authentic connection.

It need not be with another person.

Nature is a source for me => “bad” weather, oceans, mountain vistas, forests. All of these leave me feeling with an expanded feeling.

Books are another source => learning from the best minds of the past.

Others like to challenge themselves with mathematics or coding.

If you’re locked down..

• cut off from novelty
• cut off from whatever you’ve been using to distract yourself
• cut off from authentic connection

then you may have an opportunity to see if your focus needs to change.

Happiness is the space between cravings.

If you’re new to spending a lot of time with your spouse and kids then this may help.

De-escalation: your #1 priority is to constantly deescalate yourself.

• Spread the energy – as best you can, separate the kids
• Use headphones when they are on electronics
• Tag-team when home schooling and preparing meals – support your spouse by offering them time alone, not working alongside
• Feeling wound up? Channel your energy into a little bit of housework, in an empty part of the house. 8-12 minutes sessions, throughout the week, chill me out AND help the family.

Young kids? Go to sleep when they do. Wake up before them and do something positive for yourself.

Talk to my eyes: put another way, never, ever, offer advice from the couch

• If it’s not worth getting up and moving to where the “problem” is, then let it slide. This is a great filter because… when you are tired (not at your best, likely to make things worse) then you will tend to let it slide.

When someone offers assistance, acknowledge they will do things differently than you. Pause before you get involved! Their way is likely good enough.

Why? Because when you are spending 24/7 with someone, constantly helping will not be helping!

Mantras

1. I will do what needs to be done
2. We will be maintaining our standards

Virus Spread in Colorado – Colorado appears to have flattened the curve. However, even at a declining daily rate of change, positives are growing at a nominal rate that’s too fast for us to lift social distancing. Hopefully, we will see a meaningful decline in Month 2 of lockdown.

Colorado Hospitalizations – My home state hospitalizations have fallen far short of my expectations. I got this completely wrong. All across the US, predictions are being revised downwards, materially, daily. Personally, I have no problem with this => NYC shows us what happens when community spread gets rolling. However, human nature shows me that this will likely have implications going forward.

Unemployment – the numbers are so large they are impossible to process. More than double the total population of Colorado lost jobs since we have been locked down. The first wave of infection, and shutdown, is going to deplete most of the population’s financial reserves. Communities are going to be hit much harder on the subsequent waves of infection.

The Fed – the actions taken by the Fed make sense in the context of: (#1) spread the wave of (inevitable) bankruptcies; and (#2) they are aware of far worse information than the general public. Many businesses are non-viable, for years, at present. Go bust, more slowly.

Market Valuations – I got market directions completely wrong. My strategy means I paid no price for this error. Market valuations make sense if buying is being driven by other people’s money (OPM). Anyhow, I can’t figure it out so I’m going to wait and see. I noticed a material sale of airline shares by Buffett.

American Governance – The system is working. We have many different experiments happening across the country, and around the world. I’m grateful we have a governor, independently wealthy, not facing re-election in November, with executive experience. Our state’s system has worked well for the people.

Blessings => companionship, marriage, home school (for something to do), my kids (for relentless positivity) and crunchy salads. Everything I wanted my family to achieve in 2020, they have achieved during lockdown. They’re impressive.

Are you aware of the concept of negative knowledge?

Certain media sources, and people, make me more stupid.

I first heard this concept many years ago via Taleb. I’ll link a twitter thread below with his latest reminder.

That NYT?

+Ran articles about irrationality of worrying about the pandemic
+Opposed the travel ban
+Now blaming the administration for not having stiffer travel ban https://t.co/4NNOpkeO1V pic.twitter.com/czrGEeI6Lu

— Nassim Nicholas Taleb (@nntaleb) April 6, 2020

You can give yourself a material, sustainable advantage by rooting out people, publications and habits that make you stupid.

Taking the weekend off from my devices.

Back Monday with some tips for living in close quarters.