torsdag 31 juli 2014

There is no growth, there is only inflation

Peter Schiff's verdict in short on the state of the US economy, on his podcast interview with Doug Casey (transcript here):

Peter: And that makes a lot more sense to me, given what I’m observing in the actual economy. The critics who argue that that’s impossible, that the people who think that inflation is more than 2-3% percent, they say they must be wrong, because that would mean that the economy has not experienced any legitimate economic growth. And to that I would say, absolutely, it hasn’t. The growth is all a fantasy. It’s all a result of the assumption that there is no inflation, when there really is because what we have is inflation masquerading as economic growth. But the bottom line is the economy is really contracting, that’s why the labor force is shrinking, that’s why we’re using less energy, that’s why the people’s standard of living is going down, and real incomes are falling and job opportunities are disappearing. It’s because we’re in a recession and no one wants to admit it.


Also worth pointing out is a chart from zerohedge showing how High Yield credit already a week ago pointed to S&P 500 shortly going below 1800:

 
 
 
And remember, this is how much S&P 500 has fallen from its all time high,
after a historically large and long rally: approximately just 1% as of yesterday's close
 
 

Know yourself, be yourself

What I learned on Ibiza this summer

I am listening to the Jay Z remix of I Just Died In Your Arms over and over again, reminiscing last week on Ibiza.

Whenever a memory pops up in my mind, I smile or actually laugh out loud (or have to force myself not to). I am often acutely happy after binge drinking. Sure, I am almost always in a good mood, loving life, appreciating my station both before and after turning rich or muscular, single or paired. But still, I seldom laugh as hard as when having a “Hungover (the movie) experience” of going through yesterday’s pictures, often with the help of others.

Yes, that's a suit, a white shirt, golden cufflinks,
a Big Bang Rose Gold Hublot... and a pool
...24 hours after I missed my flight home


Alcohol in large amounts is probably bad for you (lowers testosterone, alters your state of mind), but in limited amounts (like 1 beer per 10 kilograms of body weight on a party evening = 1 beer per 22 lbs. Let’s say a “standard beer” is equal to 40cl beer with 4.5% alcohol weight) it can be enjoyable, bonding, fun, breaking barriers, encourage sex and if on a rest day not even interfere with your training. There is a lot of research on this nowadays and even a night of binge drinking only lowers your testosterone by some 30% during a full day.

However, drinking a lot and drinking every day is not good for you. You’ll get weak, confused and damage your liver as well as your cardiovascular system through inflammation in the blood vessels. My party week in Ibiza was probably detrimental to most things I represent (an improving mind in an improving body). However, it still helped me get even happier - which is the most important thing of all, I think.

So, do you need to get drunk to get high on life? No, you don’t; not if you know yourself well enough, are self-confident enough to be completely uninhibited... but it does help and at quite a small cost. I would encourage anybody to get seriously drunk a couple of times a year to see what happens and hopefully enjoy filling in the blanks the days after. If you have tendencies to violence you should NOT try this.

One important conclusion here is that it is when you sober up that you have the most fun. So, you must sober up. You must have long periods of sobriety to be healthy and create the potential for a sharp drunkedness (as opposed to the dull feeling of drinking moderately for days on end). The “problem” is that you also have to take the cost of getting crazy and creative first.

Some can do this by pure will, others are natural clowns, yet others get high on entrepreneurship or 48 hour programming sessions (I was one of them up to the age of approximately 24; maybe I still have the capacity… but drinking is easier), or just hanging out and relaxing with a group of friends (maybe playing or doing sports, or even just looking at sports). For me, I need alcohol, and an encouraging group, to get creative, crazy, clowning, testing, taking risks and do stuff that creates exciting situations and memories that we all can laugh at afterward. It also helps me getting closer to do that stuff when sober, because it actually is a much better experience to get crazy and creative sober and remember it all perfectly, and not having to take the physical cost of drinking poison.
 
After a pool dive that went wrong



To conclude:

If you are a little inhibited, try a couple of nights of binge drinking and just let go, be yourself, be a child, clown around. Do not be aggressive, that is just weak, stupid, unsecure and possibly conducive to addiction

Alcohol creates a natural life topography of highs and lows. First drunken action, then a hangover, then remembering what happened. Life “feels” more with fluctuations and risk than with just a flat line.

Aim for letting go when you are sober, try to create a drunken state of creativity by remembering stuff you did when you were drunk.

Be yourself to such an extreme that you almost become somebody else - and laugh with pride afterward
The end game is to be able to create and indulge in “flow” of all kinds (programming, console gaming, reading, clowning, playing...) by will, that all get you almost crazy and another person by gradually during a long time experimenting further and further out of your usual comfort zone, and then remember these episodes afterward with pride and happiness


Notice the guy on the bed in the background
video
 
 
PS: I still have the song on repeat..., enjoying crazy memories and feeling of flow

onsdag 30 juli 2014

Ibiza

A friend called me two weeks ago and asked if I would like to come down to Ibiza, where he and a couple of friends had rented a house. Meeting with friends and being spontaneous are definitely things on my "Improve Scheme", so I booked a flight the next day.


The first day (the 21st) I just hung around the pool, trying handstands and some belly flops



One day (the 24th) we explored the surroundings and walked down to this beach on the western side of the Island for lunch and a sunset

 
 
We went out after that, because this video of the "pit" at Pacha is from early morning the 25th, at 5:22 am. Guetta started playing at 03:20
 
video


Part of the house and pool

Panorama picture of the entire house and garden
 
Bedroom


On Tuesday the 22nd we were at Pacha, I think, but this picture is from the 24th (early 25th) when Guetta played at Pacha. He started at 03:20 am.


And on the 23rd? Steaks and sausages at home. Perfectly medium rare which was incredible, considering the state of the grill



And another day (the 25th) we hung out at Chiringuito beach, Ses Salinas. I was incredibly hungover from the party at Pacha (see video higher up from the "pit" at Pacha), but after my burger and a couple of beers I was fine again
 
We had trouble fitting everything in the car on the way home so I stayed in the trunk of the car (pic coming)
 
 
Later on we had a house party

 
 
We had a house party on the 26th as well and this is what it looked like afterward:

compared to before:
 
 
 
This morning (the 27th) I missed my 7:00 am flight home, partly because of the promise of a day at the Blue Marlin, partly because taxis were hard to get at 4-5 am.
 
On the 27th we went to Blue Marlin again (Sundays). The first time for me. I started a little chill on the bed with some beer and rosé
 
 
 
My friends kicked back too
 


Later on, happiness got to me
Yes, that guy (me), is 42 years old and former partner
of the European Hedge Fund Of The Decade (and still its Mg Dir)


 Another bottle of rosé came later, as well as another batch of beers (24 bottles)


 
 
On the 28th we just hung out in the pool for a very long time, like 8 hours in a row. One of the guys' feet looked like this afterward
 


A friend just hanging out (for 8 hours, see feet above)


Things got a little crazy after I downed a bottle of gin:
 
 
 
So happy with my new ACLs (both knees)


Just had to throw the sofa into the pool


Held my breath for 3 minutes and 33 seconds under water (on tape, GoPro)


Everything went into the pool:


chairs...


a table



Then dinner at Km5 (I think) followed by Pacha, where 2manydjs played this night, among others







When pigs fly...


and mirror ball men...


The decor and the music were WICKED!

 
We got home unusually early; 6:30 am, so I wasn't even in a hurry to the airport (my flight was departing at 11:25)
 
Once there I started to feel the costs of the long and hard week (the departure being delayed by 1 hour didn't help either):

 
 
 
Where we lived (on the western tip of Ibiza, marked by ink):
 
 
 
Some used the day time for trading in the sun while candles melted. Some of us just slept through the light part of the days. It was a quite diverse set of people, all quite fortunate (or successful if you will) materially.
 
 
I lost 3kg (7 lbs) during the week (rolling 7 day average so it hasn't troughed yet after the trip)
 
 
But this pic is taken on the first day of the trip


 
 
 

söndag 20 juli 2014

Always read Hussman's weekly to insulate from speculation

Hussman explains again (in today's weekly comment) that if stock markets at any time during the following quarter century reaches a secular low in valuations, The S&P will be lower than today (even if it occurs exactly 24 years from now, and earnings keep growing 6% p.a. despite current records margins).

This is just arithmetics and has no element of opinion to it.

Hussman:
The resulting arithmetic is quite simple: even if stocks were to touch a secular low even 24 years from today, and even if fundamentals such as nominal GDP, corporate revenues, and corporate earnings match their long-term peak-to-peak growth rate of 6% annually between now and then, the S&P 500 would actually be below its current level 24 years from now [Calculation: (1.06^24)*(0.5/2.10) = 0.96].

fredag 18 juli 2014

Is the market correction over yet?

Well, the S&P 500 is one full per cent below its all time high....

So, after its QE induced levitation of more than 200 per cent, the stock market has corrected by an all but invisible one per cent. The backdrop to this is the weakest post WWII economic recovery, not to mention the highest valuations ever, the highest public debts ever, highest stock market margin debt ever etc. (the full evidence will be presented in a future post, as well as my thoughts as to why the market has appreciated so much the last 5-6 years).

Do you think the correction is over yet, with Market cap/GDP ratios well over 100 per cent above normal valuation levels and at their highest ever? Yes, there still are some (less reliable) valuation aspects, where the peak of 2000 beats the current peak - but shold that epic peak and eventual epic crash be the benchmark of choice?

Just looking at a chart it should be obvious that there hasn't even been a correction in the market the last couple of years. It should also be evident that the current 5 year stretch of unbroken positive returns is a historic anomaly, not to mention that we have in just the last 15 years seen similar stretches end with disastrous downturns.

It's about time now again. Just because the central banks have succeeded in fooling a lot of people for a couple of years does not mean they have ushered in a new era of constantly rising stock prices, or "a permanently high plateau" for that matter :) as was believed by the most prominent economists in the fall of 1929.


tisdag 15 juli 2014

The stock market will crash

First a few facts:

  • Nobody can accurately forecast stock market movements
  • There are however a number of people, including me, who have profited handsomely from predicting poor long term returns (which also turned into short term crashes)
  • Stock markets crash from time to time. They do so because human psychology tends to drive stocks to unsustainable highs
  • The US stock market is currently at such an unsustainable high, given all available data
  • No one still can't predict the market, me neither, but with equity valuations at historical extremes and the bull market extremely long in the tooth we are due a very long period of zero returns. That is usually resolved by re-setting the market at a lower level during a 1-2 year crash.

My track record consists of pumping IT stocks as an analyst between 1994-2000, then shorting IT stocks at a hedge fund in 2000-2003 and other stocks at the same fund in 2007-2009. The performance in many of these years earned us several awards, including one for the entire period 2000-2009.

This, however, still does not mean I can predict the market. Nevertheless it indicates my overall thinking about the stock market can be "useful" for the lack of a better word.

Just as with everything else I base my stock market research on reading and assimilating a lot of information from various sources. Some people these days would call me a perma bear but the fund returned over 500 per cent during a period of two 50% crashes and a total return of zero. I was simply being negative because the market was in a poor spot. It almost normalized in 2009 but after 5-6 years of relentless rises there are all the reasons in the world to be negative again.

To be clear, I have been seriously negatively inclined (i.e., I have been seriously wrong since summer 2012 and Draghi's "Whatever It Takes" speech) to stocks since 2012, which is when I started to privately short the Swedish stock market. I kept selling throughout that year, and only thanks to my risk averse personality I'm "only" down by 1.5m USD on that trade, and I still have more than 2m USD in short positions that I expect to start delivering in 2014.

Most of my data comes from the US financial markets but the Swedish market has historically exhibited very little tracking error with respect to US stocks. It is basically a slave market to the S&P 500.

Also: nothing here is to be interpreted as solicitation or recommendations to make investments. I simply state what I believe will happen.


The evidence:

TO BE CONTINUED...

Two tips to improve and be happy

1. Listen to NPR TED radio hour every now and then.

You don't have to do it constantly and regularly, just as you don't have to listen to every TED talk there is. Time is limited.

But when you have a spare hour, perhaps when you are cleaning or washing or take a long walk or sunbathing. Choose episodes or just go through them chronologically. There is so much wisdom and new perspective there, almost regardless of the topic. Today I listened to Three episodes: Love, Fear, Collaboration. Yesterday I listned to PCs about the multiverse and about copying. The day before that there was the Nitrogen cycle, Extrasensory perception and noise, voice, listening. One interesting story was about a color blind guy who invented and permanently implanted a color/sound converter enabling him to hear colors and views. With time his brain has adapted to the new device and he naturally both hears colors and sees Music. He also hears infrared and ultraviolet. I want to do that. And I will.

2. If you are bored or just inactive, DO something, anything. Take a walk, or if it rains look for stupid stuff on the internet to copy. It could be:

  • filming something in slow motion
  • making up a funny cat picture caption
  • balancing two forks and a coin on the rim of a cup
  • imitate Batman, the high school years

The point is to just find something simple that you could copy in between 1 minute and 1 hour. When I do it I totally get flow, focus and feel excited, creative and accomplished afterwards. Even better is if you can use that energy for something useful, something that makes the world or your life better... but copying something goofy to get going can be a good start. Try it.


 This took me about ten minutes until I got the balance right
Meaningless in itself but I had flow doing it and I'm sure my brain rewired


The best slomo part is between 0:30-0:40



1min 14s of me waking up and running the full length of my penthouse apartment, in slo mo



And remember: Be happy

måndag 14 juli 2014

Don't hate. Learn.

Have you watched that ridiculous guy flopping around like a spineless fish, doing kipping pull-ups and at best getting his forehead level with the bar?

Have you had a hard time concentrating on your deadlifts due to the bench presser with his ass two feet above the bench while his two friends lift the weight for him?

Have you had to bite down on your lip to refrain from a bitter remark to yourself about the quarter squats being performed next to you, not to mention the guy happily pumping away his bar-only biceps curls in the squat rack?

What about the cross-fitters? Do you silently call them names and wonder why they even bother doing burpees when they don't manage even one single push up or ever push off from the floor when they "jump"?

All the above is hating. Stop that! Stop hating!


For one, why do you let anybody else steal your focus?

Second, look, listen and learn instead. If you really can't stop yourself from looking, stop judging and try to really understand why they do what they do. Are they new? Are they simply trying to be active and have fun with some friends? Are they preparing for a competition? Are they doing something esoteric and complementary that you just don't understand?

In Ender's Game the main character studies his opponents until he understands them so well that he loves them. Learn to love what you see around you, no matter if it's in the gym or somewhere else. Be happy, study, learn - or just leave them alone. They don't concern you.

I know it's hard to love the squat-rack biceps guy, but just ask him nicely if you want the rack instead of hating. Hell, I curl there since there are so few bars and free weights at my gym, but I am always quick to give up the rack if somebody wants it.

Nobody loves the guy who both cheats and throws weights around or just drops them when he's done, but that's the owner's concern and not really yours (unless it's directly dangerous). Take the opportunity to practice focus instead and learn to ignore the sudden noise from the gorilla.

Always remember that it is not your job to educate your fellow gym members how to lift, how to get strong, what is proper technique and so on. Your job is to be happy and reach your targets.

BTW, today's visit to the gym was kind of a failure. I was supposed to do 5x5 at 115kg bench press but ended up doing 70x5,5,5,5, 90x5, 100x2 and 110x2 during my warm up and then 115x 3,3f,2f,2f,2 ('f' stands for failure, so only poor 2s and 3s today. I'm still happy with the last 2-repper anyway after two failed 2s in a row)

I also included 3 sets of light cleans after my planned workout. It's hard to say if it's a good thing to do explosive work after tiring myself with heavy bench, heavy and light standing bar rows and biceps curls, but maybe it was good for my focus.

söndag 13 juli 2014

Coming topics

Coming topics:

Know yourself - partly on July 31, 2014
Know your problems
Should you reward yourself
Create a conscious life topography - partly on July 31, and 4&6&7 aug 2014
Avoid stuff, search for experiences
Don't hate. Listen and learn. - July 14, 2014
Read (and write) but never rush it
Try new things, experiment, take risks - partly on July 31, 2014
Say yes. Do things, but have the integrity to say no.
Sit less
My best blog tips
Realize you never really know anything
Dare to be quiet in negotiations
Dare to ask the same question at least three times
Recommended books
My role models (yes, including Kurzweil, Schiff and Hussman)
Stock market view - in process 15 July, 2014...
Stock portfolio recommendations
Science and scientists
Most processes are cyclical and opportunities arise when people forget that
Pod casts, pod walks - listen to TED
How to train efficiently
What to eat
Alcohol and training - touching on the topic slightly on July 31, 2014
Intermittent fasting
What to choose to do for a living
Future technology, longevity, the singularity
How to mobilize ("stretch")
Dogs
How did I decide to quit as PM and partner of my hedge fund?
Was it really all luck?

I am the quitter that continued

I'll start with the superficial presentation, the tangible sales pitch, and then move on to who I really am, my core.

Right at this point in life I am male, 42 years old, self made double digit USD millionaire, 300+ lb bench presser (my record is 308.5 lb), 182cm tall, 90kg, managing director of a hedge fund that has been awarded "Hedge Fund Of The Decade" in Europe. I used to be partner and portfolio manager as well but I resigned earlier this year to pursue happiness instead of more money I don't want or need. For a brief description of me, see this blog post.

Apart from my financial success I have also received an award and a scholarship from the hands of the King of Sweden for being the best student in mathematics and physics over the course of three years (class 10-12, i.e. ages 15-18 approximately). I was appointed honorary member of Sweden's chemistry society for acing the organic chemistry test in the qualification round for the Chemistry Olympics. I have climbed the mountain Aconcagua (Argentina/Chile 6959m, the highest peak outside the Himalayas) and took a picture of me in my underwear at the summit.


My superficial so called success contrasts with who I really am:

I am not an alpha. I am at best a gamma, i.e. I don't care for domination, for following or followers. I am just me, independent, an end in myself. I believe every man is an island and that certainly goes for me.

I am not driven or ambitious. I started out in the lower middle class, became the second ever in my bloodline (my father was the first) to get a degree (Finance) and struck it rich in the finance industry - first as a technology analyst, then as a portfolio manager and partner. Drive never explained my "accomplishments", neither in school, nor in business. I just wanted to be left alone.

I am not relentless, I am lazy. I always look for shortcuts, real shortcuts. To me, in school, a real shortcut was studying one week ahead of class all the time. That meant I never had to put my hand up, never had to be put on the spot in class on a new topic, could choose to sit at the back of class and just do what I wanted. In business I just did what had to be done or solved the problem at hand. It's just that I didn't work by the clock or expected to have a life on the side, so except for sleep I just kept at any problem before me. Somehow, putting in 100 hours/week got people's attention. At the same time, I learned a lot.

I don't form good habits by choice. I don't manage my habits, I happen into habits by figuratively putting one foot in front of the other with no regard for the big picture. I have a somewhat compulsive personality, almost autistic. Once I see a problem that is solveable I start picking at it, and I keep working on it until I have found an efficient and satisfactory solution. In the process, sometimes a habit is formed. I never meant to lift weights 4 hours a week. It is a quite recent development that I strive to be stronger at all. When I practiced Tae Kwon Do some 25 years ago, e.g., I famously said regarding weight classes that "I'd rather look good than be good"

I don't have a plan. I am naturally myopic and hedonistic. I savour the moment and seek pleasure. I never had a plan either so the question is how the hell did I end up rich, fit, educated and intelligent?

It's all luck! You hear successful people say it again and again. Luck is the most important factor. To start with, I was born male and white in the developed western world (Sweden). That alone puts me among the top 1% in terms of starting point. Then, I happened to like mathematics; that was probably part genetics and part looking for control in a world where I was being bullied by larger kids. I also took flight into reading. Thanks to the extremely pedagogic Swedish children's show "5 ants are more than 4 elephants" I learned to read by myself at the age of four. It's a lot of luck just being at the right place at the right time to catch that show on TV.

I am not a socialist, but I used to be before I knew better. In grades 3-6, I imagined living on welfare, just slacking all day. I thought the Swedish system of at least 50% tax pressure and free welfare for all was perfect for me. A few years later I turned more to the right and thought 50% was a bit steep, and maybe 30% was more reasonable. I still didn't make any money, I just felt it wasn't quite right that the state should take your money. I guess it was still a wallet issue for me, even if I didn't make or planned to make any money.

I am a die hard individualist and I still didn't see the wrongs of socialism and general welfare, that's how little I knew, how little I cared, how indoctrinated I was by the land of Olof Palme.

I am a libertarian. Finally, a friend pointed me toward the books Atlas Shrugged and the Fountainhead... and I saw the light. Everything fell into place, the logic, the moral, the role models, the theft and threat of kidnapping that was the Swedish state.

I am no weight lifter. Nor am I a bodybuilder or a fitness person altogether. I am just taking shortcuts and manifesting a habit I happened into - and demonstrating to myself and others what you can accomplish in any area as long as you are efficient. I actually stated very clearly when I was around 13 years old that in the modern society nobody needs to be fit. I was way ahead of Wall-E and the blob people. Then I saw the movie "Rocky IV" with Sylvester Stallone and Dolph Lundgren and I got interested in girls - and suddenly I wanted muscles.

I am a quitter that continued. My natural state is to avoid pain, avoid exhaustion, avoid strain, avoid endeavours, take shortcuts, get away with the least possible effort. I was never interested in school, but once I started getting grades I made sure I was top of my class just not to have to put my hand up (oh, how fun that first time we got our grades was, when everybody assumed that that dirty, strange and awkward boy who did his own hair had really shitty grades... but turned out to be nr 1). At work, I never had any ambition to get anywhere or increase my pay, but after just a couple of years my autistic focus, problem solving and many hours got me headhunted and put in charge of building the IT research department for a major Swedish bank just as the IT craze got going in 1996. And then it just continued from there.

And now that I have (tried to) quit the finance industry, I am somehow still the Managing Director, albeit without really working.

One week ago

Be more you

This blog is about me relaying the best tips, tricks and life hacks I can find and verify. I focus on fitness, finance, technology (computing, AI, biotech, energy, robotics), life sciencies, philosophy and self improvement.

Stay on if you want shortcuts to being more you, living your life for you, and less of a secondhander living for the sake of others.

I've been blogging since January 2005, but due to being a portfolio manager, partner and managing director of a hedge fund I had to keep my blogging a secret and the blog private.

So, we won the award "European Hedge Fund Of The Decade, 2000-2009" in one of the most competetive and lucrative industries in the world, but I couldn't share my perspective on business, technology and life with strangers? What a waste.

Now, I have resigned* from finance and am ready to share my thinking with you. Welcome.

The reason I finally started this blog was a simple question from Mike at Danger & Play. My answer became a blog post on his site, and a friend of mine, Wysocki, encouraged me until I finally wrote this post.

The URL "AlwaysBeBruceWayne" of this blog has both serious and ironic layers to it. A popular meme goes "Always be yourself. Unless you can be Batman, then be Batman". I don't think you should be Batman. I strongly advocate you being you. As much as possible. Always. Not even if you can be Batman should you be Batman. You should be you, and this blog is about discovering a you that is even more you than the old one. Never try to be somebody else, that spot is already taken and mastered. On the other hand, there is only one you. By the way, Batman probably should be more Bruce Wayne than that miserable guy in tights.

However, as some point out, I happen to be a bit batmanesque (intelligent, fit, rich, partying and being managing director* without any real responsibilities) and I do want to save people (from stupidity, inefficiency, secondhandedness, relativity), albeit on the internet and not on the streets, so the URL still fits. Almost. Or at least it could catch an audience. And, yes, I wear a Rose Gold Hublot (45k USD) and sold my yellow Lamborghini Spyder (convertible) a month ago. Before that I had a silver Ferrari 360 Spider (convertible) that I bought from the Swedish soccer player Zlatan Ibrahimovich.


* In 2014, I resigned from all my responsibilities as a portfolio manager and sold my partner shares. However, for the time being, I stay on as the Managing Director. Since that only requires a couple of hours of work a week, I spend the rest of my 50 hours of face time studying, learning, developing, IMPROVING.

Oh, I almost forgot, I drink a lot of alcohol and watch a lot of movies and TV-series.