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Growing from 2021 to 2022

 It’s the end of the year and time to take stock of my finances. Overall it was a good year professionally and I’ll have the opportunity to increase net income and investments in 2022. First a look back. The retirement accounts increased by 19%, a nice gain. I’m pretty much fully invested in those accounts and plan to stay that way for the near future. With 10 years to go until retirement (approx), I can tolerate pullbacks. That said I’ll take risk off the table starting at S&P 5000.  My share of an investment company increased by 15%. This is even better because I added no new money and even took a distribution. Adding that back in, the company holdings increased by closer to 23%. Everything else was flat. A big focus of the next 2 years will be to build up my liquid accessible holdings. I want a buffer, a war chest. I’ve learned that big expenses come up. Private school during a pandemic. Moving expenses. A car.  There will be many more big expenses. Braces, college, etc.  Right

Momentary Tension

There's a tension in my mind between living in the moment and seeing the bigger picture. It's in vogue to be in the moment -- be mindful, notice, observe. It's the only slice of time one experiences. Yesterday's gone and tomorrow never comes.  I was listening to a podcast and the conversation was about why people hold onto beliefs that they know are weak or even untrue. One reason is the idea of a personal identity being defined by or connected to a certain belief, whether it be religious or tribal or whatever, and the fear that losing a belief will call that identity into question. And, there is some sort of weight given to consistency and continuity of self. If I don't believe this certain thing that I believed yesterday, who am I?  There is, in a sense, a sunk cost of belief. It's as if we've invested in our point of view and to change our minds would somehow waste ... something. Which is a fallacy: The Sunk Cost Fallacy describes  our tendency to follow

Goals and Markets

When it comes to investing everyone has a trading style and hopefully it coheres with their income, liquidity, and life goals. Personally I always start with the goal and work backwards. Here are my goals. 1. Maintain a lifestyle free of financial worry. In practical terms this means my wife and I don't want to fret over small purchases, medium expenses, vacations, or Murphy's law like the car breaking down. At least in a financial sense. 2. Retire comfortably before age 60. I'm 46 and have plenty of time, but I'd probably like to retire at 55. I've seen people decline rather rapidly from 60-70 and I don't want to wait to enjoy that freedom. That said, as long as I'm enjoying life without financial worry (goal 1), retirement age can be flexible. I have a retirement number in mind, not sharing it here. 3. Earn/save enough for tertiary goals (beyond lifestyle and retirement) as well as generosity. Tertiary goals are things like buying property, kids' colle

Change Is Constant; The Biotech Wave

I've started and stopped a blog post for a while now, and there is nothing more boring than recapping a blogging gap, so I'll jump right into the present.  I'm preparing for an international move (with my family) and could not be happier about it. I won't go into details but personally and professionally it's a dream, really. There are plenty of details to figure out; that's the price of admission.  We are a family, or we try to be a family, that thrives on change. I've heard people say there's nothing worse than moving. I don't know. Routine sometimes bugs me. The inability to seek and find and enjoy change also bothers. The only constant is change as they say.  Last year when it became apparent that the pandemic was not going away quickly, we decided to move from an apartment to a house -- for the space, the yard, all that. We've been in the house for a year, and yes it feels like home. It felt like home after month. It feels like we've liv

Everything is getting better

Everything is getting better and yet it doesn't feel  that way. There's a feature/bug in human psychology that causes us to lose perspective almost immediately and judge the present moment -- for lack of a better word -- unfairly.  The end of the pandemic is going to play out in a very strange way, methinks. And I should explain my view of the current facts: I do think the end is near, at least an end to the pandemic stage of the virus in vaccinated countries. The virus will not be gone; it shouldn't be expected to disappear really. It will be around. But, most people who get the virus will handle it quite well. Individual risk is dropping, and fast.  And yet, how this plays out among communities and societies could get weird. During the pandemic, we saw this over and over. Some people never left their homes and some did, a lot; some states locked down multiple times and some didn't; some schools closed for a full year and some opened back up. I'm not really interes

Why it is so Difficult to Let Winning Stock Picks Run to Big Gains?

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There are 2 situations as an investor where I tend to get antsy, especially when picking individual stocks. First, if I have a big loss. This might happen because of a bad earnings report. The stock, suddenly, is down 20-30% and the whole thesis for the company is in question. In that situation, it's gut check time. If I have good reason to think other investors are wrong for selling, I can add more -- but adding to a losing position might just create a bigger loss. If I'm not sure why it's down, I might just sell and move on. Not every pick will win. I'm ok with taking losses. It's normal, and a small loss is better than a big loss.  The second antsy situation is more fun: what to do with a big gain.  In 2020, I had this situation with Moderna. It was a hot, unproven vaccine play and by dumb luck I'd had an investment dating back to May 2019, pre-pandemic. I was up 100% then 200% then 300%. So I sold 1/3, then another 1/3, then let the rest go. Turns out I coul

Interpretation Is Overrated

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2020 was one of the more interesting years to exist.  I'm curious how one might react to that statement -- it depends on one's inner monologue. If you find yourself scoffing, your inner monologue interprets 2020 as a shit show and "interesting" as an ironic description. If you find yourself amused, your inner monologue projects a bit of playfulness. You could, I guess, have any number of reactions. What I've learned is that it is really about you and not about 2020. Events are events. Inner monologues assume and project meaning.  Inner monologues make judgments.  Inner monologues are not infallible. In fact they often apply meaning in ways that are unhelpful.  I don't know enough about mindfulness or stoicism or zen / buddhism to know which is the most relevant philosophy here, but if I've learned anything this year it's the value of non-judgment. By non-judgment I don't mean the pop usage, which is sensitivity to moral judgments of personal behavi

Asking Questions and Seeking Harmony

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I'm a questioner, as my wife likes to say. I question things all the time, big things and little things. I like to ask the question behind  the question. It's not good enough for me to ask what we should have for dinner; I like to ask why dinner as a concept even exists.  As you might imagine, this can be quite annoying at times, probably because to a questioner, nothing is ever settled and people like a certain amount of settled stability. When you're hungry the last thing you want is someone questioning the existence of set meal times. If a question turns up new information, I'm willing to experiment with change, to see if the change works. Sometimes it doesn't work and I need to start over. I'm good at starting over because then I get to ask new questions. I like going back to first principles. First principles means: why do we do what we do in the first place? What's the point? The pandemic has raised a lot of questions about how people live and work and

Thinking Through A Noisy November

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It's November in the strangest year of my lifetime. And yet, if one stops reading the news for a few days, normalcy is almost possible. We've been eating out and doing our own version of hybrid school and, as the Brits say, simply carrying on.  It's a massive understatement to say a lot is going on. It's all very interesting and/or annoying but from the perspective of stoicism and daily life, most of the noise can and perhaps should be ignored. Other than to make small talk.  The virus is continuing to spread like a fashion trend -- in Europe, then the American coasts, then the rest. The 2nd wave will probably follow this pattern. We will keep on with figuring out school, we will keep working a somewhat modified schedule, we will be careful without being paranoid. The continued significance of the virus is that, well, it's disruptive and you don't want to get really sick. However, we are healthy people and treatments have improved. Practical steps can and should

Everyday Long Term Thinking

Life is short but short term thinking is not the best way to live life.  It's a paradox. Tomorrow you could get hit by a bus or a pandemic, but that doesn't mean you should eat all your candy today. You'll feel better about today and tomorrow if you accept transience, eh, permanently. In other words, circumstances will always change but Life (as in human life, humanity, the legacy of loved ones, the essence of why we're all here) will go on and quality of Life matters. And that's why we don't eat all our candy today and we teach our kids to save some for tomorrow, for others, for their bodies' sake. A little long term thinking can help guide us today.  Recently my family has been thinking about the next few years because opportunities have come up, which, if they come through, would be a major life change in the short term (in this case, short term meaning the next 3-5 years). We had to decide whether or not to even consider these opportunities. It was hard