Watching Future Home Movies

Kids are funny and incredibly annoying.

It's truly a skill to take a step back during the crazy moments and laugh or smirk or resist correction. I try to picture certain scenes as home movies that I'm watching as an old man. Thinking of it from the perspective of my future self helps me notice the humor in it all. I don't always succeed -- in fact I rarely succeed -- but meditating on the home movie concept is helpful.

The Future Home Movie

Some random moments from the past few days with my twin 8 year old boys:

• Boy putting small lizards in his hair and in his ear and in his brother's pants.
• Boy walking in a lake trying to catch fish with a net.
• Boy running around naked.
• Boy putting all the toppings on his burger -- cheese, ketchup, mustard, jalapenos, lettuce.
• Boy getting a homemade haircut that turned into a mohawk.
• Boy learning to make his own lunch.
• Boy watching Harry Potter and calling the bad guy "Baltimore".
• Boy wrestling with brother, teasing brother, hitting brother, being inseparable from brother.

Example of small lizard that boy put into hair and ear and brother's pants.

None of these moments are particular to the pandemic but all of this time with the kids and the kids with each other is a pandemic circumstance. It's hard but hopefully will be a home movie worth remembering in 2040. We've taken several big vacations and we rarely remember the tense moments in the hotel; we remember the joyful moments with llamas and boats and fish and food and cheap snow globes. 

Market Thoughts

Today the market ripped higher and it appears that my hedge will result in a small loss, but that is exactly why it's a hedge. It's a small loss that protects against a large loss. That said, I still have a mixed view: stocks are vulnerable here because the rally is quite extended; but, the Fed has clearly made its point and being too bearish would be a mistake. Many mid and small caps are still 20% off their highs and can continue to recover.

Some other notes based on my portfolio:

• Gold reacted well to the Fed statement today and mining stocks continue to be my largest position. Well, cash is a larger position if you consider it a position.
• Biotech, which has been outperforming on the down days, has not been so hot lately. That's ok.
• Energy is 10% of my portfolio and really starting to run now. My crash purchase of Exxon is looking better and better. I also recently added Chevron.
• Video Game stocks are consolidating; next week will be big with several earnings reports. I'm optimistic that they will rally post-earnings. If they drop, it'll be a buying opportunity.
• Cash is a good place to be right now. We can continue to rally but I'm not all-in right here. People forget very quickly what it's like to go down 10% day after day. It's a good idea to remember risk.

Appreciating the Future in the Present

So with my family I'm trying to remember that what we do now in the midst of this virus will be a significant imprint. In 20 years we will talk about what we did when the virus shut everything down.

With my portfolio I'm trying to think about what my investments should be anticipating. There are clear winners and losers. Tech companies that don't require people to share germs in person are doing well and will continue to do well as they can grow and scale in most circumstances. Brick and mortar companies will enjoy a comeback but there's no guarantee that people will forever want to sit in an office or eat bad popcorn in a theater or browse physical retail inventory. I hope I can find a few companies that I'm still holding in 20 years, enjoying their profits and dividends.

There will be ups and downs but the secular trend toward tech and economic efficiency is clear and should inform one's long term investments. More and more people want to spend less time on errands and more time with the people we are all thinking about and zooming with during this crisis.