"There are thousands of people out there with the same degree you have; when you get a job, there will be thousands of people doing what you want to do for a living. But you are the only person alive who has sole custody of your life. Your particular life. Your entire life. Not just your life at a desk, or your life on the bus, or in the car, or at the computer. Not just the life of your mind, but the life of your heart. Not just your bank account, but your soul.

People don’t talk about the soul very much anymore. It’s so much easier to write a résumé than to craft a spirit. But a résumé is cold comfort on a winter night, or when you’re sad, or broke, or lonely, or when you’ve gotten back the chest X ray and it doesn’t look so good, or when the doctor writes “prognosis, poor.”

... You cannot be really first-rate at your work if your work is all you are."

- Author Anna Quindlen, A Short Guide to a Happy Life

A. The Art of Thinking Clearly

Where are we in the market cycle ?

Most investor & allocator conversations tell me we are near relief and optimism, but the price action would make you think it’s exhilaration.

I think this is a time for remembering Edwin Lefevre’s Reminiscences of a Stock Operator:

“It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight! It is no trick at all to be right on the market. You always find lots of early bulls in bull markets and early bears in bear markets. I've known many men who were right at exactly the right time, and began buying or selling stocks when prices were at the very level which should show the greatest profit. And their experience invariably matched mine--that is, they made no real money out of it. Men who can both be right and sit tight are uncommon.”

I expect the best action is to sit tight and climb the wall of worry ahead of us.

Remember the Base Rate of returns for the S&P.

Thinking about Base Rates, took me back to Rolf Dobelli’s: The Art of Thinking Clearly. It’s a simple little book on decision making and cognitive biases. People talk about Kahneman or Thaler, but I think Dobelli is much much more useful.

Here’s an example of Base-Rate Neglect:

Mark is a thin man from Germany with glasses who likes to listen to Mozart. Which is more likely?

A) That Mark is truck driver

B) That Mark is a professor of literature in Frankfurt

Most will bet on B.

Which is wrong.

Germany has 10,000x more truck drivers than Frankfurt has literature professors. It is 10,000 times more likely that Mark is a truck driver.

So what just happened?

The detailed description enticed us to overlook the statistical reality.

Which is to say big down years in the S&P are statistically rare despite the recency bias and what the constant drum beat of bad news on tv will tell you.

B. Payoff: The Hidden Logic That Shapes Our Motivations

Hearing the amazing Dan Ariely present at Nudgestock last week discussing Behavioral Science and COVID-19 made me go back to his last book, Payoff.

The book is a study on human motivations. Why we do what we do, and how we can change our behavior.

Some hacks I walked away with:

1. When scheduling something a few weeks / months from now, ask yourself how you would feel if this meeting was tomorrow? If it's something that you would be elated if the meeting got cancelled, then don't schedule it in the first place.

2. Leave large chunks on your calendar unscheduled for serendipity and opportunity to strike. But also schedule time for the big things which aren’t immediate but important. Things like family, friends and your own education.

3. Use rules / religion to limit choices and therefore make decisions easier and better. Make it easier to say No.

4. Be careful about the environment you construct. How can I construct this environment to be more productive?

5. Be Willful. Assume no one knows what to do. Assume everyone is making stuff up. Therefore, always seek to work with the best. Attract the best to you.

C. A Few Things Worth Checking Out:

1. Brad Gerstner of Altimeter Capital was on Invest Like The Best discussing Public and Private Markets.

2. My friend Feisal who runs the world’s best Global Family Health Office has been doing a bunch of great webinars. I’ve listened to every single one. Go sign up asap.

3. Hanging out with my kids at home has made me realize that after almost two decades of formal schooling I still can’t answer very basic questions about everyday scientific questions (e.g. why the sky is actually blue) and have to go look them up.

Most of the things I was “taught” at school simply didn’t stick. We were just told that an atom consisted of protons/neutrons/electrons, but we had no idea how anybody had figured this out (or, for that matter, why this was important).

The net result is: no understanding, years of waste.

Why Video Games are the Future of Education.

4. David Rubenstein sat down with Bill Ackman to chat markets.

5. I ran across this analysis by Mark Lundeen. Mark makes the point that using the Currency in Circulation figures from Barron’s, divided by the number of ounces of gold bullion which the government claims to hold, the value of each ounce, in Dollars, is $7,483. That is a far cry from today’s market price of about $1,750. I think Gold is a trade that benefits regardless who wins the US Presidential Election.

6. Looking at this picture made me miss my dad, and think about this Wait But Why article which really put into perspective how little time we have with our parents once we are in our 40’s.

7. Something to think about as we go through a bout of self-loathing and cleansing as a society.