Hope

Day 77 – June 1, 2020

One of my all-time favourite movies is “Inception”. Christopher Nolan’s film-making and story-telling won many awards, and deservedly so, but above and beyond that is one of the fundamental concepts of the movie, and it’s a fascinating one. Its importance plays out in the world continually. Even if you haven’t seen the movie, that basic idea is easy to understand… the difference of a thought, and its origin, and how different you treat a thought, depending on whether you came up with it yourself, or whether it was suggested to you. And how you might act completely differently, depending on that.

The simplest example… I tell you to think about pink elephants. Now you’re thinking about pink elephants… but you know it was me that made you think of them.

A better example… after dinner, you realize you haven’t done the kitchen cleanup all on your own in a long time, and decide you’re going to be a nice person and do everyone a favour. “I’m going to wash the entire kitchen”, you think to yourself, happy and proud to be a helpful and appreciated part of the family.

Compared to… you thinking that, but before you get a chance to announce it, someone says… “Hey… you haven’t done the kitchen in a while… go do it”. The end result of the action you ultimately take might be the same, but you’ll be thinking about it very differently.

In fact, you might have been mere moments away from announcing your intention, but now that someone else suggested it to you, it completely reframes it… and you probably feel differently (and not as good) about it. So much so that you might be tempted to say, “Hey, I was going to do it, but if you put it that way — forget it. You do it.”

The magic would be, from someone else’s point of view, if they could plant that thought into your head. They want you to do the kitchen, but they want you to come up with the idea. When you own the idea, you feel a lot differently about it, and… more importantly, you’re far likelier to take responsibility for it.

Throughout my life, I’ve been on both sides of that… well all have… professionally, personally, whatever… there’s no technical solution to Inception, as in the movie, with fancy (and presently non-existentent) technology… so in the real world, the closest thing would be social engineering — not in the sinister fashion of trying to extract login or bank info from people, but by simply interacting with people in a way that guides things in the direction — and ultimately, conclusion — that you’re hoping for.

From one point of view, this can happen when someone has managed to surround themselves with excellent, intelligent people… but because of corporate hierarchies, they’re the one in charge, and the decisions and responsibility fall on them… yet the real brains may be “below” them. Nobody down there wants to be responsible; it’s better for those people if the boss comes up with the idea… so while they won’t come right out and say it, they know exactly what needs to happen… and will dance around it until the boss says, “Hey! I have a great idea!”. “Great!”, they will reply… knowing exactly what’s coming.

The other point of view… well, as a parent, you quickly learn that there comes a point where telling your kids what to do… doesn’t work. As per above, “Do the dishes, now!” isn’t often met with the success for which one would hope. But here’s what does work… “Hey, we want to try to start watching the movie at 8. Try to get everything you need to get done… out of the way by then.” They know they have to do the dishes; you don’t need to even mention it. And, now the power is entirely in their hands. It’ll be their idea of “Oh… better do the dishes”.

With respect to this pandemic, I’ve spoken about the difference between having a doctor instead of a politician in charge. And that even though there are politicians involved, they’re deferring to her order, and the messaging is clear. There is one voice…. but… Dr. Henry isn’t really telling us what to do. Like an excellent parent, she’s transparently presenting us all the facts, but to a great extent, letting us figure out for ourselves how to act. She’s never said “Don’t travel this weekend.” — but she’s hinted as to why it’d be a bad idea and suggested against it… yet left it in all of our collective minds to consider… to the extent that if you did, or if you’re not socially distancing, or if you’re not wearing a mask when you really should… you’ll actually feel a little guilty about it. You’ll actually have taken ownership of the decision… and I think our high compliance numbers and resulting success are a great testament to that one simple fact… a fact that has even bigger implications these days; great success can be found by educating people, and arming them with enough knowledge that it allows them to reach correct conclusions on their own.

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Day 74 – May 29, 2020

If you’re a flat-earther… stop reading now. But if you actually believe the earth is a sphere (it’s actually an oblate spheroid, a little flatter at the poles and bulging at the equator, because of the spin… but whatever…), then you may have wondered at some point… how fast am I moving? If you’re standing at the South Pole, the answer is… you’re not… you’re just spinning in a very slow circle, completing a full revolution once a day. The circumference at the equator is 40,000km, and a day lasts 24 hours, so the math is simple — you’re whizzing along at 1,667 km/h… a little over 1,000 MPH. Actually, you’re moving through space a lot faster than that… because the earth moves around the sun, and our solar system spins around the center of our galaxy… and our galaxy itself is also moving through space, at over 2 million km/h. There’s no better proof of the impossibility of time travel than that… even if you move back in time one second, you’d materialize in the middle of nowhere, out in space somewhere. OK, that was a tangent… where was I…

The city of San José, Costa Rica, is a little over 1,000km north of the equator, somewhere around the 10-11º latitude. What’s interesting about places close to the equator is how quickly the sun rises and sun sets. Given how fast the earth is moving at that spot, it makes sense. It goes from full sunshine to pitch black in less than 30 minutes, and same with sunrise, but the other way around. And how little sunrise/sunset times change throughout the year. Without exception, no matter what time of the year it is, somewhere between 5am and 6am, pitch black to brilliant sunshine. And sometime between 5pm and 6pm, the opposite. Every day lasts almost exactly 12 hours. They have no idea what it’s like around here, for it to be pitch black at 4:30pm on those miserable Winter days, or brilliant sunshine after 9pm (coming in less than a month!)

What’s also interesting about San José is the temperature variation throughout the year — or lack thereof. There are no hot or cold seasons… it’s all the same, year-round, and the temperature range is a narrow sliver. Over a typical year, the coldest temperature is around 18ºC (64ºF) and the hottest is around 27ºC (80ºF). That’s only a 9ºC difference, and if that’s all you’ve ever known, the temperatures near the edge of that range can feel extreme… which leads to the amusing situation some friends and I found ourselves in when we were there. We were staying in a nice place with a beautiful pool… and it was after dinner, already dark, but it was 18ºC out… more than suitable pool weather. So we’re in the pool, splashing around, having a great time… and there’s a security guard wandering around… in a full winter jacket, toque, gloves and ear-muffs. Looking at us like we’re crazy. And we’re looking at him like he’s crazy.

But that’s all he knows, and that’s all he’s used to, and 18ºC to him is like -20ºC to us… the very edge of super-cold.

And now you’re wondering what this might have to do with this pandemic (I was going to say “global pandemic”, but every time I do, my son corrects me… “As opposed to what, dad… a neighbourhood pandemic?” — OK, it’s a pandemic… it’s global. And it’s very straightforward… it’s making us look at things differently, for us — but things that for certain people are a way of life, because they were already used to it.

Indeed, I think for a lot of people, adjusting to the new-normal has been a bigger shock, the more complicated their previous life was. Because really, the simpler your life was before, the easier (if any) adjustments you had to make. Some remote village where people live self-sufficiently, grow their own food, fish, raise chickens… they’re barely, if at all, affected. There’s that lingering thought I keep having about simplifying life in general, because now that things are starting to open up, my old life is pulling me back in, and I find myself resisting a bit.

We’re still far from the end of this, and we’re all itching to bring back at least some degree of familiar normalcy. It’ll be a far cry from the real thing, which is coming one day… on the (hopefully not too) distant horizon… but even when things are 100% back to normal, I hope we can hold on to some of the not-so-normal, that was imposed upon us… because it’s not all bad. I certainly hope so. I’m trying.

When I told some guy in Costa Rica that it sometimes doesn’t get dark until after 9pm here, he was startled… and he asked, “What do you do?”. What an interesting question… what do you do with all that extra daylight. Well, the answer, I suppose, is you make the best of it. Much like we’ve all been making “the best of it”. But hopefully we’ve learned something that carries through; something that was very new to us, but blatantly obvious to someone else, someone from whose life we had something to learn, even if we didn’t know it before.

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Day 65 – May 20, 2020

Some years ago, I travelled down to Santiago, Chile, and stayed at a “W” hotel. I’d never stayed there, but it was in the area I needed to be, and why not try something new. I don’t usually do well in “W”-type hotels because it’s just not my scene. I get that there’s an entire demographic that loves that sort of stuff, but for me… being in a place that’s trying too hard to be hip and cool, it just comes across as pretentious, Bright purple colours, edgy art, a DJ during what’s supposed to be a quiet Sunday brunch, a lobby that feels like a nightclub and is full of people who aren’t guests — but just want to be seen there. In trying to emulate what they think is hip and cool, they lose the message. And when you couple that with cultural differences… what you end up with is what greeted me shortly after arrival, when I called down to housekeeping. They answered, and here’s how it went:

“Whatever”
“Umm… hello….?”
“Yes, Mr. Kemeny… what can I do for you?”
“Oh… hi. Yeah, do you have any extra coat hangers? Could you please send some up?”
“Whatever”
“Uhhh… sorry, what?”
“Yes, right away… someone will be up right away with some hangers.”
“O…K… great. Thank you.”
“Whatever”

She hung up, and I sat there thinking about it. I totally get where they think they’re coming from… it’s their “W” motto — “Whatever, Whenever”. It’s plastered all over the walls, as in, “Whatever you want, Whenever you want it”. That message is clear and appreciated and exactly what you’d hope for in a boutique hotel. But in trying too hard, and not quite getting it, it comes across as incredibly rude and dismissive.

Don’t get me wrong, I found it amusing, and completely embraced it for my entire stay. I’d get in the elevator, and someone from the hotel staff would say hello, and I’d say…. “Whatever!”, with a big smile. Walking out the front door, the doorman would wish me a good day and I’d reply, “Whatever!”, and give him a nice tip. It became my de-facto reply to everything, especially because it’s often what I’d feel like saying anyway. Still or sparkling water? Feather or foam pillows? Milk or Cream? Freshen the towels? Restock the mini-bar? Turndown Service? Whatever.

For those who grew up with that word and its more common use, you understand that hearing that word from someone doesn’t usually mean “Oh, absolutely, whatever you’d like”. It means something more like, “Your opinion is worthless to me, and while I heard what you just said, I couldn’t care less.” They say the opposite of love isn’t hate, it’s indifference. Indeed, what would be worse to hear back after telling someone you love them? It probably doesn’t get much worse than “whatever”.

As this pandemic goes on, that word and its implications are showing up, and not in the good way. Why aren’t you wearing a mask? Why aren’t you social distancing? Are you really heading out of town for the long weekend? Doesn’t it concern you? The “whatever” replies in this context are a bit more sinister than usual, because in a way, what they’re saying is not just “Your opinion doesn’t matter to me”, but also, “Your health or well-being doesn’t matter to me.”

The great success we’ve had around here fighting this thing… can have a bit of a downside, and that is people getting too complacent, too “whatever”. We aren’t through this yet; not by a long-shot. The idea was to flatten the curve, to be sure our medical infrastructure could handle things if they got a lot worse. Thankfully, that was achieved and things did not get too bad… but rest assured, they still could.

And if you weren’t going around saying, “whatever” a few weeks ago, you certainly shouldn’t be going around saying it now. There’s a big risk that things stay relatively flat, we all see that, and our “whatever” attitude starts taking over as the weather gets better than things open up. I hope we can all remember exactly where we’re at, not even halfway to the end of this. We keep hearing that the second wave can be a lot worse than the first one. As much as I loathe fear-mongering from the media — oohhh, here’s a scary story, click here to read it… this common house-hold item could kill you — click here to find out what it is! — I really dislike that crap, especially because I fall for it as often as you. But the one fear-mongering thing I welcome these days is what we’re being told repeatedly about what can happen if this thing gets out of control. And it will, in some parts of the world. How about we don’t let it happen here.

We all have a roadmap from 100 years ago… there was a first wave, things got better, restrictions were lifted… things went back to normal… more than they should’ve, people dancing in the streets rejoicing… including a huge, crowded parade in Philadelphia (among others)…and suddenly, things got very bad, very quickly. That was a whole lot of people saying… whatever.

So, ok… let’s use that word, but in the good way. When someone asks you to put on a mask, take a step back, move the discussion outside… you can certainly say “whatever” — as in, “Of course, whatever you’d like.”

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Day 64 – May 19, 2020

These little walks down memory lane, like yesterday’s piece on Mt. St. Helens, always seem to stir up something else… that I likely haven’t thought of in ages. Indeed, yesterday’s piece started off about a Sunday morning, with me describing how I was just sitting there reading… and nobody has asked me what I was reading, but I will tell you anyway… it was the stock-exchange listings from the previous night’s Vancouver Sun. And if you’re wondering why is an 11-year-old kid was reading stock prices on a Sunday morning 40 years ago, I’ll tell you…

Our grade-6 teacher had created a very cool one-month project. We would all get to buy and sell stocks, all starting with a virtual $1,000, and he would track it on a big chart in the classroom. Every day, we would submit our “trades” — buy this many shares at this price, sell this many at that price. He would do the math and track everyone’s profit/loss. We would submit our trades every morning, along with where we’d gotten the price — The Vancouver Sun or The Province.

There wasn’t really much research that could be done on it… at best, you’d have day-old news to contemplate, and anyway, we were in grade 6… who’s doing any sort of real research, and even if we did, to what end… whatever we might come up with would already have been built into the stock price. But it was a fun exercise, and of course, it grew very competitive, watching everyone’s graph-lines wiggle up and down from day to day. For the most part, people were picking stocks by names that sounded good, or maybe familiar. By the end of two weeks, a few lines had started to separate upwards… and I wasn’t one of them, and it was bothering me. And it didn’t seem like lucky guesses. These guys knew something.

As it turns out, indeed they did; their fathers were stock-brokers or somehow involved in business where they had access to better information. My dad was a mining engineer, so at best he suggested a few mining companies that were exploring for gold… but they weren’t going anywhere in a hurry. I needed to find an edge.

Arbitrage is the simultaneous purchasing and selling of an asset, where the buy price is lower than the sell price, so the transaction generates an instant and risk-free positive return. The most common place where this takes place is financial markets, where, for example, a certain stock may be listed on multiple exchanges. If you have instant access to both markets and notice that shares of ABC are offered for $10⅛ on one and being bid at $10⅜ on another, you buy the cheap one, sell the expensive one, and deliver the cheap ones to the guy that bought the expensive ones. This all happens instantly, and while making ¼ on that transaction may not sound like much, it certainly adds up when you do it 1,000 shares at a time, multiple times a day. There are armies of supercomputers trying to do this continually, all day these days, and to some extent, that serves a useful purpose… it keeps prices in check. As soon as an opportunity arises, some arb grabs it instantly, and the advantage is gone.

And what I had stumbled upon a few days earlier was this… perhaps an opportunity for manual arbitrage, though at the time, I did’t even know that word… all I knew was that, on the same day, the prices listed in The Vancouver Sun were different than The Province. Why?

As it turned out… The Sun was an afternoon paper… it’d always show up around 5pm. The Province was an early-morning paper, always there by breakfast. In our home, we got both. And here was the thing…. by the time The Sun needed to go to print to make it for afternoon deliveries, the stock markets weren’t closed yet. The price listed in The Sun was the day’s mid-morning price, taken at… 11am? Noon? Not sure, but certainly well-before the 1:30pm market close. The Province the next morning had the closing prices from the previous day… and so, differences in price. And by scouring for prices that were higher in The Province, I could “buy” them with yesterday’s lower price and hope the upswing held long enough that I could “sell” them at a higher price. Not all stocks that went up in that last hour of trading stayed up, all through the next day, in time to sell them… but something like 80% of them did, which is staggeringly-high, well-beyond any typical financial wizardry from even the best analysts.

My wiggly line started heading north pretty quickly after that, much like the Mt. St. Helens ash plume… and with almost as much vertical force. Within a week, I’d caught up to the competition…. and just kept rolling… which led to the teacher asking me to stay after school that next Friday. “OK, what’s going on here?”, he asked. Of course, I couldn’t keep my mouth shut… I was so proud of being so clever and figuring out this loophole. I spilled everything. “Do you think that’s fair?”, he asked me… and my simple question back was, “Is it against the rules?”

From there, we had an interesting discussion about The Rules vs. The Spirit Of The Rules. What rules? The stock market is a game where you’re trying to win, and to win, you have to out-think someone else. Where in the rules does it say I can’t do this? Yes, I realize this isn’t possible in reality, but this is not real. It’s a game, and I found a better way to play it.

And after that, although I think he was impressed by my resourcefulness, he changed the rules. All trades must be submitted in the morning, using that morning’s quotes from The Province. End of advantage, and I ended up losing because one of those other guys sold everything, and put it all onto one particular stock which shot up on the very last day. Because asking daddy for inside information is ok, but figuring out how to play the game better… is not. Yes, I’m still bitter.

So… there are rules.… some rules, archaic and irrelevant, are meant to be broken. Some rules, for the greater good, need to be adhered to. Then… there’s that grey area of bending rules. Today, here in B.C., the rules have changed. We have had rules in place for more than a couple of months, and they have served us well. So well, that many people will insist we never needed them, and that is very wrong. Either way, as of today, with our rule changes, it’s one step forward towards a return to normal.

On the assumption that the people who make these rules know what they’re talking about — and, given their success, they certainly do — we should follow them. Indeed, our local rules and implementation thereof have become a model not just for Canada or North America, but the entire world. For populations of 5 million plus, we are number one. I would really love to see us stay there. Some people will break those rules. Some people will bend them… but I suggest, let’s try to stick to them. And if you think you can’t stick to the rules, at least consider the spirit of the rules. It’s not just about you. The stakes are a lot higher than those wiggly lines on a large paper chart from 40 years ago. Look at the wiggly lines on the charts attached to this post, especially the yellow one. Especially today. That is success. That is a win. Let’s all do our part to keep it there. Let’s keep rolling.

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Day 60 – May 15, 2020

“Collect as much data as you can for now.” — this is a mantra that is common in many different disciplines, especially the ones where you’re not sure what data matters. One day, you’ll have a chance to look back on it and figure out what matters, but for the most part, especially initially, the thing to do gather as much as you can, and eventually learn from it.

“Eventually” could mean decades from now. It could also mean tomorrow. In fact, it could even mean 15 minutes from now. On that note, as you’re reading this, somewhere, on the periphery of your focus, there are ads and sponsored posts and other slight differences that are being thrown at you; an experience that will differ slightly for someone else. Some of it is based on your history, but some of it is just data collecting… like, does it work better to use this ad or that ad? Does it work better in red or green? Does it work better positioned here or there? This data is all being crunched, often in real-time — to deliver to you the most pleasant experience possible. Haha, sorry, not quite — to deliver to you the most profitable experience for someone… is the better answer. Facebook is worth $500 billion, and their revenue stream has to come from somewhere, since 99.999% of the people who use Facebook have never given them a penny… so, rest assured, those who are paying want to make sure they’re getting their maximum bang for the buck.

And, of course, an awful lot of data is being collected about this virus, and there are disagreements about what’s important. As per above, it’s always a good idea to gather it all and then figure out later what matters and what doesn’t. Sophisticated modelling techniques do this all the time. For example, a neural network. That sounds a lot fancier or scarier than it really is. It’s not some sort of artificial brain which can think for itself, become sentient and launch an attack on humanity… rather, it’s just software for taking a ton of data, much of it possibly unrelated, and grinding through it in such a way that it “learns” what inputs are relevant to outcomes, and which are noise. A properly trained neural network can be very useful for predicting outcomes that a person may not as easily see, because it’ll have filtered out the irrelevant aspects and focused only on what makes a difference.

A simple example would be trying to train a neural network to predict the outcome of horse races. This is a project that as been on my “to-do” list for about 30 years, and perhaps if enough horse racing returns soon, and I’m still locked up at home, I’ll finally have a chance to work on it. And I will tell you exactly what I plan to do, and what I hope to find. The first thing is to take tens of thousands of historical races and format the data in a way that it can be fed into a neural net. Then, it will grind away on it, “learning”… and I would assume it’ll find a high correlation for specific horses with respect to things like fractional quarter-mile times, weight carried, relative class of opponents and track-surface-conditions. It’ll find a low correlation with things like the name of the horse, what time the race was run and what day of the week it was. That’s the beauty of the neural network; just throw all of the data at it, and let it figure out what matters. It might figure out correlations for specific horses… that even the most astute handicapper or sharpest bookie might miss.

I know a lot of people reading this are thinking whoa dude, that’s pretty cool. Yes, it is… it would be. I’ll keep you posted.

More relevant to all of us are our local numbers, and there are many to look at. We are on track (haha!!) for opening things up soon, and, at least around here, it makes sense. It’s been a while since I’ve talked about “Time To Double”, so let’s look at that a bit. The graphs below don’t do justice entirely to where we’re at, because TTDs when presented in this fashion becomes a “lagging” indicator. Things are better than what those graphs imply, if you’re looking at the TTD lines.

Recall, back in the day… like back in March, which seems like it was 20 years ago… we were looking at some scary TTD numbers. The new-cases numbers were increasing by about 25% day-over-day, a TTD of about 3. Scary exponential growth.

If we take some averages of the last 5 days of confirmed new cases… the TTDs and percentages look like this:

B.C.: 130 (0.53%)
Ontario: 43 (1.63%)
Quebec: 37 (1.89%)

Canada: 44 (1.62%)

These are obviously very-flattened curves, compared to where we were.

I am well aware of the people standing up screaming that those numbers aren’t real. Have a seat, and let’s discuss the obvious. Of course not. There are more, and have been more, cases than we’ve “known” about. We will in due course know how “off” we were… like is the real number 10x that? 100x? 1,000x? I’d love it, if it were 2,000x because that’d mean we’ve all been exposed to this, and if you believe that gives you immunity (and that seems to be the case with coronaviruses in general), we’d be in great shape. That number is way too big, but while I’m here, in an effort to make numbers and guesses and projections more accurate for all of us, I urge you all to visit the bccdc dot ca site and take the survey. You may even get a serological antibody test out of it.

Inaccuracy of those particular numbers aside, there are some concrete ones which are indisputable… hospitalizations, ICU cases, “pressure on the medical infrastructure” and excess deaths… to name a few of the most critical ones. These numbers vary wildly around the world, but they’re the best indicators, along with new cases, to indicate how close jurisdictions are to phasing-in re-openings. At least around here, those numbers look good… good enough that we’re marching ahead to the next phase.

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Day 58 – May 13, 2020

Here’s a common scenario… there’s that cute girl in algebra class you’ve been dying to ask out, but you’re not sure. Like maybe she’s been giving you some looks… maybe. And finally one day, she’s alone at her locker and you somehow dig down for every milligram of self-confidence you have within you, convert it into courage, walk up to her, and babble something like, “Yeah so like… hey.. like you know, if you like… umm… you know, if you ever like maybe wanna study together or go out and I dunno, do something or whatever like maybe.. you know… I mean like you know, you don’t have to, but maybe you want to but like… ok.”

Or another scenario… you have a joke… you think it’s pretty funny, but it’s also sort of offensive… maybe. You think you know this crowd and setting… board room, end of meeting, end of day, everyone is in a good mood… and they’ll like it… you think. It should be ok. It’s funny. We’re all friends here, sort of, right? So, you serve up your joke…

In quest-based video games, you die a lot. And when you do, you’re magically reborn and you keep going. Early game developers were quick to address the concerns of annoyed players who had to keep going back to the beginning every time their character died. From there emerged the “Save Point”, where you could set a point (“Save Game”) from where you’d resume next time you died. If you were in a forest, approaching a castle and suddenly… the ground was littered with first-aid kits, fancy weapons and ammo… well, it’d be advisable to pick up all that stuff and then Save Game before you storm that castle, because you know what’s coming.

It’d be a different world if we could all periodically Save Game and then Restore when things didn’t go our way.

Like in my first example, you’d have done a “Save Game” before you went up to her, before she laughed in your face, and her nearby friends looked up and noticed what was going on and also laughed, and the last thing you heard from behind you as you ran away was “are you serious?”, your face burning hot and red like a tomato…

Or in the next example, you tell your joke, but instead of laughter, you’re met with stony silence and several “what an idiot” expressions…

So what do you do? Restore game, of course. In both those cases, a full rewind to before the micro-implosion in your life, like it never happened.

Unfortunately, the world doesn’t offer that, so at any given point, we just make the best decision we can going forward and hope it works out, knowing full-well that in hindsight, it might have been a mistake. You have the rest of your life to process the regret you just managed to generate… because there’s no going back.

But let’s recognize that the vast majority of the time, we’re all making decisions based on what we hope is in our best interest. The thing is, defining that best interest has become more difficult these days, with the vastness of conflicting interests. Whether we’re talking about the planet… or the individual levels of governments that control certain parts of it… or the people below those governments, the individuals like you and me… there is a colossal, multi-dimensional tug-of-war going on. A lot of finger-pointing and blame. A lot of the three most famous words you hear at a racetrack or casino or poker table: woulda, coulda, shoulda. None of those particular venues would function at all if we could Save Game and Restore. Oh, well gee, I just lost all my money on a horrible decision — let’s just go back a few minutes.

The giant gamble some governments are taking with people, and that people are taking themselves, also doesn’t offer a Restore point. We’re stuck with what they tell us to do, and what we choose to do. And at the end of it, there’s one thing I can be sure of, as I’ve said before — nobody will have been right, and nobody will have been wrong. Part of the reason has to do with the unexpected direction things have taken in some places. Part of the reason is that we’re learning something new every day. Part of it is that there are people who march around with no masks, guns and signs that say things like “let the weak die”. I will never be able to relate to that person, and vice-versa.

And part of the reason is that it’s impossible to judge any of it until we can look back on all of it. That will be a big, thick book, with hundreds of chapters and an additional LXVIII appendixes.

Let’s just all remember — we have no ability to Save Game. We have no ability to Restore. None of us have a functional crystal ball. All we have is the ability to make what we think to be good decisions, and hopefully create a going-forward future with the least amount of regret.

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Day 55 – May 10, 2020

As it’s Sunday, no B.C. numbers today… so I’ll throw in my usual guess, which today is just the same as yesterday’s +15, and we’ll leave it at that… and hopefully that’s pretty accurate (we’ll know tomorrow) because it’d imply another good day all across the country. Speaking of good days, Happy Mother’s Day to all the mom’s out there… I hope those who are celebrating in person have found a safe and socially-responsible way to do so. The weather is certainly cooperating… outside is good, for many reasons. Just stay away from others and it’ll be more than fine. You know the drill.

Mother’s Day every year marks the point in the NHL playoffs where fans around here are trying to figure out who to cheer for now, because if the Canucks made the playoffs, they’ve probably been recently eliminated. There’s a reasonable chance they could’ve gone a little deeper this year, but we’ll never know what this season and post-season would have looked like, were it not so rudely interrupted. We can only speculate.

Speaking of hockey and speculation… back in the day, when Wayne Gretzky dominated the NHL, it became a bit of an issue what to do with him in hockey pools… the pools where you draft players and then accumulate points as the players on your team accumulate goals and assists throughout the season. Fantasy sports leagues do this on a whole new level, where you have to decide who on your roster you’ll “dress” for tonight’s game, because you can’t play your full team of 22 players. Rest assured, in today’s world, the guy who got to draft Gretzky would dress him 100% of the time. In fact, Gretzky was a bit of a hockey-pool one-man wrecking machine, because whoever got him usually ended up winning everything. To prevent that, one possibility was to break Gretzky’s goals and Gretzky’s assists into two, as if he were two separate players, and then someone could draft one or the other. But even there, his assists alone were dominant. Or, of course, nobody got the opportunity to draft Gretzky, and that kept things even.

That was a good example of the tail wagging the dog, a good metaphor where one little statistically-significant aspect of something can have a profound and obfuscating effect on everything else. And, as mentioned, one option is to remove it entirely,… but then things look a whole lot different.

Today’s example of the tail wagging the dog involves a pair of U.S. states, New York and New Jersey, very much the hotspot of this outbreak in the U.S. Let’s call that area NYJ for simplicity.

NYJ has a population of 28.4M out of the American total of 331M which is around 8.6%. But out of the American total test case count of almost 1.4M, they have 35.6% of them. And 44.7% of the more than 80,000 deaths. Not just the hotspot, but now very much the epicentre, which was not always the case.

What’s interesting, and good for NYJ, is that they’ve managed to get things far more in control than was the case not so long ago. The individual numbers there are flattening and trending well. Who knows what that will look like after seeing the crowds in Central Park, but at least they’ve contained things to a manageable level… and, in doing so, made the U.S. numbers in general look a lot better… and consequently, created a lot of false optimism.

The Federal recommendation for re-opening involves declining case rates over a period of 14 days. This does not mean 14 straight days of succeedingly-declining numbers. It simply means a 14-day period after which the number of active cases is simply lower, ie recoveries (plus deaths, I suppose) have out-paced new cases. At present, numerous states are in varying stages of re-opening. At present, the number of states who meet that 14-day criteria is… zero. Nevertheless, openings with reckless abandon. Because that’s Freedom.

Perhaps a better spelling of that word these days, in some places, would be “Free-dumb”. Somehow, freedom and the constitution and liberty and guns all get wrapped up in the same, confused package. There’s the word for it.

Indeed, more than 200 years ago, American founding father Patrick Henry proclaimed “Give me liberty or give me death!”

It seems some Americans, not happy with having to make a choice, and perhaps a little greedily — both from inward-facing and public-facing points-of-view — have found a way to obtain both.

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Mr Mercer – Day 52 – May 7, 2020

There is a Canadian alternative rock band from Tsawwassen called 54-40, named after the longitudinal line of 54’40°… where in the 1840s, U.S. President James Polk wanted the border. That whole dispute is a long story on its own, but suffice it to say, “we” won — otherwise, places like Prince Rupert, Terrace, Prince George… and everything south of that — would be American territory. A tiny part — the southern tip of the Alaska Panhandle — is all that’s left of that line.

That 54’40° line is very far north of Tsawwassen, but just south, literally bordering it, is the 49th parallel, the agreed-upon resolution to the aforementioned dispute. Another long story, but the short of it was that west of somewhere, the 49th parallel would define the Canada/U.S. border. It was a lengthy back-and-forth, and pretty-much the last thing settled was the exception of the southern tip of Vancouver Island. Before that, the border sliced right across it, but that didn’t make a lot of sense, and it was the final concession granted. But nobody noticed till after, the tiny (less than 5 square miles) little peninsula that’d been chopped off and isolated… and when they did, they just decided to leave it for another day. Probably the U.S. would just cede it back to Canada, and that would be that, right? Wrong.

And that is why there is a tiny U.S. enclave, completely landlocked by Canada. It has an official border crossing, and while its residents are officially living in the U.S., it’s Canadians who make up the vast majority of visitors, to buy cheap gas and access “Suites” (really, just P.O. Boxes) to take delivery of items that won’t ship to Canada, but will to the U.S. Ironic, of course, is that all of those goods must go through Canada to get there.

Way back when, that border crossing was little more than a formality. Those 54-40 guys rode their bikes in and out of there and barely waved at the border guard. You could go down to the beach, draw a line in the sand, and jump back and forth between countries. Before 9/11, you didn’t need a passport. And while technically, you’re supposed to declare everything you buy down there, apart from liquor and cigarettes, nobody cares. But, on that note, funny story.

At some point in the late 80s, I was flying down to Chile to visit family. My uncle and aunt who lived down there smoked a very unique brand of smokes that was only available in the U.S., so he asked me to bring him “as many as you can”. I told him that it would be way over the limit and the duty on it would be ridiculous, but he said not to worry about it. He’d pay me back everything. And furthermore, if I did it right, I could get those duty payments back when I left the country with the cigarettes.

So a couple of days before my flight, I headed down to Pt. Roberts, went to that one big gas station/store and picked up all of the “Now” brand menthol cigarettes they had. Seven cartons (not packs — cartons) — so 70 packs of cigarettes. I think 1,400 cigarettes is probably over the “out of the country for 20 minutes” limit, but I had no intention of smuggling them — I was going to be paid back, whatever it was.

The look on the guy’s face was pretty good though… anything to declare? Yeah, cigarettes. How many? Seven cartons. That got him to sit up straight. He made me pull over and get out. He looked at my backseat, packed with cartons. He looked at the receipt. He told me to come inside. So I went into his tiny hut. There was a hockey game playing in the background, on a postage-stamp-sized black & white TV. His first question was, “What are you doing?”

I explained the whole thing to him, how I’m happy to pay the duty, how all of those cartons would be leaving the country in 48 hours, how I don’t mind paying, but I want to make sure I can get that money back. Yes… he said, that’s all correct. OK.

He pulled out a huge stack of paper. He let out a big sigh. On TV, Tony Tanti scored a goal. He picked up the pen, put it down, looked me straight in the eye and asked, “Do you promise me you’re taking all of these out of the country?” “Yes!” “Ok, get out out of here”.

Apart from the technicality of it being part of the U.S., it may as be Canada. This friendly American enclave is a great place to “live” in Canada but still “live” in the U.S., if you know what I mean. For residency purposes, many Canucks and Grizzlies have lived there.

Back in grade 10, a new band teacher showed up — Mr. Mercer — fun, jolly American guy, who lived in Point Roberts, worked in Vancouver, and proudly announced how he paid taxes in neither. Music was a big part of my life, so I spent a lot of time in the band room, and was having lunch there one day with some friends when a couple of guys in dark suits showed up looking for Mr. Mercer. I guess they eventually found him, because he was never seen nor heard from again. Staff wouldn’t talk about it, except to say he’d had some legal issues and wouldn’t be back. Nice guy — I hope the Club Fed he was thrown into wasn’t too bad. And as an interesting coincidence, to loop things around, a few of those school bands I played in was alongside a guy called Dave Genn… who in 2003 joined 54-40 and has been their lead guitarist ever since.

And speaking of looping things around… way back in the day, we used to go down to Pt. Roberts to a place called The Breakers… it was a happening place in the early 90s — always a fun experience. I was usually the designated driver for such outings, but on this particular night, I’d had a bit too much… so someone else took the wheel. We all piled into the rickety VW van for the trip home, being loud and obnoxious as you might imagine, but as always, getting quiet at the border. We drove up to the border crossing little hut, that night inhabited by a tired-looking near-the-end-of-his-career border guard. The old guy stuck his head in the window and looked back at us, all staring at him.

“You boys been drinking?”, he asked.

“Well — they have, but I haven’t”, replied our driver, pointing his thumb back at us.

“OK, off you go, drive safe.”

And that was that… back to whooping and hollering… but suddenly (queue the Twilight Zone music), things didn’t look right. It’s a straight line from the border to highway 17, cutting straight through Tsawwassen, but that’s not where we were. We were on some winding road in the middle of a forest. What just happened?

We’re all screaming “You idiot!” “Turn around” “What are you doing?” “Where are we?” — but on we go… and suddenly… more Twilight Zone music… up ahead is the same border crossing we’d just crossed 10 minutes earlier. Don’t ask me. I mean, obviously, he’d somehow turned left, then left again, and entered Point Roberts through some back road… and we’d looped back and… here we were.

Now we were terrified. “Stop!” “Don’t stop!” “Pull over!” “Don’t pull over, that looks suspicious!”. Well, we drove straight up to the same little hut, same old guy. And he stuck his head in the window and looked back at our petrified faces.

“You boys been drinking?”, he asked, with the exact same tone as before.

“Well — they have, but I haven’t”, replied our driver, giving the same thumb gesture as before.

“OK, off you go, drive safe.”

The rest of the (careful) ride home was silent.

What’s the deal with Point Roberts these days? Is that border all locked up like the rest of the 49th? There’s no hospital or pharmacy down there, and American citizens are not allowed into Canada except when it’s essential. I couldn’t find much about it, but I have to assume a medical emergency would count as essential. Unless you’re symptomatic, then what? I hope the have it figured out. Especially since 99% of the money spent in Pt. Roberts comes from Canada, and that’s dropped to near zero for now.

Point Roberts is part of Washington State, and there’s not much bad to say about Governor Jay Inslee’s handling of this difficult situation. President Trump told him, “You’re on your own”, and they’re rolling with it. I hope that includes a plan for Point Roberts.

Yes, it occurs to me there’s not much tie-in here with our present pandemic except this: this whole topic of Pt. Roberts came up because of the wonky Detroit/Windsor border, and how different Ontario and Michigan are in handling things. I’ll once again go on the record to state my appreciation for our local neighbours to the south. We, here, have a lot more in common with our American counterparts than they do over in Ontario, something that will become more and more relevant as things open up. B.C. and Washington are in agreement on most things, and on the same page about how phased re-openings should look. Works for me. And them.

 

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Day 47 – May 2, 2020

The first Saturday in May… The Most Exciting Two Minutes in Sport… The Run for the Roses… even if you know nothing whatsoever about horse racing, you’ve heard of it. And if you’ve ever been flipping channels on some random first Saturday in May and stumbled upon it on NBC, perhaps you stopped and took it all in. The Kentucky Derby — up to 20 horses, all of them among the best 3-year-olds in the world.

Since 1875, every single year… through two world wars, through the great depression… without interruption… until today.

The pomp, the pageantry, the intrigue, the expectations, the finely-tailored suits, the elegant dresses, the big fancy hats, the mint juleps, the magnificent horses, the colourful jockeys, the call to the post, the singing of “My Own Kentucky Home”, the post parade and… of course… the race itself. For the first time since… ever… Churchill Downs is empty today. Louisville, Kentucky, home of the derby (and Muhammad Ali and KFC) is a relative ghost town. All of it postponed until the first Saturday… in September.

NBC, who has held the broadcasting rights to the race since 2001 and who blocked-off the usual 3 hours of coverage, managed to fill it with some excellent content… jumping between past and present day. The only word to describe the opening shots… haunting. The show opened to several pans of Churchill Downs, completely empty. Not a soul in sight. If you’d told me 6 months ago that that’s what we’d be looking at, I’m not sure I could’ve come up with a scenario to explain it, short of World War III — but even then, the previous two didn’t stop it.

There were lots of present-day isolated interviews, a re-run of the 2015 Kentucky Derby, and all of the storylines leading up to its winner (and eventual Triple Crown winner) American Pharoah. And then, the coolest part of it, especially being a tech-guy… they ran a simulated race with the best 13 of the historical winners — all 13 triple-crown winners battling each other. Their lifetime past-performances, meticulously and professionally put together by the folks at The Daily Racing Form, thrown into a simulation and rendered beautifully. I must admit, it was exciting to watch.

Secretariat won this virtual race, really to nobody’s surprise. He was voted “Horse of the Century” for a reason and, again — if you know nothing about horse racing, at least go to YouTube and pull up his Belmont Stakes win in 1973 — that’s all you need to see.

Secretariat was the betting favourite in all but one race he ever ran, and he was the betting favourite today. And… interesting stat, if you look at any racetrack in the world, from any period of time… the rate at which favourites win is remarkably consistent… between 32% and
36%.

An interesting thing about that… odds are not set by a bookie; they’re set by you and me. These days, odds in racing fluctuate as people bet on different horses, and so the horse on which most money is bet… is the favourite. That means, roughly one third of the time, the crowd consensus is right. Which means the majority of the time, like 2 out of 3 times, everyone is wrong. Not totally wrong, because, after all, it’s a horse race, and anything can happen.

Which really summarizes where we all are today. Nobody is at Churchill Downs sipping mint juleps (the provider of mint to the track is stuck with two tons of it). Nobody is anywhere, really… but we’re slowly emerging. So let’s pretend we’re all racehorses, all of us with our individual styles, all of us trying to win. Some of us like to sprint to the front and hope we hang on. Some of us like to sit mid-pack and make a late move. Some of us like to sit far back, let everyone else get tired, and then take a huge run at the end.

There are a few issues that can arise. Like if you are the type that likes to run out in front of everyone, but you had a bad start and after a few steps, everyone is ahead of you. Or you like to come from way behind, but nobody is running that fast and nobody is getting tired enough for you to have a chance to make up ground. Or you’re sitting happily in the middle of the pack, but unfortunately can’t find any room to make a move when it’s time because you’re blocked on all sides, by the rail or other horses. It was a great plan… but now it’s time to course-correct.

Some of us want to sprint back to work, or at least want others to do so. Some of us want to hang back until we feel we’re comfortable making a move. Some of us will just go with the pack and see where it takes us. And some of us, like two thirds of us, if you stick to this metaphor… will probably wind up going about things differently than we’d planned. And, of course, this is a humungous racetrack that’s thousands of miles all around, with 7 billion horses and staggered starts and a lot of conflicting bets and misaligned interests… so yes, the metaphor falls apart, but the general idea of it is the same… we’re all running in the same direction trying to reach a common goal. The biggest difference is that this race can have lots of winners, not just one… and the strategy that we run with (or is imposed upon us) can make a huge difference. It will make a big difference — all the difference.

Let’s all run an intelligent race, and get to that finish line safely.

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Day 43 – April 28, 2020

Our local numbers shot up a bit today, but it’s a lot less concerning that in might have been a month ago, because we know exactly where and why this is happening… almost entirely due to known clusters playing themselves out — and play themselves out they do… some clusters have vanished, some care homes are down to zero and, for the most part, we have a really good handle on things. Things are on their way to re-opening.

Let’s also talk about some different numbers today, and what they imply.

In general, people talk about the stock market being up or down. Also, in general, it’s well understood that it’s good when the market is up, and and bad when it’s down. How does that apply to what’s going on these days?

First of all, let’s quickly define what we mean by “the market”. Everyone has heard of “The Dow”, and how it goes up and down.

The Dow (which refers to the Dow Jones Industrial Average — which is important to note, because there are other “less famous” Dow Jones averages) is an index that tracks, in real-time, the stock prices of a variety of big American companies, including Apple, McDonald's, Exxon, Boeing, Pfizer, Nike, Visa,, Walmart and Coca-Cola. That’s a little cross-section of the bigger mix… a variety of big industry. There are 30 companies that comprise the index, and you have heard of all of them. They are industry leaders, and how they’re doing is a reflection on the economy as a whole, at any given moment. On some days, when things are good and everything is way up, and the Dow will reflect that. Or the opposite, of course.

Today is a good day to use as an example, because it’s a mixed bag. Technology stocks (Microsoft, Apple, Google, Facebook) are all down. Financials (JP Morgan, Bank of America, Morgan Stanley, American Express) are all up. Consumer retail shares are a mix (Walmart, Proctor & Gamble are up, Amazon is down). Telecomm is also mixed bag (AT&T is up, T-Mobile is down, Verizon is flat).

Average it all out today, and the Dow is up… a little bit. There are other indexes to look at; the S&P 500 is the next most-commonly known, and it has a broader inclusion of the top 500 listed companies. It’s perhaps the best representation of the market as a whole. It’s also up a little today. Its little cousin, the S&P 100, which lists an arbitrary sample of those 500, is slightly down today.

At any given moment, what defines the price of an individual stock? It’s the equilibrium point where at that exact point in time, someone thinks buying those shares at that price is a good idea… while someone else thinks it’s the right time and price to sell. And these days, that someone is just as likely to be a big, intelligent computer.

Tens of thousands of shares are being traded every second, so when things get quiet (from a broad market price point-of-view), it’s an interesting oasis of calm before the next storm. Like, briefly, for a moment, everyone knows where things are at. Or, think they do…

Imagine you’ve been sitting on a little seesaw in the park, quietly enjoying smooth ups and downs with your friend. Suddenly, instantly, the seesaw grows to 20 metres long… and your friend is replaced by some gigantic bully that seizes his end of the seesaw and starts slamming it up and down, as hard as he can. You hold on for dear life, understanding that jumping off may hurt you more than just hanging on… and you just hope this giant jerk will eventually tire and go away, hopefully leaving you gently on the ground. This is what it’s felt like to be an investor these days.

The all-time high for the Dow was recent… before things came crashing down. On Feb 12th, the Dow closed at 29,551. From there began a bumpy ride that saw it lose 5,000 points over the next couple of weeks, before bouncing back up a bit. Then, in early March, all hell broke loose, and the wild swings of thousand-point gains and losses began, bottoming out at the lowest of lows, hitting 18,214 on March 23rd. And from there, it shot-up to 22,500. It’s presently sitting at 24,100… still well-off the high, but also significantly higher than that bottom. A 20% “off the high” is still alarmingly awful in such a short time, but it’s twice as good as the 40% bottom from a month ago.

Many people are saying it shouldn’t have dropped that far. Many are saying it should have dropped a lot further, and still could. Many are saying there’s no reason it should have recovered this much already. As per above, for everyone who thinks it should be higher, someone else thinks it should be lower. Those two people are presently buying/selling to/from each other, and that’s why it’s exactly where it’s at.

What caused these drastic moves? Unexpected news, rumours, fear… and, of course, real-world disclosures regarding the long-term effects of shutting down significant parts of the economy. And everyone absorbing that information, independently interpreting it and acting accordingly.

When things move that quickly, it rarely has anything to do with fundamentals. Nobody is looking at price:earnings ratios or dividend streams… more like trying to figure out market sentiment and just riding it out till things settle down.

At some point, when it’s fallen that far, a bounce is not just expected, but possibly predicted. The technical traders — those who care nothing about underlying companies but just analyze the numbers themselves… they love to pick resistance points… and identify trends in the market by when prices bounce off a price, or power through it. One of the most famous ones is based on the Golden Ratio — a relationship found all over nature. Flowers, pine cones, sea shells, dolphins, penguins… all have proportions and other fundamental constructs based on it. The magic numbers there are 61.8% and its converse, 38.2%… and whenever a market tanks, the first thing to look for is a “bounce off the 618” — which is exactly what happened to the Dow in my example above. Which further leads me to accurately assume that really, nobody knows what’s going on fundamentally, so when trying to figure out when to buy back in, “let’s just go with that”. When the Dow hit that 618 retracement, a lot of buying stepping in.

There is another index… it’s called the VIX… and if you Google VIX, you can instantly pull up a chart of it and how it looks. The VIX measures volatility, ie just how wildly things are swinging. The bigger the number, the wilder the ride.

The VIX never broke 20 in all of 2019… like you and your friend on the seesaw, quiet ups and downs. When the insanity began last month, that VIX shot up and broke 80 at one point, and has consistently been over 50 most of March. It’s recently started coming down, which is optimistically implying that things will settle down, at least to the point where maybe there’s some idea of what’s really going on. Call it cautious optimism as places start opening up and life shows some promise of taking its first steps towards normality.

And that’s market sentiment in a nutshell — nobody knows. Especially these days. Even in the best of the quietest times, there are always people on both sides of the seesaw. But the level of “unknown” these days is unprecedented… but I will tell you this, with certainty. The market will be hitting new highs… when? I don’t know. I will say September of 2022. But it could also be a lot sooner than that. Or, it could be a lot later. See what I mean?

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