A Shrink’s Financial Origin Story

Inspired by an amazing post by The Accumulator from December 2020, Indeedably has challenged finance bloggers to pen their financial origin, and the course that led them to blogging about finance (mostly FIRE if we’re honest) (1, 2). You can find the other contributors at his latest venture, the excellent Sovereign Quest (2).

The mix of people’s experiences seems to be split into different camps – exemplified by The Accumulator and The Investor. Some bloggers ended up here because they’re wired to save, they always have, and it feels natural (e.g. Dr Fire, TI) (3, 4). Some have experienced the full-fat lifestyle and found it wanting (e.g. FatBritAbroad, Saving Ninja) (5, 6). Money is not the route to fulfillment. Others have learnt from personal or family experience, bumping against the limits of financial constraint and vowing never again (e.g. Weenie, Cashflow Cop) (7, 8). Or a combination of the above.

My story is possibly a combination of the latter two, but I’ll let the reader decide. I suspect it is certainly different.

Personal motivators

I was brought up in an averagely wealthy family, in an expensive part of the UK. Neither of my parents went to university; one a teacher, the other a tradesperson. I have vague memories of the impacts of economic recessions in my childhood, but my parents never let it effect us. Money was spent when there was some, and the belt tightened when there wasn’t; e.g. holidays camping in Cornwall one year, then a villa in Tuscany the next. Both were enjoyable to me as a child, and I knew no different. My parents have lived fairly financially uneventful lives. They never had a desire to ‘keep up with the Joneses’, but we always had good quality stuff, usually second hand.

When a grandparent died while I was in my teens, my parents used the inheritance from the resultant house sale to pull me out of the very poor local comprehensive, and put me through private school. The cost of this was not hidden, and my parents framed it as an investment. I was not as fish-out-of-water as I could have been, for reasons soon explained. I progressed academically, and went off to study medicine.

Throughout my childhood I was taught the value of money. This went from 50p pocket money on sweets in the village shop, to paper rounds, to pub work in my later teens. My parents fell in that awkward bracket where you don’t receive a student bursary, and the student’s living costs are expected to be supplemented by the parents. Mine didn’t, so I worked to pay my way. I also partied hard (medic, obvs), so had to always keep a rough budget and worked in cash. Despite the budget, when I graduated I had around £2k in a student overdraft and £2k in credit card debt. I paid it off sharpish, and then wondered where to go next with my money. So far so normal…

Family motivators

My family is not wealthy. My extended family is not wealthy. My ancestors were eye-wateringly wealthy. Family crest, motto, estates… the works. My parents are the first in many generations in those family lines not to go to university. One of my grandparents (from the wealthiest ancestral line) used to talk about what they would get the servants for Christmas, and hunting over the estates. Two hundred years ago, on both my mother’s and my father’s sides, my family would have been in the Times Rich List of the day. One side through inherited very old money. The other through banking and investing during the industrial revolution.

It’s now all gone.

My parents’ cousins were the last ones with inherited wealth, the male heirs holding the last farms. Now sold to pay for their retirement.

Those parts of the family didn’t work. The family had never worked. Not in generations. The estates provided for the lavish lifestyle.

When death dues came knocking a few fields were sold off. Then the Caravaggio. When the bills for the 70 room manor got too high they downsized, buying a few farms, one for each offspring. My great-uncle sold off the last of the London estates in the 1960s to pay farming bills.

Multiply this down the generations and there’s nothing left to live off, and no work ethic to acquire more.

Our family get-togethers would involve reminiscing on faded glory. I was brought up on an odd diet of old money opinion; the nouveau riche were to be looked down upon, anyone who needed to flaunt wealth had no class, quality was everything. There was a reason we didn’t keep up with the Joneses. That was for the proletariat.

It cast long shadows on Joe Bloggs arriving at private school in daddy’s Porsche, then skiving the day off to smoke and shag behind the bikesheds. Earning loads of dosh, flashing it about, building a nest egg, multigenerational wealth plans, it all didn’t matter if your kids or grandkids frittered it away. Common sense and financial literacy mattered more than millions in the bank.

I grew up very conscious of all that had led to where we were. As I started earning I set goals to not drain from the family coffers, but to stand financially independent. The wealth of past generations may be gone, but I could acquire more.

And maybe, one day, I might buy back the family silver.

The Shrink

Other posts (also collated at Sovereign Quest):

References/ Links:

  1. https://monevator.com/financial-origin-story/
  2. https://sovereignquest.com/
  3. https://drfire.co.uk/wednesday-reads-financial-origin-story/
  4. https://monevator.com/financial-origin-story/#comment-1232471
  5. https://sovereignquest.com/fatbritabroad-the-financial-origin-story
  6. https://www.1500days.com/guest-post-fi-by-any-means-necessary/
  7. http://quietlysaving.co.uk/2014/04/17/intro/
  8. https://cashflowcop.com/financial-origin/
  9. https://indeedably.com/origin/
  10. https://medfiblog.wordpress.com/2021/02/16/evolution/
  11. https://fireandwide.com/playing-the-cards/
  12. https://centbycent.co.uk/financial-origin-story
  13. https://fireplant.net/origins/
  14. https://mortgagefreebythesea.com/a-life-less-ordinary/
  15. https://achatwithkat.com/financial-origins-always-a-saver-new-to-investing/
  16. https://myquietfi.com/my-money-story-part-i-a-prologue-to-the-preamble/

The Financial Dashboard – November 2020

The goals for November were:

  • Fix the bits on the cars I’ve already bought parts for
  • Sell five things
  • Read a book thee evenings a week
  • Cut down on takeaway spend

Checking the assets and liabilities:

These are taken, as always, from my Beast Budget spreadsheet. A bit of ship steadying after the wobbles since the change of employer. My salary appears to have stabilised, and most of our home improvements are now done and paid for (or on a 0% credit card). I managed a 30% savings rate, with a 2.47% increase in my net worth. My previously smooth curve on my net worth graph has had a jagged section, but I’m back to all time highs. The usual cash regular savers were topped up, although my 3% regular saver with the Monmouthshire is due to end next month, and new money in the Freetrade S&S ISA went to increase previous holdings.

If you fancy a free share, sign up to Freetrade with this link (I also get one).


Goal passed: Fix the bits on the cars I’ve already bought parts for

Success, I actually got round to doing these things in time for the MOT. The old daily will continue to soldier on, as it flew through with only a couple of minor points, and I’ve worked out I’ve done 1,500 miles in the six months since the job change. I’m rewarding it by ordering yet more parts (which hopefully won’t sit in the garage for months). Next goal is to get the garage cleared for the project car to return to hibernation.

Goal failed: Sell five things

I’m giving up on this for the time being, as all I’m doing at the moment is monthly dump runs.

Goal passed: Read a book thee evenings a week

I’ve been reading Dan Jones’ The Plantagenets, which is a bit of a beast and not my usual fare; I don’t generally read non-fiction unless it’s for a purpose. It’s interesting stuff, and making the time in the evenings has been relaxing. I want to keep this up, so I’m going to roll this goal over.

Goal failed(ish): Cut down on takeaway spend

We got into a bad habit in October of ordering takeaway every time we saw friends. Prior to the event we would usually go out for food once a week with various people. With that off the table we’re using takeaway instead, and actually I should just make the food. In September we spent about £180 on takeaway(!), and this has came down a bit to £130 for October, but it’s still superfluous spending, and the further £80 we spent in November is too much.


  • Groceries – Budget £200, spent £218.11, last month £216.97
  • Entertainment – Budget £100, spent £74.50, last month £65 
  • Transport – Budget £250, spent £470.33, last month £129.54 – MOT time!
  • Holiday – £150, spent £0, last month £17.63
  • Personal – £100/ £2108.46/ £280.50
  • Loans/ Credit – £50/ £98/ £43.70
  • Misc – £50/ £442.02/ £705.75 – The sooner these end the better
  • Fees – £300 /£131.98/ £629.75

In the garden:

Just ticking over now. Planning to dig over the raised beds and add compost over the Christmas break.

Goals for next month:

  • Clear the garage and store the project car
  • Read a book three evenings a week
  • Cut down on takeaway spend

Happy December everyone!

The Shrink

Full English Accompaniment – Embracing change

I am increasingly frustrated by state and institutional approaches to long-term planning. Working in the NHS means I’ve long known the government takes a quick fix strategy, rather than actually calculating the most effective long-term solution. I naively assumed that this would not be the case for industry, or industrial planning. Proper industrial & financial planning has worked for so many countries, surely we would look at five-ten year plans in the UK. I was wrong, and it makes me sad.

What brought this to the forefront of my thinking? Government announcements this week about strategies to help with housing. Since the 1950s there has been low levels of housebuilding in the UK, and much of the UKs property market is underutilised. What is the Governments strategy? Fanfare-laden ‘Generation Buy’, a tagline for a plan to remove the financial risk restrictions imposed after the 2008 housing bust-up (1). 95% mortgages here we come. BoJo told the Telegraph he wanted to “create a “Generation Buy” of young people enabled to engage in the world of capitalism by investing in their own home” (1). I mean the only reason they can’t invest in their own home at the moment is the disequilibrium of house price/ earnings, but much easier to create further debt and financial risk than either a) increase earnings or b) decrease house prices. Plus the tory bedrock are satisfied as their house prices continue to increase after the COVID lockdown uptick (2).

All the while the world burns. Literally in some places. You’d be forgiven for missing the massive toxic waste spill that’s occurred in Kamchatka this month (3). Huge swathes of seabed sterilised. Only coming to light after surfers come ashore blind due to chemical burns. That doesn’t matter though. Much more important things going on that deserve column space, like mineral firms potentially becoming pawns in geopolitical battles (4).

Thankfully a few people pay attention to natures warning signs. Crusty suits and stuffy politicians may be avoidant of new ideas, but the market isn’t. Plenty of investors and companies, including among the FI community, are putting funds into change. DIY Investor UK is a great example, investing in a fossil free portfolio that follows his convictions (5). Gentleman’s Family Finances documents his experiences with Abundance, a platform that enables you to invest in bond/loan-type products for sustainable projects (6, 7). Both Abundance and rival Clim8invest are currently raising money through Seedrs/CrowdCube (7, 8). Where the is interest, there is a market.

I am left with a speck of hope. People will vote with their feet, and if enough people invest or spend sustainably then progress will follow the money, not Governmental plans. Change will happen.

Have a great week,

The Shrink

N.B. This is likely to be the last Full English for some time, for NHS/ personal reasons. The UK FIRE Blog RSS tracker will remain here for your weekly fix of posts: UK FIRE Blog Feed


Opinion/ Comment/ Blogs:


  1. https://www.independent.co.uk/news/uk/politics/boris-johnson-generation-buy-mortgage-deposits-b754599.html
  2. https://www.theguardian.com/business/2020/oct/07/uk-mortgage-approvals-at-12-year-high-as-house-prices-keep-rising
  3. https://edition.cnn.com/2020/10/07/asia/russia-kamchatka-toxic-marine-life-death-intl/index.html
  4. https://www.telegraph.co.uk/business/2020/10/04/us-invests-british-miner-fight-chinese-control-rare-metals/
  5. http://diyinvestoruk.blogspot.com/2020/10/fossil-free-portfolio-update.html
  6. https://gentlemansfamilyfinances.wordpress.com/2020/10/05/literally-investing-in-abundance/
  7. https://www.abundanceinvestment.com/
  8. ww.telegraph.co.uk/business/2020/10/04/us-invests-british-miner-fight-chinese-control-rare-metals/
  9. https://www.ons.gov.uk/economy/grossdomesticproductgdp/timeseries/dgd8/ukea
  10. https://www.thisismoney.co.uk/money/saving/article-8786339/Rate-cuts-come-fast-brutal-NS-blow.html%E2%80%A8
  11. https://www.theguardian.com/business/2020/sep/27/bank-of-england-rate-setter-backs-negative-interest-rates
  12. https://www.independent.co.uk/arts-entertainment/films/news/cineworld-close-cinemas-after-no-time-die-delayed-b772792.html
  13. https://www.fca.org.uk/news/press-releases/fca-bans-sale-crypto-derivatives-retail-consumers
  14. https://www.telegraph.co.uk/money/money-makeover/money-makeover-33-nine-buy-to-lets-can-retire-40/
  15. https://www.bbc.co.uk/news/business-54370026
  16. https://www.bbc.co.uk/news/newsbeat-54432739
  17. https://finance.yahoo.com/news/achieve-financial-independence-170047857.html
  18. https://earlyretirementinuk.blogspot.com/2020/10/end-of-month-report-september-2020.html
  19. https://sparklebeeblog.wordpress.com/2020/10/01/monthly-update-sep-2020/
  20. http://quietlysaving.co.uk/2020/10/03/september-2020-plus-other-updates-2/
  21. https://firelifestyle.co.uk/2020/10/03/financial-update-19-summer-is-over-october/
  22. https://playingwithfire.uk/september-2020-big-spending-alert/
  23. https://awaytoless.com/monthly-spending-september-2020/
  24. https://www.onemillionjourney.com/savings-september-2020/
  25. https://firevlondon.com/2020/10/04/sep-2020-update-on-a-zero-month-and-on-q3/
  26. https://pathtolife2.com/2020/10/05/financial-independence-update-september-2020/
  27. https://sassenachsaving.home.blog/2020/10/05/september-net-worth-and-goals-update/
  28. https://www.moneymage.net/2020-september-savings-report/
  29. https://www.thefrugalcottage.com/dividend-income-september-2020/
  30. https://thesavingninja.com/savings-report-27/
  31. https://adotium.co.uk/2020/10/03/autumn-2020-report/
  32. https://moneygrower.co.uk/third-quarter-dividend-income-2020/
  33. https://obviousinvestor.com/p2p-lending-portfolio-update-september-1st-2020/
  34. https://southwalesfi.co.uk/2020/10/09/fees-and-fire/
  35. https://averagemoneymanagement.wordpress.com/2020/10/09/cost-vs-value/
  36. https://www.itinvestor.co.uk/2020/10/10-years-of-fundsmith-equity/
  37. https://bankeronfire.com/office-puppet-show
  38. https://indeedably.com/millionaire/
  39. https://moneybulldog.co.uk/do-you-really-need-pet-insurance/
  40. https://littlemissfire.com/how-to-get-paid-to-walk/
  41. https://lifeafterthedailygrind.com/lifestyle-inflation-how-luxuries-become-necessities/
  42. https://sassenachsaving.home.blog/2020/10/11/the-true-cost-of-having-children/
  43. http://eaglesfeartoperch.blogspot.com/2020/09/conservatory-design-build-part-3.html
  44. https://www.ukvalueinvestor.com/2020/10/best-and-worst-performing-stocks-through-the-pandemic.html/
  45. https://simplelivingsomerset.wordpress.com/2020/10/09/padawan-recency/
  46. http://fiukmoney.co.uk/21-year-old-net-worth-and-fire-plan-update-2/
  47. https://diseasecalleddebt.com/what-are-the-financial-concerns-of-relocating-for-love/
  48. https://gentlemansfamilyfinances.wordpress.com/2020/10/02/month-end-september-2020/
  49. https://gentlemansfamilyfinances.wordpress.com/2020/10/07/home-improvement/
  50. https://gentlemansfamilyfinances.wordpress.com/2020/10/09/will-covid-affect-your-future-spending-patterns/
  51. http://diyinvestoruk.blogspot.com/2020/10/ocado-portfolio-addition.html
  52. http://diyinvestoruk.blogspot.com/2020/09/ceres-power-full-year-results.html
  53. http://diyinvestoruk.blogspot.com/2020/09/green-homes-grant.html
  54. https://asimplelifewithsam.com/2020/10/01/your-future-self/
  55. https://monevator.com/the-slow-and-steady-passive-portfolio-update-q3-2020/
  56. https://monevator.com/low-cost-index-trackers/
  57. https://monevator.com/are-you-ready-to-spend-all-your-money/

The Full English Accompaniment – Negative interest rates

Life’s turning into a real tough place to earn a return. Lots of talk from the BoE over the last couple of weeks about the potential for negative interest rates in the UK (1, 2). I’m not fully sold on negative interest rates. Japan has been trying it for several years with minimal effect (3). Feels slightly like a last roll of the dice from desperate men. This video from The Plain Bagel has a good explanation of how and why they’re supposed to work (4):

Couple that with NS&I, the last bastion of inflation-beating/equalling interest rates on savings announcing a cut to it’s interest rates, and things aren’t so rosy (5). Premium bond rates are also getting a haircut (6). Can’t really blame NS&I. They were tasked by the government with raising money through national savings. They were so wildly successful their IT systems have failed to keep up (7, 8).

So savings interest is getting chopped, and the stock market is looking bubbly. Speculation and individual stock manias appear to be driving at least a proportion of portfolio returns (9). The sustainability of the current run is debatable. Taken together I have concerns about the viability of my FI plan. There was an interesting article in the Telegraph this week, discussing whether the 4% rule for pensions will stack up in the era of low interest rates and volatile returns (10). Plenty of FI-ers plan using the 4% rule, based upon those ‘long-run averages’, to return necessary FI goal numbers. If we’re heading into a further decade of 1% returns on bonds/ savings, people will have to take more ‘risk’, diversify into property or equities to try and maintain their required 4%. Will house price increases or BTL supply those returns, or will it all come down to bull markets? The future is looking murky, and we continue to live in interesting times.

Have a great week,

The Shrink

P.S. I appear to be particularly miserable/ morbid/ grumpy today, so sorry about that.


Blogs/ Opinions:


  1. https://www.theguardian.com/business/2020/sep/17/bank-of-england-keeps-interest-rates-at-01-but-warns-on-economic-outlook
  2. https://www.bbc.co.uk/news/business-54314971
  3. https://www.investopedia.com/articles/markets/080716/why-negative-interest-rates-are-still-not-working-japan.asp
  4. https://youtu.be/pX3_3NMZa0k
  5. https://www.theguardian.com/money/2020/sep/21/nsi-savings-rates-premium-bonds-prizes-direct-saver-investment-account-isas
  6. https://www.bbc.co.uk/news/business-54232018
  7. https://www.thisismoney.co.uk/money/saving/article-8775437/NS-plunges-meltdown-Delays-rates-tumble.html
  8. https://www.thetimes.co.uk/article/ns-amp-i-says-sorry-for-poor-customer-service-as-it-slashes-rates-2bmk7pvsl
  9. https://seekingalpha.com/article/4375276-macroview-newton-physics-and-market-bubble
  10. https://www.thetimes.co.uk/article/how-low-interest-rates-killed-magic-4-retirement-rule-vbbvvdt3c
  11. https://www.theguardian.com/us-news/2020/sep/20/leak-reveals-2tn-of-possibly-corrupt-us-financial-activity
  12. https://www.thisismoney.co.uk/money/markets/article-8750989/Nvidia-hits-bid-block-deal-tech-giant-Arm.html
  13. http://astrobiology.com/2020/09/phosphine-detected-in-the-atmosphere-of-venus—an-indicator-of-possible-life.html
  14. https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0237839
  15. https://www.airbnb.co.uk/rooms/44999445?_set_bev_on_new_domain=1600083186_IvH1VwA96IkDx8UK&source_impression_id=p3_1600083186_IFtPoKvH1zXUopRm
  16. https://www.winkworth.co.uk/properties/sales/goldhawk-road-shepherds-bush-w12/SHE121014
  17. https://www.rightmove.co.uk/property-for-sale/property-83955202.html
  18. http://quietlysaving.co.uk/2020/09/15/milestone-reached/
  19. https://www.firemusings.org/updated-cost-of-coffee-cake-cookies/
  20. https://pathtolife2.com/2020/09/17/financial-independence-update-august-2020/
  21. https://southwalesfi.co.uk/2020/09/18/why-dividend-stocks-arent-as-good-as-they-sound/
  22. https://moneygrower.co.uk/10000-in-cumulative-dividend-income/
  23. https://asimplelifewithsam.com/2020/09/18/ideas-for-meal-planning/
  24. https://www.moneymage.net/6-reasons-to-batch-cook/
  25. https://www.muchmorewithless.co.uk/ration-challenge-meal-plan/
  26. https://playingwithfire.uk/living-and-working-abroad-can-you-get-to-fire-sooner/
  27. https://www.onemillionjourney.com/millionaire-interview-series-6-educatorfi/
  28. http://thefijourney.co.uk/wp/2020/09/20/project-2235-september-2020-update-a-new-normal/
  29. https://indeedably.com/explain-money-to-me/
  30. https://sassenachsaving.home.blog/2020/09/26/musings-on-turning-fifty/
  31. http://diyinvestoruk.blogspot.com/2020/09/plug-power-portfolio-addition.html
  32. https://averagemoneymanagement.wordpress.com/2020/09/25/blocking-out-the-noise/
  33. https://www.foxymonkey.com/beat-inflation/
  34. https://drfire.co.uk/the-long-tail/
  35. https://bankeronfire.com/build-wealth-with-the-80-20-rule
  36. https://gentlemansfamilyfinances.wordpress.com/2020/09/19/trading-up/
  37. https://medfiblog.wordpress.com/2020/09/24/flight-distance-a-p2p-story/
  38. https://www.itinvestor.co.uk/2020/09/worldwide-healthcare-trust/
  39. https://www.mouthymoney.co.uk/beware-dodgy-sellers-targeting-wannabe-influencers-to-peddle-rubbish-goods-online/
  40. https://sparklebeeblog.wordpress.com/2020/09/23/september-activities/
  41. https://monevator.com/should-you-use-cash-to-bridge-the-gap-between-your-isas-and-your-pension/
  42. https://monevator.com/weekend-reading-daddy-what-did-you-do-in-the-great-pandemic/

The Full English Accompaniment – Spectres of our past

Just when you thought it was safe to peak out from under the covers, 2020 brings back that myopic decision to smash you in the face. A tetherball hit with venom and fury smacking the back of your head.

Image Source: The Thick of It

No, it’s not the impending second lockdown due to people getting too boozed up and handsy…

Brexit’s back in the news baby (1, 2).

Let’s distract the news cycle from that second wave and The Thick of It level of government with another joyous occasion. Spinning how the government has signed deals it’s not read and agreed to things it now wants to renege on. I mean mother beeb can put out good news articles about future trade deals (3), but it doesn’t detract from the fact BoJo& Co are looking at violating international law and breaking up the union. It just distracts.

Image source: The Thick of It

I’ve more or less tried to keep Brexit off these pages. I never thought it was a good idea, but there were glimmers of hope amongst the dung shovelled by greedy media-hungry political dilettante’s acting as the face of out. Maybe it could have been a grand vision. I had hoped we might see a Commonwealth trading block, bound together by shared history, serving to both compensate for our historic violence and crimes, and build prosperity for the future. Instead we’ve got this shower-of-shit government.

So I’ve started re-stocking the larder with long dated food. We’re re-tightening the proverbial household waistband; should MrsShrink lose her job. We’re parking cash for the rainy day and not sinking it into the vagaries of the market; expanding our emergency fund. 2020 has been a tasty warm-up for 2021. It’s going to be a long ride.

Image source: The Thick of It

Have a great week,

The Shrink

News/ Blogs/ Opinions:


  1. https://www.bbc.co.uk/news/world-europe-54099257
  2. https://www.bbc.co.uk/news/business-54093220
  3. https://www.bbc.co.uk/news/business-54116606
  4. https://www.cnbc.com/2020/09/10/stock-market-futures-open-to-close-news.html
  5. https://www.cnbc.com/2020/09/06/tesla-could-be-the-most-dangerous-stock-on-wall-street-investment-researcher-says.html
  6. https://www.reddit.com/gallery/ioyq50
  7. https://www.bloomberg.com/opinion/articles/2020-09-06/big-tech-bubble-could-be-rivaled-by-china-s-food-and-beverage-sector
  8. https://www.joe.co.uk/comedy/someone-has-used-freddos-to-prove-that-minimum-wage-in-the-uk-should-be-18-hr-248521
  9. https://www.onemillionjourney.com/portfolio-update-21-august-2020-105404e/
  10. https://zerotofreedom.org/my-portfolio-review-september-2020/
  11. https://firevlondon.com/2020/09/06/august-2020-eat-tech-to-help-out-your-returns/
  12. https://www.thefrugalcottage.com/dividend-income-august-2020/
  13. https://www.moneymage.net/2020-august-savings-report/
  14. https://firelifestyle.co.uk/2020/09/10/financial-update-18-is-it-september-already/
  15. https://sassenachsaving.home.blog/2020/09/12/august-2020-net-worth/
  16. https://www.ukvalueinvestor.com/2020/09/selling-xaar.html/
  17. https://thehumblepenny.com/how-to-start-a-business
  18. https://www.itinvestor.co.uk/2020/09/china-investment-trusts-come-of-age/
  19. https://indeedably.com/business/
  20. https://bankeronfire.com/higher-taxes
  21. https://medfiblog.wordpress.com/2020/09/11/exam-hustling/
  22. https://gettingminted.com/dividend-cut/
  23. http://www.cantswingacat.co.uk/2020/09/11/low-interest-premium-bonds/
  24. https://theescapeartist.me/2020/09/12/when-you-want-to-help-people-you-tell-them-the-truth/
  25. https://gentlemansfamilyfinances.wordpress.com/2020/09/11/tesla-bubble-bubble-bubble-pop/
  26. https://gentlemansfamilyfinances.wordpress.com/2020/09/09/from-dinky-to-sitcom/
  27. http://diyinvestoruk.blogspot.com/2020/09/bg-positive-change-fund-update.html
  28. https://monevator.com/put-150-years-into-your-retirement-calculator-and-smoke-it/
  29. https://monevator.com/dont-wait-to-open-your-stocks-and-shares-isa/
  30. https://monevator.com/weekend-reading-what-gives/

The Full English Accompaniment – The Lost Year

We’re almost two-thirds of the way through a year that seems to have disappeared. Memorable for COVID-19, lockdown and, if you’re that way inclined, the fastest bear market and reversal on record. We’re now back where we started in February/ March. Sports, bars and shops are re-opening. US markets are reaching all time highs. Almost like those six months didn’t happen and COVID has disappeared.

It certainly didn’t feel like that working in the NHS in March & April.

I’m finding it quite challenging to reflect on the past six months. It’s been a blur of lurching from hypothetical crisis to crisis in the news, averting potential problems, while simultaneously blending mundane existence. One of the consultants I work with has managed to squeeze in cheap holidays to Venice, France, and now Ireland, completely missing all quarantines. I envy him. Most of us have gone to work, gone to a food shop in a mask, watched Netflix, switched off. I wonder if this is what the routine of dementia-inducing retirement feels like?

The media has been commenting on ‘revenge spending’ – people splurging after they’ve been forced to save by lockdown (1). Apparently it’s driving lots of new car sales (2). Why the hell is it called ‘revenge spending’. “I’m sticking it to the ‘big man’ by dropping 20 large on a new Corsa”. What a load of dung.

Personally I think these are all attempts by people to do things worth remembering. ‘Remember that time we went to Zante during lockdown’. ‘Remember when we came back from holiday on an overbooked TUI flight and everyone got COVID’. ‘Remember when we replaced our three year old car with a new car’. Mentally marking the passage of time with big events.

Others seem to be taking comfort from doing the same old thing. Going to the same places. Visiting favourite restaurants previously shut. Spending £300/month on clothes you wear once (3). Publicly grumbling on an anonymous blog. We take pleasure where we can.

From a ruminative Shrink, have a great week,


Blogs/ Opinions:


  1. https://www.telegraph.co.uk/luxury/womens-style/rise-revenge-buying-means-uk-luxury-retailers/
  2. https://www.telegraph.co.uk/business/2020/09/01/revenge-buying-drives-surge-sales-70-plate-new-cars/
  3. https://www.bbc.co.uk/programmes/m000m4bz
  4. http://www.independent.co.uk/environment/climate-crisis-ice-sheets-melting-global-warming-greenland-antarctic-a9699921.html
  5. https://www.bbc.co.uk/news/business-53995878
  6. https://www.ft.com/content/26b91aac-8c73-44cc-b8d7-1aae371ab951
  7. https://www.thisismoney.co.uk/money/markets/article-8698877/Technology-stocks-hammered-day-two-sell-off.html
  8. https://seekingalpha.com/article/4372406-u-s-stock-market-is-bubble-plain-and-simple
  9. http://www.cnbc.com/2020/09/03/markets-are-facing-a-potential-minsky-moment-collapse-strategist-says.html
  10. http://www.forbes.com/sites/investor/2020/09/03/the-crash-of-2020-into-the-end-game/
  11. https://www.ft.com/content/d8eb62ef-a1cb-4597-867b-15a79dbdcd5d
  12. https://www.ft.com/content/5d6fc188-2b9c-4df7-848e-a6c1795dc691
  13. https://www.theguardian.com/business/nils-pratley-on-finance/2020/sep/03/scottish-mortgage-wont-be-too-bothered-about-the-nasdaqs-wobble
  14. https://www.finumus.com/blog/do-not-currency-hedge-your-equity-portfolio
  15. https://earlyretirementnow.com/2020/08/31/the-half-percent-safe-withdrawal-rate/
  16. https://www.foxymonkey.com/all-weather-portfolio-uk/
  17. https://bankeronfire.com/magic-money-making-machine
  18. https://www.itinvestor.co.uk/2020/09/commodity-investment-trusts-are-all-the-rage/
  19. https://www.firemusings.org/should-we-consider-chunking-up-retirement-into-different-phases/
  20. https://southwalesfi.co.uk/2020/09/04/renting-v-buying-from-a-fire-standpoint/
  21. https://lifeafterthedailygrind.com/best-free-landlord-apps/
  22. https://sparklebeeblog.wordpress.com/2020/09/04/2020-reflections-so-far/
  23. https://theescapeartist.me/2020/09/06/the-what-did-we-learn-from-2020-chat-with-andy-hart/
  24. https://gentlemansfamilyfinances.wordpress.com/2020/09/05/all-time-record-house-prices/
  25. http://eaglesfeartoperch.blogspot.com/2020/09/conservatory-design-build-part-2.html
  26. http://diyinvestoruk.blogspot.com/2020/09/mid-wynd-trust-full-year-results.html
  27. https://indeedably.com/50-years-early/
  28. https://playingwithfire.uk/did-someone-say-coffee-could-you-save-money-with-a-sage-bambino/
  29. https://monevator.com/k-shaped-recovery/
  30. https://monevator.com/annual-isa-allowance/
  31. https://www.onemillionjourney.com/portfolio-update-21-august-2020-105404e/
  32. https://thesavingninja.com/savings-report-26-we-made-it-to-sweden/
  33. http://quietlysaving.co.uk/2020/09/04/august-2020-plus-other-updates/
  34. https://www.thefrugalcottage.com/september-aims-7/
  35. https://obviousinvestor.com/p2p-lending-portfolio-update-september-1st-2020/
  36. http://www.cantswingacat.co.uk/2020/09/02/august-income-report/
  37. https://www.earlyretirementguy.com/september-2020-networth-update/
  38. https://asimplelifewithsam.com/2020/09/05/august-review-2/
  39. https://averagemoneymanagement.wordpress.com/2020/09/05/freetrade-diary-8-august/
  40. https://awaytoless.com/monthly-spending-august-2020/
  41. https://pathtolife2.com/2020/09/05/my-fi-journey-one-year-on-how-did-i-do/

The Full English Accompaniment – Wheat from chaff

I stepped away from the blog for a few weeks. Clinical work got busier, home life got busy, and I had a short break away. In that time everything and nothing has changed.

Day-to-day life continues in a sort of limbo. Never quite knowing what you’re allowed to do or not. Constant slight thrill of risk, if you’re so inclined. Constant irritation if you’re not.

The markets are still bonkers. While tech companies run rampant, the rest of the market is stagnant. The NASDAW/ S&P500 are concentrating in a small number of very valuable companies. Tesla is doing a 5:1 stock split (1). AirBnB plans to float on the stock market, along with a host of other IPOs (2). Meanwhile high street stalwarts like WHSmith are cutting staff left, right and centre (3).  The UK has seen a GDP fall of 20% for the last quarter (4). Not unexpected given furlough etc, but how many of those jobs will come back? Furlough is coming to an end and the Gov can’t keep footing the GDP bill, even if it does foot your cheeky Nando’s bill (5). I’ve finished reading The Intelligent Investor, and Jason Zweig’s comments on the dot-com crash relating to tech IPOs ring prophetic.

Image Credit: A person on reddit (6)

Doom, doom, the end is nigh!

Always an easy call to make. This was a reckoning of our own making.

As a fellow member of the UK Finance community put it, the UK Government made a Faustian bargain, trading low unemployment numbers for zero-hours contracts and underemployment of the individual. UK productivity has been crap for years. In the last decade it’s been the worst since the industrial revolution, and it continues to fall (7, 8). Output per hour fell dramatically during the last quarter, and not just due to furlough (9). There’s been talk for the last decade of the benefits of improving productivity, but no clear routes to that goal (10).

The growth of the last decade has been bought through cheaper tech, offshoring, zero-hours contracts and credit. Zombie companies have continued to function thanks to cheap credit. MrsShrink works for one. They were told if the site shut down with COVID-19 it would not return, so they worked through and went cap in hand to investors. Now if I was one of those CEOs, and I had staff on furlough with low productivity, I would be very tempted to use the end of the furlough scheme as a way to cut the dross. The move to homeworking has shown who was really working in the office. It’s also a hell of a way for companies to cut overheads. Giants like BP are talking about slashing their real estate bill (11). I would not want to be in REITs.

Likewise, if I was an investor in one of these zombie companies I would be quite tempted to let it go to the wall. Ploughing millions into a staid institution with minimal innovation into changing markets? Sorry Debenhams, House of Fraser, WHSmith (though their airport/ hospital/ petrol station arms are doing a killing), etc.

Households have been able to buy new cars and new furniture due to cheap credit. Shares rose on Wall Street last week as the Fed said it will tolerate higher inflation (12). I’ve said before that inflation is probably the way out of the insane COVID government debt, but it’s not good for consumer credit. Higher inflation means higher interest rates. Amigo and other sub-prime lenders are sounding warnings due to the COVID payment holidays (13). Banks are setting aside massive sums to cover projected bad debt (14). The UK Government is mooting removal of the triple lock on pensions (15). Warning signs of increases in interest rates in the medium term.

So we may lose the zombie companies, the unproductive companies, and the unproductive individuals at companies. It probably won’t make much of a dent in tax receipts. The companies are unproductive, and the top 1% of UK earners account for a >1/3rd of income tax (16, 17). The death of bloated companies leaves markets for lean new ones. There’s the potential for a big boom in new industries (18). Maybe this is what the stock market is pricing in. Ultimately it feels like we’re on the precipice of a period of great financial change, after a couple of decades of stability. That change will bring opportunity, but also plenty of downsides. Exciting times.

The Shrink


Opinion/ Blogs:

There’s been too many UK finance blogposts in the past month for me to condense them all here. My RSS feed for UK finance bloggers can be found here.


  1. https://www.barrons.com/articles/tesla-stock-split-today-what-to-expect-51598620837
  2. https://www.thisismoney.co.uk/money/markets/article-8648013/Airbnb-pressing-ahead-floating-stock-market.html
  3. https://www.bbc.co.uk/news/business-53661767
  4. https://www.theguardian.com/business/2020/aug/12/uk-economy-covid-19-plunges-into-deepest-slump-in-history
  5. https://www.bbc.co.uk/news/business-53675467
  6. https://i.redd.it/zj5u6myjmnh51.gif
  7. https://www.theguardian.com/business/2020/feb/03/uk-productivity-slowdown-worst-since-industrial-revolution-study
  8. https://www.bbc.co.uk/news/business-49971853
  9. https://tradingeconomics.com/united-kingdom/productivity
  10. https://www.cityam.com/tackling-uk-productivity-crisis-could-yield-83bn-a-year-for-economy-says-pwc/
  11. https://www.theguardian.com/business/2020/aug/12/bp-mulls-radical-reduction-of-office-space-in-move-to-flexible-working
  12. https://www.theguardian.com/business/2020/aug/27/wall-street-shares-rise-after-fed-announces-soft-approach-to-inflation
  13. https://www.theguardian.com/money/2020/aug/28/lender-amigo-profits-dive-as-covid-payment-holidays-extended
  14. https://news.efinancialcareers.com/uk-en/3004265/writedowns-banks-covid-19
  15. http://www.thisismoney.co.uk/money/pensions/article-8666859/amp/Triple-lock-guarantee-state-pension-increases-curbed.html
  16. https://www.ifs.org.uk/election/2019/article/how-high-are-our-taxes-and-where-does-the-money-come-from
  17. https://www.theguardian.com/business/2019/nov/13/richest-britain-income-tax-revenues-institute-fiscal-studies
  18. https://www.cnbc.com/2020/08/12/depression-backdrop-will-spark-a-wartime-boom-market-bull-jim-paulsen.html
  19. https://www.bbc.co.uk/news/av/business-53534922/why-stock-markets-are-defying-a-shrinking-economy
  20. https://www.bloomberg.com/news/articles/2020-08-03/boe-avoids-repeat-of-2008-schism-for-now-even-as-split-widens
  21. https://www.bloomberg.com/news/articles/2020-08-06/goldman-says-time-to-think-about-a-shift-in-market-leadership
  22. https://www.cnbc.com/2020/08/05/nikolas-entire-quarterly-revenue-of-36000-was-from-solar-installation-for-the-executive-chairman.html
  23. https://www.theguardian.com/uk-news/2020/aug/12/dr-martens-repays-uk-furlough-cash-after-strong-lockdown-sales
  24. https://www.theguardian.com/technology/2020/aug/14/partys-over-airbnb-restricts-under-25s-in-uk-france-and-spain
  25. https://i.redd.it/jskjkodg3se51.png
  26. https://www.bbc.co.uk/news/business-53781515
  27. https://www.reddit.com/r/wallstreetbets/comments/i1u3rm/the_dollar_standard_and_how_the_fed_itself
  28. https://www.reddit.com/r/UKPersonalFinance/comments/i42of0/anyone_else_having_major_issues_with_premium
  29. https://www.businessinsider.com/personal-finance/obsessed-with-fire-movement-wasnt-right-for-me-2020-8?r=US&IR=T
  30. https://www.thisismoney.co.uk/money/investing/article-8651885/Baillie-Giffords-Scottish-Mortgage-Investment-Trust-soars.html
  31. http://www.scmp.com/comment/opinion/article/3099052/beware-us-china-technology-war-about-burst-tech-bubble
  32. https://www.thisismoney.co.uk/money/investing/article-8675409/Why-Buffetts-investment-philosophy-cause-celebrate.html

The Full English – The Working From Home Collapse

A big theme among the associated press/ copywriters this week has been working from home. Indeedably provided us with a fab view take on what’s going on, and what it’s like to be in That There London (as opposed to us provincial capitals) (1). When lockdown first kicked off and people moved to working from home I believed it was a flash in the pan. As a species we’re primed to dislike change, especially as we get older and higher up the ranks. It would be a few months, and then we’d all be back. But the longer this ‘new normal’ goes on, the more I think that we’re seeing a transformative change.

Neither I or MrsShrink have worked from home. It’s difficult to work from home as a Doctor. You can’t perform a physical examination. As a psychiatrist, I can’t assess the subtle interpersonal behaviours which form part of our reviews. The NHS, notoriously slow in it’s monolithic tech, won’t allow most IT solutions for security reasons. MrsShrink meanwhile, off in manufacturing, is managed by gammon-types with grey suits, grey hair and grey skin. They struggle to understand the role IT plays in their zombie company on a good day, never mind working from home. Reminds me of the Japanese IT Security Minister who had never used a computer and didn’t understand the concept of flash drives (2).

My view is therefore coloured by my experience. For most professional office jobs the story is different, and the narrative coming out of press offices says so. Google and Natwest have both told staff to stay home until next year (3, 4). Barclays are a bit more old-fashioned, but have still said a return to office will take time (5). BoJo & Co of course want everyone back in the offices, because a large proportion of our economy is structured upon those offices and the surrounding service infrastructure (6). They don’t want that to change. But people do. Commuting is miserable, and working from home means less spent on the commute and more time with family (7). For the top brass it’s an opportunity to flex/ impress with your home environment (8).

The Agrarian Revolutions, Inclosures Act and Industrial Revolution all saw massive shifts in the way people lived and worked. We’ve gone from serfdom, through shifting to villages and working on manorial lands, to living in cities/ towns working in factories/mines. The last century has seen industrial production offshored, and those productive factories replaced by service factories. Transport infrastructure has improved, but we still travel to hubs of work. Is that about to change, and if so, what’s the fallout?

For companies it offers the opportunity to lay off layers of staff and automate (9). For the worker it cuts the commute to a crawl, enables greater family time, saving cash, and geoarbitage. As an NHS worker we geoarbitaged early. I get paid the same wherever I am in the UK, so why live somewhere with a high cost of living. Now more people get that opportunity.

The fallout? House prices outside of the South East skyrocketing, as people move to lower cost of living, less polluted, less commuted areas. Commercial property? I wouldn’t touch REITs right now. If all those offices close what will the buildings become? And then there’s town and city centres. Most high streets were already hearing the grim reaper’s call. Will they transform, shorn of their officeworkers into shopping and nightlife centres. Or is this the final call? That service infrastructure left empty, sandwich artists placed on Universal Basic Income. If we’re about to see wholesale change in our working lives it’s worth thinking about what will happen to what is left behind.

Have a great week,

The Shrink


Opinion/ Blogs:


  1. https://indeedably.com/ghost-town/
  2. https://www.theguardian.com/world/2018/nov/15/japan-cyber-security-ministernever-used-computer-yoshitaka-sakurada
  3. https://www.wsj.com/articles/google-to-keep-employees-home-until-summer-2021-amid-coronavirus-pandemic-11595854201
  4. https://www.bbc.co.uk/news/business-53484767
  5. https://www.bbc.co.uk/news/business-53579428
  6. https://www.theguardian.com/business/2020/jul/31/coronavirus-companies-defy-boris-johnsons-planned-return-to-work
  7. https://www.bbc.co.uk/news/uk-53580656
  8. https://news.efinancialcareers.com/uk-en/3004187/bankers-lifestyles-pandemic
  9. https://www.cnbc.com/2020/07/29/lots-of-companies-are-saying-they-have-operating-leverage-thats-just-code-for-firing-people.html
  10. https://www.thisismoney.co.uk/money/mortgageshome/article-8560157/Now-City-watchdog-tells-banks-reject-loans-took-break.html
  11. https://www.businessinsider.com/bernie-sanders-calls-elon-musk-a-hypocrite-over-stimulus-tweet-2020-7?r=US&IR=T
  12. https://www.theguardian.com/environment/2020/jul/28/worlds-largest-nuclear-fusion-project-under-assembly-in-france
  13. https://www.bbc.co.uk/news/business-53563601
  14. https://www.telegraph.co.uk/technology/2020/07/30/monzos-losses-rise-114m-banking-app-warns-slowing-growth/
  15. https://www.forbes.com/sites/vineerbhansali/2020/07/29/what-locust-swarms-tell-us-about-robinhood-kodak-and-covid-mania-in-the-stock-market/
  16. https://www.thisismoney.co.uk/money/comment/article-8552729/Five-key-areas-capital-gains-tax-reform-impact.html
  17. http://thefirestarter.co.uk/3-months-in-thoughts-doubts-panic-perspective/
  18. https://gentlemansfamilyfinances.wordpress.com/2020/07/31/vcts-for-financial-independence-part-3-making-it-work-for-you/
  19. https://simplelivingsomerset.wordpress.com/2020/07/29/holidays-in-the-sun-are-not-a-human-right-people/
  20. http://quietlysaving.co.uk/2020/08/01/july-2020-plus-other-updates/
  21. https://firevlondon.com/2020/08/02/july-2020-shambles-and-zombies/
  22. https://moneygrower.co.uk/july-stock-purchase-a-polarised-market/
  23. https://www.onemillionjourney.com/income-expenses-savings-july-2020-1869-saved/
  24. https://earlyretirementinuk.blogspot.com/2020/08/end-of-month-report-1st-of-august.html
  25. http://www.cantswingacat.co.uk/2020/07/30/july-income-report/
  26. https://pathtolife2.com/2020/07/30/financial-independence-update-july-2020/
  27. https://averagemoneymanagement.wordpress.com/2020/07/31/freetrade-diary-7-july/
  28. http://fiukmoney.co.uk/july-20-net-worth-and-monthly-update-23-569001-36-89-fi/
  29. https://monevator.com/freetrade-how-to-build-your-portfolio/
  30. https://monevator.com/the-agony-of-alpha/
  31. http://diyinvestoruk.blogspot.com/2020/07/tesla-new-addition.html
  32. https://www.itinvestor.co.uk/2020/07/smithson-closes-in-on-2-billion/
  33. https://bankeronfire.com/not-fade-away

The Full English – Tesla doesn’t need advertising

I covered Tesla’s share price last week briefly. This week I will continue to be a fanboi, demonstrating exactly the point of my title. I’ve been idly browsing electric cars on the usual motor sites, and I’m now bombarded with adverts for the Renault Zoe, Honda electric thing (I signed up for the mailing list for that to be fair), and the VW E-Up (Yorkshire accent engaged). No Tesla adverts though. They just don’t need them.

For one, they’ve got Musk, who is a law unto himself. My considered view is that he is a maverick genius, gifted of the unique talents required to truly become a world-leader; self-belief, intelligence and funds. I think his self-belief, once confidence and always bordering on arrogance now oscillates into narcissism. He has got too high on his own supply, spent too much time reading his own hype. That does not stop him being successful.

Nor does it stop him leading a company in a disruptive direction. Which leads to hype, interest in the media, and first-mover advantage. Musk and Tesla generate their own hype by moving in ways the rest of the auto industry do not, and continuing to do so. There are parallels with Steve Jobs in the Ipod and Iphone era. There’s been a swathe of copy written this week trying to justify or make sense of this for the old guard. Arguments that Tesla is still undervalued (1), that it represents the start of a new era (2). Tesla is true capitalism at work, identification of a new disruptive direction and completely shifting the commercial conversation in that direction; to use quasi-management speak (3). People believe the hype generated. They buy the hype, in equity form and in material motors. Tesla’s profitable (4). But does that hype justify it’s inclusion in the S&P 500 and a greater valuation than Toyota. That is pure speculation and gambling.

If you fancy a shot at a free Tesla share, sign up to Freetrade with this link,

The Fire Shrink

Blogs/ Opinion:


  1. https://www.investmentweek.co.uk/news/4018198/value-remarkable-tesla-underappreciated-markets-fund-managers
  2. https://uk.reuters.com/article/us-autos-tesla-newera-insight/how-tesla-defined-a-new-era-for-the-global-auto-industry-idUKKCN24N0GB
  3. https://unherd.com/thepost/is-tesla-all-that-remains-of-real-capitalism/
  4. https://www.theguardian.com/technology/2020/jul/22/tesla-profit-shares-fourth-quarter
  5. https://www.wsj.com/articles/everyones-a-day-trader-now-11595649609
  6. https://www.bbc.co.uk/news/business-53201204
  7. https://www.theguardian.com/business/2020/jul/21/robinhood-cancels-uk-launch-of-its-investment-app
  8. https://www.cnbc.com/2020/07/24/zooms-marketing-chief-on-the-companys-rise-through-the-pandemic.html
  9. https://www.bbc.co.uk/news/business-53528653
  10. https://awealthofcommonsense.com/2020/07/generational-wealth-inequality/
  11. https://medfiblog.wordpress.com/2020/07/24/pay-rise-half-truths/
  12. http://quietlysaving.co.uk/2020/07/20/lockdown-dogs-of-the-ftse/
  13. https://firevlondon.com/2020/07/20/what-has-lockdown-done-to-my-finances/
  14. https://drfire.co.uk/lockdown-impact-on-finances/
  15. https://indeedably.com/pandemonium/
  16. http://diyinvestoruk.blogspot.com/2020/07/the-carbon-budget-introduction.html
  17. https://www.ukvalueinvestor.com/2020/07/ftse100-sp500-cape-ratio.html/
  18. https://thesavingninja.com/employee-share-scheme-which-option-to-take/
  19. https://tuppennysfireplace.com/how-to-save-money-without-a-budget/
  20. https://playingwithfire.uk/air-bnb-diaries-side-hustle-or-not/
  21. https://www.crackingretirement.com/retirement-isnt-static/
  22. https://earlyretirementinuk.blogspot.com/2020/07/life-in-times-of-cholera-just-kidding.html
  23. https://www.foxymonkey.com/jobs-vs-robots/
  24. https://moneygrower.co.uk/robinhood-cancels-uk-launch-similar-app/
  25. https://thefifox.wordpress.com/2020/07/21/how-much-money-should-you-have-in-your-savings/
  26. https://lifeafterthedailygrind.com/the-ikea-effect-why-diy-brings-happiness/
  27. https://www.itinvestor.co.uk/2020/07/debt-investment-trusts-for-the-brave-only/
  28. http://bankeronfire.com/zeroing-in-on-your-workplace-pension-returns
  29. https://www.mouthymoney.co.uk/how-my-simple-thumbprint-trick-can-stop-you-becoming-a-victim-of-identity-fraud/
  30. https://monevator.com/cash-versus-bonds/
  31. https://monevator.com/weekend-reading-just-the-links-maam-4/
  32. https://www.moneymage.net/7-thoughts-low-cost-living/
  33. https://www.finumus.com/blog/how-to-sell-a-house
  34. https://gentlemansfamilyfinances.wordpress.com/2020/07/25/more-agony-of-woodford-investors/
  35. https://gentlemansfamilyfinances.wordpress.com/2020/07/22/stamp-duty-cut-property-frenzy/
  36. https://youngmoneyblog.co.uk/here-are-5-apps-to-upgrade-your-post-lockdown-finances-spon/

The Full English Accompaniment – Uncoupled from earnings expectations

I wish I had bought into Tesla in March. So does everyone who didn’t. Well… most people. From a low of $361, it’s now up around $1,500. I seriously considered it, but stuck to my portfolio plans, and have now missed out. Meteoric doesn’t quite cover it.


Image Courtesy of Google Market Summary

So I missed out, and I’m disgruntled. Fear Of Missing Out, FOMO, has been cited as a major reason for moves in the Nasdaq over the past few months. Entitled millennial’s wanting to not miss the bandwagon with their US stimulus cheques, so the trope goes. There’s a nice piece in this week’s Wall Street Journal (1), demonstrating that FOMO ain’t a new thing. From the tulips to the South Sea Bubble, most generations will get a little FOMO. We tell ourselves we’re intelligent investors, and we won’t get caught up in this hype.

Instead, we will try to intellectualise a position. Tesla does make sense in our head, as well as our gut, because reasons. It justifies a $300 billion dollar valuation, the greatest of all automotive manufacturers, at >60 times it’s earnings, because reasons (2). It’s beating sales expectations, and expanding it’s factories (2). It’s piggy-backing a rise in Chinese EVs, following a move in China towards a predominantly electric vehicle market (3). We must be right, as (confirmation bias) Piper Sandler, a proper legit firm, reckons that Tesla is worth $2,322 (4). We can make it make sense.

Last week I mentioned the TQQQ in my news. For the uninformed, the Invesco QQQ (ticker: QQQ) is an ETF that tracks the Nasdaq 100 index (5). It’s done very well with the rise of tech, thank you very much. TQQQ is a Powershares ETF triple-leveraged QQQ, just in case your risk tolerance wasn’t sated. The QQQs and the Nasdaq are again interesting this week, as following their colossal climb, we’ve seen a short, sharp drop. The options market is looking pretty negative. Valuations have been climbing, creating larger and larger multiples on the price/earnings outlooks. As the earnings come home to roost, there’s bets that the valuations are too high (6).

So, on the one hand, FOMO and other psychological biases and influences are pushing certain stocks higher. On the other, people are betting against these biases continuing, and reality (whatever that is), asserting itself on stock market prices based on valuations.

The Gestalt Market

This is basically the core philosophy of the Efficient Market Hypothesis (7).

“…asset prices reflect all available information. A direct implication is that it is impossible to “beat the market” consistently on a risk-adjusted basis since market prices should only react to new information.” (7)

Either some of the people amongst those on the bandwagon know something the others don’t, and the out-sized pricing is justified, or they don’t, there’s no info, and market forces will re-assert themselves via a fall in price.

This theorem has plenty of criticism laid on it, by lots of big names. It doesn’t account for behavioural psychology. It doesn’t account for the various anomalies caused by small neglected stocks, or bubbles. The claims of Paul Samuelson, that the market is “micro efficient”, not “macro efficient”.

As I’ve been slogging my way through The Intelligent Investor, a comment from Benjamin Graham has laid this bare:

“Corporate accounting is often tricky; security analysis can be complicated; stock valuations are really dependable only in exceptional cases.” (8)

If corporate accounting in the ’70s, when Ben Graham wrote, was “tricky”, corporate accounting in 2020 is downright shady. My mate is effectively the CFO of a moderate SME. He’s an honest man. He’s spent the last three years tearing his greying hair out as he uncovers deeper and deeper accounting errors by his predecessor and relays them to the owner. How many companies out there are sitting on mis-carried noughts and odd write-downs? This is stuff the market cannot know.

Instead I find myself thinking of the market as the sum of all knowledge and cognitive biases. The sum of wisdom and collective financial thought. Not just knowledge, but also hunches, gambles either way, suspicions and beliefs. You can gamble for or against Tesla or TQQQ. There is likely to be someone out there doing the opposite. Given money and investment follows interest, science imitates and replicates art, we end up at the sum total of belief. We may like to intellectualise and make the company financial data (the science!) echo or challenge the news, but ultimately that is our own bias. The gestalt market doesn’t care. Your beliefs are gristle to it’s mill.

Have a great week,

The Fire Shrink

Fancy a free share? Sign up to Freetrade using this link, and we both get one.


Blogs/ Opinion:


  1. https://www.wsj.com/articles/from-1720-to-tesla-fomo-never-sleeps-11594994422
  2. https://www.theguardian.com/technology/2020/jul/18/tesla-valuation-elon-musk-profit
  3. https://www.forbes.com/sites/michaeltaylor/2020/07/16/tesla-inc-share-price-boom-might-not-be-all-it-appears-to-be/#478ac7272a28
  4. https://markets.businessinsider.com/news/stocks/tesla-stock-price-street-high-target-piper-sandler-raise-musk-2020-7-1029393184
  5. https://www.investopedia.com/ask/answers/061715/what-qqq-etf.asp
  6. https://seekingalpha.com/article/4358915-qqq-selling-may-only-begun
  7. https://en.wikipedia.org/wiki/Efficient-market_hypothesis
  8. Benjamin Graham. The Intelligent Investor (Revised Edition). 2003. Chapter 12, page 318.
  9. https://www.eurekalert.org/pub_releases/2020-07/p-epr070220.php
  10. https://www.bbc.co.uk/news/health-53392148
  11. https://www.thisismoney.co.uk/money/news/article-8535085/230bn-commercial-property-crash-Treasury-watchdog-sounds-alarm.html
  12. https://www.bbc.co.uk/news/business-53400721
  13. https://www.thisismoney.co.uk/money/pensions/article-8530101/Government-faces-17bn-bill-fix-age-discrimination-pension-blunder.html
  14. https://www.forbes.com/sites/soonyu/2020/07/14/how-one-fintech-unicorn-became-a-fashion-destination/
  15. https://www.forbes.com/sites/nathanlewis/2020/07/10/modern-monetary-theory-goes-mainstream/#5fdf246621e5
  16. https://www.theguardian.com/food/2020/jul/14/nespresso-coffee-capsule-pods-branding-clooney-nestle-recycling-environment
  17. https://southwalesfi.co.uk/2020/07/17/5-tips-to-f-i-r-e/
  18. https://igniting-fire.com/2020/07/17/why-you-need-a-raspberry-pi/
  19. https://gentlemansfamilyfinances.wordpress.com/2020/07/17/2-year-blogging-anniversary-and-38th-birthday/
  20. https://monevator.com/find-the-best-online-broker/
  21. https://monevator.com/weekend-reading-is-cash-kaput-post-covid-19/
  22. http://eaglesfeartoperch.blogspot.com/2020/07/garden-update-summer-2020-six-on.html
  23. http://bankeronfire.com/the-low-effort-high-impact-way-to-do-well-at-work
  24. http://diyinvestoruk.blogspot.com/2020/07/personal-assets-trust-full-year-results.html
  25. https://theescapeartist.me/2020/07/19/every-time-you-see-a-small-business-someone-made-a-brave-decision/
  26. https://asimplelifewithsam.com/2020/07/19/june-review/
  27. https://sassenachsaving.home.blog/2020/07/13/june-2020-net-worth/
  28. https://www.thefrugalcottage.com/30-frugal-living-tips-that-will-save-you-thousands/
  29. https://www.moneymage.net/5-reasons-childfree-and-happy/
  30. https://playingwithfire.uk/covid-19-in-the-uk-its-still-an-emergency/
  31. https://theenglishinvestor.com/and-the-english-investor-is-back/
  32. http://www.cantswingacat.co.uk/2020/07/16/neverspoons-boycotting-wetherspoons/
  33. https://thefifox.wordpress.com/2020/07/16/fail-to-plan-plan-to-fail/
  34. https://www.itinvestor.co.uk/2020/07/mello-virtual-welcome-to-the-new-age/
  35. https://earlyretirementnow.com/2020/07/15/when-can-we-stop-worrying-about-sequence-risk-swr-series-part-38/
  36. https://www.finumus.com/blog/bye-to-let-its-not-1994-any-more
  37. https://indeedably.com/deliberate/