how to profit from coronavirus: investing through the pandemic

How to Profit From Coronavirus

There are a couple of cheap/free options you can to take out to limit the near-bottomless downside risk of COVID-19. I mentioned them in the last post, but they’re time-sensitive; hopefully you took those steps before the panic-buying began.

Now it’s time to think about the upside. When a black swan flaps its wings, great risks and opportunities swirl out of the same chaos.

So: what would it take to not just weather this situation, but profit from it?

premature exploitation: popping the bubbles a little too soon

The Embarrassing Problem of Premature Exploitation

Babies love putting things in their mouths: dirt, insects, bits of grass, their own poo. They have no sense of fear or self-preservation, and come up with endlessly creative ways to place themselves in mortal peril. Once they learn to talk, their constant experimentation with the world transcends the physical to the philosophical. They want to know everything. They are bottomless pits of curiosity, with very little in the way of attention span or self-discipline. Your typical two-year-old can only concentrate on a task for six minutes at a time. Young children are not self-aware enough to feel much in the way of shame, or embarrassment. Nothing is off-limits. In a word, very young people spend almost all of their time exploring.

The elderly are set in their ways. The only foreign objects they put in their mouths are dentures and hard caramels; occasionally followed by a fork to extricate said caramels from said dentures. They tend to have stable routines, rituals, hobbies, and social circles. They rarely try new things or experiment with new identities. They’ve lived long enough to know what they’re about, and they intend to wring out every ounce of enjoyment before the curtains come down. In a word, very old people spend almost all of their time exploiting.

The ‘explore-exploit’ constraint is one of the most useful ideas I’ve come across…

The Best of the Best Books I Read in 2019

Last year I finally cracked my goal to read 100 books. After completing the challenge, I decided that I wasn’t going to get too hung up on the number this year.

Sure enough, I dialled it back: I only got through 56 books in 2019, which feels a little disappointing.

But having looked through my list, I realised that this was still a great year for quake reading. As always, it was agonising trying to choose between a worthy field, but I’ve winnowed it down to my top 10.

These are the books that blew my mind, made me howl, or filled my notebook to overflowing. In no particular order:

the optionality approach to getting lucky: dead ends, treasure chests, and bottomless pits

The Optionality Approach to Getting Lucky

We’ve established that there is no such thing as cosmic justice: it rains on the just and the unjust alike. But over the course of a lifetime, we at least vaguely shuffle in the direction of getting what we deserve. The goal of this post is to get us from ‘vague shuffling’ to ‘slightly-more-purposeful ambling’.

If you want to get lucky, the usual advice is that you have to be prepared, and then wait for opportunities. This is not very helpful.

Instead of wandering aimlessly and hoping for the best, we can use a simple framework to figure out which opportunities are worth pursuing.

This is the filter I run over pretty much every decision these days. It’s called the optionality approach…

stockmarket charts: how safe are index funds, anyway?

Beware of Geeks Bearing Formulas

The history of finance is a history of brains dashed on the pavement. The fact that many people tend to be ‘irrationally’ wary of the markets starts to take on a new significance: the suspicious folk-wisdom has often been correct, while the ‘experts’ have consistently been dangerously wrong.

Hence Warren Buffett’s warning: beware of geeks bearing formulas…

How to Make Friends as a Solo Traveler

The first stage of being a solo traveler is fear. I flew into Bangkok in the middle of a thunderstorm. Sheet lightning and flickering neon signs threw the grimy streets into sharp relief as I took a cab through the pounding rain. The driver dropped me in the vicinity of my hostel, overcharged me for the fare, then pretended he didn’t have change for my fresh banknote. When I finally found my accommodation, soaked to the skin, I realised I was the only one staying there. There I was in a megacity of eight million people, and I’d never felt more alone…

Advanced Investing: The Barbell Strategy for Investing

Advanced Investing: The Barbell Strategy for Bastards

Marry an accountant, but have occasional flings with rock stars. Lift very heavy weights for a few repetitions, then do lots of low-impact cardio. Work a secure and boring job, while pursuing highly speculative ventures on the side.
The common thread running through all these ideas is called the ‘Barbell Strategy’, and it’s useful for all sorts of big decisions – from your career and work, to health and fitness, and of course, your investment portfolio…

The Worst Investment Ever: How I Lost $10,000 Catching a Falling Knife

The Worst Investment Ever: How I Lost $10,000 Catching a Falling Knife

It’s pretty embarrassing to air this story in public, but it’s for a good enough cause that I’ve decided to bite the bullet. Back in 2015, I was still picking individual stocks, and doing pretty well for myself. I probably thought I was hot shit. That is, before I made a series of really dumb mistakes which cost me US$10,000.

I would have reached my six figures savings goal much faster if I hadn’t screwed up, but I didn’t lose any sleep over the whole mess. In fact, I’m actually kind of glad it happened. I might be a slow learner, but hopefully you can wise up sooner than I did…

The Barbell Strategy: How Not to Be a Starving Artist

The chances of making it big as an artist, writer, or entrepreneur are vanishingly small. However, there is one way to not only give yourself the best shot possible at succeeding, but avoid a bone-crunching existential crisis if things don’t go according to plan.

Use The Force to Win At Investing: Lessons From a Billionaire

How a Billionaire Taught Me to Invest Using the Force

Star Wars fans come in all shapes and sizes. Sometimes they look like scruffy, twenty-something writers from a small island on the arse-end of the world. Other times they look like besuited, seventy-year-old billionaire fund managers from the American mid-west. David Booth is co-founder of Dimensional Fund Advisors, which manages about $445 billion of investor cash. I didn’t get to ask him to weigh in on the Han vs Greedo controversy, but our conversation was still among the most life-changing I’ve ever had.

Becoming an investor: An animated guide for beginners

How to Become an Investor: An Animated Guide for Beginners

If you’ve hitched your wagon to the Deep Dish caravan, you’ve got a big problem on your hands: A bunch of small but powerful lifestyle tweaks have unleashed a tsunami of savings and filled your pockets with cash. What to do with all that lovely money? Getting started with investing is easy, and anyone can do it! Come join our hero Jimmy on his epic animated adventure from total noob to investing badass.