My retirement scoreboard, Part II

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unemployable
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My retirement scoreboard, Part II

Post by unemployable »

I'm starting a new thread for several reasons. It's been a couple years since I dusted the scoreboard off and apparently I can't change the title of my original thread. The search for new things to obsess over is ongoing, but broadcasting such creates expectations I may not be willing to follow up on, and this forum strikes me as not necessarily the optimal arena in which to document my tribulations to that effect in the first place. Anyway...

John Nash is back at work at the Exxon station. That's the first reaction I got on the original thread, and I'm rather fond of it. Partly because XOM is a big part of the increase in my wealth over the last year and a half.

Image

I wasn't happy with my old method of holding the cards in. The plastic tracks were salvaged from an accordion file folder, so the cards now slide in. Not perfect but better than what I had. I can now move the board without the cards going every which way. I also fidgeted with the presentation a bit. Below the date, the rows are:
  • Net worth and change on the year
  • Monthly spending implied at a 4% withdrawal rate and the change from the previous month end (naturally, this is the change in both net worth and withdrawal amount)
  • Actual expenses incurred during the month and implicit withdrawal rate for that amount
  • High-water mark in net worth and date
I'll probably keep fidgeting; I never get completely satisfied with this kind of endeavor, but right now the only other thing I can think of tracking is some reference to amount of assets sold, which so far this year is around $1,000.

Generally blue will denote good things (total amounts of money possessed, increases in same, withdrawal rates under 4%) and red bad things (spending, declines in net worth, WRs above 4%, high-water marks occurring in the past). However, I don't have enough cards and digits for a complete set of blue and red so there will be exceptions.

Expenses will be net of work, rental and similar procured income but not of investment income such as interest and dividends. They will typically cover the calendar month, although I may fudge stuff around month-end and/or decide it's just easier to use credit-card cut-off dates. These are changes from my previous accounting method, so the WRs will look higher. I try not to take too much stock in month-to-month withdrawal rates, but every alternative is worse:
  • Using YTD expenses and annualizing is bad because my expenses have considerable seasonality, being back-loaded in the calendar year
  • Don't like using a running 12-month rate as I keep calendar years mentally separate
  • Smoothing out large purchases is too much math for this kind of exercise
If I have time I'll run the last few year-ends with annual numbers. I have most of the data and should be able to reconstruct performance to within a few basis points.
Last edited by unemployable on Thu Jun 02, 2022 2:17 pm, edited 1 time in total.

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Re: My retirement scoreboard, Part II

Post by unemployable »

Year-end 2021 scoreboard. Expenses are annualized and are net of non-investment income.

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Seppia
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Re: My retirement scoreboard, Part II

Post by Seppia »

Happy to follow.
Funny you mention XOM, I had the same experience with SHEL, which is kinda the exact same but European (in multiple ways)

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Re: My retirement scoreboard, Part II

Post by unemployable »

Well that sucked. And July hasn't been any better.

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Re: My retirement scoreboard, Part II

Post by unemployable »

Last week of July saved the month for me. It was ugly for awhile.

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Re: My retirement scoreboard, Part II

Post by unemployable »

The worst summer ever continues

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OutOfTheBlue
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Re: My retirement scoreboard, Part II

Post by OutOfTheBlue »

Hey, don't lose the perspective.

You are still free, and FI!

And as you well said in a recent thread, health is wealth (and you seem to be killing it in that department too)

Enjoy!

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Re: My retirement scoreboard, Part II

Post by unemployable »

Wait, I did?

It's been a rough few months for other reasons.

OutOfTheBlue
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Re: My retirement scoreboard, Part II

Post by OutOfTheBlue »

Right. My bad. Thought you were commenting on the scoreboard alone, but yeah, I guess the real upheaval comes from elsewhere, as you've shared in the other thread.

Hang on in there.

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Re: My retirement scoreboard, Part II

Post by unemployable »

My expenses were the bare minimum this month (among months where I have a housing cost). Among other things, I did not use my car at all, riding my bike to the grocery store or Walmart instead. My spending was so low that I pulled forward a once-a-year October expense into this month, to make my expenses and withdrawal rate more fairly reflect necessary spending. This exercise in asceticism occurred in no small part because I felt like I was losing money every goddamn day. And somehow my net worth is down for the year only half as much as the S&P is.

We rarely discuss short-term market moves here. But I've been doing a lot of scenario analysis, in terms of how much further down the stonk market can drop before I feel like I'm in real trouble. I've already lost roughly a house in my price range in less than four months and that fucking sucks, especially because housing prices are apparently going to keep inflicting as much pain as possible before collapsing like every other asset class is currently doing.

I should preface this little drawdown exercise by explaining some 15% of my portfolio is in I-bonds that pay CPI + 3. Given the CPI numbers we already know, they will pay in the neighborhood of 10-11% for 2023. My stock holdings putatively tilt towards low-beta/value/quality, but that's been no guarantee of superior performance so far — check out Verizon's chart for example. I still own a lot of oil; have no intention of selling but it seems investors there are increasingly concerned about debt service. In any event, I do claim my holdings are the kind that traditionally outperform in bear markets, especially those accompanied by inflation.

No one really thinks we're close to the bottom, do they? I can lose another 17-18% before I get significantly above a 4% withdrawal rate, which corresponds to about 20% in the stonk market, or around SPX 2870. I'd hit a 5% WR down around 35% from here, call that 38% in the market or SPX 2222. That takes us back to around the mid-2010s and to the 2020 covid low. I'm not sure we'll see that again, but the 2600 level or so feels eminently plausible, and threatening 3000 seems pretty likely.

If there's good news it's that all the market bottoms in my adult lifetime have been very brief and rebounds have been rapid. We haven't really had an "L bottom" since the Depression.

I'm not a fan of most of the doomsday discussion around here, and do not predict such. But something's gonna blow up. I can feel it, and have already heard rumors.

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ertyu
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Re: My retirement scoreboard, Part II

Post by ertyu »

oof, scrolling up to the first post, that would hurt me, too

what i have heard about something blowing up is that whatever blows up is likely to be abroad this time around. the recent developments in the uk confirm. almost everyone seems to agree that this time around, it won't be the us that breaks, but let's see -- all economies are leveraged so idk if any place can be declared "fully safe". what rumors have you heard? im curious if it's anything that's also been mentioned on the podcasts i follow.

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Re: My retirement scoreboard, Part II

Post by unemployable »

ertyu wrote:
Sun Oct 02, 2022 12:43 am
what rumors have you heard?
The internet thinks it's Credit Suisse.

People started getting worried about Lehman right after Bear Stearns went out at $2. It took a few months but the consensus that it was the next domino was in. Point is it might not be Monday. Maybe like Wednesday.

Re-introducing QE does NOT get the UK or anyone else out of the woods.

Most US pensions and endowments have rather low bond allocations* — they just don't return enough — and LDI is not as big here as it is in Europe. But a lot of people have been out there picking up nickels in front of steamrollers and anything involving levered fixed income is suspect. Risk parity comes to mind. Also if a bank goes under one wonders about the hedge funds that prime broker there and didn't pull out in time. At Bear most prime accounts had a direct claim on the assets and they just became JP Morgan accounts anyway. With Lehman most people had their assets frozen.

Correlations already are going to 1. Long-term Treasuries (see TLH and TLT) are down more than the SPX is YTD, substantially more.

*At least in the sense of a pie wedge that says "BONDS" and is in unlevered long-only investments. They may have macro or "real asset" or hedge funds that have net long exposure somewhere else.

ertyu
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Re: My retirement scoreboard, Part II

Post by ertyu »

by now i've heard them, too, all of wallstreetbets is credit swisse memes :D

joke aside, while i don't know the intelligent way to play this, it seems to me that if it's true it will lead to a policy response and a short-term bounce - though in what, or what to do about it, idk

white belt
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Re: My retirement scoreboard, Part II

Post by white belt »

Despite what the permabears on FinTwit say, Credit Suisse is well-capitalized and default risk is very low. Having said that, the bank has had issues in recent years and may very well announce restructuring with their next earnings call. This isn’t a Lehman moment.

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Re: My retirement scoreboard, Part II

Post by classical_Liberal »

I'm down about 9% YTD and it's really painful considering how conservative my portfolio was coming into this year. I had been selling index holdings for the entire last half of '21, keeping most in cash and buying some solid "value" stocks with some of the gains. Still, most of those conservative stonk plays have been a losing effort as well. I had enough conviction to dump large quantities of index funds for cash, but not enough to short. Mainly because i wasn't sure of the timing. Live and learn I guess.

Almost a couple of years ago we had a conversation on here about XOM. I never thanked you for helping me pull the trigger on that one. I went in with about 5% of NW and it has paid me well. I sold half my holdings at $103 back in June. Mainly because I get real nervous when a single stock is double digit percentage of my portfolio. That holding is my only asset that hasn't lost money this year.

My opinions:

Credit Suisse will blow over. @Whitebelt is right to say they are well capitalized. A major restructure is imminent, but I think they have the capital to get through it. They will be crippled but not dead. The financial world has PTSD from the last war and is too concerned about Maginot Line.

SPX is currently priced at about the same price levels pre-COVID panic, but earnings are about 25% higher. IMO that means that the only real pain that has been fleshed out is multiple contraction due to higher rates (or inflation that caused them). The recession we're in hasn't been fully priced in yet. I look for another 20% drop, VIX moving higher into the high 40's low 50's. Looking two years out, stock index funds or LTT will be flat to slightly up from here, assuming no new major geopolitical events (China/Russia). Demand side inflation will drop, that should be enough to get the CPI down 3-4% YOY, and that will be enough for the Fed, who will be looking at a 2 year recession going into the end of next year, to loosen.

Basically I don't see the sky falling. This whole thing has been waaaay to orderly and composed, the everything bubble is deflating, not popping.

Lastly, I'm jealous of those i bonds. Now you get CPI+jack shit.

Hope you're doing well overall!

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Re: My retirement scoreboard, Part II

Post by unemployable »

Oil is about 30% of my net worth currently. I bought between mid-2020 and early 2021, and it has gotten that big due to outperformance. If that sounds like a lot, well it is, but it's about what the weighting of fossil fuel companies in the S&P was during the late 70s, early 80s and mid-2000s.

XOM is a little more than a third of my oil holdings. I figured once the scare of negative prices was out of the way it was once-in-a-lifetime cheap. So I'm like Warren Buffet with it and have no intention of selling. My other holdings are a bit more speculative and I'm hoping for a structural bull market that'll last at least another year or two.

During the depths of covid I decided I needed to take some idiosyncratic risks. A "keep doing what you've done and you'll keep getting what you've got" moment. I've never been comfortable trying to value or time tech stocks, so came back to which other sectors should bounce back the most once the economy gets back to whatever normal will be. I also bought airlines and retail, and those haven't done nearly as well, although they were smaller positions and now they seem super cheap again. (I have SAVE, which should be taken out by JBLU at $33, so that's a hold until the deal's done.)

I bought the I-bonds in October 2001. Right now assuming none of the dividends I live off get cut they're at least six years' worth of living expenses and mature in nine. My boss/partner and I spent the last few days of that October running around town getting cash into the right accounts to get the max bought ($30k back then) by the end of the month when rates would reset. They outperformed stocks all the way through 2013 or 14, and if the SPX drops another 15% or so — that number gets smaller every month! — they'll pass them back again.

I'm probably going to vagabond this winter and spring around the south and southwestern US, hoping to score some long-term housesits. Not sure whether I'll find any in my mom's old stomping ground. I'm rather looking forward to my old stomping ground of North Carolina instead.

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Re: My retirement scoreboard, Part II

Post by unemployable »

I've moved out of my semi-permanent summer place and started vagabonding and housesitting for the next half-year or so. I had considered taking the scoreboard and digit cards, all of which fit into a 3x5 file box, with me but living out of one's vehicle requires one to be ruthless about minimalizing what you travel with, so the scoreboard's packed away.

The house I'm currently in has Roku. And Roku has a channel that shows nothing but reruns of The Price Is Right. I don't have a lot to do during these sits once the sun goes down and don't find much else on TV outside of a few sports that interesting, so now I'm an expert on what things cost in 1984.

This is all a preface to my October investment performance. My net worth increased by ... cue Johnny Olson voice ... OVER ONE HUNDRED THOUSAND DOLLARS!!!!

I remember when that was a lot of money. Like you could buy an OK house with that much. (Or a house in a lot of other states, not just Oklahoma.) Way back in 2019. Or a Price is Right 1984 bedroom set for each day of the month.

To use the scoreboard format:

Oct. 31, 2022
$672K         +3.07%
2,240    Mo +17.7%
1519 Ex   Wi 2.71%
Hi 737K    Jun 7.22.

Expenses are net of rental income for part of October. That is a nearly 18% gain without buying or selling a single asset, having a job, or counting any income — I take expenses out of cash and add dividend/rental income to cash, which I don't count in my net worth. If I had counted changes to cash that is not pledged to a liability my return for the month would have been higher. I hope I enjoyed it, because I doubt I'll ever have another 18% month again.

Everything bounced back in October, but oil stonks Superballed back, and many made new highs. Whoever that was who sold Exxon at $103, hope you bought back in. Anyway, it's increasingly apparent that October is probably the stonk market's highest standard-deviation month. Everyone knows about the crashes, but quite often the market's worst fears in fact get priced in during September and we have strong relief rallies in October. Within my investing lifetime this phenomenon also occurred in 2002 and 2011. Meanwhile June and March have become sneaky dangerous months.

Anyway, the housesitting. I'm on my second sit, and have three more booked, including one with a longtime friend. It's interesting how you get to look into people's lives through their homes. Especially regarding how much crap people accumulate. My current hosts are out at their former address getting everything out of the storage locker they had all their "other" stuff in. As if their new house and four-acre property weren't already sufficient to fulfill all their needs — it would certainly fulfill all mine, especially the location. They tell me an 18-wheeler will be coming in. I think they'll need to put another shed on the lot to fit it all.

When summer ends I throw everything into a 5x5 storage locker I split with a friend who lives with a similar seasonality. So every year I'm forced to declutter a bit. This year was made more difficult as I took some of Mom's stuff she didn't want or need during her downsizing. Homeownership begets crapownership. Once again I'm not sure why I'm in such a goddamn hurry to unhomeless myself.

The housesitting so far is still a hustle; I get rejected for about five or six sits for every one I get. It supposedly gets easier after you get a few under your belt. I sure hope so, because sleeping in your car in the northern New Mexico desert in winter sucks. Maybe it's better down around Las Cruces.

MBBboy
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Re: My retirement scoreboard, Part II

Post by MBBboy »

Super interesting. I don't know anything about house sitting, sounds interesting. Seems to fall into the general societal theme of outsourcing to strangers tasks that used to fall to friends and family.

My job offers a free subscription to care.com, which is primarily known for being a place where you can find babysitters and nannies. I perused it for fun during a benefits call, but all I could think was "there are people out there who literally have no one in their life that could watch their kid for a few hours?" And not just "people", because law of large numbers says there's probably examples of everything. By people I mean a market large enough to become an entire industry. It's wild

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Re: My retirement scoreboard, Part II

Post by unemployable »

MBBboy wrote:
Thu Nov 03, 2022 9:11 am
My job offers a free subscription to care.com, which is primarily known for being a place where you can find babysitters and nannies. I perused it for fun during a benefits call, but all I could think was "there are people out there who literally have no one in their life that could watch their kid for a few hours?" And not just "people", because law of large numbers says there's probably examples of everything. By people I mean a market large enough to become an entire industry. It's wild
Yeah, as a teenager I was one of the neighborhood pet carers/babysitters/lawn mowers. Even had a paper route once a week. Multiple income streams! Some combination is going on now of teenagers in better neighborhoods being more scheduled in order to get into the right colleges, people having fewer kids in the first place and perhaps less sense of community as, for example, the house next door is an airbnb now. In addition to the inexorable commodification of everything you alluded to.

Caring for kids is actual work and requires your constant presence. OTOH cats need about 15 minutes a day. Dogs need more, maybe an hour or two, but come with positive externalities such as exercise from walking and social interaction from other dog owners. Not that kitties don't have their own extracurricular benefits unless they're the kind that hiss at the stranger when cornered.

My friend says he pays about $40/day to board his dog and $20/day to have someone come to his house and care for the cat. Then they're mostly locked up in a cage and you have to get them to and from the boarder as opposed to letting them stay in a familiar place. And you have someone watching over the house. Positive non-economic benefits on both sides.

From the sitter side you want a car in the US/Canada and enough financial independence that you can at least afford groceries, gas and other car-related expenses. And you want to have a plan for the gaps between sits. The era of remote work is very much amenable to housesitting but you'll still have travel days and days where you'll have to find internet and perhaps a place to do video calls. I'm already accustomed to sleeping in my car and versed on such concerns as finding a good place to park for the night, but have discovered I can tolerate only down to about 25°F (—5°C) at night with my current setup.

classical_Liberal
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Re: My retirement scoreboard, Part II

Post by classical_Liberal »

unemployable wrote:
Tue Nov 01, 2022 9:51 pm
Whoever that was who sold Exxon at $103, hope you bought back in. Anyway, it's increasingly apparent that October is probably the stonk market's highest standard-deviation month.
That was me! No I did not, but I only sold half of my position as part of a larger portfolio issue. The 150%+ return had given XOM an overwhelmingly large percent of my NW I wasn't comfortable with in a single stock. I did start watching it more closely when it hit low 80's a couple of times since the sale. If I had rebought I'd likely be looking at a sell point again for the same issue.

I've been thinking of you many days this month while following the stock, waiting to see how rich it made you with this update. Congrats on the gains!
unemployable wrote:
Tue Nov 01, 2022 9:51 pm
I had considered taking the scoreboard and digit cards, all of which fit into a 3x5 file box, with me but living out of one's vehicle requires one to be ruthless about minimalizing what you travel with, so the scoreboard's packed away.
I'm in the process of doing this for the first time after almost 4 years at my apmt. When I was coupled up and rent was divided by 2, it was less painful to leave the place vacant for months on end. Sublease isn't an option so time to let it go. Luckily in this round of homelessness I have a minivan, makes a big difference.

Glad the house sitting is going well!

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