Tuesday 3rd January 2017
In this issue of Money Truths….
- Bill Gates – champion party pooper….
- You are too drunk, too fat & too lazy….
- What your waistline might say about your financial profile….
- If you’re not in the market, you can’t get whacked….
- Put your hands on £1200 you didn’t know you had….
Bill Gates – champion party pooper….
It was a strange Christmas….
For the first time in many-a-long-year there was no scaremongering to be found in the newspapers about some global pandemic coming to wipe us all out….
No big scare stories about swine flu to keep us on our toes….
No deathly warnings about avian flu to whet the appetite for the Christmas bird….
No weeping and a-wailing about the latest indestructible strain of giraffe flu heading this way from some dark corner of the globe….
And I don’t think I was alone in missing what has become a much-loved form of festive entertainment….
In the absence of suitably terrifying headlines about impending death in the Daily Mail, Bill Gates – founder of Microsoft – stepped up to the plate to comfort the masses with his own seasonal message of hope and positivity….
‘I rate the chance of a widespread epidemic, far worse than Ebola, in my lifetime, at well over 50%.’
59-year-old Gates, who might yet live another 40 years or more, went on to reckon that the next Spanish flu-like epidemic might kill as many as 33 million humans in just 250 days. How’s that for a yuletide greeting?
More than that, Gates says the world is hopelessly unprepared to cope with such an emergency.
I don’t know where Gates gets his figures or what data he is basing them on. All I can tell you is that he doesn’t sound like he’d be much fun at Mircosoft’s office party….
You are too drunk, too fat & too lazy….
So, no impending pandemic to lose sleep over – at least not yet. But just in case you were thinking of relaxing, Public Health England (PHE) were quick to fill the vacuum and stick the boot in….
Apparently 8 out of 10 of middle-aged people (40- to 60-years-old) in the UK weigh too much, drink too much or do not get sufficient exercise.
Modern life is killing us. That’s the conclusion PHE has reached. 77% of men and 63% of women in middle age are either overweight or outright obese.
87% of men and 79% of women in this age bracket drink more alcohol than the chief medical officer’s alcohol guidelines say is healthy. And PHE concludes that those who are not drinking too much are physically inactive.
Obesity in British adults has risen by 16% in the past 20 years. The number of middle-aged people being diagnosed with diabetes is increasing.
More than 15 million Britons live with long-term or chronic health conditions. Busy lives and sedentary jobs make healthy living difficult.
The lives we live and the choices we make are wreaking havoc on our health and our prospects of longevity…. We are too fat, too drunk and too lazy to make old bones….
And if you’re wondering how all this talk of big bellies, drunken stupors and idleness relates to money, you should be aware that your girth tells the experts a great deal about your financial profile and behavior….
What your waistline might say about your financial profile….
Management Science journal recently published the results of a study called ‘Stature, Obesity and Portfolio Choice’….
This study of 40,000 people concluded that obese people are 10% less likely to participate in the stock market than those of average weight.
But relationships between weight and financial profile are complex….
Previous research has found that poverty and obesity are closely correlated – perhaps because individuals living in more impoverished areas have poorer access to fresh and healthy foods than wealthier counterparts. And poverty does tend to be a bar to stock market participation.
Studies have also shown that obese people are likely to have lower levels of educational attainment – which might also help explain why fewer obese people play in the stock market.
Tall people are those most likely to be found in the stock market – 7.5% more likely than people of average height says the study conducted by Management Science.
And the most likely stock market players of all are people who were tall at school. Height is closely related to self-esteem says Jawad Addoum, one of the report’s authors:
‘You are more likely to think things will work out (including your investments), which may make you feel better equipped to invest in risky things like stocks.’
It’s all very interesting – and confusing if you happen to be tall and fat. But, we should bear in mind that stock-market participation alone is no guarantee of stock-market success.
You can be tall, buff, well-coiffured and all kitted-out in a tailor-made suit and a shiny pair of hand-stitched shoes. But if you’re no good at picking stocks, it won’t make a blind bit of difference….
And if you’re carrying a couple of extra pounds round the mid-riff right now, and you’re not engaged in the stock market, console yourself with the thought that every cloud has a silver lining. The stock market might not be a great place to be in 2017….
If you’re not in the market, you can’t get whacked….
All the tall, self-assured and confident investors in the stock market are high-fiving one another right now and breaking out the Cuban cigars….
Even the small overweight players are slapping one another on the back and adding a few doughnuts to the regular order….
Stock players and traders of all shapes and sizes are loving life in the markets as we head into 2017.
In Britain, the FTSE 100 index, the FTSE 250 index and even the FTSE All Share index are all sitting at respective high-water marks….
It’s the same story in the United States where the Dow Jones is as close to breaking through the 20,000 ceiling as it has ever been. The S&P 500 also sits close to its high….
Donald Trump – who hasn’t even started work in the White House yet – has served as the magic fertilizer. His election to office – alongside attendant hopes about his plans and ambitions – has succeeded in producing another few feet of growth on a stock-market beanstalk that already had its top obscured by the clouds….
Confidence is running tall. The bulls are running free. There is talk of this tree growing to the sky. There’s a real feel-good factor at work in the markets. Consensus sentiment favors more growth yet….
For me that consensus sentiment – coming as it does from such a dizzy peak – is as good a contrarian indicator as any.
When everybody is a bull, I want to be a bear. Right now, I’d be selling than buying in the market.
Sir John Templeton said: ‘the best time to buy is at the point of maximum pessimism.’ It stands to reason the best time to sell is at the point of maximum optimism.
Calling the exact point of maximum optimism is a job for a clairvoyant. But there is plenty of optimism around right now. And a lot of it is probably undue given the levels of uncertainty that exist around the world.
The Economic Policy Uncertainty Index says levels of uncertainty are at their highest point since the Index began measuring. That uncertainty (levels of which are likely to grow in America and in Europe) will find expression in the market sooner or later. And when it does, stocks will fall.
That won’t be a fun scenario if you’re tall and confident with plenty of skin in the game. But if you’re short and rotund and you don’t have money in the markets, at least you can’t get whacked. It’s an ill wind that blows nobody no good….
Put your hands on £1200 you didn’t know you had….
Ever the contrarians, here at Money Truths we believe New Year resolutions are doomed to failure. But only if you try and put them to work too early – before you’re over Christmas, back in a regular frame of mind and ready to make changes….
We believe in settling back onto the bike and warming-up before putting some mustard on the peddles and scooting after that yellow jersey….
In our experience, changes made once you’re back in the game work better and last longer than changes you make when you’re still coming down from life high on the Christmas hog….
That’s why I’m going to wait until next week to show you a couple of moves you can make to quickly improve your financial outlook for 2017 – including one that will put an extra £1200 in your pocket….
That’s how it looks from here….
I’ll be back next Tuesday.
All the best,