Tuesday, 25 February 2020

Time to sell my gold bullion?

It might be a good time for me to check how much physical gold bullion I have sitting in my safe (I bought a few ounces way back in the 1980s or 1990s) and think about selling it off, as the combination of a lower Aussie dollar and spike in gold price has seen the price increase to around A$2,500 an ounce. Precious metals are generally a rather poor 'investment' as they cost money to store/insure, have relatively high buy/sell spreads (more similar to real estate than equities), and don't provide any income/dividend stream - so they are basically just a 'hedge' against inflation/hyperinflation or a counter-cyclical commodity play for those with a large investment in the share markets (having 2%-5% invested in bullion can improve overall portfolio diversification). So, if I don't sell my few ounces of gold now, while the price is unusually high, I may as well leave it sitting in my safe indefinitely and keep it for bartering purposes in some post-apocalyptic scenario (but in that situation tinned food or ammunition might have greater utility!).

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Looks like the markets might finally be reacting to the possible impact of COVID-2019

After doing some 'rebalancing' on 6 Feb in response to the developing corona virus outbreak, it appears that 'Mr Market' has finally reached the same conclusion as me - that while the economic impact of the corona virus is still uncertain, there appears to be considerably more downside risk than any upside potential, so why not play it safe and go 'risk off'? For the past two weeks I had been wondering if the bull market was going to completely ignore the corona virus outbreak, but it turns out that it had already run off a cliff and was just taking a while to notice -- a bit like Wile E Coyote in a road runner caroon!

I had managed to shift our ~$1.5MM SMSF investment in the Vanguard 'high growth' index fund to a mixture of the Bond index fund and the Conservative index fund (having to mail in a signed paper switching form meant that it took several days to implement the decision I made on 6 Feb), and I also liquidated my $250K investment in the Colonial First State (CFS) geared share fund and my $100K investment in ETFs and used the proceeds to pay down most of my 'portfolio loan' (that had been used to fund the ETF purchases early in 2019, and my $100K deposit and $42K stamp duty for the investment unit purchase at the end of last year). I'll now be able to fund a large part of the 'settlement' for the investment unit using my 'portfolio loan' when construction is finished in 2023, and will only have to take out a relatively modest mortgage (around 50% LVR).

I had also intended to sell off my ~$50K investment in the CFS and ~$100K Vanguard International Index Fund and High Growth Fund investment but as these were 'collateral' for a couple of my margin loan accounts it turned out that I also needed to mail/upload redemption forms for those requests (the phone/online redemption requests I made on 6 Feb weren't actioned). As the market is currently already down by about 5% from the recent highs, I've decided I'll now just leave these investments 'as is' and avoid the headache of having to do additional capital gains tax calculations when I do this year's tax return. In any event, having paid off my margin loan balances there at least isn't any risk of getting margin calls and being forced to sell out of these positions at an unfavourable time (at least I learned something from the GFC!).

For the next 6-12 months I'll be keeping an eye on how severely COVID-19 affects the global and Australian economies, and the next decision will be trying to pick a suitable time to shift our SMSF investments back towards a 'growth' weighting, and when/if to utilize my available margin loan facilities to make geared investments in the stock markets. These things typically seem to take at least six months to 'wash through', but it could be a lot longer if the impact turns out to be a global recession (and possibly Australia could finally break its record run of economic growth and enter its first recession of the 21st Century).

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Monday, 24 February 2020

Diet 2020 Wk 8 - week ending 23.FEB.2020

Another 'bad' week where I didn't stick to my 'keto' diet plan on Thu-Sun, and overate a bit on Friday and Saturday. Although the average daily calories for the week was still reasonable (1,896 kcals/day, compared to my 'maintenance' caloric requirement being around 2,600 kcals/day), my average weight was actually slightly higher than the previous week. The last four days I averaged 2,406 kcals/day, so I really need to get 'back on the wagon' and stick to my standard keto diet plan this week!

On a slightly positive note, my average body fat percentage (according to the wildly inaccurate bathroom scales) went from around 17% to around 16.5%, so the extra kcals probably aren't being stored as body fat (yet) - probably because I doing regular weight training sessions again (I actually did an extra gym session on Sunday, but my weight training app does weekly summaries from Sun-Sat, whereas I track my weekly diet stats from Mon-Sun, so the 'extra' gym session will be included in next week's tally).

I missed my Kendo training session on Saturday (I slept in!), so I'll need to set an alarm from now on (usually the wife and kids are up fairly early on Saturday mornings, but this week they all stayed in bed for some reason). I also need to get to bed a bit earlier, as I'm not getting enough sleep (which isn't good for either adding muscle mass or losing fat).

Averages for last week were:
Calories:   1,896.2 kcals/day (~800 kcals/day less than maintenance)
Fibre:          8.9 g/day
Carbs:         21.0 % of cals
Fat:           46.7 % of cals
Protein:      123.6 g/day
Sodium:     3,654.1 mg/day
Weight:        85.7 kg
BMI:           28.0
Steps:      9,582   steps/day
Sleep:          5.8 hrs/night
Body Fat:      16.5 %
Gym sessions:   3
WT Reps:    1,002
WT volume: 69,390   kg
Treadmill:    42:44 mins

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Sunday, 23 February 2020

My natural limit for muscle mass

Having read that BMI isn't a great indicator of healthy weight range for those that doing weight training (those with lots of muscle can be 'obese' according to BMI, even though they have quite loss amounts of body fat!), I was reading up about the natural (ie. not taking steroids etc.) limits for how much muscle mass can be achieved. One measure is the so-called "fat free mass index" (FFMI) that calculates muscle mass for body builders and fitness enthusiasts, based on weight, body fat and height.

Plugging my current numbers into an online FFMI calculator, I get:
weight: 86 kg
body fat: 17%
height: 176 cm
FFMI = 23.1 (lean mass of 71.4 kg) and 'adjusted FFMI' of 23.3

For comparison, average male FFMI is around 18-19, 22 is 'excellent' and 23-25 'superior'.

The usual limit for FFMI is around 25, with a FFMI of 26-27 considered suspicious, as it is rare for this to be attainable naturally. An FFMI of 28-30 is highly unlikely without steroid use.

Anyhow, my goal is to continue weight reduction while on high protein ketogenic caloric restriction (to maintain as much lean mass as possible) until I reach my 'ideal' weight of around 76-80 kg and a body fat of around 10%-12%.

Out of interest, I plugged in my 'target' weight into the FFMI calculator to see what body fat percentage I would need to be if my FFMI remained unchanged:
target weight: 80 kg
target body fat: 10.5%
height: 176 cm
target FFMI = 23.1

This indicates that if I reduced my weight below 80 kg I'd either have to lose muscle mass, or else my body fat would be extremely low. For example, to be 78 kg and 23.1 FFMI, my body fat would need to be around 8.5%.

Conversely, if I keep my weight around 80kg (once I get there) while continuing to do weight training to add some more lean mass while reducing body fat further, the natural limit (FFMI 25) would mean being 'ripped' with a body fat percentage as low as 4%. I won't even get down to that sort of body fat percentage, so I think a realistic goal will be to aim for a weight of around 78-80 kg and a body fat percentage of between 8%-10%. We'll see how things progress during 2020...

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COVID-19 figures - bad globally, dodgy in China

Well, the official WHO SITREP figures are looking a bit dodgy, especially in relation to China. There was a period of optimism when the rate of spread in China seemed to be slowly substantially, only to see a 'one off' jump in reported cases when China decided to include cases detected 'diagnostically' (via x-rays etc.) rather than only reporting clinical cases (confirmed by lab tests). A few days later China reversed track and decided to again only report clinically confirmed cases. Personally I think the data shows that China was simply unable to keep up with the volumes of lab testing required, so for a week long period had been under-reporting new cases, and then added in the 'one off' diagnostic figures in an attempt to correct the data. The plot of calculated fatality rate (using current day, T-1, T-2, T-3 and T-4 calculations) clearly shows that the death rate had been climbing during the week that low numbers of new cases were being reported by China - indicating that the number of new cases was under-reported (hence pushing up the fatality rate). The 'one off' inclusion of diagnostic case numbers brought the fatility rate back down to the previously calculated percentage. And the recent 'low' daily increases has again seen the calculated fatality rate increasing to above 3%. This again suggests that the 'clinically reported' numbers for new cases is too low, and may be due to lab capacity being stretched, rather than an actual decline in the rate of spread.

Fatality rate (deaths/reported cases) using Current Day (T0), previous Day (T-1), etc as the denominator (rationale being that there is a lag of several days between a case being reported and average time of death in those cases that result in death):

Plot of my initial projection of spread of COVID-19 and 'actual' (reported) cases. Shows the uncertainty in cases numbers, due to changes in how China was reporting COVID-19 cases (clinical only, then including 'diagnostic' cases, then back to only including those confirmed by lab tests...). The trend in deaths seems to suggests that the number of reported cases is too low (as it is unlikely that the disease is getting more lethal):

Globally the rate of spread still appears to be exponentially increasing, but starting from a low number of initial cases, and has not yet shown any signs of being brought under control. The next month or so will show whether or not this outbreak will be contained globally, or if a true pandemic will evolve.

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Friday, 21 February 2020

A look at the Net Worth data available at NetworthShare

While there is only a small (and self-reported) data set of 384 individual's net worth available from NetworthShare, it was interesting to calculate the average net worth of these individuals when grouped on the basis of age or education level.

Education level

Here I assigned a value of 5 for 'some high school', 6 for 'high school graduate' and 'associate degree', 7 for 'bachelors degree', 8 for 'masters degree', and 9 for 'doctoral degree'.

As might be expected, the lowest average NW was for 'some high school', and the highest for 'doctoral degree'. However, there is probably some confounding due to higher education levels being correlated with age (a 22 year old is more likely to currently be at 'bachelors degree' level even if they eventually get a doctorate).

5 $337,770 
6 $1,129,286 
7 $1,169,362 
8 $1,518,510 
9 $3,447,460 


Here I just used the central age for each age bracket eg. '30-34' was assigned an age of 32. The average net worth for each age group was then:

22 $215,939 
27 $242,059 
32 $721,005 
37 $940,524 
42 $1,320,281 
47 $2,771,012 
52 $1,727,526 
57 $3,274,879 
62 $2,009,363 
67 $2,496,224 
72 $4,903,639 
77 $770,845 

Again, the general trend is as expected - net worth increases with age during the accumulation phase of one's life cycle, and is then consumed during retirement. It should be noted that as these are current NW figures for people that are currently in each age group - the effect is similar to a person tracking their NW in cpi adjusted terms. The overall trend is for NW to increase by $49,405 for each year older. Overall there seems to be a linear increase in NW with age, rather than exponential. This would be mostly due to contributions (savings) being large relative to investment earnings until the final years of accumulation.

Of course the data is not a random sample - after all, people are probably more likely to self-report their net worth if they are financially literate and when they are satisfied with how their net worth is progressing. So I would guess that these figures are not representative of the general population.

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Thursday, 20 February 2020

Still waiting to see COVID-19 economic impacts

The spread of corona virus in China appears to be restrained to about 1,500-2,500 new cases per day, with the proviso that the 'one off' spike in cases when 'diagnostic' cases were added to the total (which previously only included cases confirmed by clinical testing) seems a bit odd. It might suggest that there are capacity constraints affecting the testing all the possible COVID-19 cases (after all, to be detecting 2,000 cases per day you would have to be processing a massive number of samples), in which case there could be considerable under reporting. The other proviso is that the current figures are those that occurred due to transmissions during the 'lock down' period prior to 15 Feb. Now that China is again shifting attention/emphasis to getting Chinese industry 'back to work', there is a risk that the rate of spread may start to increase again (but this wouldn't show up in the case numbers during the 7-14 day incubation period, so this won't be apparent in the daily WHO SITEREPs for another week or so). An unward spike in new cases by the end of next week would be a very bad sign.

Outside of China reported cases are still low, but increasing. A lot of this is due to the cruise ship contagion, but the new cases detected in Japan, Korea and the Philippines are a worry, as is the lack of believable cases numbers for Indonesia. The global situation will probably become clearer by the end of March.

The equity markets appear to still be largely discounting/ignoring the potential economic impact of COVID-19 (increased volatility, but no panic so far), so for the moment my decision to shift investments to a more conservative asset allocation appears premature. Then again, markets can drop rapidly if/when sentiment turns, so for the moment I'm still quite happy to 'sit on the sidelines' until the full economic impact of COVID-19 becomes clear. Either it will be a 'one quarter' hit to Chinese economic growth, and a minor blip in global GDP, or it will continue to affect the Chinese economy in the second quarter, and there will be flow-on economic effects around the globe. Given the constrained ability of many developed economies to provide further economic stimulus (large deficits and low interest rates still left over from the GFC response) that could be problematic.

Timing the markets is never easy - which is why I generally avoid it. Only with the benefit of hindsight (in a year or two) will I know if I made the right decision. But it is unusual for a potential financial crisis to provide sufficient advance warning to have an opportunity to 'tilt' ones asset allocation away from risk before the markets have reacted, so a decision had to be made. A decision to assume 'all will be well' and do nothing is still a decision. And my lesson from the GFC was that things can be going bad behind the scenes even while everything seems fine, and that it can take 6 months or more for the 'turning point' to become apparent (by which time it is too late to do anything).

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Tuesday, 18 February 2020

Biorythms and body fat percentage readings

To smooth out the daily 'noise' in the body fat percentage readings that I get each morning using my bathroom scales (there can be +-2% fluctuations from day to day!) I calculate a 21-day moving average of the body fat and weight readings to better track my overall progress (between getting more accurate DEXA readings of my body fat). For the single DEXA reading I obtained so far, the 21-day average of body fat readings from my bathroom scale was very close to the value provided via DEXA.

Aside from the slight weight increase that occurred due to overeating over the Christmas holiday period, the plot of average weight vs. elapsed days shows a steady decline, with the rate of weight loss increasing since I changed from a 'balanced' caloric restriction diet with intermittent fast days, to adopting a high protein/fat 'keto' diet plan earlier this year. This is to be expected, as you are going to consume (loose) body fat over time if you are ingesting fewer calories than your basal metabolic rate, especially when caloric requirement is also increased by doing additional physical activity such as walking and weight training. Weight training also helps maintain metabolic rate, which might otherwise reduce (hence reducing caloric requirements) in response to sustained caloric restriction. Over a period of 100 days my average weight reduced from around 101 kg to around 86 kg (a weight loss rate of about 1kg/wk)

However, the plot of the 21-day moving average of body fat readings shows a distinct cyclical pattern overlaid on the overall downward trend, with a periodicity of roughly 30-days. It can be quite disconcerting to encounter these 'plateaus' in body fat reduction, as it means I experience several weeks of quite noticeable decreases in body fat (yay!), only to be followed by several weeks of stable (or slightly increasing) body fat readings (d'oh!), despite sticking to my diet and weight training routine.

I used an online 'biorhythm calculator' to plot the three theoretical biorhythms (physical, emotional and intellectual) and compared it to the cyclic fluctuations in my average body fat readings. It appears that there may be a monthly fluctuation in body fat percentage - or at least in the readings produced by the bathroom scale's bioelectric impedance measurements, which are known to be affected by hydration.

I'm currently in the stable/upward part of the cycle in body fat readings, which seems to be 'stuck' around 17% at the moment. This means that my calculation of lean mass and body fat (derived from my weight and body fat percentage) suggests that I'm losing lean mass and not losing any fat at the moment (which doesn't make sense as I'm losing weight at a fairly modest rate and doing weight training to retain lean mass as much as possible). Hopefully this is simply an artifact due to the 'monthly cycle' in hydration that is affecting the body fat readings produced by my bathroom scales, and I should start to see lower readings over the next week or two. The fact that the skin fold thickness over my abs seems to be reducing would also suggest that I am still reducing body fat, regardless of what my bathroom scales are saying! It would be nice to be able to get accurate skin fold thickness measurements to calculate body fat, but the skin-fold calipers I ordered online several months ago never turned up.

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Monday, 17 February 2020

Diet 2020 Wk 7 - week ending 16.FEB.2020

A very mixed week. The first four days I averaged 1,110 kcals/day and stuck to my keto diet aside from a deliberate 'carb loading' snack prior to doing a weight training session at the gym on Wednesday. Then on Friday I had to leave work to collect DS2 from school in the morning (he was sick with the 'flu) so didn't go to the gym on the way home as I'd planned, and I also ended up having a bit of a 'binge eating' day (3,096 kcals) with several unplanned snacks. I then also didn't stick to my standard 'keto' meal plan over the weekend - although I averaged a reasonable 1,800 kcals/day on Sat/Sun, I had quite a lot of carbs on the weekend.

Today I'm back to following my keto meal plan, and I'm actually planning on having a bit less to eat than usual today to offset the excess calories I've had during the past three days. I'll be going to the gym on the way home this afternoon, and will get back into the routine of going to the gym for three weight training sessions every week.

I did have my two hour kendo lesson on Saturday - kendo training is quite a good aerobic workout, and I was quite sore in my left thigh and calf on Saturday afternoon, and was also feeling it a bit in my left foot and shoulders on Sunday, but I was feeling fine again by this morning. I'm finding the kendo training a lot more enjoyable (and causing no injuries) compared my aborted attempt to resume judo a few years ago (I gave that up after the fourth lesson after hurting both shoulders - it obviously wasn't a good idea to do judo when I was still obese - I'll try again later this year when I've been at my optimum body weight for a while). I'll be wearing official kendo clothing (Hakama and Keigoki) to classes from now on (rather than casual cloths), and, as I am enjoying kendo training sessions, I've ordered a set of kendo armour, spare shinei, bags etc. from Japan, as well as ordering a Zekken (embroidered name tag used in competitions/training) and a pair of bokken (wood swords) for kata training.

The equipment I bought for kendo cost about $1,000 in total, and the annual club and association fees and gradings will cost about $500 pa. so kendo is quite a bit cheaper than my target shooting, scuba diving or snow skiiing activities.

Averages for last week were:
Calories:   1,594.0 kcals/day (~1,000 kcals/day less than maintenance)
Fibre:          5.5 g/day
Carbs:         17.7 % of cals
Fat:           43.8 % of cals
Protein:      129.6 g/day
Sodium:     3,242.7 mg/day
Weight:        85.4 kg
BMI:           27.9
Steps:      6,762   steps/day
Sleep:          6.2 hrs/night
Body Fat:      16.9 %
Gym sessions:   1
WT Reps:      257
WT volume: 20,132   kg
Treadmill:    14:01 mins

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Wednesday, 12 February 2020

Covid-19 (1999 nCov) cases outside of China

While the rate of increase in confirmed Covid-19* cases in China appears to have been reduced from exponential to linear (assuming you can rely on Chinese 'official' data sources - but their track record on accurately reporting bad economic data might suggest otherwise), the rate of confirmed cases outside of China still appears to be increasing exponential, its just much lower as it started from a much smaller initial figure.

The international cases are currently at a similar level as was present in China as at SITREP#3, so unless there is much better containment achieved internationally than was the case in China, we could see 40,000 cases outside of China within three weeks. Fingers crossed that doesn't eventuate.

*Apparently Covid-19 is now the 'official' name for 1999 nCov, as adopted by the UN. I wonder how many committee man-hours went into deciding that?

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