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Friday, 28 February 2020

Australia is "well prepared" for Covid-19 - really?

According to the head of the Biosecurity Program at UNSW's Kirby Institure, Australia might need 650,000 ICU bed's in a worst-case Covid-19 scenario (which considers the 'what if' case of 25%-75% of the population eventually being infected) - although these beds would be needed "over a period of time", such as one year.

However, even if a patient only required IC treatment for two days (which is probably way too low a guesstimate, given the average ICU length of stay is 3.3 days), that corresponds to 3,560 ICU beds in continual use dedicated exclusively to Covid-19 patients. Given that Australia only has approximately 2,000 ICU beds in total (spread across public and private hospital ICU units) that would seem to be a bit of a challenge -- especially as most of the ICU beds are already fully utilized for patients with burns, trauma, heart attacks etc. So, a 'worst case' scenario would imply almost tripling the number of ICU 'beds' (which in reality means a whole load of specialized equipment and infrastructure, specialist medical staff, and associated support staff...)

If one assumes ICU beds only have 90% availability (i.e. allow some 'down time'  for cleaning/disinfection between patients, maintenance, breakdowns etc.) and the LOS for Covid-19 turns out to be at least the same as the average ICU LOS (3.3 days), then the ICU bed requirement in Australia in the 'worst case' could easily hit an additional 6,500 ICU beds (a four-fold increase in the existing number of ICU beds). And its not as if Australia would be able to source additional technical and staff resources from overseas in such a situation (Australia's traditional answer to shortages in nursing staff is to poach them from the UK health system...), as other countries would be trying to boost their capacity at the same time.

BTW, the current fatality rates are skewed towards countries that have quite good health care capability (China, Korea, Japan, Iran) - and in that sample roughly 5% of Covid-19 cases have needed IC, resulting in the current fatality rate of between 1%-3%. If/when Covid-19 spreads to developing countries in Africa etc. the lack of ICUs could mean the fatality rate in those countries approaches 5% (those that 'need' ICU and can't get it would presumably not have good outcomes).

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Not losing (much) weight or money

So far this week I've avoided overeating, and have been going to the gym for weight training and doing plenty of walking, but I've also not been sticking to the 'keto' diet plan (my pre- and post- gym session 'carb loading' rapidly got out of control and devolved into snacking on packets of potato crisps!). I'll make an extra effort to stick to my 'keto' diet plan today, and during the weekend, as my cheap 'breathalyzer' device finally arrived in the post (I ordered it via banggood.com several months ago) and I want to see if it works for monitoring 'keto' status. I did a couple of test blows yesterday and it gave a reading of 0.000% BAC, which isn't surprising as a) I don't drink alcoholo and b) I've been averaging more than 50g/day of carbs for the past week, so I wouldn't expect to be in ketolysis currently. I'll resume doing a 'dip stick' test in the mornings and also do the 'breathalyzer' readings, and see how/when I shift back into 'keto' (and how the breathalyzer readings compare to the test strip results). My bathroom scales indicated my weight was around 85 kg body fat around 14.5% this morning, so I'm still 'on track' to reach my goal of ~78 kg and 12% body fat by mid to late April. I've been losing about 1.5 kg of fat for every 1.0 kg of lean mass loss while doing the 'keto' dieting and weight training regime, so the next 7.5 kg of weight loss should be roughly 3 kg of lean mass (sob) and about 4.5 kg of fat (yay), which would leave me with about 11% body fat.  We'll see how things turn out in reality at the end of April when I've switch the maintenance calories for a couple of weeks and get my second DEXA scan done.

On a more positive note the movement down the risk-return curve I implemented for our SMSF investments and (most) of my geared share and fund investments was JIT. As of closing unit prices two days ago our SMSF investments (around $1.5) would have been about 4.5% down compared to when I processed our 'switch' from High Growth Index Fund into 70% Conservative Index Fund and 30% Bond Index Fund. Instead our SMSF investment had been pretty stable since the switch (the Conservative Fund was down around 0.5% and the Bond Fund was actually up a little bit, so overall our SMSF fund was only down by about 0.3% instead of 4.5%. Given that the markets have continued the sell-off during the past two trading days, we're probably down by about 1% since the 'switch' compared to ~10% if we'd stayed 'risk on'. Overall we probably preserved around $150K of our SMSF investments value by being cautious and going 'risk off' as a precautionary measure. Given the worsening global situation regarding Covid-19 (and the possibility of an upward spike in Chinese cases now that its been almost two weeks since the end of the lunar new year national 'lock-down' was eased to get industry restarted in China), I can't see market sentiment suddenly getting positive any time soon.

If global containment has been ineffective (which seems increasingly likely), and person-to-person transmission is occurring with an R0 of around 2.5, the number of cases (and deaths) globally will reach alarming proportions quite rapidly. Other than containment, there was no 'plan B' possible for mitigating the effects of Covid-19, given that the 'herd' (humanity) has NO immunity to this novel coronavirus, and any vaccine will take at least a year to be researched, tested, and then manufactured in sufficient quantities to even start rolling out an immunisation program. That's why the WHO and national government's 'by-the-book' "don't panic" reassurances were correct public policy, but there probably needed to be a LOT more containment action taken around the world. Australia's decision to ban all flights from China to Australia is looking very prudent in hindsight (perhaps the PM decided that early, decisive action regarding Covid-19 would make up for the lack of initial Federal government action during the bushfires?). Unfortunately that is only delaying the inevitable, unless Australia was to impose a quarantine on all arrivals from any countries from now on (extremely unlikely, and impractical, but who knows?)

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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).

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

Age

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:

AGE AVG NW
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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Annual Salary review and bonus

I was notified yesterday of my annual pay rise (1%!) and bonus (11.24% of base salary). Any pay rise is better than none, and considering that CPI in Australia only rose by about 1.8% during 2019, the 1% 'pay rise' means that my annual salary has only declined by about 1% in real terms during the past year. However, as I've only been receiving 0% or 1% 'increases' in base salary for many years now (and the increase in AWOTE in the 2019 FY alone was 3.1%) I'm certainly seeing my salary slowly decline in real terms over time.

The only saving grace is that when the company I work for was taken over by a multinational company several years ago they migrated our current salaries unchanged, and then phased in their standard 10% bonus scheme over the following three years. Effectively that means I got a one-off pay rise (assuming the bonus is allocated in full each year - which depends on company profitability and personal performance rating) of 10%. So my total salary package (including bonus and SGL) has probably kept pace with inflation over the past decade.

But in the grand scheme of things the quanta of my annual pay rise isn't too important to me these days, as I'm am rapidly approaching retirement age anyhow. So, as long as I don't get retrenched before I'm ready to retire, and earn roughly my current salary, I'll be happy.

Also, an extra 1% pay rise (and even the 10% bonus) is relatively 'small beer' in comparison to changes in my net worth. Once your NW grows beyond 20x salary income, asset allocation and investment returns are of more importance than pay rises or annual salary bonuses. Of course that means that any major investment declines (such as occurred during the GFC) are extremely painful - you can see your NW decline by the equivalent of a year's salary in a single month!

Looking at it another way, my annual bonus was roughly the same as the cost of the ill-fated purchase of an S-type Jaguar last year, and is also about the same as it costs me each year to stay registered as a Financial Planner (the basic admin and software fees to remain an 'authorized representative' of an AFSL holder).

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Tweaking my diet and exercise plan

My weight this morning was 84.6 kg, which is almost down to the best weight I achieved way back in 2001! However, the bathroom scales also gave a body fat reading of 18.2%. While the body fat reading isn't very accurate, I have read that strict ketogenic diets can lead to muscle loss, even when subjects were doing weight training. Given that I'm approaching my target weight of around 80kg, and that I've lost 8kg over the past month (much faster than my target of 0.75-1.5 kg of weight loss per week) while on the 'strict' ketogenic (<35g calorie="" carbs="" d="" decided="" diet="" high="" i="" p="" protein="" restricted="" to="" ve="">a) resume my weight training at the gym three times a week, as of today
b) possible modify my 'strict' keto diet my consuming some carbs (eg. some fruits) after my weight training sessions, as apparently a combination of protein and carbs is better for gaining/preserving muscle mass via weight training

I'll see how I feel after the gym session this afternoon, but at this stage I'm planning on having a peach and some grapes when I get home after the weight training session.

On a side note, I ordered a set of Kendo armour (bogu), sword (shinei), bags and clothing (gi) from Japan last night. The full set costs USD $555 (about A$860) but included 'free' shipping and embroidery of my name (in Kaku gothic  Katakaba script) on the clothing. I had previously bought a cheap set of Kendo clothing in traditional indigo (dark blue) colour before I started the beginner Kendo lessons, so this time I decided to order a black uniform as well as black armour. Most people wear the traditional indigo coloured gi, but I might feel like standing out from the crowd (then again, maybe not - I'm pretty sure my Kendo will remain mediocre for quite a few years). While the Kendo equipment isn't cheap, I figure that it is good exercise, and as I have to take DS2 to his Kendo grading every six months, and to Kendo training every Saturday I may as well also do Kendo training and get graded along with DS2. Assuming DS2 continues doing Kendo for another five years while he is in high school (and I do it for at least the next five years), the annual cost of the Kendo equipment (assuming nothing breaks or wears out, aside from Shinei) is quite reasonable.

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2019 nCoV Fatality Rate Trend

As of the Latest WHO SITREP (#22) the generally cited fatality rate (Current Death Total, which I've called T0, divided by Current Cases Reported, which I've called D0) is trending slightly higher (to 2.3%) and my 'estimate' of the 'true' fatality rate (which won't be known until the final number of total cases and deaths is known at the end of the outbreak) which I've calculated as D0/T-4 (i.e. current known deaths divided by the number of cases known four days previously) is trending down at a reduced rate (stuck at 3.2% for the past two days).

The T0/T-4 rate was decreasing due to the daily rate of increase in known cases declining - peaking at a daily increase in known cases of 50% during the first week of SITREPS, to 'only' 11% daily increase over the past week (and down to 6% day-on-day rate of increase in known cases as at SITREP#22). As the rate of new cases has gone from an exponential rate to close to a linear (constant) rate, the T0/T-4 fatality rate has trended towards a 'steady state' figure that I think is probably getting closer to the 'true' overall fatality rate of 2019 nCov. At the moment it is looking like the 'true' fatality rate is somewhere between 2.5%-3%,

The rate of new cases reported is sitting around 2,500 per day, which would mean that the total cases will be somewhere around 60,000 in another week, and the death toll will be around 1,600-1,700.

One worrying sign is that the number of cases reported outside of China seems to have spiked higher - I haven't been tracking those figures, but I'll add that to my spreadsheet and do a post tomorrow with the latest SITREP figures included.

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Tuesday, 11 February 2020

Diet 2020 Wk 6 - week ending 09.FEB.2020

A mediocre week - overate a bit on the weekend (although still well below maintenance calories), so my weekly average cals was 1,563.6/day. I also didn't go to the gym at all, but will start going again this week as there doesn't appear to be any corona virus transmission occurring within Australia at the moment. My daily stepcount was also lowered than my target, as I didn't do much walking on the weekend (there was a tropical storm lashing Sydney). But I did go to my two hour Kendo lesson on Saturday, so my overall activity level was probably still OK.

This week my average daily cals will probably be considerably lower, as I was sick on Monday and didn't each much (or go to the gym). My focus for the rest of this week will be to achieve my daily step count totals, and to resume going to the gym for weight training from Wednesday onwards.

I got my latest blood test results last week and it is all looking OK (aside from my ridiculously high IgE levels, which the immunologist is trying to get down using Imuran medication). There has been a considerably decrease in my triglycerides level (which used to be well above the 'normal' range, despite my cholesterol levels not being too high) so it is now down within the healthy range. My blood pressure has still been averaging around 105/65 since I've reduced my blood pressure medication by 50%, so I'll probably stop taking the BP medication completely (as suggested by my GP) once I've attained my target weight in a couple of months time. My resting pulse is averaing around 63 BPM, compared to averaging around 70 BPM last November when my weight was around 100 kg and I hadn't started regular gym sessions. So my general fitness and biomarkers certainly seem to have improved.

Averages for last week were:
Fibre:          5.9 g/day
Carbs:          9.9 % of cals
Fat:           48.2 % of cals
Protein:      135.1 g/day
Sodium:     4,323.0 mg/day
Weight:        85.9 kg
BMI:           28.0
Steps:      7,007   steps/day
Sleep:          5.7 hrs/night
Body Fat:      15.9 %
Gym sessions:   0
WT Reps:        0
WT volume:      0 kg
Treadmill:      0 mins

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Sunday, 9 February 2020

Review of my nCoV model

Well, a week after I did my crude 'model' of corona virus case rate and lethality, it looks like the rate of spread has been substantially reduced (by heroic/draconian containment measures in China) from new cases increasing by ~30% each day a week ago, to ~11% increase each day currently (as at WHO SITREP #19). That has meant that the rate of new cases has gone from increasing exponentially to 'only' increasing by around 3,000-4,000 new cases per day for the past 5 days.

The current day deaths/cases ratio has remained constant at around 2%, but due to the delay between new cases being reported and resolution of the outcome (recovery or death), the 'T-4' ratio is probably trending towards the eventual 'true' lethality rate (assuming an accurate number of total cases is ever fully known). The 'T-4' ratio has been steadily decreasing, from around 5% when I did my 'model' a week ago, to 3.5% as at Sitrep 19. So it looks like the final fatality rate may end up being around 3%, which would still 50% higher than the 2% 'current day' calculation that is generally being reported.

If the current rate of new cases remains fairly constant at 3,000 cases/day we would continue to see about 100,000 new cases reported each month in China, which would result in 2,000-3,000 deaths per month. Hopefully the rate of new cases will start to reduce significantly, but the planned end of the industry closures around China tomorrow (Feb 10) might make that more challenging. If closures are extended (again), or the resumption of travel and reopening of offices and factories causes a spike in infections the impact on the Chinese and global economies could be significant. At the moment I'm in a 'wait and see' mode, having started to reduce my allocations to equties for the moment.



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Thursday, 6 February 2020

Going a bit 'risk off''

I'm generally a 'risk tolerant' investor, so have our SMSF money invested in the Vanguard 'High Growth' diversified Index fund, and have some margin loans (funded with a home equity loan) that are invested in ETF funds and some CFS geared equity funds (so, using home equity to fund a margin loan to fund a geared share fund is what would sometimes be termed 'triple geared' !).

Anyhow, an opinion piece in today's SMH about the immediate impact of the nCoV outbreak on China's industry (basically it's shut down until 14 Feb) and longer term outlook (the WHO daily SITREPs on nCoV cases doesn't show any major reduction in the rate of reported spread, and there may be under-reporting issues in Indonesia, and in the Chinese figures themselves) for a prolonged impact on Chinese GDP and therefore global trade and GDP, highlighted to me that aside from being a major health concern, the nCoV pandemic exposes the Chinese and global economies to increased risk. Far from Chinese industry getting 'back to normal' after 14 Feb, the continued increase in nCoV cases suggests that either a) the 'shut down' will be extended, having a major impact on economic expectations and hence share markets, or b) factories re-open as planned, but the spread of nCoV will therefore be harder to control and may have a significant long-term impact on Chinese economic performance and hence the equity markets.

Overall, there seems to be considerable down-side risk and no up-side potential (aside from health stocks such as CSL). Therefore I decided to 'rebalance' my portfolio by reallocating our SMSF from the High Growth option to a mix of Conservative (70%) and Bond (30%) options, and by selling off my geared share fund investments (and use the proceeds to pay off my margin loans and reduce my home equity loan balance). I monitor how things go over the next 3-12 months to decide when to increase my equity weighting again.

Although this will result in some capital gains tax liability, I've learned from the GFC that when its time to reduce investment risk, taxation issues should not be the tail that wags the dog.

Time will tell if this was a prudent investment decision, or an overreaction.

Being invested in 'cash' might also provide an opportunity to make some undeducted contributions into my superannuation, before my total super balance hit the 'cap'.

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Wednesday, 5 February 2020

Diet 2020 Wk 5 - week ending 02.FEB.2020

Had a pretty good week diet-wise, averaging 1,268 kcals/day. It was also ketogenic (averaging 10.0% cals from carbs) and reasonably high protein (averaging 131g/day). My sodium intake was still quite high (averaging 3097 mg Na/day), so this week I'll cut back a bit on eating packaged ham and roast beef as a 'snack' in the afternoon and aim to eat more plain, grilled beef and chicken for dinner instead. My weight during the week dropped from around 89 kg to around 86.8 by the end of the week, and this morning my weigh-in was 85.7kg (the lowest since 2001!) and about 13% body fat. I can feel a 'six pack' in my abs, but I still have about 0.5 cm of layer of subcutaneous fat covering my abs, and the skin is fairly loose, so I certainly don't have a visible 'six pack' as yet. Once I get down to 80kg (and around 10% body fat) I'll slightly increase my daily carb intake (by having porridge for breakfast and having some fruits and more vegetables at dinner time) to achieve a more 'balanced' macro ratio, and my caloric intake to a level suitable to maintain my weight and also accommodate a gradual addition of lean mass via ongoing weight training.

I didn't go to the gym at all last week, as DS1 and I decided to avoid the gym until it is clear that the spread of coronavirus in Australia has likely been well contained (ie. no new cases for a week). Meantime I'm just doing my walking, 5BX in the evening and doing a little bit of weight training at home. There's just been a 13th case confirmed in Australia, but apparently that was someone that came back from a tour of China that visited Wuhan, so there don't seem to be many new cases transmitted person-to-person within Australia, so I'll probably start going back to the gym this coming Friday.

I ended up missing my second Kendo lesson last Saturday as I was stuck in a queue to hand in the registration plates of the unregistered Jaguar I had to sell to a parts dealer last week. I'll have to pay to get new plates made with that rego number if I get another S-type Jaguar some time in the future, but at least I should be able to get the same rego number again. After dropping in the rego plates I drove out to Horsley Park Gun shop to purchase a new .22LR CZ455 rimfire that I'll use for benchrest target shooting at the local 25m range where I currently do 10m air pistol target shooting on the weekend. Once I've completed the series of Saturday morning beginner Kendo lessons I'll switch to attending the Wednesday night Kendo sessions, and do gym on Mon, Fri, Sun instead of Mon, Wed, Fri. That way I'll be able to go more regularly to air pistol on Saturday mornings with DS1 and DS2. I'll start doing benchrest rimfire shooting at another target shooting club that operates on the same 50m range on Sunday mornings.

I didn't do much walking on the weekend, and yesterday didn't reach my 10,000 step target, so I'll have to make sure I get in some extra walking for the rest of this week. I had a routine blood test done last week, so it will be interesting to see how my cholesterol etc. levels have been affected by the months of weight loss and increased activity/exercise.

Averages for last week were:
Fibre:         11.2 g/day
Carbs:         10.0 % of cals
Fat:           45.4 % of cals
Protein:      131.2 g/day
Sodium:     3,096.7 mg/day
Weight:        88.1 kg
BMI:           28.8
Steps:      7,959   steps/day
Sleep:          6.0 hrs/night
Body Fat:      17.4 %
Gym sessions:   0
WT Reps:        0
WT volume:      0 kg
Treadmill:      0 mins

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Tuesday, 4 February 2020

Net Worth: January 2020

My estimated NW increased by $60,194 (2.46%) during January to $2,502,382, due to the strong gains in Australian and global equities markets, which flowed on to the valuation of our SMSF investments. House equity valuation didn't change as there was no updated monthly sales data available when I did my monthly estimate of our house valuation (other reports suggest that the Sydney real estate market continued to improve). My NW hit the $2.5m mark for the first time, which helped mitigate the disappointment that my S-type Jaguar had to be written off as the Jaguar 'specialist' service center couldn't fix the problem with the electrical system (ended up selling the car to a parts dealer for $500, after buying it for $8,000 and spending about $2,500 trying to repair it when it broke down).

This month I had to pay the $42,452 'stamp duty' on the $1m off-the-plan unit that won't be completed until 2023 and I also paid $3,500 for the next uni term of my Masters course (which I paid using my 'portfolio loan'), and I also bought about $1,000 of 'toys' (a cheap $210 kayak to use when I'm at the lake house, some gym clothes and annual gym membership pre-payment, and a $600 .22LR CZ455 rifle to do some benchrest target shooting on the weekends), so I'm more than tapped out in terms of cash flow this month. Seems that I'm asset rich and cashflow poor and will need to clamp down on spending too freely on 'wants' - which is probably good practice for when I retire...

Fortunately I *should* get paid my annual bonus (around 10% of salary) during February, which will help pay this month's credit card bills! If I ever get around to lodging my 2018 and 2019 tax returns I should also get a tax refund (I sold some shares in 2018 and probably made some capital gains (still trying to find all the DRP and purchase details from back in the 1980s!) but I also had quite a few tax deductions, so should get some of my PAYG tax refunded).

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Sunday, 2 February 2020

Coronavirus data sources and my amateur modelling

I found a couple of interesting and reliable sources for anyone interested in tracking the progress of the 1999 nCoV outbreak. The official daily WHO SITREPs can be found here, and I've started using the reported cases and deaths figures from these reports to calculate the daily lethality 'estimate' (around 2.5%) which the media is generally citing, and then also calculate my hypothetical estimates - where the current death total is divided by the case numbers from previous days (1, 2, 3 or 4 days prior) rather than the current number of reported cases. My logic (possibly flawed) is that while deaths (of known coronavirus patients) and generally known immediately, the number of reported cases will always be less than the true current number of infected people, as there is a 1-14 days incubation period before symptoms become apparent. Reported cases may also be less than the true figure, due to misdiagnosis or underreporting - but that would then also understate the deaths figures. So overall I think using current deaths/current reported cases is likely to underestimate the 'true' figure. Initially my rough calculations comparing each days reported death total to the case numbers 4 days prior (T-4) was quite alarming, as it was close to 20% on some days, and was averaging over 12% during the first 10 SITREPS (days). However, the latest daily figures show that this T-4 estimate is now dropping towards 4%-5%. So my current "guess" is that the true fatality rate for this virus may turn out to be around 4%-5%. Only time (and the control of the epidemic eliminating new cases) will provide the correct figure.

Another interesting site to monitor the coronavirus statistics is here. This site is 'live' (updated every few hours) so it provides more current figures that the daily WHO SITREP, but it is harder to use these figures for calculating day-to-day changes in the figures and identify trends in case numbers and fatality rates. The plot looks rather impressive though - a bit like the ones shown in nearly every SF movie about global disasters - but is a little frightening when you realise that this is reality and not a disaster movie! The relative numbers of 'total deaths' vs. 'total recovered' also isn't very reassuring at present (305 deaths, 348 recovered), but hopefully 95%+ of all coronavirus patients will eventually recover.

A link to a WHO introductory 'course' about 1999 nCoV was provided in their latest SITREP, so I did a free registration for an OpenWHO account and went through the 'course' (it's only a short general video and some powerpoint slides).

I did post a comment in the course discussion about lethality rates ("unknown at this time") and how the media is reporting the simplistic deaths/cases figure, and why that is probably too low an estimate. I'm surprised that they don't have an estimate (with error range) for this virus based on time series analysis of the daily figures. While the final 'correct' figure on lethality can't be calculated until it's all over (for example, the reported cases is likely to be lower than the actual number of people infected - but hopefully not too much lower, as that would mean the outbreak is harder to contain), there should be some standard statistical methodology for getting a reasonably accurate prediction based on the daily data series.

My very rough projections done on Friday had estimated the daily case numbers for SITREPS 11 and 12 would be 10,163 and 13,212. The actual numbers turned out to be 9,826 and 11,953. So my 'model' had overestimated by 3.4% and 10.5% respectively. This was because I projected case numbers to continue increasing by 29% per day (the average from the first 10 SITREP figures), while the last two days have seen case numbers increase by 'only' 26% and 22%. The plot of SITREP figures for reported cases and deaths doesn't yet show any downward inflection point that would suggest that the spread of the disease (within China) is being fully contained (as yet):


On a more positive note the international spread of the disease appears to be under reasonable control, provided the initial cases imported from China didn't spread into the general population before adequate quarantine etc. was put into place. Given the incubation period the international figures over the next week or so will show if the effects will be mostly restricted within China, or if it will become a major international pandemic (as was SARS).

Hopefully my 'model' is total unrealistic and I don't know what I'm doing*, as it currently projects reported cases hitting 90,000+ and deaths exceeding 1,800 in a week's time from now... we'll see what the actual figures in SITREP 22 turn out to be.

* As stated in my previous post I have NO medical training or qualifications, and my statistics and data modelling is very rudimentary, and I'm working from a very superficial set of data.

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