A Wonderful Christmas in a Strange and Unusual Year

Merry Christmas!  I hope all of you are doing well and that your celebrations were filled with happiness, laughter, and good food!

For our part, this year marked the 20th Christmas that Aaron and I have spent together.  Like every one of those other Christmases, it was one of the best days of my life (despite the unusual circumstances and challenges this year has brought).  We decided that with the world feeling so uncertain, and the need to remain socially distanced from others, it would be the perfect opportunity to stay home, wear knitted sweaters and jeans, and enjoy a classic early-to-mid twentieth century dinner; pure, old-school comfort food that invoked a sense of warmth and safety, friends and family, prosperity and peace.  This meant a menu consisting of:

• An 8 1/2 lbs. ham that we roasted for hours in a glaze of brown sugar, honey, cinnamon, clove, and, for a touch of citrus high notes, orange juice.  As the juices from the ham escaped during cooking, we’d mix them and periodically baste the meat as the concoction thickened and caramelized.  Both the flavor and the fragrance were extraordinary.;
• Buttered peas;
• Broccoli;
• Sweet Potatoes; and
• Dinner rolls

Along with a French press pot of freshly brewed black coffee – Homestead blend from Stumptown Coffee Roasters – desserts options included:

• Apple pie served either by itself or à la mode with Häagen-Dazs vanilla ice cream; and
• Chocolate chip cookies made with Ghirardelli 60% cacao bittersweet chocolate

While the food cooked and the fragrance wafted out from the kitchen, we were able to speak with friends and family across the country through telephone calls and text messages.  Afterwards, I spent a good deal of time sitting at the dining room table reading a history book on the obliteration of the Russian Aristocracy following 1917 as part of some case studies I’m doing on multi-generational family wealth preservation while Aaron found a moment to play the new Cyberpunk 2077.

I wish there were some way for you to experience this … We have so much meat left over that I think I’m going to bake a fresh loaf of bread in one of the Dutch Ovens so we can make thick restaurant-style sandwiches with the roasted ham slices for the rest of the week.  They’ll be incredible with a glass of cold iced tea; maybe a potato soup to dip it in, diner-style.

It’s wild to think about what life looked like last Christmas compared to this Christmas.  Overall, during the year 2020, we made significant progress on nearly all of our personal and professional goals; in some cases, notching major wins that represented dramatic leaps forward as we shoved years of effort and expenditure into a few quarters.  No matter what was going on in the world, our strategy was to focus our attention primarily on the things we could control, opting to make the most intelligent decisions we could in the circumstances as they were presented to us.  Once it became clear that a major global liquidity collapse was not in the cards and capital markets stabilized, we decided to press forward to expansion under the theory that at some point life would return to normal and we’d be better positioned to scale by already having the bulk of the foundation in place.

There Are Often Silver Linings to Even the Worst Periods in History

Despite those wins – including completing the build-out of a structural trade at Kennon-Green & Co. that I think holds the potential to be one of the most important operations of the next five to ten years – neither Aaron nor I ever want to live through another year like 2020.  There was a period of several months where nearly every intrinsic value calculation I’d run required estimating the probability of a liquidity collapse that created a situation like Wachovia so that perfectly fine companies boasting net worths in the billions of dollars suddenly imploded to zero.  Fortunately, executives, managers, and employees across corporate America reacted brilliantly.  I was particularly pleased with one of our largest holdings, The Walt Disney Company, as managed temporarily suspended the cash dividend, went to the bond market to raise enormous sums from fixed-income investors to bolster cash reserves, and accelerated capital expenditures in the Disney+ streaming division so that its development timeline moved up by several years.  It was one of the cases where I expected to be better off owning it five or ten years in the future than I was at the start of the year even if temporarily ran billions of dollars in losses and the quoted market price collapsed by 50% or more.  If anything, I began to suspect we were looking a a post 1929-1933 phenomenon where by 1937 you saw larger businesses succeed disproportionately because they gobbled up market share from smaller companies that failed.

Like many of you, I can’t wait to go wander the aisles of bookstores for hours without a mask, again.  I can’t wait to go to the movies, again.  I can’t wait to meet people for brunch or coffee, again.  I can’t wait to go to the gym, again.  I can’t wait to go back to my barber every two weeks, again.  I can’t wait to regularly update my wardrobe, again.  I can’t wait to go to the public library, again.  I can’t wait to pick up friends at the airport, again.  I can’t wait to wander around Disneyland, again.  I can’t wait to go to concerts, again.  While we’re still maintaining our working assumption that life won’t look entirely like it did until starting around December 2021, most timelines now appear that the sun will feel like it is rising, so to speak, sometime around July or August.  By then, nearly everyone in the United States who wants a vaccine will have had it (and I’m betting a lot of people are simply not going to have a choice as it will be required by employers, businesses, insurers, and school districts so the choice will be to get it or face ostracization and unemployment).

On the other hand, the small amount of personal time I did have allowed me to discover some wonderful things this year that I otherwise wouldn’t have encountered were it not for the pandemic.

Television and Film in 2020

Aaron and I watched all 50 episodes of the most popular dramas in history, The Untamed, and I read the entire 1,324 page Mo Dao Zu Shi translated source text of the epic novel plus bonus chapters, written by Mo Xiang Tong Xiu, upon which it was based.  Very few things have come along that have the kind of cultural clout that does – aside from a massive increase in business for Amazon competitor Tencent, one of the stars, Xiao Zhan, quite literally became the biggest celebrity on planet Earth with daily search engine queries that were almost unimaginable in number.  The situation grew so out of control that, through not fault of his own, he ended up involved in a bizarre series of economic boycotts that entangled companies like Nestle and Piaget in Switzerland and Estée Lauder in France.  (The crazy thing is that most Americans were in such a bubble during 2019-2020 that they had no idea any of this was going on despite the fact that if aliens were observing humans from low orbit, it would have been one of the biggest stories of the decade.)  Plus, the drama itself had a great soundtrack.  These were two of the best compositions …

It’s incredible that all of this stemmed from a girl who was at university studying economics because her mother forced her to do something that would make money, yet she wanted to practice her fiction writing, creating this epic fairy tale of magic, love, warring clans, ancient legendary monsters … some parts of it were based on things she wrote in high school during study periods.  You can watch the entire series on Netflix.  You should.  Seriously, you should.  There is a reason it smashed so many records.

On the Korean drama front, there wasn’t much this year.  We did manage to watch Mystic Pop-up Bar, which we both enjoyed.

I also discovered several series from Thailand that I deeply appreciated, which ended up leading me to a study of the economic development that has occurred there.  While it is far from a sure thing, the nation has my attention now.  I was looking at some of the major stocks traded in the local market – didn’t end up buying anything (yet, anyway) – but the country has a shot at pulling off what Korea did over the past few decades.  If they manage to avoid political strife or a catastrophic natural disaster or war, Thailand is primed for an exponential rise in personal freedom and wealth.  I am very, very intrigued.  I want to see them succeed.  At one point, I was so interested in whether it might make a good twenty or thirty year bet in our family’s own endowment portfolio (as well as for some of the long-term private clients of Kennon-Green & Co.) had the pandemic not been going on, I would have flown there to spend a few weeks looking around and meeting with people.  The Western perception of Thailand is completely out of date and differs materially from what it has become.  Perhaps the biggest problem it faces is demographic – a declining birth rate coupled with an aging population – as well as the pandemic causing tourism dollars (which are still a major source of capital inflows and economic activity) to fall off a cliff.  Nevertheless, real GDP growth in my lifetime alone has been extraordinary; something I expect to continue, even if at a slower rate.

I also watched the first three seasons of The Dragon Prince on Netflix over the course of the past few weeks – usually a couple of episodes late at night before I fell asleep if I found myself too tired to read – and it deserves all of the critical acclaim it is receiving.  I can’t wait to watch it with our kids.  Supposedly, Netflix has committed to seeing the entire epic’s story arc completed over several more seasons so the writers have the ability to pace the plot with the care and attention it deserves.

Video Games in 2020

I didn’t have a lot of time for video games this year (due to the way we budget entertainment hours as The Untamed drama and book claimed a good chunk of the allocation and the need for overtime at the office cutting into my personal life) but I did manage to:

• Start Stardew Valley, which was and is incredible!  It was an absolute godsend during the early days of the pandemic as it served as my virtual Zen garden, letting me clear my mind in between long days worrying trying to find ways to protect the life savings of people who had entrusted a major portion of their net worth to us.  Tending my kale, then, later, cranberry fields, planning the expansion of my barns, growing my farm’s income and net worth, exploring the mines … it was an exercise in meditation, planning, and patience that helped me reset before going back into the maelstrom.
• Finish the first installment of the much anticipated Final Fantasy VII remake, which was also a great stress relief back during the first half of the year when we couldn’t go outside.
• Discovered and finished quite a few indie and smaller studio games during the year, including:
  • Several visual novels.
  • A Greek mythology-inspired game called Hades by Supergiant in San Francisco.  Hands down, it was my absolute favorite game I’ve played in a long, long time.  It is, perhaps, one of the only games in history I would award a perfect 100% rating.  It is classic old-school NES-style endless replay value awesomeness.  If you have Steam on your PC or a Nintendo Switch, buy it today.  I cannot praise it highly enough.  It’s amazing.  I could pick it up and play for twenty or thirty minutes here or there, totally resetting my thought process then going back to work on days where I was at my desk until 2 or 3 a.m.
  • A reverse-horror game called Carrion on Steam that I finished – it’s short, only a few hours – but imagine playing Metroid only your character is the alien villain trying to destroy everyone and escape.

Right now, I’m playing Assassin Creed; Valhalla but unlike Assassins Creed: Odyssey, the latter of which both Aaron and I adored, I’m finding Valhalla excruciatingly boring.  I may not finish it because I’d rather redeploy that time elsewhere.  As I mentioned earlier, Aaron is playing Cyberpunk 2077, instead, which doesn’t look like my cup of tea so there is almost no chance I start it.  (Cyberpunk’s launch disaster has been wild to watch – the consequence it has had on the shares of the publicly-traded game developer over in Poland, the front-page Wall Street Journal coverage, glitches so bad it was pulled off the Playstation store by Sony … )

Ah!  That reminds me, Aaron and I ended up getting new computer systems for our personal home offices / studies.  After more than fifteen years, we switched back to Microsoft’s operating system given the lack of innovation that had been happening at Apple in regards to their Mac systems.  I wasn’t sure what to expect – each of the two systems by itself with the monitor and accessories was more than $6,000, putting them more on par with the old PowerMac systems we had at the ecommerce businesses we owned years ago – but we are thrilled with them.  I mean it: We’re absolutely ecstatic.  They have made our lives so much easier during this year of working-from-home.  Plus, the hardware is quite beautiful.  (With the exception of a slight difference in RAM configuration due to pandemic supply chain availability, our systems are nearly identical except he opted for an all-black case whereas I went for the black-and-white case.)

Books in 2020

Most of my reading is non-fiction which, to me, is both entertainment and work.  A lot of people don’t feel that way, which I respect but don’t fully understand because there is so much to learn.  I already mentioned the book I’m reading on the decline of the Russian Aristocracy following the revolution in the early 20th century but there were so many others during 2020.

I finished economic books such as Thomas Piketty’s Capital in the Twenty First Century – I found his understanding of human nature and incentives well-intentioned but woefully naïve, several of the bestselling political memoirs in recent years such as Barack Obama’s A Promised Land and Hillary Clinton’s What Happened, biographies and case studies of people who had built financial services firms such as a book by Eddie Brown, one of the most successful black financial executives in the world who founded and nurtured an asset management company with $6 billion under management.

In terms of fiction, the most notable work aside from Mo Dao Zu Shi was The Count of Monte Cristo by Alexander Dumas, which I read during our brief stint in isolation up in our second place in Newport Coast, often sitting outside on a small patio surrounded by humming birds and mourning doves, overlooking a private walking park where people would walk their dogs or play with their kids, as I drank espresso and ate Jeni’s Brambleberry Crisp ice cream.  This was when we were using it (the second place) as an office because our new office was not done due to construction delays during the pandemic.  We ended up getting rid of it fairly quickly – once we were given keys to our office, we had planned on making it our home to see if we wanted to live in that neighborhood should we buy a house but decided there were some things about that specific neighborhood that we didn’t like as much so we got rid of it and kept our original place – but it served its purpose.

I don’t know … looking back over the course of the past twelve months, I don’t have a lot to write about in terms of what I did personally because there wasn’t much of a personal life.  There was only work.  It was the primary recipient of our attention and time.  We shoved achievements that might have taken years into less than 365 days, a lot of it not visible to anyone else but creating a framework that should pay off handsomely down the road both in terms of efficiency and client experience.  Our philosophy was that the fact it was difficult, or inconvenient, due to the pandemic was not justification for avoiding the necessary work of making the right decisions and progressing.

I need to go.  More furniture is being delivered for Aaron’s parents’ place and he and/or I need to be there to give the furniture company access.