Atlanta has a snow problem

Atlanta can’t deal with snow. That’s a feature, not a flaw. We don’t get much of it. It would be unwise for us to spend the sort of money needed to be accurately prepared. We struggle with snow for the same reasons upstate NY school districts w/o air conditioning occasionally shut down during a heat wave. Alas SNL didn’t get that and Atlanta is the most insecure city I’ve ever lived in (and I’ve lived in Baltimore FFS!), so now we freak out every time it is going to snow within 100 miles just to make sure there is no eventual SNL skit.

We’re also terrible at listening to science. Not long ago our lawmakers were putting stickers on textbooks telling kids science is just opinions. So no surprise they make decisions without looking at what the weather people are actually saying: 40 degrees overnight, rain coming in, briefly turning to snow, less than 1″ falling, and ground temperatures in the 40s when it hits so much of what does come will melt.

So out of an odd fear of the rest of the world thinking we are hillbillies just because we can’t deal with weather we don’t often get, we make plans to shut down society 24 hours ahead of a storm that the forecasters are saying won’t be anything of a storm. And then we’ll be surprised on Wednesday morning when there is an actual chance of black ice as the temperature goes down which will cause more trouble than what we were trying to avoid.

We act like ignorant chumps in hopes of making sure no one in New York makes fun of us.

No, CNBC, hedge funds didn’t just beat the S&P 500 for the first time in a decade

Saw this clickbait today…

I’ll save you a click: The article says that a weighted composite average of hedge funds posted a -4.07% return in 2018. That’s 31 basis points better than the S&P 500 with dividends, which returns -4.38%. It’s the first time since 2008 that the hedge fund index beat the S&P 500. Hence the headline.

But wait… That doesn’t mean investors who own the hedge fund index, if that is even possible, would have come out ahead of investors in an S&P 500 index fund. To figure that out, you have to know the expenses. And while we don’t know the exact pound of flesh each of these hedgies extract from their investors, I’m willing to go out on a limb and say the total is far higher than the 0.04% expense ratio that the Vanguard S&P 500 Index carries. I’d even go so far to bet that the difference is more than 31 basis points. If so, the hedge funds might have won, but the hedge fund investors still lost.

But wait, it’s actually worse for the hedge funds than it appears. Investing isn’t just about one random 365 day period. It’s about a lifetime.

Using the handy 11-year graphic comparing returns tweeted by CNBC’s Leslie Picker…

over the last decade plus one year — so even counting the last two years hedge funds actually won — the S&P 500 index has outperformed the hedge funds by a combined 66.24%! So congrats, hedge fund investors. Even if fees are included in the index and you are 0.31% richer than the alternative this year, you are still down HUGE over the last decade.

The best financial advice to come out of this is one simple point: Don’t base your asset allocation solely on what you hear, or read, on CNBC.

Red Top Mountain

Beautiful 70 degree January day in Georgia. Great opportunity to get out. This is a lovely 5.5 mile hike around Red Top Mountain looking down at Allatoona Lake and the Etowah River. Highly enjoyable, though we weren’t the only ones with the idea so the trail (and the car park) were rather crowded.

If your imagination is good enough, you could almost talk yourself into believing this rocky shoreline was the wonderful Maine coast and not north Georgia. Of course this was also a lot closer.