Well, that happened, and by that I mean a black swan sort of a day, a day living in the same general neighborhood as September the 15th, 2008 (the worst day of the worst financial crisis since the Great Depression) and September the 17th, 2001 (the day the stock market first opened for trading following 9/11). And let’s not pooh-pooh the 22.6% single-day swan-dive-into-a-belly-flop the Dow 30 did on Black Monday — that would be the 1987 Black Monday, not the one we just experienced, which we’ll probably end up calling the 2020 Black Monday — which makes today’s sub-8% drop look like a wee piker. I remember it well . . .

Today was a day in which, among other things, the Russians and the Saudis decided to really screw with each other over the price of oil (the good news: getting those two to kiss and make up and just all get along is something the current administration should be not-terrible at). It was also a day when people living in a portion of Northern Italy representing one quarter of Italy’s landmass — which is a lot, but it’s even more when you consider that the people living in those areas generate two-thirds of Italy’s economic output — was in quarantine. And making it all so very, very much worse, it was also a day when the worst president of all time continued to make light of the unfolding epidemic and continued to let us know, in so, so many words and actions, that he really doesn’t want to test people for the virus because that would make him look bad.

But I digress. I’m here to talk stocks ‘n bonds and such and, more specifically, Friedman’s Law of the Backtrack.

* * *

One of the very best ways to judge the severity of a stock market downdraft following a generally up-trending market is to figure out the “backtrack” — that is, how long ago was the earliest point in time that the stock market first reached the levels the downdraft is reprising?

The answer to that question today is December of 2017. That’s the first time you could have bought into (or sold out of) the American stock market at a pricing level similar to today. So, if you ignore dividends (the cashflow that a stock portfolio generates) and look only at prices of stocks themselves, everything that happened in the stock market from 12/2017 until 3/9/2020 has pretty much amounted to a hill of beans . . . flattened by an ocean liner anchored off the coast of the Bay Area, full of people whiling away the hours while sitting in quarantine.

Picture it this way: if you had thought about buying into the market in December of 2017 but didn’t, and have regretted it ever since as you watched the market climb climb climb, regret no further because the market has retraced itself all the way back to that level and you can now do what you regretted not doing way back then.

To just go there, feast your eyes on this five-year chart of VTI, which is Vanguard’s Total Stock Market fund in its Exchange Traded Fund wrapper:

So you see those faint vertical gray shadings alternating with similar white shadings (or vice versa, depending on how you see things) (oo-wee-oo)? They represent six-month chunks of the calendar. And you see the blue squiggly line? That represents the closing daily prices of VTI shares for the past five years — from considerably less than $100 in early 2016 to more than $170 about three weeks ago.

I chose VTI here because it serves as the most fundamental of all building blocks for people investing in stocks in America because VTI, in a very sophisticated but outwardly quite simple way, represents the entire American stock, and it does so proportionally, so, if, e.g., the value of all shares of Apple stock equals 4% of the value of all publicly traded stocks in the American stock market, then 4% of the portfolio of VTI would be invested in AAPL shares, etc.

And you see that horizontal dotted line? I snapped that, chalk-line like, with my mouse, and did my utmost to make sure that the right-most part of the dotted line would intersect today’s price of VTI just a few minutes shy of the end of the day. As it happened, that line is at $139.78, and the last price for VTI today was $138.50, so the line is actually a bit higher than the price of VTI at the close of the market at 4pm Eastern/1pm Pacific (yup, it was so ugly a day in the markets that the last five minutes served to add insult to the already quite egregious injury).

And you see the leftmost point where that blue line and the horizontal dashed line touch? It looks like it’s right around 12/31/2017 or 1/2/2018. But I went ahead and looked up the intraday prices of VTI in late 2017 and it turns out VTI had an intraday high price (as opposed to the closing prices shown in the chart) on December 18, 2017 of $138.68 — a bit more than a bit higher than the close today.

And that’s the answer to the backtrack question: the American stock market has backtracked a few days less than two and a quarter years, and is (un) partying like it’s the Monday a week before Xmas during the 2017 holiday season. I remember it well . . .

Given that this is 2020, that kinda sounds something like three years. You know what else has been going on for something like three years?

* * *

Two last things:

First, yes, I did expand two and a quarter years into three years and added in an implication about something that’s been going on for about three years and a couple of months (or a bit more than three years and four months, depending on how you count). Fluffing up numbers is appropriate given the aim of my fluffing, who, among other chiefly things, is the NDIC — the Numbers-Distorter-in-Chief.

Second, don’t @t me for using Yahoo Finance. In the early days of the Internet, when dinosaurs roamed the earth and the Internet was almost purely a force for good, Yahoo Finance was totally great for grabbing charts, so it’s where I built up my charting chops. Admittedly it hasn’t been great at that for years, but it still does a better job than other charting tools — for me anyway (and did I mention that This Old Dog is one of my favorite TV shows?).

A Better Solution to Hourly Billing Practices: Radical Real-Time Hourly Fee Billing

Sunday, June 16, 2019 at 9pm
By John Friedman

Less than a five-minute read

The Problem Defined.

Hourly fee billing is tough on the people on both sides of the billing process. For those charging hourly fees there’s the tyranny of the clock and the unhappy chore of doing your billing each day (or week or month, depending on how you do it), while for those receiving the bill there’s the big reveal as, with heart racing and a decidedly Doc, how bad is it? mentality, they search for the one number among the many numbers they most care about.

So I stay away from hourly fee billing as much as I can. Most of the time I can stay away from it entirely, such as when I do a comprehensive financial planning project and charge a flat fee for the entire project. In that context I can charge a flat fee because, after a few conversations with a prospect, I know within a pretty close approximation the amount of work that’ll be involved (setting the floor price) and how much value I am likely to be able to deliver to the client (setting a ceiling price) and, within that range, I can come up with a flat fee that I am confident has a good chance of reaching what I call The Goldilocksian Ideal — being neither too high nor too low, but just right and capable of fostering a good long-term commercial relationship between the client and me.

But when I do consulting work, which by its nature is much more ad hoc than a comprehensive financial planning project, I can’t predict how much work is involved and how much value I can deliver, so I fall back on billing at an hourly rate. Lawyers, CPAs and others — please welcome financial heath advisors (me, anyway) into your hourly-fee world!

* * *

The Solution to the Problem.

Last fall I started using cloud-based software in my business (for those curious: I went with Google Suite, because I thought that, after three and a half decades of captivity in the Microsoft world, from MS-DOS to Windows 10, I’d give something new a try; plus, my tech clients and their employers tend to be somewhere well north of 80/20 — GOOG to MSFT — and that always seemed like a great datapoint to keep in mind).

Once I got far enough up the Google Sheets learning curve (not an easy task after all those years of doing things the MSFT way), I immediately knew that, except for a few clients who prefer the traditional approach, I was going to stop sending pdf’ed hourly-rate bills at month- or quarter-end, and was instead going to start using real-time billing, with the client’s up-to-date hourly bill accessible to the client any time s/he wants to see “where the bill is.”

What I didn’t initially envision is that I would end most meetings writing up the entry for that meeting with the client present, watching me type it up and listening to the main topics from the meeting (and sometimes the main decisions from the meeting as well). This is the step that puts the “radical” into the concept of “radical real-time” hourly billing. It’s also the natural way to do it if you’re aiming for true real-time billing — and the full-tilt transparency that it enables.

I’m about three months into this new process, and so far so good.

* * *

The Expanded Context: Selling and Misinforming vs. Advising and Informing.

When I first went into financial planning I worked for a financial planning firm that was part of a life insurance company. The people there had a lot to teach me and others about selling generally, and about selling fixed-price life insurance products and mostly fixed-price investment services specifically. There is, after all, that truism that preaches if you can sell life insurance, you can sell anything.

That firm had no experience, however, with pricing professional services and they had very little experience with pricing financial plans, so they mostly didn’t know what to make of me when I came in with clients who wanted to pay me for financial plans and weren’t so interested in buying insurance products or investment services (this is the main reason I went out on my own after working there less than two years).

One day, though, they had someone talk with us about pricing in contexts in which there was some pricing leeway. The thing I recall this fellow saying was that we should price $1k-and-up offerings at $1.7k, $2.7k, $3.7k, etc., and never ever never-ever at $2k, $3k, $4k, etc. According to this fellow, there was something magical about ending a price with “$700” because (a) that’s far enough below the next thousand-dollar upward increment that the prospect wouldn’t round up, and (b) that anything lower would mean you’re leaving money on the table, which is his single-play, single-play, make-the-sale-and-move-on mentality was a tragic outcome.

In short, he advised that people didn’t perceive that $700 increment accurately, and that we could use that to our advantage.

I followed that advice for a couple of years, until the day it dawned on me that I didn’t want to start off my client relationships by pricing my services in a way intended to foster mis-perceiving. After all, I’m trying to build long term trusted relationships, so I have a repeat-play, make-the-bond-and-continue-building-trust-every-chance-I-get mentality. So now my pricing is the very memorable and easy-to-perceive-accurately $2k, $3k, $4k, etc. No rounding needed!

* * *

I close this piece out with a quick, somewhat related story.

The first time I took a personality test aimed at finding natural-born salespeople, the sales manager from the company having me take the test sat me down with the results and told me I needed to re-take the test, and that this time I should answer the questions the exact opposite of how I had answered them the first time through — and, by golly, I passed that salesperson test with flying colors the next time.

Death and Dying, and Two Tears

Monday, January 30, 2017 at 1pm
By John Friedman

Maxine Friedman died at 10:59 a.m. Central Time on Wednesday, January 18, 2017.

That was a little more than a month after she turned on her hospice care and about three hours after I dashed off a short piece about how, all of a sudden, she seemed determined to exit this mortal plane quite quickly. Little did I know when I wrote that piece just how determined she was as, throughout that early morning, one moment she wouldn’t be showing a given sign of impending death, and then the next she’d’ve gone through that sign plus the next two signs that came after it — going through her death transitions quickly indeed.

She is now in the process of actively dying, the hospice nurse whispered to me.

Not long after that, Maxine Friedman exhaled for the last time. As before, with but one exception mentioned at the end of this piece, I won’t go into detail here about those particular death transitions or her particular process of actively dying; you can learn all about the general lay of that land quite nicely online.

* * *

I flew a dawn-eye flight into Chicago on Saturday the 14th.

I arrived and immediately headed back towards her room.

As I walked the hallway I heard the hum of the air pump that kept her mattress inflated just-so, to counter all those teeny-tiny holes designed into the mattress to let a comparable just-so amount of air out, all the better to give a bed-bound patient a deluxe ride. The hum grew louder as I approached.

Hi Mom!

She smiled back at me the most wonderful smile I think I’ve ever seen from her: those blue blue eyes of hers, her mouth a little pinched and not all that facile, giving a different cast to her smile.

She was just shy of silent when she tried to respond (and would stay that way through to the end) but that smile spoke a love and warmth that I’ll remember for as long as I possibly can.

Once I settled in (dawn-eye flights do exact a price, no matter how many times you fly them) and got into the flow of the caregiving, it seemed pretty clear that she was nearing the end of her life. The previous month we’d been jarred — stunned, really — by the doctor’s assistant’s suggestion of a months-not-years time frame. Now it was looking like she had it in mind to skip over weeks-not-months and fully embrace days-not-weeks.

Sometime the next day I realized that she’d arrived at not-even-a-week, and I put out an all-hands-on-deck to my sibs.

At her caregiver’s suggestion, we kept the room well lit so she wouldn’t be disoriented if she were to open her eyes and look around. There came a time soon when that had happened for the final time.

Along the same lines, I decided that either the caregiver or I would be with my Mom at all times. That meant that I would sleep on that lousy joke-of-a-bed sofa-bed next to my mother for what turned out to be the final nights of her life, going to sleep in the wee hours of the morning, waking every hour and a half or so to check in on her, and then waking up at dawn because, hey, there’s plenty of time to get some good sleep some other time and I’d be seeing her for only so long.

Those wake-ups remain with me, as precious quiet moments she and I shared in the dwindling middle-of-the-nights of her lifetime.

Wednesday the 18th at dawn it was pretty obvious that she had a day or two left at most. And that’s when she started to sprint through her transitions. As it turned out, she had just a few hours.

* * *

I’m glad I was able to be there that much. It was, I believe, helpful to her and, I know, profoundly important to me.

I highly recommend that you, if at all possible, be fully present in that way when a loved one lays dying, for lots and lots of reasons, three of which I’ll mention here.

First and most importantly, people I trust and who are knowledgeable on these matters are quite certain that your loved one knows you are present and is understanding what’s happening in the room — maybe not in every single instance, but in most (e.g., perhaps not when your loved one is dying as a result of severe physical trauma, but quite likely in hospice settings). Assuming you and your loved one get along, then, your loved one would benefit greatly from your presence — much preferable to dying with only medical staff present.

Second, if your loved one is in hospice, and since hospice providers vary quite a bit, your presence might be needed to get the hospice provider to do the right thing. The hospice folks my Mom used came highly recommended by a favorite doctor, but they were much better at providing equipment and meds than they were at providing humans when we needed them (don’t even ask about how good they were at providing humans who knew anything about my mom’s case).

Third, experiencing the hours leading up to your loved one’s dying moment,and then experiencing your loved one’s dying moment, can be a very positive experience for you. It’s helpful to draw a distinction here between death and dying — between experiencing the fact of a loved one’s death on one hand, and experiencing the events leading up to and including a loved one’s dying moments on the other. Experiencing death happens when, for example, you see your loved one in an open casket and understand more directly than ever that the body s/he once inhabited is now uninhabited; cold, stiff, unmoving (though you might think you’re seeing your loved one’s chest going up and down just a little, taking breaths in and letting breaths out). You also experience death in the days and weeks after, as you realize over and over again that things you once shared with your loved one will now have to be shared, if at all, with someone else, and you find yourself regularly confronting differences — gaps even — in how you’re experiencing life. And the list goes on and on and on as your life is filled with constant reminders of your loved one’s death.

Experiencing the events leading up to and including your loved one’s dying moments is something else entirely. Experiencing dying is to see life leave a body — going through those steps I mentioned above and, again, will not detail here. But to accompany your loved one as s/he takes those irreversible steps is to experience something unlike anything else — the most sorrowful, and the most this-is-life-and-this-is-not-life experience possible. And if you’re lucky, it can be among the most loving gifts you’ll ever bestow upon your loved one — the ultimate I’m here for you, the ultimate I’ll be with you when the deal goes down. It’s your pronouncement that you will help your loved one traverse this difficult span, without looking away, without reference to self, and without any concern other than for your loved one’s safe passage/safe journey. Zero other concerns.

Do so, though, only if you are at least pretty darn sure that it’ll be good for you to experience a loved one’s moment of dying. It’s not good for everyone. You should expect it to really pack a wallop — to leave a mark that just might stay with you for the long run. And it’s definitely not good for young people. I leave it to you to determine whether a particular young person in your life should experience a loved one’s moment of dying. I was in my 40s the first time I directly experienced dying, and that was plenty old enough for me! But I’m not sure it would’ve been good for me to experience it when I was in my 20s.

* * *

Depending on how you count, my Dad had a decade-long exit from this mortal plane. His was a slow decline with the logical conclusion. By the time he exited he’d used up every single ounce of his life and was totally spent — in a good way. He totally ran through the finish line and then essentially collapsed. His official cause of death was failure to thrive, and that was indeed the case.

My Mom had an 18-month exit from this mortal plane, with a clear moment demarcating the moment her healthy life ended and her not-healthy life began. By most reckonings those eighteen months were difficult but worthwhile. Her world was pretty small during that time, but she gave and received lots of love, and was able to be at home with ’round the clock caregivers for all but a few weeks of that time. And when the time came, she, like my dad, required about four days to go through the process of dying, and then it was sweetly, peacefully, over.

* * *

I break now from my “no details about her dying” approach mentioned above to note one extraordinary thing my mom did in the final minute of her life: she shed a tear from her left eye — the caregiver and the two hospice folks and I saw it plain as day, and I dabbed it from her cheek — and then about half a minute later another tear flowed exactly the same way and it, too, I dabbed up.

I have to say that these tears have stayed with me, and given me quite a jolt, mostly in a good way but also in a pretty darn painful way at first.

How perfect is it that tears mark both happy and sad things in our lives? None of us will ever know for sure, but I think my mom was saying, Thank you kids for being here and taking good care of me, it’s been wonderful and oh my how I would like to continue in this loverly ol’ world of ours but alas it’s not to be so I bid you adieu, both fondly and sadly, both madly lovingly and closed-throatedly sorrowfully.

Mom, we will miss you very much. You were really something. And you wrote a great last chapter for yourself and for your loved ones. Thank you.

Further Last Acts of Love

Wednesday, January 18, 2017 at 8am
By John Friedman

Four days before my father died I asked him, as I had each day during the past many weeks, whether he was happy to be waking up. He always indicated he was — he was not able to speak via words back then — until the Saturday before he died at which time he managed to utter a single word, no. It took him another four days to exit this mortal plane because, as we would soon come to learn, he had a last act of love to accomplish.

He was always a very verbal guy. Many thought he was a quiet one, but among loved ones he was not (they said much the same thing about my fave fab four, George).

My mother is proceeding differently. She has, quite determinedly, gone about her tasks of making her life come to a close — quickly gone through the transitions, they say — and had nary a word to say along the way. To paraphrase the nice line from the hospice booklet, she is no longer in need of the heavy, nonfunctioning vehicle that is her body, and will soon be free of it.

A woman of actions not words!

To be continued . . .

Occupational and Physical Therapists: What Do they Do and Which is Which?

Wednesday, July 22, 2015 at 8am
By John Friedman

Baby boomers with elder parents rejoice! I am pulling elder parent duty this week, with lots of time on my hands (here and there anyway), and can answer some simple questions that will come up the first time you ever find yourself in a similar position.

* * *

After a big medical event, the occupational therapists and physical therapists — the PTs and the OTs — work with the patient in discrete chunks of time throughout the day. There are others Ts around (speech therapists, for instance), but the PTs and the OTs are the main Ts that’ll be coming through.

If you’re like most people, you’ll be confused about what the OTs and PTs do and which is which.

There’s a simple shorthand. Now, please use caution, Will Robinson, when using this simple shorthand, because, in my experience, most OTs and PTs are not in love with this simple shorthand, but it surely is a good place for you to start understanding what they do. The simple shorthand is that OTs are arms and PTs are legs, so OTs are more about fine motor skills and PTs are more about gross motor skills. Or if you really want to raise a ruckus and maybe get on the bad side of the PTs coming through, you can use this one: OTs are fine and PTs are gross.

Another way to think of it is that occupational therapists help patients get better at the things that occupy their time, such as brushing their teeth, combing their hair, etc., while physical therapists help them get better at doing anything remotely like what you would do in gym class (aka physical education), such as walking.

Either way, when they’re not around and you’re keeping an elder parent company, I’ve found that it’s a good idea to push your parent to do things on their own which they might not initially want to do. They want a drink of water from a cup on the tray in front of them? You can pick it up and put it to their mouth, but maybe you should think like an OT and ask them if they can pick it up and put it to their mouth? Gentle requests like that can get your parent into the mode of trying to push against the physical envelope in which they find themselves unhappily confined, and that in turn can help them start to feel a bit of empowerment and accomplishment. At least in my experience, even when they fail — and make no mistake about it: taking a sip out of a cup can be a very big deal after a medical trauma — they find something valuable in the effort.

PTs and OTs are experts at this part of the healing process and, in my experience, they as a group tend to be very lovely people — gentle, loving and caring, but ultimately forceful and wise about how to get patients to find profound healing powers dwelling deep down inside their traumatized bodies.

So yay for OTs ad PTs and thanks for doing everything you do.