I feel obliged to share a rather amusing discovery I recently made.
It was a picture of hedge fund legend Ray Dalio celebrating his 77th birthday in Ibiza, dancing until 4am in one of the island's many superclubs. Dalio later posted on X that he had "a blast", a level of enthusiasm usually absent from his discussions of debt cycles.
It is comforting to know that while I was debating whether 8pm was too late to begin a new TV series, Dalio was out there navigating smoke cannons, strobe lights and what one nightclub website describes as a 'psychedelic adventure of epic proportions'.
Besides the peculiar imagery this elicits, I must admit there is something faintly wonderful about all of this. Not because we should all aspire to spend our late seventies in a nightclub. Rather, the appeal lies in the complete indifference to the elaborate rules we've constructed around ageing.
Every generation inherits its own version of these rules. Teenagers are encouraged to chase novelty. Your 30s are for becoming a respectable member of society. And those beyond 60 are expected to develop an intimate knowledge of cruise ship itineraries and Bunnings' opening hours. I can personally attest to this as someone whose parents are currently plotting a transatlantic expedition aboard the Queen Mary.
Naturally these scripts vary across cultures, but the underlying assumption is that there is a correct way to occupy every stage of life. Lately, I've been thinking about these rules myself.
Unlike Dalio, I just returned from a holiday where I spent considerably more time appreciating the high-quality bedding than investigating the local nightlife. This would have horrified my younger self, but the prospect of 10 uninterrupted hours of sleep has recently earnt a new glamour.
To acknowledge the obvious, I am in no position to offer wisdom on growing old. I can, however, borrow liberally from those who are. Having spent several paragraphs questioning the wisdom of age-based rules, it may seem odd to arrive at a book titled More Rules for Aging. Author Roger Rosenblatt is also in on the joke. His latest work is a new iteration of his original 2001 bestseller and is also much less prescriptive than the title suggests.
Below are a few of my favourite 'rules'.
Look only at the rim
"When I was playing intramural basketball in college, I was 5-foot-11, a mite in the land of giants, and my all-around game was so-so at best. Yet most of the time I managed to score in the double digits by paying no attention to the defense. I simply pretended it wasn’t there. I looked only at the rim of the basket. And sure enough, most of the time the defense didn’t touch me.
Other games in life offer similar opportunities, at any age. Disregard the impediments to your well-being - a noisy neighbor, a treacherous colleague - and concentrate instead on where you are headed. You’ll be pleasantly surprised how easily you get there. Nothing but net."
I am a proud member of the 'Morningstar Mambas'. This is a team in a loosely organised lunchtime basketball league, where corporate workers temporarily abandon their desks in favour of missed jump shots and minor injuries.
Rosenblatt's observation resonated strongly with me. Much of my time on the court is spent observing the opposition, usually identifying the player most likely to embarrass me and then adjusting my game plan accordingly. Unsurprisingly, this approach has delivered very few points and an excessive amount of sweat for a workday.
Most investing content concerns itself with obstacles. Inflation, tariff wars, recessions. Whilst these are important topics, investors often discover that the greatest impediment to reaching a goal is spending too much time staring at the defence.
Grab the chicken leg
"So there we were, in our 20s, Ginny and I and a bunch of friends, having a picnic by the Charles River in Cambridge, when I picked up a chicken leg with the intention of eating it and held it aloft. A little boy walked by and took it from my hand and kept walking. My friends and I laughed - the boy was so casual.
Ginny said, 'He must think that life is a chicken leg, waiting to be snatched.' In fact it is, even when you’re no longer a spring chicken."
I think there is something distinctly American about Rosenblatt's optimism. The chicken leg exists to be taken. Somewhere between childhood and old age, many of us replace this instinct with hesitation. Of course, at times caution is appropriate, but we shouldn't consider it a proxy for wisdom.
Observe the moth
"In her essay 'The Death of the Moth,' Virginia Woolf notices a moth in its death throes, batting about a small windowpane. The author watches the animal’s plight with pity and admiration - awe, really.
Its struggles are beautiful. She imagines the moth saying death was too strong, even for it.
Observe the moth in its monumental fight for life, and do likewise. We gain life’s powers by knowing that eventually they will be taken away. There is beauty in this struggle. Murmurations of starlings occur only in the evening."
Woolf's essay feels strikingly at odds with modern conversations about maximising longevity. Admittedly, I occasionally fall victim to the odd 'anti-ageing' supplement from the chemist. Perhaps Woolf and Rosenblatt would argue that mortality is not life's great affliction, but one of the things that give it meaning.
Screw it up royally
"You’ve spent a long life telling yourself that mistakes are to be avoided, but that isn’t necessarily so. Playing jazz piano, whenever you make a mistake, which is inevitable, you make another mistake deliberately to make something right out of something wrong. Then you do it again. Theoretically, you could play an entire tune of mistakes, and it would sound just fine.
You may think it would be better not to make the mistake in the first place. But a creative mistake may be truer to life, as you’ve no doubt discovered. You took a job you didn’t want, soon to discover it’s the ideal job for you. You were born to do that job. When you think of it, life is an assembly of creative mistakes."
I believe what Rosenblatt is really arguing against is the illusion of control. Investors understand this instinctively. Entire industries exist to predict the future, yet the greatest fortunes are often built on developments few saw coming. Life appears to operate on a similar principle.
Do not seek immortality
"It won’t come to you anyway, certainly not through your works and achievements. But the good feeling you have for others, and they for you, that goes on forever. I’m fond of quoting the poet Philip Larkin: What will survive of us is love. That should do it."
It is a curious human instinct to seek some form of permanence from a fundamentally impermanent existence.
Modern culture is preoccupied with the idea of strong personal branding and leaving a legacy. But one can be both highly visible and quickly forgotten. Most people can recall a kindness received years ago, yet struggle to remember who won last year's industry awards.
Concluding thoughts
Many of Rosenblatt's 'rules' are less concerned with ageing than with liberation.
And perhaps the great irony is that ageing may be the only stage of life where we finally become free of the rules we've spent decades trying to follow.
Which brings me back to Dalio in Ibiza. Whether your version of freedom is dancing until 4am or going to bed before 9pm, the privilege of age may just be learning the difference between what you're supposed to enjoy and what you actually want to do.
Simonelle Mody
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Weekend Update
From Shane Oliver, AMP
Global share markets mostly rose over the last week helped by good earnings results and some moderation in expectations for Fed rate hikes. US and Eurozone shares rose to new record highs and Japanese shares also rose. The Korean share market has broken its down trend after long positions were washed out into a 39% fall, with a similar story in semi conductor stocks. Chinese shares fell slightly though. Despite the positive global lead Australian shares fell around 1.7%, which was partly a correction after a 5.6% rise in the prior two weeks left them overbought but earnings reports are off to a mixed start with worries about slowing housing finance commitments weighing on the banks and sharp falls in industrial, property and material shares also weighing on the market. And of course, the Australian share market doesn’t have much exposure to the AI related stocks that are back in favour again.
Bond yields were flat to up over the last week. Metal and gold prices fell slightly, but iron ore rose slightly. Bitcoin fell slightly and is managing to hold above support around $US60,000 but has yet to confirm the latest crypto winter – which has seen a 53% fall from the high in October last year - is over. While the $US rose slightly the $A was little changed. Oil prices had another bounce as there is still no deal to re-open Hormuz (to get up back to where we were before the War started), let alone regarding Iran’s nuclear ambitions (which was the key point of the War in the first place).
While there is still no resolution to the Iran/Hormuz impass, our base case remains that oil prices will stay in a $US70-100 range with Iran preventing it going lower and the US moving to try and calm things down whenever it gets above $US100. While shipping through Hormuz remains depressed, reports from US sources suggest that it is helping more shipping get through (with transponders turned off), but this is unclear. The risk remains that there will be no sustainable peace deal, the flow of oil out of the Middle East remains down 10-15% on normal levels and that we will have to face higher oil prices as reserves run down. This risk may escalate if Trump determines he has got nothing to lose by going a lot harder on Iran, maybe after the midterm elections.
On the geopolitical front another issue to watch is the whether the escalation in the Russia/Ukraine war, marked by increasing attacks in Russia, leads to an aggressive Russian response like a “provocation” of NATO. Ukraine has been increasingly successful in bringing the war into Russia by attacking its energy industry and more than 20 Wildberries warehouses (which is similar to Amazon) to deprive it of export revenue and bring the war home to ordinary Russians. Ukraine’s aim is to bring Russia to talks but Russia may react by provoking NATO to try and get Europe to put pressure on Ukraine. Russia is unlikely to ultimately succeed but it could still briefly unnerve investment markets.
In Australia, the RBA left rates on hold as widely expected, but it signalled a clear tightening bias. Softer than expected readings for underlying inflation, jobs and house prices enabled it to remain in wait and assess mode. But it doesn’t see inflation back to target until late next year, sees the risks as being on the upside to this with Governor Bullock noting that it will raise rates further “if required”, that its “thinking very hard about when to raise” rates and that it only considered a hold or a hike in rates at the August meeting, not a cut. Of course, this could just be jawboning but it’s clear the RBA’s tolerance for more upside disappointment on inflation is low. And rightly so, as the credibility of the inflation target and the RBA is now at risk.
Against this background we expect another RBA hike by year end, possibly in September but probably in November, taking the cash rate to 4.6% as underlying inflation is likely to take too long to fall back to target and the RBA will need to do more to reinforce its credibility. The money market is now seeing a 56% chance of another hike by year end, albeit this is bouncing around with the oil prices.
After spiking to around $2.10 a litre in early August on the back of the removal of the final half of fuel tax relief along with a spike in oil prices petrol prices in Australia have fallen back to around $2 a litre – well above their pre-War levels. They are now around roughly where you would expect them to be given the level of world oil prices. This leaves the weekly petrol bill for an average Australian household (of $70) at the high end of the range from the last five years, excluding the March high ($90.3). It’s about $8 a week above where it was over the year prior to the War.
The US earnings reporting season has now seen more than 90% of S&P 500 companies report with around 87% exceeding expectations. The consensus expectation for earnings growth has now risen to 33%yoy. After adjusting for one off asset revaluations at Alphabet and Amazon its now blown out to 50%yoy. Earnings growth is being led by energy and tech companies. Capital spending by the top five hyperscalers has now been revised up by around 50% and while it initially caused some concerns, those concerns appear to have faded for now.
Housing finance commitments fell 5% in the June quarter as rate hikes, tax hikes on investors and poor buyer confidence hit. As would have been expected given the tax changes, finance commitments to investors (-10%) fell more than to owner occupiers (-2%), but there is likely further falls ahead as the Budget was only in the middle of the quarter and reports from the major banks indicate a 15-20% slump in mortgage applications since May (with one report of a 28% fall from investors). This is consistent with other indicators of a downturn in the property market. Fortunately, finance commitments for dwelling construction still rose for now.
Also in this week's edition...
Harry Chemay walks through the all-too-familiar question plaguing many retirees - will you run out of money?
Tax rules have changed, but many investors are still using yesterday’s strategies. Noel Whittaker discusses the investment that sidesteps the new tax traps.
Kera Van Valen from TD Epoch argues that reliable dividend payers have also historically delivered consistent returns and weathered challenging market conditions.
Dr Joanne Earl is back with her retirement insights - 5 months in.
How effective has the RBA been at maintaining their 2-3% inflation target? Ashley Owen runs the updated numbers.
AI may prove as transformative as the internet, but markets are behaving as if success is guaranteed. Michael Turner asks whether investors can ride the bubble without overpaying.
Are markets still expensive? Amy Arnott walks through the seven key indicators every investor needs to know.
Curated by Simonelle Mody and Leisa Bell
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