Just Here For The Ratio

If you don't engage on Twitter, there is a phrase "just here for the ratio" which is one someone Tweets a really bad take and they get flooded with negative comments, it's called a ratio. Humorously, people will reply "just here for the ratio" and it's kind of funny.

Barron's early on the weekend mornings will post retirement oriented articles. This week's article, sometimes there'll be two, was titled Buying The Dip Can Be A Retiree's Best Friend. Here's How Seniors Can Safely Shop written by an advisor named Debbie Carlson. I stopped reading after a sentence or three so I'm not going to comment on the article but the "ratio" had some interesting points.

One comment made fun about seniors thinking long term. You can be 80 and jacked or you can be 50, unable to move and on oxygen. Which would you rather be? Something that just came up this week is how ever so often on a large wildfire there will be someone qualified who's 80. Qualified means able to pack test (3 mile hike, 45 pounds, 45 minutes). Chances are someone like that should have been thinking long term at 65 and at 70 and probably now at 80. If he makes it to 95, well 15 years seems like kind of a long time, the stock market is up a lot in the last 10 years, it is up a lot in the last 15 years. Sadly, not everyone needs to really focusing on the long term when they're 60 or whatever but a senior thinking long term is not on its face, incorrect. 

Apparently, the article recommended Facebook which is actually called Meta Platforms but still has symbol FB. There were a couple of comments deriding the suggestion that seniors should be in FB. I have no opinion on FB specifically but the idea of owning a stock with the attributes that FB might have or that bulls on the stock think it might have; the potential for a lot of growth and a share price that they would hope would go up at a rate much faster than the broad market is valid. A diversified portfolio will include holdings with the types of attributes that FB bulls think that stock has. A diversified portfolio should include holdings with the types of attributes that FB bulls think that stock has. 

If you want to argue about whether or not anyone should try to include individual stocks (with enough time to do the work, I'm a yes) that's different, but if you think not, then exposure to funds with those attributes are appropriate for a diversified portfolio. Indexing is of course valid but there are many different approaches that are valid.

One comment asked why an article written by an advisor had nothing about how to hedge. Look at past posts on this blog for one way to go about hedging a portfolio.

I've never been a fan of "buy the dip." Dips are small declines. It makes much more sense to build an asset allocation that you stick with instead of chasing 3% moves in the broad market. I would differentiate buying a panic versus a dip. By panic I mean something like a 20% decline or 30% or whatever. If you think 3% or 5% is a panic, you might have too much in equities. 

Some personal news. We were due to take a road trip leaving last Monday the 18th. When we were halfway to where we were going to spend the first night, I got a notification of a small fire starting just south of Walker. Just south of Walker is the direction that threatens us. At first it was just a few acres and it's only mid-April, it'll be fine. Three hours later it was on its way to blowing up into a serious fire. The most serious wildfire threat we've ever had as it turns out because for all the big fires we've had down there, this one was the closest one.

We turned around, 7 hours from home, and drove back. I made this decision after talking with the Forest Service. On Tuesday, the fire, called the Crooks Fire, had transitioned to a Type 3 incident on it's way to a Type 1 on Wednesday. Type 1's are the most serious and for it to become a Type 1 in just 48 hours is insanely fast. 

Pretty much the entire fire world was on its way to Walker by Tuesday. An evacuation order was issued on Tuesday. The entire fire world got here on Wednesday...but actually even more apparatus and crews came on Thursday and then Friday. There were also more aircraft assigned to the fire than I've ever seen before. These things involve meetings, work at the fire house, keeping the community updated via our Facebook page, being a host to the outside resources staging at hour station house, functioning as the chief for our department and of course doing actual fire-related work.

We've been through several of these since I've been the chief and we have a pretty good game plan. We get a great turnout of volunteers every day, we essentially work a regular shift that any department might to. We do a little work around the station house, have a briefing on the fire situation and what we will be doing that day and then go do it. Typically we do structure protection which is to clear things that can burn away from people's houses. 

What makes fire south of us so dangerous is very rough, steep terrain and a very overgrown forest. As a borderline miracle the crews, and air operations where able to knock it down, essentially (but not totally yet) ending the danger before the fire was 96 hours old. Despite horrible wind earlier in the week, Friday was very cold, humidity went way up and it even snowed for a few minutes--not enough snow to put it out. 

We made the news when one of the homeowners whose house we mitigated sent in the video from his Ring Camera into the news. He was talking to us through his device. I'm in the video wearing the white helmet. A friend jokes "hey I saw Roger on TV stealing firewood."

Part of the equation for why the outside response was so huge and so fast is that the Hassayampa Fire Shed which is comprised of Walker, this area south of us and Groom Creek just to the west of us, is specifically named in the infrastructure bill as one of 10 national priority fire shed. Buried in there on page eight hundred and whatever, "put out the fire in Walker." That might not be the exact wording. I started hearing about this a couple of months ago and while I haven't read the bill, it seems like it might be true.

Being able to play role in trying to solve the community's problem is a huge gift. If that seems odd, I would encourage you to go volunteer at your local fire department if you're luck enough to live in an area that is served by a volunteer department. I'm on the left in this last picture.