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Coming up:

• Everything is crashing all around us
• Are you really happy if you haven't recorded it on a spreadsheet?
• My global musical collaboration
• And, quite literally, more

📉 This month in the markets

It's been a rocky start for investors in...well, just about anything. Writing this a few days before it lands in your inbox, the US markets are down 10-15% so far this year, and some of the biggest stocks have been hit particularly hard (Netflix has lost 40%, and Tesla 19%). Bonds had their worst start to a year in living memory, and must we even mention Bitcoin (down 20%) and Etherium (down 35%)?

On the plus side, you learn a lot more when things are breaking down than when everything's great, and I've found it fascinating. Here are some random thoughts:

• All of this has been brought about mainly by a change of tone from the Federal Reserve (implying an end to cheap and easy money), rather than much in the way of concrete actions. This is a pretty mad aspect of markets, when you think about it: everyone is suddenly willing to pay less for assets based on an assumption about what other people will pay for those assets based on what one guy has said he might do.

• If you still think interest rates are going to increase significantly in an attempt to combat inflation, think again. If just talking about maybe doing something has sent the market down by more than 10%, imagine what would happen if interest rates were jacked up to where they need to be to control inflation.

• The FTSE has largely sat out all the excitement, for the same reason it's under-performed the US in recent years: it doesn't have much in the way of growth stocks. UK-listed stocks might finally get a bit of love again.

• The argument for owning bonds has traditionally been that they move inversely to stocks, but I've written before that I don't think that'll be the case anymore. Indeed, bonds have fallen this year too: sure, not by as much as the US stock market, but I don't like the idea of owning something crap just because it's sometimes less crap than something really crap.

• It's clear that the whole of the crypto space is currently a "risk on" asset, meaning it's correlated with the performance of the (particularly US) stock market. Bitcoin, while it's designed to be "digital gold" and might theoretically function as it one day, very much isn't at the moment.

• What would it be like if your residential property portfolio (or even your home) offered minute-to-minute pricing like the stock market does? I suspect a large part of the stability of property comes from the fact that the price is so hard to determine.

• Even printing money is a tough business, with the producer of UK banknotes issuing a profit warning.

What do you make of it all? Have you been buying or selling anything as a result of January's excitement?

😍 This month in happiness

Cor, what a difference a couple of months makes.

In my last update at the beginning of December, I was thoroughly fed up – and a few very kind readers replied to say that they could tell from my writing that I wasn't my normal self. 

Now though, I'm bouncing. What changed?

Well, taking three weeks off for Christmas didn't hurt. It provided the "hard reset" I needed to escape from fight-or-flight, "s^^t what's going to go wrong today?" mode, and regain the necessary headspace to make some positive changes.

Also, I've made happiness an explicit goal.

My main goal for 2022 is to be able to give at least 90% of days an "enjoyment score" of at least 7 out of 10. Yes, I track it on a spreadsheet daily. No, I don't get out much. I also jot down some notes on what I did that day, with the idea that I can look back at patterns of the types of activity that correlate with good days and less good days.

Weird thing to do, I know. My theory is, though, that for years I've set financial and business goals, and achieved them. Yet the ultimate goal behind everything is happiness and fulfilment, so why not apply the same focus to achieving that directly?

How will it go? We'll see – but although I'm not hitting 100% (damn you, 19th and 21st January) I'm still on track, so the early signs are good.

🌖 This month in new beginnings

My theme for this year is "begin again", and I wrote a short article about it here.

Do you have a specific theme or overarching goal for this year? I'd love to hear about it.

🙃 This month in dystopia

It's fashionable to think of the House of Lords as being out-of-touch, anti-democratic, an unholy blend of hereditary privilege and political back-scratching. It may well be all those things, I don't know. But damn, their Economic Affairs Committee knows how to bring the heat.

Hot on the heels of slating the Bank of England for not understanding how its own QE programme works, they've issued a scathing report on Central Bank Digital Currencies (CBDCs).

CBDCs are generally presented as being just like Bitcoin – other than the small detail of being massively centralised under the control of a third party that can change the rules on a whim, and with no constraints on supply. So they're nothing like Bitcoin at all then really, are they? The general idea, though, is that a CBDC would mean you having an account directly with the Bank of England rather than with a high street bank.

Central banks like this idea because it would give them the capacity for far more fine-grained monetary policy than is possible now. In theory they could impose negative interest rates, "mark" coins so they could only be spent for certain purposes, or even have coins "expire" if they weren't used in a certain period of time. Oh, and there'd be no privacy because they could have perfect visibility of every transaction. I should say that officially they have no plans to do any of these things, but I encourage you to think of everything there've been "no plans" for over the last couple of years that have subsequently happened in short order.

So it's clear why central bankers want a CBDC. But why would you want it? I don't know, and the Lords don't know either. I liked their summary:

“We took evidence from a variety of witnesses and none of them were able to give us a compelling reason for why the UK needed a central bank digital currency. The concept seems to present a lot of risk for very little reward. We concluded that the idea was a solution in search of a problem.”

Well played, your lordships.

🌍 This month in crowdsourcing

My son turned 4 recently, and my mum wrote a song to mark the occasion. I recorded the guitar, bass and piano parts in Garageband, then quickly hit my musical limits. So on Fiverr.com I hired:

• A pro drummer to record a studio-quality live drum part
• Someone in Poland to play harmonica
• A producer in Connecticut to mix and master it

Total cost: £36.34. I bloody love the internet. 

My son didn't really care because he couldn't eat it or push it around a track, but we had fun and that's the main thing.

Fun thing to ponder: What could you get done inexpensively either to save you effort, enhance a hobby, or just for fun?

🍿 This month in media

🤘 What does this button do? is an autobiography by Bruce Dickinson, the singer in Iron Maiden. There can't be many metal band members who're into fencing (of the épée rather than Ronseal variety) and work as a commercial airline pilot when they're not touring. It's an entertaining listen even if you've got no real interest in Maiden – and as a happy side-effect, it's got me listening to them properly for the first time.

🎺 I'm going to one-up myself this month by not just giving a music recommendation that no-one cares about, but one that's in a foreign language for bonus inaccessibility. Give it a go! Nunca vas a comprender by Rita Payés is lovely, and has a delightful video to boot. You just don't hear enough trombone solos these days.

🖼 Hey, do you know what NFTs are? Maybe. Do you want to watch a 140-minute documentary about them? Probably not – but "Line Goes Up – The problem with NFTs" is worthy of your attention if you care about this area at all. I certainly don't agree with everything he says, but it's instructive to see someone make the case against so strongly.

✋ Before you go...

To be honest I write this newsletter mainly for my own enjoyment, but I want to make it as valuable as possible for you too. So I've put together a quick (4 questions) survey about what you do and don't like about it.

This is the survey link and I'd really appreciate hearing your thoughts if you have a minute or two to spare.

👋That’s it for January! It's good to be back.

Cheers!

Rob 

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