“The object of life is not to be on the side of the majority but to escape finding oneself in the ranks of the insane – Marcus Aurelius (121 to 180 AD)

“You should always side with the minority because that’s where you’ll find the more intelligent” – Johann Wolfgang von Goethe (1749 to 1832)

Last weekend on Twitter somebody I follow posted the question “So peeps, what are you doing now to cheer yourself up on another lockdown Saturday evening?” And I replied “Listening to Neil Young songs”. Yes I do realise that’s not everybody’s idea of being cheered up but she’s Welsh. Say no more.

Anyway, in pops a Twitter message from another follower, Rob, an old friend of mine, quite the music buff and recently returned from a couple of years in Winnipeg. “He’s a Pegger” was his message, indicating that the recently voted Best Ever Canadian Singer/Songwriter hailed from Winnipeg. My reply went along the lines of “so how come he was born in Ontario?”  A fact that’s remarkably easy to verify given that the chorus of his song ‘Born in Ontario’ also contains the words “I was born in Ontario”.

Rob came back with the classic line you hear so much these days. “It was such ‘common knowledge’ I never bothered to check”. How many of us hear ‘accepted facts’ and don’t bother to check their accuracy?

Let me give you another example.  A news headline on the 30 November: “The 2020 Atlantic Hurricane Season was a Record Breaker”. So how many hurricanes were there? 13.  

Being a believer in the motto of The Royal Society, founded in 1660, ‘Nullius in Verba’, which roughly translates as ‘don’t accept their word for it, go check for yourself’, I did.  And I found in only a few minutes that in 2005 there were 15 hurricanes which beat 1970s’ previous record of 12.  Prior to that, the record was 11, set in the late 19th century. Not much to worry about then, eh?

Now let’s turn to health. According to ‘official statistics’, up to the end of November, in Scotland there were 5,564 Covid deaths. Leaving aside the fact that many deaths were primarily due to other causes, including a 96 year old ‘Covid fatality’ with so many serious illnesses her undertaker told me that a Madras curry would’ve finished her off, the statistics are confusing. 

According to Life Expectancy tables 2017/2019, life expectancy at birth in Scotland is 77.1 years for males, and 81.1 for females. Yet the Covid fatality statistics show the mean average age at 79 for males and 84 for females.  Odd?

And according to the figures readily available, 92% of those succumbing to the virus had an average of 2.7 co-morbidities, which is medical jargon way for ‘life threatening serious illnesses’, and the bulk of those dying had lived beyond their life expectancy. Only 38 out of the 5,564 were under 45.  That’s about 0.7%. And that percentage is similar, oddly enough, to the numbers coming from the only place in the world that measures Covid fatality rates in five year cohorts from birth right up to age 110.

‘It can be reasonably concluded that so far this year around 0.001% of the Scottish under-45 age group have died with/of Covid. And yet the authorities have locked down the economy?’

Pennsylvania’s population incidentally is almost two and half times the size of Scotland’s. Their detailed figures show that despite forming only 0.3% of the population compared to the 55% aged under 45, far more of the ‘over 100 year old cohorts’ died with Covid.  Applying these percentages to Scotland it can be reasonably concluded that so far this year around 0.001% of the Scottish under-45 age group have died with/of Covid. And yet the authorities have locked down the economy? You do wonder what long term damage will accrue.

Popular among experts and headline writers is an obsession about ‘the Global Debt Crisis’, the latest of a long running ‘crisis’ pandemic which has filled the column inches since the ‘Great Financial Crisis’ over twelve years ago. 

Don’t’ know how much you remember about that, but various celebrity experts predicted years of deep recession and/or hyperinflation and there was much gnashing of teeth especially amongst former Nobel Prize winning economists, some of whom still can’t admit they got it badly wrong. It’s known as Cognitive Dissonance and by the looks of it this year it’s become a pandemic to rival Covid.

A question I’m regularly asked these days relates to the latest global worry that’s catching the eye of pessimists. And that is the linking of Debt to GDP. I asked a few chums at the ‘Brains Trust’ coffee morning catch-up at Brian’s Café (spot the pun?) what they understood GDP to be. 

There was quite a collection of answers. I particularly liked the reply that reckoned the ‘G’ stood for ‘Guessed’. But nobody ‘guessed’ that GDP is supposed to measure a country’s ‘income’, not its assets. It seems to me that it makes more sense to compare liabilities against assets as you do when preparing a balance sheet. If you want to find out what the figure for alleged Global Debt is, it’s easy. Google it. Now try to discover what total Global Assets are. I gave up, but I’d bet a Pound to a Centimo it’s way higher than the alleged debt.

As to a country’s GDP, as Rory Sutherland (Author of Alchemy) and investor Christopher Mayer among others ask, “What if the concept of GDP is itself nonsense?” The concept didn’t exist until the late 1930s and whatever formula they came up with then cannot make any sense in today’s service/digitally orientated global economy.

Here’s what textbooks say about it. “GDP can be calculated by adding up all of the money spent by consumers, businesses, and governments in a given period”.  Now ask yourself this: given the complexity of modern economies, how on earth can anybody claim that their assumptions are accurate?

The financial world is crammed with arbitrary terms that border on nonsense but simply accepted by those who can’t be bothered applying ‘Nullius in Verba’. And sadly those investors who fell for the dire predictions of extreme pessimism cult eight months ago have missed out on a remarkable stock market recovery since, with records broken left right and centre. As I wrote here at the time…

Meantime I am heartened by the remarks last week by legendary US investor  Bill Miller who said this is only the fifth time in his career he has seen such opportunity to buy quality stocks so cheap. 

And I’m delighted to report that while the pessimists fretted about debt and other arbitrary economic nonsense, since lockdown on the 23 March my favourite global fund has delivered, after charges, a remarkable 98% return. Merry Christmas everybody!  But be careful in January. Markets could get a bit slippy, Brexit or no Brexit, but that’s another horror story.