Saturday, 28 May 2011

Sleep, good luck and better investing decisions

Sleeping's never really been a problem for me. Of course, like most in my teens the odd growth spurt or exam worry would have me up in the middle of the night pacing, reading, or fretting about things but that was pretty rare. Since then though I've been a good sleeper. In my 20s if I sat in one place for any length of time I'd be snoozing away within seconds - regardless of the company! When my head hits the pillow at night these days I'm off like a light. Click and I'm gone. Unfortunately, I wake up with the light though. If it is Summer and the sun has risen I'm awake. In Winter this causes some problems as the sun seems to not rise till 8.30 or so hence some problems arriving at work early...

Anyway, to tie this in and get us back on track, yesterday while reading Monevator's article Never say never again - a piece on timing, market cycles, booms and crashes - I was introduced to the writings of James Altucher. I got stuck on his blog. Reading, reading and reading. The guy is like blogging crack. So addictive. His style is almost evangelical in tone but what he says make sense. I could feel myself getting sucked in deeper and deeper. It got to past 11pm and I was still going. I came to a piece on how to be the luckiest guy on the planet in 4 steps. To precis, the four steps are physical, emotional, mental and spiritual. Hey, nothing clever in there. That's what every preacher since the dawn of time has told us to do to be a better person. But his physical steps are quite extreme and involve going to bed at 8.30pm every night and rising between 4am and 5am every day. He's guaranteeing his 8 hours a day which two recent studies say are absolutely crucial to humans to be better people and operate at full alertness. Anything like just 6 hours a day and the subjects in the test were basically operating like drunks.

James also expounds the benefits of reducing distraction. He mostly blames emotional distraction for creating bad luck but I have pretty much cut all that out these days so I think my distraction comes from gadgets and technology. I have loads of the little gadgets - an iPhone, an iPod touch, an android tablet, a PS3, a Xbox, a Wii, a laptop, tellys in every room. I know. I've been a slave to getting new things. None of them are unloved though - in fact I love them all a little too much. Another study by iPass shows that mobile technology workers spend much longer operating their gadgets and working than others and their sleep patterns are disturbed by their little phones 'pinging' during the night and the temptation to read one more email, rss feed or twitter. There's a nice infographic about the whole thing.

me - asleep at the wheel
What's this got to do with finance, money and being a millionaire though? Not much I guess but clutching at straws maybe if I got a bit more sleep and cut out some of the distractions I'd start to generate a bit more luck. And then I wouldn't make decisions like buying in to RSM Tenon last week. RSM Tenon is an accountancy firm with big plans - challenging the big four in the UK. They've been pretty agressive in the expansion stakes and a recent rights issue to fuel this expansion was well accepted and subscribed. I've sat on the fence for years with them watching from afar and finally thought that with a little bit of spare cash I might put a little sum into them.

Anyway, watch that share price collapse almost to the hour from when I bought in:

Had I done a tiny bit more research I would've checked the discussion boards on iii and seen that fellow investors were already calling a collapse in the price before it happened. I could also have checked a copy of Accountancy Age and seen that RSM Tenon were having to hire massively as half of their senior accountants have walked following the merger with Tenon and their subsequent loss of power in the organisation. I could even have had a look at their accounts and seen that the level of debt that RSM Tenon are carrying is pretty huge and will almost certainly mean that they will can their nice dividend soon, call another rights issue and further dilute the share price. Bugger. More sleep, more luck, more research and more thinking would mean I would never have gone near these guys. What do I know about accountancy anyway? How could I possibly judge if they were doing a good job? And I thought I had learned my lesson with bio-ethanol investments in 2006.

But how do others sleep?

I'm most interested in people like Gordon Brown, Tony Blair, Ben Bernanke, Alan Greenspan, Fred Goodwin, and Mervyn King. Personally I bet they sleep terribly. Their actions have cost the world and its citizens years of prosperity and doomed the next generation to years of debt repayment slavery. While sensible developed countries like Australia, Norway, and Germany now power on with their sensible non-debt fuelled lives, enjoying boom times powered by the ever-growing industrialisation of China, India and Brazil, we in the old West live on a knife-edge.

I hope the only way Gordon Brown gets to sleep at night is by a tranquilliser gun. I hope Mrs. Brown has to load up a couple of darts, don her safety glasses, look through the sights at Gordon (secretly wishing that the gun was real), and pull the trigger aiming at a new un-bruised section of his body each night. As the drug works its way into his system, I hope Gordon has regrets - massive ones.

Last night I dreamed about meeting childhood pop idol Simon le Bon on a market stall at a music festival selling his latest Duran Duran wares. Simon had apparently lost everything but was still living the gigging life, hawking new cds, and indulging in something that made him happy. I indulged on photos with him. He was doing what he loved. I hope that with a bit more sleep and a bit more luck that I can follow another of James' blog posts by quitting my job and doing something I love.