And What About Money I Truly CAN’T Afford to Lose? April 7, 2023April 6, 2023 Some of you ask me that from time to time. A large chunk of it I entrust to Chris Brown’s Kentucky-based Aristides Capital (minimum investment: $500,000). Like all hedge funds, his is open only to “accredited investors.” Unlike many, his truly is hedged. Which means he may do worse than some when the market soars, but less badly, if badly at all, when it falls. He has yet to have a losing year. His monthly investor letters are lively, informative, and — ordinarily — all about how the fund’s various holdings and strategies performed. (Aristides was down 1.57% in February and a further .62% in March but remains slightly up for the year. From inception in 2008, it has compounded my IRA at 15.87% annually, net of fees.) This month’s letter added “some broader things” that I got Chris’s permission to share. To wit: Last week, Kentucky lawmakers overrode Governor Beshear’s first and only veto, passing what the ACLU calls the “Worst Anti-Trans Bill in the Nation,” Senate Bill 150, into law. The bill combines: (1) a “Don’t Say Gay” law (specifying that no student, not even in high school or during sex ed instruction, shall receive any instruction that relates to sexual orientations or gender identities); (2) provisions opposing federal Title IX protections (the new law prohibits any local school district from making a policy that transgender students should be referred to by their preferred names/pronouns, and also includes a “bathroom bill,” mandating that transgender students may not use the restrooms or locker rooms that correspond with their gender identity); and (3) a trans health care ban, which bans physicians from providing gender-affirming health care to trans & non-binary adolescents, including any of a broad range of standard medical therapies supported by the American Medical Association and the American Association of Pediatrics. This is stunningly cruel legislation, which essentially says to a very vulnerable group of kids, “We don’t want you to exist, we don’t believe that your lives are valid, and we are going to do everything possible to make your lives worse.” Kentucky voters were recently polled as to whether they support a ban trans-affirming health care for youth, and by overwhelming margins, they do not. But radicals in the legislature, largely from districts where they could never lose a general election, ignored common sense, the Golden Rule, and the will of the people. One of the bill’s original sponsors, Republican Sen. Danny Carroll of Benton, proposed an amendment to soften the bill’s language, but to no avail. He was the sole Republican no vote in the Senate. “In the midst of all this, my fear, my no vote, is for those kids that are being left out. Those kids that may be contemplating suicide, may need to delay puberty. That can have a huge impact on them,” Carroll said. “We’re not doctors, with the exception of a couple of us, we’re not doctors. I trust them to make the right decisions when they’re dealing with those kids…” In the Kentucky House of Representatives, four Republicans voted against the bill. Rep. Kimberly Moser (R), who represents part of two counties near Cincinnati, said during House debate, “I’d like to say to the rest of the world who’s watching Kentucky: We are not complete Neanderthals.” She was kicked off of her committee assignment by House Republican leadership. Rep. Kim Banta, another northern Kentucky Republican, co-authored an editorial before the vote, which read in part: “We have seen the painful struggle of students who were perceived as different, and we have made extra efforts to be more accepting so that their school day is less miserable. Schools should be safe, happy places — not judgment zones where marginalized kids feel unsafe — or the consequences could be tragic. It’s time to spray a fire hose on the hostile teacher rhetoric and consider the broader consequences, including teachers leaving the profession (adding to the teacher shortage), college students averse to entering the profession, and companies doing business elsewhere. Let your legislator know you’d like them to focus on more pressing issues, like homelessness, addiction, family-care leave, and infant and maternal mortality, among other things.” Banta explained her “no” vote this way: “I felt like we were singling out a very fragile group who already struggle for acceptance and belonging, and I just honestly, I said, ‘this is mean, and I can’t do this.’” My gosh is Banta is right about business. Twenty-percent of young adults born between 1997 and 2003 now identify as LGBTQ. If you are the parent of a trans or non-binary kid, or really any queer kid, do you want to be in Kentucky right now? My second-born is non-binary; fortunately they are already a happily grown adult but there’s no way I’d want them to have to fight hateful garbage from adults (!!!) at school. A radical legislature unaligned with the people of our state is hurting business in other ways, too. If you’re a woman of reproductive age, do you want to live in a state that bans abortion, even in the case of rape or incest? Or a state that might force you to carry a non-viable fetus around for weeks? Surveys of high-earning women show that these issues matter to the vast majority of them. Kentucky, you are not making it easier for us to compete with New York and San Francisco for the next analyst we are trying to hire. Highly-Gerrymandered legislatures are a disaster. Whether on the Right, or the Left, they are not “sending their best people” to begin with, and then those people are generally unconstrained by the next general election, and need only win a primary. Michigan went through a non-partisan redistricting process a few years ago, and the results are pretty good. Sure, there are still a few wackos, but if you listen to an episode of Stateside, the Michigan Public Radio show about politics, you’ll frequently hear Republicans and Democrats discussing legislative priorities with one another, in a respectful way, and working to actually accomplish what is feasible. It feels like being on another planet compared to Kentucky, or Ohio where 9-figure corruption scandals have become frequent and normalized, and you know there’s a decent chance the next law will be something only 20 or 30% of the people of your state support. Kentucky, and our nation, have real challenges that demand real solutions. A grim report from the Financial Times shows American life expectancy has fallen such that it is not only years worse than other developed nations, but now worse than Lebanon (ranked 150th in the global corruption rankings!), and somehow even worse than communist Cuba. Nor is it only less wealthy folks who are dying early here. Shockingly, for folks making the same amount of income in the US or England, Americans are dying on average five years earlier. How? Our rates of premature death are higher than peer countries throughout childhood, but from age 17 to 45, the relative risk of death is dramatically higher than our peers, literally 4-fold higher at age 30. The late political scientist Robert Lane’s The Loss of Happiness in Market Democracies attempts to explain why becoming wealthier has not made places like the United States happier in recent decades. It’s a good book, with a lot of academic literature, well presented, and the conclusion is basically this: once your basic needs are met, happiness largely comes from a rich family life and connections with other people (i.e. friends and your community). Meanwhile, according to a recent WSJ/National Opinion Research Center poll published last month, only 27 percent of Americans say “Community involvement” is a value they personally consider “very important,” down from previous readings of 47 to 62% over the last two decades. Community involvement is not valued by members of either political party (32% of Dems, 23% of Independents, and 25% of Republicans rate it as “very important”). Happiness, or, conversely, high levels of chronic and repeated acute stress, have a huge impact on our mortality. Public health is supposed to be more than tracking Covid disease cases, or encouraging people to get vaccinated. It is the role of public health to promote healthy lifestyles, help prevent disease, protect people from environmental hazards, and ensure access to quality care. We don’t have that. We have a fake food pyramid, a smorgasbord of high-sugar, calorie dense foods, rampant gun violence, a raging drug epidemic among young adults largely isolated from meaningful connection (and a readily-available supply of lethal, fentanyl- and Tranq-adulterated, drugs), a carceral system that destroys families and re-traumatizes people rather than making them less likely to commit more crimes, health care that is unaffordable for many, and few shared public opportunities for participating in exercise, sports & leisure. Free markets are great for many things, but free markets alone cannot fix the alienation of modern life; the profits from many of these problems fall to a relatively select group of companies, whereas the burdens fall on all of us as a society. I am an inherently optimistic person, mainly for the reason that it’s functional. No matter how challenging a situation is, if you believe it’s fixable, you’re likely to function better than if you lose hope. But, at a certain point, if we are to thrive as a nation, we need to collectively understand that happiness is not a fixed pie, nor does happiness come from making other people unhappy. As Kennedy famously noted, “A rising tide lifts all boats.” We desperately need to focus on lifting all the boats. → Amen to that. And thanks for septupling my IRA.