A Better Cup Of Coffee Right Now

Yesterday I wrote a post about quitting coffee. Today I’m sharing with you advice on how to have a better cup of coffee. You don’t have to have a sophisticated palate or a barista to notice the difference. You can tell because of the magnitude.

We love our coffee. Coffee is a huge part of our daily life ritual and culture (think about how much prime real estate is taken over by Starbucks and Tim Hortons). At the same time, you would think that the average coffee drinker would be a connoisseur about something that they put in their body so much but the reality is that we know so little about our coffee.

Coffee, on its surface, is an incredibly simple beverage: just add hot water to ground up roasted beans. Why complicate it? To have an excellent cup of coffee. You can immediately have a better cup of coffee with these few simple easy tips. First a few comments on coffee machines. A good machine definitely helps. A good machine doesn’t mean it has to be expensive. You can have one of the best cup of coffee in the world with the AreoPress (US$38 on Amazon). Also, very importantly, a good machine won’t turn crappy coffee into a great cup. Garbage in, garbage out. There’s nothing you can do to make it taste good. Now with that out of the way, here’s how you can improve your coffee regardless of the machine.

1- Buy organic whole beans. You might have to fork over a couple extra dollar more but the taste is significantly better. It’s not just a “health” thing or a socially conscious decision. Organic coffee beans taste much better. If you want to take it a notch higher, go with Arabica coffee, its the better coffee plant. The coffee you drink everyday is most likely coming from Robusta coffee plants. If you want to take it another notch higher, aim for beans that within a month of roast date. By the way coffee beans do go bad.

2- Grind your own beans before making each cup. It requires a little extra work but again it’s all about enhancing your coffee. This ensures that the oils and flavors end up in your drink and not in the air. Don’t buy the cheapest grinder

3- Use fresh cold water. Coffee is mostly water but we seem to neglect it. The better the water, the better the cup. The ideal water for coffee is soft water which contains less minerals, rather than mineral rich hard water. This last sentence is now being debated. Generally speaking, soft water is better for coffee. However, if you want to go crazy, some hard water has been known to produce a better cup of coffee. It comes down to knowing which minerals makes it hard. Magnesium helps make the coffee taste better. Bicarbonates does not. It comes down to knowing your water.

4- The ratio of coffee to water. The key is to start with the golden ratio of 17.42 units of water to 1 unit of coffee. It’s a starting point then adjust to taste. A unit could be grams, ounces, whatever you want. Basically 15 grams of coffee requires 261 gram of water. You can be more precise by using weight—instead of volume—to measure your coffee and water. Most of the time people don’t put enough coffee.

Enjoy your next cup of coffee!

Coffee Divorce

*Updated Friday January 29, 2015 with more info.

That’s it. It’s over between me and coffee. Me and coffee have officially been broken up for almost a full month. I’ve been faithful by not messing around with any other source of caffeine (and no decaf, it’s weird and still considered cheating in my book). I have been juggling with the idea of quitting coffee for a couple months and that now my baby is finally doing her nights, it definitely help make the hard decision. So I was “using” coffee to get through.

Why do such a cruel thing to myself? I did it for me. I wanted more energy. I also don’t like the idea of being “addicted” to anything. The motivation also came from a friend of mine, a more intense coffee drinker than me I just should note, who has quit coffee and as a result claims he has way more energy than when he was on coffee. I heard that from other folks as well. I had to test it myself.

I should give you a little background on my coffee habit. I’ve been a daily drinker for 9 years (same amount of time that I’ve been with my spouse). I average two cups a day, occasionally three. One or two in the morning and one after lunch. I’m also not one of these grumpy people in the morning because they didn’t have their cup of coffee.  I love my coffee. I like waking up the morning and making it. It’s almost like a little ritual and there’s pleasure in doing it. Those who visit my blog probably read a couple posts on coffee. They have been among my most popular posts. I think people visit the blog more for the coffee posts and than the investment stuff. I’m one of those coffee “amateur”. I have a few coffee/espresso machines, grind my own beans, shop for organic beans etc… I’m that coffee guy. As many coffee lovers know, the idea of quitting coffee can be torturing.

The verdict: It has been 28 days and I feel awesome. The first benefit I noticed is the quality of my sleep. Now I have these very long colorful dreams. it feels like the dream never stops.  It’s definitely sign that I’m sleeping more deeply. The first week is the roughest but it gradually gets better. The first three days I didn’t notice anything different. Then I think on the fourth day that’s when my  body realized that the good stuff wasn’t coming in anymore. I got hit by random fatigue attack. My thinking was at times blurry and I suffered from the lack of concentration. So my start to 2016 wasn’t the most productive. If you Google a list of symptoms, I had about half of them. And fortunately I didn’t get any headaches, and that’s a big one and a deal breaker for a lot people. Four weeks in I can testify that I have more energy than before and it’s going to get marginally better. We know that non-coffee drinker don’t need coffee to have energy. We drink coffee to get that “natural” energy level, whatever that might be, and not to be above.

After a couple weeks the benefits outweigh the cost. Quitting coffee is an experiment that’s working well  The break up was fine for the most part. There were a few instances where I really wanted a cup, like the time I had breakfast at a restaurant. It feels really weird not have a coffee when reading your newspaper. I could have ordered decaf so I could have the complete experience but I didn’t. Coffee and a newspaper. They go together so well. I’m not a smoker but when a smoker says they need a cigarette with their drink, I can sort of relate to that now. They call themselves social smokers. I haven’t banned coffee from my life. I plan on drinking the occasional cup sometime the future but I don’t plan on reintroducing coffee in my daily diet. I will treat coffee like alcohol, I will have it occasionally for pleasure purposes. Maybe on weekends or when I read the newspaper. I guess you can call me a “social” coffee drinker.

 

Why are the markets melting?

Stocks are tumbling at a fast rate around the world. The Dow is down ~400 points at the moment of writing these lines (an improvement from the -500 earlier). Looks like we are in a good old traditional correction. After one of the longest bull market in recent history, we forgot how a correction feels.

So why are the world markets falling like a rock? Well fear is dominating investors sentiment and that fear derives from uncertainty. Since uncertainty is the seed of fear and chaos, where is it coming from? None of following should be surprising to you but here are the top concerns that are behind this extended selloff:

• Oil: The speed and magnitude of the decline in oil. Crude is at a 12 year low and is now trading below $30. The selloff comes down to two simple Economy 101 forces: Increased supply and decreased demand. Lower oil prices also cancel plans for capital spending. This is a source of major business spending and equities takes cue from that.

• The withdrawal of Fed’s stimulus. This was a major leg of the stool on which the global recovery was resting on. Now the Fed is in tightening mode.

• China slowdown fears. Nobody knows what’s going on in China, the 2nd largest economy in the world. The lack of clarity is a source of fear and adds to the volatility. People who does business in China said that the growth rate is closer to 3% than 6%. Also it seems that the Chinese government doesn’t know how to handle the problem.

• Europe’s recovery remains to be fragile. At maybe 1% economic growth, it’s not growing fast enough.

These are some of the factors that fuels the selloff. Combine all of that and you are in a major funk. Fear is a very contagious emotion. Fears breeds more fear and that’s how you lose 300-400 points a day.

Andre The Giant – Life and Legend

My view of the holidays and what the reality is are two different things. And the whole time I’m fully aware of my flawed thinking.

My idea of the holidays is this: Having a lot of free time to do the things I enjoyed the most. Something along catching up on reading by the fire place while sipping on eggnog. Maybe learn the art of binge watching. All along I know that’s a fantasy.

As you would know, the reality is that the holidays are quite chaotic. You rush to cram year end work in a short amount of time (plus some people have to work during the holidays). Then you have your Christmas shopping, cards to write, decorations, packing, many long drives, hosting, visiting, cooking etc…Add kids in the picture and you have a tornado. And I love all of that. That’s what you want every year. You eat well, you drink well, and spend time with great people. Everything is merry. When it’s over you are happy and sad at the same time. I’m fully aware that I’m lucky and not everyone can have the luxury of a nice holiday. So I’m grateful for that. I just need change my perception of what the holidays are. Or maybe its need to be relabeled or re-branded. I’m sure if I had the nice quiet holiday I was talking about I would write a post on how it should be more hectic. We actually should have a “real” holiday after the holidays to recuperate and detoxing. Along the line of a mandatory stay at home so we can actually rest and start the year energized. And why does everyone publish these top ten list of books you should read during the holidays if nobody has time to read them.

I wrote everything above to let you know that I only read one book during the holidays: Andre the Giant – Life and Legend by author/cartoonist Box Brown. It’s a 230 page comic book biography that I read in less than one hour. It was gifted to me by illustrator Hugh Langis. The gift itself is a total surprise considering I’m not exactly what you would call a fan of the giant. You can have a glimpse of the book with a preview here.

Hogan opening the story.

His real name was Andre Roussimoff (1946-1993) and the “Giant” was his professional wrestling stage name. My wife actually know him because he was an actor in the Princess Bride (they needed a 7 and a half foot giant…). While on set he ran a 40,000$ bar tab. What else do you do between scenes?

Andre was born with a rare syndrome known as acromegaly, he produced too much growth hormone in his body. It’s a condition where his body continued to grow and eventually his body started to turn on him. Doctors said he wouldn’t past 40 years old. At his peak, he weighed 500 pounds and stood nearly seven and a half feet tall. The current WWE/WCW “Giant”, Paul Wight the Big Show,  used to have acromegaly and had a surgery to halt the progress of his condition. Coming from a rural family in France, Andre didn’t see a doctor until he was much older, so maybe he could have been saved if detected early on.

When I was a kid I was too young to have seen the Giant wrestle. His body of work goes back to the 70s and 80s. He was undefeated for 15 years. However I know Andre not for his wrestling accomplishments, but for his drinking stories, out of the ring stories, and persona. His drinking is stuff of legend. He’s drinking throughout the whole comic book.

By Box Brown

This is certainly not a complete biography. I’m sure there are more accomplish body of work. I think the point of the book was the capture the bigger than life essence of Andre and the book accomplish exactly that. He had one hell of a life. Even though he died in 1993, as to this day he’s still the legend he was. It’s fun a read if you have an hour to learn more about an extraordinarily human being.

2015 – The Year Nothing Worked, Especially Hedge Funds

2015 was the year where nothing really worked. Stocks, bonds, commodities, foreign investments are all down. Cash went no where. There wasn’t any place to hide. The only way you could have made money is by holding U.S. dollars and shorting the market. If you held the “FANGs” (Facebook, Apple, Netflix, Google) you made some money. However it’s not exactly what I call a sound investment strategy. With two trading days in 2016 in the books, the FANGS are slumping with everything else. Yet, don’t divest your portfolio to buy these four stocks. They are not the holy grail.

Do you remember your favorite financial advisor mentioning you need a diversified portfolio? Something about asset allocation? When one market is slumping it’s alliright because you have another asset class that’s thriving to balance things out.  Well that didn’t work out too well in 2015.

Below is a table of the performance of some of the main indexes. The crazy thing is that the market was hitting new highs just in May 2015.

Source: Barron’s, Bloomberg

Right now hedge fund performance are retaining my attention. Hedge funds used to be the sexy thing. Hedge funds was the go to place for new graduates. After many disappointing years and the financial sector getting clobbered in the media, working at a hedge fund has loss its cachet. Now it’s fashionable to work at tech companies and start-ups. Several well-known funds closed their doors in 2015 as big bets on oil went bust and returns sank. Three Tiger cubs seed funds, JAT Capital Management, and the macro fund of Fortress Investment Group  were among some of the funds that closed shop.

Remember that hedge funds were promoted as investment vehicles that suppose to make money in any markets, bear or bull. Hedge funds also aim to make money even in volatile conditions. Because of that they were able to justify  their high fees. They have historically charged 2% of assets under management and 20% of any profits. Of course their are cheaper and more expensive funds.

The most well-known names in the hedge fund business, considered investment geniuses, such as Bill Ackman of Pershing Square Capital Management and David Einhorn of Greenlight Capital have been crushed, both down around 20%. The depth of their losses is stunning. Bill Last year Bill Ackman was prompted as the next Warren Buffett and now he has a lot of explaining to do to his shareholders. While on the subject of Buffett, his Berkshire Hathaway (BRK) investment machine also did worst than the market.

If the crème de la crème can’t beat the market, who can? Below is a table the hedge fund performance since the financial crisis. To their credits, they performed much better than the market in the 2008 crisis but hasn’t been able to repeat that performance.

To defend themselves, some managers claim that hedge funds never had the objective of beating stock or bond indices. Rather, the role of hedge funds is to provide diversification (uncorrelated returns) when added to portfolios of stocks and bonds and other assets. Also it’s unfair to compare their performance to the equity market because some hedge funds invest in other assets.

In 2016, hedge funds will have a lot of work to do to gain back investor confidence.