Every year about this time I send out an unofficial end of year investor's letter -- "unofficial" because 1) it does not get sent to my investors and 2) it usually has little to do with investing.
I’ll get to the funds’ performance in a bit. First, let’s pick up where we left off last year.
You’ll recall that Priya, Nikhil and I survived Tarana’s trip to the bridal gown store in the mall in Dartmouth, Massachusetts to buy a prom dress. More about that later.
Years ago a friend sent me a copy of a book with a “read this chapter” note. The important part was a story about an old man who liked to dance. If I remember right he used to go to a community center or some place like that and, no matter what kind of music was playing, he would go out on the dance floor and close his eyes and spin around and do whatever the music made him feel like doing. The way the old guy danced was nothing like the move-as-little-as-possible, keep your hands at your sides and, heaven forbid, don’t let anyone think you are enjoying yourself style that I had perfected years ago. His way was better.
I read the story, put the book on the shelf and figured I’d come back to it another time.
My father gave me a piece of advice: sometimes it’s best not to let everyone know what you’re thinking. I took that advice to heart. Maybe I learned it too well. I missed the part where if sometimes its best to keep things to yourself, then ― at other times― letting the world in is okay, and sometimes it’s a lot better than ok. Nikhil always understood that. A good example: we stopped at a town square during a festival in the Netherlands on our way to Kröller-Müller and Van Gogh a few years back. Nik and I wandered to the bandstand as the music started. His dancing involves a lot of jumping and pretty soon he had a bunch of bikers in leather jackets over black t-shirts, with long beards and dark sunglasses, leaping up and down with him to the beat of what was actually a pretty good band playing old Motown. A few songs, lots of spilled beer (theirs, not his) and many high fives and fist bumps with his new Dutch friends later, we were off. He was about fifteen the time.
I still have my friend’s book, which I have read through many times, and it’s easy to bring back the image of the old guy out on the dance floor. I thought about him again a few weeks after the David’s Bridal Shop episode.
The after-prom party for the Chapin class of 2018 was held in someone’s parents’ second or third house’s huge backyard, somewhere up in horse country. I think the story included shuttle buses and an enormous sloping lawn and a big tent and paper lanterns. Not burdened with the awkwardness of boyfriends and girlfriends and the before the after prom issues of is this a date date or a prom only thing (I am making this part up and it may have no relation to reality), the girls were free to be happy and to be loud.
Only not too loud. There was a neighbor and a phone call and maybe a police car, and the sound system, probably louder than Woodstock, had to be turned off. But the story ends well: a Bluetooth system switched on, dozens of headphones handed out, and the class of ‘18 and their guests spread out over the lawn dancing with abandon, neon glow sticks around their wrists and in their hair. To those of us watching from afar, a silent dance party on a starry starry night, a marvelous night for a moondance.
Oh yeah, before I forget, both funds did just fine this year.
Jumping the gun to wish you a great end of 2019 and happy, prosperous, and a choreographed with abandon 2020.
Every year about this time I send out my unofficial investor's letter -- "unofficial" because 1) it does not get sent to my investors and 2) it usually has nothing to do with investing.
I’ll get to the fund performance in a bit. First, a story.
We spent a long weekend in Newport back in May, and a heavy downpour that Saturday led us to the Dartmouth Mall in New Bedford, Massachusetts. More specifically, and improbably, it led us to David’s Bridal Shop.
Tarana’s school has a formal graduation ceremony, with hymns and speeches and limited seats for parents, grandparents and nannies (you need tickets to get in), and a commencement address, and each girl wears a long white dress. By tradition each dress is unique (there was a scandal involving a duplicate dress this year but I am not allowed to talk about it) and as March became April and April turned to May, finding the right dress rose higher and higher on the to-do lists for the members of the Chapin class of 2018.
Priya and Tarana were on top of this, but Nikhil and I were blissfully (and appropriately) unaware. The occasional white dress reference over dinner was easily lost in other transition talk as our family planned for both kids to move out of the apartment later in the summer, Nik into his own place and Tarana off to college.
For me, with the kids leaving, this was a year of vigilance for signs of overwrought sentimentality, which, whatever “overwrought sentimentality” means, sounds like a good thing to avoid. I kept an eye on myself for new obsessions and the emergence of odd hobbies. Indeed, I developed a passion for swapping out hard drives and upgrading RAM in old computers, but otherwise showed few signs of decompensating.
I dropped Priya and Tarana at the store and drive off to the far reaches of the many-acre parking lot, hoping that it would take so long to park that by the time Nik and I walked with our umbrellas back to the store, the dress would have been chosen, bagged, and paid for and the two guys in sandals, shorts, and hooded sweatshirts with Montauk printed on the front (Nik’s in green, mine in blue) would not have to see their daughter and kid sister prematurely wearing a wedding dress.
It was not to be.
David’s bridal is the Library of Congress of wedding dresses, rows and rows and rows. There were lots of fitting stations, each with a three-fold mirror and platform, and each with a little bleachers section so that the bride-to-be’s entourage could watch and weigh in. The women (all women, at each station, no best guy friends like in the movies) were split into two groups. One group, usually the mother and one best friend, gave their opinions right away, before the bride. The rest waited until the core group made up their minds, then cheerfully reinforced whatever was already decided. Dress after dress was unwrapped, modeled and rejected, until “the one” emerged, eliciting a roar from the bleachers, hugs and tears and the ringing of a loud bell (Nikhil and I laughed when we heard the bell the first time, drawing angry looks.)
But all of this activity faded when we reached the back corner and found Priya and Tarana and a saleswoman in cat glasses. I felt a sense of relief, because it looked like Tarana was playing dress-up, pulling costumes out of a fake cardboard storage chest in a friend’s attic. Nikhil and I looked at each and exhaled. The foundations of our existence remained intact, unthreatened by images of a future we were not yet prepared to see.
Then all of a sudden “the one” emerged, and we were no longer in someone’s parent’s attic. The women in next fitting station turned their heads towards Tarana and nodded and smiled and raised their eyebrows, the saleswoman put the right earpiece of her glasses to her lips, and Priya took a picture, then another one.
For Nikhil and me, the image we had feared was indeed remarkable, but it revealed the present, not the future. It was a graduation dress after all, found in an unusual place, but for worn for the right reasons at the right time. There were hugs but no tears.
And no one rang a bell. Nik and I made sure of that.
Regarding the fund: it was indeed a year of living (a little) dangerously. That said, the fund has done just fine.
My dear friends and colleagues – wishing you happy holidays and the best for 2019
(Below: Tarana is far right, second from the top; below that — Nikhil and I having survived David’s Bridal)
Eat Drink Son Daughter: A Saturday Morning In The Kitchen
It’s a recent September Saturday morning and I’m by myself in the kitchen thinking about a 1990’s movie from Taiwan. The sun is up, a window is open. The sailboats from the 79th Street boat basin are moored well past 100th Street, and the West Side Highway is weekend morning quiet.
I’m making an omelette, eggs scrambled into a mixing bowl, the other ingredients chopped or sliced in their own little plates waiting to be poured into hot oil one after the other, the order and timing based on size, protein and fat content (how quickly they cook), trying to coordinate each being done just right so the ingredients in the omelette will arrive at done-ness all at the same time.
Kitchens are the best chemistry labs. All of the ingredients are in the pan now, melding together. Fatty acids separate from glycerol from contact with the hot oil. Proteins unfold and unwind in what used to be the nuclei of the eggs. I lower the heat, run the edge of a spatula around the perimeter of the pan to keep the omelette from sticking, turn on the ventilation fan, open another window and hit the button on the Nespresso machine, pretending I’m making espresso with a burr grinder and the real Gaggia machine that I struggled with for years before sticking it in a high shelf in the pantry. I flip one half of the omelette onto the other, trying but not quite succeeding to make the edges match so that the top melds to the bottom, making it into one.
In the movie, a father prepares dinner for his three adult daughters. It’s a Sunday, he does this every week. While he collects vegetables from his garden, strips leaves from various plants and grinds them into spices and arranges a drum set’s worth of kettles and pans and pots over the stove over a huge stove, we learn about each of his daughters, and the challenges they face. Gradually each makes her way home. They eat together, plates of food and words and smiles and raised eyebrows crossing the table rapidly, managing never to collide.
I’ve seen the movie a couple of times. It’s more of a still photo than a film for me, the four characters pausing life for a couple of hours and recharging their energies together. It’s a beautiful image, and one that means much more to me now than in 1994, three years before Nikhil and six years before Tarana.
It’s a good omelette. I clean up and head out, feeling content in that sunny and breezy September morning way. Nikhil and Tarana are both settled in their new homes, working and studying and moving forward. I’m thinking about cooking and kitchens and making sure that they keep coming back.
Van Gogh and Prime Numbers, Manhattan Preschool Admissions and Long-Lost Love in the Netherlands: Investor Letter 2013
Before I summarize the 2013 fund performance, a brief anecdote:
Tarana was four.
We sat at the kitchen counter, admiring Van Gogh's "Starry Starry Night" on a computer screen. Using crayons and old stationary, we each drew our own versions. Although I stayed within the lines, Tarana saw and better captured the wonder of Van Gogh's swirls, and while we used the same crayons, her colors more closely matched his.
When we finished, I wanted to expand the moment, to create an experience -- one that she would remember (and that we could use to illustrate her creative early childhood when the time came to fill out Manhattan preschool applications.) I played and told Tarana about Don McLean's "Vincent" -- but that failed to make an impression on her, and reminded me how depressing the song sounded on the radio when I was twelve.
Tarana ultimately made it into a good New York City kindergarten, no clumsy help from me needed.
Regarding the fund: 2013 was a good year.
My thoughts about 2014? The number suggests stability. It is equidistant from the nearest two prime numbers, 2011 and 2017, and the two nearest sets of twin prime numbers, 1997/1999 and 2027/2029.
Volatility emerges when you dig a little deeper; 2014 sits far from the midpoint between the average of the prime number squares on either side. The average of 43 squared and 47 squared is 2029.
We won't know how predictive any of this analysis is until 2015 (a number whose prime factorization -- 5 x 13 x 31 -- adds up to 49, the square of a prime, a characteristic that I prefer to ignore for the time being) but it's as predictive of the coming year as any other macro trend I have heard of or read about.
So, to sum up--
2014: stable, but with an underlying instability that may take fifteen years to resolve.
Meanwhile, in August, at the Kröller-Müller Museum in Otterlo, the Netherlands, Tarana stood for a long time in front of "Country Road in Provence by Night," a painting that -- for reasons possibly related to something she saw or heard as a young child -- she seems to love as much as I do.
Which suggests -- to me anyway -- that even with a macro strategy based on primes, twin primes or squares of primes, something beautiful eventually happens when you share your stars, your swirls and your colors with someone you love.
To my dear friends and colleagues-- wishing you happy holidays and the best for 2014 (prime factorization 2 x 19 x 53.)
There’s a scene in “Night at the Opera” where Groucho checks into his little cabin on the ocean liner and then hears a knock on the door. A porter enters. Another knock. Room service. Another knock. Another. Five people, then ten-- all in the little cabin, and they keep coming.
Fall, 2007. I sat slumped on the couch, Tarana tucked lazily under one arm, Nikhil lying on the other side, the top of his head brushing against me. One window was cracked open and the air felt like leaves on the ground and smelled like pine needles in a campfire. It was a dark and rainy late afternoon, a ways to go before dinner. By now all four Marx Brothers were in the little cabin, surrounded by assorted plumbers, housekeepers, and lost travelers all repositioning themselves around suitcases, toolboxes and silver serving dishes with steam escaping from under the lids. More knocks on the cabin door, and more people: sea captains with monocles, women with bumpy blond hair parted on the side.
The scene reached a critical combination of too many people in too little space and the kids started laughing, and the laughter ratcheted up a little with each new knock on the door. The camera caught Harpo’s big eyes and nutty smile, the kids got on their knees on the floor to be closer to the screen. I forget how the movie scene ends, but I remember the black and white from the screen lighting their faces. Tarana laughed and bit her lower lip. Nikhil was catching the light in his mouth like a snowflake.
Our children fly past us, riding on a star. But every once in a while we get to ride along.
David Sable MD
writer, teacher, fund manager and retired reproductive endocrinologist