Dr. McGilchrist starts his presentation saying that the popular understanding about the Left/Right Brain is bunk. After clearing up these misconceptions he talks about the importance of how we pay attention. Paraphrasing…
Everybody sees what they are interested in finding…
Attention shapes the world and the two kinds of attention came about for evolutionary reasons…
Even the oldest species have an asymmetric neural network…
Every living species has to solve this conundrum, ‘How can I eat and yet stay alive?’ You need two kinds of attention, one focused on the pray you want to eat and another that watches everything else to stay safe. These two kinds of attention need two different senses of attention…
The left brain is focused while the right brain is panoramic…
That’s the first 15 minutes. Dr. McGilchrist is a good speaker, he doesn’t say, ‘You know’ every 15 seconds!
The rest of the presentation is the really interesting part, call it philosophy as opposed to the science of the first 15 minutes. Some of it can be quite contentious so I’ll let you decide to watch it or not.
o o o o o o o o o o o o o o o o o o o
I had never before wondered if I were right or left brained. Dr. McGilchrist mentioned that writing was a left brain activity. In school composition was one of my least favorite subjects even as literature, as taught by Mr. Laidlaw, was very interesting. I started taking writing seriously at around age 30 when faced with the task of writing proposals and reports for my management consulting clients. I believe programming is a left brain activity as well. Yet my world view seems to be more right brain.
o o o o o o o o o o o o o o o o o o o
With the stock market bubble collapsing life has become quite stressful. This year I made two fight or flight trades which, while not bad, were certainly sub-optimal. In both cases a bit of patience would have resulted in better outcomes. The problem is that bankruptcy, like death, is rather terminal, both to be avoided if at all possible.
The portfolio dichotomy is between growth and cash flow. While one has other sources of income growth is a good choice because volatility is not a real liability. Since I no longer have other income I should attend to cash flow which means selling covered calls. Unlike the stock market, there are no historical charts of covered call performance.
Dedicating about 1/3 of the portfolio to covered calls since April 2019 they covered my ordinary expenses not quite twice, 178%. How volatile was that ride compared to the stock market?
4 year monthly S&P 500
4 year covered calls cash flow
The big drawdowns were the result of protecting long term positions. They would not happen if the port had no long term buy and hold positions to protect.
Of course managing covered calls is a lot more work than buy and hold. There simply is no free lunch!
I almost forgot, when cash flow exceeds ordinary expenses the port grows. Is that the free lunch?
The Captain
