TCFP75: Cosmic

It was Carl Sagan who came up with the idea of the Cosmic Calendar (see this Wiki page). It’s a method to help understand the life of our universe (c.14 billion years and counting) by mapping it into a single year.

In so doing the first life on earth appeared around 21 September, the first animals on 7 December and dinosaurs on 25 December. Primates appeared on 30 December and modern humans on 31 December (at about 11.52 pm).

In “modern times”:

1. The wheel arrived 11 seconds before midnight;
2. Buddha 6 seconds before midnight;
3. Christ 5 seconds before midnight;
4. Modern history (starting around 1580) 1 second before midnight.

My conclusion is that we know nothing. Or that the knowledge available to us is not finite – there is no end to what we can know.

Most of us 8 billion are welded to what we think we know whilst ignoring what we don’t. Is it any wonder humanity stumbles from one crisis to another? We are virtually blind – what else could we expect?

How does this relate to how we work with you?

I start by accepting how little I know, which I am fine with. In fact, I think it’s beneficial. If my mind is clogged up with things I’m sure about, where’s the space for new thinking to come along?

It also means we focus on doing the best we can to mitigate what we don’t know.

And we do that by not making many decisions others would and by being prudent. For example (this list is not exhaustive):

1. Our forecasts for your spending, investment returns, inflation are prudent.
2. We make sure there’s enough cash / secure income to hand to weather storms.
3. We don’t call market tops and bottoms.
4. We don’t make calls on geographies or sectors.
5. We don’t do anything exotic.
6. We wait for opportunities to enhance investment returns. It’s in these moments we can act and take advantage.
7. We maintain as much flexibility as possible.
8. We use different products, tax allowances, etc., because we don’t know in advance which will turn out to have been the best options.
9. We are in regular contact with you. To see where your thoughts are, what you would like to do, what’s going on with you.
10. In summary we look to minimise future regret.

Is this the perfect approach? Of course not, there can be no perfect approach with imperfect knowledge, but it is a thoughtful and pragmatic approach.

As we move forward, as more knowledge comes to us, we adjust – practical and philosophical to reflect our new understanding.

In this way your financial plan is always in motion, it waxes and wanes to suit changing knowledge.

And it all starts with knowing I know next to nothing.

Boring But Effective | Truthful, Helpful, Kind

advice@townclosefp.co.uk