July 23, 2020

Expected Returns, Factor Investing, Financial Advisors, Financial Planning, Fundamental Topics, Portfolio Management, Portfolio Theory, Historical Data, Retirement, Annuities

Episode 108: Dr. William Bernstein: Praying for a Bear Market

Benjamin Felix

July 23, 2020

Expected Returns, Factor Investing, Financial Advisors, Financial Planning, Fundamental Topics, Portfolio Management, Portfolio Theory, Historical Data, Retirement, Annuities

William Bernstein, Ph.D., M.D., is a retired neurologist in Oregon. Known for his website on asset allocation and portfolio theory Efficient Frontier, Dr. Bernstein is also a co-principal in the money management firm Efficient Frontier Advisors, has authored several best-selling books on finance and history, and is often quoted in the national financial media.

In keeping with our recent tide of incredible guests, today’s one is no exception. Dr. William Bernstein, a financial theorist, advisor, and neurologist, joins us to share some of his incredible insights. As the author of several seminal books such as The Intelligent Asset Allocator and The Four Pillars of Investing, Dr. Bernstein has made his mark applying his medical evidence-based approach to investing. These works have had a particularly strong influence on Cameron when he made the transition from active mutual funds earlier in his career, so it was an incredible honour to have him on the show. In this episode, we dive into a range of topics. We kick off with the importance of understanding investment theories and market history along with why Dr. Bernstein believes young investors should cross their fingers and hope for a bear market. We then take a look at how overconfidence and ill-discipline affect investment decisions and how investors can test their risk appetite in real-time. From there, we turn our attention to small-cap and value stocks and Dr. Bernstein’s take on them and the role they should play in your portfolio. We round the show off by discussing the real economic issue that Dr. Bernstein thinks the pandemic is bringing to the fore in the US, the parallels he has seen between his medical and his financial advisory career, and some of his frustrations in communicating financial advice. Be sure to tune into this phenomenal episode.

Read the Transcript

How important do you think it is for investors to understand the theory of investing?

Well, it's extremely important. If you don't understand that risk and return joined at the hip, you're going to have problems from the get go. Stocks, usually not always, but usually have higher returns than bonds do. The reason for that is because they have higher risk. If you expect the high returns, long term returns of stocks, you are going to have to be prepared to take it in the shorts every now and then, and sometimes in a very big way. Conversely, if you expect safety, then you're going to have to expect very low returns. And if someone tells you that they can give you high returns with low risk, that is the point where you make 180 degree turn and run like hell.

How important do you think it is to have an understanding of market history to be a good investor?

Well, again, it's one of the essential pillars of being able to invest. And understanding market history means understanding several things. First and foremost, it means was that in the very long run, both stocks and bonds can have periods of very poor returns. About once a generation and sometimes twice a generation stocks lose about 50% of their value. In the past 20 years, stocks lost about 45% of their value, in the early 2000s more than 50% of their value during the financial crisis of 12, 13 years ago. And very recently they lost about a third of their value very quickly before recovering. That's the first thing you have to understand.

The second thing you have to understand is that there's an inverse correlation between how good the economy looks and what future returns are going to look like. If you were compensated for taking risk, then you have to be compensated the most when the risks look the most frightening. So the best fishing is done in the most troubled water, the most stormy waters. The very best time in US history to buy stocks was in the early 1930s when they were practically being given away. And if you mentioned buying stocks to someone, they'd either laugh at you or try to slug you. And the same thing was true in the early '80s as well. And most recently in March, 2009, most people got visibly sick when they thought about the stocks in their portfolio. Those are the very best times to buy stocks. And that's one of the things that history teaches you.

From Rational Expectations, you said something along the lines of young investors should be praying for long extended bear markets.

Yeah, of course. And that gets to radical issue called return sequence, which is that if you are in an accumulation phase of your investing career, you're saving periodically, then you should get down on your knees and pray, as I wrote, for awful returns, awful bear markets, great volatility, so you can accumulate shares of no prices. On the other hand, if you were a geezer like me, you don't want to see bad returns right off the bat, you want to see good returns right off the bat. So you can build up your nest egg a little more for so when the bad times come, you've got plenty of cushions. So how risky stocks are depends more on where in your investing lifecycle you are.

If you have more human capital, that investment capital, you want bad returns and the opposite is true. If you work for the government or for the post office, then you can invest in the riskiest kinds of value stocks. On the other hand, if you're tied to the financial services industry, you want to be much more conservative in the way you invest.

A lot of people equate risk as the volatility of these prices during these bad times. Would you say that these are the true real risks that long term investors face?

Yes. There are a couple of different ways to measure risk. Probably not a bad way, but not the optimal way is just to look at volatility. I mean, if an asset class is volatile, you know that it's risky. But the real risk is not just how the risk of bad returns, but having bad returns at a time when your consumption is going to take a hit. So you might win, you might lose your job. I mean, the worst thing that can possibly happen to you is to have your stock portfolio down and lose your job at the same time. And that's one of the reasons why stocks have a high return is they tend to do the worst at the times when you're most likely to be doing the worst in terms of your vocational situation.

Now in the very long term, the most important measure of risk is to see a long term decline in stock prices like in the last generation. We've never really seen that in the United States, all right? And I don't think you've seen that in Canada either, but you don't have to go very far back in history to see a nation that encountered that. And that was Japan. If you would watch Japanese stocks in 1990, now 30 years later, you are still well under water. And if you were retired, you ran out of assets pretty darn quickly. And then if you go further back in history, back to the history of say, Europe, a lot of countries in Europe or Japan saw their securities markets absolutely destroyed. They never really came back.

For example, if you look at the returns of the US long term bonds, and I'm sure Canadian bonds behave the same way, between, let's say 1940 and 1980, what happened to bonds during that 40 year stretch was much worse than it has ever happened and has ever happened to stocks both in Canada and the United States during that period.

We're talking about risk and volatility is one way to measure risk and it's probably how most people think about risk. Do you think investors are good generally at evaluating their own personal tolerance for volatility?

No, they're awful at doing it. And you're probably going to be asking me some questions about psychology, but the biggest psychological flaw, the mistake that people make, is being overconfident. Men are particularly bad at this. Testosterone does wonderful things for muscle mass, but it doesn't do much for judgment. And one of the mistakes that a lot of investors, and particularly men make, is thinking that they're able to tolerate stock market risk. They look at how maybe if they're lucky, they're aware of stock market history and they can see that yes, stocks can have these terrible losses. And they'll say, "Yeah, I'll see it through and I'll stay the course." But when the excrement really hits the metal aiding system, they lose their discipline. And the analogy that I like to use is a piloting analogy, which is the difference between training for an airplane crash in the simulator and doing it for real. You're going to generally perform much better in a sim than you will when you actually are faced with a real control emergency in an airplane.

How should people assess their risk tolerance?

The only way to do it is in real time and with the aid of a good memory. Well, the one thing that I would urge anyone to do who's just starting out with investing, who's never invested in equities before, is to take it slow at first. Theoretically, what a young person should be doing is investing all of their money in stocks. But in fact, if a young person in the real world does that, their first bear market may hit them very hard, they may never invest in stocks again. So start at a 50, 50 allocation, something like that or something close to that, and then assess in real time how you behave when things really go sour. And if you were able to just hold on and get through, that's probably the right allocation for you. If you're chomping up the bit during those periods and saying, "Gosh, I'm going to buy more." Then you know that you can probably have a higher allocation. But if your thought was, "Oh my God, look at all this money I lost. I'm never going to do that again." Then maybe you should be 30, 70.

How do you get people’s perception to shift? Do you think it’s possible to change people's perception around times like this?

No. Our emotional responses to our environment are hardwired into us by probably millions of years of human evolution. And you can't get rid of the basic psychological underpinnings of investing, which is fear and greed. There's just no way you can get rid of fear. It's ingrained into us. I mean, 10,000 years from now, people, if they hear the hiss of a snake are still going to be revolted and frightened and want to run away. The same thing will also happen to people 10,000 years from now when their financial situation worsens and the economy worsens if we're still around in 10,000 years.

Should young investors be considering using leverage?

Well, the theory also says that in order to lose weight you have to eat less and exercise more. And that's about the same way that I feel about leveraged portfolios for young people. I don't think there are too many people in this quadrant of the galaxy who are able to tolerate a leveraged stock portfolio. It looks good on paper. If you have a PhD in economics from Yale, it looks good, but for real people in the real world, it doesn't work so well.

Do you still think that it's reasonable to expect return premium from a small cap and value stocks?

Isn't that a good question? I was just about to ask you the same thing. I don't know the answer to that. I don't feel bad about that because I'm thinking no one else does either. If you believe that there is both a behavioral and a theoretical component to the small value premiums, that is small and value stocks are riskier, therefore they should have higher long term returns, then I think at least some of the premium is still there. If on the other hand, it's all behavioral, then with luck people have learned about that and have arbitraged that well. I wouldn't say with luck. If that happens, it'll get arbitraged away. I don't think it's going to be as large to the extent that I believe that some of it's still due the risk. I think that it's still there. And I think we've seen that the evidence for that just during the past five or 10 years, if you're a value investor, you've been very discouraged by the past five or 10 years. And a lot of people have given up on it, and a lot of people have said, "Value is dead."

Whenever I hear from anybody that a certain approach is data or a certain asset class is dead, I perk up my ears because that means that all of the weekends have sold out of it. And I think that's what's happening with value now. I do think in the answer to your questions, at least some of the value and small premiums are still there. And the main reason why I believe it is because the valuations now of small and value stocks relative to the market are much more attractive than they were 10 years ago.

We talk a lot about the data around small cap and value in the theory around small cap and value. And this leads people to think, "Well, why don't I just build a portfolio of 100% small cap value stocks?" How would you answer that question?

Well, the reason why you shouldn't do that is for periods of 10 and 20 years and perhaps more, that can fail. You don't want to take that kind of risk just for a little boost of return. If anyone should heavily weight towards small and value, it should be a young person in the accumulation phase. All right. For the same reason that I talked about 10 or 10 minutes, shorter, 15 minutes or so ago, which is that if they do happen to have a long period of very low returns, then it's good to be accumulating them. So if you're a 20, or a 30, or a 35, or even a 40-year-old saver, it might make sense to heavily tilt towards small and value. I don't think that people much over the age of 35 or 40 should do that very aggressively.

Is it safe to assume that you would support having some tilt towards small cap and value at all ages? Would that shift over time?

If you're able to tolerate the under-performance, yes. And in the same thing that I said about learning what your tolerance is to equity in general early in your career. You should also be learning if your tolerance to small and value under performance over periods of 10 or 15 years. You should encounter that first and then decide. The young person who's been investing in small and value stocks for the past five or 10 years is now in a perfect position to evaluate how they respond to that risk.

What do you think about dollar cost averaging, which is just systematically deploying cash versus the concept of value cost averaging?

Well, let's get one thing out of the way, which is that if you have a lump sum to invest, 80 to 90% of the time you're better off doing the lump sum as opposed to a periodic approach. Now the periodic approach has a psychological advantage and it's certainly sub-optimal from a return point of view, but it just stands to reason that lump summing does better than either value averaging or dollar cost averaging because you've got more dollars in the market over time or dollar years in the market, if you will. Now, do I think that value averaging is better than dollar cost averaging? Yes, I do.

But it's the same sort of phenomenon, which is that with value averaging, you're very likely to have fewer dollar years in the market. Okay? But you can get very lucky with value averaging, really lucky with value averaging. If you start value averaging and then three or four years into the process, you have a real market decline, then you wind up putting most of your assets in very low prices. So it can work out both ways, but the rewards of value averaging, if you were at all fortunate, can be very high. And that's why I was favor it over dollar cost averaging.

At what point does it make sense for an investor to start shifting their portfolio away from say an equity bias portfolio towards one that holds more fixed income? And is it an age thing? Is it you've met your personal goal thing or is it really a preference thing in your mind?

Well, it's certainly is a risk thing. One thing that gets quoted back to me a lot, and I stole from a guideline of Richard Ryan who was a bond analyst and a consultant, which is when you've won the game, you stop playing. So if you're someone who has accumulated enough assets to maintain body and soul for the bulk of your retirement, 20, 25 years worth of residual living expenses, then you really ought to be taking risk off the table. I don't mean sell all your stocks, but certainly cut back on your stock exposure so that if you do happen to have a bad result in the stock market, you will not be eating cat food.

And it becomes sort of a Pascal's wager. You can make a mistake, if you will, obviously, by selling out and then having the market go higher. You might've been able to buy the Bimmer or fly first class and now you don't have that opportunity, but I can assure you that the mistake in the opposite direction is a much worse mistake to make. If you can't buy the Bimmer or fly first class, you will have regret. I can assure you, you have a lot more regret if you make the opposite mistake, which is to maintain a high stock allocation into retirement and see your portfolio get cut in half, and then run out of money after seven or eight or 10 or 12 years, which can easily happen to you.

Now that's all dependent on your burn rate. For example, it's an irrelevant question to ask to the person who's got enough ... at least an American who's got social security or a pension and enough to pay their basic living expenses. It doesn't matter what that person's stock portfolio does, they're still going to always be able to pay their rent and put groceries on the table and not have to move in with their kids. All right? And so it all depends on what your burn rate is. That person has a burn rate of zero of their portfolio. If your burn rate is only one or two or even 3%, you can probably still be fairly aggressively invested in stocks. But if your burn rate is four or 5%, then you best seriously consider reducing your asset allocation for stocks as you run out of human capital. That is when you're 55, 60 years old.

How do we reconcile that idea of taking risk off the table once you reach the LMP, the liability matching portfolio? How do we reconcile that with the idea that stocks can be less risky than bonds over a very long period of time?

Because over shorter periods of time, then the stocks are certainly riskier than bonds. What's the sort of crossover point? It's somewhere around 30 years. Maybe it's 20 years, maybe it's 40 years. I don't know. But the bottom line is if you are 65 years old, you are squarely in the short term risk pool. Okay? If on the other hand, you're 30 years old, you are in the long term risk tool and that's the basic reason. Academics like to play this parlor game is do stocks become riskier over time or less risky over time? And the Orthodox answers, they become more risky over time. But it's really a stupid question to ask without adding, at what stage of your career? Okay?

Clearly, if you're a young person with an excess of human capital and you're saving, bonds are riskier than stocks, all right? But if you're a retired person who is 65 or 70 years old, clearly stocks are riskier because you're much closer to being in the short term pool than the long term pool. And you might say, "Well, someone who is 65 can usually live to be 95 or 100." And that's true, but the risk doesn't occur at age 95 or 100. The risk occurs when you're 68 years old and your stock portfolio gets cut by 60% and you're burning 5% per year. And so that clearly puts you in the short term risk pool, even though you might be living 30 or 40 years.

What do you think about annuities and when would you ever recommend people to consider them?

Only in the rarest of circumstances. And a person who I would consider for an annuity would be a young person who has no sheltered assets at all, who wants to buy a tax inefficient asset class that they think has high expected returns, and it's a passive asset class. And so that would be [inaudible 00:25:51] and high yield bonds. If you want to invest in those two things, it's not wise to do that in the taxable portfolio. At least in the United States, it's not. And so the place you want to do that is in a sheltered portfolio. And there's only one company. I try not to mention names of companies, but there's only one company that offers a very low cost annuity that provides index funds or possibly managed funds in those two asset classes, and that company's name begins with a V.

That's a very rare circumstance though. Most of the time a variable annuity is not a great idea. Now fixed immediate annuity is not a bad choice for some people who have a high burn rate. But at least in the United States, before you even think about investing in a spear, at first, you should right off the bat be delaying your social security or your pension payout to the oldest possible age to get that possible high payout. Because what you're doing when you buy a spear or your delay social security is you're buying longevity insurance. In the United States at least, there's no better longevity insurance than delaying social security at 70. Now I have no idea, maybe you can tell me what the Canadian equivalent of doing that is.

How would you describe the difference between financial systems, and I'm taking this from your book, Rational Expectations, the difference between financial systems and air foils or electrical circuits?

I mean, my audience, I suspect is very much similar to your audience, which is people who are very numerate, who are good with numbers, and they tend to be engineers and scientists. And that's great. One of my mentors in this business of financial writing, Scott Burns, who trained at MIT as well as [inaudible 00:27:47] right under Archibald [MacLeish 00:27:49], told me that the problem with doing financial writing is that for 90% of the population fractions are a stretch. And if you're not one of those people, if you're someone who's good with numbers and God bless, but be beware that there's a trap. Because if you're the kind of person who lives in breathes models, you expect those models to be accurate descriptions of the universe. And that is certainly not true with finance. It's like expecting the laws of physics to work with finance is you're going to be very, very disappointed because you're working in a world where the equations will change and where the empirical data will change from year to year.

And mistake that I see engineers making is they think that if they can just get one more year of data, if they can refine their correlations to one more decimal point or their standard deviations to two more decimal points, they've achieved the Holy grail. No they haven't. And what I tell all engineers is to forget the math you've learned that's useful, devote all your time to now learning the history and the psychology. And one of the things that any stock analyst, any person who runs an analytic firm will tell you, because they really don't want to hire a finance major, they actually want philosophy and English and history majors working for them. They do a much better job of dealing with stock markets than the mathematical types. It's different with bonds. If you're dealing with bonds, then you want rocket scientist. But if you're dealing with stocks, then you want linguists and philosophers working for you.

Should people be using mean variance optimization to optimize the allocations of their portfolios?

God, no. My favorite term for mean variance optimizer is an error maximizer. It's useful as a teaching tool. It can answer some very limited questions. For example, I say to myself, "Precious Metals Equity has a very high volatility and has a zero long term return or that is your long term return, what is the minimum return I expected to have, but I wanted to make a portfolio?" And you certainly don't want to even use it to tell you how much to put in your portfolio, you just want to first order estimate, should it be on my portfolio or not? And then you can start to answer that question. But beyond that, if you expect your portfolio to fall out of a black box, then you're going to find yourself sooner or later in a world of hurt.

What do you think about gold? Not Precious Metals Equity, but just gold as a portfolio on occasion?

Well, for starters, I will say this about gold, it's a higher, long term return than Precious Metals Equity has. But the problem with gold is that it really isn't that valuable. It's no more than stocks. And the beautiful thing about Precious Metals Equity is that it's basically a leveraged debt on gold. And so even though it has lower expected returns, I actually prefer it because the volatility of it allows you to do volatility pumping. So several times over the past 60 years, Precious Metals Equity has lost 75% of its value, and then that reverses it. The opposite things happens on a geometric basis. Within a year or two, it can triple or quadruple its value. And that's a wonderful kind of asset class behavior. If you have a very small percent of it in your portfolio and you are disciplined enough to rebalance the portfolio, Precious few people in this quadrant of the galaxy have that kind of discipline.

You're a medical doctor and a markets historian, can you really say that you look at the result of this COVID pandemic and has it caused you any deep concern for your portfolio that says it's different from past big market events?

No, I'm not at all concerned about my portfolio. As Mark Twain supposedly said, but he probably never did, that history doesn't repeat, it rhymes. Every time it's a little bit different. The crisis this time, it was different than past crises because the precipitating event was different and future crises will be different as well. What really scares the bejeebers out of me about securities markets these days is that it's increasing the wealth disparity. In the United States, for example, what you're seeing are people who have lost their jobs, who have very modest savings, and deferred compensation come in, the US 401(k) come in, let's say, and they're having to raid that to put groceries on the table. Who are they selling their stocks to? They're selling the stocks to fat cats. All right. Probably like you and I. And so we're getting richer and in the United States, at least people at the bottom wrong end of the socioeconomic spectrum, are getting hammered. It makes me angry to be honest.

Is there any merit to the comparison between the United States right now and Japan in 1989 or '90?

Anything is possible. The United States once before did seal a loss of equity prices that approached 90% from 1929 to 1932. That was due to very extraordinary circumstances, a tone deaf central banking system that did exactly the wrong thing. And what costs did in Japan was simply that equity prices were so out of line. The peak of our bull market occurs generally somewhere around a PE of 30, not a PE of very close to 100, which was what it was in Japan. So it's not surprising the Japanese equities fell by so much. When you start with a PE of 30, at least have a little

What similarities have you found between being a neurologist and being a financial advisor?

One of my pet peeves are people who call themselves neuroeconomists. These are people who've taken a couple hours of coursework, and they're set for the sheep's brain, and they've got their certificate that says that they're neuroeconomists. I actually don't think that standard neurology or medicine does you much good in finance with a couple of exceptions. Number one is if you are scientifically trained, which hopefully you are as a medical doctor, then that's a very useful mindset to have and invest in. The other thing that's really useful that medicine provides you with is the recognition that early childhood experience is very formative. So when I talk to people about money, I often start with asking them what were their childhood experiences of money? For example, one of the things you learn very quickly is that people who are spenders and don't save, we can be modern Warren Buffett and if you're a spender, it doesn't do you any good.

Spenders tend to be people who have very authoritarian fathers and who came from very poor backgrounds. That's a very bad sign. People who train in architecture tend to be trouble because they want to be constantly redesigning and renovating their houses. I've yet to meet a really rich architect. And you learn that in medicine too. You learn that certain traumatic childhood experiences produced certain long standing medical syndromes as well. So you learn, again, if medicine teaches you anything, it's the importance of early formative experiences and finance and how people look at money.

Can you talk about how and why you transitioned from being the neurologist to this industry?

Oh, it got old. The one thing I guess that you need to know about me personally is I'm easily bored. And it's the same thing with medicine. It's very rewarding. I enjoyed neurology immensely. If you notice I write less and less about finance. The last serious bit of finance that I wrote about was maybe about six or seven years ago when I came out with my booklet series and I wrote Rational Expectations. I haven't been doing a lot of financial writing at all lately. Most of my writing has to do with historical topics.

What do you think the impact on global trade is going to be following this crisis that we're going through?

Isn't that a good question? It certainly isn't going to do good things for the length of global supply chains. I think that people have come to realize just how fragile they are and they're going to get shortened a little bit, but we still are left with a global manufacturing system and consumption system. It is very global. And were we to go back to the 1930s, I think we would start to see economic damage that would dwarf what we're seeing now. I think it's a natural ad and flour. I think the United States has yet to learn the lesson that the other worlds, other developed nations, have, which is that if you're going to have a globalized economy, be part of the global economy, you had better have a social welfare system that compensates the losers.

You can't be throwing textile workers, and steel workers, and auto workers to the wolves and take away their retirement plans, and their healthcare, and their children's education when they find themselves at the short end of the globalization stick. If you're going to be part of the global economy, you better have a decent safety net. And if you decide not to be part of the global economy, you're going to find yourself with much bigger problems.

What do you think of the central bank response in the US anyway during this pandemic crisis?

t's mostly been pretty good. It's certainly better than the response of '08, '09. What they should have done back in '08, '09 was wipe out the bank management, wipe out the bank shareholders, give the bond holders a very big air cut and save the depositors. All right? And then recapitalize the banks and sell them back to the equity markets at a great profit in two or three years. And that's not some far left wooly fantasy. I mean, there are a lot of what we should have done including ... starting with Jean Farmer who's come out and said that. We haven't gotten to that point yet. But if we do have a banking crisis that segues onto this. And I don't rule that out, there are a lot of bad debts out there. The tide hasn't gone completely out. We haven't figured out yet who has been swimming naked. And when we find that out, we hopefully will behave more intelligent and avoid the kind of tea party backlash this country saw back 10 years ago.

What have you learned about communicating financial topics since you wrote your first book?

It's almost impossible to do. The subset of people who have both the mathematical chops as well as the emotional discipline and are willing to learn some financial history, that subset of people is very tiny. And I've sold a lot of books to people who fit that subset. But if that subset was more than half a percent of the population, I'd be a millionaire by now from my book sales. When I become a millionaire from my book sales, I can tell you that. And you asked me that I can go off camera, which was, how do you talk to people who don't get it? And the answer is you don't do it. You're banging your head against a wall.

Where does that leave investors? It basically leaves most people in the same situation they would be in as if when they got onto the airplane and fly to Chicago. And instead of turning right and going to your seat, the flight attendant tells you, "No, no, you're turning left and you're flying the airplane." Don't expect people to fly their own airliners. We don't expect people to take out their kid's appendix and you sure as heck shouldn't be expecting them to do their own portfolio management because that's harder than both of those things.

So you're saying for a large subset of the population some form of financial advice makes sense.

No, not at all. What I'm saying is that a decent European style pension system is what makes the most sense.

I mean, it's funny, it's really hilarious when you watch a Swedish crime series and they open up the proverbial suitcase and the proverbial suitcase has a million krona in it. Okay. That's what a Swede thinks is a large amount of money, $100,000 US or Canadian because the Swede doesn't need the same two or $3 million to retire [inaudible 00:42:33] didn't have to worry about that. Whereas an American has to save a couple billion dollars to retire successful because there's no social welfare system backing them. Same for social security, which doesn't provide very much.

Was that the original impetus for you to dive into this field, right? Because you did not have a pension plan beneath you. So you had to do your own homework for your own future?

Exactly, exactly. I mean, I realized I was going to have to do it for myself. I live in a country that doesn't have a functioning social welfare system. So I was going to have to figure out how to do it for myself and lucky for me, I could do it And then lucky for me, which I didn't understand at the time, I also knew how to write, which I didn't understand until I was about 50 years old. And so that was a very happy junction of skillsets. Having said that, I can't dance and I'm no good around fixing the house, but at least I had two skillsets that amounted to something.

So that's the perfect setup for my last question, which is how do you define success in your life?

Oh, that's easy. When you get to my age and your kids still want to spend time with you, then you're a success.