Sunday, February 11, 2024

Guest Review: Part II of @pdxsag on A Man for All Markets: From Las Vegas to Wall Street, How I Beat the Dealer and the Market

Noted investor and polymath Edward O. Thorp wrote an autobiography in 2017, A Man for All Markets: From Las Vegas to Wall Street, How I Beat the Dealer and the Market (3/5). This is part 2, on lessons concerning Thorp's health and longevity. In part 1, I reviewed the book and the lessons from Thorp's investing and business successes.

We closed part 1 with the lament that Ed had very little in the book about his health and things he did to maximize it. He mentions being a small, scrawny kid prior to college, fitting the stereotype of a big brain sucking up the majority of resources from the growing body. Later in the book he mentions never smoking cigarettes. Further, as far back as 1985 he had a rule he wouldn't hire smokers or let anyone smoke on the office premises. An ardent anti-smoker, along with a propensity for walking and hiking for leisure activity, was pretty much it from the book as far as his health practices and habits.

We are left, then, with making a few hypothesis and looking for evidence on each from the book's subtext and available other sources. These are, from most probable to least:

  • Occam's Razor: (as always) lucky genes
  • Close second to that: be rich and live in Southern California
  • The Null Hypothesis: he's not an outlier, just an early peak at true normal
  • OTC supplement maxxer, but is demure discussing it
  • Esoteric billionaire longevity stack, but sworn to secrecy

Evidence for lucky genes is strong. He has an outstanding intellect (lucky), and IQ is positively correlated with all the good life-outcomes, such as longevity. He is a "small bro," indicating naturally low insulin. He outlived his wife (ie. shared environment) who passed from cancer in 2011 at the age of 81. Occam's Razor says go with the simplest explanation staring you in the face. So there you go.

As to being rich and living in Southern California, let us take each of those in turn. 

Jane Austen observes (through the character of Fanny Dashwood in Sense & Sensibility), "people always live forever when there is an annuity to be paid them." More recently, the joke at CalPERS expense among actuaries is if you want to live to 100 you should endeavor to become a retired California high school teacher. The corollary to these is that death rates invariably spike following stock market crashes. It's not entirely from stock brokers jumping out their windows. It's most true among early retirees, those 65-70. Particulars aside, the overall message is well-known and obvious: stress kills and the financial anxiety from a shrinking, fixed income is the most stressful of all.

As a statistical arb trader before that was a thing, Thorp's fund literally never had a down year from its founding in November 1969 to its closing in December 1988. He was one of the few private sources of capital (ahem) willing and able to buy in the teeth of the 1987 crash. He writes about the argument he had with his chief trader who was unwilling to put on the full size of trades that Ed wanted to.

The Southern California weather and lifestyle prior to the immigration flood-gates opening, combined with the financial security from being rich (and satisfied with life, a theme from the book) is about as good as it gets for health and longevity. The closest analogs we have are the famous Blue Zones, where idyllic weather and traditional social structures combine to create regions with the greatest number of centenarians.

Additionally, it is instructive to compare Thorp to other well-known billionaires: Munger and Buffett at 99 & 93, Jim Simons then at 78, and Carl Ichan at 86 to pick the first set that to come to mind. To be sure, they all look good for their age, but they don't look good-good. One could use them to make the argument that being rich spots you 10 years, but to get to 20 years, such as Thorp exhibits, you need SoCal over the NY/midwest, and you need low-stress. I think you'd be hard pressed to find less stress per million dollars than a statistical arb PM with tenured college professor as his back-up gig. 

Moving on to the null hypothesis, one of the jokes from time to time on social media is how old celebrities in the 80's looked compared to people now. While celebrities routinely undergo cosmetic surgery (and politicians – they do this to fool voters from realizing how pickled their brains are), even among normal people it's easy to see a difference between Boomers today and adults of the same age in previous generations. Better diets, less smoking, and less grueling physical labor all contribute to make a noticeably more physically youthful appearing population.

It may be that Ed isn't unique at all, he's just early. We are comparing him to his cohort of Silents and members of previous generations that we know. However, we are not able to compare him to Gen X and Millennials that haven't had a chance to reach 80 and 90 years old. His lifestyle more closely matches today's adults today than his contemporaries. From his experience meeting with the strength training club in college, Ed took an active interest in his health and fitness level at a time most people didn't think much of it at all. Also, unlike the vast majority of his cohort, but like the vast majority of GenX and Millennials, he never smoked. Third, he had an office job for his entire career. This pretty much describes the average Gen X and Millennial.

The big difference between today's adults and those of Ed's (earlier) time is rampant diabetes and pervasive omega-6. As those two are judiciously avoided by a great many health-conscious GenX and Millennials, it may be that in forty and fifty years from now a large number of right wing internet autists (also notoriously avoidant of the Covid vaccinations) pass for 10-20 years younger than the average obese, stroked-out retiree-American. You read it here first.

While I called “lucky genes” the Occam's Razor explanation, none of the preceding are mutually exclusive. We don't have to pick just one, and it's probably more correct to say all the above are the Occam's Razor explanation. Ed looks great because he maximized on all axises for longevity.

But what fun is that in a blog post.

So we shall consider the more speculative hypotheses for which we have only indirect evidence. Our sources here will be his interviews with Tim Ferris, as well as some passing mentions in this book.

One of my complaints about podcast interviews of famous rich guys is the podcasters all ask the same question, namely: “how can we be rich like you, but right now.” So weak. What none of them ask is, “you look great and you're still playing everyday in the equivalent of the major leagues. Come on brother, no really, what's your secret?”

Ok, looking at a guy like Weinstein or FoundersPodcast guy, we don't have to wonder.

I think if a guy like Weinstein even were to ask, he'd get a non-answer. Thorp hinted at as much with the kooks that wrote him with their own gambling and investing strategies; the housekeeper that nagged and nagged him for stock advice only to ignore the most important part after he relented and gave her some, which was to check with him before selling; and the wordcel that asked for his expert opinion on matters, but really just wanted to tally a binary vote among his friends and associates. Giving advice to Normies is often casting pearls before swine.

However, there is an exception with the Tim Ferris podcast. Tim Ferris and his audience are health and longevity maxxers themselves. Not only did Tim ask, he's asking from a place where Thorp would expect to be listened to. Thorp's initial answer (discussion starts about 46 min mark) was that the data on supplements was not very compelling (true) and so he “doesn't take much of them.” Well, scratch that.

And yet... in the same breath, Thorp mentions reversing osteopenia by taking supplements for bone health (calcium, magnesium, and K2). Then later on in the interview (1hr 11 min) he discusses taking finasteride for the last 20 years(!) for prostate health, and which also has the pleasant side-effect that it restores and maintains hair growth. Does this point to the possibility that there is a secret, boutique longevity doctor among SoCal's elite?

Bone health supplements and finasteride are hardly esoteric pharma secrets. Also, you'd have to assume other billionaires would be doing it too and we felt we could only spot them 10 years. But there is one more interesting data point that dropped just as I was finishing up this post. In these interviews Thorp has an unmistakeable facial tic where he squints hard and closes both eyes every 5 to 15 seconds. In Tucker Carlson's interview of Vladimir Putin, Putin had a similar facial tic, though far less pronounced. Putin also had restless legs. Putin is 71 and, like his many of his western counterparts, has had cosmetic work done. Is there a longevity drug they are taking which causes facial tics? Not sure, but you can bet we'll be watching for more instances among rich, old guys.

1 comment:

Anonymous said...

the only drugs I can think of off hand that would cause such tics are anti psychotics often prescribed for bipolar disorder