Investing & Retirement

# Turkey, Money, COVID, and More

I’m thankful for you, reading this article. But I’m also thankful for turkey and potatoes and pecan pie. And in the spirit of Thanksgiving dinner, I’d like to serve you with a smorgasbord today. The appetizer comes from the engineering world. The main course brings in investing. And for dessert, I added a quick calculator to consider the risk of COVID at your Thanksgiving dinner.

## Low and Slow

I’m a mechanical engineer. In the engineering sub-field of heat transfer, there’s an important quantity called the Biot number. The Biot (bee-yo) number compares the way heat enters a body at its surface against the way that heat travels through the body.

That might not make sense to you. That’s why the Biot number needs to be explained using food!

Why do we cook pizzas at 900ºF for 3 minutes? Great question, especially when compared against cooking turkeys at 350ºF for multiple hours.

Pizza has a small Biot number. It has a large surface area compared to its volume—it’s very thin. Any energy added to the pizza at its surface will quickly propagate to the center of the pie.

But turkey has a large Biot number. It’s roughly spherical, so its ratio of volume to surface area is vastly larger than a pizza’s. It takes time for energy added at the surface of the turkey to propagate to the center of the turkey.

And then there’s the matter of mass. This is separate from the Biot number, but equally important. Cooking a 20-pound turkey will take longer than cooking a 1-pound pizza. That’s easily understood. Heavy stuff takes longer to warm up.

Why do I have to bake pumpkin bread at 325ºF for an hour? Why can’t I bake it for 450ºF for 40 minutes? Or in a pizza oven, at 900ºF for a few minutes?

I don’t recommend it, but it’s an experiment you could conduct yourself. You’d find that you’d overload the exterior of the loaf with heat before giving that heat enough time to propagate to the center of the loaf. The outside burns. The inside remains raw. And everyone’s sad at the lack of pumpkin bread.

The more cubic or round or dense a food is, the more low-and-slow the cooking or baking will be. This applies to loaves of bread, cakes and pies, or dense cuts of meat. A meat smoker might run at 225ºF all day.

If a food is flat or thin or narrow, it can probably be cooked high and fast. Pizzas, bacon, stir fries all apply. Lots of surface area and lightweight.

But what about mashed potatoes? We only boil potatoes at 212ºF degrees for 15 minutes. That’s way colder and shorter than a turkey or pie. And potatoes are reasonably dense. What gives?

The answer is that water transfers heat more effectively than air. That’s why 60ºF air feels temperate to your skin, but 60ºF degree water is frigid. That’s why you can stick you bare hand in a 400ºF oven (for a few seconds), but sticking your hand in boiling water (212ºF) will scald you. Water moves heat better than air.

And moving or flowing fluid transfers heat better than stagnant fluid. This is why cold winter air has a “wind chill” factor—the blowing cold air removes more heat from your skin that stagnant cold air. And those Thanksgiving potatoes are surrounded by boiling and roiling water. They cook quickly.

## Invest Like a Turkey

Enough engineering. Let’s bring it back to money.

You can approach investing like baking a pizza. Or you can invest like you would cook a turkey. I recommend the turkey version.

You can (try to) pick stocks that will double overnight. Or you could explore exotic asset classes with promises of “going to the moon.” You can even borrow money—or leverage—to further extend your investments. This is investing like a pizzamaker. It’ll be hot and fast and potentially over in five minutes.

But sadly, historical context provides ample data suggesting that pizza investing is not effective. Hand-picking stocks has more risk than reward. Short-term flips are closer to gambling than to investing.

That’s why you should invest like a turkey. Low and slow and long-term. Check on your progress occasionally. Adjust your timeline if needed. A half-cooked turkey does not resemble your final product, just like a half-funded portfolio can’t support your retirement. But mostly, stay on plan and trust the process. Plan for the long-term and let time take care of the rest.

Use last week’s retirement calculator to plan for the long-term…starting with your savings goal for 2021.

## A Plate Full of Stuffing

And speaking of Thanksgiving, ensure that your investing portfolio resembles a Thanksgiving plate: diverse and well-balanced.

Could you imagine eating 1500 calories worth of gravy? Well, maybe. But it would be accompanied by plenty of turkey, stuffing, cranberry sauce and potatoes, too. You can even fit in a slice of something exotic, like pecan pie.

Similarly, a well-balanced investment portfolio reduces your risk from being over-exposed to any single asset type. I described my personal choices in my “How I Invest” article. But there are many ways to skin a turkey, and many ways to diversify a portfolio.

## Will Your Turkey Get COVID?

Everyone seems to be all huffy about gathering for Thanksgiving. So-called “experts” are saying the holiday will act as a super-spreading event for COVID. First, Starbucks cancelled Christmas. And now China is cancelling Thanksgiving? What’s up with that?!

Don’t be an ignoramus. For most of the United States, a gathering of 10 or more people has a higher than 50% chance to contain at least person who is positive for COVID. Re-read that sentence.

If you’re going to gather for Thanksgiving, it’s helpful to understand the risk involved. For some, the risk is small and reasonable. For others, the probability of COVID being at your gathering will easily surpass a coin flip.

The following calculator is a simple, first-order estimate. It provides an example of how probabilities work. There’s more explanation after the calculator.

I’m not an epidemiologist or virologist. Please take this math at face value. If an area has a positive infection rate P, then then odds of a person being negative is 1-P. The odds that all N people at your gathering are negative is (1-P)^N. Therefore, the odds of at least one positive case at your Thanksgiving gathering is 1-(1-P)^N.

I recommend looking up your area’s positive case rate here—COVID ActNow. Now, a large positive test rate is just as indicative of insufficient testing as it is of high infection rates. If you only have enough test supplies to test the sickest people, then you’re likely to have a higher rate of positive infections. More reading here from a guy named Johns Hopkins.

So feel free to play around with the infection rate. The true infection rate of an area is likely lower than what’s reported on COVID ActNow.

Keep Grandma healthy!

## Thanks Again

Thanks a ton for reading the Best Interest. I try to stuff this blog full of fun and helpful information, and having wonderful readers is the gravy on top.

I wish you a happy and healthy Thanksgiving. And don’t burn the pumpkin bread!

Thank you for reading! If you enjoyed this article and want to read more, I’d suggest checking out my Archive or Subscribing to get future articles emailed to your inbox.

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Jesse Cramer created The Best Interest to explain personal finance and investing in simple terms. His writing has been featured by CNBC, MSN, The Motley Fool, and other national publications. He resides in Rochester, NY with his girlfriend and their dog. Follow him on Twitter: @BestInterest_JC
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## 4 thoughts on “Turkey, Money, COVID, and More”

1. I’m a chemical engineer, did a lot of heat transfer work, even wrote some heat exchanger design software back in the day. Had never heard of the Biot number. Glad I’m still learning! The risk calculator makes me feel pretty safe, we are going to an extended family Thanksgiving dinner, and the odds show to be 10% of anyone showing up infected. Probably will only be within six feet of half of them, that cuts it to 5%. Odds of catching covid from one exposure, maybe 10%, that cuts my risk to less than one percent. Odds of a covid infection becoming a serious health risk about 10% for my age, total risk to me is now less than 0.1%. That’s not even worthy of consideration, the 200 mile car trip is probably more dangerous.

1. Hey Steve, thanks for chiming in. Go engineers! I loved heat transfer. And food is very interesting too, obviously 🙂

As for your COVID math…I’d say many of us (including me) are using blunt tools to think about this. That said, I still hesitate at some of your figures. For example:

*Don’t only consider who you’re within 6 feet of. You also have to consider that people at the gathering will be mingling. There’s a network effect. Aunt Ethel hugs Little Tim, and then Little Tim hops on your lap. Suddenly, your distance to Ethel doesn’t seem so relevant.
*”Odds of catching from one exposure = 10%” <--is this a W.A.G? Or supported from some evidence? Probability of transmission is a function of time and proximity. Spending all day in the same house as an infected person is significant time (the CDC threshold is 15 minutes) and close proximity.
*”Total risk to me”–I don’t want you to get sick. I don’t want me to get sick. I also don’t want to people you and I know to get sick. It’s about you, and me, and the group. Lots of people who did not go to the Sturgis motorcycle rally got sick because of the Sturgis motorcycle rally. That’s the nature of a pandemic.

As always, good to hear from you. Have a slice of pie for me!

2. Anonymous says:

@Kobayashi, srry didn’t mean to get you into gambling due to my lucky streak with NVIDIA! Jesse, it’s now on you to give our man an investing intervention :\ But another question is… what of the strategy of picking what you see as the emerging dominators in an industry, and balance through exposure to many industries? Anyways, just giving maybe some fodder for other possible articles!

1. I might have missed a comment from Mr. Kobayashi? But I can try to decipher the context…

Hand-picking stocks takes more than the ability to identify good companies. It takes the ability to identify good companies AND the ability to identify when they are underpriced. And that’s a tall order for people like me and you.

Some pretty wise people would say, “You want to take 10% of your portfolio and pick some individual companies? Go ahead. But the other 90% should be in smart, safe, diverse funds.”

Let’s give it a squash analogy. There’s nothing wrong with going for an attacking shot. But you have to build the rally first. And if you keep on attacking, attacking, attacking…eventually you’ll hit the tin or get counter-attacked. Pure attack is a bad long-term strategy. Instead, take a balanced approach. Play smart shots most of the time, and use attacking shots only when you feel there’s a good opportunity.