Yay, bloodbath on the markets again

It’s all red on the screen again. Now one jittery near-death experience could be called careless, but two is a conspiracy. This ship is going down 🙂 There are only two stocks in my ISA which are in the black, MRCH because I bought it damn cheap last year and it’s still got about 7% to fall before it’s below the waterline, and TSCO who are about to fall into negative territory for me.

So what’s a chap to do, eh. Could sell everything and get into gold and the Swissie I suppose. Unlike the more cheerful among us, I expect a depression for the Great British Public, though not necessarily for companies, who seem to be increasingly decoupling themselves from the state of the nation. So it looks like the Autumn Sale is back on, in spades.

I still have some space in my ISA, but would have to break into a savings account to load it up. And since I’ve already bought last week (most of which has bombed slightly) I might as well wait until I get paid before hitting the market again, as I want to spread myself out to after October with purchases.

However, what I do want to do this time is attend to the diversification/asset allocation

August asset allocation

I’m heavy in finacials and pharma, which isn’t surprising as I have gone for the two representative companies from each of those sectors which is my target – with the other sectors I’ve either only got one company or nothing at all.

I could do with upscaling utilities. An oil company or two wouldn’t go amiss, I will start with RDSB but not just yet. Something like ULVR would be nice, but they’re too dear at the mo and the yield isn’t up to much either. Utilities such as the HY favourites SSE could join NG. The contents of the two ITs give me some exposure to the sectors I’m missing, and fortunately both are weak in financials.

Something else that is puzzling is what the hell has happened to emerging markets? I used to have a Brazilian ETF but sold it a while ago, it’s now down 16% on what I sold it for. L&G Global emerging markets fund which I’m buying in small bits over the months is down 13% since last month. Emerging markets are meant to the the new dawn, a bulwark against the torrent of bad debt swilling out of the burned-out West. At the moment these guys are drowning even faster that the rest of my ISA, which tends to be heavy on FTSE100 firms.

So here’s to the bloodbath continuing, at least till I have some more money to lob into the great sucking force swilling around the plughole. It is always hard. at times like that to remember that the sturm und drang does eventually quieten down. Those emerging markets boys had better get their act together though, I think it’s going to be a long hard slog for the West to crawl out from the wreckage…

The Market’s been like the Grand old Duke of York’s men this week

What a rough old week it’s been on the markets. Share prices just like the Duke’s men, when they were up they were up, when they were down they were down. Barmy. You couldn’t make head or tail of it, other than that people were having the bejeesus scared out of them as the mood swayed from total panic to near euphoria.

There have been days where nearly everything has been a sea of red on my screen, and today everything is on the up. I took the opportunity to hop in and buy TSCO, AV. and BA., which diversify me into two sectors I haven’t been in before. I’ve now only got about £3k space left in my ISA. Going forwards I’ve got space for about five more shares and then I have to follow SG in buying more of what I have got already.

Now obviously there are a lot of people that are nervous. What are their fears? And what makes me so different to them…

I share many of the fears. The slowdown in the West will probably turn to depression – we have used all our ammunition up fighting the banking crisis and there’s not much more left. All the tightening of government, corporate and household budgets will result in too much money chasing too little economic activity. We’re guaranteed a big hunk of inflation to craftily lose some of the wealth, and I expect in real terms the net worth represented in my shareholdings to fall, even if the nominal value stays the same. There’s a precedent for this – the FTSE100 in the last ten years hasn’t been a barnstorming success like it had been the previous decade.

I’m not sure I am looking for the same as other investors. This isn’t about winning or getting ahead to me. It is about attempting to lose less. The value of the currency is being destroyed, in an attempt to devalue existing commitments, and also to cover up the fact that in Britain and the West in general we have become decadent and lazy. In itself that wouldn’t be a problem. However, it means that we can’t afford the standard of living we are used to and have expectations of, because we can’t be arsed to put in the work, as a nation.

That’s shown analytically by Tullet Prebon’s Project Armageddon report (hat tip to Monevator for this gem). The strapline ‘thinking the unthinkable; might there be no way out for Britain’ sums the prognosis up pretty well. A larger and larger section of British citizens are content to live off the wealth created by fewer people. Author Tim Morgan is rabidly right-wing (to the extent he makes me look like a bleeding-heart liberal!) but it’s hard to disagree with his stark summary of the issues Britain faces, and the issue is one of attitude and habits, which are hard to change, possibly taking generations.

the gravest problem – the concept of entitlement

Despite the appalling mismanagement of the New Labour years, Britain remains the world’s eighth largest economy (though it has now fallen to 37th in terms of per-capita income).

Reflecting this, British citizens enjoy high quality health, education and welfare systems, combined with strong provision of other basic services.

The problem which has emerged over the last decade, and can in large part be traced to Labour’s doctrine of moral absolutism, is the widespread assumption that individuals and, by extension, Britain as a whole, have an entitlement to these advantages, when the reality, of course, is that they have to be earned on an ongoing basis.

It’s why we have to hire non-Britons to pick the fruit and veg in the fields of our green and pleasant land, and a little bit of this attitude is why we have had rioting in London’s streets for the right to have the right sort of footwear and a flat-screen TV, while elsewhere in the world people have been rioting to get rid of autocratic leaders. People sense the austerity to come, and try and hold on to what they have by any means possible. For the rich that means the numbered Swiss bank account and tax evasion on a grand scale, for the middle classes that means the skewing of government policy to try and keep house prices up and to hang on to their child benefit, for the working classes it means the cash in hand jobs, and for the kids it means a chance to nab a free TV and get some excitement at the same time. As the man from Tullet Prebon summed up, we got here via

Worse still, the legacy of moral absolutism and entitlement has created a political landscape of warring interest groups which gravely compromises Britain’s ability to find unified solutions to its problems.

The debasement of the currency will gradually make imports dearer and Britons poorer, to accommodate our reduced productivity, and governments will hope the change is gradual enough that people won’t pin it on them. Some of this malaise applies to the rest of the developed world, which of course hammers our chances of exporting our way out of this.

I am well into the last third of my working life. I have earned most of the money I will have, so the focus for me is to lose as little of it as possible. These macroeconomic problems will destroy some or perhaps much of my wealth, and is why I have diversified into non-financial assets and tried to screw down my cost base as much as I could.

The problems I fear are the large scale macro issues – peak oil and the like. The Tullet Prebon report was interesting, because I had not seen the scale of the nearer term malaise in Britain. My social circle is from a narrow section of society. I don’t personally know anybody who is unemployed. I know people who to me look underemployed, but they do this as an elective lifestyle choice to have more time, which is different. They are doing this at the early part of their careers in a similar way to my search for a way to be able to retire early at the end of my working life.

I will probably never be able to use the benefit system, because as long as the stock market doesn’t fall to 20% of its value my net worth will be over the  capital assets threshold for getting JSA. I am happy enough with this, I don’t particularly expect other people to fund my lifestyle. However, it does somewhat hack me off that the general indolence will trash money as a store of value.

Equities are diversification for me – my non-financial assets are to hedge the downside, but equities are there to hedge this sort of world-view. I don’t share the view, but I can’t say it’s impossible that we might find leadership that will stiffen the British spine, and as a nation we pull the nose up before the ‘whatever’ crowd puts the economy in a tailspin.

So I share the fears that made the stock market dive. But since this part of my assets is there to hedge the rosy world-view then it is only logical to get in there and buy. So I did. I’m getting close to my ISA limit and will soon have to consider either converting my cash ISA or possibly venturing outside ISA territory with more growth-oriented stocks. Either way it would be rude to ignore the opportunity to pay less for more, which acknowledging that Mr Market may well be feeling in a much sicker mood and the harbingers of Depression start to become clearer. Which is why I haven’t loosed all my firepower at the market yet. I don’t know whether the Grand old Duke of York’s men are up at the top or down at the bottom of the hill at the moment 😉

A long, hot summer of rage and bad temper

Along with the mayhem in the markets there’s aggro on the streets of London. It’s apparent that there is a lot of weak parenting about in the UK.

We’ve seen rioting in the UK before, Brixton in the 1980s and the like. Though the methods were repugnant, there were real issues then. Whereas now, the chavs are rioting for iPhones and branded trainers, FFS. I mean, what the hell are they going to tell their grandchildren in 20 years? “Well, son, yes, I remember the summer of rage in 2011. We were so pissed off and hard we stormed the Sony Warehouse for some TVs and then looted the iStore to big up the ‘hood with some badass flat screen TVs and gadget bling“?

[iframe http://www.youtube.com/embed/6SHKhvVjLIc 425 349]

This old lady puts it pretty well, though if you’re easily offended by bad language it’s probably not for you. She gives it straight, and curiously enough it seemed to work, at least for a few seconds.

On to more cheerful subjects, well, there’s been a lot of bad temper in the markets of late, with the FTSE diving to 4800 at one point. Shorting my company Sharesave shares has worked well for me. Yesterday I think I had the pleasure of seeing a loss on every single stock in my ISA apart from Merchant’s Trust who are still a comfortable way over par. The ISA as a whole is a shade under 5% down. So I added Tesco, apparently for less than Warren Buffett paid for it. If 3.61 is good enough for him it’s good enough for me, and at that price they almost scrape my minimum dividend target fo 4%.

I added another couple of shares in areas I didn’t have before, indeed this crash has done my diversification no end of good. It’s hard not to succumb to the temptation to add to some of what I have already, which have so far paid out reliably. I am seriously thinking of moving my cash ISA into my S&S ISA to get some more firepower in this hot summer. Buying income has got a lot cheaper all of a sudden.

Now of course this crash isn’t without reason, there’s an awful lot twisted badly out of shape with Western economies, the prospects of slow or no growth, the horrendous sovereign debt, the appalling mess that is the Euro, where they must either go forward in the United States of Europe or back into individual currency blocs.  There’s a hell of a lot to be scared of.

And for all the resurgence of today, I figure this bear market has still got a fair way to go down yet. Which is jsut as well, because I have some way to go. I aim to be fully invested into my ISA by the end of October, and the bears could give me the chance to save up enough to be able to do that by then 😉

I’m all for a long hot summer of rage in the stock markets. In real life, however, I think we could do without any more. Hopefully the chavs have got their iPhones and running shoes and the Met will reclaim the streets.


Dr Doom predicts Perfect Storm in 2013, maybe opportunity knocks

Well, he would, wouldn’t he, after all you don’t pick up the moniker Dr Doom for nothing. 2013 is when the SHTF according to Nouriel Roubini, as private debt that got transformed into sovereign debt falls out of the sky to give us all a sore head. He’s pretty definite on that 2013 date, pointing to a synchronised slowdown across all world economies. He also predicts a Chinese credit crunch as they end up sucking up some of the Fed’s largesse. I’m probably with him on that, I don’t do China even though everybody else does because I can’t understand it, their demographics stink, even in my lifetime and I’ve already taken the indirect fallout from one property bubble, thanks, I see no reason to repeat the experience by choice.


For a different take on this we have Niall Ferguson on Consuelo Mack in March. Basically he says after 500 years of giving everybody else the shaft we are going to take it. I paraphrase him a tad, but he say we have got lazy, we don’t work hard enough and all those chaps stage right in China, Taiwan and Hong Kong work far harder. He’s sort of like Oswald Spengler but with a more beguiling presentation. We’ve also become lazy at school and university because we were scared to tell the dimwitted that they were, er, dumb because it might impair their self-esteem.

Me, I say one swallow doesn’t make a summer Dr Doom. You did get it right in 2007. I’m probably more bearish in the medium term than you are, mate. I agree that the second dip is on its way – we kicked all the crap into the air first time.

I’m going to buy into that sucker. Starting tomorrow with a small spread of £1k. I’ve never bought into a crash before, though I have bought on the way out in April 2009. It’s almost undoubtedly too early, but I have to learn how to tackle the uncertainty and the fear. these are firms that have been on my watchlist for a while, and one has a remarkable NAV discount, the other has a yield and a track record of steady dividend growth even through the last recession, indeed both continued to improve divi through the recession.

Over the last year I’ve become better at being fearful when others were greedy, which is why I have a fair amount of cash available in my ISA, as I’ve held off buying of late. I am going to study the previous recession/first dip, and some of the basic technical indicators, to try and modulate my future  purchases with the market. This is the anathema of index investing, it’s a naked attempt at market timing. I figure Mr Market is going to be mightily pissed off over the next year or so. Hopefully he’ll be offering some bargains. The time will come to smell the fear as the western word dices with depression, and become greedy but with mindfulness.

On this first £1k I’m bound to lose money in the coming months, but I have to break new ground and learn to overcome the fear if I am going to take advantage of opportunities to come. At the moment all the newsflow is full of Dr Doom like prognostications, a torrent of money flowing away from the stock market. A small ermine stands at the side, and needs to gauge how to slip into the raging stream and swim against the tide…

I can be more sanguine about taking on this crash, because I’ve seen success from taking on the market in 2009, and also because of diversification. Owning my house,  and having non-financial assets explicitly to hedge against a financial depression means the stock market is only a part of my net worth. It isn’t necessarily going to stop me being hammered in it – it is easy to screw up. It wouldn’t be the end of the world, I’ve been there before in the dot-com bust. Market crashes are a great opportunity to get more for your cash – the tragedy is that all around the feedback is that this is all trash and you want to be getting out. Been there, done that at the turn of the century. Let’s try it the other way this time.


I’m being run down by Bears!

I’m generally bearish on the Western economies. I’m probably bearish on the word economy, I think peak oil is beginning to overtake industrial civilisation. At the moment, however, it’s getting crowded in Bear camp.

Now the US debt shenanigans are still not sorted, and Club Med is still in the mire. The markets are beginning to fry up Angela Merkel’s breathtaking arrogance in saying she’d fix it, but they can wait til she’s had her month’s vacation. Even Monevator toyed for a fleeting moment with going long on tin hats. I think that normal service has been resumed and he’s back to his chipper self. He was missing the first credit crunch after a while, well, it was a BOGOF offer, here’s part two to get along for the ride 🙂

What’s up with this pack of bears that’s suddenly overtaken me? Guys, companies appear to be making shed-loads of money. In the long run we’re probably all going down, but I think this pack of bears has got the timescale wrong. It’s the 10-20 year timeframe where I’m really bearish.

Yup, we’re goingto take a bath on the Euro and perhaps on something nutty from the US.  I’m getting ready to get in there and buy in this one. I’ve had a one-year interest free purchase credit card deal which is due in a month and I was going to pay it off with the cash from the associated savings account. I’ve actually transferred this balance to a 0% for a year deal, and paid £120 for the privilege (ie the total deal was 3%, since they charge you 0% + 3% handling fee, which is a 3% interest rate in my book) so that I could be in a position to fully fund my ISA for this year ahead of time using the savings account.

The crap may not happen, and I may not ISA this cash, in which case NS&I may help me defray some of the interest handling fee. I don’t normally pay credit card institutions interest but in this case I view this as insurance to be able to buy into any opportunities that arise. Sometimes you gotta pay for opportunity.

There are just far too many johnny-come-lately bears in the camp for my liking these days. I don’t know why companies are becoming a lot more profitable. I saw that in  valuations and dividends before I saw it in articles like this one which seem to indicate it is happening in the US as well.

I’m not saying everything is hunky dory – there’s still a lot of debt around, and anybody who isn’t part of the rich feral elites is getting slaughtered in the crossfire. I can shelter from some of the increased tax part of that, as I can get my outgoings low enough to save a decent amount pre-tax but I can’t dodge the the increased inflation.

There’s going to be a lot of sturm und drang. I am starting to buy some stocks, but in itsy-bitsy pieces. iii (and Halifax) offer a batch purchase where you can buy shares for £1.50 dealing fees instead of the usal £10, so I can spread my intended purchase into five pieces and still come in okay. It’s a worthwhile insurance against buying in too early or late. October is always a good month for a stock-market rumble. Spreading myself over the next few months up to Christmas should give me some chance to get some of the dips – maybe it’ll all be dip.

And yes, the Big Bad Debt micght gets us, the United States may default and the notion of the riskless asset be lost to the world. There’s always the chance of the Big One striking. History has a lesson, though you need balls of steel to use it. German stockholders saw their investments plunge to a hundredth of their value in the hyperinflation of the Weimar Republic. It might not have felt that bad because of the ramapant inflation, changing the figures so it will have been less of a hit in numerical terms.

They did come back, so if you can hold your head as all around are losing theirs… In an extract from the Telegraph’s article “What’s left to trust in the world of money” they don’t even mention gold –

If nothing is done, the façade will eventually break; that’s the point at which to run for the hills. Food, property, energy – these are the things that retain value when money dies.

It’s the old ghost of Bretton Woods. With the dollar as the reserve currency the rest of the world gets to sponsor a little bit of Americans’ lifestyle. The rest of the world lives with that in exchange for a stable reference point, the fulcrum with which Archimedes could move the world. Maybe no reference point is stable. We exchanged that for the balance of trust when we found that the Gold Standard was choking the increasing amount of wealth that was created by the nascent Industrial Revolution. It also conveniently helped Nixon pay for Vietnam…

It doesn’t have to mean Armageddon – there hasn’t been a stable reference point for four decades 😉




Advantages and Disadvantages of Reading with a Kindle

Over the past month or so I’ve acquired a bunch of PDFs of books on finance and investment, and stared with the first one, Reminiscences of a Stock Operator by Edwin Lefevre, a fictionalised biography of the legendary trader Jesse Livermore, who was notable for shorting the market in the Great Depression.

However, reading it on laptop is the damnedest way to read anything that was designed as a book or other long-form document. I learned to read before I went to school, so I have a higher reading speed than most people. However, probably because I didn’t learn to read from a computer screen, my reading speed drops dramatically on the laptop, and it costs me 20 W of power just to hold the page on my screen. I can’t read it in anything other than a sitting position, the whole thing is a pain.  Paying for Stock Operator in book form almost starts to look attractive, but I have another 20 or so books to read like this. The reading experience needs to get better, and a Kindle could do it.

I’ve come across the Kindle before, though I hadn’t seen one, and my first reaction was along the lines of

this is like a games console or similar consumer thneed designed to create a locked down consumer space to part the simple-minded from their money.

If used as intended, that’s exactly what you get. You can get a Kindle version of Reminiscences of a Stock Operator for £9, and off you go. That’s not bad for this book if you compare the dead-tree versions, though the secondhand market will come up with the goods in real form for £6.42 at the time of writing. My copy is a PDF, and was the result of a Google search. The book was from 1923.

Monevator’s Kindle books on investing article made me think about this again, particularly as I have now collected even more PDFs from the fascinating period between 1900 and 1930 when the Haber-Bosch process of creating artificial fertiliser from natural gas hadn’t been refined, and all sorts of bizarre methods were tried in agriculture using electrical discharges.

At the same time Martin Lewis’s moneysaving expert website warmed me up to how to get a WiFi Kindle for £75-ish so I figured it was time to revisit this, so I bought one, and loaded it with PDFs. You get a 30-day trial during which you can return and get your money back less delivery if you don’t get on with it, so I figured I could take a flyer.

Kindle on a paperback book set in 10.5pt
the total Kindle area is similar to the book, but the screen is a lot smaller

As the picture shows, a Kindle isn’t the same as a paperback, because the screen is smaller than the page of a typical paperback. And though I am middle-aged I can see easily enough that the resolution of the screen isn’t the same as a paperback, but it is far, far, closer to it than my laptop.

It’s good enough. I’ve got my normal reading speed back, it’s a lot more convenient and I can read anywhere. I’ve only read PDFs on the Kindle apart from the instruction manual, and the image quality of the result with PDFs isn’t as good as with a true Kindle book. To get a whole A4 page onto the Kindle screen results in a small and ill-defined font. However, you can spin the Kindle through 90 degress and read in landscape mode. It doesn’t reformat automatically, I would have thought an orientation switch would have been an easy win, but it can be done manually. The result is much sharper than reading the same PDF on my laptop, even though the screen is physically much larger on the laptop.

Landscape mode is easier to read on this PDF
Landscape mode is easier to read on this PDF and matches the book font size more closely

So I’m a convert – but I won’t be buying from Monevator’s list yet. I don’t like paying for what I can’t touch in terms of media, and there’s no used market for Kindle books, because they’ve presumably stitched things up so you buy a license and not a product. Embodying your media in Real Stuff has the advantage of giving such monoplistic control freaks the shaft, they surrender control of the secondhand market as soon as they let go of the physical embodiment. Hoever, if I don’t buy ebooks I don’t get to eat that crow. The Kindle works well for PDFs, and Google can turn up all sorts of good stuff.

The go anywhere appeal is the best part of the Kindle, in all sorts of surprising areas. At the electronics bench, once upon a time you could have databooks with device pinouts and application data. Since the 1990s you had to print out the PDFs, and datasheets aren’t concise. With a Kindle, all the datasheets are to hand at the bench. That go anywhere feature is what makes this transformational. For other people it will be having recipes in the kitchen to hand, or workshop manuals in the shed – all places where taking a laptop is doable, but a right pain.

Oh an if you haven’t got a PDF creator, Google docs creates PDFs if you want to print something, as the cloud hasn’t got access to your print drivers. The Kindle can take these too, so you don’t have to pay the Adobe corporation for the privilege of using your Kindle. Two proprietary closed shops designed to part the punter from their money circumvented at a stroke 🙂

The Kindle works for me. I have my reading speed back, I don’t have to put up with the intermittent noise of a fan and I can focus on what I’m reading as I used to be able to with paper. There are things wrong with the Kindle, colour would be nice, the screen could be 1.5 times bigger, the sturm und drang on the screen associated with a page turn isn’t so great, though it is over quicker than a page turn. It would be nice if it would slowly scroll the page itself as you can do in Word. But I’m carping here – the overall experience delivers.


Spreadbetting Sharesave, Riding with the Devil…

One of the benefits of working for a big FTSE100 company is they do sharesave schemes. I’ve never understood why anybody doesn’t do sharesave if they’re offered it, but less than half seem to. You get to save up to £250 a month from taxed income, and get the option to buy shares either three or five years in the future. The option price is set at the price at the start of the scheme, usually with a small discount on the current share price.

Now these are optional options, mind you, so you don’t have to buy them at the off, but you have the right to take them. That’s not like any share options you normally buy. If the SP of your company has gone down the toilet over the 3 or 5 years, well, let the options lapse, and instead take the cash you’ve saved and go on holiday/buy a flat panel TV/stick it in an ISA/buy the shares of your company or another on the open market if you like.

There is absolutely nothing not to like about sharesave. But what you mustn’t do with the buggers is look at the sharesave account screen and start thinking what you’ll spend the money on. Because you ain’t got it till the options mature and you take them (or not). So I keep ribbing a colleague who has already decided what he’s going to spend it on, ‘cos these suckers have got another year to run.  Believing you’ve got it now is like the poor saps that start to think about spending the winnings from their Lottery ticket before they’ve actually won them.

The SP has gone up about three times the option price. That time two years ago was a dark day for the company. I dropped every single previously running sharesave contract to hit that one which the full £250 per month, even at the same time as I was wondering if I could stick some of the nasty practices any more. It’s not like betting on red, if I left early I collect the cash savings plan, so no big deal. Sharesave is like that, the worst that could happen is you get your money back 😉 Compared to anything else to do with shares, that’s pretty damn good.

Don’t count your chickens…unless you can lock the suckers in

My colleague sets me off thinking. The SP is three times higher than at the start. I would be happy with that, what if I were to lock in that price? I’ve had the prior experience of things looking great only for it all to go pear-shaped by the maturity date. Generally Joe Public can’t sell shares they haven’t got, well not for only £15k worth of shares. However, there is a shady part of the financial market called spread betting that lets mere mortals short shares. What if I use spread betting to lock in the current SP?

My favoured financial spreadbet company is IGIndex, because I understand their system. Hey, I’ve lost money with them before 🙂 The advantage of expensive education is you get to remember what went wrong.

I cocked up massively at an earlier date using spread betting, through coming up with some byzantine approach to try and measure the value of the SB options, and getting the tracking wrong. There was no need for all that complication. The way to look at it is I hold options on 7,535 shares. If a share moves a point it goes up by 1p. IG options go up by £1. So I need to sell 7535/100 = 75 options to cover my real holding of buy options. I then need to cover the margin.

This sort of game sterilises a lot of cash if the SP rises a lot. I have enough to cover a fair change in the SP, and my company is an elephant, in a mature industry, so it will probably not gallop. So if I cover a 2x margin I will probably be okay. I’m only protecting 1/4 of my options to start off with, so if this elephant starts to gallop I’m still in the money (by 3/4 of what I would otherwise have gained relative to now, less the spreadbet spread). I should be so lucky. On the other hand if it tanks then I’ve locked in the tripling in value for 1/4 of the stake, minus the spreadbet spread. If I haven’t screwed up, I can’t lose, subject to the force majeure conditions later.

The trouble with spread betting is you are dealing with spivs

Spreadbetting isn’t real, like Contracts for Difference. Spreadbetting is effectively playing inside a model of the stockmarket set up by IG Index. It has to bear some resemblance to the stock market to be credible, but there are traps for the unwary in terms of short-term spikes and distortions at times of market stress. I need to have enough margin that for IG not to feel they could get away with forcing me out. There is no recourse or process of appeal.

IG Index are basically spivs. The clue’s in the name – spread betting. The trouble with dealing with spivs is you get spivvy behaviour. They’re as crafty as they can be without being provably dishonest. I wasn’t aware of their fun and games with spiking people out beforehand, and as a timid spreadbetter I was tossed out on earlier forays. At an unnecessary loss, natch.

So I’m only protecting 1/4 of my option holdings, and have a very high cash holding relative to the difference I am expecting.  That isn’t how you’re meant to use spread betting – it is sold to the impecunious as a way of leveraging up.

That’s not true, and it fails you when you need it most, so neophyte punters get margin called and eaten for breakfast. It seems if you haven’t got a cash holding with them that would be equivalent to the cost of the equivalent shareholding on the stock market, (covering a fall to zero for call or a doubling in SP for put options) they’ll have the opportunity to close your position on spikes. I’m reducing my exposure by only covering 25% of my holdings as I can only take a position until March which I would need to rollover at some cost to get to Sept 2012.

I will see how it goes with this before covering any more, ideally with a spreadbet reaching to September 2012 in one go. If the current spreadbet works okay for the next quarter (i.e. the change is what I expect, it doesn’t have to be positive) I will consider protecting another quarter of the holding, effectively freezing my gains progressively; pound cost averaging in reverse.

SB firms have a bad reputation (thanks to the anon poster who educated me to this) for putting spikes in their data so people that use stop-losses get spiked out and their positions closed. So I need to take an unprotected position – I have the stock assets to cover it in my options, so the only way I get kicked out is with a margin call. I need to front load the account with enough cash to cover a notional 2x increase in SP.

Having understood my previous cock-up and been warmed up to the shady tricks used by IG to trip up over-fearful punters with narrow margins/stoplosses I’m up for it. The fundamentals of what I’m trying to do are sound. However, it’s unusual – most spreadbetters are trying to make money from trades without underlying assets to back up the trade.

What could go wrong? Force majeure for starters…

If I lose my job before next August and the SP has risen I lose the options and get to eat the crow on the spreadbets. If the company takes an external unforeseen hit then the SP usually tanks, think News International. However, if the company management announce redundancies the SP usually goes up, because stock markets hate employees in the way vampires hate garlic 😦

Likewise if there is a bid for the company the SP goes up, though the pension scheme issues with my company probably make it toxic enough for that to be unlikely at the moment. I’m prepared to take these risks, let’s face it if redundancies are on offer then I will be first in line for voluntary redundancy The pension scheme means compulsory redundancy is expensive, the firm has never gone that way yet, though there are other ways of ejecting people without making them redundant. I’ll eat the loss on the spreadbets without too much remorse in that case.

Dividend payments are taken from the account on the ex-dividend date for sell options. In theory this should be offset by the corresponding fall in the SP which boosts the value of the sell option. I will experience this at least once. The divi has been declared, so I know how much this is and consider this the price of insurance.

A Faustian pact with spivs is never going to be easy

In the end hedging is never going to be easy, it’s counter-intuitive and a spreadbet is inherently leveraged as you’re focusing on the difference in SP rather than the total SP, so it’s easy to bite off more than you can chew.  I can afford to lose the entire stake, though it won’t make my day, it would nearly wipe out my entire ISA gains this year.

If that happens I’ll take the lesson, and actually close this spreadbetting account and accept I haven’t got the smarts to use it properly. Assuming, that is, that I don’t find out that I fundamentally failed to understand how to track my sharesave options with the spreadbet. If it’s my bad I don’t mind paying for education, though I’ve double checked this time 🙂

I’d like to find a decent solution to the hedging conundrum. It’s particularly valuable for sharesave, and it would have been great to have found a hedging solution in years gone by. I’m also sitting on a stack of Share Incentive Plan shares which I have to hold for another four years to retain the tax advantages. It would be nice to lock these suckers into the current share price without selling and eating a 40% hit.

Why not Contracts For Difference?

On the face of it CFDs look like a better approach. However, I’ve opened a demo CFD account with my ISA provider, iii, and there appear to be significant commission and financing costs for a year’s worth CFD. For a short trade the finance charge seems to be in my favour, but III in their own literature say that CFDs tend to be shorter term holdings.

Daley says that, ultimately, choosing between a CFD and a spreadbet tends to come down to personal preference: “People tend to go for one or the other. If they like CFDs, they don’t like spreadbetting, and vice versa. Overall, CFDs tend to be used for slightly shorter intra-day trading or for perhaps two to three days.”

Plus there’s a £35 per month (!) inactivity fee on their CFD platform. So in this case it’s better the bunch of spivs that I know…



Greece – a long hard rain’s gonna fall

Well, that’s all right then. Looks like the Greeks have passed their vote on the austerity measures, so everybody gets to ignore the issue for another month or so. FTSE100 is up, everything is good and we’ll carry on as normal then. Both the Greek people and us as Europeans have been failed yet again by the dismal spinelessness and lack of leadership across the board.

Any fool can see the Greeks can’t live with the same currency as the Germans under the current rule of engagement. They only managed in the first place by fiddling the figures, and the poor foundations of Greece’s entry to the Euro are now giving way under the load of their lifestyle and lack of earning power. Greece either spends too much or doesn’t work hard enough. They can never make up the productivity difference with Germany, even if they wanted to. There are two possible responses to that, either drop them out of the Euro, preferably before the Army generals take over the country again and the EU has its first military dictatorship in the ranks, or treat them in the same way as the Americans treat Indian reservations, and simply accept that we have a group of people that will continually require Federal subsidy.

It’s not as outlandish as it sounds. We do that sort of thing in the UK already – we take the money that used to be earned by financial services in the City and Labour used that to cover up the increasing structural unemployment in the rest of the country, both explicitly in generous and uncapped benefits, and more perniciously as middle-class welfare by excessively expanding the public sector (ONS stats). Part of the hoo-hah from Yvette Cooper, Harriet Harperson et al that the cuts are going to disproportionately impact women and the poor is because that stands to reason – the primary beneficiaries of the largesse will take the greatest hit when it runs out.

Greece could be made to work with a permanent financial transfer from other countries, though it would be polite to ask both the donor countries and indeed the Greeks themselves if that is really what they wanted of a European Monetary Union. And perhaps get some more political accountability all round, so that politicians can’t let grand ideas run away without regularly testing them against the ideas of the poor sods that are going to have to pay for it all. It’s the old taxation and representation issue that caused a load of trouble in some obscure colonial outpost in 1776.

What isn’t working is to pretend that Greece can sort the problems out without continuous gifts from abroad. Even if they get the gifts they may not make it, so endless talk of bailouts and austerity is whistling in the dark. In the beginning, perhaps there was a case to be made for pretending it won’t all end up in a horrible mess, so enable the French and Germans to stabilise their banks. They’ve had long enough now.

It’s time to stiffen the spine of leadership and start taking action to deal with the place we find ourselves. Europe is still reasonably rich, and in some areas reasonably productive. We have some serious macro challenges. We are living beyond our means. We may have less oil available to us that we had in future. Some of us have created a monetary union without creating a fiscal union.

None of these issues are intractable, either in isolation, or together. But they are hard, and if we leave them to fester they will cause us very serious grief. We need leaders that will give it to us straight, and get us to roll up our sleeves, spit on our hands and get to work fixing some of these, to build us a better future, rather than lolling about resting on the fruits of the last twenty years.

Of course, what the Greek government says and what it does are two very different things. And yet another shedload of EU taxpayers’ and IMF money is going to be burned worthlessly on the pyre of this characteristically European failure to take decisive action. Guys, the mission is lost. There’s no way back from here. Either man up and buy Greece  time, again and again forever, or let go.

The Greek public sector workers, and indeed ours here in a much lesser way, just haven’t accepted that in the fight between European living standards and global capitalism has been won. The living standards lost, to the rest of the world that generally gets by on less, and to the transnational corporations and the guys that own the capital wealth.

Defeat is inevitable, but if effective action is taken soon then a successful retreat may be possible. Living standards are going to fall across the West in general and Europe in particular, the question now is how quickly. And if we continue to ignore reality and go la-la-la-la all the time, then they’re going to fall pretty damn quick.

Greek public sector workers aren’t going to be retiring in their mid fifties in the coming years, unless they have been saving hard and been squirreling their savings abroad. If they’re lucky they’ll get to retire at all! This bomb is going to go up in the next year or so, as Labour’s Liam Byrne so succinctly put it ‘there’s no money left‘. At least in the UK we can create the money, effectively taxing holders of cash and all consumers to make up the difference.

The Greeks could do the same with the drachma. They have the advantage of a decent climate and a place people want to go on holiday to. If they want to kid themselves they are rich enough to retire at 53 then they have to get other people to fund it, and it’s more civilised to do it by continual devaluation making the country a cheap destination for tourists that blagging it from other people via the EU and IMF. Of course that will have the corollary that imported Stuff will continually get dearer, but Greece can probably feed itself, and hey, early retirement does have its price!

This one is going to cause the mother of all financial shitstorms when it finally comes off the rails. I’ve been holding off buying shares for the last couple of months, partially because I wanted to get into index-linked cash in a serious way, but now I am going to start saving towards a war chest to buy into that shitstorm when it turns up.  I have a list of firms I like the look of, that do real stuff and have been doing for years, and get to pay a dividend. They’ve been getting too dear of late.

There’s some chance IMO that the storm will be such that it may take down the Western currencies, in which case all bets are off and money itself may no longer have any value, effectively we will have what happened to the Reichsmark. That kind of thing destroys things like pensions, savings and anything that isn’t stuff or land. It’s not impossible to imagine that happening, but it is probably not going to happen, and in that case the storm will offer opportunities. It will probably be ruthless in testeing for value, however – ‘goodwill’ has questionable value when all around you are losing their heads.

It’s also interesting that the old saw about the volatility of the capital value being higher than the volatility of the income is what I experience. Against that should be set the fact that I’ve only been tracking this for a short while, so it’s hardly like I have been seeing things over a couple of business cycles. I qualify yield in terms of income as a fraction of what I paid for a share rather than in terms of the current share price, which takes at least one volatile variable out of the equation. However, it does reflect how I intend to use my holdings, once I have retired.

I’m also surprised that there aren’t more PF writers getting ready to steer into the coming storm. Maybe I am just crazy, but I am up for it, though I need a bit more time to save up that war chest. So in some ways I’d rather the EU and the Greeks play a little more shadow boxing before the levee breaks and the shaky edifice assembled from the combination of cowardice and misplaced conviction crumbles in the tide, perhaps later this year or early next year.

For sure, I could end up doing the same as the EU politicians, and burning the whole stake as I buy into a moribund market if the financial system is destroyed, the sky turns to endless falling rain and the markets flame out. On the other hand, this is one crisis that is clearly going to happen, the only uncertainty is in when the deonouement will play out. It seems kindof rude not to at least consider whether I can make something of it… Yes, it is market timing. No, I can’t call the exact bottom, so I will have to wade in when I feel enough damage has been done and have to be prepared to see gut-wrenching losses if I call the low too early. That’s life – the meek do not inherit the earth, they get slaughtered in the crossfire. The main lesson I should take is from the pusillanimous European elites fixated on weak deferral of action. That lesson is “Be Not Them”. Yoda had it about right. “Do or Do Not. Do not Try”

Portfolio, performance management and XIRR

No, not the sort of performance management that is ruining office jobs by making them paint-by-numbers,  I’m happy to say. What I’m looking at here is how do you know if you should get out of stock picking and become an index investor instead, and I was tickled by the various maxims of John Templeton as listed by Monevator recently.

How do you qualify how well you’re doing at stock market investing?

This isn’t straightfoward, since the value of an investment is a noisy signal with switchbacks. There are a couple of obvious ways:

Wilkins Micawber approach

Take the current value which your ISA provider usually computes from the last market valuation. Add any cash sculling around in the account, subtract what you’ve put into your ISA since opening it. Outcome > 0 result happiness, outcome < 0 result misery. Simple, honest, and automatically tracks your dealing fees. You ought to rescale each year’s input to allow for inflation, though I haven’t done this so far. In my case the result is a 7% increase over the 1.7 years that the first transaction appeared, so result happiness?

This valuation is as of Friday 17 June 2011, so as of the first part of the hit caused by the unfolding Greek tragedy. The Greeks will no doubt be able to switch the result negative over the next year, and if I had a crystal ball I’d sell some stuff and buy later. Trouble is I don’t have one, I don’t know which bit so sell, or when, so I’ll sit tight. and save to buy more, I have been waiting for this rumble, and have switched much of this year’s savings to cash in the meantime.

There’s much to be said for the honesty and simplicity of the WM approach. However, due to the volatility of stock markets, it is more suited to portfolios that have been running for five years or more. It’s also what fundamentally matters for people investing conventionally towards their pension – it is the size of their pension pot that determines their annuity value and thus their retirement income.

Cost of purchased income (how good an annuity is this?) approach

However, that doesn’t really reflect how I plan to use my ISA, which is to use the income to boost my income. I hope to have the intestinal fortitude to be able to focus on the income and leave the fluctuations in capital value alone. Say I take the amount I have put in, minus the amount of cash still lying around in my ISA, and divide that cost by the dividend income over the last year.  That ratio is 4% in my case.

How do I allow for the fact that I haven’t owned some of the companies for a whole year? At the moment intuitively this would seem to underestimate the portfolio’s performance. I target reasonably reliable dividend payers, so if I had had them for a whole year presumably the dividends would have added up to more than 4% of the stake.

Another honest and decent approach, but again more suited to an investment account that has reached steady state (new money contributed < 10% of total invested)

So far so good, we’re still in the elementary-school arithmetic stage. Maybe there’s a better way?

XIRR, PRR and RIT to the rescue

For things arcane and technical I look to Retirement Investment Today who has usually spent some time understanding the intricacies of analysis. RIT introduces us to the Excel function XIRR and the required fixing factor to turn that into a PRR (personal rate of return) to account for sub-year periods. As I’ve been running for more than a year I can use XIRR straight off the bat. For my trusty old copy of Excel2000 I had to go hook out the install CD to add in the analysis toolkit before any of that would happen for me.  XIRR takes the valuation at the end, and the series of times and associated cash inputs that made it, and gives you an annualised rate of return. It allows for the fact that some of the money has only been working for a short while, while the initial stake has been working all the time. Here  is one example, though the illogical American format dates will barf on a non-US date format PC. A more homely explanation of XIRR is available

XIRR% is the answer to the question:
“What constant, annual, bank-like interest am I getting, considering various deposits and withdrawals at arbitrary times?”

Now my current ISA has only been running for 1.7 years since Oct 09. My XIRR is 9% as opposed to the 7% calculated above. Is it really a better estimate of “what constant, annual, bank-like interest am I getting”? Search me, guv. Intuitively since my full stake hasn’t been working for me for the whole time I probably do get more than 7%. 9% sounds reasonable, so I’ll run with that.

Why Stock Picking?

It’s been a while since I had to liquidate my previous index-tracking ISA in 2007 for a life change reason, and it’s been an even longer while since I did any stock selection in the dotcom bust. I’ve come to view the current investment mode de rigeur, index investing, with a jaded eye, as it failed me in the first decade of this century after I cleared out of tech stocks having taken a jolly good hammering.

It takes a while to get back in the investing traces, and I had some things to learn, for which I have much to thank The Investor side of Monevator. For my investment activities in a ISA targeted at UK stocks, I will do stock picking (this is contrary to the general recommendation from TI, BTW). I do income, not growth, because I have no talent for growth stock picking, whereas I can see income track record and other fundamentals. I believe some of the assumptions behind index investment may break down if the mix of what works in the economy starts to skew as a result of oil shortages, and partly because I don’t want another slice of passive sideways tracking over 10 years 😉

However, when I diversify into foreign markets index investing will be my weapon of choice, because these will be smaller amounts of my ISA, I will find it hard to gain domain knowledge and trading non UK shares is more expensive. I also use it for my AVC savings that are larger than my ISA, because I have the option of two pretty decent low cost index funds there – I choose the 50:50 UK/Global.

I did some damn fool things in the first year, particuarly associated with BP Macondo. Not just once, but twice, and it didn’t end well. There’s a case to be made for taking a look at what would have happened if I had been a straight index investor.

How did I do against Index Investing with the FTSE All-Share?

If I were a UK index investor, I would track the FTSE All-share, because I feel the FTSE 100 is highly skewed and more varying in content than, say, the S&P500 – it is more of a top slice by definition. Since I have an Excel file of my cash injections with dates, I can run a what-if on how much I would have in my ISA if I just went and bought the FT all share index each time I lobbed some cash in. The ^FTAS has currently got a yield of about 3% so I have also added a 3%*no of years to date from purchase date* cash injection since I was only able to get a historical price series rather than a total return series for the ^FTAS. It’s not exact, as the yield varies with time and value of the ^FTAS, but for about two years it is hopefully good enough.

The difference is 1.3% in my favour. It isn’t a huge amount of cash, given the ISA is only a little under two years old. I was lucky in being able to compensate using gold and silver ETFs for the rank stupidity of losing £350 on BP, though as a lesson in ‘do not churn’ and ‘do not do what you did in the dotcom boom-bust’ the learning was cheap at the price.In aggregate I’ve lost more than that on some other holdings, but these are stocks I believe in, and some have more than made up in dividends for the loss of capital I have eaten, making the total return positive.

The 1.3% difference doesn’t probably tell me much, other than that an older head than mine in the 2000s can curb some of the excesses. I’m not going to do BP-like things and I will not do PMs in my ISA again.

The yield profile is more suited to my future needs. If I take the arithmetical 4% I need a stake 25 times my desired annual income boost, if I take the 3.1% yield of the ^FTAS I need 32 times the income boost, or I have to start selling down lumps of capital every year. The capital will hopefully have appreciated more with the ^FTAS, but selling chunks usually is a hit on dealing fees.

I’m not going to claim that this is anything other than luck, I’m not a John Templeton. However, I have reminded myself of things not to do, and confirmed so far the validity of seeking income. I hope to take advantage of a damn good stock market crash in the coming months in which to get some good companies at knock-down prices.

It is, of course, perfectly possible that we are in the endgame and that the horsemen of the apocalypse are coming for us from all points as the Greeks stress-test the decaying edifice of Western finance beyond the point of no return. That’s partially why I have non-financial investments, but for the financial investment side I will see if I can make use of the forthcoming white-knuckle ride.

How would I have done with Regular Index Tracking investment?

A chap like The Accumulator would disapprove of both the stock picking part and the irregular lump sum investment process. To evaluate this I took the total amount that I had contributed to the ISA over the time it’s been open, and asked Excel the question

“assuming no dealing fees, what would have happened if I had purchased the ^FTSE index with the same amount of money each month”

The answer was interesting – I would have been 0.7% up on what I managed. I did the same 3% scam as above to simulate the ^FTAS yield.

This shows that for all the sturm und drang of stock picking if I had bought the ^FTAS regularly I would have been 0.7% up (though I would have eaten 1.7* 0.35% TER making it a dead heat IMO). It’s a fair cop, I would have spent less time worrying about BP Macondo and more time living life had I gone this way.

Now for various reasons it would have been difficult for me to do a regular ISA purchase over that time; I started a regular employee expecting to work another 10 years at the same job and had to swing my financial aims to becoming financially independent in three years, and simultaneously investing in several non-financial assets as a hedge against the financial system exploding. That involved lumpy calls on my disposable income so I contributed to my ISA when I could, with the overall aim of achieving the maximum permitted contribution in a tax year.

However, the result is interesting – I am tempted to lob £100 every month into a ^FTAS index fund in my ISA to get a regular index-tracking benchmark. Using a fund such as  HSBC FTSE All Share Index Fund identifier: GB0000438233 which I have brazenly pinched from the Slow & Steady Passive Portfolio rather than an ETF means I minimise dealing charges each month. I can check how many more units I have at the end of a year than I had at the start and the current valuation of that number of units. Ideally the over the long term the value of what else I bought that year should be greater than 8.8 times the tracker, else I am drifting off-course. Instant low-stress benchmarking and it saves me grubbing about with Excel and the handwaving fixing factors to account for the 3% yield.

Greek Farce/Tragedy Ahoy

For all the bull being spouted from the Eurocrats, the Greeks are stuffed within the Euro. They can’t pull the nose up before they hit the ground, and either the French and the Germans are going to sub their lifestyle for ever in return for the Greeks surrendering ther self-determination, or Greece will have to bring back the drachma to live the lifestyle they wish to live.

In Greece they don’t like paying taxes, but with the drachma the government could collect the taxes by taxing capital using inflation. They can’t do that with the Euro. Whatever happens, a nasty whirlwind is going to storm through the financial system again. Ths whirlwind is going to sort the men from the boys, and I’m not sure which camp I belong to!





I’m a glass half-empty sort of guy on the economy, but…

The Daily Fail seem to be in a particularly dark mood where they presented this graph of the June 2011 OECD composite leading indicators as desperate evidence that growth has dropped.

June 11 Composite Leading Indicators

Obviously there was a near-death experience in 2009, but given that some people thought that the first half of the 2000s was a non-inflationary constant expansion, it looks like we’re off to the races economically somewhere in the world…

I don’t know what they’re smoking, but it looks like these leading indicators are at their highest than at any point in the last ten years with the possible exception of 2007. There’s a country breakdown in the PDF which basically says get out of emerging markets and into the USA, Germany and the UK are okay-ish.

The Mail seem to have confused the economy as experienced by the proletariat with the economy as measured by company results (the CLI graph is not the same as company results FWIW). Jobs are haemorrhaging and wages are below inflation so the popular experience of the economy is pretty rough.This is particularly the case in the UK where we pay too much for our houses, and then often don’t get round to paying down the capital of the mortgage spending the nominal increase in value on cars and holidays.

However, companies seem to be in reasonably good shape as long as they aren’t exposed to the consumer and given the amount of lolly my modest ISA is paying in dividends they seem to be making money too. It is just that the spoils of war are increasingly going to people with money rather than people who are in debt, with the latter being most people in the UK.

Now whether that is a good thing or not is a perfectly reasonable thing to challenge, however, it seems the money is being made even in the bombed-out West. Indeed, the United States which comes across to me as an indebted basket case appears to be growing well, it’s just that people there don’t feel it either. Conversely, there appears to be fire in the engine-room of some emerging economies – it almost looks as if the West has managed to craftily outsource some of its recession, if the turning points of these composite leading indicators really do correlate with growth a little while later. I experience that too – my Brazilian ETF is quietly dying in a lost corner of my ISA, and it’s hardly like the pound is strengthening against the Real to make this happen.

So I’m a glass-half full sort of chap on this, unlike the Mail. Of course, it’s all damn lies and statistics, but it squares with what I am seeing when I look at the companies I own a trivial sliver of. Some of the buggers in my potential candidates watchlist have raced away from me before I could rustle up the wedge to buy – I have £7k of my ISA unused this year, but I’ve been concentrating on building cash reserves with NS&I of late. Hopefully the Greek denouement will bring things back down to earth a bit ready for me to take a second bite at the ISA cherry in the autumn, when I’ve saved some wedge.

These companies are making money. It’s what capitalism does, but capitalism doesn’t say it’s going to spread the money evenly across the populace like manna. Some of the horrible time we the people have been having is because we borrowed like drunken sailors during that apparently NICE era from 2001-2007, and it’s payback time. I’m not sure that capitalism is going to help us do that.

And no, I haven’t changed the medium term view that resource crunches are going to be bad news, particularly for general stock market index growth. However, I note that companies made money before the gift of ancient sunlight allowed us to run year-on-year growth. They just didn’t make so much of it… This is short term noise compared to that backdrop. Anyway, Peak Oil is a timebomb, and I’ve been reliably assured that timebombs don’t go off. I hope the man’s right about our healthy future 😉

Time for a contrarian buy of HSBC N America S&P500 tracker, maybe. I still can’t see the United States as anything but a hopelessly indebted bombed out shell with very serious medium and long-term problems. But on the principle that the darkest hour is before the dawn, and that I have hardly any exposure to the US, I may sport some of my remaining ISA allowance there later this year, or even trickle it in up to 3k if I can convince myself I really don’t pay any per-transaction dealing fees on this with iii. Though I have reservations on the way index tracking works on top-slicing markets like the FTSE with the FTSE100, the US market is huge – the HSBC tracker holds 500 stocks, and seems to provide damn good sector diversification. No sector is > 15% by value, compared to the 1/5th of the FTSE100 in financials and 17% oilies.

Guess there has to be the standard disclaimer – this is not suggesting anyone buy the S&P500 unless you already want to. The US is an oil-dependent empire in Spenglerian decline, though it has a gutsy and enterprising population so if anybody can run on empty they’ll find a way. Don’t do it to yourself 😉 I am mad, but in the end if I trash £3k on the US then it won’t kill me – it’s a mistake I can afford to make.