Sign in     Like us on Facebook Follow us on Twitter Watch us on YouTube

A Roger Moore Story To Make Us Feel Better

As an seven year old in about 1983, in the days before First Class Lounges at airports, I was with my grandad in Nice Airport and saw Roger Moore sitting at the departure gate, reading a paper. I told my granddad I’d just seen James Bond and asked if we could go over so I could get his autograph. My grandad had no idea who James Bond or Roger Moore were, so we walked over and he popped me in front of Roger Moore, with the words “my grandson says you’re famous. Can you sign this?”As charming as you’d expect, Roger asks my name and duly signs the back of my plane ticket, a fulsome note full of best wishes. I’m ecstatic, but as we head back to our seats, I glance down at the signature. It’s hard to decipher it but it definitely doesn’t say ‘James Bond’. My grandad looks at it, half figures out it says ‘Roger Moore’ – I have absolutely no idea who that is, and my hearts sinks. I tell my grandad he’s signed it wrong, that he’s put someone else’s name – so my grandad heads back to Roger Moore, holding the ticket which he’s only just signed.

I remember staying by our seats and my grandad saying “he says you’ve signed the wrong name. He says your name is James Bond.” Roger Moore’s face crinkled up with realisation and he beckoned me over. When I was by his knee, he leant over, looked from side to side, raised an eyebrow and in a hushed voice said to me, “I have to sign my name as ‘Roger Moore’ because otherwise…Blofeld might find out I was here.” He asked me not to tell anyone that I’d just seen James Bond, and he thanked me for keeping his secret. I went back to our seats, my nerves absolutely jangling with delight. My grandad asked me if he’d signed ‘James Bond.’ No, I said. I’d got it wrong. I was working with James Bond now.

Many, many years later, I was working as a scriptwriter on a recording that involved UNICEF, and Roger Moore was doing a piece to camera as an ambassador. He was completely lovely and while the cameramen were setting up, I told him in passing the story of when I met him in Nice Airport. He was happy to hear it, and he had a chuckle and said “Well, I don’t remember but I’m glad you got to meet James Bond.” So that was lovely.

And then he did something so brilliant. After the filming, he walked past me in the corridor, heading out to his car – but as he got level, he paused, looked both ways, raised an eyebrow and in a hushed voice said, “Of course I remember our meeting in Nice. But I didn’t say anything in there, because those cameramen – any one of them could be working for Blofeld.”

I was as delighted at 30 as I had been at 7. What a man. What a tremendous man.

More here – B3ta

When Enough Is Not Enough…


 

Its Not My Fault…But Then Its Never My Fault

Whilst sitting at my local this afternoon enjoy a cuppa and a Kit Kat I spied someone reading a piece about a company called SurfStich which to be honest I had never head of as it doesn’t sit within my universe of tradeable stocks. To save you the trouble of reading the article I can summarise it quick quickly. SurfStich lists in 2014, the listing is a bit lacklustre but price recovers from the $1 listing price to hit a high of $2.13. Stock then dies in the arse and shareholders crack the sad’s and want to sue the company. I have dropped a chart of the price action  below.

Capture

On the chart I have plotted the listing price of $1.00 and as you can see the stock spent a good year above the listing price before beginning its precipitous fall from grace. I can guarantee you that when the stock price passed through $2.00 the investors who are now suing the company considered themselves to be absolute geniuses and when the stock began to fall those who ran the company were apparently complete dickheads for letting it happen. Here is a news flash for investors who operate on this sort of deflection of personal responsibility – you are responsible for your own actions and all the consequences that flow from them. You had ample time to exit the stock with a substantial profit but you didn’t – the decision not to was your fault – no one else is to blame.

I understand the notion of personal responsibility is an anathema to a lot of people but if ever there was a cornerstone principle for being successful at anything it is being able to accept your role in the events as they unfold. You cannot consider yourself to be the best investor in the world when price is running your way but then somehow seek to blame the company for your failure to take any form of defensive action when things do not go your way. This just paints you as a childish amateur.

This Really Shits Me

This little rant has nothing to do with trading so if you are not interested tune out now. I came across the article below whilst looking for something else and I thought it would be a good primer piece for people who wanted to know a little bit more about statistics since it uses neither mathematical notation nor formula and then I saw that I had to fork out EUR41.94 (about $AUD63.00) for the privilege of simply downloading.

research

This sort of thing along with the rise of bullshit journals, pay to publish, citation mining and the general drop in quality of cornerstone publications such as Science and Nature are some of the reasons why I am glad I left this life behind.

Quote of the Day

On Sunday we had the middle meeting of our Mentor Program and one of the topics that always creeps up is the desire for complexity within trading. There is a belief that the more complex your system the better it will be In part this is due to the illusion of control that such approaches engender. We feel that if we have much greater input into the system then the system somehow will exert a degree of control or rationality over the market. This is analogous to why people pick their lottery numbers rather than letting them be generated randomly. The odds of winning do not change with either method but the first creates the illusion of control.

As chance would have it I came across the following quote which touches on the notion of simplicity.

“Simplicity is the last step in art and the beginning of nature.”

– Bruce Lee.

 

 

Property Versus Shares

I was mucking around on the Valuer Generals site the other day searching for historical bits and pieces relating to my property when I noticed that the VG kept historical records on their estimation of the median house price in Melbourne. One of the things I have always found difficult in real estate is not the paperwork, the land rats, tenants, maintenance or the incredibly primitive way that houses are actually sold but rather the paucity of data that surrounds their instrument. Reliable and consistent data seems to be very hard to find and this was an issue I found when I was looking the the VG estimations – I couldn’t get them to tie in with other bits and pieces I found. However, only the VG site had any depth of historical information. Imagine trying to deal in a stock that had half a dozen conflicting prices from different sources, none of which you could actually deal in because prices are largely made up and then trying to find out what the price was five years ago only to get another half a dozen differing prices. It seems as if the real estate market is deliberately set up to be obscure and in some ways reminds me of an embryonic options market where those involved either didn’t understand their market very well or were being deliberately opaque.

Out of curiosity I downloaded the VG’s median house price data just to have a look at the trajectory. Because I am frequently bored I like to look at the history and structure of various markets – too few people are actually students of the markets they operate in. As such they miss out on a large number of free lessons that can short cut their process. No one makes original mistakes in their investing, everyone has made the same mistakes before you and the lessons from these mistakes can often be found in the data. Whilst mucking around with the data I remembered that the ASX often produces a comparison between the returns that are generated by various investment categories. I have always thought that these comparisons had a flaw in that they relied upon simple average returns, looking at averages is fraught with danger because they can be extremely misleading. Which is why managed funds constantly quote them.

As an extreme example consider the following investment scenario. I discover a magic fund with brilliant marketing material and on day one of year one I invest $100,000. In the first year the fund makes a return of 100% and I think I am a genius. In the second year the fund loses 50% and naturally I think the fund manager is an idiot but I am consoled by the fact that the year before I made 100%. When I present this scenario to people I ask them what the average rate of return is for those two years and most people answer correctly – it is 25% (100%-50%/2). I then ask how much have I made on my original $100,000 and I generally get an answer in the ball park of $100,000 x 25%pa. These guesses range from $125,000 to $150,000 as people try and do a compound interest calculation in their head. The truth is I have made zero – in the first year I doubled my money and in the second year I halved my money thereby returning me to my starting point. Yet my average return is 25%. This is why when looking at returns we have to be careful about using a long term average to generate an idea of how much we would have made. It is better to look at each individual piece of return data and assign a dollar value to it. This way you can build some form of equity curves which gives you a lot more information as to the trajectory of the value of your investment.

For a bit of fun I decided to take the data from the VG’s site and apply the returns from the All Ordinaries Total Return Index to their initial starting capital of $75,500 and see what the comparison between the two was. In effect I built an equity curve for the median house price and an identical investment into a surrogate ETF.

hp1

I have to admit I was a little surprised at the size of the differential because when you hear talk of comparisons between the two investment vehicles the impression you get is that the returns are quite close and that with the runaway bull market in housing that property has been the place to be for long term passive investing. Plotting data like this enables you to get a sense of the trajectory of price and to me two things are immediately apparent. Equities are more volatile in terms of a passive investment and this volatility is apparent in the impact of the GFC. Property moves a little like a truck, slow and steady whereas equities tend to throw themselves around a little. However, the shocks are not as severe as I thought they would be, 1987 is a blip that doesn’t appear and the tech wreck was a mild impediment. What did do the damage was the GFC and this is the problem with a simple buy and hold methodology.

To compensate for this volatility and to give a more real world flavour to our surrogate ETF I dropped the loss from the GFC to 10% from the historical 40.38% which is reflective of what actually happened when our macro filters kicked in and dropped us out of the market. The result of this simple fix is interesting.

hp2

The dramatically different result is simply a function of controlling runaway losses and not allowing them to have a detrimental impact upon your equity. Such a technique  is not rocket science but it does seem sufficiently difficult that it eludes all professional money managers.

Despite what the data says I am doubtful that it will convince die hard property advocates of anything – people with firm opinions are immune to data and it is hard to break the emotional bond that people have with actually owning something. And that is not really the purpose of the exercise as the advantages of equity investing over property investing are many , manifest and quite easy to elucidate. But is does serve as a salutatory lesson in what the differing mechanisms of presenting returns can tell us. It also tells us in no uncertain terms as to why  the worlds second richest individual is a share investor and not a property investor.

 

 

Aston Martin – On Tour

From the good Dr Joe –

Join us for a three-day driving adventure across Southern Germany for an exceptional Art of Living experience with Aston Martin. Cruise along alpine roads, wind your way around mountainous hairpin bends, and feel the unrivalled performance of an Aston Martin. Along the way, discover the rich heritage, culture and outstanding cuisine of Bavaria.

You will begin your ‘On Tour’ journey at five-star Resort Sonnenalp, before setting off towards Lindau Harbour along the stunning Alpenstrasse (Alpine Road). Explore the picturesque cobbled streets and take in the breathtaking views, with the iconic Bavarian Lion and New Lighthouse standing majestically at the entrance of the harbour, against the backdrop of the Alps and Lake Constance. You’ll then head back to the hotel for welcome drinks on the terrace and a Michelin-starred dinner hosted by the Art of Living team.

The following day involves a thrilling and challenging drive, starting off with the Oberjoch – a famous mountainous pass with the greatest number of bends in Germany – and taking you to the legendary Neuschwanstein Castle and Linderhof Palace, where you’ll be taken on a fascinating tour. This drive will enable you to experience the full power and exceptional handling of an Aston Martin with long stretches of open roads and intricate mountain climbs. Capture snapshots of unspoilt alpine lakes, breathtaking castles and gardens, alongside authentic picture-postcard Bavarian villages. The day will draw to a close with a traditional private Fondue experience with fellow guests – an iconic Bavarian feast – at our second hotel, the luxurious Schloss Elmau.

For your third day, a stunning scenic drive has been planned for you to enjoy at your own leisure, giving you the perfect opportunity to explore the local traditional towns and experiences. During an informal lunch at the hotel’s mountain restaurant, you will have the chance to take in the breath-taking panoramic views and enjoy the local Alpine walking routes. The hotel’s award-winning spa is also available for you to relax and unwind in with a vast array of treatments. A delectable farewell dinner will be spent in the company of the Art of Living team, with a wine pairing from the in-house sommelier – the perfect opportunity for you to share your stories of what will have been an unforgettable discovery of Bavarian culture.

More here – Aston Martin – Art of Living

General Advice Warning

The Trading Game Pty Ltd (ACN: 099 576 253) is an AFSL holder (Licence no: 468163). This information is correct at the time of publishing and may not be reproduced without formal permission. It is of a general nature and does not take into account your objectives, financial situation or needs. Before acting on any of the information you should consider its appropriateness, having regard to your own objectives, financial situation and needs.