On turning 50

It’s coming up for my 50th birthday. How did that happen? I want a recount!

But actually, not really. Being 50 is no great shakes. I have always thought that 30 was the biggest hurdle. At 20, you don’t tend to view it as a milestone. When you reach 30, though, you do feel that some kind of barrier has been crossed. At least that’s how it was for me. I am sure that others feel the same. You are more keenly aware that you are crossing a line which leaves youth behind. When you reach 40, you have reconciled yourself to this fact that this happened long ago, so at that point it is just a number.

I was amused by a comment I saw on “mypersonalteenlife” (http://is.gd/ahqBgx):

There is a 14-year-gap between my youngest sister and me, but we still get along and now that she is getting older we have so much more to talk about :) Keep your sister close :)

I am still trying to fathom out whether the writer is deliberately being ironical, or achieved it accidentally. It’s like that famous Mark Twain quote:

When I was a boy of fourteen, my father was so ignorant I could hardly stand to have the old man around. But when I got to be twenty-one, I was astonished at how much he had learned in seven years.

Let me tell you a secret about how I thought about age. We all tend to worry about it, and have a tendency to think that we’re in the perpetually “old” category. I figured this out when I was talking to a friend who was about to turn 30. He was sensitive about his age, and I formed the impression that he, too, considered it a turning point.

At age 14, I thought 18 was old. At 19, I thought 18 was young. 25 was old. At 30, I thought 35 was old. Nowadays, it’s all much more of a blur. There’s no real distinction in my mind. Someone who’s 20 would consider a 50 year-old to be a veritable alien, possibly one of the Lizard People. It doesn’t work like that in reverse, though. I tend to think of a 20 year-old as being basically the same age as me, but with better skin. I suppose a lot depends upon who I speak with. If it’s some young punk, then yes, they’re a young punk. If it’s someone intelligent, then I feel that we may be talking at somewhat the same level.

I do notice one thing, however: it is a lot more interesting striking up a random conversation with an older man in say, his 60’s, than one in his 20’s. Seriously, older people are much more interesting. The advantage of age is that you become much more rounded as an individual. The last few years I have come to appreciate just how little I know. Youth tends to think in absolutes, whereas elders tend to see a lot more nuance in life. The Universe just doesn’t work the way you think it does!

I don’t know. Maybe I’m alone on this, but I find myself becoming softer in my attitudes, more hopeful and kinder to the younger generations. This is completely the opposite of “the way it’s supposed to be”. We’re “supposed” to become more cynical and embittered with age. I read an interesting take on this some time ago. The writer suggested that it’s not so much that people become more cynical, or whatever, it’s that their inner personality becomes amplified.

One last confession. Although I can’t put my hand on it now, I did keep my first grey hair as a souvenir. I was 29 at the time, a few months away from my 30th birthday. I was in my scungy room at the time. I hated where I lived, and still have nightmares about living there on rare occasions. I was doing my PhD at the time. I actually count that period as among the happiest in my life.

Yesterday, I listened to the song Little Boxes by Malvina Reynolds (https://youtu.be/2_2lGkEU4Xs). The lyrics are the most profound that you will hear in any song. We should all force ourselves to hear it every five years, starting at age five. Here are the lyrics (http://is.gd/mEhTgo):

Little boxes on the hillside,
Little boxes made of ticky tacky,
Little boxes on the hillside,
Little boxes all the same.
There’s a green one and a pink one
And a blue one and a yellow one,
And they’re all made out of ticky tacky
And they all look just the same.

And the people in the houses
All went to the university,
Where they were put in boxes
And they came out all the same,
And there’s doctors and lawyers,
And business executives,
And they’re all made out of ticky tacky
And they all look just the same.

And they all play on the golf course
And drink their martinis dry,
And they all have pretty children
And the children go to school,
And the children go to summer camp
And then to the university,
Where they are put in boxes
And they come out all the same.

And the boys go into business
And marry and raise a family
In boxes made of ticky tacky
And they all look just the same.
There’s a green one and a pink one
And a blue one and a yellow one,
And they’re all made out of ticky tacky
And they all look just the same.

It turns out that I am a “pretty serious non conformist”, living a life hardly anyone understands, sometimes being called a freak. That’s according to http://is.gd/zDlwfB, anyway. And yes, I have been called a freak before. I have sometimes felt that at work, my colleagues have considered me a bit simple sometimes, not “getting” aspects of life that seems obvious to them. This is the curse of being non-conformist. People think you don’t “get” it; whereas the non-conformist would be thinking “yeah, I ‘get’ it only too well, it’s you that doesn’t actually ‘get’ it”. Maybe I’m starting to sound too pompous. As Scott Adams once said:

If you have any trouble sounding condescending, find a Unix user to show you how it’s done.

The one place where I do disagree with the song is about universities. My years in academia were the best years of my life. I never felt I was being pigeon-holed. I studied mathematics. I fail to see how studing pure and applied mathematics and statistics turns you into some kind of drone. Maybe that’s more for the arts, where there’s little in the way of objective facts. Conclusions can be more subjective, with pressure to conform to the received interpretations. A mathematical proof, on the other hand, is either right or wrong, there’s no opinion about it.

So, those are my reflections on turning 50. Now get off my lawn!

Only joking.

This is what 50 looks like.

This is what 50 looks like.

May you all be well and acquire all kinds of happiness.

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Magic hat portfolio: MCGN in, XCH out

My Magic Hat fantasy fund, which is mostly mechanical, is on Stockopedia: http://www.stockopedia.com/fantasy-funds/magic-hat-463/ Its goal is too achieve above capital returns greater than the FTSE350 and Magic Formula screen using a portfolio of about 12 shares selected from Stockopedia’s Greenblatt Screen.

The Greenblatt screen is beating my human-intervening portfolio on a 2-year basis, but not on a 1-year basis. That doesn’t necessarily prove anything, as relative performance can often be sensitive to the period chosen. The portfolio is beating the FTSE 350 by 6.3% over 1 year. It’s the kind of outperformance that I would expect most competent investors to achieve over the long term. Investors with real skill should do a lot better. Although we do hear of people regularly whipping the indices, I do think that that kind level of skill is rare. Over a 3-year period, the Magic Hat portfolio has outperformed the FTSE 350 by about 2.2% pa. Yawn!

XCH (Xchanging) was kicked out of the portfolio on a rotational basis. It lost about 26% of its value during the holding period.

In its place is MCGN, which, according to Stockopedia:

is engaged in developing, implementing and supporting business-critical software. The Company is organized into two divisions, Microgen Aptitude Systems Division (MASD) and Microgen Financial Systems Division (FSD). MASD’s flagship products are Microgen Aptitude, a high-performance application platform used by medium and enterprises to automate complex business processes, and Microgen Accounting Hub (MAH), which provides a single point of control for financial and accounting data. Microgen’s Financial Systems Division delivers a portfolio of back office processing software to the banking, wealth management and energy sectors. For trust administrators through to fund and asset management organizations, the Company provides solutions for front and back office administration, performance measurement/analytics and fund and product design.

I chose it because it had a StockRank in the 90’s (its score is actually 90), and a nice dividend yield, 3.71%. Its PE ratio is a modest 11.1, with a PEG of 0.6. Its P/FCF is 8.58, and EV/EBITDA is 5.5. That looks a pretty good deal to me. I don’t have any insights into the industry or the company. The Fund as this is primarily mechanical.

May you all be well.

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5 tips on being more charismatic

Summary taken from 6 minute Youtube video “5 Habits of Exceptionally Charismatic People” (https://youtu.be/aPhNnk7MDRI):

  1. accept your imperfections. Don’t be neurotic or try to be perfect.
  2. Don’t be the centre of attention. Instead, ask yourself: “How can I ask the most interesting questions?”
  3. Talk postively about people, not negatively. Be genuine about it.
  4. Use your hands. Keep them visible
  5. Gaze deeply, briefly, into someone’s eyes
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The Willows – by Algernon Blackwood; and a comparison with HP Lovercraft

The Willows is a short story by Algernon Blackwood, published in 1908. It is 34 pages long, and is available for free from Project Gutenberg: http://www.gutenberg.org/ebooks/11438 . It is a work of “Weird” fiction, or, to simple folks like me, supernatural horror.

The story is about a man and his friend, who he refers to as “The Swede” on a canoing trip along the Danube. They camp on a small island covered with willows. They discover that the willows seem alive with malevolent intelligence, and there are forces at work that want to feed on their souls.

The Willows is one of Blackwood’s best known works, along with The Wendigo. The Willows is the first work I’ve read by Blackwood, and I came across it through my readings on HP Lovecraft. Many critics express surprise about Lovercraft’s popularity, and cite Blackwood as the better author.

However, having read The Willows, I find that I prefer Lovecraft’s work. I should first state that I found Blackwood to be very readable. I half-expected an opaque writing style that would seem difficult to read to modern readers. But this was not the case. Lovecraft’s writing style, on the other hand, often polarises views. People ask: “Was H.P Lovecraft actually a good writer?”, accusing his prose of being turgid and adjectives suffocating (http://is.gd/3AzYLQ). And oh, the purple prose, described as being delivered by the boatload, where the adjectives roam in packs. Was Lovecraft a hack, or literary genius? In my opinion, his use of words adds atmosphere. The reader really feels a sense of foreboding.

Perhaps it’s unfair to criticise Blackwood after having read only one of his stories, but what I find great about Lovecraft is his “world-building”. Individual stories feel as though they are part of a larger whole. I also think that the antagonists in a Lovercraftian tale have motive and purpose, even if they are only darkly suggested. With Blackwood, it seems that the spirits just seem to want to eat your soul. In a Lovecraft story, motives are only half-revealed, and seem more complex. The protagonists are often hapless wanderers into situations where they are hopelessly out of their depth. They venture too far into places where they are unwelcome, peering behind the veil of reality and into business where their presence is unwelcome.

Perhaps the beauty of Lovecraft is that he leaves a lot of blank canvas for you to fill in with your imagination. Lovecraft seems so much more inventive to me.

So, having read my first Blackwood story, I think the score is: Lovecraft 1, Blackwood 0.

That’s just my opinion, of course. Do you agree? Disagree?

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$ALY.L – Laura Ashley – Hmmm

It’s about that time of month when I can have a trawl of the Stockopedia rankings to see what looks interesting.

ALY (Laura Ashley) has a Stock Rank of 99, and has fallen 9.8% to 30p today. Paul Scott picks up the story (http://is.gd/X1JMZq):

at the time of writing, I hold a long position in this share … It has decided to spend £31.1m buying the freehold to an 8-storey, 98,254 sq.ft. office building in Singapore. This is to give the company a Far Eastern base, apparently. That’s a lot of office space, for a company which does 90% of its turnover in the UK! … property purchase seems bordering on the bizarre … Overall this company is one of my favourites at the moment

Paul is a much better investor than me, so bear in mind that anything I say here is pretty much worthless.

The company has a full listing (at least it’s got that going for it), and seems to be under the control of Asian directors. Dr. Khoo, a director of ALY is locked in a divorce battle. There was also the business recently of a shareholders meeting being held in Malaysia.

Taking a look at the cashflow statements shown on Stockopedia, I see that the net income for y/e 30 Jan 2010 is £12.7m, rising to 23.8m for y/e 31 Jan 2015. However, the actual cash flow from operating activities has decreased from £11.9m to £-3.5m (negative). The cashflows seem to have declined progressively, too, although the year before was worse than the most recent report. (See comment below, This paragraph contains errors)

The Asian growth story seems exciting enough, but then it would, wouldn’t it? No doubt I’m wrong, but my gut instinct tells me to avoid this one. There’s too much intrigue. It’s all too bizarre for my liking. I’m not happy at all. It’s off my list, on the basis of “if in doubt, don’t invest”.

Let’s catch up in a year’s time and see how this one panned out.

May you all be well.

30p ASX 3585

30-Jun-2015 Update : see my comments below for a note about cashflow.

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My problem is impatience

Thorntons is up 42% to 145p today on news that Ferroro bid for the company (Motley Fool: http://is.gd/E6KEty). I had sold out in May (http://is.gd/X8SH92) at 92p. I made a nice profit on the trade, but still, it’s always galling to see that I could have made a lot more.

I had also sold FLYB (Flybe) prematurely, before its big runup.

Too little patience! By nature, I do not have an addictive personality. I consider that I have one of the least addicitive personality of all the people I know. There’s no objective way of measuring that, of course.

However, all this focussing on money and shares has taken its toll. There’s been too much checking, too much andreniline, too many trades.

That’s why, towards the end of last month, I decided that I really needed to step back from the whole process.

I do have share alerts for my portfolio, which would allow me to make appropriate decisions should the need arise. But what I’ve been doing is now try to trade once a month, and stop reading too much. Don’t look at what the Footsie is doing. My new strategy is to perform a comb on Stockopedia for highly ranked shares, and choose something that looks good. Old stuff gets ejected.

I have not been able to stay away from portfolio-checking as much as I would like. I am in the process of improving my portfolio application, so it inevitably means that I need to run programs that display performance and gains/losses.

However, I find that by changing the stimuli, you do affect your behaviour. As the Buddha says insightfully in Majjhima Nikaya 10: “Whatever a monk keeps pursuing with his thinking and pondering, that becomes the inclination of his awareness”. I have noticed that when I stop pursuing investing activities, and go and do something else with my life, the perpetual desire to find out what’s going on does subside.

Anyway, I’m far from proving that I’ve “conquered” my addiction. As ever, we shall see.

It’s interesting, but I’ve spoken to a few lads who work on the oil fields periodically. Alcohol is of course forbidden on oil rigs. They are not averse to a few beers, but they say that when they are on the rigs, they don’t even think about beer. I guess it varies with personality types.

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Aberdeen Oil

I work, at least until very recently, in the Oil & Gas sector in Aberdeen. I do have something in the way of a grapevine, so I thought I’d like to share what I’m hearing. Take everything I say with a pinch of salt. It’s only my perspective as I see it.

Financial market consensus seems to be that oil prices have bottomed out, and we can see recovery to more reasonable levels. I’m not sure what everyone’s expecting: $100 a barrel, maybe??

I’m still hearing that oil and gas service companies are STILL retrenching, though. Producers just seem to be cutting costs to the bone. Personally, I think a swathe of junior producers aren’t going to make it. They’ll generally have the more marginal fields in which more investment has to be made. Potentially you can make a lot of dough on some of those AIM companies if oil recovers. The operative word is “if”. High risk, high reward. Personally, I think the risk doesn’t justify the reward. That’s just my assessment of the situation, though.

At the very least, I think producers will adopt a “wait and see” approach. It seems that the oil services companies are seeing the problems as more than just a temporary blip, and are reducing capacity accordingly. Oil & Gas tends to be something a schizophrenic industry, much like the stock market. It’s very much boom and bust. I don’t think companies like to reduce capacity casually, though. There’s a cost and an upset involved in that, not to mention effort in ramping up if demand takes off again.

Now’s my time to vent my concern about the attitude of the SNP as being unfit to govern the nation. Last year, when oil prices were high, that industry was seen as a cash machine that disgorges its bounty to all passers-by. Not so any more. Here’s what Jim Sillars’ said (http://is.gd/IqA0St):

BP, in an independent Scotland, will need to learn the meaning of nationalisation, in part or in whole, as it has in other countries who have not been as soft as we have forced to be. If it wants into the ‘monster fields’ in the areas west of Shetland, it will have to learn to bend the knee to a greater power – us, the sovereign people of Scotland. We will be the masters of the oil fields, not BP or any other of the majors. If Bob Dudley thinks this is mere rhetoric, just let him wait. It is sovereign power that counts. We will have it, he will not.

The sheer arrogance of that statement beggars belief. Given the change in events we’ve seen, I don’t see anyone bending at the knee. If anything, it looks like they’ve got it the wrong way around as to who has to bend to whom.

Alex Salmond has also expressed a wish to repudiate Scotland’s share of the national debt (http://is.gd/6QQyag). Again, this is sheer arrogance. Not a great idea to signal to the credit markets that you’re not going to pay your debts because you don’t fancy it. One word: Greece.

Anyway, that’s my spleen vented.

I really can’t emphasise enough that theses are just my opinions. I simply don’t know how things are going to pan out in the long run.

Take care out there.

Update 20-Jun-2015: I thought I’d highlight another problem with the Oil & Gas industry in Aberdeen. There is increasing environmental regulation coming from the EU, particularly in regard to decommissioning. This is very much a new field, with a new market. Potential service providers do, of course, see this as an addressable market. Regulation seems to be geared towards turning a site to its pristine state, with possible small exceptions.

An example of an exception might be to leave trunk pipelines in place, in case they need to be used in future. It is also suggested that some platform foundations might be left in place, as the risks outweigh their removal. Other than that, it’s basically all got to go. Decommissioning platforms carries risk of environmental contamination. The industry hasn’t figured out best practises yet. Options include moving the whole platform onshore for decontamination, decontaminating in situ, and even both at the same time. No-one really knows, and it’s something that industry will only learn through experience.

All this was never a problem when the fields were build decades ago. We stand at an unusual time in history, where so many factors are coming into play at once. One is, obviously, the oil price, which is affecting the assessment of the economic viability of a field. Also, many of the platforms are old, are likely to be at the end of their economic life in any event, so operators are facing huge expenses. Lastly, there is an increasing appreciation environmental regulations, and of having to factor in decommissioning costs at the commissioning stage. This obviously affects the economic viablity of projects.

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