No gifts

Not quite a top five here, more a top two and bottom three.

When going to a wedding, or a christening or a baby shower or other similar event, particularly when the host has explicitly said that gifts should NOT be brought, you have a number of options:

Do as the host says, just come and celebrate the occasion but don’t bring a present. Again, that’s what the host wanted.

If you can think of a particular thing that you know the host was looking for but haven’t been able to find yet, then if you can get hold of it then it would be a great gift, But only if you know it was something the host was definitely searching for.

What is not acceptable is to:

Give a token gift just because you think it inappropriate to go without one

Give money or vouchers

Make a donation to a charity of your choice in their name

White House Deep House Red House

In one of the most expensive and most conservative areas of London, in a small street of sober Georgian terracing, there is one house that has been painted with bright red stripes. That isn’t new information, it was prominent in local and even national press. And incidentally in time I think the new paintwork currently seen as garish and out-of-character and objectionable will come to be seen as neighbourhood attraction and slapped with a preservation order.

But the point is that the neighbours did object. Quite rightly. Not to the unplanned colours, but to the owner had wanted to build a massive basement extension, going down two whole floors of the entire property’s footprint. It would have caused massive disruption and massive mess, the houses on either side would have become virtually uninhabitable for months on end while bulldozers and diggers ploughed in.

The issue here is a planning loophole. While a party wall agreement goes a tiny way towards helping to allow for risk of structural damage, it in no way recompenses the afflicted neighbour. And that’s something that helps nobody. If at the end of the work there is minimal exterior change, as with mega basements and similar development, then planning rules become almost irrelevant. Yet it is not the end result that pees off the neighbours, it is the hell they must put up with to get there.

If there was a legal obligation to properly compensate the neighbours for that disruption then the central house owner would have been allowed to build their desired basement palace but the afflicted parties would be paid appropriately for that disruption.

Cashback

Moved onto a new mobile phone contract. It is with one of the big 4 network providers but it is ridiculously cheap. How? Although the contract remains directly with one of the big four network providers, the sale was effectively through a broker and customers are expected to claim cashback Yet there are only two ways the broker can make money from this.

1. They expect people to misplace or forget the payback periods, to not bother with the deliberately archaic methods they insist upon for reclaiming.

2. The more cunning method. They sell policies, collect full subsidy up front from the network provider, then conveniently go insolvent before the cashbacks are due.

I can handle the first. This post is basically a reminder. But I vaguely expect the second.

Getting High

Being high up. Mad. Paying good money to go up to the top of the Shard or any other tall building is mad. You can get basically the same view from thousands of office windows. And that view is usually rubbish. You are so high up that you see very little.

Personally I think I get a much better view from my own kitchen window. You can see the details of the trees and features. You can sometimes see little animals.

The only reason that so many people think the view from the tall towers is great is because they have allowed so many other tall towers. Basically they block off light forcing new ones to be even higher.

Yes it is all about us vs them. If all other buildings around you were two storeys high, you would get a much better view and a much better life from a four storey block than you would from a twenty storey block in the midst of other twenty storey blocks.

The density argument is rubbish too. Central Kensington is one of the most densely populated areas in Britain and central Amsterdam is one of the most densely populated cities in Europe – both have strict planning laws restricting height, yet they have some of the most desirable housing in the world.

Most families want a house with a garden. Surveys prove that. But developers make more money from massive apartment blocks and try to convince you that the view is great.

Campaign Project and Stock Management

To maintain effective marketing, or to run effective projects, both require constant cycles of prediction and measurement.

For example, first you measure the current one, use that to plan and predict the next one. Measure that one. And so on.

Having been through plenty of campaigns and plenty of projects, I know there are some things that I can predict well. Perhaps an odd predilection for stats helps. Of course we all get some estimates wrong, but the more we do the better we estimate. And I've done loads.

But there are some things that I cannot predict. I cannot predict share prices without insider knowledge. So I agree with what Stephen Dubner wrote on Freakonomics a while back:

Here are a couple of stock-market headlines I’d love to read one day:
“Stocks Surge, Reasons Unknown; May Be Nothing More Than the Random Fluctuation of a Complex System”
or:
“Stocks Dive: Three First-Movers Sold Hard and Then Everyone Else Inexplicably Followed”

Of course, in the second case, if the first-movers sold hard, if you believe that others will also sell hard, then you should sensibly follow.

So my own investment strategy, still holding all my boom-bought shares as they go bust one by one, now it looks very foolish indeed.

Just Giving Public Signals

From the generic to the specific. Invented figures. You are prompted to contribute to a good cause by a solicited group email that links to a public page showing individual amounts. You go to the site, and see just one donation there, showing £50, and the date suggests it was placed there a while ago. You know from history of similar appeals that most individual contributions tend to be smaller. So you wonder whether that first entry is discouraging subsequent ones. You genuinely want to contribute, but how much? Five options:

1. Give £50 like the first person. This further reinforces the possibly unfair suggestion that £50 is the expected going rate.

2. Give more than £50. Appeases your own conscience; but if the signals theory is correct, this may be even more likely to dissuade later small contributions.

3. Give a sum that is the usual typical contribution, say £10. This could now bring in the others who were prepared to commit that smaller figure but who didn't want to publicly set the precedent.

4. Give an intermediate sum, say £25. This might still perform the signalling function of "it's ok to contribute less" but at the same time it keeps the ballpark figure higher.

5. Do nothing, or contribute offline. May seem the easy option, but it doesn't provide any helpful signal. The charity still appears in the same position as at the start, with a single lonely contribution apparently discouraging followers.

This is not a web issue, the same question often arises where a short list of donations is passed around with any office collection.

So what did you do?

Me and Warren Buffett

Five things in common?

1. I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years.

2. It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.

3. Our favorite holding period is forever.

4. We believe that according the name 'investors' to institutions that trade actively is like calling someone who repeatedly engages in one-night stands a 'romantic.'

5. Wide diversification is only required when investors do not understand what they are doing.

Those are genuine quotes from the investing legend. I should have diversified more widely.

Interest in the Economy

Despite the significant losses documented yesterday and in earlier notes, I don't claim poverty. Particularly compared to most in my home town, I'm doing ok.

However worse times are coming. News today: The Bank of England has cut interest rates to 1.5%, the lowest level in its 315-year history, as it continues efforts to aid an economic recovery. The Bank of England is shafting us.

Manufacturers' association EEF said the move was "too timid", and that the Bank should have cut rates further. Self-serving poppycock . The reduction of interest rates is not the only weapon in the arsenal of weapons available to tackle stagnation of demand. Whatever happened to the direct fiscal stimulus? Investing in the infrastructure of the country?

There are seven times as many net savers as net borrowers in this country, though overall saving rates are overall about zero as average borrowing is about seven times average saving. But all these ridiculous cuts will do is encourage more borrowing. Madness. That is exactly what got us into this mess in the first place.

Stock Tips

I'm a big investor. No real job, no real pension, so my future income is dependent upon my investments.

Admittedly this has been done without any major research. But in principle, without even thinking about it, my basic investment strategies have broadly followed the legendary Motley Fool guidelines and the even more legendary Warren Buffett guidelines:

Even my biggest financial mistake was made in accordance with those principles, though it was also based on a stupid anecdote.

So, after Telewest, apart from a series of technology stocks, my next two big investments were solid well known retail brands with prime high street locations, I thought they were undervalued shares with excellent potential being ripe for turnaround.

One of those stocks was Woolworths.

Anybody else out there who wants to follow my financial advice?

Cooking Christmas Lunch

As it's festive break, please excuse a short personal post.

I rarely cook. But a recent long vacation in India (see here and here) reignited my taste buds. And I've discovered it's easy. Time-consuming and tedious, but easy. The results are excellent, even though I say so myself. Nobody else does.

My wife says it's because I have such low expectations. Because I like simple dals and tarkaris. But I do things properly, fresh spices - no pre-bought pastes, not because they are universally pricey, but because they are universally vile.

One issue is that you can only get these ingredients in "Indian" shops, not in the big supermarket that supply our basic weekly requirements. And those shops are a bit out of the way, designed for local users. Whenever we drive down, there's never anywhere to park. Problem.

Problem sorted. Tomorrow, while most of the world sits down to christmas lunch, I'll pop down then. They're always open. Thank god not everyone's a christian.

Bidding Gambling and Voting

There 's stuff in the news about "penny auctions". For example the BBC reports:

I think bidding on penny auction sites is akin to a gambling-like experience," Professor Griffiths said. "Obviously, when people are bidding again and again and again and they don't actually win the item in the end, that's very much like gambling."

However, Juha Koski from online auction site Madbid.com disagrees. "We have two experts who have given us their opinion on this. This is definitely a game of skill and would not form under any circumstances under the definition of gambling."

That was the most surprising disagreement since Madoff disagreed with proposed hedge fund regulation. Five reasons why these auctions are really lotteries:

1. The gambler pays for every "bid", each bid is essentially a non-refundable ticket

2. The final price of the item bears minimal relation to the value of the item on the open market

3. The lottery operator (or seller) gains most profit not from the winning bidder but instead from the number of bids made (or tickets bought)

4. The operators argue that entry needs significant skill. Actually I agree - in the same sense that choosing lottery numbers requires significant skill

5.Sometimes the winning price is the lowest unique bid, that essentially proves it

It's obvious. If the supposed regulators cannot work this out then they are either incompetent statistical morons or subservient slaves of the gaming industry.

[note: yes I know that choosing lottery numbers requires some "skill" to avoid picking the obvious numbers that other people are more likely to have picked]

Recipe to build a Kolkata suburb

Ingredients:
1. A few acres of land
2. A few thousand families

Cooking time:
Sixty years

For each family:
1. Fence of your personal area with bamboo and twine, then string up a temporary shelter in the middle of it.
2. When you can afford to, replace the temporary shelter with a mud shack, keeping a small plot to grow your vegetables or tether your goat
3. When you can afford to, replace the mud shack with a fairly solid brick and plaster structure
4. As funds allow, gradually add floors to give yourself more living space
5. Tear the whole house down and build a block of flats on the same little plot, extending right to the roadside. Goodbye green space, hello modern suburb.

The Urban Village

I've been away. Top five reasons why a congested Kolkata suburb of 2008 is like a traditional English village of 1908

1. The same people have lived in the same houses for generations. Almost no geographical mobility. Everybody hangs out at the same local watering holes.

2. The local store owner lives above his shop just a couple of houses down the road from you. He stocks everything and knows the price of everything. You ask him for what you need to buy, he hands it to you. Open all hours.

3. The local bank manager lives in the same street too. New accounts and loan acceptance are based largely on personal recommendation.

4. Windows and doors are open all day, most people walk to work, kids play in the street.

5. The local rag'n'bone man comes round daily with his animal-drawn trailer to collect your reusable household waste

Sounds ideal, but there is a lot that was wrong with that world, and it is disappearing fast - because now is the age of the department store - tomorrow may be the age of the internet, that will be very different again.

B of the Bang

Councils in the UK are often sued for frivolous, even dishonest reasons. Examples here.

But in an almost literal reversal of fortune, the makers of a supposedly dangerous sculpture this week paid over a million pounds in compensation to Manchester City Council. Story here.

Now I have noticed something similar in my own home town, and I'm wondering who I can sue. Admittedly it took many years to be constructed up to its full height, but now it is equally tall and equally threatening. Bits seem to fall off it every year. It seems to inspire strange yobbish behaviour. It's probably of foreign build - up in Scandinavia I've seen lines of similar sculptures stretching for vast distances.

Oh, it's a christmas tree.

Burying Bridges

There were once-in-a-generation news headlines this week. The presidential election (RB wins). The drastic cut in interest rates (RB loses). These massive stories are a chance for political cowards to bury bad news.

That's what Boris Johnson and his gang seems to have done. For all the pre-mayoral-election talk of needing to regenerate and improve London's infrastructure, yesterday there was a little announcement that ten major capital projects have been scrapped.

Now some cuts I could understand. But one particular cancellation is just wrong. I have been driving around London for much of the last twenty years. Travel is often difficult bordering on impossible. But (in my opinion) the single worst bottleneck in the entire city is the Blackwall Tunnel.

The western stretch of the Thames has bridges every few hundred yards. Yet between the central Tower Bridge and the Essex-Kent QEII bridge, covering at least ten miles of river with high population density on both sides, there is nothing else. Well almost nothing, another ancient tunnel that has only one narrow winding lane each way, and a single unreliable ferry. But this is obviously not enough, as each of these crossings is still at full capacity. Even the costly Dartford crossing. And that approach should solve the cost conundrum. There is so much pent-up demand that any new bridge would surely pay for itself, as much as any new road anywhere in the world possibly could. It is just madness to go ahead with the massive Thames Gateway housebuilding project unless there is a corresponding Thames Gateway infrastructure project.

Three disclaimers: I cross the river frequently; I accept marginal traffic charges; and did I mention that I like bridges?

One Bold Act to Solve the Financial Crisis

We appear to be on the brink of global economic meltdown. The government needs to be bold and decisive. One simple Act would have these major benefits:

1. Increase financial stability.

2. Increase innovation, entrepeneurial spirit and small business development.

3. Promote equal opportunity.

4. Increase charitable donations.

5. Reduce poverty.

I've mentioned it before. Simply raise inheritance tax to 100%.

1. The government needs to get closer to balancing its books. Living people don't like being taxed. Dead people don't care.

2. People will need to earn a living, even the children of successful rich entrepreneurs cannot just sit on their arses.

3. So who does not think that aiming for equal opportunity is a good thing?

4. Even Gates and Buffett agree. Charitable donations have always been tax-exempt.

5. Charities often tend to benefit the poor. And so do higher tax revenues.

I could add a potential surge in retail sales and consumer confidence too as people decide to spend for their families now while they are still alive. And a huge immediate boost for solicitors and will writers. But that's short term. I'm talking of one simple act to provide a long term radical overhaul to the entire national economy.

The Financial Times

Compared to most people in the western world, here are five types of people who are so far almost unaffected by the credit crunch:

1. Self-sufficient smallholders

2. People with rich relatives or inherited wealth

3. People with secure jobs

4. People with final salary pension schemes

5. Lottery winners

None of those apply to me.

Compared to most people in the western world, I am so far almost unaffected by the credit crunch.

Question to David Cameron (or John McCain)

Do you believe in meritocracy, that every child and every adult should have equal opportunity to make the most of their ability and work without discrimination

Or

Do you believe that certain children and certain adults should have a privileged start in life, for example with the most productive and most valued resources allocated forever to the descendants of those who acquired them?

It's a very simple question. But those two options are exclusive. What do you choose?

(there is a third option, that everybody gets an equal share regardless of ability and work, but I don't expect any politician to ever suggest that)

Big Decisions

Thoughts of a colleague who is a mid-level manager at the client:

Despite earning those huge salaries for doing so, despite the oft-quoted pretence that it is tough at the top, actually it is easy to drastically reduce losses and consequently earn big bonuses. You simply close the loss making operations. It might require a degree of heartlessness and loss of popularity with those whose jobs you remove, there are obviously short term transaction costs that need to be written off, but basically it is still "easy".

What is "difficult" is to use all your existing resources and to increase their value. To provide leadership and direction to get more from the team. It's another way to increase profit, but it's much harder.

But what gets the big promotion and big salary and big bonus in the quickest time? Obvious really.

Not my words, but I wouldn't write it here unless I at least partially agree.

My Biggest Mistake

(financial)

Recall the days of the great boom in technology shares in the late 1990's. When companies like Yahoo and Amazon and eBay and a thousand other internet start-ups were soaring in value. In England companies like Freeserve and Easynet and FriendsReunited were setting the pace.

I was very much part of the early internet wave, my work was new media marketing, and I can honestly say that I predicted the prevalence of peer-to-peer sales models and web 2.0 long before the world caught up. But, on investment, I thought I'd play safe. Not so safe as to stay out of the sector entirely, but I could see a basic truth that still holds true; out of every ten start-ups only one or two will prosper, and that is as true in the brave new internet world as in the old material world. But it was not obvious who would be the next big thing, it never is. Even though I could predict the overall rise of social media, I could not predict the rise of particular social media companies.

So I recalled an anecdote - at the time of the California gold rush, a few miners struck lucky, most did not - but the ones who really made money were the guys who sold the spades.

And I recognised the need for a high capacity infrastructure for all this new communication. If I'd still been in America then I might have invested in Cisco Systems, but being in England, I invested in Telewest. In my mind it was easy to replicate websites, but it was hard to replicate thousands of miles of cable already embedded in people's streets. So I bought lots of shares. My life savings. My pension. I thought it was playing safe, buying spades not mines.

Within a few years, shares that had been bought above 250 pence were basically worthless. Like my pension fund. The company was taken over by NTL and then by Virgin Media. My stock was bought out for peanuts. Now, cable is doing well. Then, I was wiped out.

Which brings us to the present difficulties in the global financial system. Even shortly before the share price crashed, the directors and chief executives of Telewest were pulling out huge salaries and bonuses. One day perhaps we will find out the true extent of their complicity. One day perhaps my portfolio will recover.

Moral of the story: Research properly, never base your entire financial strategy on an anecdote.