And The Obese Shall Inherit The Earth

[peterbirks]

What with the failure of the Indy Mac Bank, and big troubles at Freddie Mac, I reckon that all those Americans who have put all of their savings into the Big Mac are now laughing on the other side of their stomachs.

Although I dread to think what would happen if a panic ensued and there was a nationwide fatty run on the Big Mac.

________

Camel out in 75th, following Purle's earlier departure. Seems to me that all you need to do to win the World Series ME is to win the equivalent of four sit'n'goes on the trot.

Unless, of course, you are sitting at the same table as Phil Hellmuth, where the bias that will always be shown in his favour by the organizers will raise it to six sit'n'goes on the trot. I hope I never get so poor at poker that I have to get the organizers to fix things so that I win*. But, well, in the cash games he remains a laughing stock/giant fish, so I guess I should be whooping him on to win. All the money that goes into the cash game economy from tournament winners is fine by me.

Yes, Phil, you're great. Fancy a cash game?

(See also the camapaign against Sammy Awareness, where the great fear is that Farha will finally work out that he is a producer...)

*This relates to a ruling against Hellmuth at the end of day five that he should miss an orbit of play at the start of day six after he berated an opponent for calling preflop with 10-4 (which, in a way, shows how bad Phil actually is...). Hellmuth promptly went to "teacher" overnight (i.e., Pollack and the media interests, who call all the shots these days) and got the ruling overturned. So, he's a bad poker player AND a sneak.

____________


Poker players' ability to balls up all financial decisions outside of the poker economy never ceases to amaze me. We've all heard the tale of the great Tom McEvoy "investment", but I fear that this was surpassed by Ben Grundy's revelation that he used up nearly all of his bankroll at the start of the year to buy a house for cash, just as cash was becoming king. Hell, I might have bought a flat at around the same time, but (a) I knew that it was the top of the market -- I just had to make a decision on the flat downstairs -- and (b) I bought it with the Cheltenham & Gloucester's money. I kept my own money where it was, thank you very much. Given the increase in the number of properties I have seen coming up for auction in recent weeks, I might even be taking on a third property in two or three years (depending on how long it takes to reach the bottom of this particular cycle). And that would be for cash.

Still, Ben admitted that his bankroll management for two years had been poor, so perhaps tying up your money in a (very) non-liquid fashion is economically unwise in one sense, but is the sensible thing to do in a practical kind of way. After all, that's the only real advantage in pensions -- they are a savings mechanism for people who always spend all of their liquid assets.

__________


It transpires that OpenID on LiveJournal doesn't work properly, in that you have to enable anonymous comments for it to be available. Which kind of defeats the object of the exercise.

So I've re-enabled anonymous comments, but could I point out that just signing your first name is often not much use. Even somthing like "Matt H" would not be a unique identifier. Something like Ben (Liverpool) is vaguely helpful, but my problem with most such posts is that I have no idea where the poster is coming from (i.e., how old they are, what their expertise is, what their track record is, and whether, to be blunt, what they say is worth a fart). With other bloggers you can at least look up the blog and get some kind of background. With old hobby members I know quite a lot about them anyway, and if they are old forum posters then, once again, there's some kind of track record.

______________

A picture from the weekend. Birthday Girl

Comments

[jaybee66.livejournal.com]

Do you have a pension in the classical sense?

I have something from my Reuters days (which paid 7% on top of a 9% contribution) but have no intention of getting a private one. Not surprising in that I have no intention of working in the "real world" so long as there is breath in my body.

I have always done rather well from my investments (buying run-down properties and doing them up whilst living in them, cash, commodities, stocks and inflation busting skin-flintery) and don't believe those idiots in investment houses can outperform me.

[peterbirks.livejournal.com]

I have a small 'final salary" pension from my William Hill days, which I think will pay for a kebab a week by the time I can draw on it (10 years from now, actually, when I shall be eligible for about £45 a week). I also have a company pension scheme here because the company puts in as much as I put in up to 5%. So that's 10% of my salary going into a "money pot" pension, but I doubt that it will be worth much more than a hundred grand or so (maybe £150K) by the time I stop paying into it (seven years from now). Can't remember when it was that £150K became a bit of an irrelevancy in the grand scheme of things, but it was probably some time in 2005. On the plus side, I can just leave it as is for another decade, by which time (with any luck), it will have grown enough to pay off the mortgage -- a kind of inflation hedge from a man who is punting on inflation. That is, though, plan B. Plan A is to see how inflation is going and to reassess my entire financial situation in seven years' time.

I have never had a private pension. There were some vague possibilities with SIPPS whereby you could turn them into a tax-efficient REIT (or indeed any other kind of investment trust), but Gordon Brown stomped on those. So, all that pensions do is postpone paying tax now to paying tax at a later date. I guess there's a marginal possible advantage here in the 40%/22% arena (you smooth out your income, thus making your total tax payment less over the decades), but that's a very small gain for the concomitant loss of liquidity option (or, indeed, the fact that you might die before you come to collect it).

PJ

[jaybee66.livejournal.com]

You hit the nail on the head at the end. Dying before you collect.

I have a very animalistic view of the world and believe I have no right to live. I make of each day what I can and like any other species, if my number is up then it's up.

That is where my disdain for urban living comes from. It removes people from the realities of life and forces them into virtual slavery to keep their heads above water.

When the time comes I shall crawl into a corner and starve to death.

[(Anonymous)]

"I have a very animalistic view of the world and believe I have no right to live."

I'm not sure you're alone in this belief.

Titmus (NW London)

[(Anonymous)]

Good to know.

Butler (Insignificant rock on outer arm of Milky Way)

And The Obese Shall Inherit The Earth

[(Anonymous)]

I got the impression Ben couldn't get a mortgage. Interestingly he is now being funded by badbeat but I guess that means he gives over a large chunk to them every month too so screwed both ways?

redsimon

Re: And The Obese Shall Inherit The Earth

[peterbirks.livejournal.com]

Hi Red Simon, Nice to hear from you and I hope you are well.

Yes, I know that Ben couldn't get a mortgage; there's a credit crunch, you know. My point was that he should have chosen to rent rather than buy for at least the next 18 months -- leaving the bankroll earning interest in an instant access account.

Or, alternatively, smack it somewhere earning 7% and take the bankroll deal from BadBeat anyway.

Both would be more efficient financially than buying a house for cash in January.

PJ

[andy-ward-uk.livejournal.com]

Did you see this ? Via Dr. Pauly :

"got confirmation that Hellmuth's appeal was based on two things...

1. It was an act for ESPN cameras.
2. He said that although he was given a warning many times before, it was always an idle threat and nothing every happened beyond that warning. He felt as though the timing of the penalty and that the lack of enforcement of previous warning was also justification for it to be overruled."

Hellmuth's argument was that because warnings had never been followed up on in the past, he wasn't expecting this one to be, so the penalty was unfair. Not only did they buy this, but their final sanction was ... a warning !!

Could you make this shit up ? No.

[(Anonymous)]

Any advice for poker players who don't have a pension? ISA's are my only thought. Is there anyway to get governement money into a pension scheme, with no official or table income?

thx

[jaybee66.livejournal.com]

Yes, get a proper job...

Why bother with a private pension? A suit will only piss it on the bingo.

If you are any good at poker then maybe some of that will rub off on your ability to invest wisely.

If you can't invest wisely then give up poker.

Spare cash, you don't need for a year, should go into a cash ISA. Anything over the £3600 goes into 6.5% plus savings accounts. Make sure you sign for gross interest so you don't pay tax.

Forget the stockmarket, it's for losers. Funds are for losers who take it up the A whilst someone calls them a loser.

I have 10K in gold as well as plenty of cash. I shall buy a property abroad over the coming 12 months. Anyone living in Northern Europe long-term needs their head seeing to. Just sell up to muzzie and wave goodbye to Blighty.

PJB can fill in the gaps.

JayBee's AtoZ of investing
==========================

[(Anonymous)]

'The good life' - yet so much anger.

Anyway, they're exculsive, there's mo reason to give up poker because you dont invest wisely. For many of us poker players investing BADLY is still better than holding on to the cash.

[(Anonymous)]

If you mistakenly sensed anger then you are easily dominated. Not good for your game of cards.

If investing badly is for you then I have a little something in the South Seas that might interest you.

[(Anonymous)]

lol, I sense anger all the time in JB. 'Eating out is a waste of money, anyway, no one cooks better than me'. I admire his choices, but he is full of conflict. The constant reference to 'reuters' rather than 'my job' stresses 'I could have been someone', 'I'm not doing this cause I'm a failure'. In so doing, he shows he is still a slave to the masses.He (you?) is not so detached from them since he cares what THEY think. In addition, JB readily admits he was passed up for promotion innumerable times, I wonder whether he would have discovered the good life had he not done so.

You don't seem too Tom Goodall to me, you need a touch of Felicity. Besides, I'm not JB bashing, a popular pastime here, I think his pursuits are worthy and interesting, however, there are clearly issues.

[(Anonymous)]

Just checked his blog's search engine.

Couldn't find your quotes.

Maybe you'll fare better, you seem to have time on your hands.

[(Anonymous)]

I'm thought it was on here, anyway, are you deranged? Plenty of time on my hands, cause I read Birk's journal? Actually, it might not have been here, some discussion about eating for £15 quid a week. Yeah on your, I mean, his blog.

[(Anonymous)]

a bit harsh, perhaps: 'as well as', rather than 'better'.

https://www.blogger.com/comment.g?blogID=13068024&postID=422449926824435931

[peterbirks.livejournal.com]

You already have government money going into an (unfunded) pension scheme. It's called the basic pension and your national Insurance Contributions (in theory) fund it. In fact the current pensions crisis goes back to Lloyd George, when he awarded pensions to loads of people who hadn't contributed a penny to the pension fund. It's been unfunded since then.

For the poker player, best ask Andy Ward or an accountant. One option available to you is a SIPP, which still gives you some advantages and is certainly better than letting some fund manager bleed you dry with 1.5% a year annual charges. Cash ISAs are a no-brainer -- I have been putting money into them seince they started. Equity ISAs are moronic -- too many restrictions (including the lack of an option to choose cash as an asset class, or indeed anything else apart from equities). Avoid them.

The five-year Northern Rock bond at 7% is a good product to have as part of your portfolio, so long as you have investments elsewhere which are not so vulnerable to increases in inflation.

If you are any good with property and have a fair amount of cash, there will be some solid opportunities in the auction/repossession market in the next few years.

Avoid commodities for the moment. Remember that a dollar-priced commodity is also dependent on the value of the dollar.

For what little that you do put into equities (10% is ok) I recommend taking all the companies in the FTSE 350 with a yield above the average, and then taking 10 of these at random. Sell half a stock if it outperforms the general market by 50% or more. Sell all of a stock if it underperforms the market by 50% or more.

PJ

[jaybee66.livejournal.com]

I disagree with what you say about dollar-denominated commods.

In the past five years the dollar has depreciated by 15% but oil has appreciated by 500%.

Gold has gone up by a hell of lot more than the dollar has fallen too.

The dollar depreciation argument against commodity investment is just a lame an argument as the speculator argument is.

Put simple, there are too many chasing too little these days so now is a great time to be investing in commods.

PS - Now the photo is up, I understand the post title.

[peterbirks.livejournal.com]

All I said was that you had to allow for the depreciation of the dollar. Surely even you can't deny the importance of considering exchange rates when the price of a commodity (say, gold) is described?

Then again, it all depends in what currency you plan to spend your money...

PJ

[jaybee66.livejournal.com]

Yes, the dollar's value is taken into account, which is why I buy and sell gold in Euros. Gold is fixed in Sterling and merely reported in dollars.

If I were a refiner, I would be buying Iranian oil in Euros too.

Any way, I would be happy to buy riding high commods in dollars rather than TU Sterling stocks.

[(Anonymous)]

Thanks very much. I'm not sure why your so down on equity isas. This was one area I planned to go for - given how far a balanced portfolio, histoically, outperforms savings accounts.

[peterbirks.livejournal.com]

The problem with equity isas is the restrictions attached to them. No investments allowed in AIM companies (if a company moves to AIM, you have to sell the stock) and no option for allocation apart from "100% UK equities". That's a serious restriction on asset-allocation decisions. There's now little tax-gain from the wrapper either. So, put 10% of your assets into equities (moving that amount up and down a bit according to your view on medium term market moves) for sure, but don't do it via an equity ISA.

PJ

[andy-ward-uk.livejournal.com]

No, don't ask me. I will incur the wrath of everyone by suggesting sacrificing a percent or two by ensuring that your money is used ethically, as much as you can anyway.

Andy.

[andy-ward-uk.livejournal.com]

On further thought, I should have said derision rather than wrath.

In any case, investing money is something that you should only do after you own property. And I mean own it, not mortgage it, and to hell with the state of the housing market. There is NO POINT borrowing with one hand and saving with the other, it gets you nowhere, and the middlemen are getting fat off your commission both ways.

Andy.

[peterbirks.livejournal.com]

Sorry to disagree with you on this one Andy, but I think that times have changed.

Two years ago I would have agreed with you wholeheartedly. Pay down debt as fast as you can.

Now, however, with liquidity (or lack thereof) a factor, there are good arguments for keeping a pot of cash and a pot of debt. One reason is that I am borrowing long and investing short. With a seven-year fix at 5.89% I have a product (the loan) that is no longer available.

This is the difference between now and two years ago. Then, the money was available if you wanted it. That is no longer the case.

So, the small payment (in my case, after allowing for the tax deductibility of most of the interest, it's as near as dammit zero) for retaining your options is worth it.

PJ

Pensions, yawn

[(Anonymous)]

All these comments and not a single reference to the birthday girl amidst the bubbles, for shame!

Mattito.

Re: Pensions, yawn

[peterbirks.livejournal.com]

No, not their fault! Most of the responses came in before I added the photo last thing last night. Else I am sure that it would have garnered far more comments than anything to do with the global macro-economic crisis. I know where my readers are at!

PJ

[thurb.blogspot.com (from livejournal.com)]

Quite a nice snap of the birthday girl. It has the look of a photo that's come straight from the camera without being massaged by software; a rarity these days!

I'm afraid I can't work up much interest in investment these days, having no spare cash to do it with. I have money tied up in the house, and enough money in the bank to get us through a few bad months at work, and that's it.