Money Talks - BBC 2 Evan Davis and Warren Buffett

Many thanks to fellow BU blogger Barnaby Capel-Dunn http://capeldunn.blogspot.com/ for suggesting that the Evan Davis interview of Warren Buffet on BBC 2 might make for some interesting viewing. It did and provided a fascinating insight into the life not only of the man with his mega wealth but also that of family members.

I have always believed and to some extant had that belief supported by occasional real life meetings with very wealthy people, that much wealth like much cigarette smoking risks damaging the health and lives of those involved and the lives of others. Matthew in the New Testament records:

It is easier for a camel to go through the eye of a needle, than for a rich man to enter into the kingdom of God

However quite what that means is not certain. Many people in the West of average wealth are immensely wealthy when compared with millions in impoverished parts of the world. Further more I can leave the tap running away copious amounts of water whilst brushing my teeth whereas some women in Gaza have to queue for hours to fill water bottles from infrequent well standpipes. As regards water we in Britain are rich indeed...

Reverting to Warren Buffett the impression he made was positive and I would be surprised if there isn't somewhere a needle's eye large enough for him to slip through.

Snippetts from the programme that made a large impact are in no particular order:

His Berkshire Hathaway company's website is simple and devoid of images - quite the reverse of the received wisdom that a company website to be effective needs to have all the latest bells and whistles.

His daughter recalled a time when she needed some $19,000 to extend her kitchen at home but her dad refused to lend her the money - presumably as he felt that the easy loan would not be good for her character.

His son seems to eschew dad's business and instead concentrates on making and playing music.

Warren Buffett accepted that he had a talent for making money but modestly signified that he was so far from perfect at spending it that he was giving much of it (ie untold $bns) to Bill Gates' already mega bucks charitable foundation, to spend on charities and aid where most needed rather than attempt to maintain control of the spending himself.

He left the control of companies that he bought largely with the local management.

The control freak element often associated with the very powerful or wealthy did not seem to be to the fore of his life. Interesting that he'd rather trust fellow billionaire Bill Gates with the philanthropic side of his wealth than governments or quangos. This is perhaps more a sad reflection of the state of international politics, leaders, the UN, governance and bureaucracy, than of any reluctance to let go and give freely of Mr Buffet.

Daily Commute - Hapazard Pictures

Thames Drilling Rig

Autumnal sun, yellows orange and greens abound on the trees around the Thames path to the West of the North side of Vauxhall Bridge making the final stretch of the daily commute to the office actully quite enjoyable. The atmosphere is especially attractive when the tide is in and the Thames is still flowing backwards upstream as a result.

A novel feature of late is a large brilliant red drilling rig situated in the river just upstream of the MI5/6 building. The rig seems packed with many wonders of modern science incuding a number of aerials and satellite dishes etc. For a time its presence made for much speculation as to its purpose. An acquatic extension for the MI5 spies to practice upon perhaps; the government searchingfor oil maybe to make a start on paying down the huge national debt they have created but the reality turned out to be a more prosaic machine for facilitating the buiding of systems to reduce outfalls into the river during heavy rainstorms. Still James Bond always used to spin a yarn about his being an import/export line of business so who knows.

I'll try to post a picture later.

Hopefully the picture has downloaded. The current location of the drill is about a mile upstream of the Houses of Parliament Near to the Thames footpath at Rivermill.

EDIT Current 25th October 2009 view is now posted above

Naive and Sentimental Investor

The above title was probably the apt desription of yours truly in 2002 when I first started looking at personal shares investing seriously - so seriously in fact that I joined up to Sharecrazy then as well - and have enjoyed using that investment bulletin board ever since.

In 2002 I followed much of the accepted wisdom of investing in the stock market like 'buy and hold', 'think long term', 'only invest in what you know', 'sell in May and go away', 'do as Warren Buffet does' etc etc. I broke a few rules too such as 'never fall in love with a share', 'stick to FTSE100 dividend earning shares' and 'avoid AIM resources stocks'. Like many private investors then and since, especially immediately following the slump in share prices that was part of the global recssion fallout, I saw the value of many of my share holdings fall.

This experience has made me hopefully less naive, more cynical and at least of late, the outcome appears to be that possibly some profits are in sight. Whether the sighting proves to be but a mirage more time will tell but really the only rules I try to stick to now are to avoid investing in companies the ethics of which or of their products or serviecs are patently questionable and to avoid shorting ie selling shares I don't own although the UK government encourages that kind of gaming by taxing the buying of shares with real money and any profits made therefrom but not taxing the selling of other people's shares nor any profits made from that practice.

Although I still harbour the belief that paying ready money for real shares in companies is investing rather than gambling, the distinction between the two is looking increasingly blurred so much so that some recent shares purchases are proving more of a gamble than investments. Sadly too they appear to be proving more profitable than maytrees minor's recent foray into the stock market. Take two examples:

Maytrees minor invested recently in some TESCO shares. Tesco is a FTSE100 co. of good repute with some international presence and paying divis on its shares. He paid around £4 each for his shares and their price is now around £3.75p Shortly afterwards I was looking at an attractively named company - Nostra Terra Oil and Gas Company plc - the shares of which were at that time priced at about 0.35p each and quoted as one of those dreaded resource stocks on AIM. Last week Nostra Terra announced for one of its motley collection of oil/gas hopes that:

Nostra Terra is pleased to announce a hydrocarbon discovery
on the Boxberger property in Kansas, USA.

IE that it had found two gas resevoirs not in some dangerous (for investors anyway) part of the globe but in the USA that moreover have never been produced before.

Despite there being no clue as to amount of gas etc investors piled into NTOG's shares and their price has now soared to 0.86p ie over 100% gain for the early birds and still a tidy gain though less so for those who like myself 'invested' later.

Obviously I'm pleased to have made a gain on paper at least with this share but it saddens me that by the traditional investing yardstick at least, it is more of a gamble than an investment. I wonder if this type of 'investing' will prove more fitting for personal private investors in C21 than the traditional FTSE100 type.

Time will tell.

Leadership - Wimbledon Bookfest Talks

Two absorbing talks on Leadership during Wimbledon Bookfest week were given by two very different leaders in Donhead's gym on Friday. The first by Colonel Bob Stewart DSO former commander of British troops in Bosnia and the second by Father Peter Gallagher SJ a lecturer at London University's Heythrop College and Rector (leader) of the Society of Jesus in Wimbledon.

Colonel Bob's talk coincided with the launch of his book "Leadership under Pressure". He spoke of his times in Bosnia and the UN efforts to contain the atrocities being perpetrated there. He spoke of the effects of having to kill a fellow human being - which returns to haunt you years later - and responded with dignity and obvious respect for the human spirit, to some tough questions about whether soldiers "want to kill the enemy". He said that true professional soldiers seek to reduce killing but that the lesser of the two evils principle does mean that killing of enemy soldiers cannot be avoided. He outlined the quite restrictive rules of engagement that apply in UN situations. He also talked of times when he had to decide to ignore rules in order to save civilians and harked back to the atrocities that occurred when Bosnian Serbs captured the eastern Bosnian enclave of Srebrenica and other UNs troops stuck to the letter of the rules which lead to disaster. His interpreter in Bosnia, who attended the talk as she later became Mrs Stewart was a young French UN woman responsible for setting up a large refugee camp there and seemed to me to be quite a courageous leader herself.

Lateral thinking seemed to play quite a part in Col Bob's view of leadership. EG the British MoD denied his request for helicopters from Ark Royal to help civilians outside his area so he borrowed a couple from the friendly French, then spoke about this to the BBC's reporter on the spot. Soon after she reported the reliance on French helicopters on the BBC news at 6pm, the British MoD hurried over some British helicopters to his battalion. Convoys of lorries too were used to save civilians but even then babies died on the exhausting long journies as people were crammed into these army trucks - still many other people were saved.

Father Peter spoke of the four pillars of heroic leadersip which are i. self awareness ii. ingenuity
iii. Love and iv. Heroism. Some questions put to him too were quite tough verging eg on the thorny (for some) issue of celibacy. His quiet sensitive approach to leadership and people impressed. His talk was perforce rather shorter as Col Bob overan his time but was in some ways even more thought provoking.

Col. Bob's book contains a dedication to Donhead's head whose leadership style is based on back row substantive understanding rather than bluff and bluster from front row.

The popularity of the evening and the bar is expected to benefit HCPT Group 35's fundraising for our Easter 2010 pilgrimage so a large thank you to everyone who contributed.

Why Irish Ayes are Crying

In the 14th June 2008 my post entitled "Why Irish Noes are smiling" opened:

The result of the Irish referendum on whether or not to
ratify the EU Lisbon treaty was a resounding "no" to more big government and
"yes" to more national democracy.

The mandarins of Brussels dsapproved so the citizens of Ireland were urged to vote again and come up with what Brussels deemed should be the 'right' result ie a 'yes'; which alas they have just done.

My own enthusiasm some years back, about joining the EC and the Euro has been diminishing in proportion to the increased involvement of the EC in individual private and professional lives.
A couple of years ago after many interesting discussions with a British FO friend his arguments against the UK joining the Eurozone prevailed in my own thinking and I switched from being pro to being agin the Euro. Now I'm fast reflecting on whether UK membership EC itself should be brought to an end. By all means let us have a club of nations with the common aim of exchanging and developing trade, education, arts and charity links with each other and the world at large but let not that club spawn huge bureaucracies and out of touch big government.

If the EC delusions of grandeur begin to manifest themselves in a highly paid pointless post
such an EU president, for some former political grandee, then the time will have come for dissolution or at least a graceful withdrawal by the UK.

EDIT: Post title altered to mirror "Irish Noes..." post of June 2008.

Also to add that a good yardstick for measuring meaningful more mandarin free democracy in the EC, would be whether any EU President is appointed undemocratically or elected democratically after an EU-wide poll.

Food for Sorrow

Change can bring much sorrow and not a little heartache but ultimately can bring about huge improvements in the quality of life. The trouble is that clinging on to the known usually seems more comforting than leaping into the abyss of the unknown change. An example is the way in which the British government skews our economy's support systems in favour of entrenched businesses like weapons manufacturers and car sellers rather than say favouring wind turbine makers on the Isle of Wight. This partnership between government which seeks to be re-elected which panders to popular opinion and people who seek to retain their home comforts, risks making many complacent and maybe even morally blinkered. This can have unintended consequence elsewhere perhaps on the other side of the planet. Whereas making the effort deliberately to change from the familar and cosy negative, to the less well tried, unfamiliar but possibly positive, could greatly enhance life at home and abroad.

Take arms sales: Many in the UK are employed by arms manufacturers and those companies also provide much needed facilities for research and scientific advancement. Clearly we have the right to defend ourselves but relegating that part of the economy from say the first to the third division would be a painful change not least for the nation's tax take and superficially at least prestige. However the fallacy is to omit to understand that the people and resources released by such relegation are not simply going to become moribund. Given the intelligence and energy of many of the people involved, new enterprises not concentrated so much on how to kill explosively and with massive consumption of oil, would be bound to be created - in time.

Resisting the need to change in this area risks other dark immorality eg of corruption. The Independent newspaper had an important piece on this yesterday which also highlighted how the Church ought to have a leadership role to play in steering the nation to change:

The cardinal could stand it no longer. Conducting the funeral service for a
prominent bishop in front of pews packed with his nation's top politicians and
business leaders, Polycarp Pengo, the head of the Catholic Church in Tanzania,
raged against the cancer of corruption eating away at his country. He urged all
decent people to join a crusade against the 'vices' of bribery and embezzlement.
He was right to be annoyed. A series of scandals have highlighted the growth
of graft in Tanzania. There have been calls for Benjamin Mkapa, the
globally-respected former president who was among those mourners a month ago, to
be prosecuted. And in a land where more than a third of people live on less than
£1 a day...

The costs of and payments associated with the supply of the
unneeded sophisticated radar system could have been used instead to provide food
for those on the verge of starvation in that country. Of course had change been
initiated miles away in the UK maybe the food would have been
provided. Before New Labour swept to power a few years
back, the
electorate was promised a changed emphasis for ethical foreign
policy especially
in the field of arms sales. As one who did not relish the
prospect of New Labour
generally, that was their main promise which caused
me to welcome the then new
Tony Blair government's arrival. Neither that nor
the current New Labour
government, has delivered on that major promise.

As the French might say:

Plus ça change, plus c'est la même chose