Adrian Garside

‘Risk’ is a funny thing. When we talk about risk, we automatically assume different things – usually something that has affected us recently, or maybe the impact of some bad (or good) luck is affecting us.

But, I usually talk about money – so I’m thinking about financial risk.

I’ve spoken to someone recently who wouldn’t invest in stocks and shares based investments (too risky) but he was really interested in a scheme to buy hotel rooms in the Carribean. Today I have had a similar conversation with someone thinking about buying land in Brazil.

Now, the caribbean scheme was presented in a fantastic way, with promises of awesome returns…the Brazil land proposal is similarly glowing. Neither of these schemes are ‘Regulated’ – nobody monitors what is being said or how true it is.

So, with these investments there are three risks

1. the investment may or may not perform well.
2. The scheme may be a scam of some sort, so you could lose everything.
3. There may be no realistic way of getting out of the investment.

Anyway, the two conversations, with otherwise cautious people lead me to wonder – how can people who think the stock market is risky, be interested in these schemes.

I think it’s because in normal life we don’t become expert at assessing risk – in my job we do it every day. We have a scale of 1 to 10 for how much risk people like to take with their money.

So, if you have some savings, probably getting somewhere between 0.1 and 4% in the bank you are probably dissatisfied with that, but you are taking zero risk (although you are actually losing money even by doing that because the inflation rate is higher than the interest rate). So, you might have a risk attitude of 1.

Those unregulated land/hotel speculations are probably 12 or 13 on the 1 – 10 risk scale – they have no regulations and you could lose everything.

So, if they promise that they will return 30% growth per year, you might look at your 4% and think ‘Wow’ and your eyeballs may pop out cartoon style. It’s unbelievable. But you want to believe it…and they’ll make you. And the only thing you have as a benchmark to compare it to is the measly 4%…you have no other information.

I had that reaction when I was considering the Carribean investment that a friend was selling. I decided to change the benchmark in order to make the decision easier.

I figured that if I were interested in an unregulated investment with risk ratings of 12ish…then I would surely be interested in a regulated share based investment with a risk rating of 10.

Shares have different risk ratings – Marks and Spencer based in the UK is a different proposition to Bajaj Motors on the Indian Stock exchange. So an investment fund dealing in UK shares may own shares in 30 or 40 companies and have a risk rating of between 4 and 6. An investment fund invested solely in indian stocks, or chinese, or brazillian or russian may have a risk rating of 10.

So, before I get excited about the 30%pa growth being offered, I’m just going to check the investments from the far east – don’t take my word for it – here they are – plenty getting over 60% + return average over the last 3 years – so about 20% pa. You’ll appreciate I should stick in a powerful disclaimer here that unit prices can go up and down and past performance isn’t a guide to the future. The land people – they don’t have to say things like that.

Anyway, now the comparison has changed.

Its not 4% past performance vs a promise of 30% which might look like a ‘no brainer’.

Its now 20% past performance vs a promise of 30% – which isn’t a no brainer.

Stocks and shares based investments, while they can go up and down in value, as we are seeing at the moment, are regulated, they won’t just disappear and you can sell them easily if you need to.

And if you are interested in unregulated schemes – google them, find out the directors names and google them. Google them but add the word ‘scam’ or ‘ponzi’ and see if you get many results. They may be legitimate, I hope they are, but if you are going into these schemes, go in with your eyes open and only with money that doesn’t matter if you lose it.

29th June – 3rd July, Sainsbury’s are giving 10p off per litre if you spend £60 in store.

That’s all very well, but with that kind of offer, we need to think smart, it’s £6 on a tank and with a trip to Manchester this weekend, that’s 50 miles of free motoring.

We have 2 cars, so I will do 2 £60 shops…maybe even 3…to collect the vouchers. I can always stock up on coffee or Jack Daniels…whatever non perishable items they have on offer.

So, 3 x £60 shops, saves me £18 in petrol. It also gets me a gazillion nectar points and £5.40 off my utility bill.

Let’s hope Jack Daniels is on offer too!

So, I am going to use me as the example, but that is only because it’s easier.

Most of you know I do a bit of off road cycling, less than I used to, admittedly, but I cycle off road becuase cycling on road scares the living daylights out of me – because of the cars.

Now, technically the rule is that a cyclist is entitled to ‘wobble room’.

Some motorists leave me wobble room. Some assume that I am a fixed object and just require missing…and an inch is as good as a mile, right?

Truck drivers are told that they must leave enough room for me to fall off in the road direction and they must still miss my head – I find that reassuring, my helmet meets all the current legislation, but I suspect a truck tyre would squish it in a bit.

Anyway, lets say a motorist caught my elbow with his wing mirror (so far the closest has been a vectra catching the material on my jacket). And, we’d better assume I’m not wobbling all over the shop, I’m cycling where I should be, about 18 inches from the kerb.

So, the motorist catches me, and I fall off.

My bike is a write off and I am injured and can’t work for a while and need alot of treatment and maybe my leg ‘will never be the same again’.

The car has wing mirror damage.

So – do I claim for my bike, lost earnings and treatment off the motorists car insurance?

Well, you’d think so wouldn’t you.

But, if I am not wearing a high vis jacket and reflective ankle clips, apparently that is good enough defence for the motorist and I’ll get diddly squat.

Yes, you catch my drift – if cycle on the road without full reflective garb, then drivers can drive into me with impunity.

Oh, and I know a few of my readers are devients and do ‘running’ – same rules for you too, get your high viz lycra out of the cupboard, black is out, in with neon yellow!

photo credit: DeptfordJon

I’ve just recieved an e-mail from my bank telling me my account has been suspended through suspicious activity.

These are pretty common but unusually, this time they had the right bank name, anyway, I was instructed to just click on a link – pornotizzle. com…..yeah, that sure looks official.

Just looking through my junk folder, there is one from Lloyds – who I don’t bank with, telling me there is a credit waiting for me and I needed to click on the link or lose the credit. Now this is cleverer, it has a https://online.lloydstsb address in blue text, but the link is set up to go to a very unofficial web address.

This link is done in blue text, rather than where a link is automatically set at blue text

Like this – www.amazon.com

Usually, if you hover over the link, or right click you will get the address the link sends you to – on my computer, the address shows down in the bottom left of the screen. Check my link above, it looks like a link to amazon, but is actually a link to the BBC.

The thing is, people must click on these things or else they wouldn’t be sent – don’t let it be you. If you get anything from your bank, don’t follow the e-mailed link to find out, just go directly to your bank

Back on 16th March I made my first cheese…

Since then, I let it dry for a while and then waxed it – so it looked like a baby bel…a 2lb baby bel.

I’ve left it to mature for almost 2 months…but today curiousity got the better of me and I cut the cheese. Di captured the moment on video…and if you are looking at my hand wondering if I have buboes (as in ‘bubonic plague’) let me reassure you, they are just some burns from some carrot soup I made the other day.

We’ve had some cheese on some nice walnut bread and it tastes delicious. The flavour is like a mild cheddar and quite soft and crumbly…more crumbly than lancashire. I think that is because I didn’t let the curd get firm enough when I made it, I’ll be more patient with my next batch.

A few things influence lenders when they come to changing their fixed rates.

The 1st reason is the ‘Cost of Money’ – in simple terms they may be able to borrow £100m off a pension fund and promise to pay them 4% on it for 5 years…then lend it out to the public at 5% for 5 years and make a profit of £500,000 over the 5 years.

Sometimes the pension fund will have put it’s price up, and then the lender has to put it’s price up. The pension fund would put it’s price up if it felt it could do better elsewhere at low risk, for instance if it felt that interest rates were due to rise. This happened in December and January.

The 2nd reason is ‘Public fear’. This happened over Christmas – the papers all said ‘In 2011 interest rates will rise, grab a fixed rate now’. In January the lenders were swamped with people asking for fixed rates up, and so put their prices up so they could make a little extra profit.

Now, the mad rush is over and the mortgage market has calmed down a bit, the lenders are reducing their rates a bit because they need to compete for business, rather than ‘deal with the rush’. So, fixed rates will still be dearer than they were in December…because of the 1st reason…but slightly cheaper than they were because the lenders can’t demand their ‘extra bit of profit’

This past week or so we have seen 2 or 3 lenders drop rates by a little bit…hopefully the trend will continue!

I’ve never made soda bread before…can’t even be certain I’ve eaten it before, but saw it being made on TV last night and it looked easy and fairly flexible about ingredients.

Not completely flexible, you understand, there were basics involved – 500g flour, a big teaspoon of bicarbonate of soda and a teaspoon of salt.

From there, one of the bakers last night used guinness as his ‘liquid’ and the other used buttermilk.

Now, I had neither, but I did have some creme fraiche in the fridge…which is made of yogurt and butter milk and that seemed pretty close, so I reckoned I’d give it a shot.

At 8.50 I asked Di if she wanted bagels or soda bread for breakfast… on the basis that I wanted to be sat in front of the TV by 9am to watch the Grand Prix. She opted for Soda bread, mainly out of curiosity I think, since there was none in the house and I was just stood there making a cup of coffee and obviously not doing baking.

So, with 10 minutes available, and humming the Benny Hill theme tune I set to work. Di gave me a minute by minute countdown. I put the oven on.

I had a bag of flour – weighed it – 600g. I tipped it into a large bowl from a height (I figured that by doing this I avoided the need to sieve it) and made sure I was a bit more generous with the Bicarb and the salt and I grabbed the Creme Fraiche (1 Minute) – there didn’t seem enough, so I threw some milk in too, I don’t know how much, but I was aiming for a total of about 600ml.  I think next time I will aim for less liquid than flour, it was slightly too sticky.

I mixed the lot, (2 minutes) firstly with a knife and then with one hand until it bound together (3 minutes)…no kneading like normal dough, Soda bread is better if it receives literally the least mixing you can do.

I put it on a baking tray (4 minutes) and popped it in the oven, grabbed my coffee and settled down in front of the TV to watch the parade lap and start of the grand prix.

…45 minutes later this came out of the oven, fantastically rustic looking and soft on the inside…

We ate it with some home made marmalade and home made raspberry jam….delicious…

A couple of interesting changes happenned today. Santander and Northern Rock both released new fixed rates that were cheaper than the products they replaced.

This is the 1st time this has happened since Christmas – the trend has been firmly upwards for the last 3 months or so -  and hopefully this indicates a return to calm in the fixed rate markets.

Don’t get too excited – all changes were by less than 1/10 of 1%, but the trend has been broken, hopefully the other lenders will follow…

photo credit: Photos by Mavis

This is interesting…I hope I can remember it, I really need to!

http://www.paulgraham.com/stuff.html

I have been dying to make some cheese for ages…years even, and yesterday I thought I’d have a go. I’ve got some cheese making stuff, but having just got hold of a very big pan it all became possible.

Anyway, this is attempt number 1. I haven’t followed all the golden rules of cheese making about extreme hygiene – I ran out of Milton, so the spoons I used were just ‘clean’ like humans think of the meaning of the word clean rather than CLEAN, in the way dairy people think of the word.

Oh, and I also made errors with the ingredients – the (american) recipe list of ingredients said ‘skim’ milk so I bought regular skimmed milk, but in the instructions it said ‘add the whole milk’. Anyway, scoured the internet and found that skimmed milk isn’t the end of the world. So I carried on.

Inexperience made me take the curds of of the whey before they had become firm enough, and so the cheese isn’t as firm as it should be. It looks OK on the picture – here I am supposed to be turning the cheese and putting it back into the mould upside down – something I am supposed to be able to do after an hour – this is 12 hours on and while I got it out of the mould OK (and caught the moment here) (clean work surface, not CLEAN, but that may not matter anymore) the cheese disintegrated as I put it back in the mould, so I am unsure about what I will end up with. However, I think the is the way with cheese – it’s about practice, you can’t just knock it up.

The disintegration gave me an excuse to try some – this was a curious moment.

Up until now cheese has been cheese. Trying home made cheese is different – there are the expectations of fabulousness, the years of ‘excitement build up’ and just that niggly thing in the back of your mind that you made this from separated milk…

It tastes like mozzarella – very mild. It will hopefully taste of cheddar in 3 months, but I’m not sure – I stuffed it back in the mould, but I don’t know if it will reform or just be crumbly. I’ll look in a few days and make a judgement call about whether to continue or start again.