Dom Davis (The Blog)

So for those of you who’ve not been paying attention the back story is here. Anyway, after all the fun and games with nPower with the bills and the demands and the final demands and the re-estimated bills and the real bills and the refunds and the apologies and the here’s £25 because we screwed up I was bombarded with a load of letters telling me how sorry they were, what they were going to do and a cheque for the aforementioned amount of £25. I promptly filed these and lost them.

I was toying with the idea of writing some indignant letter complaining that they’d promised me a cheque but it never turned up. OK, so not strictly true, but it’s not like I’d cashed the old cheque and they could check their systems and cancel it so I didn’t stiff them out of any more money (other than, perhaps, the cost of doing the above which, quite frankly, they deserve).

Happily (or sadly depending on your point of view) the cheque resurfaced among some other paper that had got muddled up among the stuff to be shredded (the mice go through a lot of shredded paper so I shred everything possible). It’s now been cashed and, hopefully, this is the last dealing that I will ever have with nPower. In the words of Smeagol: We hates them!

Now that nPower had my £40 I thought I was in for a long and protracted period of letter writing that would start with them sending me the final statement and end with me getting satisfaction. As has happened many times during the saga I was, once again, wrong. Just as I was phoning the Chinese for my dinner my mobile rang. It was the minion from nPower. It turns out he’d made a mistake (I retorted with “I thought you had”). It turns out that the final bill was in fact nearer £2 and he’d worked out the amount that the current bill was over, not the amount I was supposed to pay. £2 sounds a lot more sensible for the usage we had over that month and certainly better than £40. Of course the £40 payment had already gone through so there they were having taken nearly a year to sort the bill out, with a final demand for an incorrect amount having not acted on my previous call and me being overcharged to the tune of 20 times the size of my bill. Not a strong bargaining position. They knew this and instantly started with the actions they were going to take to placate me. The £40 would be refunded in full. The bill would be cancelled. A letter of apology would be sent and a cheque for £25 would be issued.

Now in the grand scheme of things £25 may not seem like a lot but you’ve got to remember that I only had nPower providing energy for a month and the house was empty for that month. The gas bill was pence. The electric bill was nothing and they’re giving me money. nPower have actually paid me to use them… and I still wont ever touch them with a barge pole again.

The only downside to this resolution is that I don’t get to write my indignant letter of outrage demanding an apology and recompense, although I may still write once the cheque has come through and demand I get written confirmation that nPower will never contact my mobile number or home number ever again unless they’re going to give me more money.

If you remember the Zozo and I aren’t overly keen on nPower. They didn’t do themselves any favours in how they [eventually] handled our final bill, but after phoning them up and complaining it seemed all was sorted. I just needed to wait for the new final bill, pay it and write a letter of complaint. Simple right? Wrong.

Today I [eventually - thanks NXEA] got home to a letter from nPower. ‘Finally!’ I thought, ‘A revised bill’. I cheerfully opened it wondering how much the final bill finally was. Oh look, it’s exactly the same amount as last time. Except this time it’s a final demand and if I don’t pay it in 7 days they’re passing me to the debt collectors. Great.

Girding myself I grabbed the phone and headed upstairs to get the old letters and the meter readings so I could tell them again. Phoning the special number reserved for debtors, paupers and criminals I enquired as to why I was holding an unrevised final demand when I was supposed to be receiving a revised bill that I could actually pay. The minion on the phone has a look into my account notes and indicated there may well have been a mistake. Indeed there has. To his credit the minion then suggested we sort it there and then over the phone rather that letting it go back into the bowels of the process to then no doubt surface again in a couple of months with nothing having changed. Agreeing with him I preferred my mobile number so he could call me back at the most expensive rate possible. There was then much being on hold while various departments were called and I was finally put through to another minion in the complains department.

The new minion was armed with my incorrect statement, my final readings and a new, freshly created statement and had the authority to sort everything there and then. He informed me that the old bill was over by 7 units on the night rate and 2 units on the day rate which sounded very low and proceeded to work out the new cost. Instead of being just of £53 the new bill was… just over £51! But as a gesture of good will they were willing to reduce it to £40. Lets just take a moment to let that sink in.

£51 to run a fridge for a month. Which was going to be discounted to £40 to run a fridge for a month.

I informed the minion that I thought that was quite steep given what was being powered then versus what’s being powered now and the relative prices. The minion said that this was now off my meter readings so I grudgingly accepted the £40 offer and paid with my card. I then asked for a breakdown of the bill including the start readings, final readings, amount per unit, final total of £51ish and the final discounted amount of £40 all clearly marked. The minion agreed, the call was terminated and my thoughts turned to dinner (Chinese, yay!) and the stinking letter of complaint I was going to write about the scandalous prices nPower seemed to have charged both The Zozo and I for power. After all, I wanted my £40 worth from them, and I was going to get it.

Anyone who knows me will know I’m a rabid Mac Fanboi and have been ever since this little baby came out. As a result I tend to run the latest versions of OSX on all my macs. Yes, there have been some early adopter issues, but generally it’s been fine. Unfortunately I’ve just found myself caught by an upgrade trap. I upgraded to Snow Leopard the day it came out, it’s on all 4 macs in the house and, until now, it’s given me no problems. Today I tried to launch Final Cut Studio (which is a very expensive professional video editing suit), specifically Final Cut Pro… and watched it crash. Now I don’t do that much video editing any more, but I do enjoy it and I do like having the power of FCP, Motion, DVD Studio Pro and all the other goodies but after trawling the internetwebs it appears I have very few options:

1. Downgrade my big machine to Leopard – not going to happen
2. Use iMovie ’08 on the big machine – would rather not, great though it is, it’s a hell of a step down from Final Cut Studio and won’t do some of the things I’d like to do
3. Use iMove ’09 in the laptop – kind of defeats the object of having the two stonking great big monitors on the big machine if I’m just going to use a little laptop for video editing
4. Upgrade to iMovie ’09 on the big machine – will cost money as I’d need to get iLife ’09 and not really get me much, and even if I could copy iLife ’09 from my laptop I’m not sure what it gives me over the version I already have
5. Upgrade to Final Cut Studio 7 – Lots of shinyness has been added since version 5, but it’s over £250 and I’m not really made of money any more… but then I’m also loath to give up on the vast amounts of money that was spent getting the software in the first place

Something to ponder. In the mean time I’ll try editing the stuff I want to edit in iMovie and see how it goes.

Spread betting is basically betting on the movement of stocks, currencies and the like. I used to do Forex trading betting on the exchange rate between the US Dollar (USD) and the Euro (EUR). The exchange rate is quoted as, for example, 1.5250 which means that €1 buys you $1.5250. You’re betting on the final digit ticking up and down, so a £1 spread bet means that for every 100th of a cent (point) the exchange rate moves you make (or loose) £1, and move they do. The Forex market is stupidly huge and those numbers change constantly, sometimes by 10 or 20 over the space of 10-15 minutes, sometimes by 100′s.

Despite the name, spread betting isn’t quite gambling. A reasonable strategy and good risk management will make you money. Lets assumed your strategy wins 40% of the time. That’s loosing on 6 out of 10 trades. You will risk an amount, £X and try to make £2X. Over 10 trades, on average, you’ll loose £6X (you’ve lost 6 times) and win £8X (you’ve won 2X 4 times). That’s a profit of £2X. X also wants to be about 2% of your total trading capital so you can loose up to 50 times in a row before being out completely.

When I started I started small. I was betting 10p per point with trades being placed for minutes rather than hours or days. The way spread betting works you’re automatically down when you enter a trade. With EUR/USD I’d be down 2 points, or 20p before anything had happened. I’d set my trade up so if it went another 28 points in the wrong direction to get me out of the trade. This would loose me £3 tops.

Quite often (in fact most of the time) the trade would go the wrong way to start with. I’d often see my 20p loss grow to £1 or £1.50 before it headed in the right direction again. Eventually it would break even, then start making a profit. More often than not the profit would then start to get eroded, sometimes heading back to break even, or maybe even a small loss, before moving to greater profit. So my bet would start at -20p, move to -£1.50, head to £0, go on to £1, head back to £0, go on to £3, back to £1, then to £5, back to £4, on to £7 and so on and so forth. My goal here is £6 since I’ve risked £3.

The way I worked would be to change the trade when it got to £2 or £3 in profit so that my trade would automatically be closed if it went back to break even. I’m now risk free. Each time it gains £1 in profit I move the point where it would automatically get closed by £1. Sometimes I would think that it couldn’t go up any more, cash in, and be happy. Other times I’d ride it as far as I could and have the trade closed by the automatic stop. Doing this I could make £15 or more in a trade which is much more than my target. Quite often I’d get two of those in a row netting me £30 in a day. Sometimes I’d have a bad day, but it was only £6 down. The problem was, even with making 3 or 4 times my risked X, with things averaged out I was only making £9-£12 per 10 trades which was 3-5 days worth of trading. I needed to scale up and that’s where things started going wrong.

I scaled up by 100 times. Instead of 10p per point I traded £10. That’s £300 risked with my strategy, and a gain of £600 every 10 trades assuming everything goes as planned.

So the trade is on. I’m automatically down 2 spots so I’m at -£20. Things go the wrong way to start off with so could go to £100 or £150 down before moving back towards break even. Despite the trade going in exactly the same way as before physically, psychologically I’m panicking. £150 is a lot of money. As it heads to £0 my nerve breaks and I close out the trade as soon as it starts turning a positive profit, possibly just a fraction of a point, netting me £3/£5 or £8. That’s all well and good but if I make a loosing trade I’m £300 down and I need to make 60 winning trades at £5 per trade to make it up. That kind of winning doesn’t happen.

Even when I could hold the course and watch the profits rise I need to be banking £600 minimum. I watch the profits rise to £100, then it reverses and heads towards £0 again. With the smaller stake I take this in my stride and sit tight because I’m pretty sure it’ll go back up again. Now I’m watching my £100 become £90… £80… £70… will it stop or will it keep going to -£300? My nerve breaks, I bail at £50. Sounds like a good profit, but I still need to make 6 winning trades for every losing trade to break even and that isn’t going to happen.

No matter what I tried I couldn’t get passed the fear of loosing vast sums of money when the bigger amounts were in play. I’d even do trades on two accounts, one at £10 per point, one at 10p per point. I’d bail with the £10 account, let the 10p run and watch as it made me £6, £10, £15. That’s £600, £1000, £1500 IF I’d let the £10 account run.

So you get yourself worked up. YOU ABSOLUTELY WILL NOT INTERFERE WITH THE TRADE. You set it up so it’s completely automatic. You’ll walk away with a £300 loss of a £600 gain. Nothing else is allowed. Problem is there is a 60% chance you’re going to walk away with the loss (possibly more so as you’re worked up and not thinking about things as rationally as perhaps you should). I did it a few times and each time I lost. I’d not done enough trades to see my 40% wins, was down hundreds and doubt has now kicked in. I started second guessing my trades, deliberating too much, waiting too long and entering trades too late, resulting in more losses. You have to remember that 6 losses in a row still doesn’t mean your system isn’t working and means you’ve lost £1,800. You could make that back and more in your next 4 trades. But then again you might not.

So there is my problem. I can make money with spread betting, quite easily. I just can’t make very much. As soon as the numbers get to any appreciable value (much more than 50p per spot) I freeze, make mistakes or just bail too early. The Fear just gets in the way. unfortunately the trading system I use is very subjective. I can automate getting out of the trade once it’s on but there is no way to automate entering the trade. If I could work out how to do that I’d make a fortune.

As it was my spread betting experience has left me roughly breaking even. My small gains over a few months were wiped out by a few bigger losses as I ramped things up. I’ve withdrawn most of the money from my trading account now, but there’s still some in there because I do still enjoy trying to diving the vagueries of the financial markets.

Steve¹ will, in the next hour, get up on stage and finally release whatever it is that Apple are releasing today. Being a rabid Mac fanboi I’m interested to know what’s being released and no doubt I will absolutely have to have one as soon as I know whatever it is (it happened with the iPhone, the cube, the 30″ monitors to name but a few). The problem is I can’t afford one. This is new to me² and no doubt the fact that I can’t have one will mean I want it even more.

Tempted as I am to delve into my savings to get one I need that money for other things (food for one thing :S) so instead there is a plan, not a great plan mind, but a plan none the less. A small (depressingly small) sum of money will put placed on what can only be described as a punt on the markets tomorrow. Should that punt pay off then all the winnings will be placed on another punt and so on and so forth until either one of the punts fail (highly likely) and I’m left with nothing or I have the money to get the new shiny toy. In theory I could turn £10 into over £700 in 4 trades. In practice £10 will probably turn into £0 in one or two, but hey well, nothing ventured nothing gained, and perhaps the gods of technology will smile on me and grant me the money for the iMustHave before it’s released.

¹Because those of us indoctrinated into the cult of Jobs are on first name terms with him

²OK, I had to wait for my big current computer but that’s because it was stupidly expensive and just going out and buying it when I first decided I wanted one would have left me paying off my credit cards for 5 years at a stupid rate of interest. That’s not to say I was doing without as I had less silly macs to play with in the interim.