The Anonymous Widower

Why A Zopa Investment Is Like A Salary!

I have been investing in peer-topeer lender Zopa since 2008 and it has been very useful to me.

I wrote Managing Zopa As A High-Interest, Almost Instant-Access Deposit Account over three years ago, and a lot of what I said then still applies.

This graph from Zopa, which shows my cashflow from Zopa for October, explains why it is possible.

Note how people tend to choose to pay their loans on the first and twenty-sixth of the month.

This means that if you have Zopa’s Autolend feature turned off and budget your finance, you have a chance, at the end of each month to give your bank account a top up.

What helps, is that, the two credit cards I use have payment dates around the twelve of the month.

At present too, it seems that about four percent of the money you have invested in Zopa is churned through every month, so is available for repatriation if required.

October 2, 2017 Posted by | Finance | | Leave a comment

Is Peer-To-Peer Lending Having A Spot Of Bother?

There have been one or two news reports questioning asking tis question.

I invest in Zopa and I have made the prudent decision to put my spare money in a Safeguarded product.

I have had a good run and certainly get more on my savings than I would in a bank. Obviously, I am including any bad debts in this statement.

I shall watch the situation, but I still believe what I said in Stability in Financial Systems.

If there are rumours of a spot of bother, then the following will happen.

  • Investors will put their money elsewhere.
  • Rates to lenders will rise.
  • This will tempt nvestors back in.

It’s a merry-go-round for money!

Note that because Zopa matches investors and borrowers by means of a computer, no human bias can drive the system in a wrong direction. Except a bent programmer and hoipefully systems are in place to check the honesty of their employees.

September 2, 2017 Posted by | Finance | , | Leave a comment

Risky Business: Train Fleets In A State Of Flux

The title of this post is the same as this article in Rail Magazine.

The article is certainly in the must-read category and it illustrates the perils of not getting your investments right.

You could argue that rolling stock leasing companies (ROSCOs) are sucking money out of the UKs railways.

I would argue differently.

The cause of the troubles for the ROSCOs is threefold.

  1. Train operating companies would prefer to have lots of similar trains, as this makes, maintenance, training and timetabling easier and more affordable. Some successful companies like c2c, London Overground, Virgin Trains and Merseyrail are one- or two-class companies and others like TransPennine Express and Great Western Railway are moving that way.
  2. New leasing companies have seen the returns, that the three original ROSCOs have made and have entered the market. As they are leasing new trains, they make it more difficult to find homes for existing rolling stock, many of of which have perhaps twenty years of life left and are priced accordingly.
  3. The  ROSCOs have also badly misjudged the technology. Bombardier, CAF and Stadler have come up with innovative solutions to the problems of our unique Victorian-designed railway and the train operating companies have liked what they have seen and ordered them.

It is interesting to note, that few of the large orders for rolling stock have not been financed by the three original ROSCOs; Angel Trains, Eversholt and Porterbrook.

Greater Anglia

As I know Greater Anglia well, I’ll look at their current fleet, which is being replaced train-for-train by new rolling stock.

  • Class 90 locomotives – These are thirty years old and will probably end up pulling freight or be cannibalised for spares.
  • Mark 3 coaches – These do not meet the latest regulations for passengers of reduced mobility and most will probably be scrapped, although one rake has been sold to be used by 60163 Tornado.
  • Driving Van Trailers – I doubt these will find a use and will join the many others in store or they will be scrapped.
  • Class 153 trains – At twenty-five years old, I doubt these single-carriage trains will see serious passenger use again.
  • Class 156 trains – At nearly thirty years old, these two-car DMUs may have use on rural lines, but they will need refurbishment.
  • Class 170 trains – These two- and three-car 100 mph DMUs  will certainly find another operator.
  • Class 317 trains – At thirty-five years old, but in good condition, these 100 mph EMUs will be difficult to place, as newly-electrified lines will inevitably deserve new trains.
  • Class 321 trains – These 100 mph EMUs will be difficult to place, despite some having been recently upgraded.
  • Class 360 trains – These 100 mph EMUs are only fifteen years old and will probably find a new operator.
  • Class 379 trains – These modern 100 mph EMUs are only a few years old and will will certainly find a new operator.

Quite frankly most of this rolling stock is not worth much!

The Class 360 and Class 379 trains will be the easiest to release.

The sheer numbers of Class 317 and 321 trains, with little new electrification planned, mean that something innovative will, have to be done to find them a home. I speculated aboutwhat will happen to all these Mark 3-based multiple units in What Will Happen To The Class 319, Class 455, Class 321 And Cl;ass 317 Trains? I certainly suspect that some will find uses, with the upgraded Class 321 trains probably the first in the queue.

As I said in the article, I feel that some Class 321 trains could become small parcel and pallet carriers.

The Class 707 Trains

The Rail Magazine article talks about the problem of the Class 707 trains, that were ordered by South West Trains and will be returned by South Western Railway.

It suggests they could be converted to run on 25 KVAC overhead working, but that will be expensive and in my view a new Desiro City is far inferior to a new Aventra.

So would a quality Class 317 or 321 be a good alternative for an operator, that needed some new trains to perhaps open a new electrified route?

It looks even more of a bad decision of Angel Trains to fund the Class 707 trains.

Is It Innovate Or Die?

Porterbrook saw problems coming with the Class 319 trains, they were leasing to Thameslink.

But they got together with Northern and designed an affordable bi-mode, which is now the Class 769 train.

Thirteen have been ordered!

In anotherf project, InterCity 125 trains are being shortened and updated to last another decade.

Will we be seeing more developments like this, where redundant trains are turned into useful ones for a different purpose?

We could even be seeing some innovative export deals!

Conclusion

It’s a tough world out there!

But those that innovate will survive and make money!

 

August 24, 2017 Posted by | Finance, Travel | , , , , | Leave a comment

Crossrail Funding Contributions From Developers Forecast To Hit £600m Target A Year Ahead Of Schedule

The title of this post is the same as that of this article in City AM.

The funding has come from the mayoral community infrastructure levy (MCIL) and Section 106 contributions.

The two biggest contributions came from |Tower Hamlets at £40m and Westminster at £34m.

What the author doesn’t point out is the collateral benefit from all this extra development. Transport for London must be getting more far revenue from more passengers going to and from the developments.

It’s certainly good news.

Are areas like Birmingham, Leeds, Liverpool, Manchester and Newcastle seening similar cast flow increases?

August 18, 2017 Posted by | Finance, Travel | , | 1 Comment

DfT Names Five Winners Of Fresh £16m Stations Fund

The title of this post is the same as an article in Rail Technology Magazine.

It announces the five winners of funding from the Second New Stations Fund.

Stations chosen are as follows.

  • Horden Peterlee in County Durham
  • Warrington West in Cheshire
  • Reading Green Park
  • Bow Street in Ceredigion, Wales
  • Portway Parkway near Bristol

Note the fund is for England and Wales only!

The stations will be described in the next few sections.

Horden Peterlee

Horden Peterlee station will be on the double-track Durham Coast Line, between Seaham and Hsrtlepool stations.

This Google Map shows the area of the proposed station close to South East View.

Wikipedia says this about the proposed station.

This station, if built, would have 2 platforms with waiting shelters, benches, lighting, help points and CCTV. The platforms would be linked by a covered footbridge and the station would have a car park with space for up to 100 cars as well as facilities for drop-off, taxis and bus services.

Let’s hope the lie of the land, enables the architects to design a good station.

Wikipedia also says this as the reason for building the station.

It was identified that one of the key benefits of reopening Horden station rather than any of the other closed stations on the line was its close proximity to Peterlee which has grown significantly since 1964 and thus, if constructed, a new station in Horden could allow 61,000 residents to benefit from improved access to employment opportunities across the region.

It sounds to me like this station is needed. I would hope to go when this station opens, as it could be a day to remember  in Horden.

Train Services

Looking at Passenger Services in the Wikipedia entry for the Durham Coast Line, it would appear that local services between Middlesbrough and Newcastle are a bit thin, at just hourly. An important local route like this deserves to have at least two trains per hour.

Grand Central and Virgin do run trains through the area to Sunderland, but I don’t think they will stop at Horden Peterlee station.

Certainly, a smart new station deserves to have a train service to natch.

Warrington West

Warrington West station will be on the southern Liverpool to Manchester Line between Sankey and Warrington Central stations.

This Google Map shows the area of the station.

It looks like the development site in the South East corner of the map could be Chapelford urban village, with the railway running East-West across the map.

This article in the Warrington Guardian gives more details of the station.

This is a visualisation of the station.

As this station is halfway between Liverpool and Manchester, I have a feeling, this could be a very busy station.

Train Services

Services at Warrington Central station has as many as eight trains per hour passing through.

There is a lot of scope to provide a quality southern service between Liverpool and Manchester calling at Liverpool South Parkway, Widnes and Warrington Central. Warrington West station could be a part of this and I could see it getting between two and four semi fast trains per hour

Reading Green Park

Reading Green Park station will be on the Reading to Basingstoke Line between Reading West and Mortimer stations.

This Google Map shows the area.

Note the Reading to Basingstoke Line down the Western edge of the map.

Train Services

It is expected that services will be at least two trains per hour at the station.

The Reading to Basingstoke Line has the following characteristics.

  • It is electrified with 25 KVAC overhead at the Reading end.
  • It is electrified with 750 VDC third rail at the Basingstoke end.
  • It has less than fifteen miles of line without electrification,

Consequently, I feel that in a few years, this line will be within the capability of a battery powered train, charging on the short lengths of electrification at either end.

Bow Street

Bow Street station will be on the Cambrian Line between Aberwrystwyth and Borth stations.

This article on the BBC gives more details.

Train Services

The Cambrian Line has approximately pne train per hour between Aberwrystwyth and Shrewsbury.

Portway Parkway

Portway Parkway station will be a one platform station on the Severn Beach Line adoining the Portway Park-and-Ride.

Train Services

Wikipedia describes the Services on the line.

Costs Summary

This article from Railway Gazette International has a detailed summary of the costs of the five stations.

Horden Peterlee, Warrington West and Reading Green Park are medium-sized schemes to support housing and business developents and make it easier to get to employment in nearby towns and cities. But they will cost an average of £15million a station.

Certainly, where I live in Dalston and all across North London, the improved North London Line has had several positive effects.

Bow Street and Portway Parkway are small one-platform schemes, which hopefully will provide better Park-and-Ride facilities. The averae cost is a lot less at £4.5million.

Conclusion

It is well-proven that new stations are a way of increasing train usage and they are generally welcomed by train companies, passengers, residents and businesses.

But as the costs for these stations show, medium-sized full-function stations don’t come cheap.

Surely, though on the right housing or business development, designing a station into the development, as at Warrington West or Reading Green Park, must give a payback to the developer in easier sales and rentals.

The two simpler schemes would seem to be part of a trend, where well-designed one-platform stations are built for Park-and-Ride facilities, hospitals, housing developments and sporting venues.

I discuss these stations in The Rise Of One-Platform Stations.

Bow Street and Portway Parkway stations will add two more one-platform stations.

 

 

 

 

July 29, 2017 Posted by | Finance, Travel | , , , , , , | 2 Comments

Finance For Crossrail

In the August 2017 Edition of Modern Railways, there is a Crossrail Update, with a section entitled Planning Cash Comes Good.

It starts with this paragraph.

How often do you come across a rail project that receives more funding than it budgeted for? well, an update to the TfL Finance Committee suggests Crossrail could be heading that way. Long, long ago when the Crossrail budget was nailed down it was agreed that £600million should be contributed in the form of planning obligations – the idea bing that property developers who benefit from the improved transport links that will be provided by the Elizabeth Line should contribute to the capital cost.

This is the current progress.

  • So far £100million has been collected from Section 106 contributions, with £200million still to come.
  • However, the Mayor of London’s Community Infrastructure Levy has contributed £400million to date.
  • The forecast is that by the time the line opens receipts will have risen to £700million.

I suspect that other Mayors will be looking at Crossrail’s funding model.

July 27, 2017 Posted by | Finance, Travel | | Leave a comment

When Will We Ever Learn?

One of our mistakes in 2008 was to rescue banks, rather than let them go bust! Retail customers up to the savings limit should be compensated, but for everything else, that’s business!

This article on the BBC is entitled Santander Rescues Rival Banco Popular From Collapse.

One of the things, I was told by my friend, who rose to be Business Banking Director of a major Clearing Bank, was to never bank with a bank, that was headquartered and/or owned outside the UK. I would change that to England after Royal Bank of UK Taxpayers and Bank of Scotland.

So who will eventually pay for Santander’s purchase?

Incidentally, with Qatar’s problems at the moment and their stake in Barclays, I personally will be staying clear of that bank.

June 8, 2017 Posted by | Finance, World | , , , | Leave a comment

The Labour Party’s Fantasy Economics

Today, the Labour Party has added a rail fare cap to their list of give-aways to all and sundry.

In the 1970s, I was asked to do a programming job for the Chief Management Accountant of a major clearing bank, who are still trading successfully, so my work didn’t toss them down the toilet.

I programmed a system, so that the Bank could work out how much every one of their management functions would cost. The program could be run so that the Bank could see how much say a pay rise for staff would add to the cost of clearing a cheque, in all of their branches. As you can imagine costs were very variable and the reasons for some of the high costs in some branches appeared in the tabloid newspapers.

It was fascinating and three things happened.

  • I learned a tremendous amount about the way bankers and accountants look at figures, which I put to good use in Artemis
  • I learned a lot about the way bankers think.
  • But above all, I gained a good friend, which was sadly cut short by the Chief Management Accountant’s early death from cancer, We regularly celebrated our fruendship  in Mother Bunches Wine Bar.

I also decided to move my Bank Account to the Bank and by luck, I was introduced to a Bank Manager, who played a large part in my life.

  • He became Metier’s Bank Manager and helped us to be the success we were.
  • He went on to be Business Banking Director of the Bank.
  • He loaned me the money to buy my first Porsche and then introduced me to the joys of owning a Lotus.
  • But as with the Chief Management Accountant, we became firm friends and put the world to rights in many convivial lunches.

Sadly, he died a few days before C.

These two friends taught me a lot about banking.

But I remember one conversation with the Bank Manager in particular.

We were talking about lending millions of pounds to companies, with strong Chilean, Israeli and South African ownership links. He said they were always difficult and risky because of the politics and determined individuals involved, but you satisfied this risk by adding a percentage or two to the deal.

Since then I have been involved in both a small finance company and Zopa; the peer-to-peer lender, as an investor, and the same principles apply.

Just as they do when the banks are lending to countries with dodgy finances.

So what makes the Labour Party think that they any sane Banker will fund their socialist fantasies, by loaning them billions at zero or low rates?

 

June 1, 2017 Posted by | Computing, Finance, World | | 2 Comments

Forget Trump: The Private Sector Is Still Going Green

This is title of a piece by Irwin Stelzer in this week’s Sunday Times.

Read the article if you can. It talks about how large companies like Exxon and Shell and individuals like Bill Gates are putting prices on carbon and backing reliable clean energy.

The last paragraph sums it up nicely.

Presidents come and go. The private sector will be engaging in long-run research and long-lived investments, perhaps more efficiently than the government has been doing. The profit motive might just turn out to be more productive than the vote-getting or ideological motives of politicians.

I think he could be right!

Think of all those successful projects, that were were done without any Government support or blessing and think of all those government projects that sunk without trace taking millions of pounds with them.

And also think about all that legal money slushing around the world looking for a home in an innovation that will be a wothwhile investment.

March 28, 2017 Posted by | Business, Finance, World | , , | Leave a comment

Making An Investment Using My Zopa Funds

Over the past eight years, I have built up a seasonable six-figure sum in Zopa. It has paid me upwards of five or six percent  after all deduction of losses and charges over those years and it has been a safe investment compared to some others I could have made.

But now is the time to liberate it, as I want to invest in something important to me, and liberating any of my other investments, would mean reducing my pension pot.

I am not selling any of my performing loans in Zopa, but just liberating any interest and principal repayments. Typically, about six percent of the money I have invested in Zopa is returned to my bank account each month.

It has been a painless way to fund my investment.

Various financial advisers have told me that peer-to-peer lending like Zopa is risky. But of course, there’s no way they can get a commission.

February 16, 2017 Posted by | Finance | | 3 Comments