Pewter

As you may or may not know I am/was a collector of deact WWII weapons.  A great investment over the years and I can certainly recommend such approaches to investment.  Firstly, the acquisition of such items is a good hobby.  Learning the subject and finding that undervalued item is much the same as those who trade in stocks and shares.  And like stocks and shares demand and supply and future performance is everything.  But such a collection is a joy to own and display.

Now times are hard I have liquidated the collection (nearly all of it) for about a 25% return.  No exact calculations here but the basics are clear that any normal safe investment (i.e. not stocks) would have returned less and certainly provided less pleasure.  But this was primarily a hobby rather than an investment so it is with some sadness that I see the collection go.

So what next?  Well, the guns were fun but they were large and hard to transport etc.  So I have been looking around at what to put some money into next.  There are a wide range of antiques and collectibles that I could pick and it is important to understand this market.  It follows much the same rules regardless of the type.

1) The value goes up and down in cycles but on the whole it trends upwards.  The demand drives the price but also the supply.  Get a small supply and a large demand and you have high value.  The good thing about antiques is by definition no more can be made.  What is in the world now is all there can ever be.
2) Quality is everything.  Condition is important.  Take china.  Chips and cracks in a 1930s piece of china will make it all but worthless in most conditions.  A cracked an repaired medieval piece still has value.  Again, application of rule 1 (supply and demand) simply means that if something is rare and valuable then owning a damaged rare and valuable thing is still better than nothing.  So value is maintained to some extent despite condition.
3) Names Names Names.  Brand is not a modern thing.  In years of old there was top quality brands and cheap rubbish.  Not surprisingly cheap rubbish in years of old still has low value and top end design and brand retains value.  A rolex will hold its value but a Casio won't.   In 100 years time a Casio still be worth very little even if there is only one left in the world.
4) Age is no guarantee of value.  There are items that are thousands of years old but are worth less than a 50 year old piece of glass.  So hunting for things based purely on age is not a good plan.
5) Nobody buys what they lived with.  By this I mean you need to focus on your market.  What will be in demand?  This depends upon age of the buyer.  As a rule, nobody is interested in buying back stuff they used to own.  So if you were an adult in the 70s then you are very unlikely to buy stuff that you used to use every day.  It loses its appeal.  So items in any period are only attractive to the generation that follows.  So work out a few easy calcs.   People who will start to buy 20th Century stuff will be in their 20s (earliest really as they get their first home and start to have discretionary spend).  So any items of interest must be around 30 to 40 years old to start to have appeal.  The trend has been for 60s, then 70s and so it is not difficult to see that the 80s will be next.  80s items are clearly easier to come by and low in value (low demand, high supply).  Getting quality iconic 80s items is a good bet.
6) Eternal appeal.  Some things will always have a following and be less subject to trend.  The top end of the antiques market is always in play.  Those with money love unique special expensive and rare.  There is never a shortage of people with money.   So some things will always have a healthy market.  Beatles memorabilia is likely to come and go as the people who remember the Beatles drops.  The top end (John Lennon's signed underpants etc) are always going to be top end but the rest will probably not gain significantly in value.

So what to collect?  Well there are other considerations on top of the rules above.  The first is longevity.  By this I mean that for something to hold its value it must be in good condition and so you need to consider how you will store it and display it without risking lowering the value through damage.  Picking robust items is key unless you have some serious storage and display capabilities.  The size of items also plays a part.  If the collection requires thousands of items then collecting antique wardrobes is probably not a good way forward.  Number is of course important.  Do you try for high numbers of low value items or fewer higher value?  My gut feel is buy things that are as undervalued at the time as possible and worth as much as possible.  Yes, on a downward cycle the drops will be more painful but if you time right the ups will maximise your pay back.

China:  There is a lot of cheap china around at the moment.  Trend is for Clarice Cliff and a few other names.  But these may trend down as the quality of the item is not the same as its reputation.  People are collecting items because of the name and names come and go.  On the other hand top end worcester will always be collected due to its quality of painting and the fact it is basically art on china.

Silver and Gold:  This is tied to the markets in terms of price.  It is hard to make 'finds' in this area as everyone is out there hunting.  Coming across gold and silver of any value is almost impossible.  It is marked and even if people do not know the dates etc they recognise that a hall mark means gold and silver.  Its one area where the TV has educated the general population.

Jewels:  Finding jewellery is also hard for the reasons above.  Top jewels tend to be mounted on precious metal and this is generally marked.  Without a lot of practice and knowledge and tools it is hard to identify stones.  Its a number game.  You have to buy up a lot of tat to make a find.  Lots of specialists out there looking.

Furniture:  Top end always holds value in the long run.  Bottom end 100 year old Ikea equivalent is not going to be valuable ever.  Too poor quality.  It takes up a lot of room.  That said, if you are going to put furniture in your house then buy antiques.  It is better quality than you will buy new unless you are paying premium new furniture costing thousands and thousands.  When you can pick up antique pieces at less than Ikea prices why would you buy chip board over teak or mahogany or oak etc.

Watches:  A great are to look at. Car boot sales are full of watches and the general population does not understand the valuable brands beyond a few (Rolex etc) and they never make it to the tables.  But lots of others do and so this is an area where finds can be big.  You can also buy from traders and there is a lot of documentation on them.  There is a watch to collect for every budget.  They are repairable and small to store.

My selection is none of the above.  I am going for Pewter.  Why?  Well there is a nice range of items in value and because it is out of fashion it is all pretty cheap at the moment (top end is still high value).  It is relatively easy to store, does not degrade if looked after correctly.  It is attractive in its own right and there is a range of brands and quality.  The key for me is that very very few people understand the markings.  Gold and silver are well documented and straight forward to identify.  Pewter is not.  This means that a 200 year old piece can be found next to a 30 year old piece.  One worth £2 and one worth £200.  Yet nobody could tell if you are not in the know.

What is also incredible is that you can pick up a mid 19th Century piece of Pewter for a few pounds still.  Real antique, nice to display.  So this approach provides a double opportunity.  The first is that there are still finds to be had relatively commonly each month out there in house clearance and car boots etc.    This means that you get instant return.  Buying £100 value items for £5 gets you an immediate buzz and return.  Those items then continue to rise (albeit in cycles).  We are also on a deep down cycle in pewter at the moment in the lower end of the market meaning that even identified and correctly valued items are likely to rise as the cycle moves on.

My first item I picked up last week was a 1857 tankard with lid at a car boot.  Paid £18, probably worth £80 to £120.  I picked up a French bowl for £35 at a shop, probably worth £50-£80.

Its a good start.  There is are lots and lots and lots and lots of dull 20th Century tankards out there.  Gzillions of them.  They help hide the real items nicely

Freedom

One of the nice things about a private blog is that you do not need to worry about what your audience thinks because the blog is not for them.  A nice record of views and state of mind over time.  Although I rarely share anything really personal on the blog I think looking back it is a fair reflection of me.

Having views is of course important.  But equally important is to be able to at least back up ones views.  It matters not that it is right or wrong (who am I to judge) but that a view expressed has been at least tested in one's own mind.  Otherwise it is nothing more than a random selection of a position which is not much better than using a magic 8 ball (can you still buy them?).

I hear there is a protest coming in London.  The protest is going to be carried out by 'veterans' (ex forces I assume) who will be protesting in favour of the death penalty for people who kill soldiers.  Its going to be a riot!  Literally.  It is an open and admitted reaction to the murder of the soldier by those two nut cases a week or so ago.  And nut bags they are.  Period.

There are numerous reasons why I think this is a bad idea.

The first is that although the protest is about 'death penalty for people who kill soldiers' it is clear that in this instance they do not mean 'apart from the two nut bags who just killed a soldier'.  There are some clear issues with this.  The first and obvious one is that the two in question are muslims.  So why now and why these two?  Is this a set of veterans who have reached the end of their tether on solider murders?  I doubt it.  I suspect there are lots of soldiers murdered over the years both intentionally as their role as soldier and of course just people murdered who happened to be soldiers (spouses etc).
So there is a consistency issue here. Who should be put to death?  And this is the crux in my mind.  The clear cut single incident that has occurred cannot be easily put into generality.  In justice there is no black and white.

Let's explore this problem.  Why soldiers specifically?  Because their role puts them at higher risk than other people?  The stats I suspect do not support this.  The numbers of soldiers murdered off duty in this way I suspect are few and far between.  But if it is their role we should therefore include any role in society who are murdered because of their role who are at greater risk.  So we need to include the police force, MPs and Lords, Cabinet Ministers, permanent secretaries.  Then we have MI5 and MI6.  Clearly ambulance men and women and fireman who are regularly targeted by criminals (for drugs for example).

Secondly does it have to be murder?  What about attempted murder?  If you paralyse a soldier for the rest of his life ruining it and leaving him/her in a vegetative state should the punishment be death?  Many soldiers may consider such existence worse than death.

But then we need to look at the mode of murder.  If I stab a soldier I should be put to death but if I bomb the MOD killing soldiers and civilians alike do I get put to death?  What if I bomb the MOD only killing the civilian staff but not any soldiers?  What then?  Are those people's lives less worthy as they work with soldiers who are targeted?

Finally, the real issue of course is one I have covered many times.  The issue of infallibility of the process.  The justice system is fallible.  Mistakes happen and now, when they do, the state can apologise and compensate.  But you cannot compensate the dead.  Yes, it is clear cut with the two killers.  They have witnesses seeing them do it and there is no denial.  But have they been brain washed or do we say that these are clear thinking men.  Are they mentally ill?  Possibly.  What right minded person carries out such brutal acts.

Maybe they do deserve the death penalty.  But deserving such a fate in theory is a long way from being able to put in place a fully capable justice system that does not muck up.  Having met many lawyers now and seen the issues of access to justice and the mistakes made I can honestly say that it scares me that my fate (life or death) may one day be in the hands of some of the lawyers I have met.

So protest away, but be warned, the BNP, English Defence league, the anti-fascists will all be there kidnapping your cause and drowning out your message.  You are handing two lunatics credibility as terrorists, you are providing publicity for people who should be made to disappear for the rest of their lives into insignificance where they belong.  Don't give these people another 15 minutes of fame.

Infinity and beyond

Infinity

In my last blog on More Monty I explored a few ideas around the meaning of probability and what that problem was telling us.  In doing so I used a few examples of infinity.  These on the surface look ok in their simplified manner and made the point well.  But the treatment of infinities is hard.  Firstly, it seems to be recognised that infinity is a concept and not a number and therefore the application of standard operators is not logical and leads one to some difficult situations.  I picked my words carefully in the last blog to avoid such issues.

But infinities are hard to deal with and it seems even more complicated in what they mean when it comes to probability.  For example, if there were infinite amount of doors (Monty Hall problem) then what would be the odds of picking the right door?

On the surface one would say 1/infinity.  Makes sense.  If you had 3 doors the odds would be 1/3.  4 doors 1/4 and so on.  But 1/infinity?  Its a number as close to 0 as can be without being 0.  But of course while we understand this concept it is also at the same time nonsense.  If we then start to look at infinities in probability then it would appear to get more tenuous.

If use of infinity with numerical operators in nonsense then calculation of odds with infinities is also nonsense.  1-infinity?  So the calculation of odds must also be nonsensical using infinities.  So how do we calculate odds in what could be an infinite universe?  It again may tell us something about probability.  Probability is inductive reasoning.  It tells us the outcome of past events and if we use that knowledge we can start to reduce randomness that would otherwise apply.

Back to dice.  If we have a 6 sided dice and roll it over a large sample range we would (assuming a perfect dice and proper rolling) get a relatively even spread of outcomes for each number on the dice.   True randomness will ensure that the outcome over a big enough period is even.  So we can use this knowledge how?  Well, an obvious statement is that when predicting the outcome of the dice we have one important piece of knowledge.  We know that we need to pick 1 to 6.  Obvious right but often overlooked.  If we had a random sized dice and we did not know its size then we would have a difficulty performing any form of reliable prediction using inductive reasoning.  Our performance outcome at a normal 6 sided dice will be on average 1/6 at picking the next number.  If the dice has random numbers then how would we perform?  How would one even calculate the odds?

The problem demonstrates that probability is all to do with knowledge.  For a better than random outcome from a random event we need to have some form of knowledge to reduce the odds from random to something better than random.  The odds of picking the next number on an x sided dice is not 1/x.  It is 1/x IF we know x.  Why?  Inductive reasoning is about patterns.  We look for past patterns with a view to improving out chances of avoiding randomness and uncertainty.  It is this reduction in uncertainty which has enabled us to evolve and survive as a race.  Inductive reasoning is not of course reliable and is a fallacy but in human evolution, while not perfect, has given us an edge over other species and indeed other members of our race in early days which no doubt enable evolution to lead us to where we are now. All humans reason using inductive reasoning with a view to reducing uncertainty.  Inductive reasoning over randomness is enough of an edge.

So what about infinities then?  The issue seems to be that odds are only calculable if we somehow have limits.  The dice shows this.  We can perform better than total uncertainty if we have a limit (knowledge of the number of sides of the dice and numbers on it).  Unbounded odds are simply not calculable and therefore performance will be random.  Probability is therefore a peculiar thing.  We can talk about the odds of a number 1 being rolled on a 6 sided dice as if it were linked to reality.  It is of course in a peculiar way.  It is simply saying that randomness dictates that if you know that it has 6 sides then you can have better chances of guessing the next number than if you did not know it had six sides.  These two concepts are key.  In infinite options there can be no meaningful calculation of odds.  Only when knowledge of boundaries (which infinity does not have in terms of upper limits) can probability become useful.

This might go some way to helping understand whether the universe is deterministic or not.  If determinism is true then all events are predictable (in theory) even if not in practice.  Therefore the probability of any event happening is finite and 1.  The debate is whether this in itself removes things like freewill.  If whatever event x is about to happen with a probability of 1 (determinism states it could not be otherwise) then we can see that to find this useful we would need two conditions to be true.  The first is that the event is certain (1/1) and the second is that we have knowledge of the boundaries to make any prediction better than random.  Of course this is where the irony kicks in.  If everything that occurs has a probability of 1/1 then we live in a world which is entirely predictable but at the same time due to its potentially infinite size and potential events totally unknowable.  So even certainty is useless in an unbounded universe even when determinism kicks in.  We have better chances with enormous but bounded odds and some knowledge than we do with certain outcomes and no knowledge.

More Monty

Monty Hall rises again.  It has been some time since I have taken an interest in the Mont Hall problem.  I have no intention of reiterating the original problem as I have done this in the past and anyone interested can look it up.  It has been a problem that has bothered me for a long time.  It nags at the back of my mind regularly.  I spent a day or so of my mental CPU cycles I had spare taking a fresh look.

But this time, I am not so interested in the maths.  I have the spreadsheet produced by a friend of mine (spreadsheet and maths genius) Dan and it shows quite clearly the reality.  So if the maths is right (and it is) what is that itch in my brain?  It's this.  What does it mean?  If the maths is right, what is the maths telling us?  Is the surprise and debate in the maths world valid or is this in fact maths slight of hand?  After all, maths produces a model of the world where the emphasis is on 'a' but maybe not the and its claim to truth is not always justified.  It can be right (mathematically) but not necessarily be reality.  Of course, this gets trickier when we deal with probability like in the Monty Hall problem as probability and what it represents is not always clear and the subject of much philosophical discussion.

The standard 3 door Monty Hall problem has a clear result.  If you select a door at random, then Monty opens a door without a car behind it (it matters not what is behind it) then if you switch your choice of door from the original the outcome is that you will win 66.666.% of the time vs 33.333.% if you stick.  Note that I chose my words careful.  The outcome 'IS'…. 

I ran some other stats on the model.  Not surprisingly if you randomly select a door after Monty has opened one then the outcome IS 50/50 as to whether you pick the right door.   Therefore, the difference between the performance of switching and a random selection of the final 2 doors must be explained.  I noted one important point.  The decision to change door in the original Monty problem was not random.  This was worth exploring.  If you made the decision itself a random choice (I.e. Whether to change or not) the outcome turns out no better than random selection.  I.e. 50/50.  So the performance improvement rests on the decision and therefore must be linked to knowledge.

The key here is that if you KNOW the maths behind this problem then you would switch.  If you did not then your decision would essentially be random.  The performance improvement simply comes from the application of knowledge of Monty Hall problem.  So is the maths itself telling us much? 

To make the problem more obvious lets increase the size of the problem.  Infinite Monty Hall version.  Now there are infinite doors.  Contestant selects one.  The odds of a correct door are therefore 1/infinity.  All we can say about this concept is that the number is very small but not 0.  Monty now opens all the doors apart from one leaving two doors only as per the original problem.  The remaining door now has odds of infinity-1/infinity.  This again is incalculable as infinity is a concept but the number is very large but not 1.

So in summary, the odds of the original door are as close to being 0 as possible without being 0 and the other door as close to 1 (certainty) as possible without being 1.  If you knew  the Monty Hall problem then you would select the highest odds door.  Given this rather extreme view of the problem it is clear that the mathematicians should not be surprised at all that if one is in possession of knowledge (any) about the outcome of an otherwise random event that your success rate will be improved.  That's all Monty Halls shows us in my view.  It is a complex way of stating a rather obvious statement.  You could use dice to show the same thing.  If you know a dice has 2 sixes printed on it then you would do better picking 6 each time.  If you did not know this then you would probably still perform the same as a random selection.

This ramble through the world of numbers raised some other interesting explanatory issues with the maths.  The first is the concept of random selection of a number.  If an event has two outcomes then you have two events going on.  The first is the random selection of two outcomes (in the mind or on computer).  The second is the random outcome itself.   The two random events (not one as is normally discussed) is why the explanation above works.

And that's the itch scratched.  How could the Monty Hall maths change reality, how did the knowledge of the doors alter a physical reality outcome.  It did not and that's because I was missing the fact that there are two events being measured.  The physical reality of the odds of the car behind the door (thanks to the maths guys and Dan for sorting this) and the event of selection.  The knowledge changed the selection from random to informed and that increased the success rate.