Game Design, Programming and running a one-man games business…

Global investment and the coming chaos

When I am not making games or building a solar farm, I am quite into investing on the stock market. I am NOT a day trader, but over the years I have built up enough to invest that it does require me to constantly keep an eye on stuff. I also like reading about the world, and technology, and politics, so it fits in nicely. As a result I spend a lot of time thinking about where to invest.

Investing is super hard, because it involves keeping emotions in check (hard), being objective (hard) and for best results, being happy for absolutely everyone to tell you that you are wrong (I find that quite easy tbh). It also involves a lot of risk, and you have to be ok with all of that. Plus it involves a lot of checking numbers, and being objective, and not making panicked decisions.

Because I think that short term swing/momentum/day trading is more likely to result in losses than gains, I focus on picking shares that will give me a decent return over the next 1-5 years. I have found this is the approach that works best for me. Its certainly not as EXCITING as day trading, but I actually want results, not a sugar rush. So I find myself thinking hard about what the future may bring. Ultimately I am a value investor: I am buying stocks where I think the underlying company will be very profitable in the future. I DO hold some dividend stocks and bonds, but most of my picks are for stock-price-growth, where I assess that a company will have rising profits in the next few years, and I will sell once the stock price catches up to my point of view.

Individual companies can be very good investments, regardless what the people selling funds and generic investment advice tell you. If its obvious that 50 of the stocks in the FTSE100 are rubbish, why would you want to own ANY of them? If your funds are limited, indexes and funds might make sense, but when you are able to pick 50-100 stocks, its worth taking the time to pick winners.

So anyway, with all that in mind, what am I currently thinking about when it comes to upcoming events and themes that might influence investment? I have a bunch of ideas:

  1. The decline of the USA : This is quite a big one, and probably very triggering for people who live there, but I think USA in 2024 is the UK in 1930s-1940s. A big global superpower that has not yet realized that it is screwed, despite all the signs being there. The US has incredibly tribal politics, huge social-division, bad levels of skills/education, bad infrastructure, a colossal debt problem, and a bad global image. Sure, the $ is a popular global currency for now, but in 5,10,15 years? I think China is clearly overtaking the US in everything that matters. I also think the US is so focused on its own awesomeness that they will not manage the decline well. I am hugely over-invested in US stocks but will be diversifying out of there.
  2. Clean Tech Revolution: The entire planet will embrace electric cars, solar & wind power, battery storage and heat pumps. Nuclear Fusion is too late, too pricey and too concentrated. There is no stopping this transition now. Along the same lines we will likely see a global transition away from meat consumption towards vegetarian or vegan diets. Thats a movement that is just too big and especially too popular with the young for it to be stopped.
  3. Rise of Asia: I mostly focus on China. The predominant view in western media is filtered through frankly xenophobic and tribal hatred of China in the US media. But the Chinese are starting to lead in tech, science, infrastructure, and geopolitical influence as well as manufacturing. They even have their ow space station, something the USA cannot afford. I do not expect war with Taiwan, but I expect savvy Chinese leaders to rattle just enough sabers to keep bankrupting the USA with its ridiculous military budget
  4. New Space Race: Not just spacex, but a whole range of new space startups is revolutionizing our capabilities in space. Starlink is the first tangible benefit but there will be more. Space Tourism will be one part, but zero-g manufacturing may well become a thing for some specialist pieces of technology. I fully expect all major cabled telecoms links to be replaced by satellite networks soon. Its just so much simpler.
  5. Fall of Russia / Chaos in Europe: Russia will have a messy transition when Putin dies. The country is not in a good state, but cannot be allowed to collapse into chaos because it has nukes. I can imagine a world where Europe steps in to handle the transition, in a similar way to the handling of eastern-european ex-soviet countries after the USSR collapsed. It will be messy and awful. I do not expect the UK to rejoin the EU, so we may escape some of the costs. It will be tough
  6. Climate Chaos: Insurance companies are likely screwed. We have been lucky so far but one day a big hurricane or flood or other climate event will wreck a big famous city. Might be New York, might be London. Who knows. Impact will be extreme. I will not buy insurance company stocks. Also worsening weather will destroy so much food production. I sometimes speculate on commodity prices to play this, and may do more. Global food price rises may destroy fast food chains, when people can barely afford the ingredients and cut back on dining out or takeaway food out of necessity.

Thats my list for now. I also have a speculative investment in quantum computing, just in case it really becomes a thing. I also expect AI and robotics to be big, so hold a lot of AI/Chip/Robotics stocks. Those are quite trendy though, so those investment ideas are less contrarian.

Solar Farm month#1: First ever earnings! How to earn £669 an hour. Maybe. (kinda)

OMG its actually happened, I have been sent an invoice (well a statement really I guess) for the sale of my solar power for the first time. The spoiler is that its about what I expected, but that doesn’t stop me breaking it down in extreme detail! If you are googling for the details of what a power purchase agreement (PPA) for a solar farm is, and how its calculated and how much you actually get paid etc, then you have probably found the right blog :D.

So firstly, lets have some disclaimers. The farm was only energized on October 4th, and this payment is for October, so we already lost 4 days (we didn’t switch on at 8am :D). We also had to turn everything off for two days later in the month so that we could fill in some earthworks around some high voltage cabling, and they wouldn’t do that while they were live. TBH they were only 400v I think, and this seemed a bit overkill to me, but then I don’t drive a digging machine :D.

Also be aware that this was OCTOBER, so not exactly peak sunshine roughly half way up the west side of the UK, so do not extrapolate this in a linear sense to be a typical month because it was not. So how much is the total paid?

Roughly £5,300

To break it down in more detail, the amount is calculated like this:

  • Electricity output £4,400
  • REGO Certificates £0
  • DUoS benefits £945
  • DUoS costs -£12
  • Triad benefits £0
  • Admin fees -£25

All figures are slightly approximated as I’m not sure what I can / cannot be explicit about and don’t want to be told off :D. Anyway to break it down…

Electricity output is the amount I can see that many MWH of power for. More on that later.

REGO certificates are things I do not have yet due to stupid insane *are you kidding me* levels of bureaucratic BS, but I WILL get them, and they will be backdated. I need to collect a ton of paperwork and then sit and wait for months for the awarding government body to try their hardest to find a missing comma or i without a dot. I wish I was joking.

DUoS. Well this is a whole world of insane complexity. The acronym stands for ‘Distribution Use of System’. Its the bewildering network of charges and fees and credits that are calculated depending where you are in the national network of distribution power lines. Basically if you generating power next door to a substation, and the re is an aluminum smelter next door to that, then all of the power you generate will stay local, and not flow out onto the wider ‘national grid’, so you are not heaping pressure on the big pylon networks. Thats the ideal situation. Amazingly, you can get both charges and benefits from the exact same system. My solar farm is fairly remote, but small enough that our energy will only ever go to the nearest town. So we got charged £12 for being so remote and using some local pylons, but credited £945 because we are remote enough that us powering that town a bit more means LESS pressure on the big power lines heading from elsewhere to that town.

Think of it as toll road charges.

Triad benefits: This is something very weird and arcane that makes DUoS look simple. Here is the googled explanation.

The Distribution Network Operators (DNO) pay what you might call a standing charge to National Grid (NG). This charge is set according to the amount of electricity being drawn by the DNO when the UK as a whole is using the most. More specifically, it is the average MW being drawn during the three highest half-hour periods (subject to being a minimum of 10 days apart) of UK electricity consumption between 1st November and 28th February inclusive. The cost incurred by the DNO is then passed on to energy suppliers who in turn charge it to their customers. (from:https://www.nowthenenergy.co.uk/news/triads2021 )

If you think ‘WTF? why do they choose three? and why those months? and why half hour? Yup : welcome to the UK energy market. You thought C++ was complex? Ha! Anyway, looks like we are unaffected which is good?

Now actually I will get paid MORE than this, because I get paid VAT (sales tax) but I then have to pay that to the government anyway, so its just a bureaucratic waste of time and doesn’t figure into the calculations.

But Wait! There is more! The ‘Electricity output’ figure is more involved. My actual PPA did not start until November 1st. From that point I get a fixed price per MWH for the next year, but up until then, the price was ‘floating’. I got paid the ‘market ‘system sell price’ price each half hour. (The whole UK commercial energy sector works on half hour billing). They send you a handy spreadsheet showing what the price was every half hour for the whole month. Do you think it was relatively stable? Ha. Behold:

Well I guess two things stand out right? Firstly what the hell was that spike? and secondly WTF does it go negative? To answer the second part first, YES, at times I was being charged actual money to generate power. When its super-windy and super-sunny, and mild, and the Uk has too much energy and we cannot cope with any more, the wholesale energy price goes negative. It happened a few times that month, but as you can see its very short lived. With a solar plant, you can’t easily switch it off (and you wouldnt want to keep turning it off and on again), but if you are burning physical fuel like gas, coal or oil, or even wood, then that price signal tells you to stop imemdiately, which is why I think it recover.s

But hey-ho check out settlement half hour #564, when I was paid a whopping £669 per MWH. Oh yes. Sadly there were only a few brief periods of this.It seems to have happened on the 11th October about 75% through the day (so 6pm) Lets look at country wide stats. Seemingly no explanation here:

But in a sense… it doesn’t matter, because annoyingly its October and solar output at 6PM on 11th October was likely pitiful, if not zero. I checked…, and it was 4.89kw at that time. So the super high price only earned me £3.27 per hour. Actually less, because the power trailed off and the price dropped off too.

FWIW this is why in some cases lithium-ion grid-scale batteries can make sense. If I had one (I ran the numbers and couldn’t justify it for such a small site), I could have stored 1 MWH in it from earlier in the day, then let it flow out at 6PM and pocketed a handy £669. The trouble is I would need about £200,000 to install that battery, and you need to be sure you are going to get enough of a return on those occasional spikes to make it worthwhile. Plus other people are doing the same thing, so as more grid scale storage is rolled out, that chart is going to look a lot less spiky. Especially over the lifetime of the farm (25+ years). Note you can also do ‘peak shaving’ which improves the economics. I blogged about that previously.

Anyway, all very exciting to see actual payments heading my way. 10 days until the money is transferred. It will be WEIRD to see money flow INTO this company. Its been an absolute money pit until now :D.

Solar Farm data-collection begins!

You might think that collecting data on how much energy your solar farm has generated would be a simple matter, where you have an app on your phone, or a website, with a single figure that was just easy to rely on and so on… Ha no. Obviously not. Everything is a billion times more complex when you go from the rooftop kilowatt-hour level to the grid-scale megawatt level.

There are THREE systems (oh yes) that are reporting the output data from the farm. We can call them the Solis, Orsis and Meter systems. Right now, I have data from two of them (although patchy) and the third one remains a mystery that I think I get access to through a third party, or maybe they just show up in the final invoices I get when I get the payment for the energy. Why are there three systems? surely its all one level right?

There are ten inverters on the site, each with up to 20 strings of solar panels. They are all made by Solis, but are different capacities, ranging from 80kw to 110kw in output. All of these inverters report their data, which as I recall is connected by actual physical cabling, running alongside the actual power cables, and all of that then gets connected to the big old wide interwebs using a router thats in our switchgear building. This means I can log into a portal either on my phone or a webpage on my desktop and read off the output of the whole site, or each inverter. The basic view looks like this:

This is the data so far today, which is actually looking pretty good. Total output today is 1.154MWH. For those not familiar with the terms, that’s 1,154kwh. For perspective, a high-end electric car has a battery size of 80 kwh. You probably use between 10 and 20 kwh a day in a house this time of year in the UK, assuming no EV or heat pump. Late October in the UK is bad weather, and very far below peak output, so seeing these numbers is encouraging. We have been connected for about 3 weeks, but have had 2 days complete downtime, and a lot of rain, so 40.7MWH in that time is fairly good I think. You can look at stuff in much more technical detail:

The yield figures differ for each inverter mostly because their capacities are different. I know people imagine a nice flat square field full of panels with a nice round 200 panels per inverter, all of which are identical…and oh how I wish this was the case for my farm too, but pretty much everything is slightly unusual about this site. (I was told by the developer that this was the hardest site they had done in ten years…just my luck!). Anyway, if you want to waste even more hours of your life, you can stare at stats for each inverter, which is pretty much there for fault-finding purposes but also kinda cool:

This is the screen where my geeky interest runs into the brick wall of me not being an electrician, but luckily other people also check this stuff, and the system will trigger alarms if something unusual happens, which would represent a cable breaking or a connector failing, or worst case, an inverter actually failing. Obviously right now it all works great :D.

Anyway…all of that is the inverter-level reporting, but thats not the ‘real’ output figure. There is also a site reporting system through a different portal (orsis) that is as far as I know, oblivious to the individual inverters and just looks at the combined power flowing out of the system. Thats also got a web portal. It might have an app too, I have not searched for that yet. Already most of my phone home screen is various solar/battery/farm/ev reporting apps :D. Here is the basic orsis view:

In comparison this reporting seems kinda rubbish, and it seems to not show the current day at all. It relies on a modem (WTF is a modem these days?) to send out data. TBH the whole UI for this system has a sort of ‘coded in 1990’ vibe to it. Maybe they need to hire a game designer with extensive experience of flashy data-visualization to do a new front end :D.

But hold on, I mentioned three systems right? Well there is a meter on the site that is remotely read by a special company, which is called a meter operator. It might seem ridiculous to need yet another service to just read a simple string of digits, but its worse. You also need to have a data collector and a data aggregator. These three different names for basically the same thing (reading about 1k of data a day) are how the insane fees that get charged are justified. In a sane world, some big tech company like Microsoft or Google would handle this sort of thing for a flat fee of $9.99 a year. Unfortunately this is not the case…

So anyway, as I understand it, that meter gets read remotely and the data from it passed by the Meter Operator (MO)/Data Collector(DC)/Data Aggregator(DA) to the buyer set out in the Power Purchase Agreement (PPA), and then I get sent some money.

Eventually.

Hopefully.

If I had £1 for every energy company acronym I have encountered I wouldn’t need a solar farm. There is then all the excitement of applying for, and getting accredited for the REGOs (Renewable Energy Guarantee of Origin), which always takes MONTHS and has a level of bureaucracy that would make a Tax collector blush. I hope to have all the information I need to finalize my application for that within a few weeks at most. Obviously you cannot pre-apply, because that would be efficient.

Anyway, I am currently in solar-stats-heaven. I was musing about buying some nano-leaf programmable RGB light blocks for my office wall to connect to the solar output from the farm. It seems like an SDK for the blocks is all very easy, but I would need to learn how to code some system to log into the web portals and periodically scrape the data. I probably cannot be bothered :D.

An autistic introduction to the stock market

A long time ago (about 25 years!) I worked for about 2 years for a company called Datastream/ICV. They were an IT company for stock market trading floors, both real-time and research. I worked in ‘the city’ in London. I had to catch the same awful train each morning all the stockbrokers caught while they tried futilely to read the financial times. The train only went one stop, and it was so bad it had its own nickname: The Drain.

As part of my job, because we supported real-time and historical trading software, my work PC had the complete suite of trading analysis software that the company provided. We were expected to be vaguely familiar with what it looked like, so we could check it worked ok. We were not expected to know anything about actual markets and trading, but just by being in that world 8 hours a day you cant avoid picking up a lot of tips and information.

If you think ‘oh I bet the real atmosphere was nothing like I’ve seen in the movies’ you would be wrong. They seem pretty accurate to me. My favorite of the bunch is ‘The Big Short‘ but I also enjoy ‘Margin Call‘, and even, for all its horrors, ‘Wolf of Wall St‘. I have definitely interacted with people like the traders in all those movies.

The full suite of trading software normally costs a staggering amount on a monthly basis, but we had it for free. One bank at one point kept missing their payments, so our company just switched off all the data and their screens went blank, for the whole bank. I’m not sure how long it took for them to make the missing payment but it was definitely just counted in minutes. The company charged a fortune, but they had to provide insane service. If your ICV screen had issues, we would fix it within 20 minutes. We were not even in the same building. We had cars full of replacement kit, and would run to them, drive as fast as possible to the bank, run up stairs with a new PC and swap them out without even saying hello. The actual faulty PC would be looked at later. Also, if there was a problem it would be fixed by the people who showed up, in one visit. Guaranteed, or the world would explode. We would not go home and come back to work on it tomorrow. Nobody goes home. It didn’t matter if it was 4AM, you were not leaving until it was fixed. It was a fascinating place to work.

Anyway… it gave me a big interest in the stock market which I already had dabbled in from when I studied for a degree in Economics. I had *some* cash when I worked there, and made a few trades. Our software was so comprehensive I could see my personal trade scroll through on the ticker and know it was me. These days, High-frequency trades and dark pools make that sort of thing academic. Oh well.

Anyway, this blog post is about autism (thats clearly me) and the markets. I think they are a match made in heaven. Trading stocks has a lot of attributes that really scare people off (or means they suck at it), but which seem perfectly fitted to my particular level of autism…

Firstly trading stocks is completely and utterly impersonal. I don’t speak to anybody about my trading, ever. There is no dealer to speak to, and I flat-out-ignore all the emails from my stockbroker for ‘a chat’. All trading is electronic (well…99% of it is), and you can trade all day long without having to talk to anybody. Bliss.

Secondly, trading well requires doing a lot of analysis that is mostly based on numbers. All the information is freely available, and its all in electronic form. If you enjoy making spreadsheets that compare things, this is heaven. Most of all, the numbers are TRUE. Apart from the super-rare cases of outright fraud, we can all know for definite how much revenue Netflix made in the last quarter, and how much their stock has risen or fallen or been diluted. The facts of the matter are never in dispute, the data is absolutely true.

Thirdly, being emotional regarding stocks is a DISADVANTAGE. The more clinical, and analytical you can be, the better. This is an occupation when a cold logical vulcan approach is absolutely beneficial. You do not need the stocks to like you, or make them laugh, or make small talk with them. In fact any kind of emotional reaction to a stock is a negative. The best traders are very very detached from the decisions they are making. Its ideal for people who prefer facts over feelings.

Now saying that is easy. DOING it is staggeringly hard. Humans are vulnerable to so many cognitive biases and stupid emotional outbursts that its amazing we invented the wheel. However you can narrow it down to a few common mistakes people make regarding trading stocks:

  • When you buy a stock and it rockets up, people want to SELL so they can ‘lock in their gains’.
  • When you buy a stock and it steadily drops over a long period, you hold it anyway to avoid ‘crystalizing a loss’.
  • If you really like a product, you sometimes buy a stock thinking that makes it a good stock to buy.
  • You want to feel like a hotshot trader so you buy and sell all the time, to feel like you are doing something.
  • A stock you buy is up 500%. You sell, because otherwise you are ‘tempting fate’ or ‘being greedy’.
  • A stock you want to buy has recently gone up 500%. You don’t buy because ‘you are too late’.

All of this is emotional bullshit. The actual way to trade is simple to describe, staggeringly hard to do. You look at companies that seem like good companies according to your analysis of their product, their leadership, their future plans, the competition. You look at the data regarding their financials, and then you calculate how much their market cap SHOULD be. You can then work out if they are a bargain *at this price*. If so, you buy. And theoretically every day, you do the same analysis. If they ever stop being a bargain you sell.

Sounds easy-peasy (but maybe a lot of analysis)

It’s STAGGERINGLY hard if you get emotional. The very hardest thing is loss-aversion. People HATE selling a stock at a loss as this means they have definitely lost money. Even though its clearly dying and dragging you down with it, people cling on like its some sort of pet. This is how most people lose money.

Oh…options…

In the UK, most people don’t trade options. Most individuals do not have access to the full range of options that are traded elsewhere in the EU or US/Canada. I cant find anywhere that sells a lot of LEAPs. Options trading is something that I do not do, although I have done it in the past. The reason I do not do it is that I have learned my lesson. I used to trade options quite a lot, sometimes trading the same option 4 or 5 times a day. I did stocks and also currency options. I thought I got quite good at it, and it seems like easy money.

Then one day I lost a staggering amount of money. I actually don’t want to look up what it was, but I know it was at least 10 years work as a boatbuilder. How long did it take to lose it? About 5 minutes. I could not sleep that night. I was distraught.

To be fair, I was not short of money, and have since easily made it back on normal buy & hold stock trading. I have not traded options since. Options are like nuclear weapons. They all seem like fun and games until Hiroshima is vaporized, where Hiroshima is your life’s savings. Do not do it. No ifs and buts, just do not do it.

What I DO dabble in (quite often) is leveraged commodity ETFs. This is very risky stuff. Its the riskiest thing I do. I only do it with about 1% of my investments. Its been hilariously profitable, but its risky, and I don’t recommend it. What I recommend is doing a LOT of reading, a lot of analysis and buying and holding stocks of companies that seem undervalued, and having the patience to see the investment come good. This could be *any* company. Over the years I have done well out of companies that make customizable teddy bears, sporting goods, software, cars, electrical equipment, pharmaceuticals and tons of other things.

Oh and one last tip: The financial news (CNBC, Bloomberg, Yahoo finance etc) is all absolute garbage. Complete trash. Do not believe anything you read in the ‘financial news’. They are not selling information or analysis, they are selling ad-space, and the clickbait is designed to maximize that. This is why you can see headlines that say ‘Tesla SOARS!’ and ‘Tesla in freefall!’ within 2 hours of each other on the same site. The ‘journalists’ cranking out ‘market coverage’ are ad-salespeople. They have no idea what they are actually writing about.

So anyway, I write this not as specific stock advice (thats for you to research), but to point out that if you are someone like me, who finds personal interactions hard, who has problems working in teams, or for other people, then if you can find a way to make income through investments, you might find it perfectly suited to you. The reality is that a lot of very successful investors are quiet solo geeks sat at a laptop, not loud alpha-males screaming at each other wearing designer suits. Frankly the alpha-males are not very good at it. (but they like to play the role until it goes wrong, thats for sure).

Do not use liquidweb web hosting. Ever.

I recently bought a new domain, to point to a folder on my server. Sounds simple right? But SIX PEOPLE over the course of four days at my host (Liquidweb) clearly had absolutely no clue how domains worked (despite selling me one), and totally failed to achieve this trivial, laughably simple task for which I pay them monthly. I got about a dozen emails to suggest various ways in which they didn’t understand, or had no idea, or couldn’t do it. They wasted hours of my time.

I fixed it myself in 40 minutes, giving up all hope that anybody at liquidweb had a clue on how to do their job.

And today I discover that 9 months ago they just put my price up 50% without bothering to email me. What utter assholes. I do not understand how people running businesses think that this is the way to treat your customers.

I am actually considering shutting down this blog, my forums and website and just only being on X.

Do not, under any circumstances, ever, ever consider using liquidweb. They are a complete trainwreck.