Month: November 2021

How the property price jump is easily explainable using back of napkin maths

One of the first things I learned about when learning the stock market was the discounted cash flow method. For those too lazy to look it up, I’m not going to explain what this is. For the purposes of this article, the only thing that interests me is the relationship between the discount rate and net present value.

I have the dubious advantage of having built various spreadsheet calculators to help me calculate NPV. I’ve applied these spreadsheets to everything from individual stocks to specific properties to solar panels to get a picture on the net present value of different assets within different asset classes. Yes, I do this for a hobby.

It’s only once you’ve built and fooled around with these sorts of calculators that you can see the dangers of certain types of macroeconomic policy.

The interesting thing is that the discount rate is never really consistently defined. Certain people will use a risk-adjusted rate, whereas Warren Buffett will simply use the long term government bond rate.

In other words, being the words of Admiral Akbar, ‘It’s a Trap!’ If it stands to reason that a drop in the discount rate leads to assets with a fairly minimal cashflow adding half a million dollars to their valuations, then it also stands to reason that even a slight, slight increase in the discount rate will lead to the price collapse of many of those assets.

Having said that, I’ve always been a cynic on the housing market, being a Hayekian, and this is perhaps the continuation of a long-held and fairly-wrongheaded (according to recent data anyway) set of postulations.

Batch cooking and the automatic fast

One of the great strengths of the slow carb keto diet that I am currently on is that for the first time in my life, I have actually been able to fast successfully. In the past, many of my attempts at fasting have resulted in rapid drops in blood sugar, in turn leading to a partial loss of vision that has cost me the better part of the day.

Now that I have successfully adapted to the slow carb keto diet, this is no longer such a problem. While fasting is still occasionally difficult, I can make it through the day with a reduced food intake.

The slow carb keto diet has also led to a reduction in the total number of meals I take per week. From having three square meals a day, I have shot down to just two meals, lunch and dinner, with the obligatory butter-coffee in the morning to get me started.

In the spirit of one thing leading to another, it came as quite a surprise to find that I had reached the end of a batch cooking day and had managed a successful fast. One would think that being in front of food all day would have tempted one to hunger – but no, the concentration and rapid motions involved in batch cooking a week’s worth of meals led to a fast that happened virtually automatically.

I love to tease out the subtle benefits of things, and this particular benefit is as perverse and as subtle as it gets. The health benefits of fasting are well-reported, and while I never set out with this objective, it neatly folds into the nexus of keto-solar-batch cook activities that seem to be absorbing a chunk of my weekend.