Weird feeling. After 10.5 years and roughly £21,000 of debt- I finally paid off the last instalment of my student loan today.
Next month, for the first time- I’ll receive my full post tax salary, for the first time since I graduated.
Indeed IFS forecasts that 83% of students from PST 2012 reforms won’t fully pay back their loan.
Of course, HE has to be paid for and graduates pay according to their ability to do so (as their salary goes up). But as I say, important to see the system for what it is and how it works in practice.
The rest will likely have it hovering over them, in one form or another, until their 50s.
...from family to reduce (or eliminate) their loans. With George Osborne\u2019s abolition of the maintenance grant (and replacement with another loan) that inequity has become greater. Poorer students start working life as poorer graduates...
— Lewis Goodall (@lewis_goodall) February 15, 2021
So let’s take a graduate on Plan 2 with a debt of £50k and a v respectable starting salary of £28,500.
Despite a good, rising salary their debt *never goes down*. Rises to £113k.
For Plan 2 (since 2012) those things are no longer the case.
More from Lewis Goodall
Some quick thoughts on what we just saw
Firstly hardly a unique insight but hard to overstimate the difference between the two last inaugurals. America has meandered sharply along its political arc.
Biden's rhetoric reached high. Every sentence seemed purposefully...
...constructed to negate every political and personal characteristic of his predecessor.
And insofar as he's not Trump, that he does accept, cherish and understand democratic norms, institutions and conventions in a way that Trump never could, Biden will make a real difference.
He will change the tone and tenor of politics, not only in America but across the West. As I've said before, just replacing Trump is a substantial victory for him and will earn him praise from historians.
But that aura will disappear quickly. A governing project it will not make
But how much praise he receives and stature conferred by posterity will depend on what happens next.
Because the big overarching question for me, watching this, is which of those two inaugurals, Trump or Biden's, is going to seem unusual in the future.
The relief that many are feeling is predicated on a type of politics ending. But it is at least as possible that it is Biden ..not Trump who is the last gasp of something. Is it Trump who is the dying embers of a dying, increasingly powerless old white America...
Firstly hardly a unique insight but hard to overstimate the difference between the two last inaugurals. America has meandered sharply along its political arc.
Biden's rhetoric reached high. Every sentence seemed purposefully...
BREAK: Joe Biden is inaugurated as the 46th President of the United States.
— Lewis Goodall (@lewis_goodall) January 20, 2021
The Trump administration is over.
...constructed to negate every political and personal characteristic of his predecessor.
And insofar as he's not Trump, that he does accept, cherish and understand democratic norms, institutions and conventions in a way that Trump never could, Biden will make a real difference.
He will change the tone and tenor of politics, not only in America but across the West. As I've said before, just replacing Trump is a substantial victory for him and will earn him praise from historians.
But that aura will disappear quickly. A governing project it will not make
But how much praise he receives and stature conferred by posterity will depend on what happens next.
Because the big overarching question for me, watching this, is which of those two inaugurals, Trump or Biden's, is going to seem unusual in the future.
The relief that many are feeling is predicated on a type of politics ending. But it is at least as possible that it is Biden ..not Trump who is the last gasp of something. Is it Trump who is the dying embers of a dying, increasingly powerless old white America...
More from Finance
Ok here is the explanation. Grab a cup of coffee and read on. If you have not read/noticed this, you will see intraday options movement in a new light.
Say we have two options, one 50 delta ATM options and another 30 delta OTM option. Normally for a 100 point move, the ATM option will move 50 points and the OTM option will move 30 points. But in a high volatile environment, the OTM option will also move nearly 50 points
To understand why this happens, first understand why an ATM option is 50 delta. An ATM option has the probability of 50% of expiring as ITM. The price just has to close a rupee above the strike for the CE to be ITM and vice versa for PEs
Now think of a highly volatile day like today. If someone is asked where the BNF will close for the day or expiry, no one can answer. BNF can close freakin anywhere, That makes every option of an equal probability of being ITM. So all options have a 50% probability of being ITM
Hence, when a huge volatile move starts, all OTM options behave like ATM options. This phenomenon was first observed in the Black Monday crash of 1987 at Wall Street, which also gave rise to the volatility skew/smirk
In a high IV environment or when the market is very volatile
— Subhadip Nandy (@SubhadipNandy16) January 21, 2022
" OTM options will behave like ATM options", one will get almost the same delta movement
Say we have two options, one 50 delta ATM options and another 30 delta OTM option. Normally for a 100 point move, the ATM option will move 50 points and the OTM option will move 30 points. But in a high volatile environment, the OTM option will also move nearly 50 points
To understand why this happens, first understand why an ATM option is 50 delta. An ATM option has the probability of 50% of expiring as ITM. The price just has to close a rupee above the strike for the CE to be ITM and vice versa for PEs
Now think of a highly volatile day like today. If someone is asked where the BNF will close for the day or expiry, no one can answer. BNF can close freakin anywhere, That makes every option of an equal probability of being ITM. So all options have a 50% probability of being ITM
Hence, when a huge volatile move starts, all OTM options behave like ATM options. This phenomenon was first observed in the Black Monday crash of 1987 at Wall Street, which also gave rise to the volatility skew/smirk
Buffett's letters taught me more about investing than any business school ever could.
Even after investing for 14 years, I uncover new insights every time I reread his letters.
Recently, I reread his letters from 1977 to 2020 for a third time.
Here are my key insights:
1. Moat is NEVER stagnant
A company's competitive position either grows stronger or weaker each day.
Widening the moat must always take precedence over short-term targets.
2. Commodity businesses
A business without moat will have its returns competed away.
Regardless of improvement, your competitors will quickly copy your advantage away.
Where returns on capital is dismal, reinvestment will only destroy value.
3. The flywheel effect
Buffett was preaching about the flywheel effect before it became cool.
Back then, newspapers were similar to today's platform businesses like Amazon, Meta, and App Store.
More readers beget more advertisers beget more readers.
4. Operating leverage
Companies with high fixed costs and low variable costs will see earnings rise faster than revenue.
However, it cuts both ways.
It becomes a disaster when revenue is declining.
Check out my article on how operating leverage works: https://t.co/Nv747oBAK0
Even after investing for 14 years, I uncover new insights every time I reread his letters.
Recently, I reread his letters from 1977 to 2020 for a third time.
Here are my key insights:
1. Moat is NEVER stagnant
A company's competitive position either grows stronger or weaker each day.
Widening the moat must always take precedence over short-term targets.
2. Commodity businesses
A business without moat will have its returns competed away.
Regardless of improvement, your competitors will quickly copy your advantage away.
Where returns on capital is dismal, reinvestment will only destroy value.
3. The flywheel effect
Buffett was preaching about the flywheel effect before it became cool.
Back then, newspapers were similar to today's platform businesses like Amazon, Meta, and App Store.
More readers beget more advertisers beget more readers.
4. Operating leverage
Companies with high fixed costs and low variable costs will see earnings rise faster than revenue.
However, it cuts both ways.
It becomes a disaster when revenue is declining.
Check out my article on how operating leverage works: https://t.co/Nv747oBAK0
