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Young Apprentice...Festival...BBC1..8pm..Discussion( no Spoilers please) |
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#401 |
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I'd be interested to know how they valued the unsold stock.
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#402 |
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So if they had succeeded in knocking the suppliers price in half, that would not benefit them when valuing the stock? They were both given the same amount of money to spend, so I don't really understand how or why valuing unsold stock was part of deciding who won, unless you were penalized for having too much stock left, or were given credit for your stock being worth X but if you negotiated Y, the difference between X & Y would count as a profit somehow. This did not seem to be explained.
Also everyone who thought a cardboard toilet was the best thing to buy should have been fired just for that. |
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#403 |
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I'd be interested to know how they valued the unsold stock. Presumably it would have to be valued at less than the team's selling price, otherwise there's no advantage in selling it! It did make it hard to see what the right decisions would be, and I feel it left the teams not being sufficiently penalised for picking unsaleable products (the washing machine got torn into, but it was at least possibly saleable in some context, just not the one they were in, whereas I can't envisage anyone anywhere ever considering that toilet).
Is it simply a case of adding up what was paid for them? Or an estimation of what their resale value would be if sold? For instance you buy 100 toilets at £10 but the RRP is £20? Does that mean the toilets are worth £1000 or £2000 to the business? I ask only because if you managed to negotiate brilliantly in this task and obtained (to take an extreme example) £10000 of stock for £1500 would that in some way have disadvantaged you if you were actually treating this a real world situation? Not disputing the correct team won - they sold more stuff which was the main point of the task - the stock value was added to prevent blatant underselling given that both teams had £1500 to start obviously, but it kept me awake thinking about it - or it may have been the rain! ![]() thanks |
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#404 |
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No, the task was to shift stuff at that festival. Anything they didn't shift should have counted against them. It's not the real world, its not a real business, it was a task to sell stuff at a festival that day, and the winner should have been judged purely on who made the most profit. You could apply your logic to all the other tasks and the winners and losers would be different - you could factor in the returning customer idea, that is a real business concern always ignored by the Apprentice. It doesn't reflect how businesses are run. This was just a selling task, like the scavenger hunt has its own rules - you don't get points for saying 'well it was good we never bought that item because we'd never have resold it at a profit.' It's just a task. Sod the 'remaining assets' they are unimportant.
The aim of this entire process is for Sugar to determine who is the best person to invest his £25,000 in. Let's say for sake of argument he is looking for the candidate with the best business idea. The 'total assets' measure is the perfect way to judge this particular task because it replicates what Sugar is looking for in real life. "I'm going to give you a sum of money X. Go and make me the best return on that investment." In other words, this task is a bit like an on-the-job business interview. Usually tasks are judged on sales or profit. But you can win a task on sales by gutting your profit margins, which is not sustainable in business - and yet many tasks in the past have been won this way. (I'm thinking in particular of Steven in this year's grown-up Apprentice, where he won the gym class task by throwing in lots of freebie equipment, which boosted sales but would in reality have bankrupted him.) And you can win a task on profit by cutting costs and minimising how much stock you buy, to ensure you are not left with a load of excess stock which brings down your profit (actually it doesn't, but it does in the way they count profit in the show).Such tasks can be won by a team which keeps most its money in its pocket and sells out of limited stock, whereas another team can lose despite selling more but being left with excess stock which is unsold at the end of the day. But Sugar doesn't want a "winner" who wins simply by putting his investment in the bank.Judging the task on assets makes perfect sense for a start-up. If you have cash to start up a business, you invest as much as you can in stock that you can sell. If at the end of the day you have not sold it, that's okay, as the stock still has value - you can sell it tomorrow. Or at another event/festival in the case of last night's task. That's how an ongoing business works, and that's why it's fair to value unsold stock at cost price as part of the task. (There is also a counter-balancing consideration about not tying up too much money in stock as it ties up cashflow, but that's a bit too complex for a TV programme. Although in truth the reason most small businesses fail is not because they are unprofitable but because they do not have enough liquid cash. But that's a discussion for another time - like never ...) The sales by both teams last night were so low that if it had been judged by profit the winner would most likely have been the team with the least amount of unsold stock, which wouldn't be fair. Of course, there are some businesses where it IS important to sell your stock "on the day". For instance, fresh fruit is perishable and only has value for a few days, so rate of sale is just as important (probably more so) than asset value, as the value of said assets quickly reduces to zero. SImilarly, if you have 100 tickets for an event, they are of no value once the event has happened, so even selling a £100 ticket for £5 can make sense. But last night's task featured "normal" items which would have been sellable for months afterwards, so that isn't an issue. Anyhow, the long and the short of it is that this was an entirely appropriate set of criteria for a semi-final task. It's intended as a test to simulate starting up a real business with Lord Sugar's money, as opposed to being a test of pure selling or pure negotiation or pure cost management as other tasks have been - although that was of course a key part of it - which is why measuring on sales or profit alone would have been less appropriate. Hope that makes sense. It's a small distinction but an important one, and one which the producers would do well to explain to bemused viewers. |
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#405 |
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So if they had succeeded in knocking the suppliers price in half, that would not benefit them when valuing the stock? They were both given the same amount of money to spend, so I don't really understand how or why valuing unsold stock was part of deciding who won, unless you were penalized for having too much stock left, or were given credit for your stock being worth X but if you negotiated Y, the difference between X & Y would count as a profit somehow. This did not seem to be explained.
Also everyone who thought a cardboard toilet was the best thing to buy should have been fired just for that. For instance, if team A buys 80 cardboard boxes at £10 each (as Ashleigh did last night) and team B buys 100 of the same boxes at £8 each, then B has done a better negotiation. But both have spent £800, and I am assuming that in the final count the asset value of both would have been counted as £800 (that would be standard accounting practice for goods of this nature). But now let's say the two teams both sell 40 units each on the day at £20 each. Both have sales of £800 - so equal - and both have also made exactly zero profit (£800 spent, £800 sales). But the remaining stock value for team A is 40 x 10 = £400. For team B it is 60 x 8 = £480. So team B would have won by £80 - AND they have more stock left to sell tomorrow, next week, next month etc. Double whammy. Equally, if team A had bought 80 at £10 and team B had also bough 80 but at £8, then team B would have freed up £160 (80 x 2) to spend on other stock to sell - also a benefit. That's why I keep banging on about the appropriateness of the total assets method, particularly for a semi-final task where you are trying to assess all-round business performance, not just selling. It's quite complex to explain, but hopefully not so hard to understand. That's why in the real world a business is valued on both its profit and loss account (i.e. sales and profit) and its balance sheet (i.e. how well it utilises its assets) - it's the basis on which most acquisitions are valued. |
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#406 |
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Join Date: Oct 2012
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slouchingthatch, no you are doing a great job explaining your position, I give you credit for that, but I don't agree it was the right way to judge this task, for the reasons I have given, especially in the post I just made, above
I'd also say (as someone who runs a business) that unsold stock being counted as assets really depends on a number of factors, and generally it's not a good thing. You have to store the bloody stuff, which is an expense. Now take those cardboard toilets, or any other stupid choices they could have made - they may never sell a single one for years. That's not as asset it's a waste of money, a mistake that you ever bought that thing, money that should have been better spent. You might end up shifting it at a great loss just to see the back of it. It's not worth what you paid for it, its worth what you sell it for, and if you don't sell it you should be penalized - I realize that's not how the task was presented, but thats what i'm criticizing. The rules were not made clear, as usual, and the rules didn't make enough sense (as usual). |
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#407 |
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People who go to festivals certainly aren't arsed whether their clothes are washed or not, and aren't going to spend money going to the toilet when they can go for free - the toilets are pretty grim but you get used to it and don't care. You can tell they've never been to one before!
I remember seeing them selling the onesies (didn't know it had anything to do with the Apprentice at the time) |
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#408 |
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Just picking up on this point, and I know others have posted various answers, but in the real world how would this type of business actually value its assets?
Is it simply a case of adding up what was paid for them? Or an estimation of what their resale value would be if sold? For instance you buy 100 toilets at £10 but the RRP is £20? Does that mean the toilets are worth £1000 or £2000 to the business? I ask only because if you managed to negotiate brilliantly in this task and obtained (to take an extreme example) £10000 of stock for £1500 would that in some way have disadvantaged you if you were actually treating this a real world situation? Not disputing the correct team won - they sold more stuff which was the main point of the task - the stock value was added to prevent blatant underselling given that both teams had £1500 to start obviously, but it kept me awake thinking about it - or it may have been the rain! ![]() thanks In the case of last night's task, I would assume that all unsold stock was simply valued at the price at which it was purchased. Hope that makes sense! |
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#409 |
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slouchingthatch, no you are doing a great job explaining your position, I give you credit for that, but I don't agree it was the right way to judge this task, for the reasons I have given, especially in the post I just made, above
I'd also say (as someone who runs a business) that unsold stock being counted as assets really depends on a number of factors, and generally it's not a good thing. You have to store the bloody stuff, which is an expense. Now take those cardboard toilets, or any other stupid choices they could have made - they may never sell a single one for years. That's not as asset it's a waste of money, a mistake that you ever bought that thing, money that should have been better spent. You might end up shifting it at a great loss just to see the back of it. It's not worth what you paid for it, its worth what you sell it for, and if you don't sell it you should be penalized - I realize that's not how the task was presented, but thats what i'm criticizing. The rules were not made clear, as usual, and the rules didn't make enough sense (as usual). "Slouchingthatch", thank you also for the explanations, yes I now understand why unsold stock is counted as an asset, but still think it is a silly idea, still it explains why these Companies with supposedly tons of "assets" suddenly go out of business!
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#410 |
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The toilets at WOMAD were exceptionally well maintained this year, not that they are ever as bad as Glastonbury/Reading, mainly due to the more family/ageing hippy clientele.
I remember seeing them selling the onesies (didn't know it had anything to do with the Apprentice at the time) |
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#411 |
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slouchingthatch, no you are doing a great job explaining your position, I give you credit for that, but I don't agree it was the right way to judge this task, for the reasons I have given, especially in the post I just made, above
I'd also say (as someone who runs a business) that unsold stock being counted as assets really depends on a number of factors, and generally it's not a good thing. You have to store the bloody stuff, which is an expense. Now take those cardboard toilets, or any other stupid choices they could have made - they may never sell a single one for years. That's not as asset it's a waste of money, a mistake that you ever bought that thing, money that should have been better spent. You might end up shifting it at a great loss just to see the back of it. It's not worth what you paid for it, its worth what you sell it for, and if you don't sell it you should be penalized - I realize that's not how the task was presented, but thats what i'm criticizing. The rules were not made clear, as usual, and the rules didn't make enough sense (as usual). I accept your point of view is a perfectly valid one to hold and we'll just have to agree to disagree on that one. But i do wish that the producers/Sugar would take some time out to explain the point of measuring the task on an assets basis. Unless you have some experience with how to run an actual business, it's not a concept that's easily understood. At least that way viewers could make up their own minds in an informed way. |
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#412 |
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Thats how I saw it, unsold stock is useless stock if it is sitting looking at you, it is not really an asset just wasted money.
"Slouchingthatch", thank you also for the explanations, yes I now understand why unsold stock is counted as an asset, but still think it is a silly idea, still it explains why these Companies with supposedly tons of "assets" suddenly go out of business! ![]() As with many things in life, it's a matter of balance. Assets are good - but only if they are being productive. Which is why businesses are valued on a combination of absolute measures - e.g. how many £ of assets, how many £ of profit - and efficiency measures - e.g. what level of return are you generating on your assets (return on net assets), what is your % profit margin, how much earnings are you generating per share (earnings per share - a key stock market measure). The issue of whether unsold stock has any value is a thorny one. You NEVER value stock at selling price, as that is presumptuous. You DO value it at some % of cost price (sometimes 100%, sometimes less - I've explained in another post why that is) but that value decreases over time. Patrick's unsold umbrellas, for instance, retain an intrinsic value - they could have been sold at another festival, or at a small loss to another retailer, for instance. Even the cardboard boxes have a "value" for accounting purposes - it's just that they were a rubbish product. (We're all agreed on that one, right?) But accounting practices do not judge whether a product is good or bad, merely how much it is "worth" financially. Norrin_Radd also makes good points that unsold stock carries its own ongoing costs - storage, the lost opportunity to have invested the cash in other products that do sell, or so on - but even so no accountant would classify them as worthless on the basis that they hadn't sold on one day, simply because there remains the potential to sell them again. All good discussion, though! |
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#413 |
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Given that Maria and Ash appeared to be pretty lackluster with selling the loos perhaps its wise to assume that Patrick sold lots of the umbrella-seats, possibly being more key to the team's win than he appeared to be.
We saw Ashleigh struggling to sell them and being criticised by Maria, Maria closing several deals at reduced prices of the loos....yet they won, it must have been the umbrellas that did it, particularly after seeing Lucy's team's success in sending the onesies flying off the shelves. I also thought Patrick's branding of the store as 'take a seat' was quite good. |
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#414 |
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Having lots of assets isn't necessarily a good thing unless they're being used productively. So, for instance, an empty factory which is only in operation one day a week is an asset - just not a very productive one. Nonetheless it still has a value in financial terms, as it is a building on land which could be sold.
As for this task, it was unfortunate that both teams picked such poor products, because it exaggerated the "asset" part of the final count-up, and it was really the "least-worst" team that won... it would have been interesting to be told if any of the full product selection were proven "winners" at festivals - LS heavily implied that the facepaints and fan-hat might have sold well, but it would have been instructive to be told that "company XX sold 500 hats a day last year" or similar. Still can't get rid of the nagging feeling that the wrong team won, though... |
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#415 |
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Given that Maria and Ash appeared to be pretty lackluster with selling the loos perhaps its wise to assume that Patrick sold lots of the umbrella-seats, possibly being more key to the team's win than he appeared to be.
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#416 |
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An accountant would NEVER value assets based on an assumed resale value. (Indeed it is illegal to do so.) It would always be based relative to the cost price of the items. Depending on the "lifetime" and age of the item - and on the nature of the accounting practice used by a company - this would vary between 100% and a much smaller percentage of the actual cost of the item. So for, say, a toaster that was bought last week, it would be valued at cost price. For an item with a limited lifetime, or which perhaps has not been sold for several months, its value would be "written down" over time, from 100% to, say, 50% to 25% and eventually to zero ("written off").
In the case of last night's task, I would assume that all unsold stock was simply valued at the price at which it was purchased. Hope that makes sense! ![]() Believe it or not I actually did run my own business once, but it didn't involve me selling any stock..
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#417 |
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Having lots of assets isn't necessarily a good thing unless they're being used productively. So, for instance, an empty factory which is only in operation one day a week is an asset - just not a very productive one. Nonetheless it still has a value in financial terms, as it is a building on land which could be sold.
As with many things in life, it's a matter of balance. Assets are good - but only if they are being productive. Which is why businesses are valued on a combination of absolute measures - e.g. how many £ of assets, how many £ of profit - and efficiency measures - e.g. what level of return are you generating on your assets (return on net assets), what is your % profit margin, how much earnings are you generating per share (earnings per share - a key stock market measure). The issue of whether unsold stock has any value is a thorny one. You NEVER value stock at selling price, as that is presumptuous. You DO value it at some % of cost price (sometimes 100%, sometimes less - I've explained in another post why that is) but that value decreases over time. Patrick's unsold umbrellas, for instance, retain an intrinsic value - they could have been sold at another festival, or at a small loss to another retailer, for instance. Even the cardboard boxes have a "value" for accounting purposes - it's just that they were a rubbish product. (We're all agreed on that one, right?) But accounting practices do not judge whether a product is good or bad, merely how much it is "worth" financially. Norrin_Radd also makes good points that unsold stock carries its own ongoing costs - storage, the lost opportunity to have invested the cash in other products that do sell, or so on - but even so no accountant would classify them as worthless on the basis that they hadn't sold on one day, simply because there remains the potential to sell them again. All good discussion, though! Problem is offcourse that it features in both the assets list and the costs (p&l) list, which is confusing in itself (just like cars, which is an asset but there is write off monthly which features on the p&l). |
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#418 |
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Join Date: Sep 2006
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Bitchy Maria wins in the war that was
Andrew Vs Maria ![]() Even more so when you are evicting all contestants in the losing team save one. It is easy to be left with a poor team member on the winning team and have a good team member evicted. The team lost, in my opinion, due to a bad decision by Stephen to get the washing machine. Worse still, Stephen said after he lost that he still felt that it was the best product on offer. (Credit to Stephen for his earlier idea of a cartoon cookbook - he just got it wrong this time. Badly wrong.) Andrew left with his head held high & a compliment from Sugar. In my opinion, Maria doesn't. We will all have different opinions and that's healthy. |
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#419 |
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Join Date: Sep 2006
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you shit... in the box , then what......
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you shit... in the box , then what......
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Wrap the box up, and give it to someone for christmas
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People will be wondering if the present has been stolen.
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Then fling your bag of poo where exactly?
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Depends if Cher Lloyd still does festivals
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Its a bucket for £60??
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Are we still talking about Cher Lloyd?
![]() People on here write great comments. |
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#420 |
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Join Date: Oct 2012
Posts: 359
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Aren't there laws about how you are supposed to dispose of human waste? Are you allowed to put your poo in a bin at a festival? Should that man actually be in business selling those things for that purpose?
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#421 |
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Join Date: Oct 2012
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The toilets at WOMAD were exceptionally well maintained this year, not that they are ever as bad as Glastonbury/Reading, mainly due to the more family/ageing hippy clientele.
I remember seeing them selling the onesies (didn't know it had anything to do with the Apprentice at the time) I have to say, I was shocked that the teams wanted things like toilets and washing machines. I was thinking, 'What?' I don't really go to festivals, but I would have thought fun things like animal onesies and face-paint would sell much better. But, I don't go to them and I don't know much about business, so I thought maybe I just didn't understand what kind of things would sell at festivals. After all, six people can't be wrong, right? And then it turned out that I was right, and I was like, 'Yes George! Get in!' |
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#422 |
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Join Date: Sep 2006
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The washing machine is going down like a dump in a box!
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#423 |
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Join Date: Sep 2010
Posts: 13,496
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I really miss joining in live, it's not the same. I will just add that I don't agree with LS about people just going to festivals to buy stuff. my son goes to festivals and it costs a huge amount of money to get in, so why go when you can google things and get them delivered
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#424 |
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Join Date: Sep 2006
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did anyone else see the politicians fighting in bbc news
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Hiya Sex, nice to see you too....
Yeah not like ours who are too afraid I reckon. ![]() All Dix do
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#425 |
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Join Date: Oct 2012
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I really miss joining in live, it's not the same. I will just add that I don't agree with LS about people just going to festivals to buy stuff. my son goes to festivals and it costs a huge amount of money to get in, so why go when you can google things and get them delivered
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