Valve Clearance
Valve clearance is there to allow the valves to cool in between combustion events (spark), and to make sure the valve closes properly and contains the combustion explosion. You need to cool the valves a little bit, the exhaust valve moreso than the inlet, as it's what sees the most heat as spent burnt gases go past it into the exhaust port. Run too little clearance and you'll cause the valve to "weld" a little bit to its' seat every time it closes, and then take seat metal off again when it opens. Do this enough times and you burn out the valve seat and need the head reconditioned. However, by running less clearance, the valve stays open for that little but longer, and you get more air in and out of the motor, and make more power. Run too much clearance and your motor just sounds like a diesel and loses power and tappet rattle annoys you while you're driving, so it's better to err on the side of caution.
The stock valve clearance (0.008" inlet / 0.012" exhaust, warm) is pretty good for any of the cams I've listed above, they're well-sized street cams, not really wild top heavy race cams that require super high compression to work, so don't be afraid to close the valves up a bit from the suggestions of the cam grinder, which will usually say between 0.010" and 0.014". There are a few ways to set your valve clearances:
Yellow Book Method
This is from the factory 3K/4K/5K engine manual, aka The Yellow Books. It's the quick and lazy method.
Set engine to #1 TDC. Crank pulley timing mark should be on 0, distributor rotor should be pointing towards spark plug 1 or 2. Set tappets (counting from the front) 1, 2, 3 and 5. Rotate engine 360 degrees, crank pulley to 0 again, distributor rotor turned 180 degrees. Set tappets 4, 6, 7 and 8.
Nine Method
I've never really gotten into doing this, takes too much time and maths for my liking :P Rotate the engine through its' range of movement, as one valve is "on the rock" of its' max lift, subtract the valve number from 9 and that's the tappet you should be setting. For example, if #8 valve is open, set clearance on valve #1. If valve #7 is open, set clearance on #2. And so on.
Stewart uses this method, and rotates the camshaft through its entire base circle and sets the clearance at the highest point. Which is a pretty good idea, as it compensates for the possibility that the base circle has been ground unevenly, and allows you to run the proper valve clearance that you want to run, instead of something that may be a few thou larger in reality.
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