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Credit deflation and the reflation cycle to come (part 2)


spunko

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2 hours ago, sancho panza said:

I don't know your set up H,but @AWW and I were discussing last week the benefits of long term renting  and running your portfolio to either susbsidize the rent or using salary to cover rent and reinvesting divi's in pension.Would aslo leave some leeway for school fees.I jsut had a quick look at WInchester plus 5 miles and whilst it's not cheap,there's one or two nice pads for the price of a repayment mortgage.Might not look such a bad deal as rates go up.

Alternatively,if you've a chunky deposit then the 15 year fix that @Barnsey recently got could be an option.Put the min down and leave the rest in oilies etc.

Dyor natch

The best bet for long term renting for me would be to wait for a BK then dump all the money into BP/Shell and live of Divis. But for ease and peace of mind and kids stability i'd sooner own a place and not have to rely on landlords and divis from a couple of companies. (respect the the guy on here thats put it all in BP).

My plan was to buy a house for 250k ish, borrow 50k, this would pay for 4 years schooling, so i'd need to conjure up 40k ish in 4 years time to pay for the rest. Or if in Winchester a place for 300k and put her in state school. A few years ago it was viable to get an OK house for these prices in these locations..

I get paid £600 a day when i work but i'm limited to how many days i work (+/- 50 days a year), pay myself tax threshold and stick the rest in a SIPP. Then i get 7k ish in child tax credits/family allowance. I'll do 200 miles a day in a car that costs about 10p per mile in diesel, then claim at 45p per mile so make £80 a day/4k per year on this! So have about 24k in clear money.

If i was working full time on PAYE for 30k a year it'd be a different scenario, but im hardly a worked to the bone these days.

But my 10 year plan is to live near Heathrow so i can get the fuck out of England as easily and frequently as possible, or move to Cornwall. If i have to work overseas now; i go to Manchester which takes best part of 3 hours, then there is usually a stopover which its a ball ache, followed by the same on the return journey.

Will see what Sunak comes up with next week, wonder if they realised inflating the property bubble even further is guaranteed to lose them the next election, no matter how bad Labour are.

 

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3 hours ago, JMD said:

DB, that looks good value to me. Have you noticed local house prices starting to increase, especially now with the influx of those 'southern accents'? I recall you saying a while back now, but think you said prices had hardly changed in the previous 10 years.  

Yes i have,and what i do notice is they sell very very quickly.Good quality 3 bed semis around the £130k to £145k mark arent up long.The prices are about the same as 2004 though they doubled from 2001 roughly.My kids are all bought now so it doesnt really matter to us ,but id rather they stay down.I always thought id never move from my house,but i am getting really really tempted with more land,though i might do that through simply buying a field,or a wood.

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ThoughtCriminal

https://www.rightmove.co.uk/properties/77451270#/

 

There's my entry for "how cheap is your area". 

 

3 bed ex council house on Teesside 65k

 

Nice area, I used to live there 😂

 

Still have two houses there, my house and one inherited. 

 

Actually, the more I look at that house the more I'm seeing 10% yield and DBs words about the NE emerging unscathed from a crash.......... 🤔

 

Don't judge me! 😂

 

 

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ThoughtCriminal
13 minutes ago, Loki said:

Apparently BTC just dropped, and the DXY is hovering around 90 (90.05)

Sorry, random data updates is all I have xD

I wouldn't worry about it: after reading umpteen experts today I've seen a 50/50 split saying the dollar is either going to the moon or its heading for lower than a snakes belly. 

 

Might as well toss a fucking coin. 🤦‍♂️

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Bricks & Mortar

House round the corner from DB.  Might want to get a trusted slater to examine and give an opinion on the roof.

On google streetview, can see the adjoining semi had all the slates replaced, likely in the last decade as they're still shiny.  Almost certain the two houses would have been done with the same materials when built.  Not many folk get a new roof unless there's something wrong with the old one.

I'd budget £10K for a new roof on that, including new (decent quality, 100 yr guarantee), slates.

EDIT TO ADD - (£10K at todays prices, mind.)

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If you're tired of Gold, have a look at TIN. Yes, it's incredibly dull but there is a genuine shortage and the spot price is going to the moon. The chart looks like Bitcoin xD

There are about three decent producers and one of them is in CONGO which looks like it's about to collapse (Italian ambassador was killed today). The one I've bought is the Australian producer that has a chart that looks like a SKI ramp xD

Screenshot 2021-02-22 at 19.14.33.png

Screenshot 2021-02-22 at 19.26.38.png

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Bricks & Mortar
35 minutes ago, Metalheadz said:

If you're tired of Gold, have a look at TIN. Yes, it's incredibly dull but there is a genuine shortage and the spot price is going to the moon. The chart looks like Bitcoin xD

There are about three decent producers and one of them is in CONGO which looks like it's about to collapse (Italian ambassador was killed today). The one I've bought is the Australian producer that has a chart that looks like a SKI ramp xD

Screenshot 2021-02-22 at 19.14.33.png

Screenshot 2021-02-22 at 19.26.38.png

I've been getting itchy to buy a bit of Cornish Metals.  I mean, here in Britain, we know where the tin comes from, right?
They seem to be registered in Canada, and have a couple of former tin mines in Cornwall.  Just did an IPO on AIM, and plan to be exploratory drilling for tin soon and for next couple years. (they're drilling in a tin mine, which I reckon is a good place to start.)

Is your Ozzie producer Metals X Ltd?  (EDIT - I see it was.  not many tin miners about).  I fancied them a few months back, but not available on HL.  Almost bought Metals Exploration PLC by mistake!  Anyway, I continued wanting something tin, and this Cornish effort surfaced recently.  Just hovering over maybe selling a Uranium miner and having a bit of them instead.

 

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3 hours ago, ThoughtCriminal said:

https://www.rightmove.co.uk/properties/77451270#/

 

There's my entry for "how cheap is your area". 

 

3 bed ex council house on Teesside 65k

 

Nice area, I used to live there 😂

 

Still have two houses there, my house and one inherited. 

 

Actually, the more I look at that house the more I'm seeing 10% yield and DBs words about the NE emerging unscathed from a crash.......... 🤔

 

Don't judge me! 😂

 

 

Redcar is the area to buy over there now i think.Close enough to Anglo Americans potash mine and also for all the new plants going into Teesside and the old steel works site.Iv ran the rule over a few.I feel dirty xD ,

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2 minutes ago, Bricks & Mortar said:

I've been getting itchy to buy a bit of Cornish Metals

Yup, I'm watching this one too.

Not sure what to make of it at the moment, the CAD price is $0.24 which should be 14p in the UK. Currently 10p on AIM so bit of a discount there. Most AIM stocks are treated like dogshit so that might explain it.

I think the mine is totally flooded at the moment so they are a long time and a lot of money away from production. Mine life is hundreds of years I think - been around forever :Old:

 

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ThoughtCriminal
2 minutes ago, DurhamBorn said:

Redcar is the area to buy over there now i think.Close enough to Anglo Americans potash mine and also for all the new plants going into Teesside and the old steel works site.Iv ran the rule over a few.I feel dirty xD ,

😂😂😂

 

Plenty cheap as chips at Redcar too DB. 

 

They've started dismantling the Steel plant and cleaning the site up in anticipation of the wind and energy transformation. 

 

Redcar/Eston is going to be a boom area over the next decade I reckon. 

 

We could all club together and buy the houses up now. Dosbods rental empire beckons? 

 

Taxi for TC......... 🙈😆

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https://www.ft.com/content/40577a9b-d4d9-4cdd-8d08-43ce1c132406
 

Quote

 

Tin-buying frenzy sends prices to seven-year high

Tin prices have soared to a seven-year high after a manufacturing-driven buying frenzy that has drained physical stocks of the commodity.

The dark grey metal, usually associated with cans, has become a key material for the global electronics industry. It is used to make solder — the substance that binds together circuit boards and wiring. The shift to working from home has boosted demand for computers and other electronic devices, while China has also been stockpiling the metal to meet its goal of self-sufficiency in semiconductors, according to traders.

That has created a supply crunch for a global market that produces 360,000 tonnes a year. The price of tin for delivery in three months on the LME — the smallest by volume of the six main markets offered on the London Metal Exchange — has been driven up more than 70 per cent from its 2020 low to almost $23,400 a tonne.

 

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6 minutes ago, Metalheadz said:

Balance sheet looks fairly solid in the quarterly reports, it's a profitable business. They have a 50% stake in the mining operation by the looks of things, and they're mining tin at around $20k AUD / ton. So currently throwing off $8k of free cash per ton.

This was interesting though:

SHARE SALE FACILITY

During the quarter, the Company undertook a share sale facility (Facility) for holders of less than a marketable parcel of Metals X shares. The Facility closed on 30 November 2020, with 6,242,379 Metals X shares from 2,621 shareholders subsequently sold, reducing the number of Metals X shareholders to approximately 4,340 and reducing Metals X’s administrative costs associated with maintaining a large number of relatively small holdings on its share register.

So essentially using a simple division it looks like they consider anything less than 2400 shares a small holding? That's a $500 investment at current prices.

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Metals X had a copper project "NIFTY" that was bleeding them to death. They've recently sold out / offloaded it (have kept a decent % interest) to focus on the tin. Should start to see decent cash flow in future quarters if the tin price stays high.

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5 minutes ago, Hardhat said:

So essentially using a simple division it looks like they consider anything less than 2400 shares a small holding? That's a $500 investment at current prices.

This is an ASX rule I think.

Under the ASX Listing Rules, any shareholding valued at less than $500 is considered to be an “unmarketable parcel” of shares.

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sleepwello'nights

I'm puzzled by the fall in value of my index linked gilts over the last couple of weeks.

My understanding is the coupon and principal both increase in line with RPI. So come hell or highwater the return is inflation proof. As there is talk of inflation starting to pick up I would have thought that their price would remain stable. 

There has been little, if any, talk of interest rate rises, so why the fall. Is it because their performance is linked to the performance of GBP in currency markets? 

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13 minutes ago, sleepwello'nights said:

I'm puzzled by the fall in value of my index linked gilts over the last couple of weeks.

My understanding is the coupon and principal both increase in line with RPI. So come hell or highwater the return is inflation proof. As there is talk of inflation starting to pick up I would have thought that their price would remain stable. 

There has been little, if any, talk of interest rate rises, so why the fall. Is it because their performance is linked to the performance of GBP in currency markets? 

Negative rates are off the table and the entire yield curve has been rising. To value a bond you need to present value the cash flows. So you project the future cashflows based on the inflation curve and then discount back to today using the Sterling yield curve. 

In other words even if there’s been no change in inflation expectations if the yield curve has risen the future value of those cashflows are less discounted back to today.

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