Credit deflation and the reflation cycle to come (part 3)

[DoINeedOne]

3 minutes ago, HousePriceMania said:

Offer me 100 

100 Loo Rolls?

[HousePriceMania]

 

 

[WICAO]

1 minute ago, HousePriceMania said:

Sensible, bit I think I'd prefer it to be 1 year + 2 years worth of bog rolls and beans 

This thread is a bit of a roller coaster at times but I think we all know that doing nothing right now is the wrong choice.

Maybe some of them as well.    We certainly don't seem to be heading into deflation anytime soon so possibly a good investment.

I'm not saying do nothing.  I'm saying just do what that plan that was written down long before current events started tells you to do.  For me it's currently to do nothing but very soon dividends will build up and I'll have to do something with it.  I know that will be to buy my most underweight against that written down plan asset class.

[Loki]

DXY and 10Y ticking along quite nicely, not bothered at all

[Green Devil]

5 minutes ago, WICAO said:

Maybe some of them as well.    We certainly don't seem to be heading into deflation anytime soon so possibly a good investment.

I'm not saying do nothing.  I'm saying just do what that plan that was written down long before current events started tells you to do.  For me it's currently to do nothing but very soon dividends will build up and I'll have to do something with it.  I know that will be to buy my most underweight against that written down plan asset class.

Need to be more specific.

Deflation of risk assets.

Inflation of living costs/energy. 

Stagnation of wages 

Just about as bad as it could be (apart from nuclear war perhaps- )

[HousePriceMania]

1 minute ago, WICAO said:

Maybe some of them as well.    We certainly don't seem to be heading into deflation anytime soon so possibly a good investment.

I'm not saying do nothing.  I'm saying just do what that plan that was written down long before current events started tells you to do.  For me it's currently to do nothing but very soon dividends will build up and I'll have to do something with it.  I know that will be to buy my most underweight against that written down plan asset class.

I'm not in a position to do nothing this year and have to be active.

I'm nearing my limit for buying shares now, at that point I will stop buying, 10% in this contrived market is more than eough risk foe me.  I sold out last year but realised after a month or two that I should have held and bought more given the inflation outlook, the way things are now I'm happy with my choices, even if we see the BK.   

I have moved onto looking for a property abroad.  Have decided to go for a ski apartment as this will give me a modest income, move money out the £/Banking system and with inflation I am looking at saving £12-15K skiiing holiday cost per year which means an effectively +ve yield, I will try and put it in my children's names too so avoiding inheritance tax. If you dont ski that might seem mad and frivolous but what's life without a bit of excitment/happiness.

After that the plan is to buy 1 or 2 houses in the UK but I wont deal with that till After October, the market is broken and there is a shit storm coming, anyone who thinks otherwise is deluded.

Deflation might still come, I can see one or two scenarios where this might happen but if it does, I am still fluid enough not to lose out. if I see even a modest crash in house prices at the end of the year I'll be a very happy man.

The one think I have learned the most since 2000 is that:

1) Being in the right asset class at the right time is important

2) Buying at the top of a bubble is a bad idea

3) Selling at the bottom of a bubble is a bad idea

4) Compound interest is your friend.

 

[JMD]

1 hour ago, Democorruptcy said:

The number of posts here are correlated to big news in the markets. The West weaponising the financial markets due to the first war in Europe for years is quite big to be fair. One way to cut the number of posts is to put on 'ignore' those people classed as "gamblers".

Exactly right. Are recent events 'the' inflexion point?                                                                                            ...And maybe Polymetal et al are mere 'appetizer' investment trades, important in and of themselves perhaps, but any mistakes made are vital to digest - in order that we ourselves don't become the 'main course' (feasted upon by the zombie bankers)!!          (Hmm, it sounded far better in my head, but I'll post anyway)

[WICAO]

3 minutes ago, Green Devil said:

Need to be more specific.

Deflation of risk assets.

Inflation of living costs/energy. 

Stagnation of wages 

Just about as bad as it could be (apart from nuclear war perhaps- )

A reduction in the price of bog rolls and beans when measured in the currency I have in my pocket 

On a more serious note:

- So far since I started keeping score just before the GFC my risk assets have compounded at an annualised real 3.3% so deflation over the long term (yet?).

- My living costs are where they were in 2017 but I have a plan in play to reduce those significantly.

- My energy costs were £48 last month but I have a plan to reduce them as well.

- Wages no longer matter.

Educate oneself, build a plan, only change the plan because of that developing education, stay the course, ignore the noise and with a fair wind life might just turn out ok...

[HousePriceMania]

1 minute ago, WICAO said:

- My living costs are where they were in 2017 but I have a plan in play to reduce those significantly.

 

My day to day living costs have pretty much halved, a combination of not driving to work and shopping in Lidl.

I'm not saying inflation is not there, it is, but a lot of it cane be avoided for a lot of people simply by swapping Tesco/Sainos/Waitrose for Lidl/Aldi/Iceland. I stopped going to the pub and I'm paying less for a bottle of wine now that I did in 2000.

 

[WICAO]

14 minutes ago, HousePriceMania said:

I'm not in a position to do nothing this year and have to be active.

I'm nearing my limit for buying shares now, at that point I will stop buying, 10% in this contrived market is more than eough risk foe me.  I sold out last year but realised after a month or two that I should have held and bought more given the inflation outlook, the way things are now I'm happy with my choices, even if we see the BK.   

I have moved onto looking for a property abroad.  Have decided to go for a ski apartment as this will give me a modest income, move money out the £/Banking system and with inflation I am looking at saving £12-15K skiiing holiday cost per year which means an effectively +ve yield, I will try and put it in my children's names too so avoiding inheritance tax. If you dont ski that might seem mad and frivolous but what's life without a bit of excitment/happiness.

After that the plan is to buy 1 or 2 houses in the UK but I wont deal with that till After October, the market is broken and there is a shit storm coming, anyone who thinks otherwise is deluded.

Deflation might still come, I can see one or two scenarios where this might happen but if it does, I am still fluid enough not to lose out. if I see even a modest crash in house prices at the end of the year I'll be a very happy man.

The one think I have learned the most since 2000 is that:

1) Being in the right asset class at the right time is important

2) Buying at the top of a bubble is a bad idea

3) Selling at the bottom of a bubble is a bad idea

4) Compound interest is your friend.

 

Can you tell me what the right asset class is right now?  I freely admit I have no idea.

Are we at the top or bottom or somewhere in between right now?  Again, I freely admit I have no idea.

Agree compound interest is very much your friend unless you're loaded with debt from over extending on consumerist tat.

Why do you want so much residential property?

...and £12-15k on a skiing holiday per year.  Holy shit, I can live a good life on that amount.

[HousePriceMania]

This'll confuse a lot of poly investors 

 

https://www.thisismoney.co.uk/money/share-investing/article-10552685/Anglo-Russian-miner-Polymetal-release-year-figures.html

 

"All eyes will be on Polymetal International when the Anglo-Russian miner releases its full-year figures on Wednesday. "

 

They are nailed on to post HUGE profits, what will people do then ( if the shares have not become worthless ) ?

[JMD]

1 hour ago, DoINeedOne said:

Maybe others are gambling but we all invest in different ways, POLY is not even 3% of my net worth

And my rules are i allow 10% for speculation or lets say a gamble but even that 10% can't just be one thing

 

 

 

 

Yes, trading, investing and speculation (oops I nearly mentioned BTC, but think I got away with it?!) are three different things. For success, each comprise different risk/rewards, time frames, levels of attainable/required knowledge. Plus your point about allocation is absolutely crucial... moderation in all things, as the Greeks liked to say.       

[Sidd]

Dreaded US markets open and metals start poo'ing. They just wont allow it to rise meaningfully.

[WICAO]

2 minutes ago, HousePriceMania said:

My day to day living costs have pretty much halved, a combination of not driving to work and shopping in Lidl.

I'm not saying inflation is not there, it is, but a lot of it cane be avoided for a lot of people simply by swapping Tesco/Sainos/Waitrose for Lidl/Aldi/Iceland. I stopped going to the pub and I'm paying less for a bottle of wine now that I did in 2000.

I agree that for many work costs can be significant.  Something that can however be managed with planning.

I now only drink alcohol infrequently.  Not judging anyone but I know it's working for me personally.

I actually visit 2 supermarkets when I do my shopping - a discount supermarket and a Tesco equivalent.  Good quality food that agrees with me from an ingredients perspective is what I look for these days and I can't get that from just a 'Lidl' equivalent.

[Starsend]

9 minutes ago, WICAO said:

Can you tell me what the right asset class is right now?  I freely admit I have no idea.

Are we at the top or bottom or somewhere in between right now?  Again, I freely admit I have no idea.

Agree compound interest is very much your friend unless you're loaded with debt from over extending on consumerist tat.

Why do you want so much residential property?

...and £12-15k on a skiing holiday per year.  Holy shit, I can live a good life on that amount.

Bonds - Bubble

Growth stocks - Bubble

Value stocks (particularly emerging markets) - Cheap / Fair value

Real estate - Bubble

Commodities - Fair value-ish

Precious metals - Cheap

 

Just my views. As mentioned it's very important to be in the right assets at the right time. Sometimes it pays to just keep it simple.

[HousePriceMania]

Just now, WICAO said:

Can you tell me what the right asset class is right now?  I freely admit I have no idea.

 

Good question !!!!

it could be fiat currency right now, has to have it's turn at some point 

1) Is it property ( big no from me obviously )

2) Is it tech shares ( big no from me )

3) is it Gold/Silver/etc ( big no from me but it wouldn't stop me buying it ).

4) Is it bonds ( No chance )

5 ) is it energy/commodities, isn't that the point of this thread, go big into the stuff people need because the prices are going to front run inflation ?  So that would be a yes for me.

6) Is it War ?  ( a good bet this one, I have RR and BAE, RR has been a dog but would do well in a war ).

7) Banks shares ( maybe, 15 years of nothing and massive state hand outs, maybe there time has come ) 

8) Infrastructure....the one way the government has out of the mess they are in, inflation and infrastructure spending, that's a fair bet.

9) Space exploration, wake me up when anti-gravity is invented.

10) Bitcoin ?  HELL NO.

[WICAO]

2 minutes ago, Starsend said:

Bonds - Bubble

Growth stocks - Bubble

Value stocks (particularly emerging markets) - Cheap / Fair value

Real estate - Bubble

Commodities - Fair value-ish

Precious metals - Cheap

 

Just my views. As mentioned it's very important to be in the right assets at the right time. Sometimes it pays to just keep it simple.

So you're 100% value stocks and commodities inc precious metals?

[Starsend]

2 minutes ago, WICAO said:

So you're 100% value stocks and commodities inc precious metals?

Yes, pretty much. Fair bit of cash at the moment as well, some in Premium bonds waiting until I see something worthwhile deploying it into.

[WICAO]

1 minute ago, HousePriceMania said:

Good question !!!!

it could be fiat currency right now, has to have it's turn at some point 

1) Is it property ( big no from me obviously )

2) Is it tech shares ( big no from me )

3) is it Gold/Silver/etc ( big no from me but it wouldn't stop me buying it ).

4) Is it bonds ( No chance )

5 ) is it energy/commodities, isn't that the point of this thread, go big into the stuff people need because the prices are going to front run inflation ?  So that would be a yes for me.

6) Is it War ?  ( a good bet this one, I have RR and BAE, RR has been a dog but would do well in a war ).

7) Banks shares ( maybe, 15 years of nothing and massive state hand outs, maybe there time has come ) 

8) Infrastructure....the one way the government has out of the mess they are in, inflation and infrastructure spending, that's a fair bet.

9) Space exploration, wake me up when anti-gravity is invented.

10) Bitcoin ?  HELL NO.

I freely admit I have no idea. 

How many people would have thought a 'global pandemic' would result in massive house price increases.  Of course it shouldn't have but then somebody/ies did something and then they did.  I never know who that somebody is and what they'll do.  I also don't know that time and time again.

So I just buy the market and go fishing.

[Lightscribe]

2 hours ago, WICAO said:

Nice job.

I'm banking on most of the world surviving but if it doesn't can you PM me the address of your bunker?  I'm not sure what I have to offer in return though other than semi-intelligent conversation.

No not bunkers etc etc. Just physical metals for me personally being semi- intelligent and all.  Shiny rocks - good.

What’s worked in the last 40 disinflation cycle may not work in the next few years in an inflationary one that we now find ourselves in. It’s looking increasingly more fragile and much as we can ignore the noise, I can’t ignore the irrational actions of governments from the last two years up until now with current events. 

[JMD]

1 hour ago, Chewing Grass said:

Best one is Cobalt60 as steel likes Cobalt.

Apparently it is possibly good for you.

Circa 1983, construction was finished of 1700 apartments in Taiwan which were built with steel contaminated with cobalt-60. Approximately 10,000 people occupied these buildings during a 9–20 year period. On average, these people unknowingly received a radiation dose of 0.4 Sv. This large group did not suffer a higher incidence of cancer mortality, as the linear no-threshold model would predict, but suffered a lower cancer mortality than the general Taiwan public. These observations appear to be compatible with the radiation hormesis model.

Great information! I'm swopping my tin foil hat for a cobalt one tomorrow.                                                           (Seriously though weren't there trials in the 90s for cobalt administered daily in tablet form?)

[leonardratso]

hmm forgot about this, had some left over isa money a while back so took an aim punt, lucky there;

[Pinkpanther]

I appreciate Others sharing their thoughts and views. - yep it does seem to be the polymetal thread at the moment but for newish investors like me I apprecate peoples honesty. (I assume its honesty)

The first rule I learnt was to only invest what you can afford to lose - (not great advice if you pension is in the stock market)

The second rule i have learnt (from this forum) is to ladder in.

and the third rule is the higher potential gain/return = more risk.

I think this whole thing is "noise" and will go back to relative normal in the near future (I may well be wrong, and It certanly is not just "noise" for the poor inhabitants of the Ukraine) but Ive decided to act on my conviction.

I looked at the price of polymetal at £10.50 and thought it was a reasonable risk! But I did not buy.

Anyway I decided last thursday to take the risk and bought 70 shares at £7.10 ( I ment to get it at sub £6 but I clicked accept instead of decline) only to watch it tank to £5.05 then go back up.

Today I decided i would ladder and managed to get another 70 at £3.47.

So I have decided that I will risk losing £750 for either good dividends, or reasonable return of my investment in 3/5 years time. Am I prepared to lose the money? - well there is the first rule.

But ultimately after my first share purchase coming up 2 years ago I am overall (exc-dividends) 20% up, and still have 3 years to go before i fully assess "my" performance. So thanks to all who share their views and experiences (positive and negative) to help others.

 

[WICAO]

2 minutes ago, Lightscribe said:

No not bunkers etc etc. Just physical metals for me personally being semi- intelligent and all.  Shiny rocks - good.

What’s worked in the last 40 disinflation cycle may not work in the next few years in an inflationary one that we now find ourselves in. It’s looking increasingly more fragile and much as we can ignore the noise, I can’t ignore the irrational actions of governments from the last two years up until now with current events. 

Maybe all of us with some shiny could sit around (not sure what we'd sit around as a fire might attract attention) and look at our precious.  

On a more serious note what % of your wealth do you aim to hold in PM's?  I've decided on 5% as it doesn't have a yield and I want as many £'s as possible to earn their keep.

[Harley]

1 hour ago, JMD said:

Have you sold your Hong Kong shares Harley? Not trying to pry, but as you've spoken in the past about them, I would be interested in why... China risk, divi witholding tax, etc?

I still own some but did pull back.  They didn't have legs.  But I'm overdue a look but there are so many to look at atm.  I've been more interested in Japan but again have some work to do.  With HK, maybe time to look at the oil refiners!