Credit deflation and the reflation cycle to come (part 8)

[Mandalorian]

13 hours ago, Pip321 said:

Nah, this is the new virtue signalling type sanctions….it’s for the benefit of a few and it’s corrupt.

This confiscation has taken a new level…maybe a study of history would have told us it was possible but a study of history would have told us a lot of things that 5/7 years ago almost seemed impossible or certainly not an imminent threat.

Germany/Russia collaborating and growing….China/US producing and consuming respectively and interest rates nailed down to the floor. 

The macro guys may have had this nailed on but I didn’t. 

Then covid, Canadian Truckers having bank accounts seized, people prosecuted for words….1984 suddenly became a distinct reality rather than just a daft conspiracy.

I had (indeed I have) Polymetal, a company held on Jersey stock exchange, trading partly in Russia and other countries…..and now untradeable in the UK despite being listed on other stock exchanges . This company is even selling its Russian assets to try regain its value and it will be interesting to see the impact.

I think we are in a new world order where Tik Toc is an issue because it isn’t owned by a US company….in North Yorkshire we have an American Army Base with massive Golf ball listening devices which seem to be increasingly ominous as the US sponsors even more wars. They want it all now….East and West. 

So if we are giving warnings moving forward I would be wary who we trust  

Not long ago withdrawals from SIPPs were heavily restricted….maybe that gets reintroduced. Also an insistence 50% must be held in Green UK ventures to qualify for ongoing tax relief….with a return of 1% growth and inflation at 5%.

I am not predicting rather defending those who did invest….5 years ago Russia was cheap, made real things and looked solid. The risk (to me) was Putin might steal our stuff….I never imagined these soft WEF liberal leaders with smart hair cuts in the West were the enemy of my assets. They were all about Globalisation, maximise your opportunity, democracy and freedom (so I thought) 

So now I am wary…but only because the goalposts never changed but the game has changed. The BRICs know it…and now I know it.

If you knew it 5 years ago then that’s great but now I know no property is safe and even physical gold is only a hedge which may need to be hidden from confiscation for 30 years before we are allowed to use it again.

My worry is ongoing US escalation until possibly billions die. I believe they will stop at nothing to line their pockets even by just another few %.

I don’t disagree where we are….I disagree that we judge anyone to harshly who didn’t see this coming.

As it says on  motorway bridge near Manchester "The state ain't your mate".

Some of us worked that out years ago.  Some only worked it out since being locked in their houses.

What you have to do is look and think what is likely - taking into account what the suits might do.

Ultimately, if they want your stuff then they are going to take it and there is bog all you can do about it.  Just got to work on what you think the likelihood of then stealing your Polymetal compared to, say, your Aviva.

FWIW, I sold a lot of my ex state owned stuff when Corbyn had a sniff of power.  Your water companies, BT, electricity companies etc would likely have been stolen without compensation.  And that was pre-coof.

[Mandalorian]

12 hours ago, baffledbyzirp said:

The whole sorry saga for me is a reminder that the nefarious PTB don't care about the rule of law, international property rights or their own citizens. They would happily pile us up on a funeral pyre to make a political point, declaiming our enemies through crocodile tears.

 

Bingo.

[Axeman123]

3 hours ago, BurntBread said:

but he's sure they can't be persecuted because their numbers continue to climb steeply, while I think it's perfectly possible for both things to be true).

Indeed, logically they are being persecuted but not enough hence the rising numbers.

[Jesus Wept]

27 minutes ago, Mandalorian said:

Would be quote boring tbh.

 

Bulk of the portfolio ~ 80%:  Serious money

Buy developed world index trackers and global investment trusts that do a similar job.

Keep exposure to non-Western economies to a minimum.  (E.g.  One or two of my favourite trusts have a small exposure to China - I'd prefer them to have none at all but hey ho - mentally I have written those shares down to zero so if Xi does piss about with them then I'm not shocked.)

 

Small chunk ~ 20%: Play money/special situations

I have some YellowCake.  'They' will eventually wake up to the fact that nuclear is the only energy source that does what they want.

Miners - they can't print it.  Yes some of the mine srae in shoithole countries but that's how it has to be.

Oil and gas - again, they can't print it.

Armaments -BAE Systems in my case.  War is profitable.

 

Might start a  thread actually.  What's in your portfolio

@Mandalorian I’m pretty much with you on this above. Global trackers or certainly regional so you can “dial them up and down as required”. The global trackers are holding a little bit too much S&P for my liking. 

SEMA will be my emerging market play.

Just waiting for entry points into the market.

SEMA has 20% allocation in China (includes some Alibaba and JD.com which I thought about buying direct the other day and decided against it).

 

Will be holding CSH2 (4.4% net yield) until the time comes. 

I am going to allocate:

S&P 40%
Europe 18%
Emerging markets 12%
Japan 10%
Blackrock Mining ETF 5%
Oil 5%
Gold 5%
Silver 5%

Currently I hold 70% sterling cash and lots of “bits and bobs and individual shares”, including gold, silver, miners, telcos, asset managers, oil, baccy and some pharma.

[Mandalorian]

8 hours ago, Jesus Wept said:

Was looking a history of S&P500 as it seems to  just go up and up and up…..

If you had put £100,000 in on the 14th July 2000

 

It would have taken nearly 13 years to return to the same point…

10 years later you would have added 350% 

 

Money printing / destruction of currencies in action….

I would also say that when they say s&P has given back a gain of 13% on average every year - you need to ‘cherry pick the data and look at very long time scales - say 25 - 35 years.

Between 2000 and 2013 it gave back fuck all.

 

Your last point.  Only if you bought a lump of it in 2000 and didn't buy like clockwork every month through thick and thin - which is how I do it.

The easiest way to make money:  Find a bull market and join in.  Just get out when you've made enough.  Don't be greedy.

Who cares about fundamentals?  They are irrelevant - 'market can remain irrational longer than you can remain solvent' etc.  Find a bull and jump on.

[Mandalorian]

7 hours ago, Axeman123 said:

It is fascinating how basically sound some normie share investing advice is, eg:

Start early, average in, stay the course, time in the market, keep adding even when you are down.

Someone in their 30s putting a lump sum in at the height of the 2000 bubble and then drip feeding in every month would still have come good ready for retirement. If they had sucessfully waited in cash/bonds and timed the bottom that followed they would have done incredibly well of course. If they had drip fed their lump sum in over several years instead (as well as regular contributions) they would have been up overall much sooner.

I think people wanting exceptional results and willing to both work for it and take risk/volatility on the chin (like us on here) can do so much better, but if I had to give vanilla advice to a normie I would probably stick with the above and feel they would be well served by it.

Even the 60/40 portfolio has recovered its bond bloodbath losses, and has returned 8% annualised over the last 10 years. Not somewhere I would want to be close to retirement etc, but for the normies maybe not so terrible.

See.  Timing the market and stock picking is a mug's game.

Buy your chosen tracker every month like clockwork through thick and thin.

[Mandalorian]

6 hours ago, Lightscribe said:

Apart from those on ‘generic’ lifestyle schemes get transferred over to treasuries automatically at designated age milestones. there’s some poor blissfully unaware 55 year olds out there that are 80-90% in treasuries who were automatically transferred in stages whilst rates were 0.5%.

Wouldn't have a bond given to me.

[Jesus Wept]

24 minutes ago, Mandalorian said:

Your last point.  Only if you bought a lump of it in 2000 and didn't buy like clockwork every month through thick and thin - which is how I do it.

The easiest way to make money:  Find a bull market and join in.  Just get out when you've made enough.  Don't be greedy.

Who cares about fundamentals?  They are irrelevant - 'market can remain irrational longer than you can remain solvent' etc.  Find a bull and jump on.

“The easiest way to make money:  Find a bull market and join in.  Just get out when you've made enough.  Don't be greedy.”

Been there and done that Silver, Argo BTC, Rolls Royce, Potash, BP and Shell since March 2020. (Thank you @DurhamBorn 🍻).

I am quite happy to sit in 70% cash for now and wait for the right time. I have a few hedges. 

As you say “Don’t be greedy ”….

Edited April 7 by Jesus Wept

[Axeman123]

2 minutes ago, Mandalorian said:

Timing the market and stock picking is a mug's game.

Woah...not exactly what I said.

Horses for courses

[Mandalorian]

1 minute ago, Axeman123 said:

Woah...not exactly what I said.

Horses for courses

It's what I say though

[Jesus Wept]

8 minutes ago, Mandalorian said:

1. See.  Timing the market and stock picking is a mug's game.

2. Buy your chosen tracker every month like clockwork through thick and thin.

1. Nope - not always (much of the time yes but not always). 

2. Yes - but if you have a lump sum and the market has risen 100% in the previous 4 years ytd something tells me to hold on in cash and a few bits and bobs. By all means cost average in every month after investing the lump sum. 

Edited April 7 by Jesus Wept

[Mandalorian]

9 minutes ago, Jesus Wept said:

@Mandalorian I’m pretty much with you on this above. Global trackers or certainly regional so you can “dial them up and down as required”. The global trackers are holding a little bit too much S&P for my liking. 

SEMA will be my emerging market play.

Just waiting for entry points into the market.

SEMA has 20% allocation in China (includes some Alibaba and JD.com which I thought about buying direct the other day and decided against it).

 

Will be holding CSH2 (4.4% net yield) until the time comes. 

I am going to allocate:

....

What makes you think you can time the market?

Friend of mine sold EVERYTHING about 18 months - 2 years ago.  'It's overvalued.  Going to crash.'

It didn't.

Maybe it will.  But what if it doesn't?

This is why I buy in my SIPP every month - like clockwork.

FWIW.  I want a market crash.  I'll be buying stuff cheap.

[Jesus Wept]

11 minutes ago, Mandalorian said:

What makes you think you can time the market?

I did it once before in March 2000.

I was subcontracting for ENRON in Puerto Rico and told the “big Texan boss” - who was constantly bragging about his shares in Enron and his 401k - that it was all about to come crashing down and the Nasdaq was approaching 5000pts and that would be it - all over - reckoned a 50% collapse. (I had just sold my biotech shares and moved to cash).

He laughed and took the piss out of this “naive young limey Brit”. 

The rest is history…

11 minutes ago, Mandalorian said:

Maybe it will.  But what if it doesn't?

My life will continue exactly as before. 

If I was fully invested and it did crash 50% I’d struggle with that. 

Downside for me of the potential of a crash greatly outweighs the upside of getting 10% - 20% a year for the next 3 years or so. Not worth it for me.

Everyone’s journey is different - good luck ! 

Edited April 7 by Jesus Wept

[Jesus Wept]

29 minutes ago, Mandalorian said:

See.  Timing the market and stock picking is a mug's game.

32 minutes ago, Mandalorian said:

The easiest way to make money:  Find a bull market and join in.  Just get out when you've made enough.  Don't be greedy.

Surely these two statements above are contradictory? the second one is “timing the market”.

Then you get back in when you think it’s ’Rock bottom’’

[Mandalorian]

10 minutes ago, Jesus Wept said:

Surely these two statements above are contradictory? the second one is “timing the market”.

Then you get back in when you think it’s ’Rock bottom’’

Getting out when you have made enough isn't timing the market.

It's realising when you've had enough out of a share rather than trying to get the absolute most out of it.

I.e.  Don't be greedy.

[Mandalorian]

27 minutes ago, Jesus Wept said:

I did it once before in March 2000.

I was subcontracting for ENRON in Puerto Rico and told the “big Texan boss” - who was constantly bragging about his shares in Enron and his 401k - that it was all about to come crashing down and the Nasdaq was approaching 5000pts and that would be it - all over - reckoned a 50% collapse. (I had just sold my biotech shares and moved to cash).

He laughed and took the piss out of this “naive young limey Brit”. 

The rest is history…

My life will continue exactly as before. 

If I was fully invested and it did crash 50% I’d struggle with that. 

Downside for me of the potential of a crash greatly outweighs the upside of getting 10% - 20% a year for the next 3 years or so. Not worth it for me.

Everyone’s journey is different - good luck ! 

I once scored a bullseye in the pub.  Doesn't make me Luke Littler!

 

See.  That's a difference.

If the market collapses by 50% then great.  I'll be there buying it.

It fell by a third during covid.  I did nothing except put in my regular monthly orders.  It's now WAY up on what it was before covid.  I've made most of my money by doing nothing.

The global stock market always comes back.  And if it doesn't then there is blood in the streets and we have better things to worry about.

[Jesus Wept]

4 minutes ago, Mandalorian said:

Getting out when you have made enough isn't timing the market.

It's realising when you've had enough out of a share rather than trying to get the absolute most out of it.

I.e.  Don't be greedy.

I think we are on the same page.

I am just a little late to this game and still learning. If I start to invest now in global trackers as sure as night is day it will come crashing down and put me off for life .

I am going to “HOLD” for now and risk waiting until there is a crash. 

Edited April 7 by Jesus Wept

[Mandalorian]

9 minutes ago, Jesus Wept said:

I think we are on the same page.

I am just a little late to this game and still learning. If I start to invest now in global trackers as sure as night is day it will come crashing down and put me off for life .

I am going to “HOLD” for now and risk waiting until there is a crash. 

And what if there isn't?

[Jesus Wept]

Just now, Mandalorian said:

And what if there isn't?

There nearly always is, and if not I will be happy to sit out and celebrate your gains ! 

[Mandalorian]

13 hours ago, baffledbyzirp said:

 or the US, which is in a massive bubble

 

Is it?  How do you know?

You say about their currency having difficulty.  Why do you think the US stock market keeps going up?  Those two things are linked.

1 minute ago, Jesus Wept said:

There nearly always is, and if not I will be happy to sit out and celebrate your gains ! 

Nearly always isn't.  The general pattern is upwards with occasional blips downwards, not the reverse.

[DurhamBorn]

1 hour ago, Mandalorian said:

Definitely not

Think of those Chinese banks and Chinese coal miners churning out divis sending you your capital back during the dollar weakening cycle.Think of how exciting it will be to outperform the S+P.Watching the UK economy collapse into a welfare driven vortex knowing pulp makers in Peru were doing just fine.

You would be like my mate who used to always say "i would never pay for it",100% certain he was,that was until Amsterdam and i sat him down on a bench opposite a window with a beautiful Croatian girl in a silver bikini.Once he broke you could not get him out of those places,he was in love 10 times a day.If we can just get you to into SEDY you will be buying BAT next and asking when the divi is due.Give in.

[Jesus Wept]

9 minutes ago, DurhamBorn said:

Think of those Chinese banks and Chinese coal miners churning out divis sending you your capital back during the dollar weakening cycle.Think of how exciting it will be to outperform the S+P.Watching the UK economy collapse into a welfare driven vortex knowing pulp makers in Peru were doing just fine.

You would be like my mate who used to always say "i would never pay for it",100% certain he was,that was until Amsterdam and i sat him down on a bench opposite a window with a beautiful Croatian girl in a silver bikini.Once he broke you could not get him out of those places,he was in love 10 times a day.If we can just get you to into SEDY you will be buying BAT next and asking when the divi is due.Give in.

Love that ! Good to see the thread back on track with talk of Croatian call girls and BAT ! 

[JMD]

6 hours ago, ThoughtCriminal said:

This is absolutely fascinating. Much watch if you're interested in China.

He's been going to china for a long time, goes to factories etc and he says the change in the last five years is astounding regarding everything from automation to manners, air quality, public transportation and even public toilets! His conclusion is that China is far ahead of most western countries and, most importantly, he says it's the trajectory: China feels like the future whereas the west feels like the past.

It's only 11 minutes and just him doing a walk and talk to camera in Shanghai. That's his twitter account so well worth a follow I think.

 

 

In reference to China becoming more polite. I recall an article of a few years back that said Western media was falsely mis-characterising the Chinese social credit system as a CBDC for government control, when in fact it was more a nudge system to encourage social cohesion and trust between the various Chinese ethnicities that had migrated into the cities. 

[JMD]

5 hours ago, Red Debt Redemption said:

Just put them in general nothing happens. Hear the neighbours bins clinking like fuck when tipped into lorry.  Alot of things you're 'supposed' to do like get a paye job and pay 40% tax doesn't meant you have to.

Yea, like the Soviet Russian workers (sort of) used to say... We pretend to recycle and they pretend to achieve their recycling targets!

[Bobthebuilder]

2 hours ago, Mandalorian said:

What's in your portfolio

Loads of boring divi paying stocks.