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

[Noallegiance]

1 hour ago, Cattle Prod said:

2/3 more years is enough for me to escape, here's hoping. I'm terrified of a sterling crisis or capital controls in the next 18 months. 

Can anyone explain what happens to currency already outside of a jurisdiction during currency controls? Can it return? Is it just a one-way street?

[DurhamBorn]

7 minutes ago, AVERAGEUKBLOB said:

$105k in my pension now, 60k in another, and 20k in another

basically all in lifecycle funds and general international equity and value equity funds, fuck the stock picking scam

still got $3k in GDX

thank god i only put $100 in vodafone and stopped DCAing into FTUIX ages ago

Lifecycle ?

 

[Calcutta]

If I thought this had legs I'd have been balls deep in Nvidia since last week.

[Axeman123]

5 minutes ago, Noallegiance said:

Can anyone explain what happens to currency already outside of a jurisdiction during currency controls? Can it return? Is it just a one-way street?

If you got money out, why would you hold sterling - or even fiat for that matter.

What happens to diversified equity portfolios held through a Singaporean broker or Vaulted gold held there in the event of a currency crisis back in your country of origin? Fuck all.

[Loki]

1 minute ago, Axeman123 said:

Fuck all.

Oh yeah? 

 

 

[AVERAGEUKBLOB]

5 minutes ago, Calcutta said:

If I thought this had legs I'd have been balls deep in Nvidia since last week.

META is ATH

[Harley]

39 minutes ago, baffledbyzirp said:

The other consideration, given the diminution in purchasing power over time, is inflation.

If you used the historic cost exclusively there would be no adjustment for the time value of money. In effect you would be using exactly the same formula the government does when it benefits from fiscal drag.

The reality is that an accurate formula is entirely reliant on personal circumstances including age, income, lifestyle, living arrangements etc. Each of us faces different obligations, habits, needs and wants, thus our reaction functions are mutable. 

You can go mad on this if you choose!  I'll skip the accounting lectures to explain financial versus management accounting techniques and objectives, there's a prof or two out there to do that!!!!

[Harley]

47 minutes ago, Axeman123 said:

I disagree.

Revisiting my example, say you previously bought one share of Harley Ltd for 50p, and now get 20p per anum dividend hence "40%" yield (on your original investment). However Your share has a market value of 500p however, meaning 4% actual yield. If you sold (ignoring CGT for a minute) you could say buy 5 shares of Axe Ltd @ 100p paying 6p dividend. The difference being 30p dividend income vs 20p.

Even if you prioritise income over total return or growth, the 40% figure isn't helpful and if anything it will just reinforce holding anything that has gone up a lot since you bought. If you want a combination of metrics that captures both past good buys and income look no further than actual portfolio value and yield as a % of that.

Just my take on it all though etc.

I'm sorry but I disagree from a decision making pov but I'm so not in an accounting frame of mind atm.  My main grace would be whether we are trying to answer the same question.  Cheers.

Edited February 12 by Harley

[sleepwello'nights]

2 hours ago, AWW said:

Same here. I had been contracting for a year or so, taking salary up to the 40% tax band and a bit more as divis on the recommendation of my accountant, when I found out that everyone else on my team was paying themselves £8k a year and taking £100k in divis. I asked my accountant why I wasn't doing that. "Because HMRC don't like it." Right, they don't like it - but it it legal? "Yes".

I sacked him but really should have sued him.

Have you done the sums to see how much more you paid than you could have done?

The extra tax you paid would only really be the reduction in National Insurance. 

[sleepwello'nights]

51 minutes ago, Axeman123 said:

I disagree.

Revisiting my example, say you previously bought one share of Harley Ltd for 50p, and now get 20p per anum dividend hence "40%" yield (on your original investment). However Your share has a market value of 500p however, meaning 4% actual yield. If you sold (ignoring CGT for a minute) you could say buy 5 shares of Axe Ltd @ 100p paying 6p dividend. The difference being 30p dividend income vs 20p.

Even if you prioritise income over total return or growth, the 40% figure isn't helpful and if anything it will just reinforce holding anything that has gone up a lot since you bought. If you want a combination of metrics that captures both past good buys and income look no further than actual portfolio value and yield as a % of that.

Just my take on it all though etc.

Given the results of my attempts at trading I'd end up losing a lot more than leaving the investments alone. I'm certain there was someone watching my trades. Whatever I bought fell and whatever I sold increased

[leonardratso]

i put £1 in arm 3x long on thursday last week, worth 70p friday (decay), today i saw it peak at £2.02. Now £1.89.

Next week i will be putting £1 into something else.

Probably a fruit machine.

[Axeman123]

13 minutes ago, leonardratso said:

i put £1 in arm 3x long on thursday last week, worth 70p friday (decay), today i saw it peak at £2.02. Now £1.89.

Interesting you mention 3x long etfs, as I have been pondering the commodity versions for if we see anything like the 2020 "negative" oil price in the BK. The trade off there will be whether the etfs and options contracts underpinning them have a counterparty blow up somewhere. Certainly not somewhere for large % of holdings.

May the odds be ever in your favour!

[Loki]

1 minute ago, Axeman123 said:

Interesting you mention 3x long etfs, as I have been pondering the commodity versions for if we see anything like the 2020 "negative" oil price in the BK. The trade off there will be whether the etfs and options contracts underpinning them have a counterparty blow up somewhere. Certainly not somewhere for large % of holdings.

May the odds be ever in your favour!

I don't know what I wasn't thinking but I can't believe I didn't buy oil CFDs when it was $5 never mind $0

[Harley]

Listened to Grant Williamson on Thoughtful Money. Always worth a listen but at his best when you only do so now and then as his is big picture stuff. 

Stuff I needed, to get out of the weeds and reposition.  Especially all with noise like a new high in the S&P, geo-polly, etc.  Lots for me to digest but essentially I'm looking to adopt a light touch and even more alt from here on.

But I'm legacy (i.e. more or less continue with the way it has been) with only a few years left to go.  Sequence risk, etc is key.  People are telling me how they're worried about their kids.  Legacy is not for them. 

They talked about the Fourth Turning and pointed out how great is the First Turning.  Seems, if the timing is right, the best we can do is work to ensure they can survive the move from Fourth to First.  

And as they said, that's more than financial, and as I said, it ain't going to be legacy.

Edited February 12 by Harley

[Funn3r]

Oil seems stupidly and artificially low to me.  Thanks to US election year. I've got some BP but what do you buy if you think the oil price will rapidly increase at some point?

[Bobthebuilder]

1 minute ago, Funn3r said:

Oil seems stupidly and artificially low to me.  Thanks to US election year. I've got some BP but what do you buy if you think the oil price will rapidly increase at some point?

Guinness global energy worked well for me from a 2020 buy.

[leonardratso]

15 minutes ago, Loki said:

I don't know what I wasn't thinking but I can't believe I didn't buy oil CFDs when it was $5 never mind $0

hindsight is a wonderful thing, i pondered £100 on thursday and it was already like 90% up, but then ive been burned before by gas 3x shit heaps and thought better of it, now im kicking myself, but hey, fear or past experience will stop you dead.

[Red Debt Redemption]

1 hour ago, Loki said:

Whoa, let me make sure I get all this down for future reference

Me last night reading @sancho panzacheers brah! 

[leonardratso]

3 minutes ago, Bobthebuilder said:

Guinness global energy worked well for me from a 2020 buy.

no divi from dem fookers, but i still bought it all over the place and it did well. Baytex looks like it might come back to life today after the cad pipeline crap.

[Bobthebuilder]

Just now, leonardratso said:

no divi from dem fookers, but i still bought it all over the place and it did well. Baytex looks like it might come back to life today after the cad pipeline crap.

The no divi was the reason I sold it a while back. 100% gain that went into divi payers.

[Democorruptcy]

3 hours ago, Cattle Prod said:

2/3 more years is enough for me to escape, here's hoping. I'm terrified of a sterling crisis or capital controls in the next 18 months. 

Where are you going?

Re oil, I read something the other day about US output hitting a new all time high of 13m barrels a day?

[Harley]

8 minutes ago, Democorruptcy said:

Where are you going?

Re oil, I read something the other day about US output hitting a new all time high of 13m barrels a day?

I'm warm to the idea it's a fake narrative to provide cover for price manipulation in the run up to the US election.  Any chance CP?

[Axeman123]

58 minutes ago, Loki said:

I don't know what I wasn't thinking but I can't believe I didn't buy oil CFDs when it was $5 never mind $0

Indeed, but I remember feeling like the world might actually end in 2020. Maybe that was truly a once in a lifetime experience, or maybe it always feels like that at the time in a big market drop. Either way I learned a lot about investor psychology along the way, hopefully preparing me for the BK.

[wherebee]

51 minutes ago, leonardratso said:

no divi from dem fookers, but i still bought it all over the place and it did well. Baytex looks like it might come back to life today after the cad pipeline crap.

how does a ETF based on oilies pay no dividends?  Surely that doesn't make any sense - if it has underlying holdings in oilies, the fund will be caning it in?  Where does that money go?

[Bobthebuilder]

11 minutes ago, Axeman123 said:

Indeed, but I remember feeling like the world might actually end in 2020. Maybe that was truly a once in a lifetime experience, or maybe it always feels like that at the time in a big market drop. Either way I learned a lot about investor psychology along the way, hopefully preparing me for the BK.

2008 was much the same.