Jump to content
DOSBODS
  • Welcome to DOSBODS

     

    DOSBODS is free of any advertising.

    Ads are annoying, and - increasingly - advertising companies limit free speech online. DOSBODS Forums are completely free to use. Please create a free account to be able to access all the features of the DOSBODS community. It only takes 20 seconds!

     

IGNORED

Credit deflation and the reflation cycle to come.


DurhamBorn

Recommended Posts

Lightscribe

I read this book over 10 years ago, and is certainly a good insight to the murky banking world and how little some of them actually know. It’s based on the authors time of working in the city and when he knew he had to get out. 

It’s quite engaging and amusing in places as far as I remember, and a few things still stick with me, that I was reminded by DBs point above regarding people fed up and ‘knowing’ something isn’t quite right. I remember the book stating that some of the best performing  traders were not those with blue blood education, but former street market salt of the earth types that had gut instincts. Lots of people I know who are not even in any way in financially minded, have said that they feel we are heading for something. 

https://www.amazon.co.uk/Cityboy-Beer-Loathing-Square-Mile/dp/0755346181

Link to comment
Share on other sites

  • Replies 11.2k
  • Created
  • Last Reply

Iv just done something i dont do often.Iv spent some money.Iv bought a 4 year old Peugeot 308 estate,4 years old £6.5k.Zero road tax,a car and engine etc im very familiar with and amazing fuel economy.Im keeping my 13 year old Peugeot and my van as well.A few jobs need doing on my old Peugeot and then il use both.The old one for work and back and the new one for longer trips.I figure il get 9 years minimum from the new one so if i factor in spending £400 a year on repairs etc it should average me £1122 a year or £93.50 a month over its life and any time over 9 years repairs only.My old Peugeot has averaged £68 a month during its ownership assuming its worthless now (it isnt to me of course).I never sell cars,they come to the end of their life and i scrap them.So the old Peugeot will be kept until it costs more than say £400 a year to keep on the road.Its the 2nd oldest car in the car park at work and id like it to become the oldest.I think the new one should see me through the next cycle.

I was going to wait another year,but i think leasing demand will drop hard and so demand for 3 to 5 year old cars increase.Plus my old one needs some jobs doing and it means i can do them myself without having to rush.

Link to comment
Share on other sites

I'm really enjoying this thread, particularly the well-grounded optimism of it.  It's good to find there are some sensible companies available on the stock market and it's allowed me to follow the investing idea of buying things from industries that you use in your own life - that is I'm hoping my Centrica dividends will pay my electricity bill and my Vodafone dividends pay my telephone bill.

Link to comment
Share on other sites

Chewing Grass
31 minutes ago, highbot said:

I'm hoping my Centrica dividends will pay my electricity bill and my Vodafone dividends pay my telephone bill.

I like the logic behind that simple statement.

Link to comment
Share on other sites

On 02/03/2019 at 13:25, Cattle Prod said:

Thanks very much for the update, DB. Made my day. Your currency calls have been superb, and yet I couldn't see why it would turn at 97 rather than 100. There is a strong upper resistance line at about 100/101 in May/June as I'm sure you know and I struggled to see it turning withput tagging that first. Then dollar bears like Luke Gromen are tactically dollar bullish for good reasons. Your 97 call was keeping me awake at night! Now things make sense to me, and 100 to 84 fits very very well with the patterns I see in my much more amateur analysis. A little run to 100 will get the dollar bulls all excited just in time for Mr. Market to bring the pain. Might knock the stock rally over too. Cheers lad!

Like you, I just wish gold would trend now! How to play this is the last piece of the jigsaw. When you say $1260 area would be the last great buying opportunity, do you mean for a 2016 type of run up, or a secular bull? In other words, would a deflationary crash bringing gold down to c. $900 offer a second, and last opportunity to buy? If we see a 2016 type run up with say GDX to 38, and then a deflationary crash, do you see that later this year, or next year?As I've discussed with you before, I can see reasons for a 2008 30% drop in gold to not happen this time. But its the question that is currently keeping me awake at night.

It's perhaps stupid of me as my current goal is to maximise capital to deploy at the bottom of the deflationary crash and bear market sell off, which is kind of greedy, and I could just avoid the guessing by averaging in every month. The destination will be the same. I guess I dont trust myself to hold through a major crash!

By the way, check out Moneyweek this week. The inflation cycle to come is all over it, infrastructure spending etc. Its getting 'out there' and as you point out in the previous page the bond market is sniffing inflation. Looking at how jumpy and desperate the Fed et al are to avoid a stock market selloff, do you think they could go straight to an inflation?! I guess they still need a trigger for the massive money printing, but they're certainly warming us up early.

 

There have been big falls in UK gas futures over the last 6 months or so. Bulb recently anounced they are cutting their prices for gas. The cause is being touted as the mild weather, which seems believable. Oil prices also dropped but seem to be leveling off. Would be interested in your thoughts on the current situation.

So I'm expecting another 6 -12 months of business as usual. But a sharp drop in energy prices followed by a sharp rise could cause some panick over the inflation figures.

Link to comment
Share on other sites

Clueless Imbecile

Thanks for all the comments in response to my previous post. It's great to hear the opinions of you guys on here. (It makes me realise just how little I know about financial markets & investing. Ha ha!).

My investment pot right now is as follows:

1) 68% Equities (mostly tracker funds, plus a few "reflation stocks" and PM mining stocks).

2)  4% PMs (in BullionVault).

3) 28% Cash.

I'm mid 40's so I'm probably overweight in equities based on traditional asset allocation strategies (e.g. "Subtract your age from 100 and the result is how much you should have invested in equities"). I'm comfortable with that though, particularly since the returns on cash savings have been so poor recently. I don't own a house (am living cheaply with parents at the moment), so my investment pot will probably one day need to buy me a house to live in. I'm quite happy living with parents so no plans to move out any time soon, but it is possible that at some point over the next 20 years I might decided I want to buy a house of my own (particularly if the UK finally gets a decent house-price-crash). My main goal in life is to achieve financial independence as soon as I can.

My dilemma is what to do about the 28% Cash, most of which is getting zero return because it's sat in my ISA. I keep thinking about government bonds (corporate bonds are too risky at the moment in my opinion). I'm worried about the potential future runaway inflation over the next cycle (approx 10 years?) that has been talked about on this thread. This leads me to think about index-linked government bonds. I'm thinking maybe index-linked UK gilts and index-linked US treasury bonds ("TIPS"?).

 

My understanding of index-linked gilts is as follows:

1) Government issues bonds with face value ("par value"?) of £100, which pay interest ("coupon") of say, 1 percent with index-linking to RPI. Investor buys a bond for £100.

2) After 1 year the government calculates what the original £100 would be if increased by RPI and then pays 1 percent coupon on that uprated value. For example, supposing that RPI was 5 percent, the figures would be:

uprated value = £100 + ((5/100) * 100) = £105

index-linked coupon = (1/100) * 105 = £1.05

At end of year 2, the uprated bond value (£105) would itself then be uprated again by whatever RPI was in the second year, and the 1 percent coupon would be calculated on that second uprated value.

The one thing I don't understand is: What happens when the bond matures? Does the government pay the investor his original £100 back and cancel the bond, or does the government pay the £100 plus RPI increase (compounded over the term of the bond)?

Could someone please explain?

 

The above is a simple case where the investor buys the bond direct from government. I guess things get more complex when the investor buys the bond on the secondary market (e.g. from another investor) for a price that is different from the original face value. That could mean that the interest they receive is different as a percentage of what they actually paid for the bond.

I also don't really know how it works with index-linked bond funds (Unit Trusts, OEICs, ETFs).

 

I'm in a bit of a muddle with this stuff. I keep thinking that I should be buying some index-linked bonds or units/shares in an index-linked bond fund (all government, because I've ruled out corporate bonds as stated earlier). However, I'm worried that they might be poor value despite the index-linking (because the bond price has been bid up on the secondary markets by people who are desperate to protect their capital from inflation) and I really don't know much about bond investment.

 

The questions I'm wrestling with at the moment are as follows:

Q1) Are index-linked government bonds a reasonable investment right now to protect my capital over the next 5 to 10 years?

Q2) Should I buy the bonds direct (apparently this is possible in an online ISA platform, at least for UK Gilts; not sure about US TIPS), or should I buy units in a fund that invests in such bonds?

 

DurhamBorn, I think I saw you mention US TIPS (or a TIPS fund) a few pages back. Would you mind sharing your opinion of whether/when to invest in TIPS or Gilts in the context of the above? (not advice, I know!).


Cheers,
Clueless Imbecile

Disclaimer: I am not an expert. Anything I post here is just my opinions, which may not be factually correct. My posts are intended purely for the purpose of debate and are not to be taken as advice. If you act on any of the above then you do so entirely at your own risk. I do not accept any liability.

Link to comment
Share on other sites

leonardratso
16 minutes ago, Clueless Imbecile said:

Thanks for all the comments in response to my previous post. It's great to hear the opinions of you guys on here. (It makes me realise just how little I know about financial markets & investing. Ha ha!).

My investment pot right now is as follows:

1) 68% Equities (mostly tracker funds, plus a few "reflation stocks" and PM mining stocks).

2)  4% PMs (in BullionVault).

3) 28% Cash.

I'm mid 40's so I'm probably overweight in equities based on traditional asset allocation strategies (e.g. "Subtract your age from 100 and the result is how much you should have invested in equities"). I'm comfortable with that though, particularly since the returns on cash savings have been so poor recently. I don't own a house (am living cheaply with parents at the moment), so my investment pot will probably one day need to buy me a house to live in. I'm quite happy living with parents so no plans to move out any time soon, but it is possible that at some point over the next 20 years I might decided I want to buy a house of my own (particularly if the UK finally gets a decent house-price-crash). My main goal in life is to achieve financial independence as soon as I can.

My dilemma is what to do about the 28% Cash, most of which is getting zero return because it's sat in my ISA. I keep thinking about government bonds (corporate bonds are too risky at the moment in my opinion). I'm worried about the potential future runaway inflation over the next cycle (approx 10 years?) that has been talked about on this thread. This leads me to think about index-linked government bonds. I'm thinking maybe index-linked UK gilts and index-linked US treasury bonds ("TIPS"?).

 

My understanding of index-linked gilts is as follows:

1) Government issues bonds with face value ("par value"?) of £100, which pay interest ("coupon") of say, 1 percent with index-linking to RPI. Investor buys a bond for £100.

2) After 1 year the government calculates what the original £100 would be if increased by RPI and then pays 1 percent coupon on that uprated value. For example, supposing that RPI was 5 percent, the figures would be:

uprated value = £100 + ((5/100) * 100) = £105

index-linked coupon = (1/100) * 105 = £1.05

At end of year 2, the uprated bond value (£105) would itself then be uprated again by whatever RPI was in the second year, and the 1 percent coupon would be calculated on that second uprated value.

The one thing I don't understand is: What happens when the bond matures? Does the government pay the investor his original £100 back and cancel the bond, or does the government pay the £100 plus RPI increase (compounded over the term of the bond)?

Could someone please explain?

 

The above is a simple case where the investor buys the bond direct from government. I guess things get more complex when the investor buys the bond on the secondary market (e.g. from another investor) for a price that is different from the original face value. That could mean that the interest they receive is different as a percentage of what they actually paid for the bond.

I also don't really know how it works with index-linked bond funds (Unit Trusts, OEICs, ETFs).

 

I'm in a bit of a muddle with this stuff. I keep thinking that I should be buying some index-linked bonds or units/shares in an index-linked bond fund (all government, because I've ruled out corporate bonds as stated earlier). However, I'm worried that they might be poor value despite the index-linking (because the bond price has been bid up on the secondary markets by people who are desperate to protect their capital from inflation) and I really don't know much about bond investment.

 

The questions I'm wrestling with at the moment are as follows:

Q1) Are index-linked government bonds a reasonable investment right now to protect my capital over the next 5 to 10 years?

Q2) Should I buy the bonds direct (apparently this is possible in an online ISA platform, at least for UK Gilts; not sure about US TIPS), or should I buy units in a fund that invests in such bonds?

 

DurhamBorn, I think I saw you mention US TIPS (or a TIPS fund) a few pages back. Would you mind sharing your opinion of whether/when to invest in TIPS or Gilts in the context of the above? (not advice, I know!).


Cheers,
Clueless Imbecile

Disclaimer: I am not an expert. Anything I post here is just my opinions, which may not be factually correct. My posts are intended purely for the purpose of debate and are not to be taken as advice. If you act on any of the above then you do so entirely at your own risk. I do not accept any liability.

if i have cash sat around doing nothing, unless im going to spend it on something, i always just shove it into premium bonds, i can always get it out again within 3 working days if i need it, it wont be eligible for prizes for possibly 2 calendar months, but i find i tend to shove it in and just forget about it, its a turd of an investment but it might win a prize as well, either way its safe, plus its an easy way to transfer cash to the kids when they reach 16, if you open accounts you control in their names until they reach 16. Then its theirs.

Link to comment
Share on other sites

31 minutes ago, Clueless Imbecile said:

Thanks for all the comments in response to my previous post. It's great to hear the opinions of you guys on here. (It makes me realise just how little I know about financial markets & investing. Ha ha!).

My investment pot right now is as follows:

1) 68% Equities (mostly tracker funds, plus a few "reflation stocks" and PM mining stocks).

2)  4% PMs (in BullionVault).

3) 28% Cash.

I'm mid 40's so I'm probably overweight in equities based on traditional asset allocation strategies (e.g. "Subtract your age from 100 and the result is how much you should have invested in equities"). I'm comfortable with that though, particularly since the returns on cash savings have been so poor recently. I don't own a house (am living cheaply with parents at the moment), so my investment pot will probably one day need to buy me a house to live in. I'm quite happy living with parents so no plans to move out any time soon, but it is possible that at some point over the next 20 years I might decided I want to buy a house of my own (particularly if the UK finally gets a decent house-price-crash). My main goal in life is to achieve financial independence as soon as I can.

My dilemma is what to do about the 28% Cash, most of which is getting zero return because it's sat in my ISA. I keep thinking about government bonds (corporate bonds are too risky at the moment in my opinion). I'm worried about the potential future runaway inflation over the next cycle (approx 10 years?) that has been talked about on this thread. This leads me to think about index-linked government bonds. I'm thinking maybe index-linked UK gilts and index-linked US treasury bonds ("TIPS"?).

 

My understanding of index-linked gilts is as follows:

1) Government issues bonds with face value ("par value"?) of £100, which pay interest ("coupon") of say, 1 percent with index-linking to RPI. Investor buys a bond for £100.

2) After 1 year the government calculates what the original £100 would be if increased by RPI and then pays 1 percent coupon on that uprated value. For example, supposing that RPI was 5 percent, the figures would be:

uprated value = £100 + ((5/100) * 100) = £105

index-linked coupon = (1/100) * 105 = £1.05

At end of year 2, the uprated bond value (£105) would itself then be uprated again by whatever RPI was in the second year, and the 1 percent coupon would be calculated on that second uprated value.

The one thing I don't understand is: What happens when the bond matures? Does the government pay the investor his original £100 back and cancel the bond, or does the government pay the £100 plus RPI increase (compounded over the term of the bond)?

Could someone please explain?

 

The above is a simple case where the investor buys the bond direct from government. I guess things get more complex when the investor buys the bond on the secondary market (e.g. from another investor) for a price that is different from the original face value. That could mean that the interest they receive is different as a percentage of what they actually paid for the bond.

I also don't really know how it works with index-linked bond funds (Unit Trusts, OEICs, ETFs).

 

I'm in a bit of a muddle with this stuff. I keep thinking that I should be buying some index-linked bonds or units/shares in an index-linked bond fund (all government, because I've ruled out corporate bonds as stated earlier). However, I'm worried that they might be poor value despite the index-linking (because the bond price has been bid up on the secondary markets by people who are desperate to protect their capital from inflation) and I really don't know much about bond investment.

 

The questions I'm wrestling with at the moment are as follows:

Q1) Are index-linked government bonds a reasonable investment right now to protect my capital over the next 5 to 10 years?

Q2) Should I buy the bonds direct (apparently this is possible in an online ISA platform, at least for UK Gilts; not sure about US TIPS), or should I buy units in a fund that invests in such bonds?

 

DurhamBorn, I think I saw you mention US TIPS (or a TIPS fund) a few pages back. Would you mind sharing your opinion of whether/when to invest in TIPS or Gilts in the context of the above? (not advice, I know!).


Cheers,
Clueless Imbecile

Disclaimer: I am not an expert. Anything I post here is just my opinions, which may not be factually correct. My posts are intended purely for the purpose of debate and are not to be taken as advice. If you act on any of the above then you do so entirely at your own risk. I do not accept any liability.

If you go into investments there is a thread called `The Library`, in here I have posted a FT book on personal investment that covers bonds/Gilts really well, and when buying primary/secondary...by Lustig I think?

Link to comment
Share on other sites

4 minutes ago, Cattle Prod said:

Gas future are the wild west, you have guys trading on long range weather forecasts which is nuts. On supply, there is no shortage of gas, and most of whats being discovered these days is gas. Which is good, because we need it to displace coal. There is a single gas field in Qatar that could supply the UK for hundreds of years, and now that we're sorting our the transport problem it will get commoditised. But prices are still locally variable, subject to supply bottlenecks and price spikes so I dont invest or trade it. Oh, Exxon discovered gas equal 1bn barrel of oil equivalent last week in Cyprus. You'd have heard alot more about it if it was oil.

Oil supply is on a knife edge and we could easily have a severe spike this year. Oil trades on the marginal barrel, and will pay plenty of money for it if it thinks the next barell will be hard to get. With most world supply in decline, the market looks to (a) us shale and (b) saudi to ensure the cheap barells keep coming. US shale is basically a ponzi scheme that has never made money, while Saudi recently finally revealed what it has to do to bring on its 'spare' capacity. We are at historically low levels of spare capacity. Slowing demand may madk that, but if either of those two wobble there will be a price shock. I'll be filling my boots as soon as this crazy pumped up market crashes. 

Thanks, apreciate your reply, very interesting. Hope you don't mind another quick question if thats ok.

What are your thoughts on gas from North Sea vs imports in terms of price? I'm thinking as north sea production declines and we become ever more reliant on imports what sort of impact that might have.

I'm trying to get my head around if energy prices will spike at a time that fits with DBs roadmap to give a perfect storm.

 

Link to comment
Share on other sites

Clueless Imbecile
57 minutes ago, MrXxx said:

If you go into investments there is a thread called `The Library`, in here I have posted a FT book on personal investment that covers bonds/Gilts really well, and when buying primary/secondary...by Lustig I think?

Thanks. Does the book cover the apparently market-distorting effect that central banks policies seem to have had over the last 10 years?

I've read Tim Hale's "Smarter Investing" (third edition) and really liked it. I'm familiar with passive investing and what I think of as traditional asset-allocation theory (bonds vs equities vs cash). However, I'm doubting whether the traditional wisdom about bond investing still applies in this QE & ZIRP distorted environment. I've read a lot of comments over the last few years where people have expressed an opinion that bonds are overpriced at the moment, hence my dilemma.

 

Cheers,
Clueless Imbecile

Disclaimer: I am not an expert. Anything I post here is just my opinions, which may not be factually correct. My posts are intended purely for the purpose of debate and are not to be taken as advice. If you act on any of the above then you do so entirely at your own risk. I do not accept any liability.

Link to comment
Share on other sites

Castlevania
1 hour ago, Cattle Prod said:

Gas future are the wild west, you have guys trading on long range weather forecasts which is nuts. On supply, there is no shortage of gas, and most of whats being discovered these days is gas. Which is good, because we need it to displace coal. There is a single gas field in Qatar that could supply the UK for hundreds of years, and now that we're sorting our the transport problem it will get commoditised. But prices are still locally variable, subject to supply bottlenecks and price spikes so I dont invest or trade it. Oh, Exxon discovered gas equal 1bn barrel of oil equivalent last week in Cyprus. You'd have heard alot more about it if it was oil.

Oil supply is on a knife edge and we could easily have a severe spike this year. Oil trades on the marginal barrel, and market will pay plenty of money for it if it thinks the next barell will be hard to get. With most world supply in decline, the market looks to (a) us shale and (b) saudi to ensure the cheap barells keep coming. US shale is basically a ponzi scheme that has never made money, while Saudi recently finally revealed what it has to do to bring on its 'spare' capacity. We are at historically low levels of spare capacity, but tge market is totally complacent due to incorrect assumptiom of limitless shale oil. Perhaps another example of markets looking the wrong way at key inflection points, @DurhamBorn?

 Slowing demand may mask that, but if either of those two wobble there will be a price shock. I'll be filling my boots as soon as this crazy pumped up market crashes. 

If Venezuela sorted itself out, would it be possible to get back to it’s previous levels of oil output? If so, how long would it take?

Link to comment
Share on other sites

leonardratso
3 hours ago, DurhamBorn said:

Iv just done something i dont do often.Iv spent some money.Iv bought a 4 year old Peugeot 308 estate,4 years old £6.5k.Zero road tax,a car and engine etc im very familiar with and amazing fuel economy.Im keeping my 13 year old Peugeot and my van as well.A few jobs need doing on my old Peugeot and then il use both.The old one for work and back and the new one for longer trips.I figure il get 9 years minimum from the new one so if i factor in spending £400 a year on repairs etc it should average me £1122 a year or £93.50 a month over its life and any time over 9 years repairs only.My old Peugeot has averaged £68 a month during its ownership assuming its worthless now (it isnt to me of course).I never sell cars,they come to the end of their life and i scrap them.So the old Peugeot will be kept until it costs more than say £400 a year to keep on the road.Its the 2nd oldest car in the car park at work and id like it to become the oldest.I think the new one should see me through the next cycle.

I was going to wait another year,but i think leasing demand will drop hard and so demand for 3 to 5 year old cars increase.Plus my old one needs some jobs doing and it means i can do them myself without having to rush.

spending money on luxuries, its a slippery slope to the avacado on toast and latest iphone im afraid.

Link to comment
Share on other sites

leonardratso
22 minutes ago, Clueless Imbecile said:

Thanks. Does the book cover the apparently market-distorting effect that central banks policies seem to have had over the last 10 years?

I've read Tim Hale's "Smarter Investing" (third edition) and really liked it. I'm familiar with passive investing and what I think of as traditional asset-allocation theory (bonds vs equities vs cash). However, I'm doubting whether the traditional wisdom about bond investing still applies in this QE & ZIRP distorted environment. I've read a lot of comments over the last few years where people have expressed an opinion that bonds are overpriced at the moment, hence my dilemma.

 

Cheers,
Clueless Imbecile

Disclaimer: I am not an expert. Anything I post here is just my opinions, which may not be factually correct. My posts are intended purely for the purpose of debate and are not to be taken as advice. If you act on any of the above then you do so entirely at your own risk. I do not accept any liability.

i posed a similar question to WICAO who has been extraordinarily successful since 2008, basically i asked if he thought he could have made such a success of his investing if he was just starting out now (think i asked him last year or could have been 2017 sometime, now being then), i think his answer was 'dunno' if i remember correctly, needless to say all the QE and ZIRP certainly hasnt hurt his strategy of investing in the recent decade, driving asset prices and zombies to the fore, but anyway, i continue my trickling in even though its just about breaking even or even at a loss so far, ill get serious on big drops with lump sums, god knows the cash aint doing much now and i dont really need it to be honest, what with my tramp like consumption of stuff.

Link to comment
Share on other sites

sancho panza
On 02/03/2019 at 08:24, Democorruptcy said:

If you are interested in that election, here are the results of it

March 4th 2018

think it's these being referred to.They include some key 'swing state' type places with some hard right types overtaking the centre left and 5 star..Brothers of Italy -conservative nationalist) and Sardianin Action poarty (linked with Lega Nord) .Apparently Abruzzo and Sardinia are liek bellwether states in the US, where they go,the country goes,both went very hard right kncoking out centre left incumbents in Feb with more regional elections during March boith polling 47% and thumping 5 star

I'm know little of Italian politics in general

Link to comment
Share on other sites

Democorruptcy
59 minutes ago, sancho panza said:

think it's these being referred to.They include some key 'swing state' type places with some hard right types overtaking the centre left and 5 star..Brothers of Italy -conservative nationalist) and Sardianin Action poarty (linked with Lega Nord) .Apparently Abruzzo and Sardinia are liek bellwether states in the US, where they go,the country goes,both went very hard right kncoking out centre left incumbents in Feb with more regional elections during March boith polling 47% and thumping 5 star

I'm know little of Italian politics in general

Regional program and results so far https://en.wikipedia.org/wiki/2019_Italian_regional_elections

In the good old days we would have bond yields spiking.

Link to comment
Share on other sites

3 hours ago, leonardratso said:

spending money on luxuries, its a slippery slope to the avacado on toast and latest iphone im afraid.

Luckily you can buy 8 avocados for 2.5 quid at Aldi ;).

I'm interested that there have been a lot of new posters on this thread recently (at least it seems so to me). Are people looking around for answers as they feel "something is coming" perhaps?

This April for me is when I stop paying into my Vanguard ISA, consolidate the gains, and deploy into miners and other deflation stocks we've talked about in a separate S&S ISA.

The way I see it - I have nothing to lose. I can't afford a house as it is, which is the only other thing I might want to spend a huge chunk of money on, and the advice which I've picked up on this thread over the last couple of years has played into the way I've always felt about the modern economy - unproductive things get rewarded, whereas fundamental businesses and sectors we need to keep the country running are undervalued.

Fundamentally, if Facebook and 99% of the other consumer tech companies shut down tomorrow, it wouldn't make a huge difference to the world. However if power plants, trains and telecommunications networks went down, chaos would follow. I know which side I'd want my money in if the shtf.

The PM side is more is a gamble in my opinion, but it does look historically undervalued. My worry with it is whether people of the generations that came after the gold standard was abandoned will still see it as something with an intrinsic monetary value?

Link to comment
Share on other sites

What are folks' thoughts on Bullionvault and the likes? I know it's not ***as good*** as holding actual physical, but given holding £25k of physical is a bit of a worry in your own home etc., what is the consensus?

Link to comment
Share on other sites

Sound Money
35 minutes ago, azzuri82 said:

What are folks' thoughts on Bullionvault and the likes? I know it's not ***as good*** as holding actual physical, but given holding £25k of physical is a bit of a worry in your own home etc., what is the consensus?

I’ve been using it since 2005 and not really heard anything bad about it since then. Was generally well regarded on TOS

Link to comment
Share on other sites

Bricks & Mortar
1 hour ago, azzuri82 said:

folks' thoughts on Bullionvault and the likes?

I've got some at Royal Mint.  I like that I could sell in an instant, since it's 100 mile roundtrip to nearest coin dealer.  I like that Royal Mint is state-owned.

Link to comment
Share on other sites

1 hour ago, Hardhat said:

Luckily you can buy 8 avocados for 2.5 quid at Aldi ;).

I'm interested that there have been a lot of new posters on this thread recently (at least it seems so to me). Are people looking around for answers as they feel "something is coming" perhaps?

This April for me is when I stop paying into my Vanguard ISA, consolidate the gains, and deploy into miners and other deflation stocks we've talked about in a separate S&S ISA.

The way I see it - I have nothing to lose. I can't afford a house as it is, which is the only other thing I might want to spend a huge chunk of money on, and the advice which I've picked up on this thread over the last couple of years has played into the way I've always felt about the modern economy - unproductive things get rewarded, whereas fundamental businesses and sectors we need to keep the country running are undervalued.

Fundamentally, if Facebook and 99% of the other consumer tech companies shut down tomorrow, it wouldn't make a huge difference to the world. However if power plants, trains and telecommunications networks went down, chaos would follow. I know which side I'd want my money in if the shtf.

The PM side is more is a gamble in my opinion, but it does look historically undervalued. My worry with it is whether people of the generations that came after the gold standard was abandoned will still see it as something with an intrinsic monetary value?

No they probably wont.The people with £50 million to invest will though.Silver demand will be industrial with investment demand the cherry on the top.Silver will drive the next cycle,and hardly anyone knows it yet.EV production will suck in silver.

Link to comment
Share on other sites

9 hours ago, Bricks & Mortar said:

I've got some at Royal Mint.  I like that I could sell in an instant, since it's 100 mile roundtrip to nearest coin dealer.  I like that Royal Mint is state-owned.

That's what I find most worrying about RM...and after costs they are more expensive than BV (I assume you have their Signature products).

Link to comment
Share on other sites

7 hours ago, sam1994 said:

I work on an open source software project as you have a chance to keep fresh and try new things without the usual expectation of day to day job in terms of delivery. We opened a Bitcoin wallet in 2012. I remember we had about 70BTC in MtGox just before it went bust. We never divvied it because we thought we'd leave it to grow. Quite ironically it is like house prices in the UK. It will always go up etc.. The way I see it is we never had it so never really lost it.. Ho hum. 

Same boat.

Still living at parent's. They are good as gold and not much motivation to leave at the moment. They wiped my arse for years so happy to do same for them if it comes.. If there was a bird in the picture sure I'd adjust priorities. I make sure I don't reveal my assets and prefer to give it some chat instead of trying to look like a mug who has a wallet. 

Saving a lot of money as a result, but Vanguard LS100 doesn't feel right and the passive investing ideology of Buffet and Bogle feels like it's stale at the moment and not sustainable. Everything in the West feels unsustainable and I feel like we are at a serious turning point. As you're saying, who could care if Facebook disappeared? Then again this is a country that ran out of chicken and people called the police...

@Hardhat do you just have a single vanguard holding or are you spread across the platform?

I do not know how to utilise the information here come April. I hope that changes. Happy to lose it all. I am where I am because of taking risks. 

S

Why one approach or the other I.e passive vs active?...50/50 means that whilst you may not make the mega gains IF I goes one way, you won't lose all of your capital if it doesn't (or you make poor buying decisions).

Link to comment
Share on other sites

UnconventionalWisdom
12 hours ago, sam1994 said:

Thanks for the simpler explanation. It makes a lot more sense now. So it sounds like you are saying that once easy access to credit evaporates, we will have a large deflation of some assets plus cash will be more expensive to obtain. But other assets that are core (energy, telecoms, infrastructure) will be able to grow with inflation and you are trying to do price discovery here to find those companies that will do well in the next cycle. 

Are Fed intentionally playing for deflation of credit or is this something that they cannot control, so may as well claim it as intentional anyway? 

Come April I will need to re-read everything again and ask and get a consensus of how to play things out. 

Sam

I've mentioned him before but Ray Dalio's books have helped me understand what's discussed here. Here's a good intro to debt cycles and the economy. 

 

Link to comment
Share on other sites

11 hours ago, DurhamBorn said:

No they probably wont.The people with £50 million to invest will though.Silver demand will be industrial with investment demand the cherry on the top.Silver will drive the next cycle,and hardly anyone knows it yet.EV production will suck in silver.

An awful lot of PM miners are struggling to stay profitable at current prices, HOC/FRES/CEY all had terrible results with prices where there are.  Im starting to think that there are not too many more people to be shook out of the sector.

Then there is mining higher grade areas for short term gain long term pain, cutting back on exploration, closing mines, AISC not being all in and the financial results showing a lot less profit than there should be as a result etc....

Its all shaping up to be one hell of a ride, if there is significant manipulation in PM's to cap the price its irrelevant in the long run, you need to make profit to mine the stuff and if the world cant mine enough you end up with what's happening with palladium.

Link to comment
Share on other sites

Archived

This topic is now archived and is closed to further replies.

  • Recently Browsing   0 members

    • No registered users viewing this page.

×
×
  • Create New...