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Credit deflation and the reflation cycle to come.


DurhamBorn

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20 hours ago, DurhamBorn said:

I think on cars paying around £5k for something 4 years oldish is the sweet spot and then keep it 10 years.Always go for a car that has been in production for a long time and is mass market.These have most faults ironed out and parts are cheap.it also means if a big part goes (gearbox,engine etc) you can get one from a scrapyard.Then find a local grease monkey backstreet garage where just the lads work there,no receptionist etc.Use them every time for all cars in the family and take them yourself.I have the figures somewhere but i think my average car cost since i was 18 is £8 a week,so roughly £36 a month.Thats all depreciation and repairs.

I build engines for a living.What breaks cars is mainly crap driving and temperature.Speeding up too fast,breaking too hard,cornering too fast etc.Another huge one is starting a car and pulling away straight away,especially in winter.Turn the key and allow the engine to run a minute in idle before pulling away.That will help your engine last pretty much forever.

Cars are built amazingly well now and can easily last 20 years without too much of a problem.Car parks are rammed with brand new ones though on lease deals.Lidl you cant move for Range Rovers,mercs and audis.

That’s what makes me smile seeing brand new cars often 35-60k models yet shopping in Lidl or Aldi to save money 

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2 minutes ago, stokiescum said:

That’s what makes me smile seeing brand new cars often 35-60k models yet shopping in Lidl or Aldi to save money 

It's the chicken and egg question. Which came first? Funds from frugal spending or debt from reckless spending?

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1 hour ago, CVG said:

It's the chicken and egg question. Which came first? Funds from frugal spending or debt from reckless spending?

Probably pcp cars and cut back on the food shopping to off set the cost they ain’t buying them cash 

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sancho panza
On 26/06/2019 at 13:18, MvR said:

 

As for being short... you know that's a complex question for an options trader running multiple accounts and strategies lol..  but basically not really. My IB options selling account would benefit from a short term downward correction in gold and stocks, but my speculative account wants them to rise longer term.

Overall, I'm basically long miners but looking to take profits on most of those as gold reach the 1500 area to free up some cash.  I've a very small amount positioned in low-probability long options to win bigly if DB and his mentor's targets play out, but not lose much if they don't, ( including GDX/GDXJ even if I've sold  the miners in my ISA ),  and I'm practising small scalping shorts on SPY, gold etc. in my spread-betting account, hoping to sharpen my top-picking skills ready for the big down-turn when it happens. 

Alongside all that I've been playing in IG's demo CFD account, placing balance long and short positions on basics like gold(long), stocks(long), oil(short), the dollar(short ) etc.  Not surprisingly I'm making out like a bandit in the demo account... up 80% in a month... it's so much easier when it's not real money! lol

EDIT: PS.. I know you watch the builders, but have you checked out the brick makers too?  Firms like Forterra, Ibstock Brick and Michelmersh?   As suppliers masses of building projects, they bound to be in play over the next few years, long or short.

Thanks.It was Interactive Brokers I was thinking of.We talked many pages back and I forgot the name you mentioned. But Interactive Investors has a lot of options as I was just asking as I need to get access to more obscure Canadian stocks than I currently can.It might alos open up some other markets away from trading the ADR's.

Ref the shorts,I know you generally hedge but was wondering if you had any substantial unhedged shorts.

It is always easier in dummy accounts,it's amazing what a bit of cash can do for your emotions.

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sancho panza
On 26/06/2019 at 18:40, leonardratso said:

 

FANTASY INVESTOR 2018 DOSBODS
            26/06/2019 usd/gdp 03/11/2018 : 0.7702   usd/gbp now : 0.7875
                cad/gdp 03/11/2018 : 0.5869   cad/gbp now : 0.6005
UID Invested in p/unit NAV @03/11/2018 p/unit NAV now Profit/Loss pence Profit/Loss
Percent(%)
Total P/L
(%) per UID
Notes          
spunko ETH/GBP 15,398.00 #ERROR! #ERROR! #ERROR! #ERROR! gb pence          
stokiescum lon:gaw 3,230.00 4,890.00 1,660.00 51.39%   gb pence          
  lon:iqe 96.30 58.55 -37.75 -39.20%   gb pence          
  lon:vod 150.52 125.76 -24.76 -16.45%   gb pence          
  lon:bp 533.30 554.80 21.50 4.03% 40.37% gb pence          
castlevania lon:shg 4.32 7.81 3.49 80.79% 80.79% gb pence          
kibuc tse:wdo 237.11 320.07 82.96 34.99% 34.99%
ca cents->gb pence
         
nicolas turgeon nysearca:udn 1,631.28 1,649.03 17.74 1.09%  
us cents->gb pence
         
  nysearca:gdxj 2,161.18 2,768.06 606.88 28.08% 16.47%
us cents->gb pence
         
sound money BTC/GBP 489,806.17 #ERROR! #ERROR! #ERROR!   gb pence          
  nyse:auy 181.77 196.09 14.32 7.88% #ERROR!
us cents->gb pence
         
ponty mython lon:infa 0.51 0.71 0.20 39.22%   gb pence          
  tse:tgz 207.18 230.59 23.42 11.30% 11.37%
ca cents->gb pence
         
doineedone XRP/GBP 35.74 #ERROR! #ERROR! #ERROR!   gb pence          
  spot gold 1oz 95,165.91 #VALUE! #VALUE! #VALUE! #ERROR!
us cents->gb pence
         
sancho panza lon:cna 145.10 87.40 -57.70 -39.77%   gb pence          
  lon:vod 150.52 125.76 -24.76 -16.45% -27.89% gb pence          
green devil TRX/GBP 1.81 #ERROR! #ERROR! #ERROR!   gb pence          
  EOS/GBP 422.02 #ERROR! #ERROR! #ERROR!   gb pence          
  ETH/GBP 15,398.00 #ERROR! #ERROR! #ERROR! #ERROR! gb pence          
janch nasdaq:fb 11,368.92 14,878.24 3,509.32 30.87%  
us cents->gb pence
         
  nasdaq:amzn 123,669.47 149,310.00 25,640.53 20.73%  
us cents->gb pence
         
  nasdaq:aapl 15,458.68 15,801.19 342.50 2.22%  
us cents->gb pence
         
  nasdaq:nflx 23,638.21 28,674.45 5,036.24 21.31%  
us cents->gb pence
         
  nasdaq:goog 78,743.71 84,990.15 6,246.44 7.93% 16.12%
us cents->gb pence
         
lavalas tse:wdo 237.11 320.07 82.96 34.99%  
ca cents->gb pence
         
  cve:gtt 107.99 54.65 -53.34 -49.40%  
ca cents->gb pence
         
  indexsp:.inx 209,981.94 230,205.15 20,223.21 9.63% 9.63%
us cents->gb pence
         
dgul lon:aca 158.65 179.40 20.75 13.08% 13.08% gb pence          
malthus lon:lnga 2,532.42 877.28 -1,655.14 -65.36% -65.36%
us cents->gb pence
         

Looks like I'm first of the losers.Oh dear....

On 26/06/2019 at 21:51, Ash4781b said:

There’s Increasing focus on liquidity and The regulators are piping up.  

With reference to what Ash?Any links?

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Democorruptcy
2 hours ago, stokiescum said:

That’s what makes me smile seeing brand new cars often 35-60k models yet shopping in Lidl or Aldi to save money 

Someone was telling me what a great leasing deal he had on a BMW. I reckoned it was costing him £40k. Next conversation was about central heating and he told his wife she couldn't have it turned on until October. Sat shivering in the house to pay for a status symbol on the drive.

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3 minutes ago, sancho panza said:

Thanks.It was Interactive Brokers I was thinking of.We talked many pages back and I forgot the name you mentioned. But Interactive Investors has a lot of options as I was just asking as I need to get access to more obscure Canadian stocks than I currently can.It might alos open up some other markets away from trading the ADR's.

Ref the shorts,I know you generally hedge but was wondering if you had any substantial unhedged shorts.

It is always easier in dummy accounts,it's amazing what a bit of cash can do for your emotions.

You'll be able to access the most obscure stocks on Interactive Brokers, I'm sure. They seem to cover pretty much everything tradable.. it's just a shame they don't to ISAs, so like you I'm hoping Interactive Investor gives access to some of the Canadian stocks, mostly miners, I'm interested in. I've not opened an account with them yet though.

No unhedged shorts at this stage, though if I do OK on the way up in any melt-up I'll be looking for some on the way down. I'll mostly stick to indices and ETFs I expect, in my spread betting account, ideally scaling into positions slowly on bounces and shifting stop-losses if the market moves in my direction, so breakeven or a small loss on my first entry is the worst outcome.

Hopefully I'll end up with a few nice sized positions to ride down in a bust, but I'm not counting on anything. I could just as easily be washed out for a few small loses.

 

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sancho panza
On 27/06/2019 at 01:01, Barnsey said:

Ipswich Building society to "free" mortgage prisoners by removing stress tests, and new customers who aren't prisoners don't have to do them either. Being applauded by thrifty Martin Lewis no less, despicable. Here we go again!

https://www.moneysavingexpert.com/news/2019/06/mortgage-prisoners-offered-lifeline-with-launch-of-new-product/

The devil is in the detail.I would suggest the criteria would exclude most who are currently struggling to remortgage for obvious reasons

  • 'You must be an existing mortgage-holder with a good payments history to apply. The mortgages are only available to homeowners who have been with their current lender for at least two years, haven't missed a payment and aren't looking to borrow any additional money.
     
  • You can choose from a range of two-year fixed and discount mortgages. These include a two-year discount at 2.55% and another at 2.5%, as well as a two-year fixed deal at 2.8% and one at 2.75%. These all come with a £199 arrangement fee and a £500 completion fee.
  • Borrowers under 50 can remortgage their home at up to 80% loan-to-value (ie, you can borrow up to 80% of a property's value). Those who are 50 and over can borrow at up to 75% loan-to-value. The maximum loan available is £750,000.
  • Homeowners who bought using shared ownership can also remortgage at up to 90% loan-to-value (capped at £500,000) of their share. On offer are a two-year fixed-rate deal at 3.15% and another at 3.25%. There are no fees with these deals.
On 27/06/2019 at 12:50, kibuc said:

Yes, that part of money creation I understand. Banks - either central or commercial - create money.

I still don't get how governments create any money.

Govts-as Dgul implied-can print cash/electronic money via the CB

On bank balance sheets,cash/reserves at CB  are a core component of the key capital ratios they work within.

On 27/06/2019 at 13:27, kibuc said:

But that's not money creation on the government side, is it? It's the BoE that creates money to purchase govt debt. It could just as well refuse to create money for that purpose and the govt would have to find another buyer. Isn't that what's happening in US at the moment? Even the US govt cannot just print money, it can only hope that someone with money will buy its debt.

In any moder economy I know money creation is a bank-only priviledge. Whether those banks can or cannot be influenced by governments and pushed towards more money creation is a separate issue.

So, essentially, it all starts and ends with banks and their willingness to lend. Governments are at their mercy.

As Dgul says,the govt owns the BoE.It will do as it is generally told.

The key issue you allude to-and it's one I've referred to before as credit deflation in order to differentiate from price deflation- is that the Govt cannot force people to borrow and nor can it(although there are ways of leaning on people) force banks to lend.

Banks balance sheets in these post cash reserve lending days are constructs based on floating asset values that are often not marked to market on a daily/monthly basis.There's some distinction in loan portfolios for higher risk loans that demand a larger capital requirement,but as th metro bank proved,these are fudgible,particualrly in the short term.

 

The big issue that looms-and virtually guarantess some sort of credit deflation withjin the banking system- is that across loan portfolios over the last ten years and maybe longer is that the aggregate figures are hiding a much more nuanced story. @Harley has discussed this before with regard to behavioural economics and that is that QE and driving interest rates down has actually forced some would be borrowers out of the marekt and brought some more in.Long story short-my working thesis is that the reduction in interest rates has stopped a lot of the more affluent/educated consumers borrowing whilst at the same time allowing some consumers to borrow who are completely unaware of the risks they are running.

The net effect on a banks balance sheet when a loan defaults is that it not noly causes a balance sheet loss but also a reduction in the ability to create credit money.As I psoted previously,Irving Fisher covered this in his Debt Deflation theory.He highlighted the risk to the economy if peopel started paying down debt

This effect-Fishers paradox-will be even more marked in a banking system that is levered up -not on cash which has a quantifiable nature-but on the fudged balance sheets discussed before.

 

Interesting times.

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sancho panza
On 27/06/2019 at 17:22, kibuc said:

That was my understanding for a very long time, until I read this paper from the BoE about money creation:

https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy

The way I understand it, the Fractional Reserves system is still in place and "money multiplier" explanation kind of sort of holds true, but the eye opener for me was that commercial banks don't need ANY customer deposits to lend money - they can always borrow enough money from the central bank to meet reserve requirements to support their lending activity. Previously I thought banks would take my deposit, lets say £10k, and multiply it by 10 to lend £100, and I never stopped to think about were that extra £90 was coming from or what would happen if they failed to get enough deposits. Now I understand that all that "multiplied" money gets created from thin air, and if my bank wanted to lend £100 but couldn't put their hand on my £10 deposit, they would simply borrow £10 from the central bank, so even the "deposit" would be created out of nothing.

The key problem all the banks have is that people can demand cash-unlikely but has happened before.Then we find out whose been swimming naked in terms of the £500k home loan made on a £300k house bought IO at 4.5 times salary when the mortgagor had a job.

 

As you say the money mulitplier does exist but can be dsitorted easily even with auditors inplace.

Worth reading this classic piece from Steve keen back in 08 before the BoE decided to openly admit what was only known to a few ie that banks create loans ahead of deposits.It seems incredible that keene was writing in 08

https://www.debtdeflation.com/blogs/2009/01/31/therovingcavaliersofcredit/

'

It also shows the impor­tance of the nom­i­nal money stock, some­thing that neo­clas­si­cal econ­o­mists com­pletely ignore. To quote Mil­ton Fried­man on this point:

It is a com­mon­place of mon­e­tary the­ory that noth­ing is so unim­por­tant as the quan­tity of money expressed in terms of the nom­i­nal mon­e­tary unit—dollars, or pounds, or pesos… Let the num­ber of dol­lars in exis­tence be mul­ti­plied by 100; that, too, will have no other essen­tial effect, pro­vided that all other nom­i­nal mag­ni­tudes (prices of goods and ser­vices, and quan­ti­ties of other assets and lia­bil­i­ties that are expressed in nom­i­nal terms) are also mul­ti­plied by 100.” [15]

The mad­ness in Friedman’s argu­ment is the assump­tion that increas­ing the money sup­ply by a fac­tor of 100 will also cause “all other nom­i­nal mag­ni­tudes” includ­ing com­mod­ity prices and debts to be mul­ti­plied by the same fac­tor.'

 

 

 

 

 

Clearly,the big unknown is what happens when consumers are spent up and decide to pay down debt.The govt can always force banks to lend BUT and its a big BUT ,they can't force people to borrow.

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sancho panza

as posted before

well worth researching if people have the time

https://en.wikipedia.org/wiki/Irving_Fisher

'

Following the stock market crash of 1929, and in light of the ensuing Great Depression, Fisher developed a theory of economic crises called debt-deflation, which attributed the crises to the bursting of a credit bubble. Initially, during the upswing over-confident economic agents are lured by the prospect of high profits to increase their debt in order to leverage their gains. According to Fisher, once the credit bubble bursts, this unleashes a series of effects that have serious negative impact on the real economy:

  1. Debt liquidation and distress selling.
  2. Contraction of the money supply as bank loans are paid off.
  3. A fall in the level of asset prices.
  4. A still greater fall in the net worth of businesses, precipitating bankruptcies.
  5. A fall in profits.
  6. A reduction in output, in trade and in employment.
  7. Pessimism and loss of confidence.
  8. Hoarding of money.
  9. A fall in nominal interest rates and a rise in deflation-adjusted interest rates.

Crucially, as debtors try to liquidate or pay off their nominal debt, the fall of prices caused by this defeats the very attempt to reduce the real burden of debt. Thus, while repayment reduces the amount of money owed, this does not happen fast enough since the real value of the dollar now rises ('swelling of the dollar').[24]

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sancho panza
On 28/06/2019 at 14:42, JMD said:

Has anyone views about cannabis investing?

The medical/recreational side will make some a lot of money but how best to invest? I think DB has suggested big tobacco like Imperial Brands might be good play. But are there any good potential small (US/UK) companies or even ETF's out there perhaps?  

I'd wait till they';ve tanked 90
% of peak,then buy Bats,Phil Morris and Imperial  for when they hoover up.

On 28/06/2019 at 16:46, Yellow_Reduced_Sticker said:

another link.

https://www.fnlondon.com/articles/deutsche-bank-is-considering-up-to-20000-job-cuts-20190628

Can't really see a future without a round of capital raising or three for them.A walking advert for why QE was a bad idea.

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sancho panza
On 29/06/2019 at 10:52, DurhamBorn said:

One thing that has happened since i started investing aged 14 is that every 10 years people say tobacco is finished and a terrible investment.Each time so far i have bought heavily into the sector,and each time iv made silly amounts of money.This time could be different,there is no doubt smoking is under huge pressure in the west etc.However these companies have massive free cash generation and there is a huge market developing in new areas.Big tobacco will dominate cannabis.In Vaping people also seem to think there will be 100s of players so low profits.Not so.Once the sector develops regulations will come in more and more.Small companies wont be able to hit them.Big tobacco will also push all retailers to make sure their products get the shelf space.Others will be squeezed out.BAT has 7000 million of free cash .Seven thousand million.No small vape players or cannabis will be able to compete.

The only worry i have at these prices is debts are too high given im expecting rates to increase by a lot in several years.That means i want to see them continue to de-leverage by the £1.5 billion a year BAT and around £800 million a year Imperial.That would mean they retire a good portion before rates increase and then have the other 50%/60% of debt rolled over into bonds before rates increase and then roll those off.I also hope Imperial drop their dividend increases to perhaps 4% or RPI after this year,and BAT keep increases again to 4%.

Not reflation stocks,but im very happy to have added both back to my portfolio.

Love the phrase in bold.

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sancho panza
On 29/06/2019 at 15:27, Democorruptcy said:

Car payments are ruining our lives

Victoria put down £300 as a deposit and has to pay £329 a month for five years.

As a first year university student with a part-time job she'd originally gone out looking for a much smaller - and less expensive - car to help her get to and from lectures. But she was persuaded to buy the Audi, which will end up costing her more than £20,000. Mandy says her other daughter, Natasha, also took out car finance and was told to bring in three pay slips to prove she could afford the repayments.

But Mandy says there was nothing like that, what's known as an affordability assessment, for Victoria.

..

That's an issue that is key to Mandy's question about how her daughter was able to sign up to a car finance plan for more than £20,000 without being asked to provide any evidence she could actually afford the repayments.

"She [Victoria] should never ever have been sold that, or offered a car like that. She should have been given [an affordability] test to prove she could afford it, but the company didn't do it.

"I think it's criminal, the impact it's had on the family, my daughter, it's outrageous."

Car finance: The figures

  • £45.9bn was borrowed in 2018 for car finance
  • 91.2% of all new cars were bought using finance
  • 2.9 million cars were financed by members of the Finance and Leasing Association

this is exactly what I was referring to in one of my posts on FRB.This is exactly the sort of person who's borrowing like this today who wouldn't have been 10+ years ago as the banks have run out of willing debtors with higher credit scores.

At some point these people will default or stop borrowing.Either will be potentially catastrophic for aggregate demand if they initate the dreaded debt deflation.

On 29/06/2019 at 21:57, DurhamBorn said:

I think on cars paying around £5k for something 4 years oldish is the sweet spot and then keep it 10 years.Always go for a car that has been in production for a long time and is mass market.These have most faults ironed out and parts are cheap.it also means if a big part goes (gearbox,engine etc) you can get one from a scrapyard.Then find a local grease monkey backstreet garage where just the lads work there,no receptionist etc.Use them every time for all cars in the family and take them yourself.I have the figures somewhere but i think my average car cost since i was 18 is £8 a week,so roughly £36 a month.Thats all depreciation and repairs.

I build engines for a living.What breaks cars is mainly crap driving and temperature.Speeding up too fast,breaking too hard,cornering too fast etc.Another huge one is starting a car and pulling away straight away,especially in winter.Turn the key and allow the engine to run a minute in idle before pulling away.That will help your engine last pretty much forever.

Cars are built amazingly well now and can easily last 20 years without too much of a problem.Car parks are rammed with brand new ones though on lease deals.Lidl you cant move for Range Rovers,mercs and audis.

I buy at the optimum point of the depreciation curve which I find is around the 3-4 year mark and as you say,tend to keep them for a few years.We bought Mrs P a Kia Sorrento for her and the kids,2 and half years old, 50% off list with 20k on the clock.My car had a 100k on and was roughly 80% off lsit at 4 years old.Owes me nothing now.

At work the car park(NHS) tells it's own story about the UK when you see who's getting in which cars

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sancho panza

Worth a read particualrly @Harley

https://acquirersmultiple.com/2019/06/seth-klarman-value-investing-is-at-its-core-the-marriage-of-a-contrarian-streak-and-a-calculator/

We’ve just been re-reading Michael Mauboussin’s book – The Success Equation. There’s a great passage in the book with discusses investor psychology, and some of the findings of Daniel Kahneman and Amos Tversky. There’s also an great explanation of one of Seth Klarman’s most famous investing quotes:

“Value investing is at its core the marriage of a contrarian streak and a calculator.”

Here’s an excerpt from the book:

The second part of a skillful process is psychological. This part deals with Kahneman and Tversky’s work on biases. These include overconfidence, anchoring, confirmation, and relying on what is most recent. Kahneman and Tversky emphasize that these biases arise automatically and are therefore very difficult to overcome.

For example, when making a prediction, people tend to give disproportionate weight to whatever has happened most recently. In investing, there is a strong tendency to buy stocks that have done well or to place bets on a money manager who seems to have a hot hand. This is just as true for professional money managers as it is for everyone else. Individual investors consistently earn returns that are 50–75 percent of those of the market as a result of bad timing.

Kahneman and Tversky also developed the idea of prospect theory, or how people make decisions when they are uncertain about gains and losses. Prospect theory reveals behavior that is at odds with classical economic theory.

Compensation provides a good example of the difference between these two theories. Ideally, you should consider your salary for a new job in the context of your aggregate wealth rather than comparing it with what other employees are making. But, of course, few of us do that. In one study, researchers asked people which new employee was happier, the person making $36,000 in a firm where the average starting salary is $40,000 or the one making $34,000 in a firm where the average starting salary is $30,000. Eighty percent of the respondents said the employee earning $34,000 would be happier.

In investing, the reference point is what you paid for a stock. When you buy a stock at $30, for instance, you effectively open a mental account. You have a gain if the stock rises above $30 and a loss if it drops below that price.

Rather than viewing the value of the stock in the context of a larger portfolio, the natural tendency is to consider each stock relative to its reference point. Loss aversion is another feature of prospect theory. We suffer roughly two times more from a loss than we enjoy a gain of the same size. The combination of the reference point and loss aversion leads investors to hold on to losing stocks and sell winners, because it is painful to take losses.

Because good decisions can have bad outcomes, not everyone has a temperament that is well suited to making decisions about activities that involve luck. But Seth Klarman has the right temperament. He’s the founder and president of a highly successful hedge fund called the Baupost Group. Klarman has a wonderful line: Value investing is at its core the marriage of a contrarian streak and a calculator.” He’s saying that you have to be different from others and focus on gaps between price and value. This idea extends well beyond the world of investing.

When most people come to believe the same thing, large gaps open up between price and value. That’s what happened during the dot-com euphoria of the late 1990s and during the spring of 2009, when despondency established the low point for the market. The first part of Klarman’s line properly emphasizes the importance of being willing to go against the crowd. Most people know that it is more comfortable to be part of the crowd than to be alone. But it’s also hard to distinguish yourself if you’re doing the same thing as everyone else.

Skillful investors heed Benjamin Graham’s advice: “Have the courage of your knowledge and experience. If you have formed a conclusion from the facts and if you know your judgment is sound, act on it—even though others may hesitate or differ.” However, Klarman correctly observes that it is insufficient to be a contrarian because sometimes the consensus is right. The goal is to be a contrarian when it allows you to gain an edge, and the calculator helps you ensure a margin of safety.'

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On 29/06/2019 at 21:57, DurhamBorn said:

Another huge one is starting a car and pulling away straight away,especially in winter.Turn the key and allow the engine to run a minute in idle before pulling away.That will help your engine last pretty much forever.

Sorry to be a geek about this relatively trivial point but I've seen plenty of advvice against doing this. At idle the load on the engine is practically nothing and not much heat is being generated by burning such a small amount of fuel, so it takes a lot longer to warm up- hence you're running the engine cold for longer. I would agree that if you pull off your driveway onto a national speed limit road and need to accelerate hard up to speed straight away then warm it up first, but from my house it's the best part of half a mile before I even reach a 30 limit road, so I just pull away and short shift at 2-2.5k (or <2k on my larger engined cars)- which is more than enough to hit 20mph without holding anyone up.

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DurhamBorn
30 minutes ago, Rave said:

Sorry to be a geek about this relatively trivial point but I've seen plenty of advvice against doing this. At idle the load on the engine is practically nothing and not much heat is being generated by burning such a small amount of fuel, so it takes a lot longer to warm up- hence you're running the engine cold for longer. I would agree that if you pull off your driveway onto a national speed limit road and need to accelerate hard up to speed straight away then warm it up first, but from my house it's the best part of half a mile before I even reach a 30 limit road, so I just pull away and short shift at 2-2.5k (or <2k on my larger engined cars)- which is more than enough to hit 20mph without holding anyone up.

Yes lots of things come in,its more for those drivers i see start up cold and then are off to the races within a second.Depending on engine/age etc there is also the problem of lack of oil at the top of the engine etc until oil gets lifted up.Its not as much a problem on newer oils of course .As you say the key is how smooth you run up the revs etc.it always amuses me the car that flies away from the traffic lights is always the one chucking smoke out.Temp and lubrication the two keys to keeping an engine sweet.It will be interesting to see how the new start/stop engines last once they get to higher miles.Very little wear on engines now below 100k as long as drove well and never drove with the temp out of control.

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Yellow_Reduced_Sticker
50 minutes ago, Rave said:

Sorry to be a geek about this relatively trivial point but I've seen plenty of advvice against doing this. At idle the load on the engine is practically nothing and not much heat is being generated by burning such a small amount of fuel, so it takes a lot longer to warm up- hence you're running the engine cold for longer. I would agree that if you pull off your driveway onto a national speed limit road and need to accelerate hard up to speed straight away then warm it up first, but from my house it's the best part of half a mile before I even reach a 30 limit road, so I just pull away and short shift at 2-2.5k (or <2k on my larger engined cars)- which is more than enough to hit 20mph without holding anyone up.

AND who are those giving that advice?

Heres my tupence worth...

The engine should idle for exactly for 27.7 seconds O.obefore driving way, WHY...to allow the OIL to splash & lub those high precision engineered parts...

WHY listern to YRS...cos i'm am an EX- 35 years man&boy center lathe turner - CNC machinist, working for the F1 racing & Aerospace industries, and this convo would come up and those old canny engineers knew their sh*t!:Old:

EDIT: BUGGER didn't see ya post @DurhamBorn xD

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Yellow_Reduced_Sticker
1 hour ago, Errol said:

Talk on this comments section is of New Gold being awarded key approval last week for their Environmental Certificate on an 8.2 million oz. deposit in Canada. This doesn't appear on the official site yet so not where it comes from:

http://investmentresearchdynamics.com/gold-boom-goes-the-dynamite-2/

@Errol yeah ya/we could of CLEANED UP as these were around 88 cents for a few days, in fact someone here mention it a few pages back i wonder if they bought!

They are 1.28 now ...i'm only down 50% on my holding, so may buy some more today while they are cheap...knowing my luck i'll buy today and they'll DROP to 50 cents!:Old:

newgold.jpg

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StrugglingMillennial
2 hours ago, Yellow_Reduced_Sticker said:

AND who are those giving that advice?

Heres my tupence worth...

The engine should idle for exactly for 27.7 seconds O.obefore driving way, WHY...to allow the OIL to splash & lub those high precision engineered parts...

WHY listern to YRS...cos i'm am an EX- 35 years man&boy center lathe turner - CNC machinist, working for the F1 racing & Aerospace industries, and this convo would come up and those old canny engineers knew their sh*t!:Old:

EDIT: BUGGER didn't see ya post @DurhamBorn xD

Im just about to move to a machine shop that does mostly oil and gas but F1 aswell, any tips on the F1 stuff 😂

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leonardratso
4 hours ago, Errol said:

Talk on this comments section is of New Gold being awarded key approval last week for their Environmental Certificate on an 8.2 million oz. deposit in Canada. This doesn't appear on the official site yet so not where it comes from:

http://investmentresearchdynamics.com/gold-boom-goes-the-dynamite-2/

theres its rally (and death) for this...

 

image.png.8dcfab7f532c592fc78f60bfa78e7f58.png

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leonardratso
3 hours ago, DurhamBorn said:

Yes lots of things come in,its more for those drivers i see start up cold and then are off to the races within a second.Depending on engine/age etc there is also the problem of lack of oil at the top of the engine etc until oil gets lifted up.Its not as much a problem on newer oils of course .As you say the key is how smooth you run up the revs etc.it always amuses me the car that flies away from the traffic lights is always the one chucking smoke out.Temp and lubrication the two keys to keeping an engine sweet.It will be interesting to see how the new start/stop engines last once they get to higher miles.Very little wear on engines now below 100k as long as drove well and never drove with the temp out of control.

few years back had an old 06 golf tdi 19.PD, got to 130K when check engine light came on, quick scan said 1 glow plug was shot, wankers had put them under the cam shaft so got them out and tested them, ecu was bullshitting, 3 were shot and 1 was good, swapped them all out so all good. What isurprised me was the real lack of wear on the camshaft @130K miles, it was like it was brand new, thats from changing oil every 9-10K and using the expensive oil, came close to that 20 years ago with an old 16valve gti that had near 250K on the clock, i was living in manchester then and rapid fit on washway road were doing any car oil+filter for £9.99, i was in every 30 days for nearly 2 years with the gti, the oil was cheap bulk oil, but it was changed so often it didnt matter. Car ended up stolen, which was good really, since it was completely shagged, mainly by me.

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