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Credit deflation and the reflation cycle to come.


DurhamBorn

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1 hour ago, sancho panza said:

Worth pondering that Ashtead has doubl the market cap(£10bn) of CNA(£3.8bn),and Rightmove is larger with revenues of £400mn compared to CNA's £25bn.Just Eat £5.3bn PE ratio 131 lol...................................with all that competion looming on £1.24bn rev.......

BT market cap £16bn versus Experian £25bn on rev £3.8bn

There's quite a few I can see that'll likely fall 90%+ from here.And I really enjoyed your point re hosuebuilders msot of whom will be in the 90% club.

Decl-short RMV/BDEV/RDW/BKGH

Another problem is that a rising or falling oil/gas price could distort the overall FTSE perofmance given teh market caps of BP+RDSB

We could potnetially see FTSE stay flat from here with huge sector rotation 

I think thats what we will see,huge sector rotation.Look at Royal Mail,market cap of £1.9 billion,it only needs to make £8 a year profit per house in the UK to get a PE of 8.Burberry market cap £8.5 billion.Market is pricing deflation stocks high and reflation stocks low right as we are at an inflection point.Im very very happy to be able to buy many of these shares with the free capital provided by the miners.

We will all have to get together sometime,maybe York,east coast mainline station,it would be like Bilderberg for working class people xD

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Democorruptcy
2 hours ago, Harley said:

I have an income portfolio (upside fund), a balanced portfolio (floor fund), and a trading portfolio/account (super upside fund!).

I first worked out how much I needed in each fund for retirement by reference to past expenditure, as adjusted for retirement.

I looked at possible asset allocation models for my floor fund and chose the Permanent Portfolio as this (IMO and for my circumstances) best suited the required risk-return profile for that fund.

My upside fund does not follow the Permanent Portfolio.  This fund is for upside expenditure so an equity income fund (plus a small trading fund) IMO, and for my circumstances, seems to best match the required risk-return profile. 

I have allocation rules, or rather risk management rules, for my trading account.  I'm only dabbling in that at the moment given my workload and I know from the past you need to be on such things 100% of the time.

When I say "portfolio" I mean all my assets.  So for example, I include a few premium bonds in my balanced portfolio, etc.  So not just SIPPs and ISAs.

Each of us has to do what we are comfortable with.  Only I found it actually took quite a while to find out what I was comfortable with!  I've probably tried them all but retirement beckons and it's all getting a bit serious!

For me, I felt a huge weight off my shoulders once I had a plan but it took many hard months to get there.  There were some great resources on the net which really helped and for which I'm forever grateful.

That is partly my motivation for posting - to validate and to try and give something back - but everything is just ideas for discussion - not advice - DYOR and decide what's right for you.

I wasn't suggesting there was anything wrong with you having rules. I'd just asked for more detail your methods, so felt I had to mention mine, or lack of them. While I'm happy with my gambling in all honesty I think I could have done better from the financial sector, given the long bull run. I'm here to learn and anything that helps the profits is very welcome.

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1 hour ago, sancho panza said:

Cheers CV,any chance you know roughly when  that occurred?

 

The broking industry has lost loads of jobs in similar manner.Can't believe hwo good Hargreaves and Interatctive are for what you pay.As an old dinosaur when it comes to buying stocks,I've used a localish broker for years and they have only charged me a small flat fee since the millenium,but the functionality of these online portals has stunned me.Can't believe there's people still paying 1% a side  no limit.

 

if you think they're good check out https://www.m1finance.com/how-it-works/invest/. Essentially able to create your own ETFs with auto rebalancing, fractional shares etc. All commission free. I think @Harley would have a field day with a broker like that. Our platforms need a good shakeup. £10 a trade and 1-1.5%fx rate in 2019 is laughable really.

But then have to question how much do HL's customers care about money if they're ok with paying 0.45% uncapped on funds up to £200k iirc O.o

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6 hours ago, Harley said:

Others?

3 ETFs in my LISA.

4 funds in my ISA and SIPP

2  ETC's in a GIA

12 individual holdings in my SIPP but reducing these as we speak. Greens are being sold off and Ill hold onto any reds till they either go bust or reflate.

I've built spreadsheets to track my portfolios but i can't be arsed with the individuals now bar a couple of long term plays like YCA. I just don't see as much upside on my time horizon, circa 30 years. Not only that my mrs is a few years younger than me and if I croak it for whatever reason my fund/etf accounts will just keep accumulating and can be hands free for her or anyone else who may receive.

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Democorruptcy
2 hours ago, sancho panza said:

I agree Corbyn won't be PM.He's been damaged by his stance on Brexit/Anti Semitism/Venezuela etc.......I think Boris will romp home in terms of seats but with a small margin of the popular vote.Lib Dems/Greens move up but FPTP will hold them back for now.Corbyn was only competitive because of May and vice versa.Anyone with an ounce of emotional intelligence will struggle to lose to JC.

Latest Betfair prices most seats next election.

1/2 Tories

7/2 Labour

14/1 Lib Dems

17/1 Any other

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6 hours ago, Harley said:

For me, my aim for my income portfolio is 25 with 4% of portfolio value in each holding and no duplicate sector holdings unless that 4% gets too large in £x terms or the price of a holding precludes further purchases (and I buy a substitute). 

I currently have about 19 holdings, hence the need to expand my net.  I may have to view small caps and/or foreign stocks differently from my current UK large caps to get to 25 with that sector rule.

My balanced portfolio has different rules as it is currently ETF based, although I may use funds and trusts too.  I choose ETFs to limit a holding in any one beyond £x and in total beyond £x for a given provider. 

My asset allocation rules also determine the number of my holdings.  I have four asset classes and then allocate within these (e.g PMs allocated down to gold and silver, bonds and equity down to region, etc).  So maybe 20 atm, maybe more as I invest more and hit those £x ceilings.

Others?

Funny enough thats the sort of amount of companies i like in my dividend portfolio,20 to 25.I do go up to 7% sometimes,but thats as im building it and as it settles down 5% tends to be max.Iv always been pretty much 100% equity,but im now having to think about retirement.I retired twice already once in my 30s and once in my early 40s,but the difference then was i always knew i could get another job if disaster struck,or if i simply chose to,as i did last year.Going forward a few years and that gets a harder option.Its likely once my portfolio is built out again il have around 30% to 40% in other assets.Silver,gold,foreign stocks,ETFs etc.

Im also thinking about buying a holiday home on the coast,Bridlington,Scabbie or Whitby.Main reason is im going to have quite a bit spare over what i need to produce an income i want.I saw some nice semi's etc a couple of weeks ago in Brid around the £130k mark,and once houses take a bath id be tempted.Plus we are affiliated to the area through spygirl and he reckons once all the probates flood the market will we get some bargains.

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Posted in another thread and thought it might be of interest here.

Ok, its treehugger so perhaps a bit biased but interesting all the same:

https://www.treehugger.com/cars/peak-copper-back-thanks-teslas-and-smart-tech.html

"Tesla Inc. expects global shortages of nickel, copper and other electric-vehicle battery minerals down the road due to underinvestment in the mining sector, the company’s global supply manager for battery metals told an industry conference on Thursday, according to two sources...Sarah Maryssael, Tesla’s global supply manager for battery metals, told a closed-door Washington conference of miners, regulators and lawmakers that the automaker sees a shortage of key EV minerals coming, according to the sources. "

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sancho panza
2 hours ago, Castlevania said:

The big shift has been post financial crisis.   Nimbler specialists without the rubbish infrastructure and costs of the incumbents ate a lot of their lunch.

Edit: it’s a similar thing with equity broking for small investors. My old man used to use Barclays. In the 90’s their share dealing service was one of the biggest in the country. Paid far more than I do now a trade, but did have his own personal broker at the end of the line who to be fair did well for him (got my old man to buy into the industrial miners back in the late 90’s). I get the impression the only people who still use Barclays are their historic customers.

I use HSBC for some ISA money( I like to spread across brokers)and their service is like a dog poo sandwich with double dog poo.And USD50 a trade for phone.It is what it is,but can totally see why they're haemrohaging customers to the likes of Hargreaves,AJ,II.....good.

7 hours ago, Harley said:

For me, my aim for my income portfolio is 25 with 4% of portfolio value in each holding and no duplicate sector holdings unless that 4% gets too large in £x terms or the price of a holding precludes further purchases (and I buy a substitute). 

I currently have about 19 holdings, hence the need to expand my net.  I may have to view small caps and/or foreign stocks differently from my current UK large caps to get to 25 with that sector rule.

My balanced portfolio has different rules as it is currently ETF based, although I may use funds and trusts too.  I choose ETFs to limit a holding in any one beyond £x and in total beyond £x for a given provider. 

My asset allocation rules also determine the number of my holdings.  I have four asset classes and then allocate within these (e.g PMs allocated down to gold and silver, bonds and equity down to region, etc).  So maybe 20 atm, maybe more as I invest more and hit those £x ceilings.

Others?

I'm a confirmed spray n prayer.I decide on the toal exposure we're going to take,then pick the companies I like,then work out the ladders.Limit 3% per  share.

 

 

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3 minutes ago, sancho panza said:

I'm a confirmed spray n prayer.I decide on the toal exposure we're going to take,then pick the companies I like,then work out the ladders.Limit 3% per  share.

 

 

So how many stocks do you own? 40+? And how do you keep on top of how they’re doing?

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sancho panza
1 hour ago, DurhamBorn said:

I think thats what we will see,huge sector rotation.Look at Royal Mail,market cap of £1.9 billion,it only needs to make £8 a year profit per house in the UK to get a PE of 8.Burberry market cap £8.5 billion.Market is pricing deflation stocks high and reflation stocks low right as we are at an inflection point.Im very very happy to be able to buy many of these shares with the free capital provided by the miners.

We will all have to get together sometime,maybe York,east coast mainline station,it would be like Bilderberg for working class people xD

Bit in bold:Incredible isn't it?

 

Yeah a hook up shoudl eb on the cards.Wolf RIchter organised one for his readers and it'd be nice to socialise with people who don't get glass eyed when I start talking economics:).Sadly,I'll need mega notice due to kids,work etc and I'd rather wait until the dollar has started weakening............not long then.

44 minutes ago, Democorruptcy said:

Latest Betfair prices most seats next election.

1/2 Tories

7/2 Labour

14/1 Lib Dems

17/1 Any other

50% return looks good from here.You'll maybe still get good value on Boris given how much the media love JC.I'd have a decent punt at that price.

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sancho panza
18 minutes ago, Castlevania said:

So how many stocks do you own? 40+? And how do you keep on top of how they’re doing?

I'll be honest CV,depends on the sector.PM miners we're in about 30,weighted by market cap roughly but have rotated some profits from bigger producers to smaller more leveraged plays.The reason I spray n pray is that it generally allows us to play the asset class not the indivdual stocks(generally if you're spread wide enough,ou won't get hit by one companies bad management).With big oils,we'll probably look at ten or so as the sector is much less volatile than PM miners and we'll probably have a greater weighting of portfolio in them.With other sectors I'm interested in,say rare earths,then we'll have a much smaller %age poftfolio value in there as well as a small number of stocks and aslo maybe only two or three ladders.

Although we buy steadily and over time,I generally sell in one foul swoop as we sell the asset class not the stocks..Our goldies will go after the weak dollar phase and as DXY starts to firm.Plan then is to buy them back once dollar weakens again.If I don't get us out for what ever reason or DXY never weakens,we'll sit in them for ten years as I'm a long term bull.

 

Hope I haven't come across as a pompous twat

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3 hours ago, Democorruptcy said:

I wasn't suggesting there was anything wrong with you having rules.....

No problem at all as I didn't take it like that at all.  Apologies if my words suggested that.

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Noallegiance
10 hours ago, DurhamBorn said:

We will all have to get together sometime,maybe York,east coast mainline station,it would be like Bilderberg for working class people xD

Not sure if this is in jest but in my opinion it's actually a fabulous idea.

Physically meeting folk on here would do wonders for my psyche. I often wonder if I've ever walked past or talked to people like the ones here. 

Despite plenty of daily input from so many here, I still feel quite lonely in my uncomplicated position when I wander the world and get the current situation constantly shoved in my face. It's depressing.

I'd probably just turn up, introduce myself and then sit in a corner with a pint and a notepad! 

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2 hours ago, Noallegiance said:

I often wonder if I've ever walked past or talked to people like the ones here. 

I think we are quite rare, but you have probably met a few without realising it. We are a private bunch who have learnt to keep our mouths shut in public and not go around blurting out all our 'strange' ideas (which tend to shock or frighten people).

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The Remarkable Resiliency Of Gold And Silver

The price of gold continues to hold up under the enormous selling in the paper derivatives markets on the Comex and LBMA. 

Gold is at or near an all-time high in most fiat paper currencies except the dollar. This summer, however, it would appear that the dollar-based valuation of gold is starting to break the “shackles” of official intervention and is beginning to reflect the underlying fundamentals.  On the assumption that gold can continue to withstand serious efforts to push the price back below $1500 (the net short position in gold futures held by Comex banks is near a record high, for instance), we could see $1600 or higher before Labor Day weekend.

http://investmentresearchdynamics.com/the-remarkable-resiliency-of-gold-and-silver/

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Yellow_Reduced_Sticker

@Errol AND all the folks here who are into GOLD!

Watched this last night, yeah, I know, I know, I know its... OFF TOPIC! :PxD

BUT! ...Britain's Biggest Armed Robbery, Brinks Mat Gold Heist is well worth a watch!

Especially when that amount of gold was removed from the market ... Gold ROCKETED!

I can remember this Heist of the century very well as it happened down the road from where i was doing my engineering apprenticeship...

ENJOY!

https://www.youtube.com/watch?v=DaPKvBU9xxQ

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56 minutes ago, Errol said:

I think we are quite rare, but you have probably met a few without realising it. We are a private bunch who have learnt to keep our mouths shut in public and not go around blurting out all our 'strange' ideas (which tend to shock or frighten people).

When i started work,many of the guys cared about finance.Not to the levels we do,but still they understood the world.The saved,they invested,they worked out how much they needed on top of their pension to go early etc.Everyone,and i mean everyone i knew when i was 20 wanted to pay the mortgage off.They didnt pay them off early,but they didnt extend them.I saw the big change when Blair got in.I think once Brown exploded benefits (and of course stopped you getting them if you had capital) then slowly people stopped bothering about saving.The didnt need to.Its a bit like the Dodo not needing to learn to fly as there was no predators on the island.Once predators turned up in the shape of hungry sailors they were wiped out.

Im working with people now on good money £34k a year on a production line and the young ones,and i mean all of them go from very poor with money to insane with it.I dont think many of them save anything.Top of the range BMWs etc lease cars in the car park.These guys could be setting themselves up while they have a good job.A few years and a house can be bought cash up here,or even a nice semi and pay 50% off.

The media is as bad.it has a left wing angle to everything,and looks to put the blame to suit itself.Electric bill is high its Centrica the thieving scum,not the fact its the massive carbon taxes etc,,pound falls,its brexit,not the massive welfare spending that is being borrowed mostly.

However my friend told me long ago that western market economies dont collapse,that is hyperbole,they do however swing from deflation pressures to inflation ones.The rich and government cant afford to let things go to bad,so they react.Their job is to make the vast majority of the people comfortable,not rich,not too poor.They need the carrot just out of rich,but where they get a nibble.HTB is a classic example.Make young people think they are getting something,when really all they are getting is to work until 65 and pay tax to pay the mortgage.Once you learn the leads and lags to indicators you start to see how things work.

An example i have in my jotters he told me was a reservoir and a town on the coast 50 miles away.When the sluice gates are closed,the people in the town dont notice,the river still runs,nothing has changed and they dont save any water.The farmers pumping onto his crop notices first though,and his crop wilts,the fishing club notice in the middle reaches as the river goes dry.The farmer complains and the sluice gates are opened again,but his crop is already lost,the middle reaches fills up,but the fish are already dead,and the town wakes up one day to no water,but cant understand why.The reservoir is pumping faster than it ever has so how can we have no water?.Of course soon they will have more water than they had before it went off.,but until it arrives its going to smell pretty bad.

Those are the leads and lags of liquidity.They are certain,its just time.Like it was certain the affects would be felt 18 months after the Fed tightened.Thats the lag.The cross market work is what did the farmer have in his field.He had lettuce,the price of lettuce will go up first,but then it will go down as he floods the market because the price has gone up.The fishing shop will lose money as less people buy bait to fish,the car wash will close in the town.Those are all cross market affects of the lead and lag.

There are very very few macro people these days who look at things that way.However that river provides a road map and once you understand that you start to understand the order things happen,and why.A market economy is huge and we miss some things,we wont and cant get everything right,but if we are the basics,understand the road map ahead then we will do well,or we will do very very well.

 

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5 minutes ago, DurhamBorn said:

Its a bit like the Dodo not needing to learn to fly as there was no predators on the island.Once predators turned up in the shape of hungry sailors they were wiped out.

Maybe we need a contrarian badge so we can recognise each other on the street as prudent savers/investors: The Flying Dodo?

I recall the changes you mention clearly. Even in the late 1990s something smelt wrong to me as the money taps were opened, but friends thought I was stupid for missing out on the 'free wealth' that their mad house price gains were giving them, even when I pointed out that with one house and two children, that gain was their kids' future loss. They could not do that simple arithmetic.

I'm struggling to identify the trait that allows one to look at the world and say, "Hang on, this isn't right. Now what if I follow the trail..." That took me several months in the mid-2000s, spurred on by some good posters on ToS at the time, but the spark was already in me to recognise that the reality being fed to me wasn't real at all. Why me? Why others on this thread? I don't think it's necessarily intelligence but maybe mistrust of authority? Nobody taught me this attitude, of that I'm sure.

I'm pretty much retired at the age of 48 and have been semi-retired for at least a decade, working when it suits me and not out of necessity. I didn't earn stupid amounts of money over my career, but I've had some fantastic times over the years and didn't spaff cash on pointless image-boosting tat. Friends who have earned more now have much less, no better experiences and a future of working at least up to state retirement age and probably longer. More importantly, their stress far outweighs mine.

As @Errol wrote, "strange ideas" aren't widely welcome, although I am noticing a shift. Things I was telling people years ago they're now telling me as though it's all new. Political shifts, disbelief in official narratives, concern about the future, awareness of increasing poverty (their own, although they don't yet understand why). I don't say, "I told you so" because there's no room in their heads to accept that, unfortunately.

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Bobthebuilder
34 minutes ago, Alex said:

Maybe we need a contrarian badge so we can recognise each other on the street as prudent savers/investors: The Flying Dodo?

I recall the changes you mention clearly. Even in the late 1990s something smelt wrong to me as the money taps were opened, but friends thought I was stupid for missing out on the 'free wealth' that their mad house price gains were giving them, even when I pointed out that with one house and two children, that gain was their kids' future loss. They could not do that simple arithmetic.

I'm struggling to identify the trait that allows one to look at the world and say, "Hang on, this isn't right. Now what if I follow the trail..." That took me several months in the mid-2000s, spurred on by some good posters on ToS at the time, but the spark was already in me to recognise that the reality being fed to me wasn't real at all. Why me? Why others on this thread? I don't think it's necessarily intelligence but maybe mistrust of authority? Nobody taught me this attitude, of that I'm sure.

I'm pretty much retired at the age of 48 and have been semi-retired for at least a decade, working when it suits me and not out of necessity. I didn't earn stupid amounts of money over my career, but I've had some fantastic times over the years and didn't spaff cash on pointless image-boosting tat. Friends who have earned more now have much less, no better experiences and a future of working at least up to state retirement age and probably longer. More importantly, their stress far outweighs mine.

As @Errol wrote, "strange ideas" aren't widely welcome, although I am noticing a shift. Things I was telling people years ago they're now telling me as though it's all new. Political shifts, disbelief in official narratives, concern about the future, awareness of increasing poverty (their own, although they don't yet understand why). I don't say, "I told you so" because there's no room in their heads to accept that, unfortunately.

Thats pretty much me as well. I read somewhere a long while ago that the more you learn about economics and the way its all run the more anarchist you become in your thinking.I learned to stand on my own feet, went self employed and just did what i wanted in life really, sometimes i feel im the only one who has sussed it out. My avatar is the logo from 70s anarcho punk band crass and it depicts the snake of capitalism eating itself.

Thanks again as always people, its been a ride so far.

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24 minutes ago, Alex said:

Maybe we need a contrarian badge so we can recognise each other on the street as prudent savers/investors: The Flying Dodo?

I recall the changes you mention clearly. Even in the late 1990s something smelt wrong to me as the money taps were opened, but friends thought I was stupid for missing out on the 'free wealth' that their mad house price gains were giving them, even when I pointed out that with one house and two children, that gain was their kids' future loss. They could not do that simple arithmetic.

I'm struggling to identify the trait that allows one to look at the world and say, "Hang on, this isn't right. Now what if I follow the trail..." That took me several months in the mid-2000s, spurred on by some good posters on ToS at the time, but the spark was already in me to recognise that the reality being fed to me wasn't real at all. Why me? Why others on this thread? I don't think it's necessarily intelligence but maybe mistrust of authority? Nobody taught me this attitude, of that I'm sure.

I'm pretty much retired at the age of 48 and have been semi-retired for at least a decade, working when it suits me and not out of necessity. I didn't earn stupid amounts of money over my career, but I've had some fantastic times over the years and didn't spaff cash on pointless image-boosting tat. Friends who have earned more now have much less, no better experiences and a future of working at least up to state retirement age and probably longer. More importantly, their stress far outweighs mine.

As @Errol wrote, "strange ideas" aren't widely welcome, although I am noticing a shift. Things I was telling people years ago they're now telling me as though it's all new. Political shifts, disbelief in official narratives, concern about the future, awareness of increasing poverty (their own, although they don't yet understand why). I don't say, "I told you so" because there's no room in their heads to accept that, unfortunately.

Your post shows the quality of the people on this thread and why everyone is welcome here.My uncle lives just outside of London.Two daughters.Every visit the talk was how much the house was worth/gone up.Roll forward the two daughters cant buy anything,and the complaints are always about how crazy it is.Lead and lag right there.

Im nearly 48 and iv always worked in factories.Iv already had 15 years retirement and will be fully retired in 2 years max,much more likely next year though.

Whats happening now is a key inflection point in macro terms.The great dis-inflation cycle is ending and a reflation starting.Lot less for wants and more spent on needs.What worries me most id the end of the next cycle.2028 could see complete collapse with nowhere to run.Apart from this thread hopefullyxD

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One of the things i notice with friends and family is they are too busy working to pay for all the credit card debt, leased cars, bills and more, i have friends who are working themselves into the ground up at 6am not home till 7pm a shit microwave meal few beers then asleep on the sofa most nights

I think time is something a lot people don't have because they too busy trying keep the light on but people also waste a lot of there time most of my family and friends rather sit on facebook checking out what others are doing then worry about themselves

Deleting social media is one of the best things you can do, although i do use twitter only because its easy to follow people who can provide you value in there posts

One thing i always remembering reading was "We all have the same 24 hours in a day" some like teenagers in my family will happily sit on facebook, snapchat, instagram for the whole day endlessly scrolling what others are doing and that seems to be effecting a lot adults too now

Sometimes it can be a lonely road and it makes you question if they are the mad ones or are you...

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UnconventionalWisdom
1 hour ago, DurhamBorn said:

needs.What worries me most id the end of the next cycle.2028 could see complete collapse with nowhere to run.Apart from this thread hopefullyxD

I'm sure this thread will get popular once inflation goes up. People currently accept that "emergency measures" can be "normalised". They can't and people will get caught swimming naked once the tide goes out. 

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UnconventionalWisdom
2 hours ago, DurhamBorn said:

There are very very few macro people these days who look at things that way

Hi DB, thanks for your great insights and I have learnt a lot from this thread. 

When you mention macro people, are there any recommendations? I initially watch Mike maloney on YouTube for a good foundation of what's going on/ likely to happen. Moved on to articles and big debt crises by Dalio. Do you (or anyone reading this) know anyone else worth a read? 

 

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3 hours ago, Alex said:

Maybe we need a contrarian badge so we can recognise each other on the street as prudent savers/investors: The Flying Dodo?

I recall the changes you mention clearly. Even in the late 1990s something smelt wrong to me as the money taps were opened, but friends thought I was stupid for missing out on the 'free wealth' that their mad house price gains were giving them, even when I pointed out that with one house and two children, that gain was their kids' future loss. They could not do that simple arithmetic.

I'm struggling to identify the trait that allows one to look at the world and say, "Hang on, this isn't right. Now what if I follow the trail..." That took me several months in the mid-2000s, spurred on by some good posters on ToS at the time, but the spark was already in me to recognise that the reality being fed to me wasn't real at all. Why me? Why others on this thread? I don't think it's necessarily intelligence but maybe mistrust of authority? Nobody taught me this attitude, of that I'm sure.

I'm pretty much retired at the age of 48 and have been semi-retired for at least a decade, working when it suits me and not out of necessity. I didn't earn stupid amounts of money over my career, but I've had some fantastic times over the years and didn't spaff cash on pointless image-boosting tat. Friends who have earned more now have much less, no better experiences and a future of working at least up to state retirement age and probably longer. More importantly, their stress far outweighs mine.

As @Errol wrote, "strange ideas" aren't widely welcome, although I am noticing a shift. Things I was telling people years ago they're now telling me as though it's all new. Political shifts, disbelief in official narratives, concern about the future, awareness of increasing poverty (their own, although they don't yet understand why). I don't say, "I told you so" because there's no room in their heads to accept that, unfortunately.

I think we're all mavericks o this thread which is why I love it. Very hard to meet similar people in real life although they are around.

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leonardratso
5 hours ago, DurhamBorn said:

When i started work,many of the guys cared about finance.Not to the levels we do,but still they understood the world.The saved,they invested,they worked out how much they needed on top of their pension to go early etc.Everyone,and i mean everyone i knew when i was 20 wanted to pay the mortgage off.They didnt pay them off early,but they didnt extend them.I saw the big change when Blair got in.I think once Brown exploded benefits (and of course stopped you getting them if you had capital) then slowly people stopped bothering about saving.The didnt need to.Its a bit like the Dodo not needing to learn to fly as there was no predators on the island.Once predators turned up in the shape of hungry sailors they were wiped out.

Im working with people now on good money £34k a year on a production line and the young ones,and i mean all of them go from very poor with money to insane with it.I dont think many of them save anything.Top of the range BMWs etc lease cars in the car park.These guys could be setting themselves up while they have a good job.A few years and a house can be bought cash up here,or even a nice semi and pay 50% off.

The media is as bad.it has a left wing angle to everything,and looks to put the blame to suit itself.Electric bill is high its Centrica the thieving scum,not the fact its the massive carbon taxes etc,,pound falls,its brexit,not the massive welfare spending that is being borrowed mostly.

However my friend told me long ago that western market economies dont collapse,that is hyperbole,they do however swing from deflation pressures to inflation ones.The rich and government cant afford to let things go to bad,so they react.Their job is to make the vast majority of the people comfortable,not rich,not too poor.They need the carrot just out of rich,but where they get a nibble.HTB is a classic example.Make young people think they are getting something,when really all they are getting is to work until 65 and pay tax to pay the mortgage.Once you learn the leads and lags to indicators you start to see how things work.

An example i have in my jotters he told me was a reservoir and a town on the coast 50 miles away.When the sluice gates are closed,the people in the town dont notice,the river still runs,nothing has changed and they dont save any water.The farmers pumping onto his crop notices first though,and his crop wilts,the fishing club notice in the middle reaches as the river goes dry.The farmer complains and the sluice gates are opened again,but his crop is already lost,the middle reaches fills up,but the fish are already dead,and the town wakes up one day to no water,but cant understand why.The reservoir is pumping faster than it ever has so how can we have no water?.Of course soon they will have more water than they had before it went off.,but until it arrives its going to smell pretty bad.

Those are the leads and lags of liquidity.They are certain,its just time.Like it was certain the affects would be felt 18 months after the Fed tightened.Thats the lag.The cross market work is what did the farmer have in his field.He had lettuce,the price of lettuce will go up first,but then it will go down as he floods the market because the price has gone up.The fishing shop will lose money as less people buy bait to fish,the car wash will close in the town.Those are all cross market affects of the lead and lag.

There are very very few macro people these days who look at things that way.However that river provides a road map and once you understand that you start to understand the order things happen,and why.A market economy is huge and we miss some things,we wont and cant get everything right,but if we are the basics,understand the road map ahead then we will do well,or we will do very very well.

 

great analogy, ill have a think about that and see if i can apply it to realworld. I have a lot of trouble noticing things because i dont really join in with them. Social media? ive no idea about it, the cost of things inflating? i hardly notice because i am the worst consumer in the world, mind i notice the price of petrol/diesel etc changing, and also my pension fund changing on a daily/weekly basis, ive managed to get the guy next to me at work checking his as well regularly and questioning it, and also asking for alternatives, ive known him for 20 odd years and he's never been interested, he is now.

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