Credit deflation and the reflation cycle to come.

[DurhamBorn]

27 minutes ago, macca said:

It is a joke.. people who put us renters down as lazy are missing the point of unafordability.. 

ive said it many times to brain dead, I’m alright jack’s on social media... who when people moan having to rent say.. “you should have studied harder and got a better job, I did and I’m alright!”

i say!

so where are the dustmen meant to live? The road sweepers, cleaners, nurses, teachers, engineers, farm workers, warehouse staff... or don’t You want your bins emptied, children educated, car fixed, washing machine repaired, food!

all low paid jobs, but if we all became investment bankers what happens then! 

If housing does not work for everyone, it does not work at all! 

If someone who goes to work 40 hours a week cant buy a two up two down terrace house (or rent one for less than 20% of their income)  your country and economy will collapse at some point.Of course what really happens is the market changes so that person can afford one,and thats exactly whats ahead.Everything else is noise.People buying a bubble prices stretching themselves to the limit on good salaries will be the worst hit.Its harsh as they work hard and cant pick and choose where they are in a cycle,but it doesnt change the facts.

[DurhamBorn]

4 minutes ago, UnconventionalWisdom said:

That's my worry... Hopefully the insights of this thread and can help combat this. 

At cycle turns and key inflection points there are always windows for people,and sometimes long ones.M0 money has been falling,people cant get their hands on cash,once banks decide they are only lending to the best risks prices will be hit very hard.The best risks will be the big deposits.

[dgul]

1 minute ago, DurhamBorn said:

If someone who goes to work 40 hours a week cant buy a two up two down terrace house (or rent one for less than 20% of their income)  your country and economy will collapse at some point.Of course what really happens is the market changes so that person can afford one,and thats exactly whats ahead.Everything else is noise.People buying a bubble prices stretching themselves to the limit on good salaries will be the worst hit.Its harsh as they work hard and cant pick and choose where they are in a cycle,but it doesnt change the facts.

Historically wages split has been about 25% tax, 25% food, 25% housing, 25% everything else (including things like medicine and education; it isn't the 'fun' budget).  20% seems a bit low.  

[macca]

16 minutes ago, DurhamBorn said:

If someone who goes to work 40 hours a week cant buy a two up two down terrace house (or rent one for less than 20% of their income)  your country and economy will collapse at some point.Of course what really happens is the market changes so that person can afford one,and thats exactly whats ahead.Everything else is noise.People buying a bubble prices stretching themselves to the limit on good salaries will be the worst hit.Its harsh as they work hard and cant pick and choose where they are in a cycle,but it doesnt change the facts.

I hope your right.. I have friends that rent that think I’m mad.. live for today! But I see older people in poverty and don’t want to be struggling if I make it to retirement.. I also really want to leave my children in a better place than I find myself in.. So for them, I am very careful with money and I drill into them the importance of not wasting money on pointless material rubbish for a short term feel good hit! Getting a job with a return, not a 50k degree in something pointless.. 

I wish my parents had told me these things when I was growing up.. I missed the boat on cheap housing living for today, now I’m a parent I have greater responsibilities to ensure my children don’t do the same thing.. 

[Band]

10 hours ago, macca said:

Dont believe anything you see on the news,,, the elites own that as well!

If it was Obama or Hilary in Singapore right now about to open North Korea to the world the MS would be salivating and falling over themselves with superlatives. Trump and Kin Jung just get mocked as being a couple of lunatics.

[Yellow_Reduced_Sticker]

1 hour ago, UnconventionalWisdom said:

The situation is at breaking point. I have a friend that was a GP in London and had to move up north because he couldn't stand sharing a place any more. It's got to be the same for nurses and consultants.

^^ Yeah just scandalous whats been going on in housing since 2007/08 when we should of had a CRASH!

 

Yesterday I posted at the TOS ...in response to fru-gal's question about what would happen to London and the SE house prices?

 

If you Read through ALL of DB's posts hes saying 50 to 70% CRASH in the SE...

 

I believe this could EASILY happened...

 

Most folks on here are a lot younger than me, and did NOT experience OR see what happened in 1989 to 1993 it was a f*****g blood bath in the SE!

 

I live in the SE (SHITIEST part with overrun with scrounging EE's & inits! ) HOWEVER this town is still EXPENSIVE average family home costs £400K!

 

In 1987 as a young wet-behind the ears dipshit, i listened to old folk at work when house prices were going up in mid-80's and bought (£65K) with a partner in mid-1987...i spent until mid-1989 doing it up AND then had it valved like all the DIP SHITS boasting in the pub ...the EA said £90K however if i cleared the gardens probably go to £95K!

 

Towards end of that year there was talk in newspapers (no Internet back then) house prices were coming down, yet these so called old EXPERTS at work said house prices NEVER went down!

 

YEAH REALLY ?, the same house we bought for £65K in mid-1987 - in 1992/93 they were selling for £30/35K ! ...I REMEMBER THIS AS IF IT WAS YESTERDAY ...mainly cos of the shit i went through!

 

Long story short, cos mortgage rates went 16% we could NOT even afford to live there, we went back to our parents house, and let the bought house out, even with the rental income plus our wages we could just barely pay the mortgage without walking away like a LOT of our friends ended up doing and LOSING YES losing their houses, after that struggle we sold the house in 2002 and even with my part of the proceeds i'd get sweet FA at present prices!

 

Now look what happened to present house prices, MOST here just DON'T believe a HUGE CRASH could happened, I can tell you can bet your sweet bippy it WILL HAPPEN!

 

 

[eek]

36 minutes ago, Yellow_Reduced_Sticker said:

 

Now look what happened to present house prices, MOST here just DON'T believe a HUGE CRASH could happened, I can tell you can bet your sweet bippy it WILL HAPPEN!

We bought in 94 but had a friend who bought (possible one of the worst houses you can imagine at the bottom of Chatham Hill) back in 1989-90. I think it took until 2006 for the house to return to the price their paid for it. 

[Noallegiance]

Poor UK economic data today.

However, the So-Called BBC like to put a positive spin on it:

"But before we get too gloomy Capital Economics UK economist, Andrew Wishart, points out the industrial sector is only 14% of the overall economy..."

And that's a good thing because...

[UnconventionalWisdom]

3 hours ago, DurhamBorn said:

If someone who goes to work 40 hours a week cant buy a two up two down terrace house (or rent one for less than 20% of their income)  your country and economy will collapse at some point.Of course what really happens is the market changes so that person can afford one,and thats exactly whats ahead.Everything else is noise.People buying a bubble prices stretching themselves to the limit on good salaries will be the worst hit.Its harsh as they work hard and cant pick and choose where they are in a cycle,but it doesnt change the facts.

This is what people I experience don't understand. They bought 15 years ago and have seen their house prices go through the roof. They say it would be best for me to jump straight in on an above average salary to buy a one bedroom flat. They can't comprehend that if all the money goes to fund bank debt, there's nothing left for the real economy. If things continue, there won't be any jobs left. 

I feel like a line Wolf in describing this in the non Internet world. Unfortunately, as you say, this collective assurance means relative high FTBers will jump in two feet forward to take on stupid levels of debt for a 2up 2 down. My colleague, mid 30s is doing this with his misses in the SE- it's like watching a car crash in slow motion. 

[Yellow_Reduced_Sticker]

18 minutes ago, UnconventionalWisdom said:

This is what people I experience don't understand. They bought 15 years ago and have seen their house prices go through the roof. They say it would be best for me to jump straight in on an above average salary to buy a one bedroom flat. They can't comprehend that if all the money goes to fund bank debt, there's nothing left for the real economy. If things continue, there won't be any jobs left. 

I feel like a line Wolf in describing this in the non Internet world. Unfortunately, as you say, this collective assurance means relative high FTBers will jump in two feet forward to take on stupid levels of debt for a 2up 2 down. My colleague, mid 30s is doing this with his misses in the SE- it's like watching a car crash in slow motion. 

...then send them here and tell 'em to join the PARTY here , then maybe ...just maybe they won't bother buying

[Cosmic]

1 minute ago, Yellow_Reduced_Sticker said:

...then send them here and tell 'em to join the PARTY here , then maybe ...just maybe they won't bother buying

They'll think your a crackpot

I tried to persuade my brother not to buy, but after all the props etc. it was hard to continue trying. He bought last year or so, top of their budget, massive mortgage. So far my sister hasn't bought, as she doesn't need it to live in (wants to BTL as she travels around and has accommodation provided by work - wants somewhere to park her cash). Maybe, just maybe, I'll be right in the end  

[UnconventionalWisdom]

1 minute ago, Yellow_Reduced_Sticker said:

...then send them here and tell 'em to join the PARTY here , then maybe ...just maybe they won't bother buying

Maybe I will. I discussed some ideas and he actually got it. His old man lost his job in the 08 crash and that spurred up his interest. He followed all the positive money stuff but stopped after being disgusted by it all. I think his argument is, "if you can't beat them, join them" 🙄

[UnconventionalWisdom]

3 minutes ago, Cosmic Apple said:

They'll think your a crackpot

Especially if they know what dosbods stands for 😁

[eek]

2 hours ago, UnconventionalWisdom said:

This is what people I experience don't understand. They bought 15 years ago and have seen their house prices go through the roof. They say it would be best for me to jump straight in on an above average salary to buy a one bedroom flat. They can't comprehend that if all the money goes to fund bank debt, there's nothing left for the real economy. If things continue, there won't be any jobs left. 

It's actually stupider than that. They don't understand that past performance isn't an indicator of future performance and that often past performance is the opposite of what is about to happen as things revert to the long term average.

[Yellow_Reduced_Sticker]

3 hours ago, UnconventionalWisdom said:

Especially if they know what dosbods stands for 😁

...sorry for being a bit thick   - but what does dosbods stands for ?

[Yellow_Reduced_Sticker]

7 hours ago, DurhamBorn said:

If someone who goes to work 40 hours a week cant buy a two up two down terrace house (or rent one for less than 20% of their income)  your country and economy will collapse at some point.Of course what really happens is the market changes so that person can afford one,and thats exactly whats ahead.Everything else is noise.People buying a bubble prices stretching themselves to the limit on good salaries will be the worst hit.Its harsh as they work hard and cant pick and choose where they are in a cycle,but it doesnt change the facts.

 

EXACTLY!

 

This is why I'm 100% CONVINCED we are going to get a property CRASH that will be off the scales! AS ever its just the TIMING...

 

Boys and Girls time to buckle up

[Cosmic]

7 minutes ago, Yellow_Reduced_Sticker said:

...sorry for being a bit thick - but what does dosbods stands for ?

Deluded old scrapper bids on dating sites - named after the thread on ToS which, when shut down, triggered the creation of this site.

[kibuc]

Hi everyone,

Just popped in to thank everyone for this absolute gem of a thread, both on ToS before it went to dogs and as continued here. It's been an education I wish I had gotten at much earlier age, preferably instead of the periodic table and Polish interwar literature.

I have neither the skills to make even semi-accurate calls nor the discipline to act on them in a responsible manner, so I probably won't contribute much (if anything at all). However, should this thread move anywhere in the future, I hope someone will mercifully give me a ping.

I'm currently 100% in miners and enjoying the ride, with some major winners (Wesdome, First Majestic, Eldorado, Pretium) offset by sorry losers (Sibanye, Anglogold, Yamana). I have a significantly smaller pot than probably most of you guys, so I feel like I need to make bolder calls and not hedge against my own self if I intend to make this upcoming mess a truly life-changing event for me and my family.

[harp]

On 10/06/2018 at 19:05, DurhamBorn said:

If i was 20 again my main concern would be building up cash so i could take advantage of house price falls.The quicker you get a home paid for and live rent/mortgage free the better.I would start building a portfolio though as well,maybe 30% of savings,and with that id be looking to buy the most likely to gain from the cycle (and the most under valued at the end of this one).Id be going PM miners,telcos,certain energy stocks etc.Id still want a balanced portfolio,but balance across inflation sectors.

My personal investing i try to aim for 9% compounding minimum.Its amazing the returns you can get from that.If Vod increase their divi at 2% going forward they should return that.Centrica would have to increase theirs by 0.7% a year on average,so if no increases for 5 years year six going up 4% would do it.Iv always seen the return as dividend + dividend growth and considered the full cycle.5 years minimum,but more likely 8+.Of course dividend cuts change things.

Once im fully invested i usually hold between 20 and 25 stocks.

If i had to throw a small portfolio together with not much cash monday understanding risk but leaning to a hope to outperform during the next cycle id probably go like this,

BT ,Centrica,Vod,Harmony Gold Mining,Sibanye Gold,Mirasol Resources,Anglogold Ashanti,Yamana Gold,Barrick Gold.

After that id add some physical PMs,silver first then gold.

As ever thats not investment advice,everything depends on people, risk profile,age,goal,income,savings etc and all DYOR etc.

 

Just thought I'd let people know as it was discussed on TOS. SIL (Silver Crest Metals Inc)which people were unable to buy in recent times, well I've just bought some on the HL app today and has gone through no problem and now sitting in my portfollio, just a toe in the water (£1k) for now.

[Thorn]

 

Miners. Reflation Stocks and IBTL.

I agree 100%- best thread ever and good to have got started.

[azzuri82]

Long-time lurker on Tos that read every page of the original thread over 3 days before landing here. Watching with interest as I figure out my next move. I'm 35, renting with partner and baby daughter and in the final stages of selling my business that's taken around 8 years to build.

Biz has been on a massive upswing as it relies on tourism, and the drop in the £ since the EU referendum has seen our turnover & profitability rise by 300% in 2 years, insane growth to manage, the last 2 years nearly killed me. I'm taking a well below BMV offer for the business as I just can't see how it'll be sustained (and due to very attractive 'entrepeneur's relief' tax rates of just 10%), hope to have around £500k in a few months to sit and wait and see what occurs over the next 2 years.

Hoping to just sit with most (80%) in cash/premium bonds, and the other 20% invest in shares/PMs.

Thanks to all for the enlightening read thus far.

 

 

[A_P]

13 minutes ago, harp said:

Just thought I'd let people know as it was discussed on TOS. SIL (Silver Crest Metals Inc)which people were unable to buy in recent times, well I've just bought some on the HL app today and has gone through no problem and now sitting in my portfollio, just a toe in the water (£1k) for now.

Just checked Interactive Investor and it's still saying "We are unable to trade this security as there is no KID/KIID document available" unfortunately. Did you buy online or give them a call?

[DurhamBorn]

6 minutes ago, harp said:

Just thought I'd let people know as it was discussed on TOS. SIL (Silver Crest Metals Inc)which people were unable to buy in recent times, well I've just bought some on the HL app today and has gone through no problem and now sitting in my portfollio, just a toe in the water (£1k) for now.

The SIL everyone was trying to buy harp was the global silver miners ETF https://finance.yahoo.com/quote/SIL/ ,not Silver Crest Metals,thats a junior exploration company.If silver runs though that one might leave us all for dead.My favourite junior is Mirasol Resources.Though at the moment im investing in the bigger mid to upper players mostly as they seem really cheap.The 8 day sentiment index for retail investors (the dumb money) in gold is at extremely bearish levels,the  recent pattern in gold is almost the same as the pattern from 1999 to 2001.From that a move from $240 to $1920 happened.If similar happened we would be looking at $6800 by 2026.That is a long way off however.My road map says gold might be about to break and that a turn is coming,and once through $1370 should run to the $1550 area (my original target was $1450+,but the fog has cleared now).

Just what i see as possible,as always could be way off,but happy to share what i see.

[Green Devil]

I was w ondering how you guys are finding this thread from T OS?

Are they allowing references to it in the threads now or it it by word of mouth\pm?

[harp]

4 minutes ago, Admiral Pepe said:

Just checked Interactive Investor and it's still saying "We are unable to trade this security as there is no KID/KIID document available" unfortunately. Did you buy online or give them a call?

Via the Hargreaves Lansdown app. Tried before with a couple of others and SIL and as you get to the final stages of the purchase came up with what you said.
Not this time, straight through!