Credit deflation and the reflation cycle to come.

[Green Devil]

Ive been looking to buy and are seeing real weakness in the bottom to mid range of the market. 

Nothing selling lots of reductions.

Prime is still unaffected good stuff goes under offer quickly  usually with numerous bids. Since im looking at the top end 4-5 bed detached,  still wondering when its going to filter up to top end.

[leonardratso]

15 minutes ago, azzuri82 said:

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.

 

 

dont forget baby daughter can also have 50K  of PB if you supply her birth cert to NSANDI. You control until she is 16 then it goes into her name unless you clear before then. Double or triple your chances if you include the missus in  your PB pot of luck.

[harp]

3 minutes ago, DurhamBorn said:

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.

Ah! Oh shit..haha! Confusing this stuff. Sorry guys, I'll just hold on to it as it seems to be doing quite well, for now!!

[A_P]

4 minutes ago, harp said:

Ah! Oh shit..haha! Confusing this stuff. Sorry guys, I'll just hold on to it as it seems to be doing quite well, for now!!

haha. I didn't eve notice you said Silver Crest , only paid attention to SIL . I did try and get a quote for SIL - Global X Silver Miners ETF and it's definetely not working. I might drop II and email though to see if they have any news on it.

[DurhamBorn]

11 minutes ago, azzuri82 said:

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.

 

 

Great to see you,and congrats on building up such a great business (and selling it at the right time i expect).I started to build one myself about 8 years ago and it was growing really fast,i could of put more capital in and got to half a mill turnover (25% margins) or more with just me and a couple of agency workers 30 days a year,but decided to instead keep it below the VAT level and around the tax allowance level.It wasnt the sort of business i could of sold,though i could of ran it hard for 5 to 8 years then sold everything.To be honest the skills i had and built up running it i should of pushed it,but i prefer working 3 hours a week and sitting drinking and spilling coffee at my garden table onto by dusty old charting books instead).Plus i dont like the idea of funding the governments corrupt schemes (like HTB and tax credits) so prefer to stay withing the law 100%,but use tax allowances,personal,ISA,SIPP etc.I enjoy a frugal life,hate holidays abroad etc so my expenses are tiny.Even my car and Van are 13 years old and repaired by myself mostly.

I really like the fact people from all walks of life and all incomes/asset levels can join in these threads without any kind of looking down noses or feeling any less or any better than anyone else.My assets are probably about 50% of yours,but i do own my house outright.Hopefully everyone from investing their first couple of k,to protecting a lifetimes worth of assets can all end up better off,or less worse off than everyone around them by joining in here.

[Cosmic]

18 minutes ago, Green Devil said:

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?

Very surprised they have not been removed tbh. I was working on something more cryptic (Q drop style) but someone just said it "Google credit deflation and durhamborn" so I thought sod it

[azzuri82]

35 minutes ago, DurhamBorn said:

Great to see you,and congrats on building up such a great business (and selling it at the right time i expect).I started to build one myself about 8 years ago and it was growing really fast,i could of put more capital in and got to half a mill turnover (25% margins) or more with just me and a couple of agency workers 30 days a year,but decided to instead keep it below the VAT level and around the tax allowance level.It wasnt the sort of business i could of sold,though i could of ran it hard for 5 to 8 years then sold everything.To be honest the skills i had and built up running it i should of pushed it,but i prefer working 3 hours a week and sitting drinking and spilling coffee at my garden table onto by dusty old charting books instead).Plus i dont like the idea of funding the governments corrupt schemes (like HTB and tax credits) so prefer to stay withing the law 100%,but use tax allowances,personal,ISA,SIPP etc.I enjoy a frugal life,hate holidays abroad etc so my expenses are tiny.Even my car and Van are 13 years old and repaired by myself mostly.

I really like the fact people from all walks of life and all incomes/asset levels can join in these threads without any kind of looking down noses or feeling any less or any better than anyone else.My assets are probably about 50% of yours,but i do own my house outright.Hopefully everyone from investing their first couple of k,to protecting a lifetimes worth of assets can all end up better off,or less worse off than everyone around them by joining in here.

Thanks, I've been self-employed in one way or another since I was 21, I'm more or less unemployable now, but like you said, the skill set you build from running a business is invaluable.

Until 18 months ago I was doing everything, from designing website/s and promotional materials to doing the books, running payroll, submitting VAT returns etc. The first 4 years or so, I was basically pissing around just to please myself, only really got serious in the last 2-3 years. The hardest lesson of all was to learn how to manage people and personalities (and I'm still not very good at it) - some need an arm round the shoulder and a sympathetic ear, others need to be screamed at to motivate.

I'm a numbers guy at heart, I really get a buzz from starting and running businesses - I'm obsessed with providing improved products and services in a marketplace and catching competitors off-guard and making them play catch up.

I'm just exhausted now after what's been a tiring couple of years, and need to make good on promises I made to my partner (and daughter). I'm not particularly money-motivated but think it's time to cash out in an industry where acquisitions don't happen often and I might not get this chance again.

I've no doubt I'll start/run another business - but I'm really bored of consumer/customer-facing business - I want to do things that actually improve things in people's day-to-day lives.

In case I'm wrong about the state of the general economy, I'm holding on to 17% of the business going forward, so if things power on I should be able to continue getting dividends of £25k'ish/year - but we rely quite heavily on the strength of the Euro at the moment -  but it feels a lot like 2006/07 at the moment - there's nothing left to keep everything moving.

I've been reading Karl Denninger for 10 years+ and a lurker on Tos for perhaps 11/12 years. Used to read a lot of Zerohedge but the constant bear food on there eventually drags you down and you forget to actually enjoy your life in the here and now.

All of your commentary on the markets has been fascinating DB - I don't blame you for not scaling things up with your business - the mental and physical toll it takes is immense - I suspect I'll have taken a few years off my life expectancy by doing so - I'm not sure I'd be able to do it again with the same level of energy, and even if I could I'd very quickly find myself a single man.

[azzuri82]

44 minutes ago, leonardratso said:

dont forget baby daughter can also have 50K  of PB if you supply her birth cert to NSANDI. You control until she is 16 then it goes into her name unless you clear before then. Double or triple your chances if you include the missus in  your PB pot of luck.

This is a great tip and was something I'd completely overlooked - thanks!

[leonardratso]

11 minutes ago, azzuri82 said:

This is a great tip and was something I'd completely overlooked - thanks!

i love PB's, its ;like playing the lottery without the risk. Of course its a stinking turd of an investment unless you win, and its only once a month, but you cant have everything.

PS. and its liquid (3 day turnaround to cash out) and backed by treasury, whats not to like. (apart from the monthly+turd thing).

[Cosmic]

3 minutes ago, leonardratso said:

i love PB's, its ;like playing the lottery without the risk. Of course its a stinking turd of an investment unless you win, and its only once a month, but you cant have everything.

PS. and its liquid (3 day turnaround to cash out) and backed by treasury, whats not to like. (apart from the monthly+turd thing).

Its nice to be able to think 'what if' once a month. I've got 50-75 a month and have nearly the full allocation which is pretty poor. Won't hesitate to cash them in to buy when the opportunities arise.

[leonardratso]

9 minutes ago, Cosmic Apple said:

Its nice to be able to think 'what if' once a month. I've got 50-75 a month and have nearly the full allocation which is pretty poor. Won't hesitate to cash them in to buy when the opportunities arise.

i use it to park money that would earn shag all anyway, plus with putting it away for the kids it stops me taking it down to ladbrokes, which is a plus. Also means i dont have to will the cash to them if i kick the bucket, it will automatically become theirs when they hit 16. But yes, if a deflation hits and stocks tank, ill be withdrawing to buy up for capital gains, i usually use savings as working capital and like with the crypto if it does well then the initial comes back out and goes back to whence it came and i play with house money in the investment. Sometime s works well but need a good bull run, which we had with crypto. Sometimes im lucky to break even, either way anything i play with i automatically write off like its already lost and live like i never had it to begin with, then have to lovely surprise if it does well.

[DurhamBorn]

6 minutes ago, Cosmic Apple said:

Its nice to be able to think 'what if' once a month. I've got 50-75 a month and have nearly the full allocation which is pretty poor. Won't hesitate to cash them in to buy when the opportunities arise.

The old "Glasgow kiss" as we used to call it when we were kids when the letter arrived with a win.

[leonardratso]

1 minute ago, DurhamBorn said:

The old "Glasgow kiss" as we used to call it when we were kids when the letter arrived with a win.

hehe, yes they came from glasgow the letters(prize warrants), think if you bought them you sent cheques off to durham. Mainly just interbank transfers now and no paper involved, i think ive still got my original bond certs with start and end numbers plus the prefix on them somewhere. ahhh nostalgia aint what it used to be.

[sexton]

4 hours ago, Cosmic Apple said:

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

I thought it was for older computer enthusiasts!

[DurhamBorn]

2 minutes ago, leonardratso said:

hehe, yes they came from glasgow the letters(prize warrants), think if you bought them you sent cheques off to durham. Mainly just interbank transfers now and no paper involved, i think ive still got my original bond certs with start and end numbers plus the prefix on them somewhere. ahhh nostalgia aint what it used to be.

Where it was in Durham is and has been re-developed the last couple of years and its a fantastic setting.There is a Chinese buffet about £8 a pop with views up to the castle and Cathedral.As good a view as youl get anywhere in the world.The passport office is over the river now and there is a big metal hydro electric screw in the river that generates all the electric.

[BadAlchemy]

1 hour ago, DurhamBorn said:

...but i prefer working 3 hours a week and sitting drinking and spilling coffee at my garden table onto by dusty old charting books instead)

You're an inspiration to us DB - well certainly to me - and I am kind of trying to design a similar life for myself these days. I'm 51 with 30 years work in IT infrastructure behind me. The last eight of those working contract via my Ltd (proper project work outside IR35, I hasten to add). From my early twenties I saved about 75% of my disposable income every month without fail - boring sod I was :)
Began to get tired of that in my mid thirties and relaxed a little, having paid off the mortgage and built a nice cash sum. But what the f**k! increasingly it was all about property speculation and bling. If you were hard working, saving and  looking out for your future then you were a fool. Then the GFC came along to rub salt in the wounds (and I had a tidy sum in IceSave at the time too but got it back through FSCS - I learned a valuable lesson there: if it looks too good to be true then it almost certainly is!)
So then I realized I had to diversify from being all cash and bought a small %age of gold and silver, first via BullionVault and then some physical coins. I remember how easily I slept the night I had finally moved some of the fruit of my life's work out of the hands of the bankers :)

I follow this thread very closely but I do not have a financial background so it all sinks in very slowly and sometimes not at all ! I have just this week been consolidating my PM holdings (up to 12% now and I think I will stop there). Also increased IBTL holdings (split between HL stocks and shares ISA and HL SIPP)  to about 5% and have today dipped my toe in the water on some of the miner stocks (1K each) that have been discussed here.

But yes, for life in general, I have grown extremely weary of working life in UK enterprises - they are all increasingly full of useless middle managers making my life hell - LOL. Shame because I really liked IT but nobody gives a shit about the details any more - just shut up and do it fast and do it cheap!

So I am now trying to aim towards a simpler life based around one or two days work a week within the personal allowance. I am also determined not to fund Help to Buy and all the other corrupt schemes designed to crush us all.

Anyway, thanks :)

 

[A_P]

I've been maxed out in premium bonds for 5 months, not won anything yet. I'll be pulling it out if I don't win anything on this next draw and park it in an easy access.

[leonardratso]

6 minutes ago, DurhamBorn said:

Where it was in Durham is and has been re-developed the last couple of years and its a fantastic setting.There is a Chinese buffet about £8 a pop with views up to the castle and Cathedral.As good a view as youl get anywhere in the world.The passport office is over the river now and there is a big metal hydro electric screw in the river that generates all the electric.

eee, i havent been to durham since i was a student at sunderland poly, actually turned into university of wearside/sunderland while i was there so i joined a poly but graduated from a uni, bonus.

I remember a group of us hiring boats one summer to arse about on the river, 3 boats went out, only one came back, we managed to sink the other 2 while drunk, lost our deposits. First time id been in an old cathedral as well, was impressed by the ceiling and the upskirt mirrors on small tables so you didnt have to break your neck looking up, or maybe im confusing that with york, mind was 30 or so years ago. Funny you should say about the hydro screw, the So-Called BBC at white city in london i remember had a jet engine or big gas turbine in the basement or somewhere to drive a generator and i remember seeing a program about how heat scavengers pulled all the exhaust heat off it to heat the entire building when  it was running. Not as impressive as the hydro cost wise, but still they werent as thick as they looked.

[Thorn]

Here. Talking about a Great Big Watery Screw would be the sort of thing that would get the thread moderated over on TOS.

Aren't reflation assets great!

[leonardratso]

1 minute ago, Thorn said:

Here. Talking about a Great Big Watery Screw would be the sort of thing that would get the thread moderated over on TOS.

Aren't reflation assets great!

im just reflating my assets now.

[DurhamBorn]

4 minutes ago, BadAlchemy said:

You're an inspiration to us DB - well certainly to me - and I am kind of trying to design a similar life for myself these days. I'm 51 with 30 years work in IT infrastructure behind me. The last eight of those working contract via my Ltd (proper project work outside IR35, I hasten to add). From my early twenties I saved about 75% of my disposable income every month without fail - boring sod I was
Began to get tired of that in my mid thirties and relaxed a little, having paid off the mortgage and built a nice cash sum. But what the f**k! increasingly it was all about property speculation and bling. If you were hard working, saving and  looking out for your future then you were a fool. Then the GFC came along to rub salt in the wounds (and I had a tidy sum in IceSave at the time too but got it back through FSCS - I learned a valuable lesson there: if it looks too good to be true then it almost certainly is!)
So then I realized I had to diversify from being all cash and bought a small %age of gold and silver, first via BullionVault and then some physical coins. I remember how easily I slept the night I had finally moved some of the fruit of my life's work out of the hands of the bankers

I follow this thread very closely but I do not have a financial background so it all sinks in very slowly and sometimes not at all ! I have just this week been consolidating my PM holdings (up to 12% now and I think I will stop there). Also increased IBTL holdings (split between HL stocks and shares ISA and HL SIPP)  to about 5% and have today dipped my toe in the water on some of the miner stocks (1K each) that have been discussed here.

But yes, for life in general, I have grown extremely weary of working life in UK enterprises - they are all increasingly full of useless middle managers making my life hell - LOL. Shame because I really liked IT but nobody gives a shit about the details any more - just shut up and do it fast and do it cheap!

So I am now trying to aim towards a simpler life based around one or two days work a week within the personal allowance. I am also determined not to fund Help to Buy and all the other corrupt schemes designed to crush us all.

Anyway, thanks

 

Thats great to hear.I actually enjoy the frugal life and dont feel like im missing out on anything.Iv worked with people who had huge mortgages and worked every bit of overtime.Hated work and worked all hours so they could go on holiday for two weeks and dream all year about it.Iv just come back from my rounds to the supermarkets near me at reduction time,all within half a mile.£50 worth of top quality food from Sainsbury for £12.£20 worth from Tesco £5.With £5 from the veg bloke at the side of the road tomorrow we will eat fantastic,healthy meals all week for £22.

Anything needs doing on the house,time to learn,buy the things from Gumtree (garage door £30 not a scratch on it last thing) and do it myself.My little van is fantastic.£800 three years ago it cost,spent a total of £180 on it in three years.So £6 a week its cost up to now.£24 a month.Over the road spend £500 a month on their two lease cars.Never seen them in day light from October until March,out at work.

Since age 39 iv worked 3 to 5 hours a week for the tax allowance.When people talk about the pension age being pushed back and back i just laugh.I couldnt care less.I could carry on as i am now up until pension age if i closed my business tomorrow.I love investing and the security of that,but its not about the money,or what it can buy,its about time and freedom.This country is ran by the rich and elite to tax the middle,to give it to the benefit class,so it can then go up to the elite.That keeps the middle working forever,it keeps the rich rich and it stops the benefit class stealing the land back.The best defense against that for me was to opt out as quickly as possible while understanding the real drivers of an economy.

Whats coming will shock people to the core.This long cycle has made people think free money will always come.Benefits,HPI,MEWing,BTL etc etc.The destruction of leverage will wipe most of that away.The next cycle will be the first real reflation for 40 years,and most people will be so trapped by leverage that they can only suffer more and more pain through it.Only a very few,those liquid,and those invested in inflation loving assets will do well.Those going under through debts will be unable to buy anything.Those struggling to hold on (pretty much anyone with a 3+ x salary mortgage) wont understand whats hitting them.The irony is the most loved assets right now are the ones that will provide the most pain.The least owned and the most hated assets are the ones that will prosper.I just love how contrarian a cycle turn can be.

[UnconventionalWisdom]

3 minutes ago, DurhamBorn said:

Those struggling to hold on (pretty much anyone with a 3+ x salary mortgage) wont understand whats hitting them.The irony is the most loved assets right now are the ones that will provide the most pain.

One of my colleagues saw his house rise in value threefold so moved to a much bigger place and took on 2-3x the remaining mortgage debt a couple of years ago. Another colleague is about to do the same. I'm in disbelief that they haven't even considered that this could go wrong. All these years offered people the chance to pay off their debt quickly... Instead a lot (maybe most?) decided it's forever so loaded on even more. 

[DurhamBorn]

23 minutes ago, leonardratso said:

eee, i havent been to durham since i was a student at sunderland poly, actually turned into university of wearside/sunderland while i was there so i joined a poly but graduated from a uni, bonus.

I remember a group of us hiring boats one summer to arse about on the river, 3 boats went out, only one came back, we managed to sink the other 2 while drunk, lost our deposits. First time id been in an old cathedral as well, was impressed by the ceiling and the upskirt mirrors on small tables so you didnt have to break your neck looking up, or maybe im confusing that with york, mind was 30 or so years ago. Funny you should say about the hydro screw, the So-Called BBC at white city in london i remember had a jet engine or big gas turbine in the basement or somewhere to drive a generator and i remember seeing a program about how heat scavengers pulled all the exhaust heat off it to heat the entire building when  it was running. Not as impressive as the hydro cost wise, but still they werent as thick as they looked.

I think Durham was the first time they had vaulted such a wide ceiling.Incredible building.Those boats are all still there.Its pretty deep that section as well,you were lucky to make it out.

[Straingone]

46 minutes ago, DurhamBorn said:

Where it was in Durham is and has been re-developed the last couple of years and its a fantastic setting.There is a Chinese buffet about £8 a pop with views up to the castle and Cathedral.As good a view as youl get anywhere in the world.The passport office is over the river now and there is a big metal hydro electric screw in the river that generates all the electric.

Real privilege to see you on here @DurhamBorn

[Napoleon Dynamite]

Glad this thread is over here now.  It's the main reason I visit TOS.  I don't have much to add, but I read it all and bear it in mind when making financial decisions.