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Crash Buyer

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Posts posted by Crash Buyer

  1. Surely there is. If fuel went up tenfold and public transport fares stayed the same then I would switch for a lot of journeys.

    Although as you say bus & train fares, which I already find too high and far more expensive per journey than car travel (on the basis you already have a car on the road), are going up above inflation so I can't see anybody switching on per-journey cost reasons any time soon.

    Bus companies have to pay for fuel too. In this scenario, public transport commuting fares would also go up from say £4 per day to £40 per day. Most jobs would not be viable for the average Joe and the economy would collapse. I still wouldn't use the bus. I'd be protecting my family and house from the starving chav hordes. :P

  2. I'd rather (and do) pay much more to drive to work by car than travel by bus. Main reasons are punctuality, time-savings, comfort, it's door to door and I don't have to share my commute with random nutters.

    I don't think there's any price level where I'd switch to public transport. In fact, bus fares have been rising faster than car running costs since 1997 according to the Department of Transport (i.e. depreciation, fuel, maintenance).

    There is no rail service anywhere near my house. Also I wouldn't consider cycling, it's far too dangerous and there's the unpredictable British weather.

  3. http://www.zerohedge.com/news/2012-09-25/how-12th-century-mathematician-just-doomed-bernankes-wealth-effect

    20120925_fib_0.png

    I thought it was worth revisiting this one (even though it was on ZH).

    Actual high was 14 Sep (a few days earlier than expected). Assuming the bottom is now in, the next high is due around 45 days from the 16 Nov low (mid-Jan).

    The main problem is that they cheated on the 2010 correction, using the August higher low rather than the July low. This would put the whole sequence out of whack of course.

  4. After last week's meltdown on the FTSE 100 I was looking to get back into the market after selling out at 5900 last month on a 5% discount.

    Unfortunately so is everybody else this morning, as it is already 60 up on the Friday close.

    Bugger those positive soundings on the US fiscal cliff.

    Just have to hope that the Greece issue might concentrate investors minds later in the week.

    For those of you still in it, the Santa rally looks odds on for the year end. It never fails to materialise with the December 31 close beating November 30 every year for God knows how long.

    Found myself in a similar situation - was looking to buy around 5600, which ended up around Friday's close. Missed that and now Monday +132 points, closed at the 200DMA. Surely now the 200DMA is support, Santa rally etc.

  5. Excellent charts on US income/tax distributions put in historical context

    http://www.bondvigilantes.com/blog/2012/11/02/us-income-inequalities-buffett-rules/

    Take a look Osborne

    Interesting that if you take out the WWII & Cold War period on the last 2 charts, you could pretty much say nothing's changed. Or to put it another way, normal business has been resumed now that we don't have to worry about the Soviets pushing their pesky communist equality agenda. There's just a bunch of Occupy protesters, rather than 5,000 nuclear warheads on the other side of the argument.

    IMO without the Cold War, income inequality would have bounced back straight after the war rather than 50 years later.

  6. BBC news announces that all FTSE Ceos will be issued more shares as part of their pay package (sorry no link).

    So along with all employees in the UK having to have compulsory private pensions (see my post further up this thread), they really want a stock market boom to get us out of this.

    What next ? CGT free on all shares?

    It's not quite compulsory yet; the govt has changed private sector pensions to auto opt-in instead of auto opt-out, but you can still opt out.

    They wonder why private sector employees opt out when final salary pensions have virtually disappeared, annuity rates are a joke and all the risk is on the employee. I had a pension review at work with one of these "specialists", so I asked them to show me their historic fund performance. They could only show me the last 5 years :o and even then they managed to underperform the FTSE excluding dividends. From memory, the TR was under 20%, a truly crap performance. Gives you an idea how bad the fund management and how high the hidden fees are.

    So I'm investing my own money instead, taking responsibility for my own future rather than relying on a pension fund manager who is busy skimming off my returns.

  7. For the bulls (at least in the short term), see the chart below. Originally posted on Bespoke Invest during the summer but I couldn't find the link to the original article.

    What's interesting is that the SPX has also followed the average year 4 performance quite closely since this was posted. We've seen the usual summer rally followed by a September high. It suggests that an October correction (as we are experiencing now) is normal and that we should expect a post-election rally.

    Election-Year.png

    Although the chart below suggests the last 3 of months of an election year are worse on average than during other years.

    presidential-cycle.gif

    Although probabilities of an increase are good - see table below.

    electioncycle.png

    Edit: Quite obviously the returns on the 2nd chart don't tally with the 3rd table.

  8. What alternatives are there to ETC/ETF if I want multiyear commodity bets? I don't really want mining stocks as this would require so much extra research and hassle - hence risk in my (simple and learning) mind.

    How about a mining stock ETF to avoid stock-picking? Although you'll end up weighted towards the big stocks of course.

  9. Gold I have as an interim top within next 2 weeks, maybe sooner.

    Equities - I still have it as an overdue correction and now looks even more so. To date the longer post QE rallies have extended the deeper has been the subsequent correction.

    Bonds in general still in uptrend on my reading.

    Gross seems pleased with himself for loading up on agency debt before the fact. So I guess he'll just keep feeding the FED.

    Perhaps the rising oil price will be the fly in the QE ointment.

    Equities: I'm really tempted to go short (back to at least SPX 1420) but that would be going against the trend. Equally longs here just look crazy; no thanks. Do nothing when there's nothing to do, right?

  10. Some good advice.

    In a previous renting case, the letting agent scum had kept my deposit under the guise of disputing a couple of things (which were not my fault). In this instance, once I raised the threat of dispute, they backed down immediately (I had a strong case).

    I think the dispute service are used to dealing with cases where deposits are being unreasonably withheld (hence why the TDS was set up in the first place) and would be more likely to look favourably on the tenant.

    IMO, ignore their court threats, it's just the scum posturing.

  11. Been a long time lurker here. I bought my first home a few weeks ago. Wasn't convinced we've hit the bottom, but a combination of factors such as being sick of renting and being at the whim of annoying LLs, being kicked out by my current LL, my father-in-law coming into some money and offering to help and us finding the a place at a price we were happy with (needs some cosmetic work but I'm up for some DIY).

    It's nice to see some colour on the walls and be able to get creative in the garden (not that I've been able to do anything much out there yet with all the rain). Also me and my wife want to start a family and I wouldn't want to have kids and have all the instability that can come with renting off BTL twats who will stitch you up in a moment if they think they can gain from it.

    Lastly the mortgage is 3.2x salary and costs about 2/3 per month of what I was paying in rent. Now live in a nice rural area but London and my work commute is still very accessible. Best bit was on Sunday, going out to the local pub, sitting in the sunshine looking out over the fields behind the beer garden, then heading home to sit in a lounge that looked the way I want it to.

    Still got a DIY list of jobs as long as my arm that need doing though. Including the unenviable task of chipping up all the thick tiles in the kitchen because the previous owner had them put in without bothering to check if normal sized appliances would fit under the counter (they don't). :s

    Sorry to hear about your LL problems. We were lucky and avoided the wide-boy BTL twats you are talking about. The UK renting system is far too biased towards the owner compared with most countries. I won't miss those ludicrous clauses in rental contracts regarding what you can and can't do etc.

    However, I've got used to not having to do any DIY and having my weekends free for recreation time, one of the advantages of renting. Now my weekends are being spent decorating!

  12. There is no inflation in house prices, quite the reverse in fact, so money set aside for the purchase of a house is not losing value to inflation.

    If house prices decline by 3% in a year and your savings earn you 3% in the same year, the purchasing power of your money, earmarked for the purchase of a house, has increased by 6% in that year.

    Back around 2008 this was even more favourable due to rapidly falling nominal house prices and higher savings rates (if you'd fixed before the recession). For me the percentage return is no longer enough to justify renting. As GeordieAndy says, more QE will be used to prop up nominal house prices, so I don't see things improving.

  13. :P

    I'd of waited till 6-9months after the olympics

    There's always a reason to wait longer!

    You can now get on with your life. Renting is dead money.

    Seriously - good luck - hope all goes well.

    Thanks!

    you mean the deposit is now dead money

    Correct, unfortunately. Although some of it was in savings accounts earning almost nothing.

    I've bought as well and complete on Friday.

    I've seen the 'deposit is dead money' comment above, and I can see some truth in that, but given that 60% of my purchase has come from nothing more than the apprecation in gold purchased 2007/2008 that doesn't bother me too much. I've got a house in W. London with no mortgage which meets my needs (not all wants, perhaps, but that's a different matter) and am comfortable with that. I should add that In terms of overall funding the other 40% was from selling my last place (a flat) and is how my gold was sourced in the first place.

    I appreciate that my position was/is unusual and fully accept that my luck has been astonishingly good. I claim little credit for how things have turned out for me.

    I'll still be lurking on here because like the o.p., I still think there will be a crash of sorts. Whether it will hit all areas the same I do have some doubts but I'll be watching with interest and chipping in where appropriate. Also I am grateful to this site for educating me in financial matters. I am especially grateful to the members (some now long gone) who helped me steer my deposit money into gold at what turned out to be a pretty good time to do so.

    Good luck o.p. Hope it all works out for you.

    And to everyone else, I hope the crash comes sooner rather than later !

    Thanks - sounds like you've done very well - may your good luck continue.

  14. I have finally bought a house. Found a relatively good deal (considering the current inflated market) and was prepared to walk away if I couldn't get it at an acceptable price (in fact when the vendors asked me if I could raise my offer, I did - they came back). Been looking for a while and previously been outbid on other houses.

    To put off buying for longer, I'd need the prospect of drastically lower prices in a relatively short period and I've concluded this is not going to happen. Although I think that real prices will continue to gradually drift down before stabilising.

    However since joining this site I've realised that not buying a house was a specific speculative bet and that there are many other speculative bets available in the markets. If house prices were to fall sharply, I could short house builders or banks. In short, my entire investment strategy no longer depends on house prices. Of course, this is not suitable for everyone and in any case a functioning society should be able to provide shelter for it's citizens at a reasonable cost.

    Meanwhile, in between DIY jobs, I'll continue to keep you company in the investment sub-forums.

  15. Interim low now in? Or early August '11 fake out?

    Eussro banks appear to have found support too.

    Another month end quandry..........

    Isn't it just. FWIW I favour a rally further well into the 1400s before we get another correction:

    - I agree with Tiho (as posted earlier by HAM) that long USD is a crowded trade

    - IMO the recent "shale oil = strong dollar" story is designed to get this trade even more crowded before it breaks, fuelling risk-on trades

    - We had the "sell in May" equity trade in 2010 and 2011 - on the surface it is appearing now too, which is a perfect opportunity to burn shorters

    So I think we'll run up higher. A QE3 rally would help Obama; to get QE3 by autumn would mean equity weakness during the summer, so let's say a June correction would be just perfect.

    Or we could get a little pre-election panic-inspired banking blackmail like 2008. :ph34r:

    EDIT: I remembered that Adam Hamilton wrote on this in Feb (this may be a re-post):

    http://zealllc.com/2012/spx2012.htm

    So what is likely to happen? A couple weeks ago I wrote an essay on the state of the SPX’s current cyclical bull market and the latest upleg within it. For a variety of technical reasons on several time scales, today’s rally is likely to persist until late spring at least. Summer is even a possibility, depending on how high the SPX gets relative to its secular-bear resistance of 1500 before that. Soon after 1500, we are due for either a major correction or possibly a new cyclical bear market.

    If this upleg crests too early, so the correction is over by late summer and the SPX can rally into autumn, the Democrats have a better chance of winning. But if this upleg crests later, or the SPX lingers near highs during the summer before correcting like it did last year, the subsequent selloff (correction or new bear) should hit in autumn. And that would give the Republicans a much better chance of winning.

    In pure market terms, politics aside, this second scenario looks more likely based on my research. The flagship S&P 500 only has to rally another 10% or so from here to hit its decade-old secular-bear resistance of 1500. And that would make for an easy and gradual ascent into late spring, no sharp surges sparking upleg-killing excessive greed, before the stock markets’ usual May seasonal peak.

    Well 2 months later we were only 10-20 pts higher on SPX so it looks like the second scenario is working out.

  16. Not sure if you have noticed CB, but Gavyn Davies linked to 'your' James Montier paper in his 25th March blog (after your post). He appears to argue that it may be 'different this time' due to the effect on lower real labour rates arising from globalisation, with India labour supply still likely to increase beyond China's, and also suppression due to the output gap.

    http://blogs.ft.com/gavyndavies/2012/03/25/a-better-era-for-global-equities/#axzz1q2PdKqZ9

    Cheers RK. I rather agree with Scepticus's point on Asian labour costs, than "its different this time". Anecdotally it's said that manufacturers are already looking for cheaper alternatives to China in Asia.

    I rather hesitate to suggest again, 1 month on, that the set up still resembles that of the 'flash crash' but I'm afraid it does. The sell off in early March was fairly minor in most markets (more in emerging) so we'll have to see whether anything materialises next week, but it certainly looks possible.

    #foolcastmeonce

    I think I'm also repeating myself but FTSE100 is flat despite S&P above 1400. I was thinking the Bernanke comments on QE would be a nice catalyst to pull in the suckers before the inevitable occurs. But the action has been a bit muted since, so I'm struggling to make a foolcast myself.

  17. Following on from the long term regression chart above.......

    Rolling 15 year real returns

    http://advisorperspe...ure-Returns.php

    #takethemoney

    Whilst on the GMO site I found this article from the same author analysing the "record profits so quickly after a recession" conundrum.

    In short, the US fiscal deficit has been the main driver of this sharp profit growth, in contrast to historic norms where investment drives profits (as you'd expect). The report concludes that we can expect profits to mean revert based on some level of deficit reduction following the US elections this year.

    https://www.gmo.com/America/CMSAttachmentDownload.aspx?target=JUBRxi51IIBtbYEu0yy2D233Qql0krF9YIWDpyU9bC1DsIW9OxrQN38JW598obIegPVL5Vm43jTd74zJ0R1rY2lRRYvkFggPe%2bdZF4oUF%2bEun279ii1ThA%3d%3d

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