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dr ray

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    Personal finance
  1. Thanks for posting this. I am always looking for new opportunities. This initially looked good as Bulgaria is in Europe now so deposits are covered by the 100K euro guarantee but the devil is in the detail here. When I looked into their FAQ page on the website it says any compensation would be paid in local currency. If their currency becomes worthless the official and actual exchange rate may well be very different so, regretably , for me "I'm out"
  2. I'm not a trader so I avoid anything volatile. I've no idea on LLOY and BDEV but for someone with time and access to cheap trading the wild swings in price are ideal. My priority is tax free income and capital growth as I pay tax at 50% and I don't have much time to track investments so I buy VCTs and high div stocks for my PEP (and gold legal tender coins) and just hold them. Its not been a highly successful strategy over the last 10 years because of losses on banks, BP and telecom and AIM VCTs in which I was overweight but I'm hoping I'll have a decent flow of tax free income when I retire in a few years
  3. No I'm too much of a passive investor to have made any move. Just stared into the headlights. At least I didn't sell out at the bottom which is what most private investors end up doing.
  4. I thought RPI would be higher by now too. Real inflation certainly is. I think even RPI will kick off in the new year. Commodity prices take about 6 months to feed through to the shops and the VAT rise will come through too. Government is either betting or else misinforming us that the excess capaciy in the economy will prevent retailers passing on prices but we will have to see. I think you will be glad you bought the NS&I certs especially if you are a higher rate taxpayer. There should be the opportunity to roll them on in 3-5 years too unless they change the rules and by then they will be like gold dust. There is the currency risk too but unless you can get index linked bonds denominated in Yuan I can't see any way around this. I thought BP would be a proxy for an index linked currency independant investment and I put a few Ks in this earler this year. Look where that got me.
  5. I have about 25K on zopa. Been with them about 18 months. The money is held by RBS until its lent out and then obviously held by the borrower. If zopa went bust they claim that the interest and capital repayments wouldn't be affected but I would foresee borrowers defaulting en mass. There is no compensation scheme and zopa can't be put in an ISA or SIPP. Until recently it was difficult to lend more than 25K as it needed a consumer credit licence (CCL) but a few months ago this was dropped at about the same time as NS&I index linked was pulled. I think this caused a flood of money into zopa and the rates have tanked. I stopped lending in September. Newbies pile in offering loans at 4-5% thinking its better than a building society but don't consider bad debt. When there is so much money at silly rates available it becomes less worthwhile. Bad debts are not tax deductable. Bad debt estimation is historical and could become much worse than indicated if unemployment bites. Regarding creating money from thin air - zopa doesn't. Money lent out is £ for £ the same money that lenders put in. No credit is created. IMHO worthwhile for a non-taxpayer or basic rate payer if rates improve a bit from now. Not worthwhile for higher rate taxpayer.
  6. Not even close. Most day traders lose money and 100k is not a sufficient amount to stop work for. You would need five times that, maybe more if you are young and don't want to live in a bus shelter. My niece was a high powered city trader who thought she might as well trade on her own account rather than make money for Parabas and lasted a few weeks before she had just about lost it all.
  7. For someone who has more than 3000 posts this shows a lack of financial understanding. The return on NS&I is linked to RPI and you will only get the full value of projected return if held to maturity. If you only bought them in July I think you will find your return is actually zero if you cash them now. If you knew the return on shares would be 6 times higher then you should have bought shares. Even better would have been agri commodities. The problem is that you didn't know and you still don't know what will be the situation in another 6 months. At least with NS&I you do know I hold a lot of NS&I and they performed exactly like I expected them to. My gripe is that RPI (though better than CPI or Core CPI) underestimates inflation because of product substitution (x becomes too expensive for people to buy therefore replaced with a cheaper alternative in index) and hedonistic adjustment (x product improves due to technological improvement but increases modestly in price eg cars, computers - considered to have become cheaper for index). RPI has surprised me in still being under 5% now giving me the equivalent return of maybe 11% pa on a safe taxed deposit on my certificates. I did expect more. If I had waited until RPI was say 20% so that I would get the same return as a punt on cotton or sugar in the last few months I would not have been able to by NS&i because they were withdrawn when they began to look like a no-brainer.
  8. Hi All I've been away for a year but I was thinking about the very same thing as bogbrush so came back on here to see what the concensus was. Nice to see all the old names still online. Argentina has 25% inflation at present and if you read Bill Bonner, they are in a crack up boom with people spending money before it becomes worthless. Houses increasing dramatically in nominal terms (and possibly in real terms too if supply is low) as a hedge against inflation. He says the buyers are cash buyers. Now it may be that the UK doesn't have enough cash buyers to cause HPI while credit remains tight so the question is whether QE will work through to the mortgage borrower. Where I live house prices are still vastly out of synch with wages or rental income and both these look like taking a hit as public sector is largest employer so on fundamentals it looks like a bad time to buy but if the crack up boom happens we can look at history and see that property will be sought after as a wealth protector. Like they say no one with 100oz of gold will ever be poor the same goes for anyone with 2 or 3 houses (unless property rights are removed). Just my opinion.
  9. Is the tooth/jaw/skull still attached? I found this today and thought it was interesting, especially the bit about soaking it in cola to remove the tooth!
  10. Funny thing is a comment by someone called Gavin Davies complaining about a 30K public sector wage. Sadly not the Gavyn Davies who is a good friend and advisor to Gordon Brown and as a previous Goldman Sachs banker amassed a personal fortune of £150 million
  11. Yes its about survival of the species (or the gene) rather than survival of the individual. The loyalties are to close family, distant family/village/tribe and then country or state or ethnic group (or proxy such as religeon). Different societies will work out by trail and error what is the best way to secure survival. In most human societies it is the wisest who usually rules not the strongest. The knuckleheads generally get sent off to fight other tribes and get killed. Most gangsters have a short rule. Totalitarian regimes like we are moving towards in the UK would like loyalty primarily going to the State and the move toward the State supporting many families rather than have the families supporting themselves can be seen as an example of this. Who now brings home the bacon in many families in the UK? Is it the family leader or the State?
  12. Actually Darwinism is badly misunderstood and all sorts of theories based on "survival of the fittest" are completely wrong because of this misunderstanding. Think about it. A group of humans living in hostile surroundings. Are they more likely to survive and breed if they co-operate or if they fight among themselves to secure the last bit of food? On a broader scale are they more likely to survive if they destroy every other animal, because they can, or if they live in harmony with their surroundings? The Darwinian principle therefore encourages group co-operation and negotiation - almost completely the opposite to what people think it does when the talk about survival of the fittest. If there was to be a sort of Mad Max scenario the survivors would be the ones who co-operated and formed groups with standards of behaviour and mutual support not the ones with the biggest guns.
  13. Unfortunately he is right in that nothing is more important than house prices in the UK. The entire UK retail, manufacture and financial industry and the spending of UK citizens is almost entirely dependant on house price inflation. The toxic assets which brought down the banks and hence the uk economy become more toxic as house prices fall. He is also right that it is a global problem in that the toxic assets are also dependant on house prices in USA, Bulgaria, Spain etc but at least if the UK house owner can carry on borrowing and spending it would go some of the way towards giving the impression of recovery. I'm not absolving Brown by agreeing with him. He should never have encouraged the misallocation of capital which resulted in our dependance on HPI in the first place
  14. How is using state funds and high taxation to keep people unemployed rather than working to improve their own position and the position of the UK for the greater good? State interferance is not only making the well off use their time and ingenuity to avoid taxes rather than creating wealth and employment but also making it unprofitable to get work for the not so well off. Its a lose-lose situation.
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