Personal Pension
Discussion
ringram said:
Sealed for reference 
I bet you are one of the ones that thinks QE is money printing too...
In which case good luck with things, you will need it.
With respect, you may be confusing my opinions with my positions re PMs. If I bought at anywhere near the prices I have mentioned, how unlucky do you imagine I would have to get?I bet you are one of the ones that thinks QE is money printing too...
In which case good luck with things, you will need it.
Colin.
longone said:
fandango_c said:
Could you explain the "learn economic history" bit above for me please?
Ta.
I assume you are serious and want to read. Try these, more if you want:Ta.
Economics in One Lesson, Hazlitt 0517548232
Wake Up, Mellon/Chalabi 101841126918
The Real Crash, Schiff 9781250004475
Popular Financial Delusions, Smitley 9781614271307
A Pocket Book of Gold, Sinclair/Carlin 139780984471201
Currency Wars, Rickards 9781591844495
Debunking Economics, Keen 9781848139930
Valuing Banks in Uncertain Times, Schoon 9781907444043
The Silver Bomb, MacDonald/Whitestone 139781475185270
How the West was Lost, Moyo 9781846142352
When Money Dies, Fergusson 9781906964443
Democracy and the Fall of the West, Smith/Miers 9781845402150
The Postcatastrophe Economy, Janszen 9781591842637
The Penniless Billionaires, Shapiro 0812909232
The Smitley and Shapiro books are hard to find at sensible prices but classics.
Colin.
longone said:
With respect, you may be confusing my opinions with my positions re PMs. If I bought at anywhere near the prices I have mentioned, how unlucky do you imagine I would have to get?
Colin.
Ok point taken. But PM's are a speculative play based on peoples perception of what they are worth. They have little underlying value themselves, no cash generation etc. At least housing generates an income. Sure a few thousand years of gold as currency have ingrained themselves in people. But would you rather have a pile of gold bars or thousands of acres of productive farmland?Colin.
And unless you are taking physical possession of gold you have nothing. Well maybe some tungsten.
My 2p.
fandango_c said:
I was being serious, but was hoping for your view as to why economic history supports your opinion on silver.
I would prefer to say economic history is the basis for my opinions. My opinions on history are no more than say my opinions on maths, I only know what university and books have taught me. None is original thought just the application of what I've learned.I quoted those books to encourage you and others to read and see what conclusions you come to. We can bandy opinion on threads like these forever but none of us are a Fergusson, a Smitley or a Sinclair. These writers give us the short cuts to possibly, or not, seeing the patterns and shapes from the past that might be reforming today.
My own opinion is that the finacial world that is opening up today has parallels only with the worst aspects of the past and as such is new to all but the most farsighted. Contemporary financial advice as I see dispensed on the net daily is outdated for the challenges of today and the future. PMs are the canary in the mine. For an asset class so universally regarded as useless it has had a sector beating rise from nowhere for apparently no reason.
Funny that isn't it?
Colin.
ringram said:
Ok point taken. But PM's are a speculative play based on peoples perception of what they are worth. They have little underlying value themselves, no cash generation etc. At least housing generates an income. Sure a few thousand years of gold as currency have ingrained themselves in people. But would you rather have a pile of gold bars or thousands of acres of productive farmland?
And unless you are taking physical possession of gold you have nothing. Well maybe some tungsten.
My 2p.
No ringram, no. Please read around the subject. Underlying value is not soley based on income or cash generation. Please look at the historic charts for gold and silver from say 2002 to date. Correct the prices for exchange rates and ask yourself, why? Why have both metals out performed any other asset class year after year, why?And unless you are taking physical possession of gold you have nothing. Well maybe some tungsten.
My 2p.
wrt farmland, I agree farmland is another good bet. I mentioned hard assets as being the way forward in other threads. But in terms of ease of investment, simplicity of ownership and potential growth over the 2-5 yr term I would go with PMs and in particular silver.
wrt physical delivery you are correct, you must not, other than with great care and monitor, use paper PM derivatives. Certainly never buy PM ETFs and forget about them.
The reason I chose to list the books on this thread, and will keep doing so, is to make it easier for those prepared to read to challenge the nonesense pedalled by financial products fans. I know the game is up and maybe they do too, but respected peer reviewed work makes it so much easier to land the blow.
Colin.
longone said:
I would prefer to say economic history is the basis for my opinions. My opinions on history are no more than say my opinions on maths, I only know what university and books have taught me. None is original thought just the application of what I've learned.
I quoted those books to encourage you and others to read and see what conclusions you come to. We can bandy opinion on threads like these forever but none of us are a Fergusson, a Smitley or a Sinclair. These writers give us the short cuts to possibly, or not, seeing the patterns and shapes from the past that might be reforming today.
My own opinion is that the finacial world that is opening up today has parallels only with the worst aspects of the past and as such is new to all but the most farsighted. Contemporary financial advice as I see dispensed on the net daily is outdated for the challenges of today and the future. PMs are the canary in the mine. For an asset class so universally regarded as useless it has had a sector beating rise from nowhere for apparently no reason.
Funny that isn't it?
Colin.
The price of silver in real terms is the same today as in 1980.I quoted those books to encourage you and others to read and see what conclusions you come to. We can bandy opinion on threads like these forever but none of us are a Fergusson, a Smitley or a Sinclair. These writers give us the short cuts to possibly, or not, seeing the patterns and shapes from the past that might be reforming today.
My own opinion is that the finacial world that is opening up today has parallels only with the worst aspects of the past and as such is new to all but the most farsighted. Contemporary financial advice as I see dispensed on the net daily is outdated for the challenges of today and the future. PMs are the canary in the mine. For an asset class so universally regarded as useless it has had a sector beating rise from nowhere for apparently no reason.
Funny that isn't it?
Colin.
Perhaps that is why some people regard it as useless?
Welshbeef said:
But trust me be a landlord isn't as easy as most say its a lot of work time effort hassle and if you get a tenant who trashes the place and sits in the house not paying rent take ten to court etc.
Also not many at all have the funds to put down 25% of the value plus if the trips doesn't stack up you will have to put in more than 25%.
Also if there is long periods of unlet can you afford to cover that mortgage? If you can then clearly your lifestyle will be drastically impacted.
That said I've been in the game for over 15 years and have a portfolio my first I bought during Uni so I had free rent for three years and made a killing then bought some more then more again then more. None are flats all are three bed houses or three bed terraces. I have significant equity in all and all are IO and I will not change that. I will sell none but I know in what 30 years time the mortgage I have on them will be a small value relative to the houses value.
But I have many pensions too including a number of final salary so I've not put all eggs in one basket. I'm not sure ill buy any more
Oh one last point when you start to buy buy to let's you generally have them close ish to where you live ie same town city so if you want to up sticks it's a huge bind. Something to consider.
I am aware its also requires work , it would be part of a long term savings plan along with cash isa/ shares etc As im not puting everything in the ame basket.Also not many at all have the funds to put down 25% of the value plus if the trips doesn't stack up you will have to put in more than 25%.
Also if there is long periods of unlet can you afford to cover that mortgage? If you can then clearly your lifestyle will be drastically impacted.
That said I've been in the game for over 15 years and have a portfolio my first I bought during Uni so I had free rent for three years and made a killing then bought some more then more again then more. None are flats all are three bed houses or three bed terraces. I have significant equity in all and all are IO and I will not change that. I will sell none but I know in what 30 years time the mortgage I have on them will be a small value relative to the houses value.
But I have many pensions too including a number of final salary so I've not put all eggs in one basket. I'm not sure ill buy any more
Oh one last point when you start to buy buy to let's you generally have them close ish to where you live ie same town city so if you want to up sticks it's a huge bind. Something to consider.
fandango_c said:
The price of silver in real terms is the same today as in 1980.
Perhaps that is why some people regard it as useless?
No it is not. The price of money expressed in silver is in the same order today but aside from comparing generations apart the spike in early 1980 was caused by the Hunt Bros corner. This corner was liquidated as a condition of the Hunt's bailout by the same Jim Sinclair, one of the authors of Pocket Book of Gold I recommended.Perhaps that is why some people regard it as useless?
Are you seriously comparing 32years ago with today's situation when valuing a commodity?
-did we have PV panels then?
-what was the exchange rate?
-did we print money to buy junk debt?
-had the US Geological Society predicted it to be the first periodic element to become extinct due to demand?
Invest £10 in The Silver Bomb, Amazon has it. You may still not want to invest in silver but you will definately hold a modified view of the future role of PMs in an investment portfolio.
Colin.
jonny70 said:
I am aware its also requires work , it would be part of a long term savings plan along with cash isa/ shares etc As im not puting everything in the ame basket.
Any decision needs to be fully costed really planned through then plan different options list pros and cons of each and then go from there but just making sure you know it isn't as easy as so many make out. Good luck in what you choose and always have an exit strategy in every investment.
Welshbeef said:
Any decision needs to be fully costed really planned through then plan different options list pros and cons of each and then go from there but just making sure you know it isn't as easy as so many make out.
Good luck in what you choose and always have an exit strategy in every investment.
I know a few people with experience in property so will speak to them , obviously cost it and do the maths.(what i dont get is those that do BTL for 5% yields)Good luck in what you choose and always have an exit strategy in every investment.
What do you mean by end game?
I plan to pay the mortgage off (with the rent) on the btl and once its paid off use the rent as income .If the first one goes well then i might look to another after a year or two. As well as this im using my ISA allowance(cash and shares) so im diversified.
Manks said:
jonny70 said:
I know a few people with experience in property so will speak to them , obviously cost it and do the maths.(what i dont get is those that do BTL for 5% yields)
What do you mean by end game?
Plenty of reasons for 5% yielders if the circumstances dictate.What do you mean by end game?
longone said:
fandango_c said:
The price of silver in real terms is the same today as in 1980.
Perhaps that is why some people regard it as useless?
No it is not. The price of money expressed in silver is in the same order today but aside from comparing generations apart the spike in early 1980 was caused by the Hunt Bros corner. This corner was liquidated as a condition of the Hunt's bailout by the same Jim Sinclair, one of the authors of Pocket Book of Gold I recommended.Perhaps that is why some people regard it as useless?
Are you seriously comparing 32years ago with today's situation when valuing a commodity?
-did we have PV panels then?
-what was the exchange rate?
-did we print money to buy junk debt?
-had the US Geological Society predicted it to be the first periodic element to become extinct due to demand?
Invest £10 in The Silver Bomb, Amazon has it. You may still not want to invest in silver but you will definately hold a modified view of the future role of PMs in an investment portfolio.N
Colin.
I think I'll leave silver for you - good luck!
fandango_c said:
longone said:
fandango_c said:
The price of silver in real terms is the same today as in 1980.
Perhaps that is why some people regard it as useless?
No it is not. The price of money expressed in silver is in the same order today but aside from comparing generations apart the spike in early 1980 was caused by the Hunt Bros corner. This corner was liquidated as a condition of the Hunt's bailout by the same Jim Sinclair, one of the authors of Pocket Book of Gold I recommended.Perhaps that is why some people regard it as useless?
Are you seriously comparing 32years ago with today's situation when valuing a commodity?
-did we have PV panels then?
-what was the exchange rate?
-did we print money to buy junk debt?
-had the US Geological Society predicted it to be the first periodic element to become extinct due to demand?
Invest £10 in The Silver Bomb, Amazon has it. You may still not want to invest in silver but you will definately hold a modified view of the future role of PMs in an investment portfolio.N
Colin.
I think I'll leave silver for you - good luck!
Before you go let me explain my first two sentences:
-the price of silver is not the same in real terms today as in 1980 because in GBP the average price of silver in 1980 was $16.3/oz and the average £/$ was 2.3, hence in 1980 an ounce of silver was about £7. Today it is about £21/oz. £7 in 1980 corrected for inflation to date is worth £29. In real terms silver since the average of 1980 has fallen by about 35%.
As I mentioned, the spike in 1980 makes the exercise academic but those are the numbers for the year you chose.
- I guess you found pricing money in silver confusing? If so, the reason money can and should be priced in PMs, and not the other way around, is because when anything is valued or measured we first need a constant to use in the comparison. A valuation can not be made between two variables. Usually it is reasonable to regard the good as the variable and fiat paper money as the constant. This is fair because broadly the money supply is constant (ish). With PMs this is a dodgy thing to do and particularly with gold because gold's total supply rises so slowly (less than 1%/year) that it can easierly be the fiat money that is growing the quicker. With silver, the industrial demand is growing very quickly and it may at the moment be actually in backwardation. I would suggest it is.
However, the real reason fiat money is better priced in PMs is the rate at which the money supply has been increased across the developed world in recent years. How much of it is finding its way into PMs and how much is speculation is hard to know but it is certainly the case that more money is now available to chase a relatively constant PMs availability. Hence in today's situation it is fair to price money in PMs.
Don't turn your back on PMs, if you own them they will save your life one day.
Colin.
longone said:
Ok no problem, I'm only trying to explain what has secured my future and could yours too.
Before you go let me explain my first two sentences:
-the price of silver is not the same in real terms today as in 1980 because in GBP the average price of silver in 1980 was $16.3/oz and the average £/$ was 2.3, hence in 1980 an ounce of silver was about £7. Today it is about £21/oz. £7 in 1980 corrected for inflation to date is worth £29. In real terms silver since the average of 1980 has fallen by about 35%.
As I mentioned, the spike in 1980 makes the exercise academic but those are the numbers for the year you chose.
- I guess you found pricing money in silver confusing? If so, the reason money can and should be priced in PMs, and not the other way around, is because when anything is valued or measured we first need a constant to use in the comparison. A valuation can not be made between two variables. Usually it is reasonable to regard the good as the variable and fiat paper money as the constant. This is fair because broadly the money supply is constant (ish). With PMs this is a dodgy thing to do and particularly with gold because gold's total supply rises so slowly (less than 1%/year) that it can easierly be the fiat money that is growing the quicker. With silver, the industrial demand is growing very quickly and it may at the moment be actually in backwardation. I would suggest it is.
However, the real reason fiat money is better priced in PMs is the rate at which the money supply has been increased across the developed world in recent years. How much of it is finding its way into PMs and how much is speculation is hard to know but it is certainly the case that more money is now available to chase a relatively constant PMs availability. Hence in today's situation it is fair to price money in PMs.
Don't turn your back on PMs, if you own them they will save your life one day.
Colin.
So the conclusion is that in £ terms (i.e. the stuff I need to buy food, pay my mortgage, fund my car etc etc) Silver has performed much WORSE than inflation.Before you go let me explain my first two sentences:
-the price of silver is not the same in real terms today as in 1980 because in GBP the average price of silver in 1980 was $16.3/oz and the average £/$ was 2.3, hence in 1980 an ounce of silver was about £7. Today it is about £21/oz. £7 in 1980 corrected for inflation to date is worth £29. In real terms silver since the average of 1980 has fallen by about 35%.
As I mentioned, the spike in 1980 makes the exercise academic but those are the numbers for the year you chose.
- I guess you found pricing money in silver confusing? If so, the reason money can and should be priced in PMs, and not the other way around, is because when anything is valued or measured we first need a constant to use in the comparison. A valuation can not be made between two variables. Usually it is reasonable to regard the good as the variable and fiat paper money as the constant. This is fair because broadly the money supply is constant (ish). With PMs this is a dodgy thing to do and particularly with gold because gold's total supply rises so slowly (less than 1%/year) that it can easierly be the fiat money that is growing the quicker. With silver, the industrial demand is growing very quickly and it may at the moment be actually in backwardation. I would suggest it is.
However, the real reason fiat money is better priced in PMs is the rate at which the money supply has been increased across the developed world in recent years. How much of it is finding its way into PMs and how much is speculation is hard to know but it is certainly the case that more money is now available to chase a relatively constant PMs availability. Hence in today's situation it is fair to price money in PMs.
Don't turn your back on PMs, if you own them they will save your life one day.
Colin.
Where do I sign?
sidicks said:
longone said:
Ok no problem, I'm only trying to explain what has secured my future and could yours too.
Before you go let me explain my first two sentences:
-the price of silver is not the same in real terms today as in 1980 because in GBP the average price of silver in 1980 was $16.3/oz and the average £/$ was 2.3, hence in 1980 an ounce of silver was about £7. Today it is about £21/oz. £7 in 1980 corrected for inflation to date is worth £29. In real terms silver since the average of 1980 has fallen by about 35%.
As I mentioned, the spike in 1980 makes the exercise academic but those are the numbers for the year you chose.
- I guess you found pricing money in silver confusing? If so, the reason money can and should be priced in PMs, and not the other way around, is because when anything is valued or measured we first need a constant to use in the comparison. A valuation can not be made between two variables. Usually it is reasonable to regard the good as the variable and fiat paper money as the constant. This is fair because broadly the money supply is constant (ish). With PMs this is a dodgy thing to do and particularly with gold because gold's total supply rises so slowly (less than 1%/year) that it can easierly be the fiat money that is growing the quicker. With silver, the industrial demand is growing very quickly and it may at the moment be actually in backwardation. I would suggest it is.
However, the real reason fiat money is better priced in PMs is the rate at which the money supply has been increased across the developed world in recent years. How much of it is finding its way into PMs and how much is speculation is hard to know but it is certainly the case that more money is now available to chase a relatively constant PMs availability. Hence in today's situation it is fair to price money in PMs.
Don't turn your back on PMs, if you own them they will save your life one day.
Colin.
So the conclusion is that in £ terms (i.e. the stuff I need to buy food, pay my mortgage, fund my car etc etc) Silver has performed much WORSE than inflation.Before you go let me explain my first two sentences:
-the price of silver is not the same in real terms today as in 1980 because in GBP the average price of silver in 1980 was $16.3/oz and the average £/$ was 2.3, hence in 1980 an ounce of silver was about £7. Today it is about £21/oz. £7 in 1980 corrected for inflation to date is worth £29. In real terms silver since the average of 1980 has fallen by about 35%.
As I mentioned, the spike in 1980 makes the exercise academic but those are the numbers for the year you chose.
- I guess you found pricing money in silver confusing? If so, the reason money can and should be priced in PMs, and not the other way around, is because when anything is valued or measured we first need a constant to use in the comparison. A valuation can not be made between two variables. Usually it is reasonable to regard the good as the variable and fiat paper money as the constant. This is fair because broadly the money supply is constant (ish). With PMs this is a dodgy thing to do and particularly with gold because gold's total supply rises so slowly (less than 1%/year) that it can easierly be the fiat money that is growing the quicker. With silver, the industrial demand is growing very quickly and it may at the moment be actually in backwardation. I would suggest it is.
However, the real reason fiat money is better priced in PMs is the rate at which the money supply has been increased across the developed world in recent years. How much of it is finding its way into PMs and how much is speculation is hard to know but it is certainly the case that more money is now available to chase a relatively constant PMs availability. Hence in today's situation it is fair to price money in PMs.
Don't turn your back on PMs, if you own them they will save your life one day.
Colin.
Where do I sign?
Let me remind you where I came in, not in 1980 or 2011 even, I said in July this year buy silver (metal not paper). Why is it so hard to accept your cynicism back in July was wrong?
I will be back to remind you when it clears $50 and $75 and $100. I urge those who are confused to learn your subject, read and read. I've given a book list, only lazyness will stop you.
Colin.
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