drbubb

DELUSION is Rampant - amongst both Buyers and Lenders ======= Mo.: Rt'mov : London : Rest of UK %chg/ Nt'wide H-oldSA Halif.SA Hal.NSA: HNindex : mom : DelusIdx 2012 J. : : 224,060 : 438,324 : 146,967 - 0.28% / 162,228 = n/a = 160,907 158,879 : £160,554 : - 0.16% :139.6% : F. : : 233,252 : 449,252 : 149,658 +1.83% / 162,712 = n/a = 160,118 158,897 : £160,805 :+ 0.16% :145.1% : M : : 236,939 : 455,159 : 151,853 +1.47% / 163,327 = n/a = 163,803 163,419 : £163,373 :+ 1.60% :145.0% : A : : 243,737 : 464,944 : = n/a = : = n/a = / 164,134 = n/a = 159,883 161,180 : £162,657 : - 0.44% :149.8% : M : : 243,759 : 469,314 : = n/a = : = n/a = / 166,022 = n/a = 160,941 161,785 : £163,904 : +0.77% :148.7% : J. : : 246,235 : 477,440 : = n/a = : = n/a = / 165,738 ====================================== mom:+1.01% : +1.73 % : Est.DI : 150.2% / - 0.17% = n/a = :+0.66% : +0.38% :+0.77% : Highest (estimated) Delusion Index in my records EXCERPT - From Rightmove's Release - They never let the market "clear" in a Recession Previous recessions have been driven by measures taken to combat inflation, with soaring interest rates and repossession numbers. Those high numbers of forced sales helped to provide liquidity in the housing market, something the current downturn lacks. The result is a very patchy market characterised by reduced transaction volumes, with low interest rates helping to keep people in their homes, exacerbating the supply shortage in locations of high demand. At £477,440, London is up 1.7% (£8,126) on the previous average asking price high set last month, while the South East is 0.5% (£1,662) above its previous record set in October 2011. The South West too is only some £300 off an all-time high. Removing London’s record-breaking performance from the dataset demonstrates the extent of its impact on the national average. Stripped of all the capital’s properties, the average asking price across the rest of the country would still be more than 5% adrift of its peak recorded nearly five years ago in August 2007. Shipside comments: “These strong rises in the south of the country have helped to push the national average asking price into new record territory. In these uncertain economic times, lenders feel safer to lend to those with a cash-cushion, and those sitting on that cash often feel more comfortable with it invested in tangible assets, including bricks and mortar. The better properties in the better areas remain in short supply, giving sellers of sought-after stock, and their agents, the confidence to come to market at a higher price. The right property within commuting or holiday bolt-hole distance of the capital seems to be an attractive each-way bet with the potential to be both recession-proof and offer good odds to keep pace with, or even outstrip, inflation”. /more: http://www.rightmove.co.uk/news/files/2012/06/june-2012.pdf I don't think that London's outperformance, in economic growth and in home price rises, is quite as assured as Rightmove seems to think. There may be a great SHOCK ahead, when the UK's borrowing capacity "hits a wall", a very predictable wall.

House prices drop 0.6% UK house prices fell by 0.6% in June (May: +0.2%), according to Nationwide, leaving the value of the typical home 1.5% lower than a year ago, at £165,738. The lender attributes the monthly decline to the difficult economic backdrop and the temporary boost to the market seen earlier this year prior to the ending of the stamp duty holiday. As for the year ahead, Nationwide regards the coming months as “highly uncertain” for house prices because economic conditions are likely to remain challenging.

The Psychology of Falling Markets We have seen that in Ireland, Spain and the US. Will it take hold to London too (within the next 12 months) ?

The AB doesn't like it much... Archbishop of Canterbury slams big society as 'aspirational waffle' The Archbishop of Canterbury, Dr Rowan Williams, has rubbished David Cameron's big society idea as 'aspirational waffle'. He also questioned the motivation for what was portrayed as the Conservative leader's flagship policy at the general election and suggested it represented an attempt by the state to ignore its responsibility to look after the most vulnerable in society. The archbishop's scathing attack on the prime minister's ideas will feature in a new book, Faith in the Public Square, to be published ahead of his retirement in December. In an extract quoted by the Observer, Mr Williams said: 'The big society, introduced in the run-up to the last election as a major political idea for the coming generation, has suffered from a lack of definition about the means by which such ideals can be realised. Read more: http://www.metro.co.uk/news/903053-archbishop-of-canterbury-slams-big-society-as-aspirational-waffle#ixzz1yirl4emw Keep on donating at church, will you ? You cannot expect them to support themselves, can you?

Hurray! Cameron to show Two Fat Fingers to (social) Landlords Under new welfare reforms to be announced by David Cameron, housing benefit for under-25s is expected to be scrapped to encourage youngsters to get a job or move back in with their parents. The Prime Minister will use a speech in south-east England to outline future radical changes which are aimed at saving an extra £10 billion by 2016 on top of existing plans. In an interview with The Mail on Sunday, Mr Cameron said: "We are sending out strange signals on working, housing and families. "A couple will say, "we are engaged, we are both living with out parents, we are trying to save before we get married and have children and be good parents. But how dies it make us feel, Mr Cameron, when we see someone who goes ahead, has a child, gets the council home, gets the help that isn't available to us? "One is trapped in a welfare system that discourages them from working, the other is doing the right thing and getting no help." /more: http://www.telegraph.co.uk/news/politics/9352432/Stripping-under-25s-of-benefits-will-knock-young-families-off-career-ladder-claims-Labour.html It is about time these benefits were cut. That will grow Household size and reduce demand for property F--- the F---ers ! What a revolutionary programme he could launch: "My policy will be to Terminate the unfair subsidies that go to people who do nothing to earn or deserve them. We cannot afford any longer to support waste and recklessness. I will F--- the F---ers, who have been living off the taxpayers. With a year or two we will be restored to being a fairer and more sustainable economy." If house prices fall, as I expect they will - It will be a great help to First-Time-Buyers, who should applaud that some sense is being restored to the market.

GOLD at Risk of Major Drop Before the Final Bull Market Cycle Rally Begins Thursday June 21, 2012 11:15 Gold has been busy consolidating in what I believe will be a 13 Fibonacci month Primary wave 4 correction. The Gold bull market I’ve been following since 2001 is a likely 13 year bull cycle that will end in 2013 or 2014 depending on how you count. This current correction pattern is working off a 34 Fibonacci month rally that took Gold from 681 to 1923 at its ultimate highs. Last fall I warned about the parabolic run likely ending in the 1908 ranges and for investors to position themselves accordingly. Today we have Gold trading around 1600 and our recent forecast in May was for a rally into Mid June topping around 1620-1650 ranges in US Dollars. The intermediate forecast still calls for a possible drop to 1445-1455 ranges this summer, the same figures I gave out on TheStreet.Com interview last September for a Primary wave 4 low. Only a close and a strong move over 1650 will eliminate the downside risk in my opinion. /more: http://www.kitco.com/ind/Banister/20120621.html

Negotiate for better

PROOF ... you don't need talent to become a global phenomenon

Confidence seen in Q1 2012 Despite uncertainty surrounding the implications of the Budget changes, there has been a growing confidence in the market in the first months of 2012. In the first quarter of the year we have seen increased levels of activity, particularly for the most desirable properties in the most prime locations which are selling well. While stock levels still remain low by historic standards, we saw an increase in instructions in March and this provided a much needed boost in new choice for previously frustrated buyers. The new Crossrail service has also helped to create interest and there is a general 'buzz' over the Olympics later in the year. A quarter of properties sold in 2011 in the West End would have incurred the additional Stamp Duty Land Tax of 7%, resulting in an average additional stamp duty bill of £87,000. While some purchasers may balk at this extra cost, we expect any effect on the market to be felt most closely by those with properties already for sale just above the threshold. Achieved sales prices could be negotiated down for a short time but we believe this will soon be factored into the asking price. The average sales price across the West End in 2011 was £1.4m for flats and £4.4m for houses. However, there are parts of our market which offer more value for money than others, particularly further to the east. That said, sales in prime parts of Bloomsbury are now in excess of £1,000 per square foot, with properties achieving record prices of £1,150 per square foot. This is in part a knock-on effect of increased demand in other parts of central London, such as Belgravia, rippling out to Mayfair, Marylebone and then the West End. “In the West End, the mood is buoyant. Demand for property remains unabated despite the Budget announcements, which we expect to mainly affect the £2m to £2.2m market for a short time only”. - WW ===== I would "fade" this forecast. I think there will be a marlked deterioration in the London property market after the Olympics, whatever property sector you may want to focus upon.

Confidence seen in Q1 2012 Despite uncertainty surrounding the implications of the Budget changes, there has been a growing confidence in the market in the first months of 2012. In the first quarter of the year we have seen increased levels of activity, particularly for the most desirable properties in the most prime locations which are selling well. While stock levels still remain low by historic standards, we saw an increase in instructions in March and this provided a much needed boost in new choice for previously frustrated buyers. The new Crossrail service has also helped to create interest and there is a general 'buzz' over the Olympics later in the year. A quarter of properties sold in 2011 in the West End would have incurred the additional Stamp Duty Land Tax of 7%, resulting in an average additional stamp duty bill of £87,000. While some purchasers may balk at this extra cost, we expect any effect on the market to be felt most closely by those with properties already for sale just above the threshold. Achieved sales prices could be negotiated down for a short time but we believe this will soon be factored into the asking price. The average sales price across the West End in 2011 was £1.4m for flats and £4.4m for houses. However, there are parts of our market which offer more value for money than others, particularly further to the east. That said, sales in prime parts of Bloomsbury are now in excess of £1,000 per square foot, with properties achieving record prices of £1,150 per square foot. This is in part a knock-on effect of increased demand in other parts of central London, such as Belgravia, rippling out to Mayfair, Marylebone and then the West End. “In the West End, the mood is buoyant. Demand for property remains unabated despite the Budget announcements, which we expect to mainly affect the £2m to £2.2m market for a short time only”. - WW ===== I would "fade" this forecast. I think there will be a marlked deterioration in the London property market after the Olympics, whatever property sector you may want to focus upon. Time will tell who is right.

What do people think of Hillingdon? It sounds like a big improvement in transport (in that area) is coming...

Charlie, If you do an edition #2, you could add a woman or two, and do a new chapter on "further lessons", updating some of the ideas from Edition #1

Re: Chatboard Comments ============== 1/ If I was more of a techie, I might take a stab and solving some of the obvious and less obvious problems on GEI 2/ I have been surprised at the Huge popularity of Blogs, in contrast with the limited popularity of chatboards. I think the Democracy which exists on a chatboard should be a big advantage. But for some reason, people do not see it that way. 3/ The Diaries and Journals here (my own, Van's, PD's, etc) are like Blogs, and they have some popularity, but they have been less popular than I might have guessed. I suppose one useful feature would be to give the Blog/Journal writer more control of what is posted on his thread. (Had I been able to do that, I suppose that Goldfinger might still be posting here.) 4/ I wonder if Charlie could be persuaded to start a Blog/Journal here. It would be a different and complimentary voice to the others here already - even if it just captured the comments from his own site. If people could respond to it here, and he read the comments, it might prove very useful and also appeal to those who have read the book and also read or post on GEI. I welcome any thoughts on the above

More DEMAND ? Story is... that there will soon be Silver futures trading in Hong Kong

(I just spotted this interview from March 2012): How To Become An ISA Millionaire - 19 March 2012 In this week’s episode: David Kuo chats with Guy Thomas, author of Free Capital, which is about 12 private investors who have accumulated £1m or more mainly from stock market investments. They investigate how two investors in particular have done so in a tax-free Individual Savings Account (ISA), which, Thomas claims, is arithmetically impossible without exceptional returns. A transcript of this podcast is also available. /transcript: http://www.fool.co.uk/news/investing/2012/03/19/transcript-how-to-become-an-isa-millionaire.aspx EXCERPTS ===== David: Now, the thing is, in earlier podcasts, I have spoken to hedge fund managers who once told me that, if you want to be successful, you need an edge. Did you identify any edges in these kind of people? Did they have an edge over the average investor, in order to amass this one million pounds? Guy: I think all of them have an edge, and it's more or less 12 different edges. The edge comes from, in every case, from previous experiences and from your own sort of temperament and psychology and marrying that up to an appropriate investment process. That's one of the big lessons of the book, that you need to find an investment style which matches your own skills and your own personality. David: Okay, now I'd like to go from edge to luck, because you mentioned the word 'luck' in relation to the success of these investors. What do you understand by 'luck in investing'? Guy: Before I answer that question, I think it's just appropriate to acknowledge that there is an element of luck in achieving these sort of results. Everyone in the book has been lucky. They've reached middle-age with better results than they expected, at least in a financial sense... (2) David: So what kind of advice would you have for our listeners? I suppose what I'm hearing from you is that, if you are a private investor, it is very important to know yourself before you actually start knowing stocks. Guy: That is really the key lesson of the book. It's not spelt out in large print, but it's the lesson I want people to draw from the book. There are 12 very different people here, with different backgrounds. Those backgrounds have been set out in the book in a certain amount of detail, which is not there just for fun, or just for padding. It is there so people can see what type of person becomes each type of investor, and to look for the one which they can model themselves on, given their own background and their own personality. David: And that precisely, Guy, is what I took away from that book, because when I read that book, I tried to identify myself amongst those 12 people to say, "which one am I out of those 12?" I'm not going to tell you which one I am – you're going to have to guess for yourself, and that is why I do recommend anybody who's listening to this podcast to try and get hold of a copy of this book and read it, because it will tell you an awful lot about yourself, your style of investing, and what you can do to be successful when you are buying shares

BDEV / Barratt has had a nice bounceback ... update It came on good volume, and we should know very soon (Monday?, Tuesday?) whether it is more than just a knee-jerk rally Surely, the announcement of more UK money-printing must have helped. (And how very reckless that is !) BKG , PSN look weaker

Merge the two threads? I probably will, if no one objects

Activist investors : http://wexboy.wordpress.com/2012/01/26/how-about-another-catalyst-part-v/

What makes a successful investment bulletin board? ============ Originally written for Chapter 3 of the book (but removed in editing) Properties of successful bulletin boards ...Most popular boards have most of the following properties. Pseudonymity: Many people do not want their postings, particularly on a sensitive topic such as personal investments, to be searchable by employers or casual acquaintances, or even family members. Persistent identity: Although pseudonymity is desirable for privacy reasons, any meaningful discussion amongst users requires some form of persistent identity, that is, a stable one-to-one mapping of aliases to users. Reputation systems: Most communities have features facilitating the association of reputations with users, for example •displaying a user’s cumulative count of posts; •searching all of a user’s past posts; •showing users’ votes (up or down) for particular posts or users. ‘Threading’ of discussions: Posts on a particular topic need to be displayed in a single chronological ‘thread’, with posts on other topics filtered out. Various forms of threading exist, including ‘semi-threading’ and ‘full-threading’. Search function: An ability to search for posts by criteria such as user name or stock ticker code or date of post or any keyword. Moderation: Any community needs moderators or ‘super-users’ who police other users, applying a scale of sanctions (eg warning, temporary ban, permanent ban) to those who are judged to be disruptive. Private messaging: This allows any user to enter into two-way ‘off-board’ communication with another user, without compromising the anonymity of the users’ real-world identities. Most of these requirements can be met by free software. Siites running on proprietary software don't significantly improve the user experience, which has not changed much in the past ten years. Improving the user interface of bulletin boards is hard design problem. Moderation is the trickiest of these requirements. Disruptive users generally use a site exactly as intended from a technical perspective, so moderation is difficult to automate: substantial human judgment is unavoidable, but also contentious, because one person’s robust discussion is another person’s disruptive behaviour. Free to users. Successful boards are either completely free sites run as non-commercial ventures by enthusiasts such as Nigel, or else ‘freemium’ models: a free basic service, with income generated from advertising and user charges for optional services such as Level 2 prices. This is counter-intuitive to many users, but operators who have tried charging - for example ADVFN in its early years - have found that the fraction of users willing to pay even a small charge to use a BB is extremely small. For an online community, the only sustainable price is free. === === Guy Thomas Monday 14 February 2011 : http://guythomas.org.uk/blog/?e=3

REVIEWS on Amazon for: ====== Free Capital: How 12 private investors made millions in the stock market [Paperback] Guy Thomas (Author) 4.5 out of 5 stars (22 customer reviews) 22 Reviews 5 star: (16) 4 star: (2) 3 star: (3) 2 star: (1) 1 star: (0) /see: http://www.amazon.co.uk/Free-Capital-private-investors-millions/dp/1906659745/ref=cm_rdp_product 4.5 Stars is a good average for an investment book == == (Most Helpful Review): Fascinating studies of 12 stock market millionaires, 19 April 2011 By S. Holdsworth (UK) =========== This review is from: Free Capital: How 12 private investors made millions in the stock market (Paperback) One of the most fascinating things about the twelve `pen portraits' that make up the bulk of this excellent book is that the investment strategies used are so vary varied. From Khalid's frenetic day trading, to John Lee's long term approach, from Eric's regular meetings and telephone calls with company directors, to Bill's focus on just the raw numbers. Bulletin boards are full of discussion about which is the best strategy, but the fact that these 12 investors have all made millions using such very different ones would seem to lead to the conclusion that the only `best' strategy is the one that's best for you. One way in which this book works so well is that for each interviewee, there is quite detailed information about their personal background, which in most cases helps to give a valuable insight into how each one settled on their own `best' strategy. . . . I would thoroughly recommend this book to anybody who is interested in the stock market, or indeed anybody who has ever dreamed of accumulating enough `free capital' to enable them to give up work. === === === I DO WONDER how many people first visited GlobalEdgeInvestors because they noticed " GEI.com " ?? mentioned in the book ?

Maybe. But it is often true that there is a "false break" at the low. Perhaps we are seeing that

Gold Will Be Top Performer in 2012 - UBS Poll Of 8 Trillion USD Official Sector Submitted by Tyler Durden on 06/15/2012 - More than 80 institutions with collective assets under management of over $8 trillion attended the event and were polled regarding macroeconomic matters and their outlook for various asset classes. Gold is seen as one of the assets likely to outperform again in 2012 due to risks posed to the euro and longer term risks for the dollar. Those polled by UBS were also positive on emerging market debt. Both asset classes, gold and emerging market debt, were the top pick of 22.5% of the assembly – thereby accounting for 45% of the votes. On gold’s role as a reserve asset, the importance reserve managers attach to the yellow metal has slipped back to 2009 levels, with about 14% having the opinion that it will be the most important reserve currency in 25 years. This marks a decline from the past two years’ surveys wherein over 20% viewed gold to be the most important reserve currency /more: http://www.zerohedge.com/news/gold-will-be-top-performer-2012-ubs-poll-8-trillion-usd-official-sector I'm not sure if this is bullish or bearish. If they really believe what they say, they may be long already. If so, who is left to buy ?

The Gold-to-Silver Ratio, and the Ultra Ratio Here's Gold-to-Silver, expressed as... RATIO: GLD-to-SLV And here's what I call the "Ultra AgAu Ratio", that's: RATIO: AGQ-to-UGL And maybe I should add the "Super AgAu Ratio" RATIO: UGLD-to-USLV GLD: $157.75 +$0.63 / +0.40% SLV: $ 27.82 - $0.19 / - 0.68% Ratio: "Ultra" AGQ: $ 41.75 -$0.56 / - 1.32% UGL: $ 82.64 +$0.66 / +0.81% Ratio: 50.52% /(H: 42.41/82.85 = 51.19%) (L: 40.24/81.04 = 49.65%) ==== "Super" USLV: $ 25.35 -$0.59 / - 2.27% UGLD: $ 40.42 +$0.40 / +1.00% Ratio: 62.71% /(H: 26.04/40.50 = 64.30%) (L: 24.18/39.36 = 61.43%)

A telling difference A retest of the Gold-in-Euros peak (or even the Red line) with light volume, could be following by a renewed slide. If stocks begin to selloff heavily again, Gold is not necessarily immune, especially if the dollar continues to strengthen

An old favorite from Nancy Sinatra (When I first saw this film, I knew I would live in the Far East someday.) Nancy S. bounced back with this in 2004 (A Second Life?)