Early Retirement Extreme Forums

It's essentially just two competing narratives, one forwarding looking (the EU of destiny) and one backward looking (The UK of yesteryear). Very generationally and emotionally driven on both sides.

My take: http://www.prospectingmimeticfractals.c ... -on-brexit

radamfi wrote:Can the "Leave" people on here say whether they would be happy with EEA membership (so including full single market access and freedom of movement)? I see this as fair compromise as we would still be "out" whilst minimising the downsides of leaving the EU.

Yes, I've been wondering if we will muddle through and end up with a situation where everybody is slightly dissatisfied.

@Dragline

Good post and now you have provided me with lots of extra reading. Thanks.

The UK has lost its AAA credit rating from S&P.

Any opinions on how long the stock prices will keep dropping? I have a big chunk of money to invest.

C40 wrote:Any opinions on how long the stock prices will keep dropping? I have a big chunk of money to invest.

I'm also interested. Things could get ugly on the year-scale as the EU may continue to face instability.

Personally, I have timed RBS very poorly Did buy some token amount of EWUS today.

I would be on the lookout for companies that are getting hammered, have relatively high domestic £ cost centers, but actually earn most revenue outside of UK/£s. Ideally not euros though. Unfortunately I'm not much of an active investor other than playing around with a margin account so don't really plan on doing much research into this stuff.. spent 30m or so trying and all the potentials (from EWU) haven't experienced much slide :/

England has got the karma it deserves in the football. And, yes, I was supporting Iceland. In my heart, I'm no longer English/British.

C40 wrote:Any opinions on how long the stock prices will keep dropping? I have a big chunk of money to invest.

I've seen a number of these types of posts regarding Brexit so I'll say this:

No one knows how much further the stock market will go up or down, including those active investors like myself who are in and out of the markets constantly. The reason active investors make money in the markets isn't because they are good at predicting direction. That misunderstanding is the main reason most retail investors underperform. If you want to have the performance of an active investor there are no short cuts. It took me 10 years to get to making good consistent money out of the markets. As Jacob pointed out, some never make it at all.

That being said I don't want to completely discourage those inclined to try (like my former self). Attached is a white paper based on a very simple algorithm that is robust and has a CAGR that exceeds buy and hold. Will it continue to work in the future? Will you have the discipline to continue trading when it is underperforming buy and hold (like the past few years)? Those are the key questions to answer before attempting to time the market.

http://3p5bnx3przb73659la2iupn2.wpengin ... 962461.pdf

interesting, Yanis Varoufakis thoughts more than 6 months ago: https://youtu.be/md6_WfF9Ky0?t=21m19s

I think the EU will try to whip the UK until they submit (conspiracy theory: the pro-EU powers are actively behind some of the collapse of the £ and stocks). And Cameron delaying things is a smart move to keep the UK in the EU (or current parties, powers in charge i.e. next PM elected has mandate to stay in the EU). It would take a strong UK populace to continue demanding a brexit; and based on the news, I don't think they are that confident about the brexit. The EU power struggle/race is now seemingly dire. Will the EU collapse? Will the EU reform, become more transparent (@37:50, https://you.wemove.eu/campaigns/transparency)? Will the UK and EU just part ways (and Scotland join the EU, UK overall getting the short-end of the stick, at least short-term).

p.s. I wonder if he is alluding to something like Bitcoin @52:47? I've seen him talk about Greece having their own Beta version of (probably centralized) digital money (mentions it @1:03:34). I know in 2013/2014 he is very critical of it's similarity to gold (not to mention it is not democratic).

p.p.s I might just short banks myself as a political statement (hate that I didn't think of it before, even taking a long position in one! ugh). Might hedge by shorting the most despicable financial service company and go long on another (less despicable?) Would be nice if there was some coordination out there to try and focus the short activity more so on a single bank.

edit: interesting background, US Fed when euro was created: https://youtu.be/szIGZVrSAyc?t=52m33s (little bit before this point, in that it was expected a political alliance would come about once the monetary alliance began to fragment, it hasn't). Was it a USD/power long con? Though it sounds like the folks that architected Bretton Woods were way smarter than the folks in a similar position in the last 30 years.

radamfi wrote:Can the "Leave" people on here say whether they would be happy with EEA membership (so including full single market access and freedom of movement)? I see this as fair compromise as we would still be "out" whilst minimising the downsides of leaving the EU.

I'd be happy with European Economic Community. It worked pretty well in the past.

radamfi wrote:England has got the karma it deserves in the football. And, yes, I was supporting Iceland. In my heart, I'm no longer English/British.

So who are you now in your heart?

stayhigh wrote:I'd be happy with European Economic Community. It worked pretty well in the past.

But that wasn't the question. Would you be satisfied with EEA membership, with everything that comes with it? (BTW, there was Freedom of Movement in the EEC days as well.)

stayhigh wrote:So who are you now in your heart?

My ideal choice would be a generic European citizenship with no nationality. But if I had to choose a country it would be Dutch as I feel most at home in the Netherlands. I've been learning Dutch for the last few years and I quit work last year to learn Dutch full-time.

I'm not 100% sure, as I don't know all rights and obligations of EEA, but it looks fine on the surface for me. But to be honest, it doesn't really matter. UK is huge economy so some trade agreements will happen sooner or later, as everybody will benefit from them. Hint: Switzerland is not EU or EEA member, have freedom of movement and it's one of the world richest countries.

Although the Swiss voted a couple of years ago to impose immigration quotas, in direct contravention of single market rules. That has to be implemented by next year and the Swiss are trying to negotiate a solution with the EU. It has already impacted on Swiss participation in the European student exchange programme.

I'm not up to date with Swiss affairs. Anyway guys, British society decided in democratic referendum about the future of their sovereign state. End of story.

@C40 - For my part, I had some inkling that the turn-around was reached yesterday due to the way the counter-cyclicals were lending quite a bit of support. Because of that I told DW to go buy some international indexes. (I had no trading money myself). However, to go along with what eudaimonia said ... day to day timing is not how I do it either. I'm just not that good at it.... if I was, I'd be a day-trader. I know a few people are capable of calling these moves with great skill and consistency but that's not my approach.

Instead I position myself in advance to benefit from events that is going to shake up the market; when it happens, the market tends to come back to what is closer to a "true" state of the world.---Which is usually where I "lie in wait" having seen it already.

I have three accounts. Friday and Monday they all [3] outperformed relatively. Today, 2/3 outperformed. We'll see how it goes after a couple of weeks from now---maybe everything will reset to where it was last week at the end of July? I have no idea. Some will have a pretty good idea, but not me.

Personally, I expect this to be shortlived in any other sector than financials. But ultimately, as far as I'm concerned, the way I actively invest, any trade to take advantage of Brexit or similar would have been set up months ago ... and also as far as I'm concerned a sudden amount of red is not how I use or what I use to set up my next "vector".

In short ... I kinda go by the idea that the market is a voting machine in the short run (so pretty psychological) but in the long run it's a weighing machine. My strategy is very much in terms of figuring out the right weights and wait for the market to come to me (because conseqeuencs really should matter ultimately)... not so much the current psychology. Ironically, I suppose this observation (courtesy of Buffett?) is very telling of what, at least the media, is saying about Brexit. If you think about it: Was this [Brexit] election a voting measure or a weighing measure?!

@stayhigh, yes and they can do it again with a contradictory outcome (a referendum to accept whatever terms may be presented by the EU etc, or via proxy PM campaigning/polling, etc).

Other big events that could affect EU:

• What will Scotland do in 2016?
  British PM replacement in late 2016 - will it be a real brexiter? a lip-servicer? or a pro-EU?
  Trump getting elected - could send shockwaves through politics and stock markets, etc
  Swixit in early 2017 - guillotine clause, swiss broke the clause (immigration quotas) so all the treaties with rest of Europe (and Schengen) will be coming to an end unless they join the EU or renegotiate.
  Netherexit in early 2017 - after election, a referendum to leave EU seems likely
  France election in mid 2017 - Front Nationale party could gain support
  Germany election in late 2017 - "Alternativ für Deutschland” gaining popularity (15%) quite quickly, eurosceptic. Though, EU seems to benefit Germany the most.

bryan wrote:Netherexit in early 2017 - after election, a referendum to leave EU seems likely

Where is your evidence for this? They have proportional representation there so unless the PVV get a majority on their own (unlikely), the other parties could form a coalition to block it.

The Netherlands is a founder member of the EEC and a big exporter. Would they seriously want tariffs or border controls, or lose the ability to live elsewhere in Europe?

Netherland already voted for "Nethexit" back in 2005: https://en.wikipedia.org/wiki/Dutch_Eur ... ndum,_2005

stayhigh wrote:Netherland already voted for "Nethexit" back in 2005: https://en.wikipedia.org/wiki/Dutch_Eur ... ndum,_2005

They weren't voting to leave the European Union then!

That's true, because European Union in it's current form (Lisbon Treaty) was officially created four years later in 2009. As you can see, Netherlands didn't want to accept it in this form (as EU constitution is ridiculous). It mean Dutch society is not happy to be part of it. I was sure this is well known fact. Same happened in France in 2005 by the way.

EU as a free market is good idea. EU as a political project is not.