The Flying Frisby - money, markets and more

An engaging conversation with financial expert Lyn Alden as we explore the past, present, and potential future of money through the lens of technology.Lyn's new book, Broken Money, challenges conventional wisdom about monetary systems, emphasizing the crucial role of technology in shaping the way we exchange value. From the significance of the printing press and the telegraph to the rise of Bitcoin, we discuss into the intricate relationship between technology and money; the impact of central bank digital currencies (CBDCs) and how Bitcoin fits into the financial landscape. A thought-provoking conversation about the evolving world of finance.Subscribe to this amazing publication. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.theflyingfrisby.com/subscribe

I went to the ARC conference yesterday - to give it its full name the Alliance for Responsible Citizenship. It is an organisation set up by Jordan Peterson, Paul Marshall, Philippa Stroud, Alan McKormick and others to “develop a better narrative in response to life’s most fundamental social, economic, philosophical and cultural questions”. I spent much of the day taking notes, and I thought I’d write them up here so that readers can enjoy a distilled version, without the rigours of having to travel to the depths of London SE and sitting through a lot of talking.“What’s it like?” Merryn Somerset Webb texted on her way in that morning. “A bit like a religious gathering,” I replied, (something Tim Stanley also observed in a barbed piece in the Telegraph). I’m quite happy with that, because I am one of the believers. I have to say the organisers have put together quite a roster of speakers, one massive oversight aside, which was not having me speak.Philippa Stroud and Jordan Petersen hosted the morning events, which began with recently removed US speaker of the house Kevin McCarthy. Peterson, who had made a brave choice of suit even by his standards - and, I say with a little concern, looked exhausted  - made the point that we each have a responsibility to do our own little bit, if we are to improve things.In this Noah’s Flood of podcasts through which we are currently living, I’m kind of done with conversations. So many people now just seem to be regurgitating the words of others. So few seem to say anything original or interesting. We are caught in this media merry-go-round in which everyone is just commenting on what everyone else has said and nobody actually seems to be creating anything. Moreover, I am kind of done with panels. Three guests, sitting on chairs, a host, who keeps opening it up the the audience, where the conversation then loses all direction. Give me strength. It’s always a good way to go into an event with low expectations because when reality exceeds expectation you end up happy. So it was here. (Read more on the secret of happiness). Laurence Fox, who is a buddy and with whom I hung out, was in a similarly jaded frame of mind. The right is great at identifying what the problem is, he said to me over coffee and a fag, but no good at doing anything about it. The problem, I suggested, is that many don’t actually know what to do, which is why so much talking goes on. Perhaps the answer lies in Peterson’s solution. We each have to do our own little bit in our own little worlds, doing whatever we do. That’s the nature of free markets and free everything: it starts with the individual and it is a bottom-up thing.The first panel was about narrative. That had former Aussie deputy PM John Anderson, who was excellent on the fact that in the Anglosphere, we have stopped telling our own story and, as a result, lost sight of who we are and what we stand for. This was a recurring theme throughout the day. Somali-Dutch activist, Ayaan Hersi, talking about Hamas and Islamic extremism, added that “their story is not your story and your story is not their story”, so it is never going to work. She may not have meant it, but that is actually quite a strong argument against multiculturalism. And I loved this line from US author Os Guiness: “freedom is not the power to do what you like. It is the power to do what you ought”I went into the break keen to do my own little bit and put the world right, and ran into my old boss from GB News, Angelos Frangopoulos, who was similarly invigorated. I had a good chat with him. I then ran into Jimmy Carr, of all people, who I know of old, and had a good chat with him too. I then met Holly Valance, who is a famous actress from Neighbours, if you didn’t know (I didn’t) and had a good chat with her about home education. So, never mind the roster of speakers, the calibre of audience was pretty good too.The next session was hosted by Fraser Nelson of the Spectator, another of the many UK media outlets which has forgone the opportunity to give me work. There was a talk by MP Miriam Cates about mental health and the decline of family. I agreed with pretty much every point she made, but don’t read your speeches, speak them, Mmiriam. They have more impact when you do.Next Nelson would interview a chap over videolink to the states, Jonathan Haidt, and my heart sank. Why have I come all this way to watch a live zoom call? Guess what? It was brilliant.It was about children and mobile phones. Moral of the story? Don’t let your kids anywhere near them. Mental health, depression, anxiety and suicide rates among young women  in the Anglosphere and Nordic countries are all all at all time highs. They are not so bad among religious conservatives, they are much higher in cultures where female independence is strong, especially left wing, secular liberals (who tend to be allowed on their phones more). It has rocketed since 2010 when we all got smartphones.  He talked about the importance of play amongst children, and how we have replaced a play-based childhood with a phone-based childhood. Kids see each other and socialise far less now than they used to. Kids don’t need connections. They don’t need retweets and likes. Even less do they need all the bullying and shaming that goes on. Tiktok messes with your mind and your ability to concentrate, but Instagram is the worst for women and mental health.Haidt’s solution was not to give kids a smartphone before the age of 14, give them flip phones. No social media before the age of 16. No phones in schools, not even in your backpacks otherwise kids will find a way to feed the addiction. Get back to play. The rise in teenage suicide is perhaps the biggest problem since we wiped out polio, cholera and mass disease.Tell your mates.So to the afternoon …In the afternoon, Paul Marshall gave a brilliant talk. For someone who is supposed to be shy and retiring, he was great - and he didn’t read his speech, or if he did it didn’t show. He was particularly good on one of my pet hates, crony capitalism. (I even wrote a song about it). He observed how we have benefited from capitalism and free markets, peppering his talk with great historical stories. He bemoaned the conflation of capitalism with monopolistic capitalism, crony capitalism and, what he called swamp capitalism, describing US politics as “continuity swamp”, and called for a politician with strength to stand up to vested interests. He didn’t say anything particularly new, but it was one of the best summaries of everything I had heard in a long time. We are both singing so loudly from the same song sheet, I felt he must have been studying my stuff (I doubt he has), though he didn’t mention the zero patients in all of this: our systems of money and tax.Then there was another video link with US presidential candidate, Vivek Ramaswamy, on the campaign trail in Utah or somewhere I’ve never been to. He went down very well in the room too. Merryn Somerset Webb hosted a good panel on ESG investing. The S in ESG is totally subjective, said Derek Kreifels, while Terry Keeley called it the biggest misallocation of capital in history. The general takeaway is that ESG is done. The arguments have been lost, even the FT is now slagging it off. It is, I’d say, roughly where the Nazis were in 1943 after they failed to take Moscow and winter set in.Michael Shellenberger, not a man with whom I was previously familiar, was next and he came out with my line of the day. “Pull back the curtain and there is no Wizard of Oz, just Greta Thunberg with a really bad religion.”His main theme was debunking climate alarmism. He argued that carbon emissions are improving, sea levels are not an issue if the Netherlands is anything to go by. The reason northern countries are so wealthy is that the harsher conditions forced us to develop more. Deaths from climate disasters are down 90%, he said, against a population that is four times bigger. He is more worried about death from drugs. You can’t say much of this on the internet though because you get censored. Climate change is a religion. Nihilism leads to secular religions, and not very good ones. There are three new secular religions: they are climate, race and gender. Climate change is also a psychopathology, and most activists have some kind of personality disorder, often narcissism. Frequently they are just spoilt children.The answers lie in increased efficiencies. The fact that the amount of land required to make the same amount of food is decreasing is good: it means more land for nature. The fact that less material is required to do stuff (eg all the things you can do on your phone, a bluetooth speaker vs a stack stereo kit from the 1980s) is another example. Think of the woman who used to have to cook food using dung and wood. Gas has been liberating for her. The solutions lie in gas and nuclear. Not in solar, the panels for which are made by slave labour in concentration camps in China, nor in wind, the blades of which do not recycle or decompose. A panel next with Alex Epstein and Marian Tupy made similar points, and was great. Epstein’s argument was that so much of environmental philosophy is just anti-human. That’s the underlying problem. We ignore the human flourishing effects of fossil fuel to be anti-human. While Tupy pointed how much better we are producing resources and using them so that their prices fall. Eventually we will create elements through nuclear fission or mine them in outer space where they are plentiful. I liked Tupy. Humans create as well as destroy. Atoms may be finite, but knowledge is infinite, and the more knowledge you consume, the more you end up with. We need freedom and we need population. We need the freedom to explore, the think, to invent, to experiment. And it is so much better when the market, not the government, chooses the winners. In the final session of the day, historian Niall Ferguson spoke. He described how liberal democracy, which in the context of the world today and of history, is tiny, is now under threat, both from within - so many now dare not speak or explore issues because they are scared of the backlash - and from outside. Beware the alliance between China, Russia, Iran and North Korea. I’d had enough talking by this point, so I left the auditorium, had a cup of tea and did some networking. I hope this summary was useful.In other news, I am working on a piece on S&P500, which could be set up for a good year end rally. I am also working on something to do with gold. It is finally catching a bid. New highs around the corner? Maybe. We are going to need them if juniors are to finally catch a bid.Please subscribe to this brilliant newsletter. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.theflyingfrisby.com/subscribe

Good morning to you,We are talking Japanese currency today.First, in case you missed them last week, check out:The story of my pilgrimage got a big and positive response from readers. This piece on the true value of UK housing also got a big response.If you haven’t already, and if speculative silver mining stocks are of interest: watch this interview with Alex Langer of Sierra Madre Gold and Silver. And, finally, a big thank you to all who came to my gold lecture on Thursday. What a great night. A reminder that due to sell-outs, we have added some extra London dates - February 14th and 15th. You can get tickets here.Right, the yen. I can’t help thinking there are some real opportunities coming …The currency has been weak as hell for a long time. Against the US dollar it is at lows not seen since this century. We all know what a rotten currency the pound has been. It has lost a third of its purchasing power just since 2020. A third! Against the constant that is gold, it has lost 90% of its purchasing power since 1999.And yet against the yen, the pound is at seven-year highs, not far off the pre-2008-financial-crisis levels. In those days a pound got you two dollars, instead of the $1.21 it gets you today.In terms of trading volume, then yen is the third most important currency in the world, after the dollar and the euro, accounting for around 17% of global daily forex turnover. Given that is thought to be $7.5 trillion, we are talking about around $1.3 trillion of daily trading volume. No small beer.Why has the yen been so weak?The main reason is that, while other central banks, especially the Federal Reserve, have raised rates, the Bank of Japan (BoJ) has not. It has ignored rising inflation (perhaps because Japan has had issues with deflation for so long). Indeed the BoJ has been creating digital money and buying extraordinary amounts of government bonds with it in order to cap rates. The BoJ now owns over half of Japanese national debt. My mind boggles when I read stuff like that. How can it be possible to print so much money and buy so much debt without apparent consequence? This is BoJ’s so-called yield curve control. I wish they’d print money and buy me a mansion. Or even just a nice car.Suppressed rates lead to the yen carry trade - borrowing yen at a cheap rate and holding other currencies that pay a better yield. But when the carry trade reverses, as in 2007-8, it tends to reverse very quickly.The yen, as a result, also tends to act as a safe haven currency: during times of panic, such as we saw in 2008, there is rapid flight to the yen in a rush to unwind the carry trade.Here is a very long term chart of dollar-yen going all the way back to 1987. (When the chart is rising, so is the US dollar).The dollar made its low - or the yen its high, depending on how you view things - in late 2011 and 2012. Since then the yen has halved. 50% declines for a major currency is kind of a big deal.Look at the speed at which that thing came down between 1990 and 1995, between 1998 and 1999, from 2007 to 2011 and in 2015-16. When that thing moves, it moves. (We’ll come to another yen currency pair that moves even faster in just a moment).Here’s the last three years zoomed in. Kind of very double toppy.I’m not going to pretend to be any kind of an expert on Japanese policy, plans or goals, but I ask, at a certain point, if the BoJ will step in to shore up the currency? Surely they must. Everything I read tells me they will. If so, at what point?The 150 level is one commonly cited number. 150 is where we are now. But I stress this is only rumour. A related question is: how long will so-called yield curve control go on for? Indeed, how long can it go on for?Again, I can’t pretend to know the answer. Little old me is struggling to get his head around the fact that it has even been able to go on at all, let alone this long.So to that yen currency pair that really moves. Ooof, take a look at this one. This is where I think the money is going to be made.The British pound and the Japanese yenHere’s a long term chart. (When the red line is rising, the pound is rising and the yen is falling. And vice versa).Again, during those periods of yen strength, this thing came down like a stone. Between 1990 and 1995 (especially 1992 - that was Black Wednesday in the UK). From 1998 to 2000. 2007-8 - Gosh! it really came down then. And then 2015-16. It also ties in with my 8-year cycle of the pound: it is even more apparent when viewed in yen.As so much of the British economy is built on finance, sterling tends to be strong when financials are strong. It sells off during market panics - which is when money flees to the yen. Thus the pound and then yen are inverted.Sterling has been weak against most currencies since the summer. Cable (pound-USD) has gone from $1.31 to $1.21. The 8-year-cycle in the pound seems to be playing out again. But against the yen it has hardly moved. It’s the same price it was in June-July.Here is pound-yen since Covid. Does this trend continue? Or is it exhausted?Most of the 2020 Covid trades - the boom in tech, in commodities, in bitcoin - have played out and unwound. But not the decline of the yen. It is still going strong. There is some catch up to be had.When does it end? That’s the question. There may still be some gas in the tank, but I’m starting to think sooner rather than later - if only because so few people are talking about it. I asked three different finance WhatsApp chat groups that I’m on if anyone had any decent yen material. Nobody came back with anything. Such things are often a good, contrarian sign. Nobody rings a bell at the top of the market, unfortunately. But this is one to watch.Forex trading is extremely difficult. There is so much that can go wrong, especially to do with risk management, position sizing and timing. I don’t recommend it unless you know what you are doing. But I feel there could be an opportunity here.Thank you for reading. Thank you for being a subscriber. Until next time …Disclaimer:I am not regulated by the FCA or any other body as a financial advisor, so anything you read above does not constitute regulated financial advice. It is an expression of opinion only. Please do your own due diligence and if in any doubt consult with a financial advisor. Markets go down as well as up. I do not know your personal financial circumstances, only you do, but never speculate with money you can’t afford to lose. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.theflyingfrisby.com/subscribe

Before we get started today, if you haven’t already seen it, check out my interview with Alex Langer of Sierra Madre. There could be quite an opportunity setting up with this silver mining company.And if you haven’t read this piece on UK (and US) house prices yet, you might like it - it’s proved quite popular. Right. The Eighth Wonder of the World …How can you turn a tiny sum into a large one?Speculate in small caps is one way. The problem is you risk losing your shirt.There is another, safer path. All you need is time - lots of it - and some discipline.You will often hear it said that time in the market is more important than timing the market. There is a lot of wisdom to the adage, though, in defence of timing, get it right and you gain significant advantage. The underlying wisdom of the adage derives from the power of compounding, what Albert Einstein called the eighth wonder of the world. “He who understands it, earns it. He who doesn’t, pays it,” he is said to have said. (It is one of those attributed quotes, but it’s better coming from Einstein than anyone else, I suppose). If I offered you a million quid upfront, or a magical penny that doubles in value every day for 30 days, would you take the million quid? I imagine you would. You fool! A penny that doubles every day would be worth over five million on day thirty.But here’s the thing: it is the effect of compounding in the later stages that is breathtaking. The early stages are muted. Take that magical penny. On day 10, it’s only worth a fiver. By day 20 it’s north of five grand. But it’s in the last three or four days that the vast sums are made. Take a look at this table.Compounding works even for relatively low annual returns. To benefit from it you have to start as early as you possibly can, re-invest everything you make and, ideally, keep adding. But it enables you to turn small sums into large ones. Just ask Warren Buffet. This table shows the effects of compounding at different rates of return, but it assumes you don’t add to the initial pot. If you do that, the effects are more dramatic.Tell your kids about compounding, and get them saving and investing. They’ll thank you.To really benefit from compounding you also need to keep fees and taxes to a minimum. Thus the maximum gets re-invested. Avoid losses like the plague. Keep adding to the pot, and the compounding works even more in your favour. There is a really cool tool here at Monevator, which allows you to see the effects. An initial deposit of £5,000, with £2,000 added every year and a 7% rate of return becomes half a million in forty years and a million in 50.Invest just £2,150 every year at 7% and in fifty years you will have a million quid. But at the same rate over a fifteen year period to get to a million you would have to invest £33,800 - fifteen times as much.The table below, courtesy of Visual Capitalist, demonstrates the maths.The rule of 72There is also a useful predictive tool which can tell you how long it will take for your money to double, assuming you compound at a certain rate. It’s called the rule of 72.Further to some correspondence with reader K the other day, I thought I should tell you about it.Divide 72 by your annual rate of return and that will tell you the number of years it will take your portfolio to double.Put in mathematical terms it looks something like this: 72 ÷ by rate of interest/return = number of years.Let’s say you have a 5% annual rate of return. 72 divided by 5 is 14.4, so that’s how long it will take for your money to double: 14 years five months, give or take. At 10% you will double your money every seven years. (The rule of 72 does not take inflation into account).At the suppressed interest rates of the 2008 to 2021 period, it’s a very different story. Savings left in cash at 0.1% would take 720 years to double.Of course, if you lose money, in a given year, it’s a very different story. Compound purists avoid losses like the plague, as we all should, and, most of the time, steer clear of cyclical sectors that can be prone to prolonged bear markets - unless they feel they can time them. That’s why compounding works well in conjunction with a diversified portfolio. You can read more on portfolios here.Until next time … This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.theflyingfrisby.com/subscribe

Here is an interview with Alex Langer, CEO of Sierra Madre Gold and Silver. This video was exclusive to paid subscribers, but I am now releasing it for one and all.I own stock in this company. I know that we are in the thralls of a really bad junior mining bear market, and thus that you might not have the appetite for speculative silver development plays, but I still think there might be an opportunity here. Have a listen. (You can listen to it above or via Apple podcasts, Spotify or your regular podcast provider). See what you think. If you prefer you can watch the video of the interview. The transcript is here. My previous notes on the company are here and here. (My guide to investing in silver is here, and if you want to buy physical, here is where to go).Sierra Madre Gold and Silver (SM.V)Share price: C$0.36cFully diluted: 148m sharesMarket Cap: C$59mCash: US$9mYou can find out more about Sierra Madre here. Buying Canadian stocksIf you don’t have a broker who can deal with Canadian stocks, Interactive Investor is a cheap and usually fairly reliable option for UK investors.They have their shortcomings, but they are cheap. If you sign up with them, say I referred you – frizzers@gmail.com – and you will get a year for free, while I gets a referral fee.If you have signed up with Interactive Investor in the past, please can you drop me a line at the above email and let me know.Disclaimer:I am not regulated by the FCA or any other body as a financial advisor, so anything you read above does not constitute regulated financial advice. It is an expression of opinion only. Resource stocks are famously risky, especially small and midcaps, so please do your own due diligence and if in any doubt consult with a financial advisor. Markets go down as well as up. Especially small and midcap resource stocks. I do not know your personal financial circumstances, only you do, but never speculate with money you can’t afford to lose.Further to my email last week, A Hidden Gem in The Silver Markets, about Sierra Madre Gold and Silver (SM.V), here is my interview with the CEO, Alex Langer. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.theflyingfrisby.com/subscribe

Before we get started today, if you haven’t already seen it, check out my interview with Alex Langer of Sierra Madre. There could be quite an opportunity setting up with this silver mining company.There are just a handful of tickets left for my lecture with funny bits about gold in London on October 19. I’m not sure when I will next be doing this show so book early to avoid disappointment and all that.And, if you haven’t yet seen Programmable Money, I think you will be amused.Right, house prices. They are in free fall …“Fastest fall in 14 years” said the Guardian on the back of the latest numbers from the Halifax, which reported year-on-year falls of 4.7%. The Telegraph was similarly gloomy. ”London house prices slump,” said City AM. “6 months of consecutive declines,” noted the FT. The latest Nationwide numbers showing declines of 5.3% are even worse.But, some context. Here are house prices since 1950. Relentless. The current declines are a mere blip, though it may not fee like that. I have long-argued that houses are, in effect, financial assets whose prices are largely determined by the availability and cost of money. When lending is loose and money is cheap, house prices rise. When lending tightens and the cost of money goes up, so do house prices fall. With rising rates, the reality of this is now plain to see.It would seem that the housing market peaked in summer 2022. I know nominally it was November, but in reality it will have peaked 6 to 9 months before that because of the various lags in house price data reporting. (There is a chap called Charlie on Twitter, who is very good on this by the way). Housing data lags the market because moving home is such a slow process: you decide to move, you put your house on the market, you wait for a buyer, it takes time to exchange and complete, then there are several months more before the Land Registry actually reports the transaction. But from August 2022 to August 2023, according to Bank of England data, mortgage lending has fallen by 43%, while the number of approvals is down 36%. Of course house prices are falling.How far do house prices fall?The answer to that lies with the Bank of England Monetary Policy committee, gilt markets, interest rates and all the rest of it. Sterling also has issues, which is going to put upward pressure on rates. But with another million or so cheap fixed rate deals coming to end in the next year, and another million the year after that, something like two million households are going to be hit with much higher mortgage costs. Just how much will those costs be? The genius that is Merryn Somerset Webb, as always, has the answer: “Mortgage on 350k at 2%: £1484 a month and total payment £445,126. Mortgage on £350k at 5.5%: £2149 a month and total £644,745. To get payment back to £1484, you can only borrow £243k (total payment 447k). And that's why house prices are falling.”Considerable problems lie ahead. All in all, I don’t think the worst is over by a long chalk and, a year from now, I think we will see distressed selling, along with opportunities for bargain hunters. This could all have happened in 2008, but the powers-that-be saw fit to suppress rates and print money. Then we got Help to Buy. I don’t quite know what they will do this time around - no doubt something is being planned - but in the meantime it seems we are seeing the beginning of the unwinding of a 30-year, generational bull-market/bubble. By way of reference, here is the that infamous Jean-Paul Rodrigue illustration of the lifecycle of a bubble. (I used to have this on my wall, I liked it so much). I would argue that we are probably in the fear stage, with the bull trap having come during Covid, but it may be we are still in the denial phase. As with so much academic projection, real life is never quite as neat and tidy.At the same time, as those of us who were around in 2008 will testify: all ye who call the end of the UK housing market bubble, beware. The housing market has a nasty habit of making bears look stupid. Some see a correction of 35% or more in nominal terms. Others are more muted at 5-10%. Both are possible. In the short term I think housing goes lower. A 1989-94 scenario looks more likely than 2008-11, though I reserve the right to change my mind, as events unfold. So to gold Here you can see gold vs sterling since 1999 when Gordon Brown sold ours for £150/oz or thereabouts. Today, such is the rise of gold (or the decline of sterling more like), we are at £1,500/oz.Josh Saul of Pure Gold Company has reported to me numerous times over the past year how many buy-to-let and other property investors have been selling real estate and buying gold. When will they flip back into property?Gold is the oldest money in the world, it is a constant, so I like to take a periodic look at house prices measured in gold. Of course, we do not use gold to buy houses. We use sterling. But as the verse goes:“Money is a matter of functions four.A medium, a measure, a standard and a store.”While gold may no longer have much use as a medium of exchange, as a store of value, a standard of deferred payment and a measure of relative value (ie unit of account) it remains and will always remain a far more effective form of money than fiat, because it is permanent, constant and you can’t print it. If the average UK house is now £288,000 (it isn’t - it will be lower because of time lags) and gold is £1,500/oz, then the average UK house price in gold is 192 oz.Here, courtesy of Nick Laird at goldchartsrus.com, we see the cost of UK house prices, measured in gold, since 1950.It’s a rather different story to nominal UK house prices, as displayed above. By this measure, the peak of the UK housing market was 2004. Sterling was (relatively) strong at more than $2 . The UK housing market was booming. Gold was sitting around $400/oz.The depths of the market came in 1979. The UK economy was weak. There was civil unrest. Gold was at the end of its epic bull market of the 1970s when it hit $850/oz. The average UK house could be bought for around 50 ounces of gold.How much have we been ripped off by fiat ? If gold is to increase by say 20% against sterling, and nominal house prices are to come down 10%, then those 2008-11 and 2020 lows of 150oz for the average UK house look pretty nailed on. If house prices come down 30 or 35%, however, as they did in 1989-94, and the gold price were to double, then those late 1970s and early 1980s numbers around 50oz for the average UK house suddenly come into play. Barring a full-blown sterling crisis (don’t rule it out), I’d say that was unlikely. For no particular reason, other than round-number-itis, I have a target of 100oz.Of course, the other possibility is that gold falls, and house prices resume their uptrend. How many ounces of silver to buy the average UK house?Here, for the silver bugs, is the same ratio but for silver.Look how cheap houses in silver were in the 1970s. You could get the average UK house for about 1,000oz!Will silver ever go back to those levels? I doubt it. It has the potential, but, as we know, silver always disappoints.Finally, for American readers, are US house prices in gold and silver.Post 2008 they almost went back to 1980 levels.Here they are in silver. Tell your friends about this amazing article This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.theflyingfrisby.com/subscribe

There is an absolutely stellar line up of speakers at New Orleans Investment Conference in November: Dave Collum, Rick Rule, Matt Taibbi, Peter Schiff, Konstantin Kisin, Lyn Alden, Danielle DiMartino Booth, Jim Rickards and many more besides, yours truly among them.So I got together with Brien Lundin, the organizer, to chat about the event, as well as to get his take on the state of the markets. You can listen to this conversation here, or via Apple podcasts, Spotify or your regular podcast provider. Ths video version of the conversation is here.If you happen to be in that neck of the woods, please come and say hi. I hope to see you there. It’s a great event: New Orleans is unique.And if New Orleans is too far to travel, there is always my gold show in London on October 18th. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.theflyingfrisby.com/subscribe

This is a free preview of a paid episode. To hear more, visit www.theflyingfrisby.comWhen it comes to investment returns, asset allocation, as I said on Monday, has repeatedly proven to matter more than individual stock picking: the market you choose matters more than the companies you select within that market. With this in mind, if you haven’t already, check out the pieces I have recently put together about portfolio allocation:* My own…

This is a free preview of a paid episode. To hear more, visit www.theflyingfrisby.comYou can find vehicles by which you can play this portfolio here.But, after a lot of hype, here it is: the do-very-little portfolio.Lots of us have busy lives. We don’t have time to constantly monitor companies, markets, technological developments, politics and all the rest of it. We have other things going on that we prefer to or have to devote our attention to.Yet we want to invest our money well - safely, sensibly, profitably. We want our money to be invested in areas that will thrive in that not-too-distant future. We might also want to have a bit of fun with an investment every now and then. Soliciting comments from paid subscribers earlier this year, the above describes many of you. With all this in mind, I have come up with the do-very-little portfolio. I was originally going to call it the Do F All portfolio, but, as it involves a bit of action taken every now and then, I’ve gone with do-very-little. A portfolio that does not require constant monitoring, only the occasional re-balance, but that should do well given the broader macroeconomic conditions in which we find ourselves.Here I am writing this missive at breakfast on a beautiful terrace in southern Italy, overlooking the sea, in one of those villages where nobody seems to do much and yet they lead long, full and contented lives, and the phrase “dolce far niente” comes to mind. What better name for this portfolio?The portfolio I am going to propose has something of the cockroach to it. It’s not as immune as Harry Browne’s portfolio which I covered the other day. It is probably overweight equities and underweight bonds. But it also contains plenty of possibilities to grow. Cockroach with a bit of spice. It’s similar, but not the same as my own portfolio (which is not for everyone).When it comes to investment returns, asset allocation has been repeatedly proven to be more important than individual stock picking. The market you choose matters more than the securities you select within that market. It’s more important to be in crypto or energy or biotech or banking when that sector is rising than it is to pick the best coin or company. Similarly, it’s more important to be out of that sector when it’s tanking. In other words, it doesn’t matter so much which horse you bet on, as which race you are in. We have a large allocation to energy, for example, especially oil, gas and uranium. I think conditions are all good for these. But that will not always be the case. In the 1970s and the 2000s you wanted to own energy. In the 1980s and 90s you probably needn’t have bothered. So here we go. The Dolce Far Niente portfolio. What does it look like?The Dolce Far Niente Portfolio

A quick heads up before we come to today’s piece: I am taking my “lecture with funny bits” about gold to the West End for one night only. October 19th is the date. (That’s the show I did at the Edinburgh Fringe). If you like gold, you will like this show. I promise. It’s super interesting. You can get tickets here. Hopefully, see you there.So, continuing the recent theme of portfolio allocation, today we talk cockroaches …I narrated a documentary once about cockroaches. Never mind the repulsion we may feel towards them, they really are the most amazing creatures. In fact, that repulsion may work in their favour because nobody wants anything to do with them, thereby bettering their chances of survival.  Cockroaches have been around since before the dinosaurs. According to Wikipedia, they are some 320 million years old, having originated during the Carboniferous period. They are hardy as hell. They can survive and thrive in tropical heat or in freezing, sub-Arctic temperatures below minus one hundred degrees (Fahrenheit or Celsius). They can survive the dryness of the desert where there is no access to water, but they can also survive in and under water. Many cockroaches even survived the nuclear bombs dropped on Hiroshima in 1945 - they are known to be resistant to radiation. You can even cut off a cockroach’s head and it will live on, at least for a bit.How nice to have a portfolio that is as hardy. We should all have something of the cockroach to our portfolios.In the wake of the Global Financial Crisis back in 2009 I remember seeing a presentation by Marc Faber in which he described a portfolio for all economic weathers. It broke down as follows:* 25% gold and cash. * 25% equities. * 25% bonds. * 25% real estate.  Dylan Grice, who at the time was an analyst with SocGen, advocated something similar. He called it the Cockroach Portfolio, after that most hardy of creatures.But the idea of a permanent, cockroach portfolio for all weathers was probably first popularised by an American investment advisor, Harry Browne, who died in 2006. Browne was also an author and politician. His books, mostly centred around investment, sold more than 2 million copies, and in 1996 and 2000 he was the Libertarian Party’s presidential nominee. But, as an investment advisor, in 1982 he developed what is known as “the permanent portfolio” investment strategy, which he then wrote about in his 1999 personal finance book, Fail-Safe Investing: Lifelong Financial Security in 30 Minutes. This portfolio would assure "you are financially safe, no matter what the future brings."Browne’s idea was that there are four macroeconomic environments - four seasons if you like: inflation, deflation, growth and recession. One of those macroeconomic environments would always apply.So his portfolio was allocated in such a way that some of it would perform well in each of those seasons.* 25% in US stocks. That would do well in times of growth. * 25% in long-term U.S. Treasury bonds. These would also do well during times of growth - and in deflation too. * 25% in cash. That’s for recession. * 25% in gold, meanwhile, would see you through the inflation.All in all, therefore, Browne’s portfolio for all economic seasons looked something like this. (You would re-balance once a year to maintain that allocation)Browne’s differs from Grice and Faber’s because it contained no allocation to real estate.But there you have it: a portfolio allocation that might even make it through a financial nuclear financial fall-out like a cockroach.I have two criticisms. First, if you go back to 1982, when Browne first conceived this portfolio, the S&P500 has outperformed by some margin. Sure, the cockroach portfolio is much less volatile, but what’s the point of it, when you can just get an S&P tracker? You could argue that this has been an extraordinary period for US equities, but even so …Indeed, if you want total cockroach, why not own gold and gold alone? Gold, being indestructible, is even more hardy. It’s been around a lot longer, and it lasts a lot a lot longer. When you, me, humanity and the cockroach itself are all long gone, gold will still be there shining away. (If you are interested in buying gold, by the way, Pure Gold Company is the place).The reason not to just own gold is that you want diversificationA word on diversificationLook at some of the richest people you know and I’ll bet you close to none of them made their fortune by having a diversified portfolio. They might have made their money from their profession or by building a successful business, in property, bitcoin or trading. Out of an inheritance or a divorce, maybe. Perhaps they wrote a book, a film, a play or a song that turned out to be a smash hit. Perhaps they are a celebrity or sports star. Whatever. Most of the time they were anything but diversified. Rather they were concentrated.But if the majority of the super rich made their money being concentrated, they kept it by being diversifiedThe purpose of a diversified portfolio is not so much to make your fortune, but to keep and grow what you have. I understand that even Warren Buffett, who is the big example that counters my argument, had a few big wins early on and then grew his fortune building a successful investment business and levering what Einstein called the eighth wonder of the world - compounding - in his favour. I was chatting with a mining investor I know the other day. He made $40 million in 2005-2006. But he was moaning about the fact that he stayed concentrated and so handed a vast lump of it back. Had he instead diversified and then grew his wealth at say 5% a year, he would now be sitting on a pot more than double that size. At 10% a year, he would now be sitting on over $200m. Concentration is how you make your fortune. Diversification is how you keep and grow it. Unfortunately, concentration is also how you can lose a fortune. Let’s say you went all in on bitcoin in 2013. Or tech or whatever. You’d be minted. But if you went all in on mining in 2013. You’d be borassic. I think you get the point.My do very-little-portfolio is coming soon. Keep your eyes peeled.Interested in buying gold to protect yourself in these uncertain times? My recommended bullion dealer is The Pure Gold Company, whether you are taking delivery or storing online. Premiums are low, quality of service is high. They deliver to the UK, US, Canada and Europe, or you can store your gold with them. More here. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.theflyingfrisby.com/subscribe