Thursday, 18 December 2014

Land value assets NEVER fall in value. All other assets ALWAYS fall in value. Period!

Have we made ourselves clear - is there anything about the words 'NEVER' and 'ALWAYS' which as a trader you still do not understand?

The acid test is to look at your portfolio and see if the largest part of it is made up of property assets. If not you have a lot of hard work, high tax liability and ultimately bankruptcy priced in.

Following: a testimonial from one of our highly valued clients. He's not formally educated in economics which is a good thing. If he were, that would exclude him from understanding it, right?

Integrating this knowledge is the high value of our training and consultation services.

This fellow is very wealthy and highly skilled at tax avoidance and evasion. We respect him highly.


"I'm glad we chatted yesterday because it clarified something for me that has been bothering me for a while which is as follows;

Although land always holds its value over the long term, it's also true that as the boom/bust cycle rises and falls the price of properties can go down in the short term. This allows nay-sayers to say "see I told you so, property prices always go up and down".

This is true of "property" prices, but with rare exceptions it is not true of "land" prices except in unusual cases such as abandonment of a town etc.

The price fall point is the point at which cashed-up landholders/investors buy back the properties they had previously sold at inflated prices.

What I did not realise until I spoke with you yesterday is that all the price falls affect only the price of the improvements to the land, not the land itself.

Therefore price falls of the total property package even in the short term rarely exceed the price/value portion embedded in the labour/materials used to build the improvements, thus protecting the constant price/value of the underlying land. 

So if the re-bought 'property' can be rented out for a holding period, the landlord is well ahead, but even if left vacant the property has a negligible holding cost to the landlord/investor, allowing him to wait out the current downturn until the market rises again and the next cycle begins in his favour.

This is why I get annoyed when commenters constantly refer to a "housing/property/ affordability problem".

With rare exceptions, value is never lost from the land but only from the house/improvements in the form of the embedded labour/materials. The buyer of any distressed property then is basically paying full value for the land, but is getting a free house thrown in, in an effort by the by now desperate mortgagor/seller to close the deal.

So when that buyer sells the "property" at the next rise in the market, he not only gets whatever rise in land value applies, he also gets full value for a house he got for free!

My contention then is this; 

As a rule of thumb with rare exceptions, even in the short term "property" will not fall by an amount exceeding the embedded value of the labour and materials used in the construction of improvements on the actual "land" thus preserving the value of the land itself.

This of course means that as the ratio of the 'land portion' to the 'improvements portion' of the "property" rises, the percentage amount of the price fall of the property must be proportionally less.

So for example if the "improvements portion' of a property is 30%, any price fall is unlikely to exceed 30%.If the "improvements portion' of a property is 50%, any price fall is unlikely to exceed 50%.

Of course the proportionality is not linear and isolated exceptions occur to every rule, but in general I believe it to be true that price falls of a 'property' will affect the price of only the 'improvements' to an amount not generally exceeding the 'improvements' portion of the total 'property' package but will not generally affect the value of the underlying 'land' itself.

Your constructive (or otherwise) criticism please?."

No need for any criticism here. The man is wide awake and avoiding the 'Ministry of Wealth'. As a result he is very wealthy and has a life of his own free from the virtual slavery so common in the middle class trader today.

By all means call for your own consultation.

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Wednesday, 17 December 2014

What would happen if private enterprise got together to fund improvements?

The location value of Wokingham would rise by at least that much.

More people would want to live here - property prices would rise, some say by up to 4 times the size of the fund.

Local enterprise would see much higher footfall - more profits.

Local enterprise would draw in much higher earners - even more profits.

Likewise for staff salaries and wages.

The icing on the cake? Property values would increase thanks to the new higher demand for a more valuable location. So developers can now sell new housing for more and be more able to fund infrastructure, bringing even more location value to the town. Likewise for existing property owners.

What better way to bring use of Wokingham's land into equilibrium, than by the wishes of the majority. What's not to like?

There is an initiative used across the world. Wokingham Council is considering it. It's called:

BID - Business Improvement District

Basically its a levy on top of business rates. Economics 101: tax comes out of rentals. So there will be no increase in rent because the tenant is already paying as much as he is willing, unless the landlord is feckless. The levy must be incident on the rent.

A fund is raised from all businesses who volunteer and qualify. This fund is devoted to the business district of Wokingham. With it location value will rise and residents and enterprise in Wokingham will prosper.

Find out more about BID here: Business Improvement District

And by all means encourage your local councillor to adopt it as soon as possible.

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Monday, 15 December 2014

Depth Marketing

Depth is going to difficult places,  protected from entry by fear and always rewarded highly in the end.

Marketing is encouraging people to go somewhere they might not normally go.

In terms of life and wealth think of it as your own adventure where you are the hero in it. That way your strategy cannot be disrupted by fear and prejudice.

You cannot get people to go over the frontier if they're still scared.

You cannot market to people with logic and reason. They are not robots.

There is a way to show people there is nothing to be afraid of.

You can respond to them and treat them in the same way they are behaving. Treat them like humans.

Universities spend millions on trading models and never produce fruit. Hedge funds hire professors at great cost and despise them. A thousand trading schemes are marketed and end up as yet more pyramids.

Because traders are being 'educated' like robots using beliefs not knowledge. And marketed to using scare tactics such as the idea there's not enough for everyone.

Fear is a myth. Scarcity is a myth. Belief us a myth.

Depth Marketing helps you to see these realities. If you can integrate them into your trading psyche you will go far virtually risk free. So can let the competition do all the worrying and bear all the risk.

If you're familiar with MeltFund strategy and you have integrated this knowledge you will already know what to trade. The only thing to trade. And when to trade it, always. There is no time you will not profit from it. The crystal ball no longer required

By all means call for a consultation on how to integrate MeltFund strategy.

Sunday, 14 December 2014

Moralism. What is the grand total?

We're going to show you the psychology that places MeltFund clients way ahead of all comers in terms of making wealth. Simply by looking at the whole of the world without prejudice. We are not going to make judgements or tell you what to believe in.

Moralism is an ideology that attempts to identify the difference between 'doing good' and 'doing bad'. We don't need to define what is good and what is bad here. Suffice to say, history shows repeatedly that what for one side of a duality is unacceptable, for another is acceptable, depending on the prejudicial circumstances of the time and place of either side.

What we do want to show is how moralism serves the world today in terms of a sustainability.

For sure, morals do not define what is sustainable and progress in and of themselves. This applies even to things as astonishing as mass murder by the state such as genocide or market conquest. If one is signed up to that states law, murder can be perfectly acceptable to the entire population so long as you are on the right side of the duality. (Nazi Germany, the British and Roman Empires,the Soviet Union and 21st century USA are perfect exposition of this) All people of those states supported the regimes, more, than they protested against them. And not a single citizen gave back any of the gains they made out of it. So its not credible to say it was forced onto any of them.

There's a lot of moralising going on in the world. That is, "I'm fine, the problem is this leader, that group of people, wealth and power, the weak and poor, this religion or that ideology.

What is the end result of moralism?

!!! THE LAW !!!

The law is what the most people uphold either by democratic due process or by submission to a tyrant. There is no escaping this. We're not saying people should stop believing in the law. We are saying each and every individual is complicit by believing in the law. So to blame others - to externalise that complicity - is not a rational world view.

So what's the net effect of moralism as a foundation for the laws of the world?

Moralism attempts to select individuals or special groups for special punishment:
  • 10,000 moralised people/ institutions (who the collective project blame onto)
  • Sustainability capacity of the world = 100
  • Sustainability factor = 0.1 (not very sustainable)
  • Total un-sustainability = 1%
What about the alternative to moralism, whatever that is:
  • 6 billion individuals (projecting blame onto the moralised few)
  • Sustainability capacity of the world = 100
  • Sustainability factor = 0.99 (very sustainable)
  • Total un-sustainability = 99%
What can be seen using this primary school maths is that the usual culprits moralism cites so often for special treatment by the law or new law, are far more sustainable than each and every individual as a non moralised collective.

What was a paradox to a prejudiced world view, is now knowledge of reality to anyone who made the bold leap and woke up.

That is - "ITS ME" who has the greatest capacity to change the world, starting with myself.

If you can integrate this observation into your personality - a very big challenge given you will no longer get the protection of the collective in denial of it - you will immediately start to find life, and then wealth.

By all means call for further training and consultation.

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Saturday, 13 December 2014

What is the proper role of government?

Is it "to keep the doors open"? That is, day to day crisis management where expedience reigns.

Or is it to discover and maintain the fundamental guiding principles that assure equal rights for all people?

The former is the perpetual state of government today, the latter a mere aspiration since the dawn.

We think the first duty of government, nay, its only duty, is to deliver policy that most effectively increases the value of real estate.

Because that increase in fundamental economic value is the supreme indicator of a society in advance.

How so? Because its opposite - a reduction in general land values - signals a society in decline!

And which is it that we really want?

Of course we all want an advance for ourselves and not always others. But the question in hand is not about your personal economy.

It's what is the proper role of government, the corollary of which is political economy - what's in the best interest of the collective. Else whence government?

Its true, there are assets other than real estate identifying social advance and decline. And compared to land values they are infinitesimal. Do you trade on a principle "of every little counts"!

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Money is in reality a coinage of credit or trust

Trust or credit is indeed the first of all the instrumentalities that facilitate exchange.

Its use antedates not merely the use of any true money, but must have been coeval with the first appearance of man. Truth, love, sympathy are of human nature. It is not only that without them man could never have emerged from the savage state, but that without them he could not have maintained himself even in the savage state. If brought on earth without them, he would inevitably have been exterminated by his animal neighbours or have exterminated himself.

And trust or credit is not merely the first of the agencies of exchange in the sense of priority; it yet is, as it always has been, the first in importance.

In spite of our extensive use of money in effecting exchanges, what is accomplished by it is small compared with what is accomplished by credit. In international exchanges money is not used at all, while the great volume of domestic exchange is in every civilized country carried on by the giving of debits and cancellation of credits.

As a matter of fact the most important use of money today is not as a medium of exchange, though that is its primary use. It is that of a common measure of value, its secondary use.

Not only this, but with the advance in civilization the tendency is to make use of credit as money; to coin, as it were, trust into currency, and thus to bring into use a medium of exchange better adapted in many circumstances to easy transfer than metallic money.

The debit, paper and metal money so largely in use in all civilized countries is in reality a coinage of credit or trust.

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Friday, 12 December 2014

There you go! MeltFund forecasts perfectly once again on house prices

Best thing to do is stop listening to the news, experts and universities if you want to find life, and then wealth.

Following 2 years of 30% year on year growth in the value of real estate, 2004 saw the start of the road into recession with a predictable 4 years worth of just 10% annual growth.

We are today, where we were in 1996. If you remember most traders - the foolish ones - had also forgotten that house price would rise until 2008 just as in 1990.