WoSSCapital

Helping people learn finance, become thoughtful investors & avoid costly narratives. Author: Escape the Wealth Illusion. 25+ years in markets, investing & macro

[WoSSCapital @WoSSCrypto]

The state pension increased under the Triple Lock today.

Almost no one understands how the system behind it actually works, why it’s failing, or why politicians refuse to do anything about it.

I’ve written a full white paper on it, published today in the hope it finds some grounding.

https://t.co/XJJoYbPueB

[WoSSCapital @WoSSCrypto]

Short video explainer of yesterdays article.

Do you know why the difference between price and value is a positive driver of financial outcomes?

https://t.co/JnuNsenllz

[WoSSCapital @WoSSCrypto]

Not the worst call by the Valkyrie Model Portfolio on last Monday's close.

Down 12% (currently) since.

[WoSSCapital @WoSSCrypto]

Many people think wealth is built by earning more. In reality, it's often destroyed by confusing price with value.

A bigger house. A newer car. A luxury purchase. They can all feel like progress on the wealth scale while quietly consuming the capital that could have created genuine financial freedom.

Price and value aren't the same thing.

Understanding the difference changes how you think about money, investing, and long-term wealth creation.

New article:

https://t.co/6NpQyXj003

What's one purchase you've made that looked expensive at the time but turned out to be incredible value?

[WoSSCapital @WoSSCrypto]

Probably because this is an income taxation conversation and wealth isn't income, despite how often politicians and charlatans like to conflate the two for their own ends.

I'm an advocate of wealth redistribution. I have been for a very long time. I wrote about it in my book and it's a theme that runs through all of my work.

But I'm also apolitical, so have zero time for politicians who talk about unrealised gains taxation, which has never worked anywhere and completely ignored the incentive structure that creates, for no other reason than it sounds good to people who will vote for them.

I've laid out a good few times how I'd actually tax wealth in a workable, redistributive fashion. And also a few ways I'd tackle the distribution of wealth in the first place, before redistribution is required.

A flat wealth tax, the likes of which has become populist mantra to win votes, doesn't feature. Because it demonstrably doesn't work, and never has, anywhere.

[WoSSCapital @WoSSCrypto]

@Dotsy1978 @jrkdenison @stuey_beef By not being in the UK.

[WoSSCapital @WoSSCrypto]

It depends on your personal circumstances, what you currently contribute and how you think about money.

Your pension is yours, so contributing more to it is more your retain. If you have the headroom as a higher earner to contribute more, and you can adjust your household spending to accommodate, you can sacrifice more of your gross to neutralise/reduce the tax burden.

In general terms higher earners should have more optionality in this regard than lower earners.

They often don't because of spending choices, but many do, or can review those choices to accommodate.

No universal answer for everyone, but the options exist nonetheless.

[WoSSCapital @WoSSCrypto]

@NumbNutButter @stuey_beef Might be. But planning finances on tax policy that might happen in future has historically been awful for those doing it. Plan for what we know, acknowledging the tail risks.

[WoSSCapital @WoSSCrypto]

Anyone who wants to cut their nose off to spite their face when they have options to plan around these changes is more than welcome. For me, I've calculated what additional income I'll add to my pension to remain tax neutral. I'll pay no more tax after this implements, if it implements, than I do before.

And I'll pay less tax on my withdrawals than I have in my contributions, pre compounding. My plan is to pay little to no income tax on my pension (without having a crystal ball to know if changes to legislation will prohibit that by then, but planning for tax changes that haven't been confirmed yet is a historically bad idea anyway.)

I'm no fan of the change, or this government, or politicians in general as my work consistently shows.

I just see my job, for my family's finances, as having to work around the harm they cause us within the bounds of what's legally available to us.

I don't take issue with your sentiment: it's a poor policy change. My issue is only with the statement that high earners will reduce their contributions to avoid the 2%. That makes no sense to me mathematically because they'd be giving up 40%-47% on that money to avoid paying less than 2%.

[WoSSCapital @WoSSCrypto]

TL;DR from Sunday's report. An important week for Macro, but will the MOU hold?

Read in full in my feed, including model portfolio updates, the distribution update & the WoSS risk barometer.

What do you think of the probability for diplomatic resolution in the medium term?

--WoSS

[WoSSCapital @WoSSCrypto]

Read or Listen to the full article here:

https://t.co/DJHEUnzOJA

[WoSSCapital @WoSSCrypto]

Read or listen to the whole report here: https://t.co/DJHEUnzOJA

[WoSSCapital @WoSSCrypto]

Weekly Update #25

This week wasn’t about headlines for a change, it was about a genuine shift in the underlying distribution. The one we’ve been waiting for.

Iran MOU news triggered a repricing across oil, rates, and volatility, but the key signal again was the divergence between paper (Brent) and physical (OMOIL). That gap is telling us something important: probability is being priced here, not certainty. But given where we’ve been, probability is improving.

At the same time:

- NASDAQ led while small caps lagged. A narrow, duration driven equity strength
- Yields fell on breakeven compression, not growth fears
- VIX and MOVE both compressed, but remain exposed to a fragile 60-day diplomatic window
- Portfolio signals triggered: Bitcoin to zero (Monday), Gold to zero (Friday). Fully rules-based, no discretion

The result is a clearer but not settled regime: improved growth/geopolitical conditions, but still unresolved inflation and policy uncertainty beneath the surface.

The takeaway is that we’re not shifting phase from a risk-on to a risk-off environment. We’re in a distribution re-pricing environment where some assets are struggling technically.

— WoSS

[WoSSCapital @WoSSCrypto]

Gave Stratiphy a go so I could manage Bitcoin positions inside of an ISA wrapper.

Two weeks in and not a good experience at all.

Issues getting the account approved, followed by bugs in the application that mean you can buy a position but not sell it, support who haven't responded in over a week from their 4 hour average response time declaration.

Doesn't in any way feel like an enterprise level product.

As soon as they get the finger out and I can sell the position I want to, I can't see me keeping any funds with them going forward.

[WoSSCapital @WoSSCrypto]

YouTube: https://t.co/epaoD6MK4o

[WoSSCapital @WoSSCrypto]

Markets looked calmer this week. Equities bounced, oil fell, VIX compressed and Bitcoin fell.

But underneath that relative surface level calm, the bond market is sending a very different, very specific message.

The 30Y Treasury hit its highest yield since 2007 and the 2Y remains above the fed funds rate. All this after PPI came in hot again the week before. Meanwhile markets have shifted from pricing cuts to pricing a meaningful probability of hikes by year-end. 70% probability of at least one.

This week’s report breaks down, mechanically, what the bond market is actually signalling about inflation, policy credibility, and whether the Fed is already behind the curve again.

Also covered:
• Why the OMOIL/Brent convergence matters more than the geopolitical headlines
• Why Bitcoin diverging from equities triggered a reduction in Valkyrie
• Why VIX falling while MOVE stays elevated is not a clean risk-on signal
• The first real structural test facing Kevin Warsh in June

Surface calm. Structural tension underneath. One for the purists more than the narrative chasers.

New weekly report below.

https://t.co/uk2Azsas8O

[WoSSCapital @WoSSCrypto]

What have I done to annoy you here?

I didn't make or present any assumptions about you to the world. I simply engaged, honestly, in a conversation based on your original post.

You made an assumption about me in your response. An assumption calling my credibility into question. One that could be construed for "playing the man, not the ball" in sporting parlance. I simply pointed out your error for onlookers then cordially continued the conversation.

I thought, having looked at your background, that you might be worth a conversation with. That's why I initially engaged. Entirely non-controversially

I mostly agreed with you for goodness sake, bar one slight semantic point on CB influence, but I've clearly managed to annoy you somehow.

So, I think I'll leave this here and chalk it up to experience. The world can decide which of us has been offside.

Have a great day.

[WoSSCapital @WoSSCrypto]

A cursory glance at my background would've told you both that I was around during that period (and long before) and that I was heavily critical of Central Banks at the time for their weakness.

I'll, rather more amicably, see your 2006-2008 and raise you a 2009-2019. I've long argued that Central Bank led rate environment created the conditions for expansionary borrowing and contributed heavily to what has been a historic Cantillon transfer of wealth, widening wealth inequality faster than any period in our lifetimes.

I think it's hard to argue that Central Banks pumping liquidity into the system through monetary policy (whatever lever is used) and supporting commercial banks in doing the same didn't impact upon these outcomes. Without their accommodating policy this would have been unlikely to happen. They certainly influenced commercial bank policy during this period.

I think you and I would probably agree on failures of Central Bank competence (the perpetual late arrival of Powell's Fed reaction function for example being the focus area in my weekly report last week as he left office).

But I'd contend that their competence in using the levers available to them is a different argument to not having those levers at all.......