harp

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  1. Agree
    harp reacted to kibuc in Credit deflation and the reflation cycle to come.   
    Be aware that the mine doesn't exist yet and is estimated to cost $850mln. Spending that much - and probable way more - for a target asset value of $679mln a few years down the line doesn't sound like a good piece of business, plus for a company with a market cap of 1/15th of that sum it's out of reach anyway. 
    People smarter and more knowledgeable than me suggest that geology is the problem here. Open-pit design makes for cheap digging, but the hardness of the rock results in high-cost crushing&extracting, and recoveries are expected to be very low. That's why the indicated 6mln oz in the ground is only worth 650mln usd with gold price at 1300$. At the current gold price, that mine looks like a money-losing business. 
    At a reasonable 1000$ AISC that mine - when built - should be worth at least three times as much, but as things stand it seems it's not even worth building. 
  2. Cheers
    harp got a reaction from M.C. UK in Credit deflation and the reflation cycle to come.   
    DB and Yellow Sticker spotted in Tesco

    https://www.dailymail.co.uk/news/article-6580777/Tesco-shoppers-shove-way-fling-items-baskets-discount-frenzy.html
  3. Cheers
    harp got a reaction from M.C. UK in Credit deflation and the reflation cycle to come.   
    DB and Yellow Sticker spotted in Tesco

    https://www.dailymail.co.uk/news/article-6580777/Tesco-shoppers-shove-way-fling-items-baskets-discount-frenzy.html
  4. Informative
    harp reacted to DurhamBorn in Credit deflation and the reflation cycle to come.   
    Exactly.That is why gold should continue up once the markets wake up to the fact.Higher interest rates mean higher inflation (at least seeing higher inflation),good for PMs,and higher debt servicing costs,bad for stocks/economy.What they will miss though is the scale of the falls ahead due to the size of the leverage and also the derivatives out there.Everyone says they cancel each other out and nothing to see.Thats is very very wrong.The macro picture is very clear.The scale of leverage can not be covered with interest rates where they are already.So rates go down,or we get a debt deflation.
    Debt deflations dont just kill companies though,even strong companies change how they operate.Take BAT tobacco.They have debts of around $42billion.Free cash flow of around $8+ billion,and pretty stable free cash even in a recession and are de-leveraging at 0.4 a year 4.0 to 3.6,3.2,2.8 times earnings etc aiming for 2.0s.However once a debt deflation hits they will start to focus more on that debt.Its highly likely they will stop dividend increases and instead de-leverage quicker at say 0.5 (or be unable to fund 0.4 and higher divis,so no higher divi).Thats not a problem in the scheme of things,but it does mean all those BAT shareholders suddenly have a dividend slowly going down inflation adjusted.
    That is why debt deflation hits very hard certain sectors where "want" spending goes.In the S+P this last 3 months the sectors/shares with investment grade bonds,strong balance sheets and low beta have outperformed the market by 25%.
     
  5. Informative
    harp reacted to Yellow_Reduced_Sticker in Credit deflation and the reflation cycle to come.   
    @DurhamBorn, why don't ya send your friend over the book i shared by Raymond Francis ...   "Never Be Sick Again - Health Is a Choice Learn How to Choose It"   Get it here: https://www.mediafire.com/file/klm5metpaop80r3/     Raymond Francis, covers how you can live to 145 years old!   More PROOF: http://thespiritscience.net/2015/11/08/the-hunza-people-are-able-to-live-up-to-145-years-old-heres-their-secret/ After all we don't want to lose our... INSIDE MAN  
  6. Agree
    harp reacted to Thorn in Credit deflation and the reflation cycle to come.   
    Happy Christmas Durhamborn to you and yours. You’re our Saint Nick.
  7. Informative
    harp reacted to DurhamBorn in Credit deflation and the reflation cycle to come.   
    Happy xmas everyone.Everything is going to plan.Oil is heading down to $20 (or $15) roadmap had $62 as the top so was out by a few dollars,but great call.$ continues to bounce of the 97 mark as expected.Gold now has bullish patterns in all currencies including at last the Yen and dollar and Renminbi.A bounce in the equity markets is very likely.The key will be if the dollar falls alongside that.If it does gold and the PMs should at last deliver.GDXJ is in the top 98 percentile now of performing funds over the last few months.
    The news will blame Trump,Brexit,trade etc etc.None of that is true.The Fed caused the problems and as soon as liquidity started to fall (our liquidity trackers proved almost perfect,we expected a 12 month lag to affects,it was around 14 months) then the rest was certain in such a leveraged system.
    The only interesting point now is with Trump acting as he is,will the Fed wait too long to loosen.If so the financial dislocation ahead could be even worse.
    What is certain to me is the next cycle.Its a reflation.A bells and whistles one.Good luck to the leveraged with no pricing power in 7 years.
    Off to my daughters for lunch,iv got them a lovely xmas present.Silver.
  8. Agree
    harp reacted to DurhamBorn in Credit deflation and the reflation cycle to come.   
    Superb post,and people should read it and think about that.Im 99% convinced silver is going to $200,maybe even $300.Im also convinced some PM miners will 20x,50x even 100x in the next cycle.My roadmap  on oil is $20 or less but $200 in the reflation.I dont play oil,but it matters for my other investments like public transport.They will hedge 5 years out so at some point they will be using oil priced at 20% of what the public is paying and their free cash those years will explode higher.
    The key here is what will come back and do very well and what wont.Amazon can go to $500 and i wont be buying it.That goes for most other growth companies.The next cycle will be a distribution cycle.That doesnt favour want,it favours need.The hated sectors will shine bright.Companies that depreciate expensive assets and can front run or keep up with inflation will be great investments (prices up 7% but wages only up 7% a year later with the pay deal etc)
    The companies im buying should be able to keep around 70% of the present dividend payouts going at the bottom,so thats around 6%/7% of the price im paying now.If the cuts are smaller all the better,if higher no problem.
    Im seeing massive value already in many sectors and im sure the pain in them isnt over.I have no concerns about going red on every holding,and i will buy on my stair case points whatever is happening.
    For the PM miners im buying more each month with my salary (100% of my salary).Last months went into Endeavour silver at $2.50.Il keep doing that as long as im there,or until GDXJ hits $40 (i expect $60+ at some point) when il stop.If they go to zero across the bunch il lose my labour and shrug my shoulders,but i expect il double at least what im putting in.
    Reflation cycles produce massive wealth in a few sectors.I doubt anyone in the city or Wall Street understand them because they are rare beasts .In simple terms if you have £100k,put £10k in silver and £10k in silver/gold miners.Inflation can return with a roar and youl be protected.
    I agree 100% with @sancho panza on the PMs.I have no concern if they half or more.I dont think they will,but if they do im fine.However i do think they have a real potential to make life changing amounts in the next 7 years.I like that kind of risk reward.
     
  9. Agree
    harp reacted to DurhamBorn in Credit deflation and the reflation cycle to come.   
    Thats the key.Good companies with solid cash flow.They are often called value shares,defensive etc.I find a portfolio of around 20 companies has always worked for me.Iv opened positions in almost everything i want now,but only 37% of capital deployed (i dont count my miner capital that would be about 20%).If all my ladders are hit then my portfolio as a whole will be in stocks that are down around 80% from their highs and il be down 15% on the portfolio (before dividends).At that point it would yield 12% before dividend cuts.Of course they could half again from that nothing is ever certain.I always try to put probability in my favour and i invest for a full cycle (or what i think is the cycle).Im pretty sure the next cycle will be reflationary.In that certain sectors will have a tailwind for different reasons.Transport for cost and public policy.Green distributed energy.Telecoms for data explosion.Silver due to the green growth and investment demand.Delivery networks that can cover the whole country each day.Value retail and entertainment within communities.
    Outside of the PM space everything is going exactly as expected.The PMs are a coiled spring,if they do run they will run hard.Im very happy to take that chance within my portfolio and im buying more with 100% of my salary each month.
    I love times like this as an investor.Lets not forget as well this and the other thread nailed to the mast what was coming.We can never know all outcomes,or hit every ball,but we have been very close on most things,and the PMs would be the icing on the cake if they run.
  10. Informative
    harp reacted to kibuc in Credit deflation and the reflation cycle to come.   
    Things are happening at Sibanye. Not only has the court just declared the AMCU strike action legal - it's a HUGE and quite violent one - but there's also a legal challenge to Lonmin deal. Court hearing is not expected to be conducted until January, which suddenly puts the whole deal into jeopardy. The deadline for the deal is end of February, and in January it was supposed to be voted by shareholders.
  11. Agree
    harp reacted to kibuc in Credit deflation and the reflation cycle to come.   
    WDO resource update is out and it's fair to say it a far cry from what I was expecting, but I had some pretty high hopes. I think the initial move down was acting on an actual leak, while the subsequent drop was just following the trend by people not in the know. There's nothing in this update I can see that would justify this hammering.
    On a positive note, the cut has been raised to 90g/t for future drilling.
  12. Informative
    harp reacted to Majorpain in Credit deflation and the reflation cycle to come.   
    The entire construction sector is one to avoid at the mo, unfortunately it what work does so its batten down the hatches time.
    Age of a business means very little these days, plenty of family business going for 100+ years have gone under in the last 20 years, mine was one of them!  Times change and if you dont change with them...  Construction as a whole is very oversupplied, some of the contractors need to die so that the others may prosper.  Interserve will eventually be one them IMO.
    Got a job on with Interserve at the moment, on the first couple of phases, with Cash on delivery written into the contract, they were taking 30+ to actually pay money into the bank.  Next phase is money BEFORE delivery!
     
  13. Informative
    harp reacted to DurhamBorn in Credit deflation and the reflation cycle to come.   
    GDXJ contains the smaller gold miners,and now quite a few of the mid range ones.GDX contains all the big gold miners and most of the mid range ones,but no small ones.GDXJ tends to outperform in a gold bull,or underperform in a gold bear.When iv used the two i tended to go 40% GDX,60% GDXJ,or if buying SIL the silver miner fund 30% GDX,40% GDXJ 30% SIL.
  14. Agree
    harp reacted to Nicolas Turgeon in Credit deflation and the reflation cycle to come.   
    And the good news is that now people wanting to invest in the gold miners through Hangreaves Lansdown can now finally buy GDX and GDXJ again! That's right, the ETF's  are now tradeable online again through HL (well when the markets reopen) so you don't need to buy a range of individual stocks for gold miner exposure.
    Happy Christmas everyone!  5 gooooooold riiiiings!
  15. Agree
    harp got a reaction from UnconventionalWisdom in Credit deflation and the reflation cycle to come.   
    Well as someone totally new to all this in Feb/March time this year, what a fucking year to get started! Talk about a baptism of fire...
  16. Agree
    harp got a reaction from UnconventionalWisdom in Credit deflation and the reflation cycle to come.   
    Well as someone totally new to all this in Feb/March time this year, what a fucking year to get started! Talk about a baptism of fire...
  17. Agree
    harp reacted to DurhamBorn in Credit deflation and the reflation cycle to come.   
    https://woodfordfunds.com/funds/holdings/kier/

  18. Agree
    harp got a reaction from DoINeedOne in Credit deflation and the reflation cycle to come.   
    I understand the concept of laddering in. But does anyone do it in reverse? Buying shares as they rise? Or is it only me
  19. Agree
    harp reacted to DurhamBorn in Credit deflation and the reflation cycle to come.   
    Indeed,and almost all of it fixed at coupons that will look crazy low in a reflation.2%,1.5%,3% etc.The key to them is when the debt comes due.They will have to re-finance into a much higher rate picture.The big amounts come due around 2025+ etc.I would expect free cash flow to be hitting around £10 billion by then and them to be financing most of the bond repayments through free cash.They might end up re-financing around half the debt only.
    The bond holders will get fleeced of course,they have in affect funded the network for equity holders for almost free.I dont expect the dividend to do much and might even be cut,but as debt is repaid id expect the equity price to move up strongly.These type of stocks are the type that do very well in a reflation,as long as they use the quickly growing cash flow to repay debt and not fund dividend increases.They dont want to get to 2025 and be re-financing all debt because rates will be sky high.As ever a stair case in as part of a balanced portfolio as there will be failures along the way.It should be noted Vodafone dont have legacy issues like massive pension deficits,and the stink the other telcos are kicking up about the Liberty deal says Vodafone have outflanked them.Its them that will have to fund a massive optical fibre network during a reflation and paying rates 3 times higher on the debt than Vodafone.
  20. Agree
    harp got a reaction from SillyBilly in Credit deflation and the reflation cycle to come.   
    50 seems the ideal age to retire, if you can. That's what was in my mind when in my 30's. I actually retired at 41, well I say retired like it was a choice, it wasn't. I got blown up in Iraq while working for a Private Military Company. The guy next to me died and my two clients in the back of our armoured  Landcruiser were badly injured as was I. After receiving a settlement, I didn't expect that it would bring a whole new set of problems. Keeping hold of it and growing that sum has been a challenge. But I have done so, for now.
    No debt and plenty of time to do whatever I want is a great place to be at. Would I turn the clock back? No.
  21. Agree
    harp reacted to Harley in Credit deflation and the reflation cycle to come.   
    It would be nice if we could all come clean and specify what we think to hold for which period (pre crash, crash, deflation, reflation, etc).  I read another very good finance only forum (respect to Spunko I defer mentioning it) where they openly talk about stocks, ITs, etc and their share portfolios.  That causes a lot of discussion so no-one would take anything as advice - indeed it just shows there is no one right answer.  We could always be a little less specific (e.g. sector, asset class, etc).  Or maybe I'm just being lazy, in which case I will lose money by not DMOFR!   If not, as a minumum, it would be nice to summarise the tenets of this thread in a timeline (maybe with flexible dates) which shows each phase, it's features (e.g. direction of bond yields), and what asset class or sub class (e.g. equity sector) would do well versus badly.  That would give us a standarda against which to frame discussions more clearly.  Treat it as a kind of work in progress this thread and its adherents are constructing.  Maybe even version it with a committee to approve changes (whoops, getting too OCD IT at this point but you get the gist!).
  22. Agree
    harp reacted to Barnsey in Credit deflation and the reflation cycle to come.   
    Just want to thank @DurhamBorn for helping us all by starting this topic way back when on t'other site to discuss what was then a relatively abstract prediction for next 5+ years once the markets solidly turn down, amazing to see this prediction pan out and become more commonly discussed on the Twittersphere by all sorts of unrelated folks. Everything going on right now is just noise I guess, some losses heading into the deflationary bust will be inevitable, and to try to maintain my sanity I'll be concentrating on how they do coming out the other end, very difficult as I do like to keep an incredibly close eye on daily moves. Stressful and exhilarating in relatively equal measure. This really is tax free gambling in some ways, dangerously addictive.
    Obviously there are so many others here making very valuable insightful contributions, some who trade in shorter time frames, and the lines become a little blurred between short term gains and longer term holds, but continues to make this topic a great place to share ideas, thanks to all thus far and here's to a very dynamic few months ahead!
  23. Agree
    harp got a reaction from Inoperational Bumblebee in Credit deflation and the reflation cycle to come.   
    Ah bollocks, the word is out. Can't believe my Harmony (HMY) and Sibanye (SBGL) are up 29% and 30%! Down in a couple of others Yamana 15% and Eldorado 17% but slowly catching up. 

    https://www.dollarcollapse.com/gold-cool-again/

    Who was it on here that tipped Wesdome in June time? Took a little punt and it's nearly doubled up to now. Wish I stuck some more in at the time. Hat tip to whoever it was.
  24. Agree
    harp reacted to Lavalas in Credit deflation and the reflation cycle to come.   
    Think I mentioned it after following @economicalpha on Twitter. Very much his tip not mine but pleased I followed it too. My plan was to reassess towards $5 and maybe take some off but at their recent Denver Gold presentation they hinted that there might be even more undiscovered gold at Kiena Deep despite that which they have already found still not being fully priced in yet. 
    https://wsw.com/webcast/dgf18/wdo.to/?lobby=true&day=1
    There’s a lot of really useful info out there on the miners and I think just like anything, it’s about finding the right people to help inform you and those you should ignore. I’m still learning so I’d rather you know the source than think I’m worth paying much attention too. This thread, for example, is obviously brilliant in that the variety of its contributions gives analysis and maybe a direction but not necessarily a consensus. The likes of www.ceo.ca, not so much. It’s fanatical stuff with too much noise. Often reminds me of the bitcoin thread on ToS. Lack of measured analysis, way too many ‘to the moon’ type statements. This really leaves them open to pump and dumps where any vaguely decent drill results can be spun into FOMO. I suppose they’re the the dumb money and we need to not be the dumb money.
    All fun
  25. Agree
    harp reacted to DurhamBorn in Credit deflation and the reflation cycle to come.   
    The SA miners were the first to turn in the 2016 rally as well,about two months before everything else.They are much more leveraged to the gold price than most (high costs) and tend to inflict great pain on the downside,but contain a lot of energy when they change course.Im very pleased with Harmony as it was my no1 stock on the rubber band list and my biggest PM holding.I actually sold 30% of my holding though at 2.10 and put half of that into Yamana at 3.40,a bit more into Endeavor Silver and kept some powder.Only reason being i had a very large stake in it and by taking a good profit out it gives me more confidence to hold the rest.Sibanye has been very kind to me over the years,and i only have a smaller holding this time,but im tempted to sell that,simply as the SA balance has increased too much in my portfolio due to the huge jump up in prices and its not balanced enough due to that.
    Eldorado have a lot of clouds hanging over them.They need to refinance debt at some point and have problems on several fronts.(not alone there in the space).Those types tend to need the sector to continue to rally and then they play catch up,usually on a bit of good news.A permit they have been waiting for etc.
    I think the top is in,or very close in the US equity markets.If they buy the dip again i think it will be the last one.The energy is running out.Its crucial though the first 20% of the bear is drip drip down to support a PM rally.We dont want to see huge drops.The UK markets looks like some sectors are mostly through their bear,others just entering.We could be in for a falling market,but one that goes sector by sector.Given the market always hurts the most people it can,US passive funds will likely be the biggest losers.