Credit deflation and the reflation cycle to come (part 2)

[BadAlchemy]

DB is a true gent and has kindly listed his typical reflation portfolio again (also provided earlier in part 1 of this thread). Anyone who takes and uses the list (as I did) owes it to themselves to then go back and read the whole thread (on ToS, and parts 1 and 2 here) because it's important, I think, to understand why those particular companies feature in it. You'll also want to monitor your investments going forward and know when is best time to sell/switch/rebalance etc. So having an understanding of what each company actually does, what assets, debts, cashflow, and profitability it has, and how it might link in with other companies on the list over the coming years will pay dividends (literally!)
I have about 30 stocks including pretty much everything on that list but am aware that I do now have to spend time monitoring the health of all these stocks and I'm not up to speed with that yet.

I admit that my initial position a couple of years ago was... here is a list of stocks that I have found on an internet forum from some bright sparks who seem to know what they are talking about. I trust a certain amount of cash that I can afford to lose to this and on my head be it if it goes tits up.
I am now moving into next stage... This is a list of stocks I own. I still believe the premise of the thread and want to move more cash into them now. So this is geting rather serious. Therefore can I try to follow the workings of those bright sparks and do I then agree/reach the same conclusions? ( to do this I must spend time following other experts/opinions... on YT/FinTwit etc, try my hand at 'coma scoring', follow, read and understand company financial reports, regularly monitor prices of things like US treasuries, gold, oil, exchange rates, my stock prices to see how they interact and relate with eachother). This is where the real work begins and I guess you can only do it if you enjoy it/find it interesting enough... I am slowly getting there. I guess if you are time limited or only find it interesting up to a certain point then ETFs/funds might be the way to go?

I suppose the final stage is that you can then stand on your own two feet and call yourself an 'independent investor'. I think, for me, stage 2 will take many, many years and maybe all that I have energy for. Should be fun though...

[Calcutta]

Going the simple route and just chucking everything at BP and Shell doesn't sound like too bad a plan, but it does leave you wide open to loosing everything should an oil rig blow up or someone get caught fucking around. From what I can see most platforms charge progressively less for buying shares if you buy more in a month or a year. So spreading the risk doesn't end up being more expensive and insulates you from the risks involved in just buying two. 

Personally my plan is leaving a load in a global tracker fund and picking stocks I fancy with say 50% of it, as the ones I want aren't particularly well represented in a fund of Microsoft and all that shit. It could go either way, probably go alright, and I shouldn't get handed my arse. 

Should probably add that if fifty grand is the sum total of a life's work then handing it over to shyster companies instead of just hiding it for a rainy day might not be too sound a plan at all. 

[Castlevania]

You should also try to understand how the company makes money. Ask yourself what  makes it unique, what are their strengths, weaknesses etc. Try and understand what headwinds the industry as a whole will face. Try and cover all the bases. Ultimately ask yourself if you’re comfortable investing in a particular company or industry.

For example transports have often come up as an area that should benefit going forward. I’m not sure about that, and haven’t been comfortable investing in the area, so haven’t. They may do very well going forward and I’ll miss out on that but I’m more comfortable investing in other areas that I do understand.

[MrXxxx]

7 hours ago, Bricks & Mortar said:

I'll assume this is a declaration that you weren't trolling.  I must admit, I thought you might be.
In that case, the other part of Harley's advice should apply.  He was harsher than most of us.  But I think now,  he was being kind, and those of us who humoured you a bit were, inadvertently, potentially more unkind.  The idea of lobbing your Dad's nestegg into just 2 stocks, in the same sector, would be extremely high risk.
My advice would be find the original thread on HPC, and read that, "deflationary collapse", for the search engine.  Then find part one on this site, and of course you're in part 2.  Read them all.  It'll probably take days.  You'll find discussions of different share trading platforms.  Discussions of the likely path for the economy.  Book recommendations.  links to videos and blogs.  Shares that are likely to do well.  Pay attention to the discussion of Centrica, as it develops, for an example of what can go wrong, and why you need to spread risk around.  Take notes.  Make a list of the inestments you might like.  Check out their charts and teach yourself how to understand the financial information.

The idea of getting a cash nestegg invested is a good one.  Putting it into practice is full of pitfalls.  Best of luck to you.

Agree, the alternative (what you are currently suggesting) is going `all in on black`...on the rare occurrence that is pays off you are buying everyone drinks in the casino, but normally you end up `drowning your sorrows` at the bar with your last few coins you have left in your pocket.

[Harley]

9 hours ago, Panda said:

Be nice mate. No need to be unkind.

Joined HPC forum long before you probably broke you're duck...

Thanks for all the other responses. Very good of you all.

I'll have a rethink 

At the risk of feeding a troll, I am being nice.  Being not nice would be to respond in any other way.  Having a rethink is a good idea, either about being a troll or about learning basic accepted investing rules such as asset allocations.  End.

[TheCountOfNowhere]

1 hour ago, Castlevania said:

You should also try to understand how the company makes money. Ask yourself what  makes it unique, what are their strengths, weaknesses etc. Try and understand what headwinds the industry as a whole will face. Try and cover all the bases. Ultimately ask yourself if you’re comfortable investing in a particular company or industry.

For example transports have often come up as an area that should benefit going forward. I’m not sure about that, and haven’t been comfortable investing in the area, so haven’t. They may do very well going forward and I’ll miss out on that but I’m more comfortable investing in other areas that I do understand.

A few times in my life, I look back and think, I should have put a few quid into shares of company X because when I saw their product it was something new/innovative/different 

Here are the ones I missed and would have made a fortune from:

1) Microsoft: Windows 3.0

2) Apple (Twice): Mac then Ipod

3) Google: Their search engine was better than the rest

4) Cisco: The Internet,  well before the dot com bubble you could see the internet was going to be huge.

5) Intel: People started buying PCs en masse

6) Bit Coin: If I'd mined them at the start or bought at 10p a coin I'd have been a billionaire

There's probably a few more, like Wifi, Budget Airlines, Builders shares after HTB announced.

It's easy in retrospect but when you look at it the stuff that's made the big bucks were innovate and you looked at it and thought, "wow, this is going to change how people live".

You wont get rich buying Oil shares etc but that is more about protecting yourself.

Look about you now, what innovation do you see ?

What do you think the future holds for the world right now ?

1) Too many people, invest in stuff people need and is scarce

2) Funeral companies...there is a wave of them coming in the next 20 years

3) War/Arms...I still think this is inevitable as more and more fight over less and less

4) Biotech, as we can see right now, these people might be needed more and more in the future.

5)  Supermarkets might be a good bet, you can see how much we depend on them now !!!

6) AI....this will be big, but not for the reason people think ( e.g. cars ) it'll be big because BIG BROTHER IS WATCHING YOU.

If people have any suggestion for any investments for 1 to 6 then I'd be interested to hear them.

Does anyone else see anything in their daily life and think "WOW !!!"  ?

[Sasquatch]

WTI up a bit this morning 

 

Quote

 

[sleepwello'nights]

8 hours ago, Panda said:

Mate.

Life. Open your mouth. Ask. You get gunned down.  

I asked a question. F**k me why all the hysteria.

Just give me the answer or shut the f**k up.

Why post anything other than the answer?

 

Because society is full of odd unkind unhappy people looking for a verbal scrap f??king halfwits.

What's hard in answering a post without reading into it like its some kind of conspiracy.. Or some poor soul who ain't that bright?

F??k this.

What bullocks.

@Bricks & Mortar's post gives eminently sensible advice. Have you taken offense to it or using it to vent a bit at the earlier posts from others?

It's sound advice,  basically don't put all your eggs in one basket and do some research to gain an elementary understanding.

Having bought more Centrica when they halved to 60p what do I know 

[Harley]

8 hours ago, Panda said:

Just give me the answer or shut the f**k up.

Agreed.  Apologies.  My mistake.

[TheCountOfNowhere]

3 minutes ago, Sasquatch said:

WTI up a bit this morning 

 

 

You'd have done well, if you'd bought at -$35 

4 minutes ago, sleepwello'nights said:

@Bricks & Mortar's post gives eminently sensible advice. Have you taken offense to it or using it to vent a bit at the earlier posts from others?

It's sound advice,  basically don't put all your eggs in one basket and do some research to gain an elementary understanding.

Having bought more Centrica when they halved to 60p what do I know 

Remember....NEVER BUY CENTRICA

[Democorruptcy]

8 hours ago, Panda said:

Mate.

Life. Open your mouth. Ask. You get gunned down.  

I asked a question. F**k me why all the hysteria.

Just give me the answer or shut the f**k up.

Why post anything other than the answer?

 

Because society is full of odd unkind unhappy people looking for a verbal scrap f??king halfwits.

What's hard in answering a post without reading into it like its some kind of conspiracy.. Or some poor soul who ain't that bright?

F??k this.

What bullocks.

I was just going to say Panda is not a troll, he's one of the good guys and I've known him for years. Then you go and do one on Bricks & Mortar for what I thought was a reasonable post.

I'm putting all these troll suggestions and tensions down to the fact that the world has gone mad.

Calm people, we are in this shit together.

[sleepwello'nights]

18 minutes ago, TheCountOfNowhere said:

A few times in my life, I look back and think, I should have put a few quid into shares of company X because when I saw their product it was something new/innovative/different 

Here are the ones I missed and would have made a fortune from:

 

Does anyone else see anything in their daily life and think "WOW !!!"  ?

I always rue the day I thought about buying some shares in Next. They'd dropped to about 12p. They had a shareholder discount scheme where if you had I think it was 50 shares or it might have been 500, Say it was 500 so for £60 my wife, a professional shopper, could get one purchase a year at a big discount. That one purchase wouldn't be restricted at all so you could buy thousands of pounds worth of what they sold. 

My wife had managed one of their stores in the past so should did buy lots of their clothing and knew how they were managed. It was about the time that George Davis, who rejuvenated the retail operation of Hepworth Tailoring by turning it into Next was ousted. So there was lots of speculation that without him they would return to a non-descript existence without his flair.

So I bought some M&S shares instead. Those 12p shares soared to reach the giddy heights of £80 and their dividend return outstripped most other retailers. Hey ho, it still fucking hurts. 

[TheCountOfNowhere]

1 minute ago, Democorruptcy said:

I was just going to say Panda is not a troll, he's one of the good guys and I've known him for years. Then you go and do one on Bricks & Mortar for what I thought was a reasonable post.

I'm putting all these troll suggestions and tensions down to the fact that the world has gone mad.

Calm people, we are in this shit together.

The trolling's not so bad on here, though I have blocked 200 people so far 

I can see what both sides are saying, Panda, if you need to ask advice from Random people on the internet then you need to step back and have a think about what you are doing.  However, I can see why you are asking, this thread is priceless and DB does seem to have a very good handle on what's going on.  Though, saying that I have lost about 5K in the last 2 months, if I'd taken my own advice then I'd be starting to invest next month or so.

There are no easy answers you need to do whatever you think right to try and protect yourself.

It's a no brainer though not to risk everything on one company, no type of share, one asset class.

Seek advice from as many sources as you can, but make the decision based on what you think is right.  If it goes wrong then you only have yourself to blame.

 

 

[TheCountOfNowhere]

7 minutes ago, sleepwello'nights said:

I always rue the day I thought about buying some shares in Next. They'd dropped to about 12p. They had a shareholder discount scheme where if you had I think it was 50 shares or it might have been 500, Say it was 500 so for £60 my wife, a professional shopper, could get one purchase a year at a big discount. That one purchase wouldn't be restricted at all so you could buy thousands of pounds worth of what they sold. 

My wife had managed one of their stores in the past so should did buy lots of their clothing and knew how they were managed. It was about the time that George Davis, who rejuvenated the retail operation of Hepworth Tailoring by turning it into Next was ousted. So there was lots of speculation that without him they would return to a non-descript existence without his flair.

So I bought some M&S shares instead. Those 12p shares soared to reach the giddy heights of £80 and their dividend return outstripped most other retailers. Hey ho, it still fucking hurts. 

That's the sort of thing.  Personal experience is a great way to make a fortune, it's down to luck and judgement tho, neither of which many people have :-) 

The problem I've seen since about 2012, there's nothing much worth investing in.

Bubbles everywhere.  You're going to lose no matter what turn you take.

Best solution was to ultimately lose less than everyone else.

Not many sell out and make money, the bubbles burst and most lose out, it's a mathematical certainty.  It's better to get ready to hold the cash and pounce when you think the bubble has burst.

Looking forward to my 1960's Ferrari for a tenner soon :-) 

 

 

[sleepwello'nights]

1 minute ago, TheCountOfNowhere said:

 

Looking forward to my 1960's Ferrari for a tenner soon :-) 

 

 

Your investments are going to have to do well to be able to run it.  

[Democorruptcy]

5 minutes ago, TheCountOfNowhere said:

The trolling's not so bad on here, though I have blocked 200 people so far 

I can see what both sides are saying, Panda, if you need to ask advice from Random people on the internet then you need to step back and have a think about what you are doing.  However, I can see why you are asking, this thread is priceless and DB does seem to have a very good handle on what's going on.  Though, saying that I have lost about 5K in the last 2 months, if I'd taken my own advice then I'd be starting to invest next month or so.

There are no easy answers you need to do whatever you think right to try and protect yourself.

It's a no brainer though not to risk everything on one company, no type of share, one asset class.

Seek advice from as many sources as you can, but make the decision based on what you think is right.  If it goes wrong then you only have yourself to blame.

 

 

Panda is not a troll he is just someone with no experience of investing. I can partly understand why he would say 2 shares given the bias towards major oilies on here. I'd sell a few of my others at the prices I paid (yes I'm thinking about that one) to buy more RDSB even today.

[Castlevania]

29 minutes ago, TheCountOfNowhere said:

A few times in my life, I look back and think, I should have put a few quid into shares of company X because when I saw their product it was something new/innovative/different 

Here are the ones I missed and would have made a fortune from:

1) Microsoft: Windows 3.0

2) Apple (Twice): Mac then Ipod

3) Google: Their search engine was better than the rest

4) Cisco: The Internet,  well before the dot com bubble you could see the internet was going to be huge.

5) Intel: People started buying PCs en masse

6) Bit Coin: If I'd mined them at the start or bought at 10p a coin I'd have been a billionaire

There's probably a few more, like Wifi, Budget Airlines, Builders shares after HTB announced.

It's easy in retrospect but when you look at it the stuff that's made the big bucks were innovate and you looked at it and thought, "wow, this is going to change how people live".

You wont get rich buying Oil shares etc but that is more about protecting yourself.

Look about you now, what innovation do you see ?

What do you think the future holds for the world right now ?

1) Too many people, invest in stuff people need and is scarce

2) Funeral companies...there is a wave of them coming in the next 20 years

3) War/Arms...I still think this is inevitable as more and more fight over less and less

4) Biotech, as we can see right now, these people might be needed more and more in the future.

5)  Supermarkets might be a good bet, you can see how much we depend on them now !!!

6) AI....this will be big, but not for the reason people think ( e.g. cars ) it'll be big because BIG BROTHER IS WATCHING YOU.

If people have any suggestion for any investments for 1 to 6 then I'd be interested to hear them.

Does anyone else see anything in their daily life and think "WOW !!!"  ?

Netflix for me. I’ve been a subscriber since a month or so after Netflix launched in the U.K. (early 2012). I thought it was amazing (this was the future!) and remember telling everyone how great it was. I didn’t think to buy the shares. They were a lot cheaper back then.

[TheCountOfNowhere]

2 minutes ago, Democorruptcy said:

Panda is not a troll he is just someone with no experience of investing. I can partly understand why he would say 2 shares given the bias towards major oilies on here. I'd sell a few of my others at the prices I paid (yes I'm thinking about that one) to buy more RDSB even today.

100% agree.

When faced with the s**t hitting the fan, this thread looks like the only sanity on the internet.  

1 minute ago, Castlevania said:

Netflix for me. I’ve been a subscriber since a month or so after Netflix launched in the U.K. (early 2012). I thought it was amazing (this was the future!) and remember telling everyone how great it was. I didn’t think to buy the shares. They were a lot cheaper back then.

Just had a look, about  400x higher :-) 

[sancho panza]

@DurhamBorn @Cattle Prod @MvRor anyone else.Learned something this morning and that's some futures are physically settled......I can see why I was confused as it appears roughly only 2% of futures get physically settled and there are varying oil contracts that are iether cash/physcial delivery based upon where the contract is issued.

I'm genuinely interested in what's going to happen ref physical oil getting delivered.I know nothing about the retender process and whether some of these traders who've got caught will be able to.

Wolf St yesterday is saying physical delivery will happen.Whcih is confirmed by the link below as we're talking Nymex(I was totally unaware of this difference).

As one of my expereinced  colleagues says 'Every day's a learning day.Day you stop learning is the day you shoudl give up' etc etc.

https://wolfstreet.com/2020/04/20/holy-wtf-moly-wti-crude-oil-may-contracts-collapse-to-negative-35/

It’s not often that we’re served up a WTF moment like this. Just about a couple of hours ago, I published my article about US crude-oil benchmark grade West Texas Intermediate (WTI) and how the May futures contract for it collapsed by 45% to $10 a barrel — US Crude Oil Gets Annihilated Under Targeted Saudi Attack — and I pointed at some of the dynamics. But WTI kept plunging.

It seems some oil trading firms and hedge funds were caught on the wrong side of heavily leveraged bets, and couldn’t roll over their contracts due to a liquidity crunch and horrible market conditions in that space. But if they can’t sell the contracts by tomorrow, they’ll have to take delivery of the physical oil at the delivery point for NYMEX futures, namely in Cushing, Oklahoma.

The delivery time is in May. But storage in Cushing for May seems to have been spoken for, and now these traders see that they have no place to go with this oil that they might have to take delivery of in May.

https://www.danielstrading.com/2014/01/03/physical-delivery-vs-cash-settlement

Popular cash settled contracts at the CME Group are the Emini S&P 500, Emini NASDAQ, Emini DOW, Lean Hogs and Feeder Cattle. Popular cash settled contracts at the ICE exchange are the Mini Russell 2000, WTI Crude Oil and Natural Gas. Brent Crude Oil is physical delivered but it has an option to cash settle.

At the end of the contract the holder of the position will either have to deliver the physical commodity if short or take delivery if long. It is estimated that only 2% of all futures contracts are actually delivered. All Physically Delivered contracts have both a First Notice Day and a Last Trading Day. Most brokers, if not all, will notify traders if they are in a contract and First Notice Day is approaching.

If a trader wants to deliver or take delivery of a commodity, they will coordinate with their broker, the clearing firm and the exchange in order to do so. If the trader does not want to take delivery, they can “retender.”

Popular Physical Delivery futures contracts include (but are not limited to) CME Currencies (Euro, JPY, & GPB), CBOT Treasuries (2 yr, 5yr, 10 yr, & 30 yr), NYMEX Energies (Crude Oil, Natural Gas, RBOB Gasoline, & Heating Oil), CME Live Cattle, CBOT Grains (Corn, Wheat, Soybeans, Soybean Meal, Soybean Oil, Rice, and Oats), COMEX Metals (Gold, Silver, & Copper), and ICE Softs (Sugar, Cotton, Cocoa, Coffee and OJ).

[Dave Bloke]

2 hours ago, Castlevania said:

You should also try to understand how the company makes money.

Reminds me of a friend who piled into Sun  just before the dot bomb with his life savings because Sun, unlike the .coms made real stuff not just bullshit websites. I pointed out they made servers used by the .coms and the banks that financed them. He lost his shirt. They were throwing sun servers in the garbage because no-one wanted them and they were already out of date by 2001.

Same thing for the place I work. A multinational telco. Their share price has bounced right back this week because everyone is going to be remote working, innit. But our commercial director said a lot of firms and individuals/S.E. were cancelling mobile contracts and looking to make savings which will hit us.

[sancho panza]

5 hours ago, leonardratso said:

https://www.barchart.com/futures/quotes/CL*0/futures-prices

 

Absolutely fascinating.So glad I'm not involved iether side of that.

[sancho panza]

2 hours ago, Castlevania said:

You should also try to understand how the company makes money. Ask yourself what  makes it unique, what are their strengths, weaknesses etc. Try and understand what headwinds the industry as a whole will face. Try and cover all the bases. Ultimately ask yourself if you’re comfortable investing in a particular company or industry.

For example transports have often come up as an area that should benefit going forward. I’m not sure about that, and haven’t been comfortable investing in the area, so haven’t. They may do very well going forward and I’ll miss out on that but I’m more comfortable investing in other areas that I do understand.

I took the decomplex trade there and jsut bought more oil.I think picking between the potential winners and losers needs a lot of studying, is really hard and my previous efforts haven't instilled much confidence in me.

Trying to dodge the value traps is hard,see my various efforts at plunging myself deeper into the mire on the share that shan't be named.

I look at telecoms.Compelling in many ways,but this side of a debt deflation I'm a little nervous at some of the debt to equity ratios.I was looking at my old planned portfolio from 2018 the other day and it had 25% Telecoms pencilled in,8% oil.We're currently about 45% big oil&gas and 0.4% Vodafone.Go figure.

[sancho panza]

48 minutes ago, TheCountOfNowhere said:

You'd have done well, if you'd bought at -$35 

Remember....NEVER BUY CENTRICA

you keep breaking the first rule of fight club.

[TheCountOfNowhere]

15 minutes ago, Dave Bloke said:

Reminds me of a friend who piled into Sun  just before the dot bomb with his life savings because Sun, unlike the .coms made real stuff not just bullshit websites. I pointed out they made servers used by the .coms and the banks that financed them. He lost his shirt. They were throwing sun servers in the garbage because no-one wanted them and they were already out of date by 2001.

Same thing for the place I work. A multinational telco. Their share price has bounced right back this week because everyone is going to be remote working, innit. But our commercial director said a lot of firms and individuals/S.E. were cancelling mobile contracts and looking to make savings which will hit us.

Oracle bought out sun....have you see the Oracle share price !!!!

1 minute ago, sancho panza said:

you keep breaking the first rule of fight club.

Trying to make sure people stop getting punched in the face

[sancho panza]

57 minutes ago, sleepwello'nights said:

 

Having bought more Centrica when they halved to 60p what do I know 

I remember averaging in at £1-60, £1-40, £1.20..feels like a different decade....................................worst trade for us since Northern Rock.