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

[ThoughtCriminal]

Are we allowed to call this madness a bubble yet? 

[DurhamBorn]

10 hours ago, Errol said:

Russia just started supplying Serbia through TurkStream:

 

Serbia opens Russian-Turkish gas project portion

https://www.euractiv.com/section/energy/news/serbia-opens-russian-turkish-gas-project-portion/

Notice how these countries all see supply as vital for their growth,ie we expect to use more and need to.This is what the woke press and fund managers are missing.These pipelines though are only part of the story.The real growth in gas use is in Asia,and that means LNG mostly,at least for many many years.The cycle should see demand rise in most places so that prices start to increase as people compete for supplies to be delivered.There is plenty of gas,but getting it to the growth areas is what will force the prices up.Russia wants to supply Europe for political reasons,the counter to that will be Azer and BP,and also a growing supply from Egypt.ENI big players.Repsol could be big winners in Asia,if they can get better terms with Indonesia etc.

I think big oil is happy for countries like the UK to go green/electric/hydrogen,because it allows them to learn all the technology,start to build scale,and then slowing roll out across other markets well into the future.In the meantime prices will be increasing where they will be making massive amounts of cashflow.

I dont look at when most people will have an EV in the UK,i look at when most people will have a fridge in India and Indonesia.

[Harley]

26 minutes ago, ThoughtCriminal said:

Are we allowed to call this madness a bubble yet? 

[ThoughtCriminal]

3 minutes ago, Harley said:

In calling it a bubble, or in buying it? 😉

[Harley]

7 minutes ago, ThoughtCriminal said:

In calling it a bubble, or in buying it? 😉

A blow off top or just the doors? 

PS:  If a top, just exactly what in?  If a ring of the bell, then for a lot more?  

[DurhamBorn]

This is a good article for anyone wanting to understand why a contrarian approach at extremes usually proves the correct route to take.Simply avoiding a few extreme valutation can make a massive difference over the longer term.

I have several times sold an entire holding when it became the biggest in an index,BAT and GSK were two prime examples,both really big holdings,both sold out of 100% when they were the biggest stocks in the FTSE,both bought back now at 52% less and 40% less.GSK topped out 20 years ago over £20 just as i left,pure coincidence im sure 

Worth a read if people have time,especially people trying to learn contrarian investing.

https://www.researchaffiliates.com/en_us/publications/articles/674-buy-high-and-sell-low-with-index-funds.html

[Democorruptcy]

8 hours ago, Cattle Prod said:

Good to see renewed BK talk, we should be on our toes. I think it'll be American mostly, but will therefore effect oil. Read somewhere recently that Ftse is around 11xearnings while s&p is around 33x. I like those ratios as im all in on the ftse

Do you intend to keep holding the oil through any BK? Temporarily short the S&P to cover it?

Talking of PE's a FTSE table here. A lot of banks and builders the top end. VOD?!

http://topstocktable.com/FTSE-100/FTSE100-PE.html

[Democorruptcy]

4 minutes ago, DurhamBorn said:

This is a good article for anyone wanting to understand why a contrarian approach at extremes usually proves the correct route to take.Simply avoiding a few extreme valutation can make a massive difference over the longer term.

I have several times sold an entire holding when it became the biggest in an index,BAT and GSK were two prime examples,both really big holdings,both sold out of 100% when they were the biggest stocks in the FTSE,both bought back now at 52% less and 40% less.GSK topped out 20 years ago over £20 just as i left,pure coincidence im sure 

Worth a read if people have time,especially people trying to learn contrarian investing.

https://www.researchaffiliates.com/en_us/publications/articles/674-buy-high-and-sell-low-with-index-funds.html

Waiting to buy at extremes doesn't sound very laddery.

[DurhamBorn]

16 minutes ago, Democorruptcy said:

Waiting to buy at extremes doesn't sound very laddery.

Sell at extremes,its a great article on why index funds/trackers can be terrible investments at times as crowding happens.Ladders should always be set when a stock is already well down from highs.Most of my ladders hit in the sell off in March,lucky some fell through 2 or 3 at once.I have very few in place now as im happy with allocation and the odd slice then buy im doing is more to keep diverse and add the odd stock.Only place i have ladders now really is in some goldies that i sold and will buy back if they fall.My main thoughts now are how much cash to carry,and how much to put in US treasuries when the pound hits $1.40 

If someone isnt allocated then they should be putting ladders in place now and hoping for pull backs that will probably come,even without a BK in those sectors.

[Loki]

@DurhamBorn Are your ladders set with a complex formula or is it just per drop of x%?

[DurhamBorn]

10 minutes ago, Loki said:

@DurhamBorn Are your ladders set with a complex formula or is it just per drop of x%?

Just a simple %.I usually set 5 at 8% moves.We have dealing charges etc or id set them closer for smaller tranches.Most were set on stocks already down 30%+.During March i did remove some though and used the capital elsewhere.For instance i bought a lot more Mosaic outside of the ladders and bought more Playtech, BP,Repsol,BT,TEF and VOD outside of ladders.

Its very rare i buy anything once something falls below bottom ladder.So holdings in the Scottish Play are still down 55% after divs and werent added to during March.

[RJT1979]

What is BK?

[Castlevania]

5 minutes ago, RJT1979 said:

What is BK?

Big Kahuna. A massive prolonged stock market sell off.

[Loki]

4 minutes ago, RJT1979 said:

What is BK?

Big Kahuna (financial bust)

@DurhamBorn thank you

[Talking Monkey]

2 hours ago, ThoughtCriminal said:

Are we allowed to call this madness a bubble yet? 

In terms of shoeshine moment on bitcoin I had my own last week where I traded in and out of it for the first time on Wednesday and Thursday as I was a bit bored. Never ever touched or looked at it before. Made me laugh even as I was trading it, if a luddite like me is having a go it can't be far off. Might be a few months and it could go a lot higher.

I absolutely will not be having another go. Hardly anybody gets out at the top of a bubble.

[jamtomorrow]

3 hours ago, ThoughtCriminal said:

Are we allowed to call this madness a bubble yet? 

Beats me why this is news - there's been a mania after every previous halving. Is this one different in some significant way?

[ThoughtCriminal]

1 hour ago, jamtomorrow said:

Beats me why this is news - there's been a mania after every previous halving. Is this one different in some significant way?

Its doubled in a fortnight. 

 

More people piling in than ever before. 

 

I'd say that's different. 

[JMD]

On 02/01/2021 at 10:51, Yadda yadda yadda said:

Hopefully this isn't wishful thinking but I don't think wokedom can survive an economic downturn. It is very much the sort of thing people worry about when there isn't anything else to worry about or campaign for. Probably needs to be a big enough downturn to impact the public sector and silicon valley.

Agreed... Maslows (hierarchy of needs) coming right at yer! *                                                                          Perhaps I'm bordering on the fanciful, but maybe the new basement dwellers will be the woke?!                                                 (*btw not you personally yaddayaddayadda)

[JMD]

14 hours ago, working woman said:

I remember when the UK first went into Lockdown last year, someone on Dosbods said all the woke stuff would disappear, which it did for a while, then reappear as things start to improve, which it slightly has. There seems to have been less over Xmas as many people focused on that. It will be interesting to see what happens now Xmas is over. 

I think the wokeness will continue for some time yet. Along with all the other pretend/invented racial/social/moral 'divisions' set to Balkanise Western societies even further. Moreover, I dought whether a new politics (despite me really wishing it could) can accommodate all these many separate 'tribes', after all that experiment has already been run in Africa, and it just ends in never ending friction/violence. Depressing stuff to hear I know, but if the cycle theory of history is correct, at least the infant's of today can look forward to a good future (so long as the China problem is dealt with)... Oh, Happy new year everyone!!

[Loki]

Anyone looking for politics or politicians to save the day is in for a long wait followed by extreme disappointment. 

[JMD]

5 hours ago, DurhamBorn said:

Notice how these countries all see supply as vital for their growth,ie we expect to use more and need to.This is what the woke press and fund managers are missing.These pipelines though are only part of the story.The real growth in gas use is in Asia,and that means LNG mostly,at least for many many years.The cycle should see demand rise in most places so that prices start to increase as people compete for supplies to be delivered.There is plenty of gas,but getting it to the growth areas is what will force the prices up.Russia wants to supply Europe for political reasons,the counter to that will be Azer and BP,and also a growing supply from Egypt.ENI big players.Repsol could be big winners in Asia,if they can get better terms with Indonesia etc.

I think big oil is happy for countries like the UK to go green/electric/hydrogen,because it allows them to learn all the technology,start to build scale,and then slowing roll out across other markets well into the future.In the meantime prices will be increasing where they will be making massive amounts of cashflow.

I dont look at when most people will have an EV in the UK,i look at when most people will have a fridge in India and Indonesia.

All excellent points DB. But you mention Egypt and that reminds me that some financial reporting I have read over last couple years have predicted big things for Egypt, even saying it will be biggest GDP gainer this decade. The commentators didn't really elaborate. But have you DB and others here any thoughts about this? It is an interesting story economically and maybe some here might have some ideas investment wise. But I also wonder what this could mean in a geopolitical/macro way? I'm no expert but I do like thinking about these things (some may have noticed!?) Ie might it become/start of a possible Western route/pivot away from 'old' ME?

[JMD]

2 hours ago, ThoughtCriminal said:

Its doubled in a fortnight. 

 

More people piling in than ever before. 

 

I'd say that's different. 

After every halving there is a big rise followed by a fall. Apparently according to the BTC commentators the 'difference this time' is that institutional money has begun to invest for the long term, eg some tech/insurance cos, hedge funds. The hope I think is more of the same over future months, plus the holy grail of pension funds joining in. And there is I think a noticeable growing investor sentiment, with an increasing number of buyers thinking it will become an important part of any future monetary reset, seeing it as a kinda digital gold... so maybe a bubble or maybe a rational hedge? Declaration: I own some.

[jamtomorrow]

3 hours ago, ThoughtCriminal said:

More people piling in than ever before. 

It just doesn't look like that (yet). Had a quick look on CM at what active addresses are doing - we still haven't breached levels of activity seen in the 2017 mania, nor does the run-up look as spikey (again: yet):

So it doesn't look like a *retail* mania, but there's clearly a wall of fiat moving in. Institutional? Some of the buying patterns seen on exchanges over past few days would support that thesis.

The other difference of interest is timing - we're ~ 1 year ahead of previous halving-cycle manias. Which means either the mania has arrived early for some reason, or it has *much* further to run before it peaks next year.

None of this is mentioned in mainstream reporting or commentary, which typically doesn't get much further than "number go up, must be a bubble" - well of course it's a bubble, it's Bitcoin and it's post-halving year.

Edit to add: with apologies to @JMD because I typed this before I saw your most recent post, which says much the same thing more straightforwardly!

[Loki]

I've just been having a play on the ychart site.  As an exercise, would any of the big brains mind giving their thoughts on Grid Metals Corp (GRDM)?

I don't want to turn the thread into a "Should I buy this stock?" thread, so I won't post any others, but the feedback would be helpful in seeing if I'm looking at the right data in the right way.

[headrow]

On 31/12/2020 at 17:36, DurhamBorn said:

 

I enjoyed my usual new years eve tradition today,collecting the big fat divi from Imperial  

 

Got £550 off Imperial, will get the same in 3 months time. 

Was going to reinvest it but i've decided i'm keeping it and walking in the council tax office in april with the £1100 in cash and fucking that thing off for another year.