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

[Yellow_Reduced_Sticker]

35 minutes ago, Cattle Prod said:

Sorry for the flurry of mails, I just saw this:

https://www.dailymail.co.uk/news/article-9249917/Two-doses-Pfizers-vaccine-94-effective-blocking-Covid-Israel-study-finds.html

I've been watching Israel very closely, and this is a simply stunning result IMO. 600,000 people in the real world, 94% effective in the over 55s. This means a clear and direct path out of this lockdown madness. Typically, it's half way down the homepage and Mancock is still being quoted as "it's still to early" for something or other, but now anyone with half a brain can see incontrovertible evidence that the vaccines (at least the Pfizer one) are highly effective. Planners (and investors) will now start calculating timelines to open up and get on with life. It'll give the oldies huge confidence too.

Even stupid governments can't hide this, thank you Israel.

MADCUCK clearly wants this to go on a LOT longer than it needs, if this ended tomorrow YOU wouldn't see him on the front page of the daily BS-MSM news, AND this is all this PSYCHOPATH cares about ...HIMSELF ...the C***!

[AWW]

8 minutes ago, Noallegiance said:

What's the difference between the Class X fund and the Class C fund? Which list is this?

Class C is inclusive, so I assume X is unbundled.

[Bricormortis]

YRS posted...

50% off...that's NO good for me, as ya ALL know here I'm the MEGA TIGHT-WAD on this board, I ONLY except 90% off AND at the mo... I'm getting that discount via a TIP from my SUPER-SCRIMPER next door neighbours, SORRY i can't post the tip, its SECRET ...they told me if i post it online they WILL send a HIT MAN around!

 

Its from out the bins right?  asking for a friend.

[Castlevania]

Shandong Molong Petroleum Machinery Co is an excellent name. Almost as good as calling your tinpot mining company Great Panther.

[Bricormortis]

Welsh govt openly discussing a "zero covid" policy.

They seem to wait til england makes a decision then makes sure they do something else.

[Noallegiance]

With regard to the Dosbods-own vernacular 'BK' am I right in my thinking that:

a) the fashionable parts of the stock markets have clearly detached from the reality of life, meaning

b) these are the types of stocks that would be hit hardest in said 'BK', meaning

c) stocks positioned for real-world societal underpinning may get away with only a minor knock in a stock market slump?

 

 

[Transistor Man]

49 minutes ago, JMD said:

... but these power blackout stories always remind me of the right-wing British journalist Peter Hitchens, because it was his writings on this very subject, but in regard to us here in the UK, that first alerted me these things happening. He has been writing about it for 10 years or so believe it or not.                                                                                           

I agree he’s good.

My Dad used to operate the switchgear on load- shedding here in the 70s, timing them off his wristwatch. At least they’ll be able to do it centrally next time. 

From committing to build a new nuclear plant to synchronising to the grid....must be around 10 years currently. (More like 12). If you’re going to need them, you need to get on with it. 

[Yadda yadda yadda]

1 hour ago, Cattle Prod said:

I was putting a bit more into the Guinness Global Energy fund, and thought I'd ask them for their full holdings. I asked Merian Gold and Silver for this before, and they said no, so I was pleased to see the response. Just outside their published top ten, they have the likes of Suncor, Repsol, ENI and Schlumberger, at similar weightings to the top ten! I have to say it looks really good to me, especially for those who have inflexible SIPPs (like me).

Thanks for that. I'll have a look at some of those minnows at the bottom for higher risk/reward options.

[harp]

1 hour ago, DurhamBorn said:

Thats a superb fund isnt it.Id be happy to own a lot of that and then own some direct shares in a few of the holdings.I think il get myself some of it.Looks really well thought out as well.Very balanced across the sector.It lacks some of the smaller gas plays that might multi bag,but looks a solid home for capital to outflank inflation by a lot.

If it’s good enough for CP and DB then it’s good enough for me! £5k to start with. Much more if the BK hits. 

[AWW]

27 minutes ago, Bricormortis said:

Welsh govt openly discussing a "zero covid" policy.

If nothing else, the pandemic has exposed how utterly useless the devolved administrations are. Another idiotic New Labour policy failure.

[Ma2]

1 hour ago, Cattle Prod said:

I was putting a bit more into the Guinness Global Energy fund, and thought I'd ask them for their full holdings. I asked Merian Gold and Silver for this before, and they said no

They usually have the full holdings in the reports and accounts. You can get to them from the HL page here, and it's page 164 for Merian G&S

https://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/m/merian-gold-and-silver-r-gbp-accumulation/key-features

Can't link directly to the below doc for some reason.

https://www.fundslibrary.co.uk/FundsLibrary.DataRetrieval/Documents.aspx/?type=packet_fund_doc_reports_and_accounts&id=e5cd94e1-a138-4704-b783-66d4b144db52&user=4kEwW%2bi4fLWIY4cAJxeCzo5n7tCHIqA6D2O6OCFRJ9hH12mMD6yjQcCOaYqdb0zu&r=1

[Ma2]

2 hours ago, Cattle Prod said:

I was putting a bit more into the Guinness Global Energy fund, and thought I'd ask them for their full holdings. I asked Merian Gold and Silver for this before, and they said no, so I was pleased to see the response. Just outside their published top ten, they have the likes of Suncor, Repsol, ENI and Schlumberger, at similar weightings to the top ten! I have to say it looks really good to me, especially for those who have inflexible SIPPs (like me).

This does look good thanks for sharing. Don't think I can get it in my works offering but would consider for SIPP.

Per @leonardratso we got told that the Ninety Nine natural resources fund was being closed which was a big blow as it covered agriculture, foods as well as mining and energy stocks. Unlike Leonard mine is being moved into the JPMorgan Natural respurces fund as the closest option and I already hold it.

The only other ones of interest which I am also invested in are the Ninety Nine Special Situations fund as it is a kind of value stock offering which I like. Again they have just changed the managers, I think Ninety Nine are going woke, so don't hold out much hope for it staying the way it is.

The others of interest that I can get in works pension and do hold are Blackrock gold and general (gold miners mostly) and an interesting infrastructure fund which holds the likes of Enbridge as their top holding and a few other pipeline companies mentioned on here

LF Macquarie Global Infrastructure

ENBRIDGE INC 5.37%

SEMPRA ENERGY 4.57%

CHENIERE ENERGY INC 4.57%

ABERTIS INFRAESTRUCTURAS SA4.57%

NEXTERA ENERGY INC 4.17%

TRANSCANADA CORP3.86%

TRANSURBAN GROUP3.84%

KINDER MORGAN INC/DELAWARE 3.75%

IBERDROLA SA 3.18%

ENAV SPA 2.92%

Not advice just for consideration in case someone else has the limited offerings I have and is looking for exposure to themes on this thread

[Ma2]

Just now, Cattle Prod said:

I guess the person who replied to me was the intern

Standard reply I get to a lot of enquiries sadly - translation - "Don't know, can't be bothered, not authorised, please check the website sir!!!"

[leonardratso]

48 minutes ago, Cattle Prod said:

Interesting. I guess the person who replied to me was the intern

if have badgered again asking them why not? not exactly private info/commercially sensitive info is it.

Maybe they dont want you buidling your own better one.

[planit]

I know you all like good share tips so I thought I would let you know that the FT has reprinted the following  Investor's Chronical tip

SELL RDSB

** Strangely enough they seem to have changed it to a HOLD on their website **

Investors Chronicle: Redrow, Royal Dutch Shell, Petropavlovsk

HOLD: Royal Dutch Shell (RDSB) We maintain a hold recommendation because balance sheet prudence could pay off in the longer-term, writes Alex Hamer.  Royal Dutch Shell has followed BP and dropped its oil price forecasts for the next few years, leading to a $15bn-$22bn (£12bn-18bn) writedown in its June quarter results. A more bearish shift has also taken place in its refining margin estimates, which the company said would be down 30 per cent in the longer term.  The impairment comes from the change in assumptions for the medium term. Shell had previously set its balance sheet price forecasts at $60 a barrel (bbl) for 2020, 2021 and 2022. These have now dropped down to $35/bbl, $40/bbl and $50/bbl. Its gas forecasts have also come down for 2020 and 2021. 

On top of the oil and gas price revisions, Shell said the $3bn-$7bn cut to the value of its refining assets had come from its “strategy to reshape and focus its refining portfolio to support the decarbonisation of its energy product mix”. The company announced it would aim for net zero carbon emissions by 2050 in April.  Shell said gearing could climb by 3 percentage points after impairments plus pension re-evaluations. As of March 31, gearing was at 29 per cent. It acted dramatically in April in response to the oil price crash, cutting the dividend for the first time in 70 years, taking its yield to under 4 per cent, and reducing spending by $5bn.  Beyond the impairment, the new forecasts raise the spectre of Shell pausing project development and existing assets falling out of profitability. The major impairment in the integrated gas division came from projects that were commissioned at $100/bbl, according to Jefferies analyst Jason Gammel.  Last month, BP said its 30 per cent oil price forecast cut had partly come from the assumption that governments and investors would look to green recovery strategies post-Covid-19.  Shell guided to higher production in gas and oil for the June quarter, with 2.3-2.4m barrels of oil equivalent per day (boepd) production for the upstream segment and 880-910,000boepd for integrated gas. The company said the higher oil production would have little impact on earnings because of the weak oil and gas prices.

 

Disclosure: Continuing to hold waaaaaaay too much RDSB 

[leonardratso]

10 minutes ago, Cattle Prod said:

I did a little if I recall. Fact is that most people just don't actively manage their portfolios like we do, and they can do most of their client work with pension fund mates over a boozy lunch paid for by your 1% fee. We don't matter for the most part I think.

its a bit shit really, you should always sign your emails 'love elon' or 'love jeff B'  xxx

then theyd get off their fat arses and give you a full list to the penny.

[leonardratso]

pah, i cant see that guinness lad on lloyds or t212, but it looks pretty much like my 'DORTY OIL' pie anyways, closest is guinness sustainable energy which apparently im not allowed to buy because of FCA rules, not that i want to buy tofu powered windmills and woke solar panel powered crud, especially since im probably buying them indirectly in the fututre anyway in 'DORTY OIL'.

[DurhamBorn]

@planit it really is amazing how wrong they can be and usually are.My dad said they are so useless it must be on purpose so they can fill up themselves dirt cheap.A bit like when you fancy a bird and your mate talks you out of it,only to start seeing her himself down the line.

Iv always found the best investments are where sentiment is destroyed,but the macro picture is hugely bullish.Its quite rare it happens.What im pleased about is my portfolio outpacing todays market gains by 64%.That and the fact iv cracked shortcrust pastry at last  

I am running through my holdings though to see if i should lighten a few lower quality ones.

 

[Barnsey]

[Ma2]

Interesting valuation model from the Guinness Global Energy Fund that @Cattle Prodmentioned earlier

"We are often asked what ‘oil price is implied in the portfolio’ as a barometer of the expectation priced into the equities. We calculate this metric regularly using our valuation sensitivity module that values all our companies assuming a $40, $50, $60 and $70 per barrel long term oil price. At the moment, we estimate that the valuation our portfolio of energy equities reflects a long term Brent oil price of just over $50/bl. If the market were to price in a long term Brent oil price of $60/bl, it would imply 30-35% upside while there would be 60-65% upside at a long term oil price of $70/bl Brent"

https://www.fundslibrary.co.uk/FundsLibrary.DataRetrieval/Documents.aspx/?type=packet_fund_doc_reports_and_accounts&id=1a4ef400-68ba-417e-a793-914645b9e985&user=hCiWiyUPX19mRbOvDJ324z05XTLnf%2bU38w5MB5HXlbJn9tdspksvsgeEuQ5J8%2fsc&r=1

 

[Castlevania]

There’s something odd going on with Centamin. IG haven’t allowed anyone to open up a long position for a good few weeks; and they’ve just announced that from Friday (due to increased volatility (for a stock that’s spent the past three months largely trading between 110 and 130 pence)) that you’ll need to post 100% margin on all leveraged positions (Hochschild is also on the bad boy list along with a load of 3x leveraged funds and penny stocks). It’s all very strange. I’m probably over thinking it, but they must be concerned about something - and as a bucket shop they don’t hedge, so a price increase is bad for them. Maybe the rumours of a Barrick takeover aren’t that far fetched

[Loki]

@Castlevania I know it's in a different league to IG but I will see if Trading 212 is allowing buy CFDs on Centamin and Hochschild tomorrow when the markets open and see what happens.

[C-gull]

27 minutes ago, Castlevania said:

There’s something odd going on with Centamin. IG haven’t allowed anyone to open up a long position for a good few weeks; and they’ve just announced that from Friday (due to increased volatility (for a stock that’s spent the past three months largely trading between 110 and 130 pence)) that you’ll need to post 100% margin on all leveraged positions (Hochschild is also on the bad boy list along with a load of 3x leveraged funds and penny stocks). It’s all very strange. I’m probably over thinking it, but they must be concerned about something - and as a bucket shop they don’t hedge, so a price increase is bad for them. Maybe the rumours of a Barrick takeover aren’t that far fetched

Is there potentially any correlation with the various Reddit pump and dumpers? The horde seems to have been spraying money at different sectors for a few days at a time, and could be that they're wondering if cheap goldies might be in the crosshairs next?

It'd take more nous than I have but there's probably good money to be made front running the meme stock pump and dumps

[SillyBilly]

I get paid on the 15th so was eying up putting my monthly salary in Shell to get my average down (albeit not far off break even now), checked the SP and 5-6% up on the day! A little peeved as I wanted price to stay depressed for another few months so I can load up more - as I am in it for a few years of this cycle I am in no rush for it to get back up. Got almost 2500 shares now and rising which is far more than I wanted in them...shooting my load early at 1700p when it was 30-40% off highs cost me. Albeit rest of portfolio is ticking along nicely thanks to the wonderful contributions of you fellows on here.

[headrow]

By Simon Constable

Like many energy companies, Royal Dutch Shell had a rough 2020. But that bad news is mainly in the rearview mirror, and now the stock looks significantly undervalued.

“If you distill it down, it’s the best in- ternational oil company in deep-water production,” says Jon Rigby, an oil-stock analyst at Swiss bank UBS.

Investors hoping to profit from the British-Dutch group’s likely stock appre- ciation should consider buying the Lon- don-listed shares (ticker: RDSA.London). Rigby sees the stock rallying over the next 12 months to 18.10 pounds sterling ($25), or 33% above its recent price of £13.61.

U.S.-based investors might turn to the American depositary receipts (RDS.A), recently trading at $38.52, which should see a similar percentage rally if the dol- lar/pound exchange rate remains stable. Investors would likely get an additional 3% dividend yield, and there is the poten- tial for a boost via a stock buyback.

Rigby bases his price target on a rea- sonable oil-price forecast of $60 a barrel for Brent crude—about where it was re- cently. “If we can sustain $60 Brent, then Shell generates 10%-plus free cash flow versus market cap,” Rigby says.

The Covid-19 pandemic has hit major oil companies hard. Shell lost $21.7 bil- lion last year, including a $4 billion loss in the fourth quarter, compared with profits of $15.8 billion in 2019.

As a consequence of the awful busi- ness conditions, shares in the $150 billion market-cap company took a beating over the past year, with the stock down 32% through Tuesday. Still, a lower share price hasn’t scared off analysts. The U.K.- based Share Centre says 23 of 34 analysts covering the stock rate it a Buy or a Strong Buy.

Wall Street is no doubt bullish because the company made tough decisions to cut

costs last year. “We are coming out of 2020 with a stronger balance sheet,” CEO Ben van Beurden said in an earn- ings statement.

In 2020, Shell reduced operating ex- penses by 12%, or $4.5 billion, ahead of schedule, according to a recent Morning- star report. A portion of the likely in- creasing profits should go straight to stock owners in the form of increased dividends and stock buybacks, once the company hits its debt target.

“Shell aims to return 20% to 30% of operating cash flow to shareholders once it reaches $65 billion net debt,” down from around $75 billion at the end of last year, the Morningstar report states. The debt reduction should come partly via asset sales and be completed around the middle of the year, Rigby says.

Some investors worry that the oil busi- ness is toast. While it is true that the auto industry is phasing out gasoline-powered vehicles, it could be decades before the transition is complete. “Combustion vehi- cles will be around for a long time,” says money manager Adam Johnson, founder of the Bullseye Brief financial newsletter.

In the meantime, Shell, like most other major oil companies, is well aware of the coming changes and has planned accord- ingly. The company said in January that it agreed to buy electric-vehicle charging company Ubitricity as part of its plan to become net zero on carbon by 2050. Ubitricity operates the largest public EV charging network in the U.K. and has growing networks in Germany and France. On Thursday, the company said it will increase the number of charging points to 500,000 from 60,000 by 2025.

Still, there are risks to investing in any oil stock, and that includes Shell. The energy business is notoriously subject to periodic booms when the price of oil peaks, followed by busts when it falls.

However, for those with a healthy risk appetite, Shell seems like a good bet for the near future.