Jump to content
DOSBODS
  • Welcome to DOSBODS

     

    DOSBODS is free of any advertising.

    Ads are annoying, and - increasingly - advertising companies limit free speech online. DOSBODS Forums are completely free to use. Please create a free account to be able to access all the features of the DOSBODS community. It only takes 20 seconds!

     

IGNORED

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


spunko

Recommended Posts

It's quite healthy we're getting a correction here imo.

Shaking weak hands out of speculative positions as the economy starts to open back up, should start to realise better value in more traditional stock sectors as well (many of which are "reflation stocks", i.e. energy and transport, but even hospitality and airlines).

Of course we may also now get a speculative melt-up.

I still think we might get BTC to $100k this year. Money is where mouth is so let's see.

 

Link to comment
Share on other sites

  • Replies 35.1k
  • Created
  • Last Reply
ThoughtCriminal
3 minutes ago, Hardhat said:

It's quite healthy we're getting a correction here imo.

Shaking weak hands out of speculative positions as the economy starts to open back up, should start to realise better value in more traditional stock sectors as well (many of which are "reflation stocks", i.e. energy and transport, but even hospitality and airlines).

Of course we may also now get a speculative melt-up.

I still think we might get BTC to $100k this year. Money is where mouth is so let's see.

 

Yeah, we have to exit the dream state sooner or later, and that's when all of the bullshit stocks get shown up. 

Link to comment
Share on other sites

I would expect some sort of shake out as the 10 year yield closes in on the average S and P yield

 ( 1.46 % I believe ).

Then also worth watching if the S and P goes below its 50 day average. That will ruffle a few feathers I would think.

Link to comment
Share on other sites

41 minutes ago, RJT1979 said:

You guys must have lost crazy money today.

Reflation portfolio wise, I'm down 3% on my 1 year average (~25% return), 7% from ATH (was about 30%) these investments are on a 5-7 year timeframe from now, that's when I expect to sell.

Lost some profit on crypto but still up around 400% on it overall.

Makes me think this is a pullback or sector rotation rather than a "crash".

Link to comment
Share on other sites

ThoughtCriminal

I posted a few weeks back about my mate who'd bought a load of vaccine stocks in November and suddenly thought he was Warren buffet. 

 

Well today he told me he's just tried to borrow 30k to invest in more stocks as "I can't lose". 😳

 

Thank fuck he has an horrendous credit history so they turned him down! 

 

This is a man who'd never bought a share in his life until November btw.

I'm calling it: this is my shoeshine moment. 

 

 

Link to comment
Share on other sites

26 minutes ago, ThoughtCriminal said:

I posted a few weeks back about my mate who'd bought a load of vaccine stocks in November and suddenly thought he was Warren buffet. 

 

Well today he told me he's just tried to borrow 30k to invest in more stocks as "I can't lose". 😳

 

Thank fuck he has an horrendous credit history so they turned him down! 

 

This is a man who'd never bought a share in his life until November btw.

I'm calling it: this is my shoeshine moment. 

 

 

I had the bright idea to check out astrazeneca. Took one look at the 5 or 10yr charts and it didn't pass the test. 

Link to comment
Share on other sites

1 hour ago, Loki said:

My portfolio is down £13.06p. 

Really?? Mine is down 13.06k 🤣🤣🤣

That will teach me to go large on ARB.......

Link to comment
Share on other sites

2 minutes ago, Popuplights said:

Really?? Mine is down 13.06k 🤣🤣🤣

That will teach me to go large on ARB.......

It's only a loss when you sell! I feel this cliche actually has some value in this thread...never sold at a loss and been pleasantly surprised by Rockrose and some others that have since fallen back a bit, but not by anywhere near what I was down...

Link to comment
Share on other sites

I sold a shitload o RDSB last week and bought lots o Silver and lots o HZM.......

AND.......yes we're down on both!!! xD If only I could control this boredom a bit more successfully :Old:

Link to comment
Share on other sites

I'm not convinced by this 'diversified portfolio' approach anymore......everything just stalks the stock markets nowadays cos that's where all the newly printed money is going.......

I'll sleep on it but I might sell everything and stick it all on Nasdaq moving up and down....and US Oil......the oilies are moving like dogshite compared to the underlying :P

Link to comment
Share on other sites

YOU HAVE BEEN WARNED! (I may be buying a house but I think I might start averaging into this coming dip/crash as much as possible)

EDIT: just noticed this tweet was liked by the one and only Christophe Barraud, who's scary good with his forecasts...

Link to comment
Share on other sites

Bobthebuilder
30 minutes ago, nirvana said:

the oilies are moving like dogshite compared to the underlying 

Repsol have been pretty good for me since October.

Going to be topping up my SIPP in March and SISA in April, not sure I wanna buy anything at the moment, it feels like the calm before the storm.

Link to comment
Share on other sites

56 minutes ago, nirvana said:

I'm not convinced by this 'diversified portfolio' approach anymore......everything just stalks the stock markets nowadays cos that's where all the newly printed money is going......

I've always been buy it low. Wait for how long and sell at a profit. Diversified gives me too many things to focus on.

 

Been in and out BP since divi day.

Always....Leaving a bit in for FOMO. Long term reflation trade etc.

Tidy profits.

Same with GSK. Not working with the pharma. Down. You'd think middle of a pandemic. Pharma all day. The weeklies and monthlies are horrific.

The FTSE makes a mockery of investing long term. Too many traders in and out for profits. So play their game.

The Market Movers do not fill me full of any confidence either.

Link to comment
Share on other sites

36 minutes ago, Bobthebuilder said:

Repsol have been pretty good for me since October.

Going to be topping up my SIPP in March and SISA in April, not sure I wanna buy anything at the moment, it feels like the calm before the storm.

That’s my problem.

I have no idea what to buy....

I’m relatively cash rich.

All I want is reasonable dividend paying stocks that keep pace with inflation and in 15 years time will still be worth a bit.

 

At the moment my ‘top 3’ are:

GSK

BT

Telefonica

And I am not even convinced on them...

Everything else looks overvalued or too risky. 
 

Anyone any ideas or suggestions. 
 

I would have loved to have got some miners last year. RIO, BHP, AAL etc...

 

Fuck... 

(holding already: BP, RDSB, VOD, IMB, BAT, ENB, REP, GSK, VZ, Gold and Silver).

Link to comment
Share on other sites

11 minutes ago, Cattle Prod said:

Maybe we really do get Hunter's parabolic rise in just a few months...stimulus package still not passed, record unemployment but the economy is, however, still just fine(?!)...meaning that stimulus will really juice things up?

https://www.nytimes.com/2021/02/23/upshot/biden-bonds-market-inflation.html

Quote

 

While Washington debates the size of a new economic rescue plan, the bond market is sending a message: A meaningful acceleration in both growth and inflation in the years ahead looks more likely now than it did just a few weeks ago.

That would be mostly good news, suggesting an economy recovering quickly from the pandemic. Interest rates remain very low by historical standards, even for the longest-term securities. Bond prices imply that inflation will be consistent with the Federal Reserve’s target of 2 percent annual rises in consumer prices, not a more worrisome spiral.

But the surge in rates has brought an end to a period of several months when borrowing was essentially free, seemingly far into the future. For the Biden administration and the Federal Reserve, that implies that the free-lunch stage of the crisis is ending, and there could be harder questions ahead.

In particular, it means that the downside of bad policy — federal spending that doesn’t generate much economic activity, for example — is higher than it was as recently as December.

“We’re at a place where the markets are starting to grapple with the question of whether there are trade-offs between more stimulus today and potentially higher rates and more inflation down the road,” said Nathan Sheets, chief economist of PGIM Fixed Income and a former official at the Treasury and the Fed.

The yield on 10-year Treasury bonds — the rate the United States government must pay to borrow money for a decade — was 1.37 percent Monday, low by historical standards but well above its recent low of 0.51 percent in August and 0.92 percent at the end of December. Those higher Treasury rates generally translate into higher mortgage rates and corporate borrowing costs, so the surge could take some of the air out of bubbly housing and financial markets.

The inflation-adjusted interest rate the United States Treasury must pay to borrow money for 30 years was negative for much of the last year, meaning the government would pay investors back less in inflation-adjusted terms than it borrowed. Last week, the rate rose into positive territory for the first time since June and closed at 0.06 percent Monday. (For shorter time horizons, the “real yield” remains in negative territory.)

That’s particularly striking given that Fed officials have repeatedly said they expect the short-term interest rate target they control to be near zero for quite some time — and bond investors appear to believe them. The yield on two-year Treasuries has barely budged in the same span.


What is happening is known as a “steepening of the yield curve,” with long-term rates rising as short-term rates hold still. It tends to presage faster economic growth; it is the opposite of a “yield curve inversion,” which is known as a harbinger of recessions.

But the flip side is that the moment appears to have passed when bond markets were giving the government an all-clear signal to do whatever was necessary to boost the economy, essentially making endless funding available at extraordinarily low cost. That could have implications for how the Biden administration approaches the rest of its economic agenda.

Treasury Secretary Janet Yellen has emphasized that low interest rates, which keep the cost of debt service low, are important in her thinking about how much the government can comfortably borrow and spend.

At The New York Times’s DealBook conference on Monday, Ms. Yellen, after noting that the government’s ratio of debt to the size of the economy is much larger than it was before the global financial crisis, said: “Look at a different metric, which is more important, which is what is the cost of that debt. Look for example at interest payments on the debt as a share of G.D.P.,” which is below 2007 levels.

“So I think we have more fiscal space than we used to because of the interest rate environment,” Ms. Yellen told the Times’s Andrew Ross Sorkin.

By implication, the further that bond yields rise, and inflation expectations along with them, the more the Biden administration would view their potential spending to be constrained. Congress is now at work on a $1.9 trillion pandemic aid package, which Democratic leaders hope to pass in March. They envision a large-scale infrastructure plan after that.

Jerome Powell, the Federal Reserve chair, will face questions from Congress on Tuesday about the central bank’s policies. In other recent appearances, he has emphasized the importance of returning the economy to full health above all other goals, and stressed that inflation has been persistently too low rather than too high over the last decade.

“Fed Chair Powell has taken each and every opportunity to reassure investors that the Fed would consider near-term inflationary pressure to be transitory,” said Katie Nixon, chief investment officer at Northern Trust Wealth Management. “The market is taking the Fed at its word that short rates will be anchored at zero for a considerable time.”

The gap between the prices of regular and inflation-protected bonds as of Friday’s close imply that the Consumer Price Index is expected to rise 2.29 percent a year over the next five years, and 1.99 percent a year for the five years after that. The Fed aims for 2 percent annual inflation as measured by a different index that tends to be somewhat lower, meaning these so-called “inflation break-evens” are broadly consistent with the central bank’s goals.

Put it all together, and the surge in rates so far is basically an optimistic sign that the post-pandemic economy will mark the end of a long period of sluggish growth. But the speed of the adjustment is a reminder that the line between too hot and just right is a narrow one.

 

 

Link to comment
Share on other sites

4 hours ago, RJT1979 said:

You guys must have lost crazy money today.

up 1k overall compared to end of australian day yesterday (my US and European holdings move overnight my time).  Year to date up 15% (two months).  That's a good result for me, and almost entirely due to this thread.

 

I'm very happy to see the bubble stocks crashing a bit and yet my holdings almost all hold steady or go up.  That supports the macro thesis of this thread that in a BK they should hold value better and recover faster.

Screen Shot 2021-02-24 at 7.59.12 am.png

Link to comment
Share on other sites

1 hour ago, Vendetta said:

That’s my problem.

I have no idea what to buy....

I’m relatively cash rich.

All I want is reasonable dividend paying stocks that keep pace with inflation and in 15 years time will still be worth a bit.

 

At the moment my ‘top 3’ are:

GSK

 

I'd hang on with regards to GSK.

I shot too early. In with an average of 12.333.

There are whispers that the 10 handle could be ticked.

Finished down over the pond. Its on a downward trend.

Although a blue day today here. Can see 12 being breached and holding this week.

Never sold at a loss in my life. But not so confident with this one.

Got a lot of capital tied up doing no graft at all.

Don't like that scenario.

Link to comment
Share on other sites

9 hours ago, Yellow_Reduced_Sticker said:

UNLESS it was @MrXxxx trying to SCAM me outta my moolah!

How did the conversation begin?...if it was "Hello Sir can I interest you in a lifetime opportunity to..." then it wasn't me...

....if it begun "Dear Mr Tightarse..." It probably was :-)

Link to comment
Share on other sites

Archived

This topic is now archived and is closed to further replies.

  • Recently Browsing   0 members

    • No registered users viewing this page.

×
×
  • Create New...