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

[Mapper]

2 hours ago, MrXxxx said:

Sorry I think you are wrong, the poor don't have anything to `tap`/tax, it will be those in the middle who earn/live within their means that will be shafted.

That’s what I said.

Always the middle.

But more specifically the type of person who frequents this thread. The type of person who understands how real wealth is built and thus saves.

We are the ones who’ll pay.

Maybe, I should try to be less pessimistic and say, "We are the ones who they will TRY to make pay". I have to believe there are ways to protect myself!

[Yellow_Reduced_Sticker]

Good amorning Boys & Girls!

 

Just had my broadband renewal notice - Plusnet 18 contract was £20 p/m ...now the SHOCKING increase £27 p/m! (when i called them they only offered a SMALL reduction so they can piss-off!)

 

INFLATION is biting BIG TIME!

 

NOT to worry ...as I'm sure i can find a broadband deal with a YELLOW REDUCED STICKER on it somewhere!

 

AND in other news...

 

"Chancellor urged to spend another £100bn driving COVID recovery"

[VeryMeanReversion]

SIPP up 10% this month so have been selling off a few things to get to 35% cash and 10% PM's.    Most of the rest is in oil, mining, investment trusts and utilities.

Old plan was to wait for FTSE8000 before selling but the gains have been so good, I have started a bit early.  Just looking for opportunities to sell and top-slice, rather than buying anything.

New plan is to wait for lockdown to finish, expect FTSE 7000+ then get cash up to 50%.

Then just wait for opportunities.  At some point, I expect a global depression to kick in.  I am prepared to lose some real value of my cash as it gets inflated away.  I don't like bonds, Bitcoin is madness, I have enough natural resources and PMs.

It's been a bit of a wild ride for the last year. Overall, I've given up £150K in net income over many years to get £350K gross in a SIPP. This got up to £440K before dropping back to £300K in the crash last year but is now at £540K after further contributions which is my all-time-high. Most of the gains were just using salary sacrifice to optimise tax relief, the rest is divis. Share price gains/losses balance out so I'm no stock picker.

I was putting monthly contributions into FTSE since the 2020 crash but have now switched new contributions to a cash fund.

Risk-off for me to prepare for big changes in the future (which I can't predict).

 

[Bobthebuilder]

15 minutes ago, Yellow_Reduced_Sticker said:

Good amorning Boys & Girls!

 

Just had my broadband renewal notice - Plusnet 18 contract was £20 p/m ...now the SHOCKING increase £27 p/m! (when i called them they only offered a SMALL reduction so they can piss-off!)

 

INFLATION is biting BIG TIME!

 

NOT to worry ...as I'm sure i can find a broadband deal with a YELLOW REDUCED STICKER on it somewhere!

 

AND in other news...

 

"Chancellor urged to spend another £100bn driving COVID recovery"

Since I've paid off all my debts I am becoming a Yellow reduced sticker apprentice.

Went through the gas, leccy and home insurance this morning. The wife usually looks after all this, she's been asleep at the wheel. Got the insurance a third less than last year and saved £200+ on the dual fuel.

A good mornings work, time for a coffee (Lidl own brand of course).

[kibuc]

18 hours ago, sancho panza said:

First coma scores of 2021.Some results not yet collated on the sites I use.17 is normally a buy but in a year like last year,you have to use some common sense.XOM and Imperial awaiting more data.Blanks are not in.

Company	Share price	Date	Chart	Inc	BS	CF	Sector	SCS
Baker Hughes	USD-23.14	18/02/21	3	1	3	2	5	14
BP	GBP-2.69	18/02/21	5	1	2	1	5	14
Can Nat Res
Chevron	USD 99.61	24/02/21	2	1	4	2	5	14
Conoco Phillips	USD-48.43	18/02/21	2	1	3	2	5	13
Devon	USD-21.59	24/02/21	5	1	2	2	5	15
Enbridge	USD 36.52	24/02/21	2	3	3	4	5	17
ENI	E 9.464	24/02/21	5	1	3	2	5	16
Equinor
Exxon Mobil	USD 55.45	24/02/21	4	1
Imperial Oil	USD 16.65	24/02/21	4	1	4
Kinder Morgan	USD 15.29	24/02/21	4	2	3	4	5	18
Lukoil
Occidental
OMV AG	USD 50.53	24/02/21	2	4	5	4	5	20
Phillips 66
Pioneer
Repsol	E 10.162	24/02/21	4	1	3	3	5	16
RDSB	GBP-1337	18/02/21	5	1	3	5	5	19
SLB	USD-26.04	18/02/21	5	1	2	3	5	16
Total	E36.66	18/02/21	3	1	3	3	5	15

 

 

 

Notes on the Coma Scores

1) Based on Glasgow Coma Score used in assessing levels of conciousness in patients.Designed for 'spray n pray' ie buying a cross section of stocks in the sector.1 is poor value,5 is great value.Higher the score the better the prospects at that price point.

2) Only as good as the data that goes in.I use investing.com or marketwatch which rely on the data provided by the companies.They are snapshot in time,much like a CQC inspection.

3) Chart scores are based on my long term set up.I'm not a chartist.

4) Balance sheet scores-this year,any company where the goodwill constitutes 100% of the equity will get a score in red.50% an amber score.Lessons of the Scottish Play.Some sectors eg Telecoms,carry much higher debt levels than others but do so at better rates.

5) There's clearly an element of 'ceteris paribus', so DYOR as ever,but the sector score is my take on whether the sector offers good value.

I hope it doesn't come across as a knock on the terrific work you're doing, but I feel like we're in the latter part of "be right, sit tight" paradigm and details might not matter too much anymore.

I haven't had any useful input to this thread in quite a while, and I think I've only read two NRs this callendar year, out of pure curiosity. I believe it can be now stated with a lot of confidence that PMs are going much higher short to medium term and that wave will lift all the boats. I used to tinker with my portfolio on a weekly basis, but now I don't even remember when my last trade was. It's clear you guys were right about the roadmap, now it's time to sit tight. More PAAS or more Coeur? First Majestic or Impact Silver? Completely different companies which would probably exihib completely different performance in normal times, but these are not normal times. I'd even go as far as saying "but SILJ (if you can!) and go on a long holiday".

[DurhamBorn]

19 minutes ago, kibuc said:

I hope it doesn't come across as a knock on the terrific work you're doing, but I feel like we're in the latter part of "be right, sit tight" paradigm and details might not matter too much anymore.

I haven't had any useful input to this thread in quite a while, and I think I've only read two NRs this callendar year, out of pure curiosity. I believe it can be now stated with a lot of confidence that PMs are going much higher short to medium term and that wave will lift all the boats. I used to tinker with my portfolio on a weekly basis, but now I don't even remember when my last trade was. It's clear you guys were right about the roadmap, now it's time to sit tight. More PAAS or more Coeur? First Majestic or Impact Silver? Completely different companies which would probably exihib completely different performance in normal times, but these are not normal times. I'd even go as far as saying "but SILJ (if you can!) and go on a long holiday".

I knew you would come around to the rubber band list,the Mighty Panther  ,if the west increases tax government income will fall not rise,and they will print even more ,

[Castlevania]

1 hour ago, Yellow_Reduced_Sticker said:

Good amorning Boys & Girls!

 

Just had my broadband renewal notice - Plusnet 18 contract was £20 p/m ...now the SHOCKING increase £27 p/m! (when i called them they only offered a SMALL reduction so they can piss-off!)

 

INFLATION is biting BIG TIME!

 

NOT to worry ...as I'm sure i can find a broadband deal with a YELLOW REDUCED STICKER on it somewhere!

 

AND in other news...

 

"Chancellor urged to spend another £100bn driving COVID recovery"

Can you please renew? I’d like BT (who own Plusnet) to restart the dividend. Thanks.

[JMD]

3 hours ago, Loki said:

Kulaks. 

...so what your saying is 'state sponsored LOBSTER hate crime'? Sorry, might not make sense, unless that is you are a fan of Jordan Peterson (Cathy Newman debacle).

[DurhamBorn]

https://www.ft.com/content/621685fe-5a08-46b9-abf2-477472a336d9

Telefonica moving along the roadmap nicely now.Key thing to them is getting debt down and with the deals done it should be down to Euro 26 billion or maybe Euro 24 billion by the end of the year.Looking at run rates the debt can probably be paid off over 10 years,so there should be very little interest rate shocks to them and they can re-finance some and pay off some.

What the market is missing on the sector is that debts are falling and the whole industry is paying down.I would expect TEF to aim for around Euro 15 to 18 billion and then start divi increases and share buybacks.

The cut in the divi is slightly less than i expected,i thought they would go for 35% and looks right.

The other good thing for UK holders is the scrip option again on the divis,so shares or shares then sell them and avoid the 15% withholding tax.

Telcos are drifting as the reflation trade grabs the narrative ,and its likely if the run up continues then il likely slice out of the big commod gainers and top up telcos.

Oil etc is running faster than id thought and if it keeps going it will push us back into recession,probably 6 months after lockdown ends,im loathe to do a sell wait buy back ,but im leaning more and more to that.

Just speaking thoughts to the thread to help formulate them.

 

[Loki]

13 minutes ago, JMD said:

...so what your saying is 'state sponsored LOBSTER hate crime'? Sorry, might not make sense, unless that is you are a fan of Jordan Peterson (Cathy Newman debacle).

I'm saying we are the wealthy peasants and need to (not right now but towards the end of the decade) be prepared for to be treated as such 

[Loki]

@DurhamBornand others what are your favourite sources for financial news and information?

13 minutes ago, DurhamBorn said:

Oil etc is running faster than id thought and if it keeps going it will push us back into recession,probably 6 months after lockdown ends

Global deflationary bust?

[DurhamBorn]

2 minutes ago, Loki said:

@DurhamBornand others what are your favourite sources for financial news and information?

Global deflationary bust?

Maybe,if the Fed tighten as oil runs.....Thats the trap they are in now as we expected.Those woke funds selling at the latest bottom,millions of low wage workers pensions sacrificed for the miss placed wokedom.

[JMD]

15 minutes ago, Loki said:

I'm saying we are the wealthy peasants and need to (not right now but towards the end of the decade) be prepared for to be treated as such 

Yes i agree. I know the historical analogy you make. It happened under kindly old 'Uncle Joe' - Stalin, not Biden! - ...though hang-on, is this history repeating/rhyming again!?!.

(my jordan peterson/cathy newman reference was just my clumsy attempt at a 'woke joke')

[ThoughtCriminal]

Hot off the press........... 

[JMD]

2 hours ago, kibuc said:

I hope it doesn't come across as a knock on the terrific work you're doing, but I feel like we're in the latter part of "be right, sit tight" paradigm and details might not matter too much anymore.

I haven't had any useful input to this thread in quite a while, and I think I've only read two NRs this callendar year, out of pure curiosity. I believe it can be now stated with a lot of confidence that PMs are going much higher short to medium term and that wave will lift all the boats. I used to tinker with my portfolio on a weekly basis, but now I don't even remember when my last trade was. It's clear you guys were right about the roadmap, now it's time to sit tight. More PAAS or more Coeur? First Majestic or Impact Silver? Completely different companies which would probably exihib completely different performance in normal times, but these are not normal times. I'd even go as far as saying "but SILJ (if you can!) and go on a long holiday".

I would love to buy sil/silj but those funds are not available here yet are they? So in the absence of having that ' investment device', surely some selection method must be considered?

I do agree with your main point that the financials of the pm's matter the least compared to say most/all other equities. But still something to consider i think, along with say untapped (fantastical?) mine reserves, good/bad/ugly management, or judging if perhaps a stock is over sold/bought. 

I get what your saying about how detailed do you go with a superb macro play like the minors definitely are. But I think it was you Kibuc who first warned us on here about Great Panther having poor management? So a genuine thank you btw for that nugget... but to be clear, i obviously didn't/would never-ever interpret information read here as financial advise (or did i !!!).

[Agent ZigZag]

4 minutes ago, JMD said:

obviously didn't/would never-ever interpret information read here as financial advise (or did i !!!).

I do because its bloody brilliant

[kibuc]

16 minutes ago, JMD said:

I would love to buy sil/silj but those funds are not available here yet are they?

I agree with your main point that the financials of the pm's matter the least compared to say most/all other equities. But still something to consider i think, along with say untapped (fantastical?) mine reserves, good/bad/ugly management, or judging if perhaps a stock is over sold/bought. 

I get what your saying about how detailed do you go with a superb macro play like the minors definitely are. But I think it was you Kibuc who first warned us on here about Great Panther having poor management? So a genuine thank you btw for that nugget... but to be clear, i obviously didn't/would never-ever interpret information read here as financial advise (or did i !!!).

Panther The Great And Powerful! I've got to admit they've done a lot of things right in 2020, even though as a gold miner they're no longer on my immediate radar.

@DurhamBorn your rubber band list for silver stocks would make one juicy ETF  I shamelessly snatched Avino, as a part-silver, part-copper play. Which is completely irrelevant now as they have "silver" in their name so they go up and down with the metal, and copper nearing all-time high has like zero impact on the share price. Funnily enough, market also completely glossed over the fact they had zero production due to a strike action lasting for over a full quarter. Doesn't matter, the tide goes up, all boats with silver in their names go up.

[Yadda yadda yadda]

We should start a firm called "Gold Silver Tiger Blockchain Technology Investments PLC" and just let it autoramp on any news whatsoever. Just make sure it Googles well with a bit of SEO.

8 minutes ago, kibuc said:

Which is completely irrelevant now as they have "silver" in their name so they go up and down with the metal, and copper nearing all-time high has like zero impact on the share price.

 

[Noallegiance]

1 hour ago, DurhamBorn said:

Oil etc is running faster than id thought and if it keeps going it will push us back into recession,probably 6 months after lockdown ends,im loathe to do a sell wait buy back ,but im leaning more and more to that.

Just speaking thoughts to the thread to help formulate them.

 

This and Intrepid running hot is what makes me keep revisiting the possibility of beginning to take profits in the next 4-8 weeks with a view to being at least 30% cash before July. It depends how melty-uppy the melt up gets. I'd want to be in more cash before it gets ridiculous so I bank a chunk of the gains and let the rest ride it up to scrape off a bit more until it pops. 

I wouldn't care if I was 6 months early in beginning to take chips off the table.

[DurhamBorn]

4 minutes ago, Yadda yadda yadda said:

We should start a firm called "Gold Silver Tiger Blockchain Technology Investments PLC" and just let it autoramp on any news whatsoever. Just make sure it Googles well with a bit of SEO.

 

https://www.business-live.co.uk/enterprise/lithium-production-planned-north-east-19816045

Just around the corner from me.Lots of silver up there in the old lead mines as well.

[Noallegiance]

5 minutes ago, Yadda yadda yadda said:

We should start a firm called "Gold Silver Tiger Blockchain Technology Investments PLC" and just let it autoramp on any news whatsoever. Just make sure it Googles well with a bit of SEO.

 

Blockchain Incorporating Gold Technologies Investments Tiger Silver.

BIGTITS

[DurhamBorn]

43 minutes ago, ThoughtCriminal said:

Hot off the press........... 

Worth taking note of David here on rates.Oil might follow closely to rates as well as the dollar,.Im still seeing 86 area on the dollar before it turns and my roadmap is more guided by that,but i think im going to roadmap Davids call on rates here over the dollar as well.Whatever hits first might be time to unload our resource stocks.Dollar has gone under 90 today at last.

https://www.treasury.gov/resource-center/data-chart-center/interest-rates/pages/textview.aspx?data=yield

Monetary base usually drives the dollar and oil in tandem,but if the Fed stops QE and treasuries fall oil might run even after a dollar turn as capital flows out of bonds and growth into inflation areas.

We need to do a lot of work on this because i dont want to be holding the baby,but at the same time i dont want to jump out before another 35%+ increase in out sectors on top of the big gains already.

[Wheeler]

https://www.eveningexpress.co.uk/news/uk/drax-abandons-plans-to-build-new-gas-plant/

Power giant Drax has abandoned plans to build Europe’s biggest gas power plant following strong opposition from environmental campaigners.

The company will no longer install the two gas turbines for electricity generation at the site of its power plant in North Yorkshire.

It marks a move away from fossil fuels and towards biomass for the power generator, which last year sold its four remaining gas plants. The Selby plant has been running for 46 years.

Chief executive Will Gardiner said: “We are announcing today that we will not develop new gas-fired power at Drax. This builds on our decision to end commercial coal generation and the recent sale of our existing gas power stations.”

--

Time for me to sell Drax and buy Gazprom I think.

[Talking Monkey]

1 hour ago, DurhamBorn said:

https://www.ft.com/content/621685fe-5a08-46b9-abf2-477472a336d9

Telefonica moving along the roadmap nicely now.Key thing to them is getting debt down and with the deals done it should be down to Euro 26 billion or maybe Euro 24 billion by the end of the year.Looking at run rates the debt can probably be paid off over 10 years,so there should be very little interest rate shocks to them and they can re-finance some and pay off some.

What the market is missing on the sector is that debts are falling and the whole industry is paying down.I would expect TEF to aim for around Euro 15 to 18 billion and then start divi increases and share buybacks.

The cut in the divi is slightly less than i expected,i thought they would go for 35% and looks right.

The other good thing for UK holders is the scrip option again on the divis,so shares or shares then sell them and avoid the 15% withholding tax.

Telcos are drifting as the reflation trade grabs the narrative ,and its likely if the run up continues then il likely slice out of the big commod gainers and top up telcos.

Oil etc is running faster than id thought and if it keeps going it will push us back into recession,probably 6 months after lockdown ends,im loathe to do a sell wait buy back ,but im leaning more and more to that.

Just speaking thoughts to the thread to help formulate them.

 

I've thought on a bit of this last week or so. Both at what price on oil does the likelihood of a recession become material. And how to position the various sectors. Initial thoughts were to predominantly hold through on oil, tobacco and telcos with the main rotation being from miners to treasuries. Looking at oilies run I'm of the opinion to at some point maybe rotate between 20 to 30% into treasuries then buyback in post a correction. If we get an almighty epic melt up I'd probably push it to 50% maybe even a bit more than that.

 

[kibuc]

2 minutes ago, DurhamBorn said:

Worth taking note of David here on rates.Oil might follow closely to rates as well as the dollar,.Im still seeing 86 area on the dollar before it turns and my roadmap is more guided by that,but i think im going to roadmap Davids call on rates here over the dollar as well.Whatever hits first might be time to unload our resource stocks.Dollar has gone under 90 today at last.

https://www.treasury.gov/resource-center/data-chart-center/interest-rates/pages/textview.aspx?data=yield

Monetary base usually drives the dollar and oil in tandem,but if the Fed stops QE and treasuries fall oil might run even after a dollar turn as capital flows out of bonds and growth into inflation areas.

We need to do a lot of work on this because i dont want to be holding the baby,but at the same time i dont want to jum out before another 35%+ increase in out sectors.

I saw it this morning and I thought it would put quite a spanner in the works of his metals forecast. Maybe I'm seeing things exactly opposite to how I should see them, but surely higher rates should be a big headwind for PMs?

However, David sticks to his prediction of $2500 at the same time, so I reckon he must be seeing real rates actually heading lower, so inflation overshooting that 3% rates target? I'm super dumb about all this.