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

[sancho panza]

1 hour ago, kibuc said:

Could you remind me how you evaluate the Income part? It seems awfully low for HMY but it depends on criteria you're using.

It's not an exact formula.I take a look through the last full years income statement and give it a score.It's not a deep dive hence why I only use it with 'spray n pray'

'spray n pray' works for me because deep dives and single company investing in sectors are fraught with the risk associated with the data that gets puts in and aslo with the operations for that company.

The reason Harmony may look skewed to you is that it's full year is to June and thus the data that the coma score is based on is 6/9 months out of date.The bulk of companies full years run into Dec but there's a few miners that don't.BT/Vodafone are two Telecoms that run into Mar/June iirc.

So yes,the HMY score would improve if I used the last half year but the premise of 'spray n pray' for me,is using full year data which means some companies don't look as attractive as they maybe shoudl do...Hence there's DYOR across most of the thread.

[feed]

47 minutes ago, Noallegiance said:

OK I'll say it. I don't get it.

Look at the difference in tax if they are frozen vs moving with inflation/ pay rises

Someone currently just below the 40% and paying £0 at 40%, in 5 years will have over 10% of their income taxed at 40%, if the thresholds are frozen and the rises just 3%.  That's just 3% 

 

 

 

 

 

 

[Bobthebuilder]

I have been looking at the SEISS grants. 2 more payments announced, 1st set at 80% of profits and 2nd set at 80% if your profit is down by %30 or more. That means that someone who qualifies for all the payments at max rate will have received £36,570 in total by July.

[Barnsey]

35 minutes ago, AWW said:

These aren't going to have as big an impact as people seem to think. You still need to earn price/4.5 to get a mortgage in most cases.

Amendable if government underwriting the risk.

25 minutes ago, Hancock said:

Runs only for 20 months

Extendable.

[kibuc]

2 minutes ago, sancho panza said:

It's not an exact formula.I take a look through the last full years income statement and give it a score.It's not a deep dive hence why I only use it with 'spray n pray'

'spray n pray' works for me because deep dives and single company investing in sectors are fraught with the risk associated with the data that gets puts in and aslo with the operations for that company.

The reason Harmony may look skewed to you is that it's full year is to June and thus the data that the coma score is based on is 6/9 months out of date.The bulk of companies full years run into Dec but there's a few miners that don't.BT/Vodafone are two Telecoms that run into Mar/June iirc.

So yes,the HMY score would improve if I used the last half year but the premise of 'spray n pray' is using full year data..Hence there's DYOR across most of the thread.

No worries. Great job putting it all together.

All this rope-pulling around bonds is creating some really juicy opportunities in goldies - HMY & EGO being (as usual) my mid-tier favourites

[Boon]

Will be interesting to see who offers the new mortgages, I think Sunak said Santander/Natwest but it seems to me it'll still be a very limited selection.

Sure it can be extended but IMO I think the mood music could have changed by then. By then a much larger portion of people will be having their HTB payments kick in, and since 2016 this has been quite poor in London because the property values have not gone anywhere. 

The people that take out those particular loans are mostly gonna be those living beyond their means, as such it seems to me that they will be in negative equity when the scheme finishes as the prices will be pushed up.

BTW anyone see that spike in BT shares just now and what the hell caused it?

 

[sancho panza]

9 minutes ago, kibuc said:

No worries. Great job putting it all together.

All this rope-pulling around bonds is creating some really juicy opportunities in goldies - HMY & EGO being (as usual) my mid-tier favourites

The problem is with the coma scores that they don't really assess individual company potential beyond the chart score which gives an approxiamtion of it's current value(obviously imho natch).

We have largish psotions in a lot of goldies already-although we sold around 30% (by invesment price)of our holdings in Sept(Although I kept the $1-60 HMY).But looking at these scores EGO(we're alreayd in at $8),B2G($2-75 or so),Yamana($3),KGC $3.75 or so) and barrick($15 or so) could all warrnat further invesment as we move to a more difficult phase in terms of the broader investment outlook.

As i've said previously,I'm looking to offload the royalty companies  we own Osisko and Sand and then redeploy that here into the above.

Gradually,our protfolio in PM's is evolving into some solid mid tiers and above,with the leverage being run in some chunkier than they should be psotions in Rio2/Minera Alamos/New Gold.

You know anthing that's not on the list that's worth a look K?

[moneyscam]

33 minutes ago, Barnsey said:

Amendable if government underwriting the risk.

Extendable.

Found the detail here - https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/965665/210301_Budget_Supplementary_Doc_-_mortgage_guarantee_scheme.pdf

Quote

Scheme mechanics 3.2 The government will provide lenders with the option to purchase a guarantee on the top- slice of the mortgage. In other words, the government will compensate the mortgage lender for a portion of the net losses suffered in the event of repossession. The guarantee will apply down to 80 per cent of the purchase value of the guaranteed property. 3.3 The guarantee will compensate lenders for the same losses and reasonable costs that the lender is entitled to recover from the borrower, in the event of foreclosure. The relevant costs should be determined in accordance with the FCA’s Mortgage Conduct of Business (MCOB) rules, which explain that lenders are entitled to recover a reasonable estimate of the cost of the additional administration required as a result of the customer being in arrears or having their home repossessed. It preclude slenders from imposing charges in order to increase profits or offset costs from other parts of the business, however. 3.4 Lenders will also take a five per cent share of net losses above this 80 per cent threshold. This will help to ensure that lenders are not incentivised to originate poor quality loans. 3.5 The guarantee will be valid for up to seven years after the mortgage is originated, evidence shows that loans are unlikely to default after such a period has elapsed. Furthermore, a mortgage taken out on a repayment basis would normally have paid down sufficient capital after this time so that the borrower’s equity stake would be close to or greater than 20 per cent, meaning that the guarantee would effectively no longer offer any protection.

So it's effectively HTB2 with a few minor tweaks. Only available for residential mortgages on primary residences and must be a repayment mortgage. Sorry won't derail this thread any further even though it's vaguely related to the macro theme of this thread.

[kibuc]

16 minutes ago, sancho panza said:

You know anthing that's not on the list that's worth a look K?

I'm thinking about thinking about looking into Centerra Gold, but I'm a bit worried that I'll start re-shuffling my hand again. Better if you do it

[feed]

1 hour ago, feed said:

 

 

 

Should add what happens to someone on £80k.  They go from having 38% of their income taxed at the 40% threshold to 44%.  This is vs the 0% to 11% of someone on £49.999.  And of course the £80k is more likely to be able to offset in pensions.

Makes fixing incredibly regressive, particularly in high inflation. 

I do wonder if the ultimate aim of getting more people into the 40% is to remove the thresholds.   
 

[DurhamBorn]

Looking at the capital parts of the budget and it should prove very good for telcos etc as we thought,and especially BT.They can claim tax back on investment,so speeding up the fibre rollout makes huge sense.Then the cost of capital will increase in future years so locking out competition.They will easily increase prices from that above the new tax rates.The budget is horrible for ordinary workers,but will help us on here leverage our gains.

The thread needs to indulge me here.Annalisa won the first night of Sanremo last night.My favourite artist in the world.Id sell you all out for one brush of her lips,and before anyone says so far off topic i dont care,you owe me 

 

[Noallegiance]

4 minutes ago, DurhamBorn said:

Looking at the capital parts of the budget and it should prove very good for telcos etc as we thought,and especially BT.They can claim tax back on investment,so speeding up the fibre rollout makes huge sense.Then the cost of capital will increase in future years so locking out competition.They will easily increase prices from that above the new tax rates.The budget is horrible for ordinary workers,but will help us on here leverage our gains.

The thread needs to indulge me here.Annalisa won the first night of Sanremo last night.My favourite artist in the world.Id sell you all out for one brush of her lips,and before anyone says so far off topic i dont care,you owe me 

 

May I ask what you mean when you say 'ordinary workers'?

And yeah. She fine.

[DurhamBorn]

4 minutes ago, Noallegiance said:

May I ask what you mean when you say 'ordinary workers'?

And yeah. She fine.

Anyone earning most of their earnings from working,the budget hammers them.

[sancho panza]

11 minutes ago, kibuc said:

I'm thinking about thinking about looking into Centerra Gold, but I'm a bit worried that I'll start re-shuffling my hand again. Better if you do it

Intriguing to see their numbers improve.marketwatch run the last 5 years.Kicking out a lot of cashflow.FCF yield of circa 20%.Yikes.They had an all round bad year last year.Not been on my radar before.I like a little more capital growth in my charts but they're a compelling case on the numbers.

Scored it cahrt 2,income 5,BS 5,FCF 5,sector 4 grand total 21.

https://www.marketwatch.com/investing/stock/cg/financials/cash-flow?countrycode=ca

 

 

[DoINeedOne]

So my ISA was pretty much full 100% oil stocks with some nice gains but i wanted to add some miners there so i have trimmed a tiny tiny tiny tiny bit off the oil and added some miners to my ISA 

 

 

 

[kibuc]

23 minutes ago, sancho panza said:

Intriguing to see their numbers improve.marketwatch run the last 5 years.Kicking out a lot of cashflow.FCF yield of circa 20%.Yikes.They had an all round bad year last year.Not been on my radar before.I like a little more capital growth in my charts but they're a compelling case on the numbers.

Scored it cahrt 2,income 5,BS 5,FCF 5,sector 4 grand total 21.

https://www.marketwatch.com/investing/stock/cg/financials/cash-flow?countrycode=ca

 

 

I know, right? Projected 2021 FCF of c.a. $400mil at $1750 gold with a market cap of $2.8bil. Those numbers look plenty good already and should look even better if gold picks up, it a matter of finding out if they can deliver.
Also, there's a big copper component there, so depending on your outlook for that metal it's a steal or just fair value. A lot of copper prod is hedged for 2021, though. At a measly $3.37...

[Hardhat]

I'm overweight in PM miners and getting a bit fucked at the moment portfolio wise, but this discussion is making me want to add more 

I am slightly worried that BTC will take over from PMs as a store of value for the younger generation though. I know loads of people my age who hold BTC or other crypto, and barely any that hold PMs or miners.

[spygirl]

2 hours ago, DurhamBorn said:

This thread said the North would be the winner in this cycle.People thought that mad,but its locked in.Industrial reflation certain now i think.

Ahh GE 2019  ..... and all that.

One, London is now 50%+ foreign born. There's no  Con votes there now. Fuckem. Theres few for Labour - bar voter fraud.

Two, the fall of Red Wall has shifted the Cons geographic political base about ~70 miles North.

Three, finance is to continue shrinking, laying off people and employing more computers. There's just not jobs, hence votes, in banking and finance now.

Even the ex-Londoners in Essex and further afield are going to cheer investment being removed from London.

 

 

[Bricormortis]

If anyone has good intel on Roscan Gold I would be obliged.  West African based, near the necessary infrastructure, top management team allegedly. Other miners in the area so permitting should not be insurmountable. Minnow price 0.47cad. 128 million cad market cap. 274 million shares.

From their website ....

Roscan Gold Corporation (TSXV.ROS) is a Canadian public company listed on the TSX Venture Exchange, which is focused on the acquisition and evaluation of gold properties in West Africa. Roscan’s initial prospective gold exploration project is the Kandiole Project located in West Mali. The Company has assembled a significant land position in the prolific gold prospective Birimian rocks of west Mali and continues its efforts to acquire further permits in this region with the goal to expand its existing land package in West Africa.

Roscan has assembled a strong, highly successful management and exploration team led by Nana Sangmuah, Roscan’s President and CEO, Gregory Isenor, P.Geo, Executive Vice-Chairman, John Learn, Roscan’s Exploration Manager and, Touba Mining SARL. This exploration team is highly experienced and has been very successful in working in this area and in this geological environment.

 

[Noallegiance]

Hands up who tipped them off...

Budget 2021: Million more set to pay income tax by 2026 - BBC News

 

[sancho panza]

34 minutes ago, kibuc said:

I know, right? Projected 2021 FCF of c.a. $400mil at $1750 gold with a market cap of $2.8bil. Those numbers look plenty good already and should look even better if gold picks up, it a matter of finding out if they can deliver.
Also, there's a big copper component there, so depending on your outlook for that metal it's a steal or just fair value. A lot of copper prod is hedged for 2021, though. At a measly $3.37...

A good point re copper.Strangely was jsut having a chat with someone re insto money and how front running it is one way of doing well.

I ahven't done the copper coma scores yet.Probably won't.It's uninvestable at these levels.But there are a lot of miners throwing off plenty copper that aren't seen as copper miners with depressed prices eg New Gold.

This is the msot excited I've been about gold/PM's since march/April.A nice chance to reorganise and stremaline into some cash flow machines.

 

this podacst @Cattle Prod psoted had a good section on gold near the end,talking about how oil/copperetc are a play on liquidty and gold is a play on solvency.I couldn't agree more

https://www.spglobal.com/platts/en/market-insights/podcasts/focus/022221-commodity-supercycle-oil-energy-transition-jeff-currie-goldman-sachs

[sancho panza]

30 minutes ago, Bricormortis said:

If anyone has good intel on Roscan Gold I would be obliged.  West African based, near the necessary infrastructure, top management team allegedly. Other miners in the area so permitting should not be insurmountable. Minnow price 0.47cad. 128 million cad market cap. 274 million shares.

From their website ....

Roscan Gold Corporation (TSXV.ROS) is a Canadian public company listed on the TSX Venture Exchange, which is focused on the acquisition and evaluation of gold properties in West Africa. Roscan’s initial prospective gold exploration project is the Kandiole Project located in West Mali. The Company has assembled a significant land position in the prolific gold prospective Birimian rocks of west Mali and continues its efforts to acquire further permits in this region with the goal to expand its existing land package in West Africa.

Roscan has assembled a strong, highly successful management and exploration team led by Nana Sangmuah, Roscan’s President and CEO, Gregory Isenor, P.Geo, Executive Vice-Chairman, John Learn, Roscan’s Exploration Manager and, Touba Mining SARL. This exploration team is highly experienced and has been very successful in working in this area and in this geological environment.

 

allegedly looks to be the key word there.it's not a minnow price if the 2019 balance sheet is still valid.

full year was was Oct 20 so surprising no results by now.or not surpsising as the case may be.

[feed]

https://www.teletrader.com/oil-jumps-3-as-opec-ministers-fail-to-agree-on-easing-cuts/news/details/54791043?internal=1

The Organization of the Petroleum Exporting Countries (OPEC) and its allies (OPEC+) failed to reach an agreement on the potential easing of oil output cuts during the Joint Ministerial Monitoring Committee (JMMC) meeting held on Wednesday

[geordie_lurch]

16 minutes ago, Noallegiance said:

Hands up who tipped them off...

Budget 2021: Million more set to pay income tax by 2026 - BBC News

Yep at least the BBC are publicly stating this, like you say following the brains on here doing so earlier...

Quote

From that BBC link...

The Office for Budget Responsibility, the government's official but independent forecaster, said this policy would bring 1.3 million more people into paying income tax and one million more into paying at the higher rate. This is known as fiscal drag.

 

It said that, when taking the rise in the cost of living into account, it would effectively bring the personal allowance in 2025-2026 to the level it was in 2014-2015.

The Budget documents show this hits middle to higher income earners the hardest.

The policy will bring an extra £8bn a year into the Treasury coffers, compared with what it would have received if it had raised the thresholds in line with inflation.

 

[DurhamBorn]

From the budget document,

"The UK’s relatively large stock of inflation-linked debt increases the UK’s sensitivity to inflation; a 1 percentage point increase in RPI inflation would increase spending on debt interest by £6.9 billion. However, the sensitivity of debt interest to RPI is largely unchanged from March 2020, which in part reflects the government’s strategy to reduce the share of inflation-linked debt in total issuance."

Now i wonder why they would want to get rid of inflation linkers