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

[Harley]

2 hours ago, DurhamBorn said:

Your probably looking at holders of the ADRs ,Telefonica Spain own 70% of the equity i think.

Duh me! 

[Harley]

Bought a few gold miners as value plays today as well as a shipping company.  The miners were not oversold but I jumped the gun because they may have turned from a dip.  Divs, cash flows, strong balance sheets, and they even mine gold!  Small top ups for TTA and BP, otherwise everything is pretty overbought or are rising dogs I'm waiting to dump on a turn.

Cleared out most trades for a net profit but left some runners to play out to profit.  Cleared out some other legacy holdings with weak fundamentals while waiting for some others to close a top.  Top sliced ADM thanks!   All part of clearing the decks for any BK.  Not good to have loose stuff flying around when it gets choppy.  

[jamtomorrow]

Chanced upon this thread I'd missed from Feb from the cryptovoices crew. Posting not for crypto relevance, but because I haven't seen an analysis of changes in global money supply presented quite like this before (although the crypto aspects are certainly interesting if you're into that):

https://threadreaderapp.com/thread/1360218745222934528.html

I won't paste the whole thread here, just a couple of charts that surprised me. First, global base money separated into physical (notes/coins) vs digital reserves:

What surprised me: as recently as 2008, physical still accounted for the vast majority of base money, globally. It's only since the GFC that digital takes over. Hmmmm

Second surprising chart, annualised global fiat growth:

There are some familiar faces in there (41% in the year of the GFC) - but WTF happened in 1999? Commentary says mini bank run because of Y2K. Which I suppose is possible given the first chart. But more hmmmm.

(Edit to add: also tightening in 2018/2019 shows up clearly)

Plenty more gems in the thread. Oh, and here's the original thread in case the unroll breaks: 

 

[Barnsey]

Interesting, my 15 year fix from Accord has been pulled from market, which just leaves YBS (parent building society) at a higher rate as the only one on the market. Won't be surprised to see this pulled too. I wonder why? 

[Hancock]

Good day for Babcock share price.

Not so good if you work there.
https://news.sky.com/story/engineering-giant-babcock-to-cut-1-000-jobs-in-restructuring-12274072

[leonardratso]

re lon:kaz, gonna sell out this week, should stay solid at around £8.50, just got to wait for the 19.5p ex divi date today to be sure of gettig it i suppose;

shame really, was a good run up;

https://www.investorschronicle.co.uk/news/2021/04/09/kaz-minerals-buyout-succeeds-with-higher-offer/

 

[wherebee]

Sold out of my MOS.  Made over 100%.  That's almost 10k profit.  Incredible, really.

The dividend forecasts looked pretty weak, and as I have been reminded by you good people before, nobody ever went broke taking profits.

Now I just need some of those aussie junior miners to boom.  Holding on the sidelines now for a bit, again.

[Harley]

2 hours ago, Hancock said:

Good day for Babcock share price.

Not so good if you work there.
https://news.sky.com/story/engineering-giant-babcock-to-cut-1-000-jobs-in-restructuring-12274072

To think I nearly sold them yesterday!  But should I sell the news?  They are one of my worst holdings and well in the red.  I was holding them to sell out higher.  Very tempted here and I may regret it but I'll hold for now.  One of the stocks I bought (but I shouldn't have) because of the limited market choice with my ISA.  One of those times I should have played with a basketball instead!  Some financials have improved but that 100% debt to equity ratio is now a big no for me (although has improved) whatever the push and net intangible assets just about exceed equity!

[Harley]

11 hours ago, PrincessDrac said:

Which miners bought H?

What are your thoughts on Fres and Poly?

I have a bit in CEY and HOC.

I can only comment about select financials because the only holes in the ground I know about are the ones I dig!  FRES have had a similar pullback, retracing most of the Jul20 run.  Not for me atm as only a 2.1% yield.  Price to book getting a bit high for tight old me but the usual stonking Current and Debt to Equity ratios.  Operating cash flow has improved but not majorly given only say £100m above 2017.  Also took on debt in 2020.  Zero balance sheet intangibles which is good to see and goes some way to forgive the Price to Book ratio.  POLY looks to me on the monthly chart like it may want to give a bit more but then has also retraced a lot.  A 6.43% yield so I'm up for that.  Price to Book getting a bit high too but at least the book contains negligible intangibles.  A far lower PE than FRES, an OK Current Ratio, but a Debt to Equity ratio of 88% which means I pass.  Nice operating cash flow growth.  So get that debt down and I'll be back!  Just the way I look at things so DYOR and make your own calls.  I guarantee the ones I bought will be dogs so you don't wanna know!  I also have some initial CEY and HOC holdings which are nicely in the red despite my system telling me they shouldn't be!

[BurntBread]

2 hours ago, leonardratso said:

re lon:kaz, gonna sell out this week, should stay solid at around £8.50, just got to wait for the 19.5p ex divi date today to be sure of gettig it i suppose;

shame really, was a good run up;

https://www.investorschronicle.co.uk/news/2021/04/09/kaz-minerals-buyout-succeeds-with-higher-offer/

 

So, what happens if you hold shares in a public company, through an online brokerage, the company gets taken private, and you refuse to sell?

Are you forced to sell when the deal goes through? If not, do the shares stay listed in your account, or do you get mailed the share certificate? Does Ivan come round every year and stuff roubles through your letterbox as a dividend? Do you get invited to Moscow for the AGM and have to drink home-distilled vodka until you go blind?

[Harley]

39 minutes ago, wherebee said:

Sold out of my MOS.  Made over 100%.  That's almost 10k profit.  Incredible, really.

The dividend forecasts looked pretty weak, and as I have been reminded by you good people before, nobody ever went broke taking profits.

Now I just need some of those aussie junior miners to boom.  Holding on the sidelines now for a bit, again.

There's a lot to like about the MOS financials which is somewhat unusual for a US company these days, even with the balance sheet carrying $1.7bn of goodwill.  But the 0.64%  yield is a no for me.  Sure was better and maybe in my range at the Mar20 turn but alas I missed that.  Been a smooth ride up from the Mar20 low but now in the overbought zone.  160% increase in the share price YOY.   My system failed me on that one so I need to go away and review/tune.  Well done to you though!

[leonardratso]

50 minutes ago, BurntBread said:

So, what happens if you hold shares in a public company, through an online brokerage, the company gets taken private, and you refuse to sell?

Are you forced to sell when the deal goes through? If not, do the shares stay listed in your account, or do you get mailed the share certificate? Does Ivan come round every year and stuff roubles through your letterbox as a dividend? Do you get invited to Moscow for the AGM and have to drink home-distilled vodka until you go blind?

haha, no idea, but i aint waiting around to find out, i just elected to get £8.50 a share and then the special divi of 27cents a share on 21st april. Good enough. I should be receiving a massive payday of £17 and then 54cents later, im just off down the porsche dealer ship, see if i cant buy a couple of valve caps or maybe 1 and a half packet of fags with the proceeds.

[NogintheNog]

57 minutes ago, BurntBread said:

So, what happens if you hold shares in a public company, through an online brokerage, the company gets taken private, and you refuse to sell?

Are you forced to sell when the deal goes through? If not, do the shares stay listed in your account, or do you get mailed the share certificate? Does Ivan come round every year and stuff roubles through your letterbox as a dividend? Do you get invited to Moscow for the AGM and have to drink home-distilled vodka until you go blind?

I can give some info on this as I recently had experience of just that happening to me.

I used to have a holding of Highland Gold Mining (LON: HGM now de listed) worth about £4500. Fortiana Holdings came in and offered £3.00 a share to take the company private. I let £3000 worth go but held onto £1500 of shares in case they didn't get taken out. However Fortiana got the required amount of shares and the Company was de listed. It still showed I had £1500 of shares in my account but I couldn't sell them or do anything with them. I contacted my ISA provider and they said they were waiting to hear from Fortiana about payment for the outstanding shares. To be fair about three months later they paid the £3.00 rate and I finally got my £1500 back in my account, now reinvested in HOC.
If I'd have realised what a ball ache it was going to be I'd have let the lot go much earlier on!

https://highlandgold.com/home/news-media/company-news/2021/fortiana-holdings-limited-completed-the-compulsory-acquisition-of-highland-gold-mining-limited/

So in answer to your question BurntBread, you will effectively be forced to sell if the private owners take control. Just make sure you will get the rate that they are offering.

[leonardratso]

@M S E Refugee thesis about failed vaccines versus the BK i find interesting, actually quite compelling to be honest, what with even just a halt of use enough to upset the apple cart, i can see a widespread failure having a heavy impact, more so if it causes some unintended consequences down the road, ie vaccinated people having some other sort of related problem, of course it will all be nothing to do with the vaccine as i keep hearing about people with covid post vaccine or even dead post vaccine, something i very much believe (ps, im a compulsive liar[or is that a lie as well]).

https://www.zerohedge.com/markets/futures-slide-after-us-suspends-jj-vaccine

[Fully Detached]

19 hours ago, M S E Refugee said:

Does anyone think that Vaccine failure could trigger the Big Kahuna?

A few highly Vaxxed Countries are seeing a surge in cases.

The US has apparently just suspended use of the J&J vaccine due to blood clot risk, so we might be about to find out.

Ref your question, I am quite convinced that governments around the world have fiddled the figures to suit their own agendas since the very beginning of the pandemic, and will continue to do so. In other words, whether the vaccine(s) are successful or not is probably less relevant than what those governments decide they want the truth to be.

[jamtomorrow]

5 minutes ago, leonardratso said:

@M S E Refugee thesis about failed vaccines versus the BK i find interesting, actually quite compelling to be honest, what with even just a halt of use enough to upset the apple cart, i can see a widespread failure having a heavy impact, more so if it causes some unintended consequences down the road, ie vaccinated people having some other sort of related problem, of course it will all be nothing to do with the vaccine as i keep hearing about people with covid post vaccine or even dead post vaccine, something i very much believe (ps, im a compulsive liar[or is that a lie as well]).

https://www.zerohedge.com/markets/futures-slide-after-us-suspends-jj-vaccine

BK-wise, one thing I'd like to understand better is what's likely to happen to working capital needs from here.

The situation we're in today looks like a once-in-a-few-lifetimes to me: inventories must already be at historic lows because of the fad for just-in-time, with COVID having amplified that further.

But now, as the economy re-opens *and* JIT suddenly becomes very unfashionable indeed (because inflation), I wonder if we'll see a bit of a scramble to find additional working capital? Maybe this is what will sort the wheat from the chaff and push the zombies with weak balance sheets off the cliff (finally)?

[Hancock]

2 hours ago, Harley said:

To think I nearly sold them yesterday!  But should I sell the news?  They are one of my worst holdings and well in the red.  I was holding them to sell out higher.  Very tempted here and I may regret it but I'll hold for now.  One of the stocks I bought (but I shouldn't have) because of the limited market choice with my ISA.  One of those times I should have played with a basketball instead!  Some financials have improved but that 100% debt to equity ratio is now a big no for me (although has improved) whatever the push and net intangible assets just about exceed equity!

Up 43% now (it was 45% when i started typing), my holding is up about 15% so will hold on to see how this one goes.

Sunak's going to be getting his cheque book out for military equipment in the coming year, may help get back to where they were several years ago.

[Wheeler]

1 hour ago, PrincessDrac said:

US CPI  Link

 

March #CPI slightly stronger than expected at 2.6% y/y vs. 2.5% est. & 1.7% in prior month; core at 1.6% y/y vs. 1.5% est. & 1.3% in prior month

 

 

I've been watching the actual figures for the past couple of months and it is clear that CPI is accelerating. Obviously the US Fed will try and spin it as temporary but a month on month increase of 0.62% isn't impacted by last year's base effect! There have been 5 months now where the percentage increase over the previous month has increased:

My prediction is it will show year on year CPI of 4% next month and 4.8% the month after. We could be on for 6% by October with the Fed talking about tightening, just in time for the BK.

 

[geordie_lurch]

Anyone got any plans to try and get some Coinbase Global Inc shares after their IPO tomorrow? I think it will race higher as it's actually a rare profitable tech company and an interesting hedge on the Crypto space given it makes it's money from transaction fees.

[leonardratso]

30 minutes ago, geordie_lurch said:

Anyone got any plans to try and get some Coinbase Global Inc shares after their IPO tomorrow? I think it will race higher as it's actually a rare profitable tech company and an interesting hedge on the Crypto space given it makes it's money from transaction fees.

might sell some blockchain shite and dabble, mind you my foray into LSEG wasnt a huge success and they live off fees. Still, who knows. Where are they likely to be available on IPO, i usually dont see them for quite a while after theyve spunked their 1st day away or so.

[Optimistic]

26 minutes ago, geordie_lurch said:

Anyone got any plans to try and get some Coinbase Global Inc shares after their IPO tomorrow? I think it will race higher as it's actually a rare profitable tech company and an interesting hedge on the Crypto space given it makes it's money from transaction fees.

Ditto your comments! I think it will be an interesting one too! I bought my first lot of crypto with them. Totally new world for me but was recommended xrp. It was delisted by coinbase due to the SEC case with Ripple but have been flying this past week, despite the court case! Bet they missed out on all the transaction fees of late! 

[invalid]

1 hour ago, Wheeler said:

I've been watching the actual figures for the past couple of months and it is clear that CPI is accelerating. Obviously the US Fed will try and spin it as temporary but a month on month increase of 0.62% isn't impacted by last year's base effect! There have been 5 months now where the percentage increase over the previous month has increased:

My prediction is it will show year on year CPI of 4% next month and 4.8% the month after. We could be on for 6% by October with the Fed talking about tightening, just in time for the BK.

 

 

A quick UK based anecdote on inflation. A niche telecoms provider that for many years has allowed customers to purchase up to five years in advance fixed at todays prices. They have just cut that to 3 years as they are concerned about inflation in their costs and not wanting to be locked in on prices.

Seems like a perfect real world example of what DB has been saying.

[Lightscribe]

50 minutes ago, geordie_lurch said:

Anyone got any plans to try and get some Coinbase Global Inc shares after their IPO tomorrow? I think it will race higher as it's actually a rare profitable tech company and an interesting hedge on the Crypto space given it makes it's money from transaction fees.

Normally I would view these IPOs like Roblox etc. Most of the stock is taken up by the big boys on the cheap, then the retails dive in when it floats it initially spikes then drops back below as the big boys sell out.

I think Coinbase could be different. It’s the original largest ‘normie’ friendly exchange. 99% of all small value BTC/ETH owners would have bought them via Coinbase. For that reason I think a lot of traditional investors will pile in for the name that they have ‘heard’ of and is an alternative exposure to crypto in general.

 

[Fully Detached]

3 hours ago, Fully Detached said:

The US has apparently just suspended use of the J&J vaccine due to blood clot risk, so we might be about to find out.

Ref your question, I am quite convinced that governments around the world have fiddled the figures to suit their own agendas since the very beginning of the pandemic, and will continue to do so. In other words, whether the vaccine(s) are successful or not is probably less relevant than what those governments decide they want the truth to be.

Correction - I am wrong about this, it seems the US has not yet suspended use but there is increasing pressure for them to do so.

[Lightscribe]

49 minutes ago, Fully Detached said:

Correction - I am wrong about this, it seems the US has not yet suspended use but there is increasing pressure for them to do so.

Even here in the UK, the government statistics for reactions and fatalities are all readily available and yet get no mention. These are from January to March and I suspect these will naturally increase the more they are rolled out to a wider range of people with pre-existing conditions etc and second doses are administered.

https://www.gov.uk/government/publications/coronavirus-covid-19-vaccine-adverse-reactions/coronavirus-vaccine-summary-of-yellow-card-reporting#annex-1-vaccine-analysis-print

Recent studies also show that those with both Pfizer doses are more eight times more at risk to the South African variant than unvaccinated. 

https://www.foxnews.com/health/israel-covid-19-study-south-africa-variant-pfizer-vaccine.amp

I can quite easily see a suspension of the vaccine rollout in western counties leading to the BK. I think eventually a continuous updatable mRNA vaccine program will be put in place instead.

Problem is if the big blast off of opening the global economy doesn’t happen, it could be the trigger to blast it the other way.