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

[nirvana]

33 minutes ago, Loki said:

HL app is as reliable as a politicians promise this morning

 

[Wheeler]

26 minutes ago, Harley said:

Ta.  My real question was do we get the same nice WHT exemption for Canadian stocks (wherever listed) as US stocks - ie.  Is Canadian tax law the same as the US?

I don't think so Harley. I couldn't find anything definitive but HL only do it for US domiciled companies according to their website, and based on my experience with Pan American Silver where I've received the same dividend per share for ISA, SIPP and taxable trading account holdings.

[Craig]

1 hour ago, Harley said:

Duh, I looked it up and was scratching my head - how does an AsiaPac ETF help?

Different PAXG, this is Paxos Gold, a gold-backed crypto stablecoin - https://www.paxos.com/paxgold/

[Harley]

2 hours ago, nirvana said:

in other news Dick Cheney has a new tie 

Liz Cheney: Biden Military Budget 'Too Low' Despite Being Highest Of All Time

 

FFS!  I heard she might run from the presidency.

[planit]

40 minutes ago, wherebee said:

in other words - be prepared to freeze to death, plebs, whilst us elites enjoy garden heaters and open coal fires.

And the amazing thing is the author is a pleb, they are rushing to buy tickets to their 'own death by 100 cuts' show.

 

 

There is also an FT article Beware the looming net zero car crash

I haven't read it all but you need to add together three things to see how low the stock market might get:

 

• Economic bad recession due to Covid plus other cyclical effects plus added tax and worry about future

 

• Companies being forced to fully accept the 'need' to be carbon neutral within a small timeframe which will substantially reduce profits (include feedback like energy costs rising, even a simple delivery might be doubled+ in cost due to the carbon footprint)

 

• Interest rates/inflation rising sustained - supply chain issues, smallish amount of deglobalisation, lack of productivity due to people not working, prices rising to be green ie green energy*. 

This stock market level could be really low and it will probably take down everything.  I guess DB would agree that the inflation commodities will recover, but slowly, their rise back out of the other stocks might not be perceptible over short time frames so everyone needs to be patient. It could just be that after a while these plays stop falling whereas the others keep going. Reinvested divis are important then.

 

* I have a problem with the current state of energy production. Green energy is counted twice. The government says X% of energy in the UK is green. Then energy suppliers sell 100% green energy so some people/companies can say that they are 100% green. The difference in green/non-green prices is not high enough for this to be anything other than a farce. It will be sorted out in time.

I also enjoy asking these customers how they get their power when there is no wind at night.

 

ps Glad Elon finally made the point about the Crypto energy use, current crypto is not compatible with ESG. If a systemically important multinational can be bought down by ESG then Crypto will be like a fly being swotted (although it will be more like a cockroach once it has fallen by the first 80% LOL). Something might rise from the ashes but I don't see a way of the value being transferred, Bitcoin will trend to zero as the replacement trends up. Also energy is energy and it is precious. The bollox about mining using green pisses me off as that is just taking green capacity off someone else who could use it to replace coal.

F**k I ended up on Bitcoin FFS - I am really sorry everyone so please don't reply to that point, erase it from memory.

[planit]

26 minutes ago, Cattle Prod said:

Update on US production:

.........

Short answer: Art Berman's production collapse this summer is being forestalled by them smashing down the DUCs. It may kick in at any point as the quality 'wall' is reached, wherever that is, but either way I think the message will reach the market this year that there are structural problems in shale supply. I haven't seen the above point on DUCs out there yet, but I'm sure it will be soon enough.

 

Thanks CP, this all fits in very nicely with the FT article from a while back, reposted here for convenience

 

US shale oil: can a leaner industry ever lure back investors?
 

Quote

Cash flow and earnings growth must be the new priorities, Ms Hollub says. “I believe that the watershed moment is here and our industry will, I don’t think, ever be the way we have been in the past.” Can the industry’s new pitch be trusted?

Some investors remain sceptical, remembering how past promises of capital discipline crumbled when oil prices rose. “Give an oilman a dollar and he’ll drill a well,” runs the old industry adage. In an era when environmental concerns are already deterring investment in fossil fuels, and long-term growth in oil demand is no longer assured, shale executives know they cannot risk breaking more promises.

“Why should investors trust it?” asks Matt Gallagher, who headed Parsley Energy, a shale producer acquired by larger operator Pioneer Natural Resources last year. “They shouldn’t.”

 

It's pretty simple, the better their earnings and financials, the more chance of getting funding which we already know is almost impossible for fossil fuel development. A 'black' finance market it probably developing at the moment for fossil fuels but these investors will be expecting big and certain returns.

I also doubt they are stupid enough to fall for this current play by the drillers so the decision will be taken on the outlook for oil and the history of losses on shale against the backdrop of Biden in office. (probably somewhere between no chance and fat chance).

If oil prices stay high they can only recycle profits to drill but I think the investors will want some money out whilst they can to make up for previous losses. Like suddenly winning on roulette at the end of a bad night in the casino.

 

[Harley]

On 17/05/2021 at 08:05, MvR said:

Funnily enough I've just been looking into this as I've got to the point I could consolidate various accounts into one and make use of portfolio margin rules to sell futures and index options. 

The plan, which may well change, is to use something like this as the core holding of a options selling account. The idea is to make better use of the cash that otherwise sits there as margin collateral.  

The stocks, bonds and gold portions are easy enough. I can't buy the ETFs directly due to KIDD nonsense, but I can sell an in-the-money put(s) just before expiry and have the ETF put to you that way instead.  Or I might create the deltas that are equivalent to the stock position with some short vol structure ( e.g. Jade lizards, short put spreads etc).

The trend following commodities could be CFDs or spread bets, or commodity futures. For a long term low maintenance portfolio you could time the trend with a simple 50/200 MA crossover or something similar.  There's also a timing model called "Duel Momentum" which appears to be another good way to time things.

The tricky one is the long vol obviously. In my case I'm looking into ways of constructing  something with 30-90 DTE SPX options, along the lines of this..

Or, given I trade so actively anyway, I may do something a bit more manually timed with VIX.. maybe naked puts funding long VIX call spreads?  The trick of course is to minimise hedging costs or ideally take in small profits from the hedge in case we don't get a crash/vol spike.

When I figure something out, share it here.

BTW I learned of a great site for back testing portfolio allocations/timing models etc. The free service is pretty good on it's own.  https://www.portfoliovisualizer.com

 

Ta.  As part of my research, this European guy's (based in Sweden?) approach to constructing the portfolio.  Probably a bit too much for me though.

https://driftwoodpalace.github.io/Dragon-Portfolio/

PS:  I really need to get into options given the previous need and now this and my recent look at writing options for income.  I have everything set up but need to swot up on the execution on the various platforms.  Maybe I can lean on you a bit on your options thread?

[Harley]

On 16/05/2021 at 22:05, Viceroy said:

This is a free report from Goehring & Rozencwajg

What, those two reprobates...

[Harley]

56 minutes ago, Wheeler said:

I don't think so Harley. I couldn't find anything definitive but HL only do it for US domiciled companies according to their website, and based on my experience with Pan American Silver where I've received the same dividend per share for ISA, SIPP and taxable trading account holdings.

Ta.  Then I'm gonna need a bigger divi Canada.  Assuming a reduced 15% WHT like the US, that makes a 3.53% target for me otherwise I'll be discriminating against the 0% Asians, etc.

[JMD]

3 hours ago, Loki said:

My SIPP punt into BTU has gone mental. My first double bagger i think

Congrats!!.. is that Peabody Energy the coal miner? I bought the likes of Whitehaven and Warrior Met and they have gone nowhere for me so far. Can i ask why you bought that one (others?), was it on the financials or sector knowledge?

[Loki]

Just now, JMD said:

Can i ask why you bought that one (others?), was it on the financials or sector knowledge?

Honestly?

Because i saw it tweeted along with Arch and saw my SIPP as free punt money😂😂😂

[Harley]

1 hour ago, Craig said:

Different PAXG, this is Paxos Gold, a gold-backed crypto stablecoin - https://www.paxos.com/paxgold/

Now you effing tell me.  What the eff am I'm going to do with a cupboard full of this stuff...

[DurhamBorn]

1 hour ago, DoINeedOne said:

Vodafone Group Chairman bought 305,000 shares 

Aggregated price: GBP 1.350

BT CEO bought another £2 million of shares as well straight after results.The top brass know exactly what happens once prices rise and depreciation stays steady.I noticed today VOD cost of debt was now about 2.8% across the debt.Key is that they can pay a lot off due to profile as it comes due and not roll over if they want.

Notice Imperial Brands decent results as well,and going along nicely.Paying down £3bill of debt to around £10bill.I think they will want to pay off another £2 bill yet,but might start share buy backs in around 10 months and another £1 bill of the debt and do half and half for a couple of years.

Imperial will also have to be careful not to pay too much debt off before share buy backs because if they do they would be a sitting duck to be taken over by someone like China Tobacco.I think the CEO has it right though in aiming for around £8 bill debt then buybacks and maybe then tickle the debt down slowly.

[JMD]

3 hours ago, Castlevania said:

It’s Tuesday. We all know what happens on a Tuesday.

 

Agreed... but is it real, or is it manipulated?.. oh well, so long as today's audience (Roman circus?) are kept entertained.     (i know obvious joke, but couldn't help myself!!)

[Loki]

1 hour ago, planit said:

energy is energy and it is precious. The bollox about mining using green pisses me off as that is just taking green capacity off someone else who could use it to replace coal.

Nothing wrong with pointing this out

[reformed nice guy]

3 hours ago, planit said:

Any VOD holders here got any comments, was a revenue decline expected and is this temporary?

I have been watching for a while and thought this might be a good entry point .

Dropped from 142 to 132.

 

Got a decent holding but il wait til it's back to two digits before adding more

[JMD]

2 hours ago, Harley said:

Really?  Has he not hedged the risk he's wrong as well?  And those ultrashorts (why would he use an ETF, that's more for the likes of me) implies he expects the mother of all declines and/or it to happen very soon.  Just sounds odd, maybe not the full picture?

Hmm... Not really what you were getting at Harley, but Kaplan in his latest newsletter discloses, as per usual, his investment allocations (generous thing to do i think; and notice he also shorts Tesla) - but anyway I thought i'd use the link he provides to watch Kaplan's new short 'comedy play' - as i thought it might give me insights into the man's investment psyche(?!)... unfortunately, i can report back to the thread that it did not help one jot. (not sure what i was expecting, but the play itself was ghastly btw).

True Contrarian: “Don't panic. The time to sell is before the crash, not after.” --John Templeton (truecontrarian-sjk.blogspot.com)

 

[jamtomorrow]

20 minutes ago, Loki said:

Nothing wrong with pointing this out

I like Bitcoin's energy use - it's what makes the network hard to attack, and that seems valuable to me as a user.

More generally, the idea we should start squabbling amongst ourselves over end-uses of energy because we've f***ed up supply-side policy is just plain daft - to my mind, that just represents civilizational retreat.

If anything, we could do with a good energy crisis to properly focus minds on supply-side. So I'm just nipping away to buy more Bitcoin, open some windows and turn the thermostat up.

[wherebee]

what the hell is happening today?  everything is green; I'm up across the board and the numbers are jumping by the minute.  Did the fed just announce more money printing?

[Noallegiance]

11 minutes ago, wherebee said:

what the hell is happening today?  everything is green; I'm up across the board and the numbers are jumping by the minute.  Did the fed just announce more money printing?

Well, yesterday I was well up on my SIPP which is all value, no momentum stocks, and the major indices were down.

Today indices are up and my SIPP is continuing up.

To my inexperienced mind, this is what the beginning of rotation looks like.

Time will tell.

[Bricormortis]

37 minutes ago, wherebee said:

what the hell is happening today?  everything is green; I'm up across the board and the numbers are jumping by the minute.  Did the fed just announce more money printing?

DXY is 89 something, maybe there is anticipation that this shakes people out of cash ?  It will / should propel the metals. ( upwards ! )

[DoINeedOne]

On 16/04/2021 at 07:38, planit said:

Shell To Put Energy Transition Plan To Shareholder Vote

The problem is here:

"Shell is also set to tie the bonuses for its top executive directors more closely to the group’s performance in reaching its net-zero goals, if shareholders approve the plan at the annual general meeting in May"

 

There can't have a situation where directors win bonuses by sabotaging the company profits. The oil companies are now counting Scope 3 emissions - they include those that aren’t produced at a company’s facilities and that customers produce when they burn fossil fuels. So the less oil they produce the lower the emissions.

There will be a small number of vocal activist investors plus all the woke fund managers (where it is not their money) voting this through. I am not sure if I know of another situation where directors are rewarded contrary to company performance.

 

Pretty shocking if this gets voted through, does anyone have any suggestions of companies where this might not happen?

So this is today was listening to the AGM this morning but it was a bit of a snooze fest of woke questions 

How the voting went i don't know ended up taking the dog for a walk 

[DoINeedOne]

Net zero: IEA calls for an immediate halt to new oil and gas developments

Paris-based organisation says an immediate halt to fossil fuel development is needed if global temperature rises are to be limited to 1.5 degrees

https://www.upstreamonline.com/energy-transition/net-zero-iea-calls-for-an-immediate-halt-to-new-oil-and-gas-developments/2-1-1011584

 

[CVG]

27 minutes ago, wherebee said:

what the hell is happening today?  everything is green; I'm up across the board and the numbers are jumping by the minute.  Did the fed just announce more money printing?

Parabolic melt-up!

[leonardratso]

agronomics took a fundraiser lately, looks like they are offering it to current holders as well, this came as a corporate event to my lloyds s&s isa;

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