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

[CVG]

7 hours ago, reformed nice guy said:

You should buy those 3 houses with your dad and rent them to three dosbodders that are on housing benefit

Soon enough Durham will be a commune of mostly middle aged, grumpy, balding, techy geeks

Could you imagine the bloodbath in the yellow sticker zone?

[planit]

8 hours ago, Cattle Prod said:

It should be even steeper, but there putting their drilled but uncompleted inventory on production without drilling new wells. OPEC knows  what's going to happen. Saudi has plenty of shale, believe it or not. They know how it works. They just don't waste money on it because its relatively shite.

Thanks for all the insights and info, extremely good for filling gaps in knowledge.

I tried not to make the previous post too long but I posted now because production obviously takes some time to ramp back up and May was  when  commentators thought this would be done by.

On top of that it made sense that shale investors would be desperate to get some cash out to make a further investment case (and make up for previous losses).

The result of the ramp up was absolutely nothing. Last weeks figure was the lowest since Nov 6 2020 if you exclude the Texas weather shutdown.

 

I know this is a big if;

but if we are at the end of the production ramp, now is the time we will get a trajectory change to one that is more obvious and visibly downwards.

It may or may not get picked up by the press and get political. It may well change a lot of people's calculations with regards to future oil supply.

[DurhamBorn]

https://www.bbc.co.uk/news/business-57353624

Media always looking for reasons because they have zero understanding of macro leads and lags.Our job is to do that.When food was cheap and markets collapsing how many were pushing potash outside of us basement dwellers.Lifting base money was always going to do this.During the German hyperinflation the people didnt blame money printing until after the event years later,they blamed everything else and lastly the Jews.They saw the problem as other currency going up,not theirs going down,and the elite of the time,the industrialists loved it because they produced in Germany,sold in harder currency and kept it all there in the selling currency.History chimes.

In other news 

https://www.proactiveinvestors.co.uk/companies/news/951054/royal-mail-worth-10-a-share-says-citigroup-951054.html

 

 

[Popuplights]

Does the hive mind think RMG is still worth a punt?

[nirvana]

[Loki]

1 minute ago, nirvana said:

The printer under the arm

[M S E Refugee]

I have had a little punt on Village Farms International, they are trading at CA$12.37 but Simply Wall St values the company at CA$167.97 per share.

TSX:VFF

Business Profile

Village Farms International, Inc., together with its subsidiaries, produces, markets, and distributes greenhouse-grown tomatoes, bell peppers, and cucumbers in North America. It operates through three segments: Produce Business, Energy Business, and Cannabis and Hemp Business. The company also owns and operates a 7.0 megawatt power plant that generates and sells electricity to British Columbia Hydro and Power Authority; and produces and supplies cannabis products. It markets and distributes its products under the Village Farms brand name to retail supermarkets and fresh food distribution companies, as well as products produced under exclusive arrangements with other greenhouse producers. The company was formerly known as Village Farms Canada Inc. and changed its name to Village Farms International, Inc. in December 2009. Village Farms International, Inc. was founded in 1989 and is headquartered in Delta, Canada.

 

 

[planit]

2 minutes ago, M S E Refugee said:

I have had a little punt on Village Farms International, they are trading at CA$12.37 but Simply Wall St values the company at CA$167.97 per share.

TSX:VFF

Business Profile

 

 

Are they selling the produce as carbon neutral or green energy food?

Very good business idea and attaching the brand to it offers good potential. What is their turnover and growth?

[M S E Refugee]

8 minutes ago, planit said:

Are they selling the produce as carbon neutral or green energy food?

Very good business idea and attaching the brand to it offers good potential. What is their turnover and growth?

Earnings vs Savings Rate: VFF's forecast earnings growth (63.1% per year) is above the savings rate (1.5%).

 

Earnings vs Market: VFF's earnings (63.1% per year) are forecast to grow faster than the Canadian market (13.7% per year).

 

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

 

Revenue vs Market: VFF's revenue (28.2% per year) is forecast to grow faster than the Canadian market (5.7% per year).

 

High Growth Revenue: VFF's revenue (28.2% per year) is forecast to grow faster than 20% per year.

[M S E Refugee]

https://villagefarms.com/clean-energy

[wherebee]

TSX:VFF

They've never paid a dividend.  Supply to Walmart, Amazon, Wholefoods, etc etc.  My knowledge is that those rapacious beasts drive down price year after year from their suppliers, gobbling up any profit that is there?

 

[planit]

1 minute ago, wherebee said:

TSX:VFF

They've never paid a dividend.  Supply to Walmart, Amazon, Wholefoods, etc etc.  My knowledge is that those rapacious beasts drive down price year after year from their suppliers, gobbling up any profit that is there?

 

Read the link on energy, heat and CO2 use, really impressive (if true LOL)

If they get the brand going then they will be able to demand high prices, people will pay double the price for those veggies.

 

I see the main problem as growth, they are limited in the amount of produce they can produce by the size of the plant and land area which needs to be near the plant.

If they can build similar stations elsewhere then growth is possible but everyone might start fighting over rubbish dumps 

They could also get bought out as the brand is good (although do Aldi also sell "Village Farms" ).

[M S E Refugee]

2 minutes ago, planit said:

Read the link on energy, heat and CO2 use, really impressive (if true LOL)

If they get the brand going then they will be able to demand high prices, people will pay double the price for those veggies.

 

I see the main problem as growth, they are limited in the amount of produce they can produce by the size of the plant and land area which needs to be near the plant.

If they can build similar stations elsewhere then growth is possible but everyone might start fighting over rubbish dumps 

They could also get bought out as the brand is good (although do Aldi also sell "Village Farms" ).

They also have a foothold in the Cannabis sector.

[Democorruptcy]

12 hours ago, reformed nice guy said:

You should buy those 3 houses with your dad and rent them to three dosbodders that are on housing benefit

Soon enough Durham will be a commune of mostly middle aged, grumpy, balding, techy geeks  gentrified.

Sorted.

[DurhamBorn]

2 hours ago, Popuplights said:

Does the hive mind think RMG is still worth a punt?

Im holding some,but iv sold 70% of mine now.I think they probably are worth a tenner,but a lot of the value has gone.

 

2 hours ago, nirvana said:

Doge doesnt have 11 aircraft carriers to make sure you take it in payment.You are skinning those poor saps.One of the great chartists wandering around France on his bike 

[nirvana]

Dave is back! And he's calling for Nasdaq to 17,000!!!

Time to load up those tech stocks??? 

 

[Yadda yadda yadda]

17 minutes ago, nirvana said:

Dave is back! And he's calling for Nasdaq to 17,000!!!

Time to load up those tech stocks??? 

 

They'll probably crash a few percent now. Just so people can whinge at him. Then start climbing later in the month.

[Popuplights]

33 minutes ago, nirvana said:

Dave is back! And he's calling for Nasdaq to 17,000!!!

Time to load up those tech stocks??? 

 

 Going all in on Tesla then!

[Craig]

50 minutes ago, Cattle Prod said:

So how is China going to pay for this, with supply chains moving out and the oil bill going up? They're going to have to pull a .999 gold rabbit out of a hat.

A virus, perhaps?

[Castlevania]

16 minutes ago, Cattle Prod said:

I'd argue that's cost them, and is going to cost them a lot more. Manufacturing going to India, Vietnam etc. Far friendlier and cheaper places to operate than China. And if China doesn't get those dollars from selling crap to us, how is it going to pay for its oil, other than gold?

Pay Iran in Yuan.

Collect interest in USD on all their usurious belt and road loans.

Slave labour 

 

[Harley]

2 hours ago, M S E Refugee said:

I have had a little punt on Village Farms International, they are trading at CA$12.37 but Simply Wall St values the company at CA$167.97 per share.

TSX:VFF

Business Profile

Village Farms International, Inc., together with its subsidiaries, produces, markets, and distributes greenhouse-grown tomatoes, bell peppers, and cucumbers in North America. It operates through three segments: Produce Business, Energy Business, and Cannabis and Hemp Business. The company also owns and operates a 7.0 megawatt power plant that generates and sells electricity to British Columbia Hydro and Power Authority; and produces and supplies cannabis products. It markets and distributes its products under the Village Farms brand name to retail supermarkets and fresh food distribution companies, as well as products produced under exclusive arrangements with other greenhouse producers. The company was formerly known as Village Farms Canada Inc. and changed its name to Village Farms International, Inc. in December 2009. Village Farms International, Inc. was founded in 1989 and is headquartered in Delta, Canada.

 

 

Ah, Simply Wall Street.  Someone mentioned it here a while back and I signed up as it's nice to have a second opinion and their approach is similar in many ways.  So thanks if it was you! 

[M S E Refugee]

1 minute ago, Harley said:

Ah, Simply Wall Street.  Someone mentioned it here a while back and I signed up as it's nice to have a second opinion and their approach is similar in many ways.  So thanks if it was you! 

Do you think that they are any good?

I am not that knowledgeable when comes to investing but the way they set out the information on each Stock is quite easy for me Pea brain to handle.

[Harley]

11 minutes ago, M S E Refugee said:

Do you think that they are any good?

I am not that knowledgeable when comes to investing but the way they set out the information on each Stock is quite easy for me Pea brain to handle.

Yes, as a support.  I would not follow blindly.  Not do I pay much attention to their valuation stuff (sorry!), etc.  What they do offer is very good worldwide coverage and data hard to collate like the yield history, insider selling, ownership, historic debt ratios, etc.  And the chart and tools are great.  I do my fundamental stuff and then cross check with them for confirmation and any gotchas.  I need more time but would like to load my portfolios to get the weekly reports they produce which look top.  I would also like to use their screeners.  Hats off to them for coming up with something new.  Everything needs more work (I offered to help!) but they are well on the right track which is exciting.

[sancho panza]

17 hours ago, DurhamBorn said:

My dad knew Blairs agent very well and he told him that they pushed immigration and welfare because it meant there would never be another Conservative government.Incredible to think what it really made sure was that there will never be another Labour government,at least in their present form.

Im not sure the Tories really understand the Red Wall yet though.They voted Tory because the ones not getting welfare are sick to the back teeth of how much people are getting and blame Labour for that and immigration.The Tories dont seem to be doing much to sort out these things though.

Despite my losses on Trump(cough,cough),to the most popular Presidential candidate ever ,Beijing Biden(cough,cough), my history in political betting is pretty good.

I think you're right on the Red Wall.The modern Labour party is a Metropolitan construct and they're at odds with the bulk of their voter base in the North and Midlands who are far more socially conservative(small 'c') than they are as you say.

That makes Labour likely losers for some time until a new party or new Labour leader comes forward that can take the party back to it's roots.

The Tories are mistaking Labour weakness for their strength.

13 hours ago, JMD said:

This article argues against the deflationists, and cites Rosenberg in particular. The article author used to be a deflationist himself, but now makes interesting points about the expected huge amounts of MMT spending that will almost certainly prove to be hugely wasteful, but adds also that lots of the spending will be directed toward green energy which is itself highly unproductive, ie seeking to replace high density energy sources with lower density, therefore forcing less productivity/efficiency and so ultimately causing  yet more inflationary pressure. Apparently Rosenberg counter's all this by saying the big spending bills won't get voted in in the first place.                                                                                                               https://blog.evergreengavekal.com/to-be-or-not-to-be-transitory/

A really excellent point JMD.We've had two decades of distrotions to trade through CB created asset bubbles and now we're going down the route of the govt misallocating resources directly themselves.

4 hours ago, planit said:

I know this is a big if;

but if we are at the end of the production ramp, now is the time we will get a trajectory change to one that is more obvious and visibly downwards.

It may or may not get picked up by the press and get political. It may well change a lot of people's calculations with regards to future oil supply.

Great chart in your previous post Planit.AS you say,if @Cattle Prod is right and the current pump in US shale output is but the last throes of decaying wells,then the markets perceptions will soon change similar to CP's previous post that a 2% supply drop created the JUne 08 spike.

Perceptions,perceptions,perceptions.

 

[Harley]

1 hour ago, nirvana said:

Dave is back! And he's calling for Nasdaq to 17,000!!!

Time to load up those tech stocks??? 

 

This is really hard atm.  Many/all stocks are, on a momentum basis, overbought.  But they could go higher with enough exuberance.  And I am seeing a few that have.  Not "normal".

Normally most stocks moving to overbought on the monthly turn down to oversold reasonably quickly with a few outliers staying elevated and meandering in and out of that zone for an extended period.  The price follows, if not you have an exciting break ahead.  The price movement for the meandering is often volatile and not much of the total upside move (say one third) so it's a time you think about taking money off the table. The turn often preceeds a MACD (average price+) turn, where the MACD is approaching its own high.

The notable difference here is MACDs are lagging more than usual.  On balance, I would trust the MACDs more once the stocks have started to move, as they have.  That IMO gives a technical case for more upside. 

Overlaying the chart action shows a common theme where many stocks have hit a major resistance level (usually a prior support).  That combined with an overbought momentum signal would be bearish but I'm very open to an eventual powerful breathrough, allowing the MACDs to resolve before a reversion to the "norm". 

Additionally candle patterns are proving very reliable as this becomes more a pickers market and help sort the wheat from the chaff.  Personally, I'm not a fan of tech or any company without well priced tangible assets.  Just my bias and the place I like to fish at!

Bottom line, a tough one but technically enticing new ground, especially seeing the emerging bullish continuation action of some stocks where maybe the meandering is currently representing say maybe two thirds of the upside to date.  I wonder how things looked in 2000 et al!

Just my reading of the tea leaves so please DYOR.