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

[No One]

54 minutes ago, DurhamBorn said:

Anything where no new entrants can build scale over the cycle and where they can put prices up with inflation or inflation+.

Key is that you have lots of assets already,even if lots of debt,but fixed depreciation and your not relying on bulky spending from consumers.

Telecoms look prime for this for me,and although recession will hit them being able to increase prices at inflation is a huge benefit.4% inflation should increase VODs costs by about £400mill,but income by £1.4bill for instance.

I think telcos are in a structural undervaluation across the whole sector outside of the US. @sancho panza coma scores back in the thread are a great way to spray and pray the sector.

Energy is another.I think oil and gas are the best contrarian and macro chance to make good capital in a long time.

Im cheering when BP stay down because i want the company to buy and cancel as many shares as they can before the big run higher.The lower they stay now,the more shares get bought back the more i make later.

Potash were nother great sector for the above,but iv sold most now with massive profits,but hold Nutrien still.

Delivery firms were another area who can leverage inflation,but again the market woke up in the end and although Royal Mail is worth £9 the huge profits are gone.

PMs are also undervalued,but exit and entry on them takes a lot of work really.

Tobacco is undervalued as it usually is.BAT has lots of debt,but is a cash machine and its really gaining traction in new products.The glory days are over,but a slowly growing divi is still good reward.

Imperial Brands is lacking in new products,but its nearly at the point on debt where it can buy back 6% of its stock a year and can likely flatline free cash,so keep earnings growing.It will fall to Japan Tobacco as well i think at some point,or the big Chinese tobacco players.

Market is overbought and shake outs are very healthy

 

I also like insurance etc and companies like M+G,but there is more risk there on  BK or systemic risk.

Great post, it confirms some of my own thoughts actually.

 

Here are some of my recent plays:

I sold my BP after I made 20% (I got in late). I'm thinking off selling Shell B because of woke crap and then maybe buying Repsol.
I have a lot of Telefonica and I'm was planning on buying BT with the next paycheque.

I sold all my POTASH as I think they are about to peak.

I have some TPI composites for the green investment drive, and I was thinking buying some Li-on miners or battery makers. 

What do you think about videogame stocks?

[reformed nice guy]

UK Core Retail Sales (MoM) (May): forecast was 1.5%  but figure was actually -2.1%

UK retail sales MoM May forecast 1.6%, actual -1.4%

German Producer Price Index forecast 0.7%, actual was 1.5%, highest since 2008 (pre bust)

 

[nirvana]

32 minutes ago, reformed nice guy said:

UK Core Retail Sales (MoM) (May): forecast was 1.5%  but figure was actually -2.1%

UK retail sales MoM May forecast 1.6%, actual -1.4%

German Producer Price Index forecast 0.7%, actual was 1.5%, highest since 2008 (pre bust)

 

ah so that's another reason they sold the crap out of the shitty £

I'm buying the dip, nothing British, they couldn't organise a piss up a brewery

Kraut and Yankee indexes 

[JMD]

47 minutes ago, Hancock said:

I see it that way, as for the next 50 years younger Brits are going to be paying those final salary pensions, and there will be an epic fight by the public sector and quasi public sector to keep the millions of non jobs.

Asians have families to do what big govt does over here in relation to caring for the elderly and bailing each other out when times are hard., so their tax rate is kept down ... hence govt interferes in ones life far less ... even more so if you're a foreigner whose income comes from overseas.

Take the comment about Singapore onboard, is this where you leave your money in shares, bank accounts etc...?

Oh and where are you currently based?

 

Where am i based? I am in 'Blighty'... both me and my investments.

Actually, i'm no longer sure - given the awful train-wreck of events since the panic/plan-demic - that this country deserves me calling it Blighty any longer. Still proud to be British, but rather tragically my country (its standards, culture, etc) has gone missing, presumed dead.  

[Hancock]

14 minutes ago, JMD said:

Where am i based? I am in 'Blighty'... both me and my investments.

Actually, i'm no longer sure - given the awful train-wreck of events since the panic/plan-demic - that this country deserves me calling it Blighty any longer. Still proud to be British, but rather tragically my country (its standards, culture, etc) has gone missing, presumed dead.  

Take it you're off to Thailand, Cambodia or Vietnam soon then.

[sancho panza]

5 hours ago, Cattle Prod said:

The reaction is unbelieveable, people are way too zoomed in. Nothing has changed at the Fed action wise, they've bought more assets this week than ever, and said clearly they will continue to do so. Just words. Some committee members think there will be two rate rises in 2023, so what? Have people learned nothing about forecasts in the last year?! First big stock market correction, that is all off the table again. Fed has also acknowledged that inflation is not transitory after all, i.e. buy inflation stocks. But the reaction is to dump them because acknowledging this means the Fed is preparing to taper or raise rates. It's like Prof Ferguson and his crystal ball. For me, I watch what they do not what they say. When they taper purchases I will sit up and take notice. For now, they are still boxed in and the rest is noise. I bought a ton of GDXJ calls yesterday, thanks Jerome.

This is an opportunity I agree.We're rotating into PM producers away from royalty co.s and looking at the below,I can't say that I think this is crash territory.WTI/Brent satying where they are.

As you say the taper is what matters and I would argue the stimulus package.Two quarter points in 2023 is neither here nor there.

[DurhamBorn]

59 minutes ago, No One said:

Great post, it confirms some of my own thoughts actually.

 

Here are some of my recent plays:

I sold my BP after I made 20% (I got in late). I'm thinking off selling Shell B because of woke crap and then maybe buying Repsol.
I have a lot of Telefonica and I'm was planning on buying BT with the next paycheque.

I sold all my POTASH as I think they are about to peak.

I have some TPI composites for the green investment drive, and I was thinking buying some Li-on miners or battery makers. 

What do you think about videogame stocks?

I prefer gambling stocks like Playtech,more niche ,but huge.

[sancho panza]

2 hours ago, DurhamBorn said:

Anything where no new entrants can build scale over the cycle and where they can put prices up with inflation or inflation+.

Key is that you have lots of assets already,even if lots of debt,but fixed depreciation and your not relying on bulky spending from consumers.

Telecoms look prime for this for me,and although recession will hit them being able to increase prices at inflation is a huge benefit.4% inflation should increase VODs costs by about £400mill,but income by £1.4bill for instance.

I think telcos are in a structural undervaluation across the whole sector outside of the US. @sancho panza coma scores back in the thread are a great way to spray and pray the sector.

Energy is another.I think oil and gas are the best contrarian and macro chance to make good capital in a long time.

Im cheering when BP stay down because i want the company to buy and cancel as many shares as they can before the big run higher.The lower they stay now,the more shares get bought back the more i make later.

Potash were nother great sector for the above,but iv sold most now with massive profits,but hold Nutrien still.

Delivery firms were another area who can leverage inflation,but again the market woke up in the end and although Royal Mail is worth £9 the huge profits are gone.

PMs are also undervalued,but exit and entry on them takes a lot of work really.

Tobacco is undervalued as it usually is.BAT has lots of debt,but is a cash machine and its really gaining traction in new products.The glory days are over,but a slowly growing divi is still good reward.

Imperial Brands is lacking in new products,but its nearly at the point on debt where it can buy back 6% of its stock a year and can likely flatline free cash,so keep earnings growing.It will fall to Japan Tobacco as well i think at some point,or the big Chinese tobacco players.

Market is overbought and shake outs are very healthy

 

I also like insurance etc and companies like M+G,but there is more risk there on  BK or systemic risk.

Must say we've been heavily buying(for us anyway) telco's theirs last week(particualrly Vod then singteland).The discovery of those coma scores for the two brazil one s and Telefonica Deutsch gives committed spray n prayers  7-9 shares to aim at fi they wish.

We also bought first ladder in Japan tobacco too.I'll psot the tobacco coma scores later if I get the chance.

[Hancock]

4 minutes ago, sancho panza said:

 Telefonica Deutsch gives committed spray n prayers  e.

Cheers just bought 3 grands worth .. getting an itchy finger!

£30 to change my pounds to Euros the robbing bastards. 

[Hancock]

I'm only 35% in Energy stocks and 32% in Base Materials .. looks like they'll need to be topped up soon, to unbalance it out a bit more.

[Lightscribe]

I can’t even begin to literate how fucked London is. I work in London anyway but was on a conference this week centrally. Whilst it was sunny, tubes/trains mildly busy as peak rush hours. Today raining and dead as a dodo. After furlough will reveal all, but London will not be able to function on anything close to this. It’s just as though most of the population has disappeared. 

Say goodbye to large swathes of businesses and the forever bail out by the tax payer of TFL until driverless trains or re-nationalisation. 

Another anecdotal, some banks (Santander confirmed) are refusing mortgages even with a fire safety certificate and sales are falling through left right and centre in my partners block of flats.

Question is, if London nose dives, does the rest of the country still have a functioning economy? 

[Hancock]

Just now, Lightscribe said:

Question is, if London nose dives, does the rest of the country still have a functioning economy? 

The rest of the country doesn't have a functioning economy, as most govt policies and money is directed at propping up London's banking sector and SE England property ponzi scheme.

The lack of tourists and business travellers will decimate the place, but at least they'll have multi-culturism to fall back on!

 

[No One]

7 minutes ago, Hancock said:

Cheers just bought 3 grands worth .. getting an itchy finger!

£30 to change my pounds to Euros the robbing bastards. 

Do you want me to give you a Trading212 or Freetrade referal code? Because honestly, you are dealing shares with the Italian mob.

[Hancock]

4 minutes ago, No One said:

Do you want me to give you a Trading212 or Freetrade referal code? Because honestly, you are dealing shares with the Italian mob.

Down 1% on FX! Do they offer SIPPS/ISA's?

If not could come in handy for when i spunk my house money should a BK happen.

[feed]

https://www.ft.com/content/cfacf00c-214b-4d52-8992-d7c01180c06a

Crown Estate prepares for a century’s worth of change in next decade

But, for now, roughly half of its revenues come from property in central London, where the pandemic has decimated tourism.

...

This year, the estate auctioned the rights to build offshore wind farms around Wales and England in a deal that could be worth almost £9bn over a decade.

 

[Hancock]

That horrid capitalism stuff looks like it could be on its way back ... perish the thought of paying the plebs a bit more!
https://www.telegraph.co.uk/business/2021/06/18/tesco-sounds-alarm-driver-shortages/

 

[DurhamBorn]

43 minutes ago, Hancock said:

The rest of the country doesn't have a functioning economy, as most govt policies and money is directed at propping up London's banking sector and SE England property ponzi scheme.

The lack of tourists and business travellers will decimate the place, but at least they'll have multi-culturism to fall back on!

 

UK policy is massive welfare paid for with city tax.They have a window as this thread has always said to use the printed money for industrial investment.I think most went on government workers and balloon maker tax credit claims though so far.

[Agent ZigZag]

17 minutes ago, DurhamBorn said:

They have a window as this thread has always said to use the printed money for industrial investment.I think most went on government workers and balloon maker tax credit claims though so far.

In my opinion I  have not seen enough enterprise, vision or positive leadership from government for an industrial led recovery. There's been alot of talk but action is what I want to see. My fear is that we are going to miss the boat big time here or at least our potential which would be a great shame as the UK , especially the Midlands  The North West and North east of the country are in an ideal position to carry the UK forward.

[Hancock]

1 hour ago, DurhamBorn said:

UK policy is massive welfare paid for with city tax.They have a window as this thread has always said to use the printed money for industrial investment.I think most went on government workers and balloon maker tax credit claims though so far.

My kids school is ran by an academy that has 2 dozen managers of differing varieties running it, on top of that they pay a legal firm for advice on transgender children and what to teach kids about this drivel.  (all these people doing these nonjobs are white British, usually with social science degrees, and about 90% are women) ... there are a mere 2000 children in the several schools ran by this academy, that these people are making a very good living from.

Until the govt deals with these people, and they accept their limit in life without the state handing them money is stacking shelves for minimum wage, then i don't see this country ever getting close to what it once was.

 

[DurhamBorn]

1 hour ago, Cattle Prod said:

I hope to see smaller city, town and village economies booming in response. 

My crowd have just confirmed a 3/2 hybrid model trial till March, after which I'll be made permanent all going well (which it will, because people want it to). That's with a reluctant old school American ceo, but there have been a bunch of converts in the senior leadership team demanding it.

So 40% less pret sandwiches, boozy lunches, after work drinks, gym, yoga classes, daytime hotels and Id imagine sex dungeon rentals for London, and 40% more cash to be spent in assorted towns and villages, from our company anyway. The working world has changed, London is going to change with it, and good. It's a nice place to stroll around minus a few million people.

Train companies still gouging though, offering c. 10% off a weekly for 3 days. I'll drive instead. 

Must be great for tobacco companies as well,no more standing in the pissing rain for a fag when you want one.Likely more nights out to the pub as well,a small hangover isnt  a problem when your at home etc.

My worry over this though is councils etc use it as a green light to allow managers to be at home doing little.My partners bosses are and its obvious they are doing very little.

[Loki]

2 hours ago, DurhamBorn said:

UK policy is massive welfare paid for with city tax.They have a window as this thread has always said to use the printed money for industrial investment.I think most went on government workers and balloon maker tax credit claims though so far.

What happens to us if they miss the window? Seriously. 

 

[Castlevania]

4 hours ago, No One said:

What do you think about videogame stocks?

Expensive in my opinion

[Harley]

2 hours ago, Cattle Prod said:

I hope to see smaller city, town and village economies booming in response. 

My crowd have just confirmed a 3/2 hybrid model trial till March, after which I'll be made permanent all going well (which it will, because people want it to). That's with a reluctant old school American ceo, but there have been a bunch of converts in the senior leadership team demanding it.

So 40% less pret sandwiches, boozy lunches, after work drinks, gym, yoga classes, daytime hotels and Id imagine sex dungeon rentals for London, and 40% more cash to be spent in assorted towns and villages, from our company anyway. The working world has changed, London is going to change with it, and good. It's a nice place to stroll around minus a few million people.

Train companies still gouging though, offering c. 10% off a weekly for 3 days. I'll drive instead. 

I'm just back from a trip to the chemist and co-op (for some goodies).  I don't go into town much as I'm very busy out in the fields, etc.  Not missing anything.  Dire.  And the goodies aren't that good!  I've no desire to spend other than productive stuff (delivered) like materials.  And maybe a pint in the beer garden if/when everything is back the way it was, else I'll DIY.  I'm going to need another adventure if/when this ends.

[Harley]

2 hours ago, Agent ZigZag said:

In my opinion I  have not seen enough enterprise, vision or positive leadership from government for an industrial led recovery. There's been alot of talk but action is what I want to see. My fear is that we are going to miss the boat big time here or at least our potential which would be a great shame as the UK , especially the Midlands  The North West and North east of the country are in an ideal position to carry the UK forward.

They (polos and civil servants) talk and talk but are clearly useless about everything.  All Arts feckwits, etc with an unwarranted sense of ability, superiority, and entitlement.  Absolutely pointless looking to them for anything, more a case of watching out for how much damage they can cause you.  Pretty obvious before, utterly screaming now.

PS: They'll empty our bank accounts and sell off everything before they (have to) change anything.

[No One]

3 hours ago, Hancock said:

Down 1% on FX! Do they offer SIPPS/ISA's?

If not could come in handy for when i spunk my house money should a BK happen.

Yup, Trading 212 has 0.15% FX fee, and free ISA
         Freetrade has 0.45% FX fee and their ISA costs £3 pm, their G.I.A is completely free however (except FX).

Both have no commission trading. Freetrade has also recently opened a SIPP too for £10 a month, no trading fees and no charges for custody either however I don't have a SIPP with the yet, I'm with AJ and Bell for now and need to continue with them for a least a year or else I get stung with £250 for leaving too early.

The only issue with 212 is that the Wallstreetbet yolo crowd all tried to rush in Jan and make accounts, and they had to put in a waitlist for newcomers.

There are also other providers like eToro. However, whomever you choose you'll save more than what you have now.

My referal links are:

www.trading212.com/invite/FMXckZm
and
https://magic.freetrade.io/join/mark/78fa17e0
respectively.

 

Full disclosure, I get a free share when someone uses these referals. DYOR yada yada