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

[Talking Monkey]

On ‎18‎/‎09‎/‎2019 at 20:23, DurhamBorn said:

Leads and lags.18 months ago the Fed was way behind the curve,its just hardly anyone saw that and still dont.They think the Fed need to ease,but you read everywhere how "loose" the Fed is.They are not loose,they are way too tight for this stage of the cycle.Rates can be zero and too tight.There is a dollar shortage now and thats forcing a debt deflation yet the Fed worries about inflation.

For me the play now is UK cyclicals.Everyone and his dog said sterling was going much lower at $1.20,but that is wrong and as it does the opposite UK cyclicals will continue to go up in price.

DB why is sterling going back up, is it because more US rate cuts are anticipated or are there other factors at play as well

[DurhamBorn]

6 minutes ago, Talking Monkey said:

DB why is sterling going back up, is it because more US rate cuts are anticipated or are there other factors at play as well

Sentiment got so bad that the price got below the levels where the commercials start to buy.Sterling should be around $1.42 on liquidity,but sentiment sent it down below $1.20.Likely UK cyclicals will keep running higher.The falls in sterling were around a 4% interest rate cut in macro terms for the UK economy.

[CVG]

12 hours ago, Bobthebuilder said:

I would agree with that, the 90s VW Golf VR6 was a cracker. Also the 90s BMW 3 series.

I'm not a petrol-head, but I can't help spotting the number of 80's Nissan Micras on the road. Is that me or is it the most prevalent 'old' car?

[spygirl]

7 hours ago, Talking Monkey said:

DB why is sterling going back up, is it because more US rate cuts are anticipated or are there other factors at play as well

Because currency markets are very volatile, chaotic over short (less than 2 years) periods.

Anyone looking for a poltical opinion a la brexit, from the Forex market is an idiot.

 

 

 

[Barnsey]

10 hours ago, spygirl said:

BoE has fixed the size of uk mortgages to income, which will fix the HPE multiple.

North is okish - bar low transaction caused by 50% of 25-50 being on TCs, where you cannit get mortgage.

South is in big trouble. Well paying finsec jobs have gone, making high hpi even more danaging. And job market is stuck as noone us relocating.

Low IR is freezing transactions.

https://www.ons.gov.uk/peoplepopulationandcommunity/housing/datasets/ratioofhousepricetoworkplacebasedearningslowerquartileandmedian

Like you rightly point out, London & SE not looking good, house price to earnings ratio well above previous bubble peak whereas most other areas just above or below.

[spygirl]

33 minutes ago, Barnsey said:

https://www.ons.gov.uk/peoplepopulationandcommunity/housing/datasets/ratioofhousepricetoworkplacebasedearningslowerquartileandmedian

Like you rightly point out, London & SE not looking good, house price to earnings ratio well above previous bubble peak whereas most other areas just above or below.

Not only that, the fall out of finsec job losses is huge in london and regional southern towns.

Ive said it before but theres towns west of london where finsec back office etc provided 50% of private sector jobs. These have been closed or decimated.

Theres only jpm at bmouth as last (big) man standing.

[Castlevania]

59 minutes ago, spygirl said:

Not only that, the fall out of finsec job losses is huge in london and regional southern towns.

Ive said it before but theres towns west of london where finsec back office etc provided 50% of private sector jobs. These have been closed or decimated.

Theres only jpm at bmouth as last (big) man standing.

JPM have just set up a back office in Warsaw. I’d imagine a lot of jobs from both London and Bournemouth will end up out there.

[Craig]

3 hours ago, CVG said:

I'm not a petrol-head, but I can't help spotting the number of 80's Nissan Micras on the road. Is that me or is it the most prevalent 'old' car?

Favoured by old biddies, usually driving 20-30 MPH under the speed limit. Hence their longevity.

[spygirl]

2 hours ago, Barnsey said:

https://www.ons.gov.uk/peoplepopulationandcommunity/housing/datasets/ratioofhousepricetoworkplacebasedearningslowerquartileandmedian

Like you rightly point out, London & SE not looking good, house price to earnings ratio well above previous bubble peak whereas most other areas just above or below.

Median income:   Code	Name	1997	1998		1999	2000	2001	2002	2003	2004	2005	2006	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018
K04000001	England and Wales	16,885	17,631		17,974	19,000	19,898	20,562	21,359	22,284	23,151	23,564	24,255	25,373	25,998	26,076	26,290	26,633	27,169	27,321	27,680	28,325	28,939	29,686
E92000001	England	16,958	17,709		17,939	19,107	19,997	20,706	21,500	22,418	23,280	23,729	24,480	25,549	26,133	26,265	26,488	26,822	27,372	27,485	27,841	28,496	29,083	29,872
E12000001	North East	15,622	15,778		16,282	17,430	17,844	18,076	18,228	19,247	20,263	20,613	21,076	21,931	22,684	23,124	23,250	23,781	24,113	24,904	25,347	25,561	25,904	26,297
E12000002	North West	16,107	16,587		16,977	17,863	18,567	19,234	19,916	20,717	21,777	22,000	22,889	23,740	24,020	24,127	24,167	24,603	25,111	25,262	25,667	26,220	26,754	27,315
E12000003	Yorkshire and The Humber	15,538	16,368		16,527	17,503	18,270	18,863	19,659	20,433	21,506	21,674	22,307	23,357	23,891	23,856	24,119	24,288	24,933	24,999	25,194	25,946	26,309	26,894
E12000004	East Midlands	15,773	16,279		16,392	17,352	18,291	19,125	19,847	20,691	21,494	21,946	22,222	23,271	24,357	24,118	24,002	24,626	24,918	25,000	25,003	25,474	25,882	26,749
E12000005	West Midlands	15,878	16,718		17,000	17,812	18,756	19,225	19,786	20,765	21,447	22,000	22,543	23,849	23,958	23,831	24,291	24,573	25,328	24,963	25,682	26,352	26,837	27,716
E12000006	East	16,858	17,584		18,000	19,020	19,978	20,495	21,511	22,242	22,883	23,517	24,061	24,949	25,500	25,379	25,953	26,145	26,514	26,817	27,300	27,892	28,456	29,128
E12000007	London	20,871	21,862		22,487	24,204	25,215	26,467	27,455	28,750	29,882	30,355	31,484	32,813	33,700	33,990	34,396	34,883	35,173	35,034	35,303	36,170	37,171	38,154
E12000008	South East	17,375	18,278		18,737	19,992	20,907	21,940	22,843	23,748	24,229	24,798	25,583	26,778	27,458	27,503	27,881	28,175	28,315	28,607	29,031	29,700	30,236	30,826
E12000009	South West	15,841	16,425		16,727	17,847	18,465	19,233	20,000	20,694	21,279	21,815	22,665	23,648	24,175	24,098	24,306	24,581	25,242	25,585	25,950	26,372	27,119	27,969
W92000004	Wales	15,679	16,118		16,457	17,157	18,018	18,189	19,130	20,085	20,634	20,790	21,105	21,830	22,800	23,178	23,397	23,617	24,103	24,453	24,869	25,440	26,026	26,346

[JMD]

15 hours ago, dgul said:

Halfords is complex.

About 40% of their trade is bikes.  That sounds good (recession => less can afford cars => more bikes) but actually there are loads of bikes already in the UK (most of which are significantly under-used).  Sure, there's a maintenance requirement, but most jobs can be done with bits from ebay etc (bikes aren't hard to maintain) and harder jobs are a better fit for a local bike shop than the guys at Halfords.

Then there's cars (60%).  Actual spare parts and maintenance isn't that significant a part of their trade -- the biggie is 'accessories'.  The big problem here is that (IMO) Halfords has done a Maplin -- they've neglected their old faithful market (spares) and gone for the high margin accessories market.  Like Maplin, though, when customers realise that they're selling the same stuff as you get on Amazon for twice the price they'll associate the brand with 'ripoff' -- and once that label has been applied it is very difficult to take off.

Oh, and the old faithful (buying spares)?  They've mostly had enough with terrible service and patchy stock levels and have realised that the internet is cheaper, and EuroCarParts is there for the 'in a hurry'/'next day' stuff.

I think the next downturn could be terminal for them.

Thanks everyone for their views on Halfords. 

dgul, I was aware of their move into cycling, in fact my local one built a whole new 2nd floor for bikes (and as you say accessories, mostly in the form of car audio, came before the cycling wheez), but even so and unfortunately for Halfords, the consensus opinion seems to be a strong 'no buy' signal.

I was hoping Halfords might have a plan to rescue themselves, but apparently they don't. And in any case if I have read their financials correctly, they are pretty much crippled for life!... even if we ignore the high debt levels, their trading is also pretty dismal, i.e. comparing their 20M profit with Games Workshop's 30M profit makes pretty pathetic reading.   

 

[DurhamBorn]

http://www.morningstar.co.uk/uk/news/AN_1568970965315216900/sse-wind-farms-business-wins-power-supply-contract-from-uk-government.aspx

Up 20% + including divi from the lows.

Underneath,  all the ducks are getting in line for a reflation.People seem to be looking at Brexit only,when it will make no difference on the downside longer term.

[DoINeedOne]

21 minutes ago, DurhamBorn said:

http://www.morningstar.co.uk/uk/news/AN_1568970965315216900/sse-wind-farms-business-wins-power-supply-contract-from-uk-government.aspx

Up 20% + including divi from the lows.

Underneath,  all the ducks are getting in line for a reflation.People seem to be looking at Brexit only,when it will make no difference on the downside longer term.

Nice still need to buy my first ladder in SSE been getting a little distracted lately 

[DurhamBorn]

Just now, DoINeedOne said:

Nice still need to buy my first ladder in SSE been getting a little distracted lately 

I tagged the bottom in most as was already laddering in.Got a bit of luck really in that i sold my miners and bought a broad spread just before they all turned higher.Hopefully plenty of pull backs ahead so people can get the structure right.Im very distracted myself at the moment,got a lot on outside of investing that is testing the stress levels.

[Bricormortis]

2 hours ago, Craig said:

Favoured by old biddies, usually driving 20-30 MPH under the speed limit. Hence their longevity.

Nonsense I trash my micra thru Birmingham and up and down to Plymouth. 3 years old when bought..now 15 yr old and bulletproof reliability. 

[Starsend]

6 hours ago, CVG said:

I'm not a petrol-head, but I can't help spotting the number of 80's Nissan Micras on the road. Is that me or is it the most prevalent 'old' car?

That or the Honda Civic

[janch]

1 hour ago, DurhamBorn said:

http://www.morningstar.co.uk/uk/news/AN_1568970965315216900/sse-wind-farms-business-wins-power-supply-contract-from-uk-government.aspx

Up 20% + including divi from the lows.

Underneath,  all the ducks are getting in line for a reflation.People seem to be looking at Brexit only,when it will make no difference on the downside longer term.

My portfolio turned green today for the first time..........hooray!  Without CNA it would have done a lot sooner.  I started in March and bought shares in reflation stocks as per this thread plus a couple of miners.  I didn't time anything  and I've bought new stocks or kept the dividends as cash ready for the next purchase.  If I allow for dealing costs then I'm well ahead but I wanted to do it this way to see how quickly I could make any profit from the initial amount I invested in cash terms.  

I'm more than pleased with that especially as everything seems to be on an upward trajectory now.  Also because I'm playing with a relatively small amount then my dealing costs as a proportion are quite high and will reduce as I go on.

[JMD]

On ‎02‎/‎09‎/‎2019 at 12:09, Sasquatch said:

Just bought 290,135 shares in Cadence Minerals. This time next year.....

Hi Sasquatch, I'm generally interested, what is your attraction to this miner? Not a physical mining company - perhaps more like project facilitators? - so a bit different ...or was the 290 thousand shares at 10p each just a gentle jibe?

[Sasquatch]

14 minutes ago, JMD said:

Hi Sasquatch, I'm generally interested, what is your attraction to this miner? Not a physical mining company - perhaps more like project facilitators? - so a bit different ...or was the 290 thousand shares at 10p each just a gentle jibe?

Total punt in the dark and to be honest I wasn't taking it very seriously. I think someone mentioned the company on the site somewhere and I like the 'rare earths' angle as I'm sure Lithium will be in greater demand in the future. Only bought £300 of stock at just under 0.1p a share (not 10p). Interestingly I got an email last week from HL telling me that a consolidation was going to be voted on at Cadence Minerals AGM today. My 290,000 shares will be reduced to a mere 2,900 which is a bit sad....

My long term aspiration is either a 50 to 100 bagger or zilch. My preference obviously for the former!

[Sasquatch]

By the way, if anyone is planning to deal in stocks through their limited company, the process is a bit more long winded than normal. I've got some spare dosh in the company bank account and have just set up a Hargreaves Lansdown fund and share account. I had to fill out old fashioned paper forms and send them off to HL along with a bill proving the business address and a form of identification for myself. Before doing this I had to get our company on to the LEI register (Legal identifier) and be allocated a certificate and number ( and pay a fee for this). Finally, to deal in US and Canadian stocks I have to fill out the usual W-8BEN form but an alternative form specific to corporations and, again, this has to be printed out and sent to HL through the post.

 

[leonardratso]

looks a winner;

min you ive got £300 in UKOG;

this ones definately a winner;

[JMD]

1 hour ago, Sasquatch said:

Total punt in the dark and to be honest I wasn't taking it very seriously. I think someone mentioned the company on the site somewhere and I like the 'rare earths' angle as I'm sure Lithium will be in greater demand in the future. Only bought £300 of stock at just under 0.1p a share (not 10p). Interestingly I got an email last week from HL telling me that a consolidation was going to be voted on at Cadence Minerals AGM today. My 290,000 shares will be reduced to a mere 2,900 which is a bit sad....

My long term aspiration is either a 50 to 100 bagger or zilch. My preference obviously for the former!

thanks Sasquatch, I guess their penny/'fraction of a penny!' share price is down to their terrible results the last couple of years, posting millions in losses. Management asleep at the wheel? Or have they a cunning plan? 

[JMD]

On ‎19‎/‎09‎/‎2019 at 18:10, Bobthebuilder said:

I was in Halfords today, they could have a bigger market if more people knew about some of the stuff they stock. Good tools for many trades, paint spray is popular with some modellers etc, i dont think they have the broad appeal that could be possible, shame i like them. Dont hold any though.

thanks Bob, its a shame but after views from this forum I think I will def. give them a miss.

[spunko]

Mk1 Micra is called informally the cockroach I believe, you can't kill it. It's popular with domino's migrant delivery drivers round here, not just old biddies, as they're cheap to buy, own, and insurance group 3 (not sure the former bothers with this anyway). 

[Yellow_Reduced_Sticker]

9 minutes ago, JMD said:

thanks Sasquatch, I guess their penny/'fraction of a penny!' share price is down to their terrible results the last couple of years, posting millions in losses. Management asleep at the wheel? Or have they a cunning plan? 

I ALWAYS keep this in mind when i about to invest in small miners, it was a saying from the great investor...Jim Rogers: "His definition of a gold mine is 'a hole in the ground with a liar standing at the top of the hole!'"

[kibuc]

Good times never seemed so good.