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

[dgul]

1 hour ago, Sman said:

I think the effects of vaping would have no real issue in terms of passive smoking as it's only water vapour that's created,  Nothing is combusting. I work within the NHS and the view currently is that it's much safer than smoking. Long term effects unknown. But I guess this would be true even of meds cleared via clinical trials.

That obviously can't be true.  

But I would accept that most of the stuff in the aerosol created isn't a problem.  I'd have thought that there are two broad risks:

• There's something specific and poisonous present at low levels.
• They've included (or not eliminated) oils in the juice.

Some problems sound like one thing but are probably the other -- so there's questions over vitamin E acetate as the adulterant, but the actual problem is that it is an oil.

Anyway, if the problem was lipoid pneumonia it would be oils in the vape juice.   Oils aren't needed in the juice, and if they're not there then this problem (LP) wouldn't be there.

[CVG]

13 minutes ago, DoINeedOne said:

Tobacco companies taking a hit today IMB.L -9.5% so far and BATS.L not as bad -3%, seems i will get a second ladder into IMB.L

Yep. Excellent. Third Ladder just purchased

[DoINeedOne]

IMPERIAL BRANDS PLC

On Wednesday 25 September, we completed the transaction with Auxly Cannabis Group Inc. As previously announced, we have invested C$123 million by way of a debenture, convertible into 19.9% ownership of Auxly.

 

 

[Loki]

50 minutes ago, DoINeedOne said:

Tobacco companies taking a hit today IMB.L -9.5% so far and BATS.L not as bad -3%, seems i will get a second ladder into IMB.L

Just bought my first lot.  First non-tech/energy/construction/miner or 'non-essential' I have in my portfolio 

[DoINeedOne]

Woodford apparently bought IMB.L few days ago not the best start what a year he is having 

[Durabo]

Mortgage Fraud up 5% so far in 2019, despite a fall off in the number of mortgages given - 

https://www.cifas.org.uk/insight/fraud-risk-focus-blog/mortgage-fraud-on-rise

https://www.cifas.org.uk/newsroom/mortgage-fraud-five-percent-2019

If its a 5% rise in fradulent mortgages when fradulent mortgages are 0.5% of all mortgages granted, its not significant. Annoyingly, I can't find the raw figures to check this. The figures are from CIFAS, and the press release doesn't contain them. I'm putting this here because if I remember rightly, mortgage fraud was one of the key indicators used in the Big Short

[dgul]

17 minutes ago, Durabo said:

Mortgage Fraud up 5% so far in 2019, despite a fall off in the number of mortgages given - 

https://www.cifas.org.uk/insight/fraud-risk-focus-blog/mortgage-fraud-on-rise

https://www.cifas.org.uk/newsroom/mortgage-fraud-five-percent-2019

If its a 5% rise in fradulent mortgages when fradulent mortgages are 0.5% of all mortgages granted, its not significant. Annoyingly, I can't find the raw figures to check this. The figures are from CIFAS, and the press release doesn't contain them. I'm putting this here because if I remember rightly, mortgage fraud was one of the key indicators used in the Big Short

If they don't look they won't see anything.

[DoINeedOne]

23 minutes ago, Durabo said:

Mortgage Fraud up 5% so far in 2019, despite a fall off in the number of mortgages given - 

https://www.cifas.org.uk/insight/fraud-risk-focus-blog/mortgage-fraud-on-rise

https://www.cifas.org.uk/newsroom/mortgage-fraud-five-percent-2019

If its a 5% rise in fradulent mortgages when fradulent mortgages are 0.5% of all mortgages granted, its not significant. Annoyingly, I can't find the raw figures to check this. The figures are from CIFAS, and the press release doesn't contain them. I'm putting this here because if I remember rightly, mortgage fraud was one of the key indicators used in the Big Short

Staged Income

have a friend who did this can't really blame him as being self employed he earned more but banks seem to hate self employed, so he had a family member who owned a company and employed him for around 7 months, he never spent a day at the company and just gave the family member around £2000 a month to pay back to him as a salary whilst he continued to do his own work

Then he got accepted for a mortgage now what i find stupid is he earned more than £2000 a month as self employed but was declined because self employed income varies 

[JMD]

1 hour ago, Loki said:

Just bought my first lot.  First non-tech/energy/construction/miner or 'non-essential' I have in my portfolio 

Loki, may I ask what are the tech shares have you bought? I'm always interested in buying reflation type tech stocks.

[Loki]

1 minute ago, JMD said:

Loki, may I ask what are the tech shares have you bought? I'm always interested in buying reflation type tech stocks.

Nothing you'll find exciting/new I'm afraid - Vodafone and BAE!

[JMD]

26 minutes ago, Loki said:

Nothing you'll find exciting/new I'm afraid - Vodafone and BAE!

thanks Loki, i'm always on the lookout for tech companies that may soar next cycle. I don't mean telecoms/aerospace ones - more like medical tech, home/personal tech, surveillance, robotics, cyber-security, semi-conductor - so I guess not really reflation stocks as per this forum. However, 'automation' will be another of the 'big themes' of the next cycle. 

So far (with some help from Harvey - thanks Harvey!) I've only found a few tech etf's. But if anyone would like to share any specific companies they are aware/invested in that would be great. 

[janch]

@JMD AJ Bell do a weekly Shares magazine with share tips.  They recently tipped Learning Technologies (LTG) AIM  and Aveva (AVV) which does digital design tools for engineers plus Polar Capital Biotechnology fund.

I haven't bought any myself as I'm still acquiring the more basics eg VOD etc but most of their tips do seem to go up so could be worth looking at??

DYOR etc etc

[DurhamBorn]

3 hours ago, DoINeedOne said:

Tobacco companies taking a hit today IMB.L -9.5% so far and BATS.L not as bad -3%, seems i will get a second ladder into IMB.L

Yes i topped up Imperial at £18.42,that was actually just below my last ladder buy,but i decided to buy more and remove last two ladders.I had hoped for more BAT,but my last ladder was bought at £24.40ish so way above the ladder below that.Il leave those ladders in place just in case.Imperial have made some missteps in the vaping/heat not burn space,but likely the vaping trouble in the US will be hammering smaller players.I doubt they will get vaping into profit for a while yet.A lot depends on what the FDA do.Most of the vape problems seem to be coming from none regulated mixes and that will prove hard to control.They will have to find a solution though and big tobacco should end up the winners.Imperial need to make sure they dont squander their massive free cash flow though.They have a few years where they have lots of spare cash still and need to make the right investments.

[DurhamBorn]

2 hours ago, DoINeedOne said:

Woodford apparently bought IMB.L few days ago not the best start what a year he is having 

Insane how he has run his portfolio.Buying risky over valued crap,losing half the money etc.Instead of buying the likes of the AA he should of kept to solid divi payers.As the divis are rolling in you can top up parts of your portfolio.45% of the Imperial i bought today were from divis from other companies over the last 6 weeks.Thats how you compound over the years.

He used to be a master at this,but somehow lost his way.I think a lot of his problems came from ignoring debt and only looking at the equity.Classic end of cycle mistakes.I think many of the stocks he owned are actually good long term investments,but only once they had been cut in half.The others were shocking picks though.I sold all my Imperial at £35,he was buying then.To be fair he did sell BAT at the top,but squandered the profits on some crazy stocks.

He said miners etc were crazy prices and over valued.We doubled our money on them,and then bought some of the stocks he had at half the price.Road map im using says PE ratios are hitting 6 to 9 and thats where my ladders started on nearly all my stocks im buying,some i used free cash flow as the multiple not EPS.

[Loki]

Sorry for the ZH link but it sounds "debt deflation-y" to me

https://www.zerohedge.com/markets/second-term-repo-oversubscribed-funding-shortage-keeps-getting-worse-and-nobody-knows-why

[Castlevania]

I can’t remember the last time four constituents of the FTSE100 all came out with profit warnings on the same day? IAG; Imperial; Pearson and then Carnival snuck one out too. We live in interesting times.

[Democorruptcy]

3 hours ago, DurhamBorn said:

Insane how he has run his portfolio.Buying risky over valued crap,losing half the money etc.Instead of buying the likes of the AA he should of kept to solid divi payers.As the divis are rolling in you can top up parts of your portfolio.45% of the Imperial i bought today were from divis from other companies over the last 6 weeks.Thats how you compound over the years.

He used to be a master at this,but somehow lost his way.I think a lot of his problems came from ignoring debt and only looking at the equity.Classic end of cycle mistakes.I think many of the stocks he owned are actually good long term investments,but only once they had been cut in half.The others were shocking picks though.I sold all my Imperial at £35,he was buying then.To be fair he did sell BAT at the top,but squandered the profits on some crazy stocks.

He said miners etc were crazy prices and over valued.We doubled our money on them,and then bought some of the stocks he had at half the price.Road map im using says PE ratios are hitting 6 to 9 and thats where my ladders started on nearly all my stocks im buying,some i used free cash flow as the multiple not EPS.

Just looking at the PE's of some of the usual suspects and that turned out right. BT 6.6%, CNA 6.4%, RMG 7%, SGC 7.1% but VOD is the outlier now at 34.4%

[subutai80]

2 hours ago, Castlevania said:

I can’t remember the last time four constituents of the FTSE100 all came out with profit warnings on the same day? IAG; Imperial; Pearson and then Carnival snuck one out too. We live in interesting times.

and still FTSE100 up a decent amount

[Errol]

5 hours ago, Loki said:

Sorry for the ZH link but it sounds "debt deflation-y" to me

Nothing wrong with Zerohedge. One of the best financial news sites there is if you want quick and non-mainstream headlines.

[Loki]

15 minutes ago, Errol said:

Nothing wrong with Zerohedge. One of the best financial news sites there is if you want quick and non-mainstream headlines.

I agree they do present the facts, but they have a tendency to go full doom porn. Still a daily visit though

[Democorruptcy]

4 hours ago, Errol said:

Nothing wrong with Zerohedge. One of the best financial news sites there is if you want quick and non-mainstream headlines.

Before I open one of their links, I always prepare my crash cart with paddles, defibrillator, oxygen tank and whatever they injected Uma Thurman with in Pulp Fiction, just in case I need resuscitating after the shock.

[dgul]

I find ZH rather entertaining.

[DurhamBorn]

8 hours ago, Democorruptcy said:

Just looking at the PE's of some of the usual suspects and that turned out right. BT 6.6%, CNA 6.4%, RMG 7%, SGC 7.1% but VOD is the outlier now at 34.4%

VOD i used free cash low rather than PE as there are a lot of things going on with the balance sheet with mergers,depreciation etc and i got in around 8x.Interesting today Imperial hit a PE of about 7.3 as well.I actually thought my numbers looked crazy when i was seeing them all come up three years ago,but they have ended up hitting.It does show why a road map and then some structure in ladders helps you avoid a lot of the pain.

The media and market have different excuses for each company as it struggles to grow or sustain profits,but the real reason is we are at the end of the great dis-inflation.Imperial should be using any spare cash flow now to buy back shares as im sure they will do.

 

[Barnsey]

I'd say this is pretty significant:

 

[Majorpain]

2 hours ago, Barnsey said:

I'd say this is pretty significant:

 

Presumably if the big manufacturers (Germany, SK, China) are showing big drops in demand, we are currently in a Wiley Coyote pause moment before the main consumer countries of the world drop off the cliff.