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


spunko

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55 minutes ago, DurhamBorn said:

Technicals were amazing for a rally.Lots of them will carry on up i think where others will fall back.

Seems very much so.  Today seemed to put the technicals on steroids.  Those stocks already heading down hit hard and those already on the turn bounced higher.  Possible bottom fishing with those stocks at monthly lows doing well.  Today did not float all boats and this could be a theme going forward and possibly not so good for trackers.

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Democorruptcy
56 minutes ago, DurhamBorn said:

UK cyclicals blasting higher as i said they would.Technicals were amazing for a rally.Lots of them will carry on up i think where others will fall back.Its laughable really how wrong sided everyone was in the media etc.Every day people were saying sterling was going lower yet the commercials were going long and sterling was going to turn.UK domestics are heaving skewered to sterling.The markets have been amazing this last year for macro strategy  driven investing.Once the dollar weakens things will get interesting as thats when the heavily over valued sectors should crack in the US.Industrials are probably already in recession and it might be their results that shock the markets.

At this moment in time my worst performing share on the day is +4%, we can always rely on CNA to do a bit of lagging xD

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20 hours ago, sancho panza said:

No, it was more to do with reserves,the way they're run etc.Key take home for me as a speculator was to leave well alone.I defer to posters with a deep insider understanding of an industry,especially when they've a history of posting constructive,informative stuff.There are better,less risky ways to play the oil/gas market eg have a look at a few of the better shares listed in the XOP/FCG ETFs for mid size producers+nat gas.mainly US listed.Some down 90% off peak and nowhere near insolvent.

Big problem with emerging market shares is the forex risk.At the mo,I'm buying $ shares at with cable at 1.22.Knowing 1.40 is highly likely.But I see more upside in the stocks than I do downside in cable.I could be wrong there.

I'm happy to take forex risk in AUD/CAD/USD/EUR.

 

 

thanks again SP, I didn't want to miss out, but very happy not to take unnesessary China risks when can buy US, etc, alternatives.

I will take another look at the mid-sized US ones, but when I recently looked most were into fracking, some were 100% frackers, and this turned me off somewhat because I am looking to buy and hold and think fracking process has a rather short time horizon. For example Devon Energy looks good and only small part of their business is fracking. 

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22 minutes ago, Democorruptcy said:

At this moment in time my worst performing share on the day is +4%, we can always rely on CNA to do a bit of lagging xD

Indeed.  Stalwarts GSK and ULVR in the red for me which is telling.  BP and RDSA also which is great news!  BATS and IMB continue to move to their own drumbeat.  Pretty much everything else dark green.  Happily, I'm almost fully allocated on the FTSE income portfolios and am looking overseas, especially the US, where hopefully the time is right on some picks. Just need to consider the need for some currency hedges.  Also need to decide if PMs are just pausing and maybe add some miners and physical silver (before a possible Brexit month end).  Hopefully commodities will broadly come into play soon (been too quiet too long!).

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20 hours ago, Majorpain said:

Chinese Communist party ultimately owns everything in China, there is no guarantee that your shares will not be "nationalised" at some point in the future if its no longer in their interest to have outside investors.  There are also stories abound about Chinese companies having two sets of books, one set for foreign investors and the real numbers for the Chinese government.

Majorpain, yes future US/China deteriorating relations and/or internal Chinese social/political collapse (will it make it to its 80th birthday?, USSR didn't!), and I suppose the strains are showing already. But does that mean you wouldn't consider buying any Chinese stocks?

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21 hours ago, DurhamBorn said:

Exactly.Card Factory is a fantastic business.The one near me always has people in,steady stream.Their new range priced at the higher end at £1.69 etc is way superior to anywhere else for twice the price.Everyone goes there for balloons etc as well for kids birthdays.They are about to upgrade their website to multi channel,so im guessing they are about to launch click and collect.I would expect that will do very well once people know about it for occasions buying /kids birthday/hen night/key birthdays etc.Market has kicked them down due to profits flat lining even though they are expanding shops,but id say holding steady in a brutal market is a good performance.They have signed a deal to supply half of Aldi's stores now (400+) after a trial in 100.They need to keep the debt down though as its a bit too high for a low asset business,but free cash should remain robust.Key danger to them is probably the other discounters increasing their ranges,but its unlikely anyone will get close to them in price/quality/range.I would expect theor EPOS data is giving them a lot of info now as well.Increases in NMW will hit them though,they might have to increase prices at somepoint,though id expect they could move things up 10% without much trouble.

DB, what do you think of Hays surprise acquisition of Thomas Cook? It seemed obvious after the collapse to all 'experts' that the high-street travel agent model was dead... until of course it wasn't.    

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4 hours ago, CVG said:

FTSE going gangbusters - presumably on talk of Brexit deal

They must have learned from Trump. He's managed to string out the lie that "trade talks are going well" for over two years.

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7 hours ago, kibuc said:

In case anyone is still interested in junior mining space - and I don't blame you I've you have long given up - New Gold reported yesterday. Rainy River did very well in Q3 and a similar performance in Q4 would see them beat the yearly guidance. New Afton also looks poised to beat guidance for gold and meet for copper.

As is now usual with NG, I think it's reasonable to expect a surge in SP between now and the Nov 6, when financials are reported and the reality sets in.

Absolutely. Life is firmly getting in the way for me right now so updates are appreciated (and that goes to everyone else posting too). 

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1 hour ago, Democorruptcy said:

At this moment in time my worst performing share on the day is +4%, we can always rely on CNA to do a bit of lagging xD

ha indeed,my dad said the same thing,his words were even that bloody thing is up xD .Really pleased with portfolios today,they did exactly as i hoped on a sterling turn.Shame it couldnt of waited a couple of months though for you know what)B|

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39 minutes ago, JMD said:

DB, what do you think of Hays surprise acquisition of Thomas Cook? It seemed obvious after the collapse to all 'experts' that the high-street travel agent model was dead... until of course it wasn't.    

Hays is very well ran and most people in the north use them sometimes.They are very good at what they do.If i want to go and see the Sanremo festival in Italy by train and a hotel,go in there and they will sort the lot for you,many people still want that service.

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48 minutes ago, JMD said:

Majorpain, yes future US/China deteriorating relations and/or internal Chinese social/political collapse (will it make it to its 80th birthday?, USSR didn't!), and I suppose the strains are showing already. But does that mean you wouldn't consider buying any Chinese stocks?

Speaking for myself, 100% no.  There is no need when there are 1000's of other stocks to buy (some of which are very high quality) on exchanges in countries where shareholders actually have rights.  The China Hustle is a good film to watch if you have time, load of people got severely burnt and it explains how they relieved investors of their money.

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5 minutes ago, DurhamBorn said:

ha indeed,my dad said the same thing,his words were even that bloody thing is up xD .Really pleased with portfolios today,they did exactly as i hoped on a sterling turn.Shame it couldnt of waited a couple of months though for you know what)B|

Is CNA still on your buy list/close to or at the bottom of your ladders? I never got round to buying any, and then saw reports of falls come through on here every now and then, so just decided to wait. 

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54 minutes ago, Harley said:

Indeed.  Stalwarts GSK and ULVR in the red for me which is telling.  BP and RDSA also which is great news!  BATS and IMB continue to move to their own drumbeat.  Pretty much everything else dark green.  Happily, I'm almost fully allocated on the FTSE income portfolios and am looking overseas, especially the US, where hopefully the time is right on some picks. Just need to consider the need for some currency hedges.  Also need to decide if PMs are just pausing and maybe add some miners and physical silver (before a possible Brexit month end).  Hopefully commodities will broadly come into play soon (been too quiet too long!).

Im in the same boat Harley.I will likely pick up a few more BAT if i can around the £25 area.Im pretty much happy with my weighting in UK cyclicals,i would of bought a few more if they carried on down,but very happy if this turn holds.Like you im fishing in the US next,and also a few in Europe.Im in no rush though.Silver miners can be bought here i think for anyone who doesnt have exposure or wants more.

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Just now, Loki said:

Is CNA still on your buy list/close to or at the bottom of your ladders? I never got round to buying any, and then saw reports of falls come through on here every now and then, so just decided to wait. 

They hit all ladders.The seem very badly ran at the moment and a lack of direction,but they have potential if the management get a grip.Very well set for electric cars etc.Im well down on them,but at 1.3% of portfolio they can sit there.£3 or bust:o

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10 minutes ago, DurhamBorn said:

They hit all ladders.The seem very badly ran at the moment and a lack of direction,but they have potential if the management get a grip.Very well set for electric cars etc.Im well down on them,but at 1.3% of portfolio they can sit there.£3 or bust:o

How did Ian Conn (great name!) get away with it for so long, when it was clear that management were failing?

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11 minutes ago, Ponty Mython said:

How did Ian Conn (great name!) get away with it for so long, when it was clear that management were failing?

I actually think he has done the right things,the last management made the mistakes.He should of sold nuclear much earlier though.Likely they are,or nearly are price setters now though so might yet come good.

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6 hours ago, kibuc said:

Full credit to Adams for turning Rainy River around, and for pushing on with New Afton expansion. Operationally they finally seem to be in good shape. However, their financials are a mess, only exacerbated by their inability to take advantage of current and future gold prices. They'll have to dillute like there's no tomorrow if they are to meet their obligations. It's already started, with that $150mil deal in August, and there will be more to come.

kibuc, isn't poor management rife across the PM mining sector? I was wondering if you had a 'top 10 best run miners' list? Companies which over the years have mainly had fully-engaged (full-time?), professional sorts at the helm. After all, political risk is a consideration, so why not management credibility ?!                

I know the technicals and mineral reserves are crucial, but how those assets are run must be just as important. If you did have some information that would be great, but anyway interested to hear you views on this.   

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1 hour ago, JMD said:

kibuc, isn't poor management rife across the PM mining sector? I was wondering if you had a 'top 10 best run miners' list? Companies which over the years have mainly had fully-engaged (full-time?), professional sorts at the helm. After all, political risk is a consideration, so why not management credibility ?!                

I know the technicals and mineral reserves are crucial, but how those assets are run must be just as important. If you did have some information that would be great, but anyway interested to hear you views on this.   

Top 10? xD Try top 2, and you'd still have to be quite generous!

Yes, that space, junior in particular, is littered with abysmal executives who make a total mess of their relationship with local communities, straight-up lie in their newsletters, show total disregard to basic math or work directly with paid pumpers to skim their retail shareholders, or all of the above. If I had to give one name from gold and silver space, respectively, that I feel I can trust, it would be WDO and AXU. In terms of putting in hard work, getting shit done, releasing honest no-bullshit updates and always staying on the conservative side when it comes to predicting the future, it doesn't get better than Duncan Middlemiss. It doesn't hurt that he sits on two great assets, either.

I reckon it might be quite similar among the majors, but they usually carry much more momentum to stay afloat for much longer. In the junior space the lifecycle is much shorter and the realization about who's who comes much more quickly.

On another note, miners are so laughably cheap now that I'm considering selling a kidney. Some of them, like IPT and EDR, are 30% down from where they were in August, at the same silver price.

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1 hour ago, Cattle Prod said:

It was more direct experience of them not paying the bills in joint ventures, a big no no. Since then you have had APEC reneging on a farm in deal to Providence Resources and probably destroying the company. As I said to @sancho panza, the russians in my experience keep their promises. I think the same principle probably applies to how they treat their shareholders.

However I took @DurhamBorn s point to be about consumption. India and China will drive consumption of energy, not production of it. The point about the Russians supplying China is a good one, and you could gain exposure that way. But look who the big airlines are in India. Air India simply watched Emirates et al take over their market, and the same us happening in Energy. They simply can't get their shit together. Oh and they stiffed Cairn out of a billion or so too. 

The rising tide will lift all boats, just go for solid western companies with good reserves governance imho. 

 

Exactly.Consumption will explode in India and grow in the rest of Asia.That mean UK consumers will be paying a lot more,even if consumption is falling here fast.

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Talking Monkey
15 minutes ago, DurhamBorn said:

Exactly.Consumption will explode in India and grow in the rest of Asia.That mean UK consumers will be paying a lot more,even if consumption is falling here fast.

Does that mean the average Brit will be getting a lot poorer relative to the average Indian DB, with all the tech advances as we invest in the next cycle I thought wouldn't be the case

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7 hours ago, DurhamBorn said:

UK cyclicals blasting higher as i said they would.Technicals were amazing for a rally.Lots of them will carry on up i think where others will fall back.Its laughable really how wrong sided everyone was in the media etc.Every day people were saying sterling was going lower yet the commercials were going long and sterling was going to turn.UK domestics are heaving skewered to sterling.The markets have been amazing this last year for macro strategy  driven investing.Once the dollar weakens things will get interesting as thats when the heavily over valued sectors should crack in the US.Industrials are probably already in recession and it might be their results that shock the markets.

bit in bold 1: Commercials  had been for some time long sterling.I've said before how C4 news found a trader from some big bank to come on and say how she couldn't find/didn't know anyone long sterling.Clearly doesn't understand what equilibrium is and secondly hadn't even bothered to look on the comex which takes two seconds.

bit in bold 2:$ weakening not weakening is the major call ahead of the big kahuna.June 08 anyone?

 

5 hours ago, JMD said:

thanks again SP, I didn't want to miss out, but very happy not to take unnesessary China risks when can buy US, etc, alternatives.

I will take another look at the mid-sized US ones, but when I recently looked most were into fracking, some were 100% frackers, and this turned me off somewhat because I am looking to buy and hold and think fracking process has a rather short time horizon. For example Devon Energy looks good and only small part of their business is fracking. 

I should have declared an interest.My apologies.

Over the last week we've bought shares that are part of XES/OIH(oil services) and also shares that are part of XOP/XLE/FCG(oil&gas).Devon Energy was one of those

As I've said before,I go through the ETF and give each a Coma Score out of 25,then weight purchases of the ones over 17 by market cap(generally).

XES/OIH-SLB,BHGE,TS,HP,RPC,HLX(pondering some of CLB,PTEN,PUMP)

XOP/XLE/FCG-PXD,CXO,DVN,ECA,PE,ENBL,EQT,XEC (pondering some of CNX,AR,SRCI,HESM,ERF)

5 hours ago, Harley said:

Indeed.  Stalwarts GSK and ULVR in the red for me which is telling.  BP and RDSA also which is great news!  BATS and IMB continue to move to their own drumbeat.  Pretty much everything else dark green.  Happily, I'm almost fully allocated on the FTSE income portfolios and am looking overseas, especially the US, where hopefully the time is right on some picks. Just need to consider the need for some currency hedges.  Also need to decide if PMs are just pausing and maybe add some miners and physical silver (before a possible Brexit month end).  Hopefully commodities will broadly come into play soon (been too quiet too long!).

We dipped into RDSB as part of our current programme but also BP to add.I'm hoping we get decnet run dwon in the next month or two to flush out some cheap big oilies,which we'll buy heavily if we can.

I'm gradually gearing our portfolio to be probably 70% commodities-oil,gold,copper,gas,potash.

PM's look good to go.

5 hours ago, JMD said:

DB, what do you think of Hays surprise acquisition of Thomas Cook? It seemed obvious after the collapse to all 'experts' that the high-street travel agent model was dead... until of course it wasn't.    

That's a bit like thinking the patients heart failure has been cured because they've managed to medicate away the oedema in the legs.

4 hours ago, DurhamBorn said:

They hit all ladders.The seem very badly ran at the moment and a lack of direction,but they have potential if the management get a grip.Very well set for electric cars etc.Im well down on them,but at 1.3% of portfolio they can sit there.£3 or bust:o

I was looking from a coma score perpsective at some European utilities yesterday and couldn't help but wonder why CNA has dropped as hard from 140 as it has.Soem Euro utilities are in much deeper doo doo than CNA and have dropped far less.

2 hours ago, kibuc said:

Top 10? xD Try top 2, and you'd still have to be quite generous!

Yes, that space, junior in particular, is littered with abysmal executives who make a total mess of their relationship with local communities, straight-up lie in their newsletters, show total disregard to basic math or work directly with paid pumpers to skim their retail shareholders, or all of the above. If I had to give one name from gold and silver space, respectively, that I feel I can trust, it would be WDO and AXU. In terms of putting in hard work, getting shit done, releasing honest no-bullshit updates and always staying on the conservative side when it comes to predicting the future, it doesn't get better than Duncan Middlemiss. It doesn't hurt that he sits on two great assets, either.

I reckon it might be quite similar among the majors, but they usually carry much more momentum to stay afloat for much longer. In the junior space the lifecycle is much shorter and the realization about who's who comes much more quickly.

On another note, miners are so laughably cheap now that I'm considering selling a kidney. Some of them, like IPT and EDR, are 30% down from where they were in August, at the same silver price.

Super post Kibuc.As MArk TWain said, 'a gold mine is a hole in the ground with a liar at the top'

Was looking at co.s like FRES/HOC and refercing their share price versus the underlying.AS you say,there's a few looking very cheap on that basis.

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Talking Monkey
2 minutes ago, sancho panza said:

bit in bold 1: Commercials  had been for some time long sterling.I've said before how C4 news found a trader from some big bank to come on and say how she couldn't find/didn't know anyone long sterling.Clearly doesn't understand what equilibrium is and secondly hadn't even bothered to look on the comex which takes two seconds.

bit in bold 2:$ weakening not weakening is the major call ahead of the big kahuna.June 08 anyone?

 

I should have declared an interest.My apologies.

Over the last week we've bought shares that are part of XES/OIH(oil services) and also shares that are part of XOP/XLE/FCG(oil&gas).Devon Energy was one of those

As I've said before,I go through the ETF and give each a Coma Score out of 25,then weight purchases of the ones over 17 by market cap(generally).

XES/OIH-SLB,BHGE,TS,HP,RPC,HLX(pondering some of CLB,PTEN,PUMP)

XOP/XLE/FCG-PXD,CXO,DVN,ECA,PE,ENBL,EQT,XEC (pondering some of CNX,AR,SRCI,HESM,ERF)

We dipped into RDSB as part of our current programme but also BP to add.I'm hoping we get decnet run dwon in the next month or two to flush out some cheap big oilies,which we'll buy heavily if we can.

I'm gradually gearing our portfolio to be probably 70% commodities-oil,gold,copper,gas,potash.

PM's look good to go.

That's a bit like thinking the patients heart failure has been cured because they've managed to medicate away the oedema in the legs.

I was looking from a coma score perpsective at some European utilities yesterday and couldn't help but wonder why CNA has dropped as hard from 140 as it has.Soem Euro utilities are in much deeper doo doo than CNA and have dropped far less.

Super post Kibuc.As MArk TWain said, 'a gold mine is a hole in the ground with a liar at the top'

Was looking at co.s like FRES/HOC and refercing their share price versus the underlying.AS you say,there's a few looking very cheap on that basis.

SP what are your thoughts on a melt up ahead of the Big Kahuna

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14 minutes ago, Talking Monkey said:

SP what are your thoughts on a melt up ahead of the Big Kahuna

Persoanlly,I think melt up is a bit of an emotive phrase.I thinkw hat we'll see is headline S&P/FTSE figures be relatively stable but underneath the surface a huge sea change in where the strenght is.ie we'll see the likes of the tech stocks eg AMZN,AAPL,FB etc drop back and see strength in commodities eg big oil(decl we're moving more long big oil).

The structural set up is in place for a major crash/depression but the moving parts aren't in position yet imho.Obviously DYOR.(Hussman said somethign similar the other day)

I'm not sure we'll see S&P 3500.Not even sure we'll see S&P 3000 but then we might.Turning points are tough to call where we are.

We're positioning for strenght in market sectors that prosper froma weak dollar.............and CNA lol

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12 minutes ago, Talking Monkey said:

Does that mean the average Brit will be getting a lot poorer relative to the average Indian DB, with all the tech advances as we invest in the next cycle I thought wouldn't be the case

They will all be getting poorer compared to the average owner of the underlying commods and the companies exposed to them.

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