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

[MrXxxx]

5 hours ago, sancho panza said:

as company executives desperately try to implement a turnaround plan.

What's this?, sell off their share holdings in tranches hoping the market won't notice and then get out of the door quickly?!

[MrXxxx]

3 hours ago, JMD said:

4 hours ago, Tdog said:

Deutsche has to be the reason Germany aka the EU is so desperate for the deal to be ratified as arent i right in thinking it puts Britain on the hook for its bailout.

I have also heard something similar, but my understanding is that... the so-called 'withdrawal agreement' signs us (the UK) up to bailing out EU institutions if its needed, for the next 25 years... so along with the expected very-very protracted 'transition' period (2 years++?), I expect we shan't really be leaving the EU in any meaningful sense. Regarding Deutsche Bank, although its not an EU institution, financial contagion etc will ensure ECB pain, and so France/Germany/UK will have to pick up the pieces.

This is in the Boris-May deal, not that the politicians, experts or media have bothered to tell us. So if a financial collapse does happen, I would expect a lot of angry voters. Just as well we aren't due another election until 5-years after next month's one.

If this is the case, it will be interesting to see job wise where all those politicians who stifled the Brexit process end up in the next 5-10 years...if it's `common knowledge` on the internet they cannot plead ignorance!....`Same old, same old`

[Democorruptcy]

1 hour ago, MvR said:

No problem. The key thing to remember is that you can store multiple currencies in a single account, and you can have a negative currency balance too. ( a bit like an overdraft ).

So to start with :-

1.  GBP balance = £20,000,   USD balance = $0,  Bond Inventory = $0.   Net Liquidation Value of the account in Sterling is £20,000

Assume the commission to buy or sell the Treasury bonds is $7.50 each way.

2. You then buy the bonds, which are paid for in dollars borrowed from your broker.  You also pay the $7.50 commission. 

Now your GBP balance = £20,000,  USD balance = minus $10,007.50 ,  Bond Inventory = $10,000.  

At the 1.25 exchange rate, the minus $10,007.50 balance is worth minus £8,006, and the Treasury Bonds are worth £8,000

3. Time passes. You rack up $50 dollars in interest on the $10,000 "loan" borrowed from your broker.  This is deducted from your dollar balance. The exchange rate has now moved to 1.50.  

GBP balance still = £20,000,  USD balance now = minus $10,057.50, Bond Inventory is still $10,000.  

At the 1.5 exchange rate, the minus $10057.50 balance is now worth minus £6705 and the Treasury Bonds are now worth £6,666.67.  The currency fluctuation has decreased the value of the bonds is GBP terms, but it has also decreased the value of your dollar debt too. i.e. they balance each other out.

4. You sell the bonds, paying another $7.50 commission.  Your GBP balance still = £20,000. USD balance now = minus $ 65 ( two lots of commissions and the $50 interest paid ), Bond inventory = $0.

Your ending GBP balance is still £20,000, and the minus $65 is worth minus £43.33. I wouldn't bother closing this negative balance out as it would cost a dollar to do the trade and won't be racking up much interest.

So now Net Liquidation Value is £20,000 - £43.33 = £19,956.67.  Since all the trading was in dollars, the £20,000 sterling was never touched.

So no profit was made.. in fact it's a small loss, but that's not the point of the trade. if the Broker had gone bust during the period you were holding the bonds,  the Fed / US Treasury would recognise the bonds were in your name, and pay you your $10,000 dollars back when they mature.

Obviously at this scale, there's not much point, but since the the US equivalent of the FSA protection in brokerage accounts is around $50,000 ( I think? ), it might be worth it to protect larger cash sums.  In practice, the Fed has historically guaranteed larger sums for retail traders, but one can't be sure they'd do it again.

In the case of Interactive Brokers, the UK FSA limit applies, since they have a UK subsidiary, so any cash balance significantly over the limit could be worth protecting this way. That's my reason for learning this stuff anyway, even though my account isn't that large.. yet... here's hoping though!

Thanks very much for that.

I see what you mean now about the currency fluctuation being cancelled out.

I agree at £20k there's not much point in doing it, I only used that figure because it had been mentioned earlier. On that figure rounding the £43 to £50 it's basically 0.25% of the £20k to buy insurance on $10k. Though the £20k is never touched, so how much do you need to have in your account to borrow the $10k, is it the sterling equivalent or can it be done on leverage? 

[MvR]

36 minutes ago, Democorruptcy said:

Thanks very much for that.

I see what you mean now about the currency fluctuation being cancelled out.

I agree at £20k there's not much point in doing it, I only used that figure because it had been mentioned earlier. On that figure rounding the £43 to £50 it's basically 0.25% of the £20k to buy insurance on $10k. Though the £20k is never touched, so how much do you need to have in your account to borrow the $10k, is it the sterling equivalent or can it be done on leverage? 

The $50/£43 was just an arbitrary figure I chose as interest paid on the loan from the broker. The actual interest amount will depend on the broker's margin rate, and duration of the loan.i.e how long you hold the position and its corresponding negative currency balance, so don't read too much into the figure. 

As for how much you can borrow, it depends what you're borrowing it for. It gets a bit complicated to describe here, but put simply, if you're borrowing to buy stocks, you can borrow 2x the free cash in your account If you'll be borrowing it overnight ( i.e. any period beyond a day ), and 4x the free cash if it's for a temporary day trade. 

All this borrowing is done transparently. When you enter a trade, you'll see the "margin requirement" for that trade, so for stocks, you'll see a margin requirement of 1/2 the value of the stock you plan to buy.

It's different for different instruments, depending on the perceived risk.  For US Treasuries, you can borrow a lot more, since they are considered "safe".  The margin requirement on $10,000 of bonds is $77, so in theory you could buy a couple of million dollars worth for a quick trade. That's some serious leverage!

This would be dangerous though, since as their value changes, so would the calculated value of free cash in the account. You could wipe out in a few seconds, and still be on the hook for further loses, at which point the broker comes after you for your house, etc.  ( in practice they usually close out your positions automatically before it comes to that, but in theory they might not be able to in time.)

Brokers can modify the margin requirement for any given instrument at any time, and sometimes increase it during periods of high volatility to protect themselves, often forcing you to either add more cash to the account ( a margin call ), or reduce your position size before the end of the day.

[kibuc]

Q3 reporting in full swing, and big boys are putting up big numbers. Barrick, PAAS, Kirkland Lake, B2Gold all showing us the money. Hopefully it will help this sector to get some attention.

Juniors are a different story, plenty of disappointments so far, with WDO shining like a single diamon in the dirt. Wowzers, who knew?

Some names, like GUY, GPR and PVG got bitch-slapped and at some point may even be considered a buying opportunity by those with nerves of steel.

First Majestic is reporting today and expectations are high after a very solid production report.

[Democorruptcy]

12 hours ago, MvR said:

The $50/£43 was just an arbitrary figure I chose as interest paid on the loan from the broker. The actual interest amount will depend on the broker's margin rate, and duration of the loan.i.e how long you hold the position and its corresponding negative currency balance, so don't read too much into the figure. 

As for how much you can borrow, it depends what you're borrowing it for. It gets a bit complicated to describe here, but put simply, if you're borrowing to buy stocks, you can borrow 2x the free cash in your account If you'll be borrowing it overnight ( i.e. any period beyond a day ), and 4x the free cash if it's for a temporary day trade. 

All this borrowing is done transparently. When you enter a trade, you'll see the "margin requirement" for that trade, so for stocks, you'll see a margin requirement of 1/2 the value of the stock you plan to buy.

It's different for different instruments, depending on the perceived risk.  For US Treasuries, you can borrow a lot more, since they are considered "safe".  The margin requirement on $10,000 of bonds is $77, so in theory you could buy a couple of million dollars worth for a quick trade. That's some serious leverage!

This would be dangerous though, since as their value changes, so would the calculated value of free cash in the account. You could wipe out in a few seconds, and still be on the hook for further loses, at which point the broker comes after you for your house, etc.  ( in practice they usually close out your positions automatically before it comes to that, but in theory they might not be able to in time.)

Brokers can modify the margin requirement for any given instrument at any time, and sometimes increase it during periods of high volatility to protect themselves, often forcing you to either add more cash to the account ( a margin call ), or reduce your position size before the end of the day.

129x leverage on bonds, what could possibly go wrong!

Thanks again, very informative.

[sancho panza]

22 hours ago, MvR said:

You're very welcome. And thank you for all your company analysis / COMA rating work, which is extremely useful and educational for me!

To trade the options on US-Ts,  you've basically got a choice between options on TLT, options on the shorter dated Treasury Notes ( up to 3 years I think?) via the /ZN futures contract, and options on the longer dated Treasury Bonds ( 10 year +) via the /ZB futures contract.

These are all extremely liquid, both the futures contracts themselves and the options on them.  The options are settled with the futures contract dated just after the options expiry.  The futures contract, when it expires, is then settled for cash. You don't end up stuck with an actual Treasury Bond, so if you get run over by a bus, there's nothing complex your family need to do. it should all settle out to cash of it's own accord, with just a few days potentially unlimited market risk. So don't die on the eve of a banking crisis.. ( besides, you'd miss all the fun!  )

You might also want to look at the /GE futures contract, which tracks the Eurodollar rate, otherwise known as the infamous LIBOR.  Basically it's the rate at which dollars are loaned between banks anywhere outside the US, and despite its name, has nothing to do with the Euro. 

It's a good "fear index" of sorts, and since it's entirely market driven and not directly influenced by the Fed, it can be act as a useful signal, as well as a trading instrument. You can trade options on this too, again extremely liquid, and there are futures contracts available going out 10 years into the future, with options on these going out as far as 2023. Its charts tend to go back further in time than /ZB or /ZN too (depending on the platform), which is nice.

Actually, regarding your disaster scenario, to be extra safe, it's a good idea to add a second authorised user to your IB account, with specific trade rights ( I assume Saxo might offer this too? ),  and leave clear instructions they can follow to immediately close all positions in an emergency. If it's someone with no trading experience, these instructions could consist of the phone number to call, account number and password etc, and exactly what to say to the broker.  Closing out all positions in IB is pretty much a single click operation.. maybe with an "are you sure?" confirmation, so I'm sure this could be done over the phone as well. IB support staff are really helpful and could advise on exactly the best way to set this up. 

No worries,glad I'm of some use...as I think you're aware,I'm looking to work around dollar down/up/down over the next year or two.

I had a check on Saxo bank yesterday after reading your posts and the option chain isn't available with TLT.I think their options trading is more limited than IB.I can get options chains on all big US companies but not british. fro example.Is there anywhere you know that I could trade UK Company options online?Just asking? IB?

We'll be getting IB accounts set up as I'd really like the opportunity to take a punt on UST's without taking everything out of sterling,just in case I'm wrong on the strong dollar phase.I'm happy to stick 50% value in UST's for a short phase up 6 months or so,but the otpions would ease that pressure considerably.

My Grandad always banged on about a couple of things 1) never,ever trust stock brokers/banks to invest your money 2) gently expand your trading into areas where you lack knowledge/experience 3) always have a contingency in place if something happens to the central player.   All good advice that I've tried to heed. The big issue here is the one you highlight that my plan B for me not being around is everything rolling into equities/cash which my Mum understands and Mrs P can work a computer. I'm just wary of doing anything that might leave them trying to square an array of leveraged positions.

My short term book is small and I mainly use to keep my instincts sharp as the long term buy and hold equity positions can cause a lot of what might be termed 'skill fade'.It's also good to keep me attend to seeing a screen that's full of red/blue and trading through it.

Until I started reading your posts I didn't really appreciate all the opportunities that this new online brokering world could offer and I msut say ,it's been superb so far.But before I dabble in the futures markets,I'lltread gently.

 

[sancho panza]

4 hours ago, kibuc said:

Q3 reporting in full swing, and big boys are putting up big numbers. Barrick, PAAS, Kirkland Lake, B2Gold all showing us the money. Hopefully it will help this sector to get some attention.

Juniors are a different story, plenty of disappointments so far, with WDO shining like a single diamon in the dirt. Wowzers, who knew?

Some names, like GUY, GPR and PVG got bitch-slapped and at some point may even be considered a buying opportunity by those with nerves of steel.

First Majestic is reporting today and expectations are high after a very solid production report.

I bailed us out of Hecla and Couer alongside Endeavour 10/9.I sued the profits on Eneavour to subsidize the losses on the other two,stuck it elesehwere.market timer that I am...................Hecla/CDE only up 20% since. I got out because I reasoned we shouldn't have been in either in the first place.

You really have to spread yourself out in this market.

 

Just done a quick coma score on GPR (chart,NI,BS,CF,sector)=52425=18.Even scoring the BS a 3 gives 17.......

PVG=2(it's not that cheap historically)3335=16

At the moment,it seems anythign with some slightly bad news is getting smacked.Picked up small holding of OR recently.

I don't know what your opinion is but when I see Hecla and Couer getting lfited up,tehre's hope for them all....??

[DurhamBorn]

I really havent had much time lately,but iv been running some numbers i count as leading indicators on my road map and they are all showing massive falls.I think the industrial sectors are now in recession and that will be picked up very soon.The falls im seeing in two real front running data sets are showing faster contraction than the financial crash,the mid 1930s and the late 1920s.Two things now.Those numbers stop falling and CBs go loose on a very big scale within a few weeks,or probably spring next year markets will start to roll over hard.Eu looks terrible,we will join in.I expect the BOE is ease again very soon.Iv also noticed a lot of media about selling gilts etc as they are about to fall.I think that's premature and they might have one last run ahead.

I dont normally short,but im opening up short positions in some industrial stocks,including in the company i work for  the macro postion facing them is so bad the line went through my chart bottom and past my coffee cup 

[sancho panza]

4 hours ago, kibuc said:

Q3 reporting in full swing, and big boys are putting up big numbers. Barrick, PAAS, Kirkland Lake, B2Gold all showing us the money. Hopefully it will help this sector to get some attention.

Juniors are a different story, plenty of disappointments so far, with WDO shining like a single diamon in the dirt. Wowzers, who knew?

Some names, like GUY, GPR and PVG got bitch-slapped and at some point may even be considered a buying opportunity by those with nerves of steel.

First Majestic is reporting today and expectations are high after a very solid production report.

you see this? got to hold for a min 6 months I believe.

[DurhamBorn]

Carney talking now

 "becoming stuck in a “low growth low inflation rut”.

CBs are seeing the  credit deflation threat now,but far too late.They are going to go loose too late,then mega loose.Government will be borrowing massive amounts in a year for "investment" at sub 1%.

All CBs will go loose soon,and all governments will turn to "investment",i expect this thread will get very busy in the spring.

[sancho panza]

19 hours ago, JMD said:

Thanks everyone for all the suggestions/discussion over the last few days regarding the riskier/junior miners. I am now in the process of drawing-up my own shortlist.

The Australian miner - Vista Gold was mentioned. I am looking for similar Australian miners and found De Grey Mining, Silver Lake Resources, Silver Mines. Are these held by anyone, or if you know of alternatives to these, I would appreciate hearing about them.     

Just my personal view.
High risk is De Grey/Silver Mines.They have little revenue,ok balance sheets,unknown potnetial or not in the ground.I wouldn';t give them a coma score as it would imply they're viable as going concerns.

 

Silver Lake is a going concern and whilst the coma scale is inherently backward looking,it's to be used spraying n praying a sector.=53445=21.That's quite a high score.

To me high risk plays give you high degress of leverage to the underlying during a bull if things go ok.Just my view.

[sancho panza]

32 minutes ago, DurhamBorn said:

I really havent had much time lately,but iv been running some numbers i count as leading indicators on my road map and they are all showing massive falls.I think the industrial sectors are now in recession and that will be picked up very soon.The falls im seeing in two real front running data sets are showing faster contraction than the financial crash,the mid 1930s and the late 1920s.Two things now.Those numbers stop falling and CBs go loose on a very big scale within a few weeks,or probably spring next year markets will start to roll over hard.Eu looks terrible,we will join in.I expect the BOE is ease again very soon.Iv also noticed a lot of media about selling gilts etc as they are about to fall.I think that's premature and they might have one last run ahead.

I dont normally short,but im opening up short positions in some industrial stocks,including in the company i work for  the macro postion facing them is so bad the line went through my chart bottom and past my coffee cup 

As you're aware,I regularly short,got out a week or so back of the pre Oct 31st falls.Mainly builders UK. 

 

Just been checking my charts and it looks like I'll be having another ride on BDEV/TW tmrw.Currently got punts on RMV (gone badly), Schroders(yesterday),Ferguson(going badly)Ashtead,Wh Smith.

Front running US downturn via Intel/Tesla/SMH.Still sat on a decent cash %age,as I'm waiting for the turn before going 80% in.

Defintely got the feel of a near term top at the mo.

 

On another matter DB have you had a butchers at GPR as per kibuc?couple of these royal old shares looking beat up.GPR at 2015 low.

 

On another matter-what about UK retail?How screwed is that getting?

 

 

[DurhamBorn]

Just now, sancho panza said:

As you're aware,I regularly short,got out a week or so back of the pre Oct 31st falls.Mainly builders UK.

 

Just been checking my charts and it looks like I'll be having another ride on BDEV/TW tmrw.Currently got punts on RMV (gone badly), Schroders(yesterday),Ferguson(going badly)Ashtead,Wh Smith.

Front running US downturn via Intel/Tesla/SMH.Still sat on a decent cash %age,as I'm waiting for the turn before going 80% in.

Defintely got the feel of a near term top at the mo.

 

On another matter DB have you had a butchers at GPR as per kibuc?couple of these royal old shares looking beat up.GPR at 2015 low.

 

 

Nothing on the PM sector at the moment as i sold most of my holdings as they did more than i had hoped,but holding several silvers still.Il probably re-visit the sector once i get laid off from work and have the time again,shouldnt be too long now that.I will do my usual scan for rubber band and technical plays.Iv just been selling a few plays i bought a few months ago like Cargotec (up 20%) and BASF (up 20%) and some Repsol (up 15%).I like them all longer term,but will look to get them back next year at lower price's.

[sancho panza]

Are we going to see an inventory recession kick off the debt deflation?

see you'vce anaswered my question already

https://wolfstreet.com/2019/11/05/after-one-year-collapse-heavy-truck-orders-bounce-a-little-caution-prevails/

What Heavy Trucks Are Saying

by Wolf Richter • Nov 5, 2019 • 24 Comments • Email to a friend

“I do believe that in North America it is a cyclical downturn”: Cummins COO.

Orders for heavy trucks, after the historic boom in 2018, plunged this year, but they may have finally bottomed out. In October 2019, truck makers in the US received about 22,072 orders for Class-8 trucks, according to preliminary estimates by FTR Transportation Intelligence. While up by about 10,000 orders from the dismal levels in September, and the highest number so far this year, orders were still down 51% from October last year ago, “signifying a subdued beginning to the traditional start of the ordering season,” FTR said:

“The order level was boosted by a couple of big fleets placing large orders into 2020, but otherwise smaller orders were placed for the first quarter build,” FTR said in a statement. “Cancellations are expected to remain elevated as OEM’s shake out excess 2019 orders from the backlog.”

These OEMs are Freightliner, the largest truck maker in the US, and Western Star, both divisions of Daimler; Peterbilt and Kenworth, divisions of Paccar [PCAR]; Navistar International [NAV]; and Mack Trucks and Volvo Trucks, divisions of Volvo Group.

The historic boom of Class-8 truck orders that started in late 2017 and roared through most of 2018 was a result of a series of events triggered by all kinds of companies trying to front-run potential tariffs. Companies ordered excessively to dodge the tariffs, and they filled their warehouses, and it triggered a shipment boom. To meet this demand, trucking companies responded by ordering a historic number of trucks.

But this boom began to unwind in late 2018, and then turned into a collapse of orders that lasted through September 2019 when it appeared to have hit bottom. October looked better. But October 2016 looked better too, only to be followed by a very tough year. Orders in October 2019 were the lowest for any October since 2016:

“Orders increased in October as expected; however, caution prevails,” said Don Ake, FTR VP commercial vehicles, in the statement. “The trade and political turmoil are producing a highly uncertain business environment. Fleets are only ordering for their immediate needs. They are not willing to speculate much beyond the first quarter of next year. The OEMs have plenty of open capacity right now, so carriers are willing to approach 2020 a step at a time.”

“Freight growth is flat, as the industrial sector slows, and manufacturing struggles a bit,” Ake added.

The historic boom in orders in 2018 created a historic backlog of truck orders that then allowed the OEMs to continue production near capacity, even as orders have collapsed this year.

Truck makers have floated through most of the collapse in orders on a high note, as they were building out the historic backlog on their books. Paccar, for example, reported that Q3 revenues in the US and Canada rose 16% to $3.5 billion, and unit sales rose 12% to 31,700 trucks.

But that backlog has largely been eaten through, and truck makers are starting to cut production.

Navistar announced layoffs in August in its medium-duty truck division. Freightliner announced layoffs at the beginning of October for two manufacturing plants. Suppliers to the OEMs have also announced layoffs, including Meritor [MTOR] which disclosed at the end of September a “restructuring plan to reduce salaried and hourly headcount” in order “to reduce labor costs in response to an anticipated decline in most global truck and trailer market volumes.”

On October 29, engine-maker Cummins [CMI] cut its revenue forecast and disclosed that sales in its engine business had dropped 11% in the quarter. During the earnings call, CEO Thomas Linebarger, in commenting on the slowdown in the truck manufacturing business globally and in North America, said:

“Maybe what’s surprising to me is it’s broader than I thought. Like we are seeing challenges in India, challenges in China. Even Europe is slowing. We saw North America coming, that was all part of what we expected.”

Cummins COO Livingston Satterthwaite added: “We are definitely seeing freight growth has slowed. We are seeing orders slow and production has got to come down to match the backlog and meet those orders…. I do believe that in North America it is a cyclical downturn.”

Commenting on the engine business, Cummins CFO Mark Smith, said that “in North America, the pickup truck market is the only one that’s been holding out steady and strong through the year.” Cummins builds engines for all kinds of trucks. He was referring to the Cummins 6.7L Turbo Diesel for RAM pickups. And RAM pickups have been hot among consumers – who’re still holding up their end of the bargain.

 

[kibuc]

35 minutes ago, sancho panza said:

you see this? got to hold for a min 6 months I believe.

I did see that. Insider buys are one of my favourite signals.

I bailed out of GUY mid-October, when they decided not to publish their production number in advance of financials. I got CAD0.88 for them so can't complain. At CAD0.50 they look interesting indeed, but there are a couple things to consider:

1. They need a proper CEO and in the call it didn't sound like they are anywhere near wrapping it up. They had a guy lined up in August but he bailed for personal reasons and now they are "searching". So it doesn't look like they have identified a new candidate yet.

2. I need to re-listen to the call and pay more attention to anything about their October performance, to see what the prospects for the full Q4 are.

3. Am I expecting another leg in the gold bull run imminently, or in Q1 2020?

4. Those 3 point above should help with with timing the buy but, then again, do I need to time it perfectly if I think the company will bounce back eventually? Do I have a better place for that money in the meantime (well ok, you know I do and you know what it is  )?

I'll probably be back into GUY at some point but need to think if I want to jump in now or wait.

[DurhamBorn]

@sancho panza yes its looking very much like that could be the trigger.The falls are off the scale,notice what Labour were saying today as well,and what it means,.Exactly what the macro picture painted was needed and coming.Notice the productive capacity bit.Iv been banging the drum that the capacity of the economy couldnt support the demands on it and a reset would happen.Tories will do the same.Narrative has changed.Energy and commods will be shooting higher in the next cycle.Lots of lags at play at the moment so very tricky to time things.Ladders in place help matters of course.

"The spending proposed by John McDonnell today is something we’ve never seen before.

The Labour government of the 1970s didn’t commit to this level of spending, the Labour governments after World War Two didn’t propose this level of spending.

He is proposing £400bn of government spending to provide what he says is a once-in-a-generation upgrade to the infrastructure in this country and the productive capacity of this country."

[kibuc]

First Majestic joined the big boys and showed us some big bucks.

$8.6m net earnings (Q2: £12m loss).

AISC $10.76/oz  (Q2: $14.76/oz, revised annual guidance: $13-$14/oz).

BOOM!

 

[sancho panza]

47 minutes ago, kibuc said:

I did see that. Insider buys are one of my favourite signals.

I bailed out of GUY mid-October, when they decided not to publish their production number in advance of financials. I got CAD0.88 for them so can't complain. At CAD0.50 they look interesting indeed, but there are a couple things to consider:

1. They need a proper CEO and in the call it didn't sound like they are anywhere near wrapping it up. They had a guy lined up in August but he bailed for personal reasons and now they are "searching". So it doesn't look like they have identified a new candidate yet.

2. I need to re-listen to the call and pay more attention to anything about their October performance, to see what the prospects for the full Q4 are.

3. Am I expecting another leg in the gold bull run imminently, or in Q1 2020?

4. Those 3 point above should help with with timing the buy but, then again, do I need to time it perfectly if I think the company will bounce back eventually? Do I have a better place for that money in the meantime (well ok, you know I do and you know what it is  )?

I'll probably be back into GUY at some point but need to think if I want to jump in now or wait.

I remember you saying as much re Guyana and another share.Fair play Good trading.We stayed in.

On reflection,I've played this badly.Our positon,whislt small for us,is about as big as I'll go with this type of risk/reward play.I'd love to average down but won't go above where we are.Got greedy early doors,paying the price.

Agreed insider buying,particualrly at that rate in a junior is interesting to say the least.I see Guy as a potential ten bagger in a bull,particualrly from 50c....lol.After this news,much like Rio2 recent drops,it'll take time to recover and won't do it in a oner.If we get a wider market smack,they get even cheaper.Guy currently sits above GORO and Integra in terms of weighting but belowAGI/HMY.I see no compelling need to push it higher for us.

As per gold/silver,we seem to be in a holding pattern.I'm reassessing where we are in the bull

..I've used the last month or so to tweak our holdings.Just seen below,so jsut confirms my insticnt to get us out of Hecla,CDE,Amarillo,WRN,Eldorado,Yamana.

 

 

ref your new buy.............guessing................Minera Alamos?

[sancho panza]

27 minutes ago, kibuc said:

First Majestic joined the big boys and showed us some big bucks.

$8.6m net earnings (Q2: £12m loss).

AISC $10.76/oz  (Q2: $14.76/oz, revised annual guidance: $13-$14/oz).

BOOM!

 

https://incakolanews.blogspot.com/2019/11/first-majestic-3q19-financials.html

..they are hiding plenty behind the gold of San Dimas and Santa Elena these days. On that subject, can we shoot dead the legend about First Majestic being a "pure silver play" once and for all? Yes way back when it got 90%+ of its gross revenues from silver and Keif does everything he can to perpetuate the myth, but these days it's just 58% of revenues from silver. 

 

Said it once, said it a dozen times, the best way to play First Majestic is to be Sandstorm Gold.

[sancho panza]

51 minutes ago, DurhamBorn said:

@sancho panza yes its looking very much like that could be the trigger.The falls are off the scale,notice what Labour were saying today as well,and what it means,.Exactly what the macro picture painted was needed and coming.Notice the productive capacity bit.Iv been banging the drum that the capacity of the economy couldnt support the demands on it and a reset would happen.Tories will do the same.Narrative has changed.Energy and commods will be shooting higher in the next cycle.Lots of lags at play at the moment so very tricky to time things.Ladders in place help matters of course.

"The spending proposed by John McDonnell today is something we’ve never seen before.

The Labour government of the 1970s didn’t commit to this level of spending, the Labour governments after World War Two didn’t propose this level of spending.

He is proposing £400bn of government spending to provide what he says is a once-in-a-generation upgrade to the infrastructure in this country and the productive capacity of this country."

Not being political here because all the big three parties dissappoint me greatly,but have to say,Labour will offer some tremendous opportunities to the callous traders amongst us.But watching them trash sterling and line the pockets of the big corporations the other side of the NHS 'investments' will be painful.

ALmsot as painful as watching the Tories line the pockets of the 1% as ably as they have done over the last ten years.

[kibuc]

7 minutes ago, sancho panza said:

I remember you saying as much re Guyana and another share.Fair play Good trading.We stayed in.

On reflection,I've played this badly.Our positon,whislt small for us,is about as big as I'll go with this type of risk/reward play.I'd love to average down but won't go above where we are.Got greedy early doors,paying the price.

Agreed insider buying,particualrly at that rate in a junior is interesting to say the least.I see Guy as a potential ten bagger in a bull,particualrly from 50c....lol.After this news,much like Rio2 recent drops,it'll take time to recover and won't do it in a oner.If we get a wider market smack,they get even cheaper.Guy currently sits above GORO and Integra in terms of weighting but belowAGI/HMY.I see no compelling need to push it higher for us.

As per gold/silver,we seem to be in a holding pattern.I'm reassessing where we are in the bull

..I've used the last month or so to tweak our holdings.Just seen below,so jsut confirms my insticnt to get us out of Hecla,CDE,Amarillo,WRN,Eldorado,Yamana.

 

 

ref your new buy.............guessing................Minera Alamos?

Interesting to see you considering seel of Yamana. Any particular issue with that name, or just taking profits?

I agree it looks expensive (so does First Majestic), but they definitely delivered in the Q3.

Re: better place for my money, I thought it was obvious I was referring to WDO  I'm still trying to get over the fact I was fully invested (100% ISA, 100% SIPP, 100% my kids' kidneys) in just that one name back at CAD 2.75 in 2018 and I was hell-bent on holding until double-digits at least. Darn, I'd buying my place right now!

[kibuc]

8 minutes ago, sancho panza said:

https://incakolanews.blogspot.com/2019/11/first-majestic-3q19-financials.html

..they are hiding plenty behind the gold of San Dimas and Santa Elena these days. On that subject, can we shoot dead the legend about First Majestic being a "pure silver play" once and for all? Yes way back when it got 90%+ of its gross revenues from silver and Keif does everything he can to perpetuate the myth, but these days it's just 58% of revenues from silver. 

 

Said it once, said it a dozen times, the best way to play First Majestic is to be Sandstorm Gold.

Mark seems to have partiular dislike for AG's CEO. Personally, when I see number like these I'm happy. I appreciate that AG's production profile changed, but it's increasingly hard to find a pure silver play that doesn't suck the suckiest of sucks. I got into AG short-term with this particular report in mind and I hope I should be ok today.

 

EDIT: WDO down at open, AG down at open, shows you what I know 

[sancho panza]

1 minute ago, kibuc said:

Interesting to see you considering seel of Yamana. Any particular issue with that name, or just taking profits?

I agree it looks expensive (so does First Majestic), but they definitely delivered in the Q3.

Re: better place for my money, I thought it was obvious I was referring to WDO  I'm still trying to get over the fact I was fully invested (100% ISA, 100% SIPP, 100% my kids' kidneys) in just that one name back at CAD 2.75 in 2018 and I was hell-bent on holding until double-digits at least. Darn, I'd buying my place right now!

I coma scored most of GDX/GDXJ/XAU/HUI.

Yamana came out at 17.Which is a buy in a normal sector but given the value in PM mining,it's quite poor compared to others.Eldorado was a 15......

Yamana scored a 1 for net income after 4 years of losses.Between it and Eldorado we had 1.3% portfolio in them from 2017 purchases.We were up,the profits balanced losses elesehwere and then some,so I just moved it into smaller holdings and beefed up holdigns like SAND/KGC/AIM/HOCM/OGC/FRES plus sprinkled some stardust on the likes of GUY/RIO2/OR

Whilst coma scores are backward looking,they pick up outliers.I don't really focus on the goings on ref individual stocks unless you/DB?MP or AN Other mentions something in particualr.COma scoring channels us into companies that are less risky-less upside too.

 

[sancho panza]

 

24 minutes ago, kibuc said:

Interesting to see you considering seel of Yamana. Any particular issue with that name, or just taking profits?

I agree it looks expensive (so does First Majestic), but they definitely delivered in the Q3.

Re: better place for my money, I thought it was obvious I was referring to WDO  I'm still trying to get over the fact I was fully invested (100% ISA, 100% SIPP, 100% my kids' kidneys) in just that one name back at CAD 2.75 in 2018 and I was hell-bent on holding until double-digits at least. Darn, I'd buying my place right now!

That's my one regret.Refused to pay CAD$3.60 for WDO in Nov 18................................head hits table.But on reflection,I know a lot more now than I did then.That was when I bought Hecla and Couer....................head hits table second time.

 

Impressive drop in KGC today