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


spunko

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3 hours ago, DoINeedOne said:

Was a feature in the Investors Chronicle about a energy revolution thought i would share as mentions a few companies spoke about here

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A few of these were being tracked over I  the green energy investing thread which I really need to get round to updating...

Siemens is definitely a big player in this sector. They make up a big part of the iShares global clean energy ETF.

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4 hours ago, Calcutta said:

Does anyone know of a decent resource for finding out company debt levels without having to Google every individual company and getting multiple results? Alas I have confused myself again. I'm assuming the most important stat regarding debt is debt/equity?

Unfortunately i dont know of any quicker (and free) method than doing it yourself.

Ultimately, the only thing that matters with debt is there is as little as possible of it and can the company roll it over (borrow again)/repay it/pay the interest over time.  A company with lots of debt due 2030 and can pay it back is in a much better position than one with a little due 2020 which cant.

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National Grid has opened offshore holding companies in Hong Kong and Luxembourg, while SSE has incorporated in Switzerland. The two energy firms say they have moved ownership of their UK operations overseas to protect themselves from Labour's nationalisation plans.

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13 minutes ago, DoINeedOne said:

National Grid has opened offshore holding companies in Hong Kong and Luxembourg, while SSE has incorporated in Switzerland. The two energy firms say they have moved ownership of their UK operations overseas to protect themselves from Labour's nationalisation plans.

So they think Labour has a chance of getting elected?

How much would these measures have cost them?

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44 minutes ago, Loki said:

So they think Labour has a chance of getting elected?

How much would these measures have cost them?

Very little.As a shareholder in SSE im glad the execs took the risk serious,its their job.Of course the real story is how crazy Labours plan is.They will end up mired in years of legal wrangling while investment collapses.Of course they arent getting into government.The fact Labour are open about stealing private property outside of the normal tax system is incredible.The irony is most people understand their pensions own some of these assets and will vote to stop it,like most of my Unite union member workmates.

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Talking Monkey
19 minutes ago, DurhamBorn said:

Very little.As a shareholder in SSE im glad the execs took the risk serious,its their job.Of course the real story is how crazy Labours plan is.They will end up mired in years of legal wrangling while investment collapses.Of course they arent getting into government.The fact Labour are open about stealing private property outside of the normal tax system is incredible.The irony is most people understand their pensions own some of these assets and will vote to stop it,like most of my Unite union member workmates.

When that point is put forward to the average working man with a bit of a pension there is no chance Labour are getting elected

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1 hour ago, DurhamBorn said:

Very little.As a shareholder in SSE im glad the execs took the risk serious,its their job.Of course the real story is how crazy Labours plan is.They will end up mired in years of legal wrangling while investment collapses.Of course they arent getting into government.The fact Labour are open about stealing private property outside of the normal tax system is incredible.The irony is most people understand their pensions own some of these assets and will vote to stop it,like most of my Unite union member workmates.

Thanks for replying durhamborn. I have a small amount in SSE and National Grid too so agree with you. It's good to see diligence from the heads of companies

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23 hours ago, DoINeedOne said:

Was a feature in the Investors Chronicle about a energy revolution thought i would share as mentions a few companies spoke about here

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thanks DoINeedOne, great article post. It poses some fundamental questions.

DB, do you still see gas as being best performing fuel play (by way of utility generators/distributors) over the next 10 years? I do hold some of those utility companies already, but after reading the above article I would be interested in hearing views regarding what Rolls-Royce - and their mini-nuclear plants - might bring to the energy-mix solution, in terms of providing instantaneous on-demand energy supply (a factor lacking in renewables). Its interesting that the article highlights the battle between gas carbon capture/and renewable-energy storage technologies.

Anyway, the risk as I see it is that even if gas is heavily consumed in Russia/China/Asia, my utility investments are UK/Europe facing and so - with carbon capture being unproven - the risk is that nuclear may become the favoured/de facto energy solution throughout Europe (by way of political expediency) in order to plug that 'on-demand/supply problem'. I realise gas consumption couldn't be 'removed' overnight but in terms of the investment potential of a 'nuclear alternative' say over the next 10 year isn't that a different question?   

 

So in terms of Rolls-Royce - they have the engineering experience (nuclear subs), they appear to have the governments ear (subsidies?), and their share price has remained flat-ish over past 5 years. I'd personally prefer to pay a little less for them, but do others own, or perhaps are tempted?     

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Interesting (in relative terms) day in the gold sphere, as Kirkland Lake decided to buy Detour Gold in all-stock deal. 

Kirkland is by far the most impressive story of the last 5 year, hitting jackpot in Fosterville and going from $2 to over $60. I'm talking about grades measured in ounces per tonne instead of grams, at AISC below $600. An absolute cash cow.

Detour Gold is a whole different story - an open pit mine producing roughly 600koz per annum from dirt at 1g/t and $1200/oz. What they have, however, are Proven+Probable reserves of over 15Moz.

In short, KL is using it proceedings from their high-grade, low-cost but quickly depleting operation to purchase lots of low-grade ounces in the ground.

If you believe in gold going up, you should probably like it. Market definitely does not - KL is down %15 at the moment of writing.

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For those with investments like me <15k say, is there a good way to get silver exposure via a fund in an isa without individual miners? Not sure individual ones would give me enough breadth with this size pot...

From what I gather there is some silver crossover in GDX and GDXJ, is that “enough” exposure to benefit, if there’s no alternative? A lot of the Silver miner trackers aren’t available in ISAs it seems.

thanks 

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There are physical silver trackers available (iShares, xTracker and also some leveraged products - 2x and 3x, used to go up to 5x), but not silver miners indices I'm afraid. Which might be a good thing actually, as a lot of "silver" miners in those products get less than 50% of their revenue from actual silver, the rest being lead, zinc or (best case) gold. For exposure to (almost) pure silver mining you have to pick your stocks.

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5 minutes ago, kibuc said:

There are physical silver trackers available (iShares, xTracker and also some leveraged products - 2x and 3x, used to go up to 5x), but not silver miners indices I'm afraid. Which might be a good thing actually, as a lot of "silver" miners in those products get less than 50% of their revenue from actual silver, the rest being lead, zinc or (best case) gold. For exposure to (almost) pure silver mining you have to pick your stocks.

Have you noticed continuing fall of fresnillo? I can't see any news. They didn't really go up when the silver was flying, yet seem to have joined the ride on the downside.  I already have too much but may just top up if it gets to 500

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37 minutes ago, mh9000 said:

For those with investments like me <15k say, is there a good way to get silver exposure via a fund in an isa without individual miners? Not sure individual ones would give me enough breadth with this size pot...

From what I gather there is some silver crossover in GDX and GDXJ, is that “enough” exposure to benefit, if there’s no alternative? A lot of the Silver miner trackers aren’t available in ISAs it seems.

thanks 

https://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/m/merian-gold-and-silver-r-gbp-accumulation

?

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12 minutes ago, Bear Hug said:

Have you noticed continuing fall of fresnillo? I can't see any news. They didn't really go up when the silver was flying, yet seem to have joined the ride on the downside.  I already have too much but may just top up if it gets to 500

They are too big to be on my radar, but I can see their H1 report was quite a stinker - profits down 70% YoY, "continued operation challenges combined with higher costs" and such.

 

That was at $1320 gold and $15.2 silver and the world is different today. However, if your operations are not running smoothly and you cannot control your grades and costs (not pointing a finger at FRES specifically, don't know them well enough), higher prices won't save you.

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23 minutes ago, kibuc said:

They are too big to be on my radar, but I can see their H1 report was quite a stinker - profits down 70% YoY, "continued operation challenges combined with higher costs" and such.

 

That was at $1320 gold and $15.2 silver and the world is different today. However, if your operations are not running smoothly and you cannot control your grades and costs (not pointing a finger at FRES specifically, don't know them well enough), higher prices won't save you.

Thanks. They are getting pretty close to ftse100 relegation zone as well

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Bus Stop Boxer
On 23/11/2019 at 21:01, Thorn said:

David Rosenberg. What an interview.

I am now a fan of this lad. He might be a friend of yours DB from the insight he has.

BBB corporate debt and ETF- based Bust and Contagion anyone?

https://youtu.be/V2u6rlVdDgY

 

The other vid showed him saying we'd pretty much be in crash territory by now.

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20 minutes ago, Bear Hug said:

Thanks. They are getting pretty close to ftse100 relegation zone as well

I'm ploughing my monthly allocation pretty much 100% at the moment after selling a big proportion of my HOC and FRES at the high this year (more luck than skill as I had unexpected expenses this year so had to take profit but I wanted to keep hold of my PM allocations). I prefer having exposure in the bigger players especially at this point in time once shit kicks off. IMHO We've had the initial run, this is the fallback, let's see what 2020 brings.

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2 hours ago, mh9000 said:

For those with investments like me <15k say, is there a good way to get silver exposure via a fund in an isa without individual miners? Not sure individual ones would give me enough breadth with this size pot...

From what I gather there is some silver crossover in GDX and GDXJ, is that “enough” exposure to benefit, if there’s no alternative? A lot of the Silver miner trackers aren’t available in ISAs it seems.

thanks 

You could look at sprott gold/silver for physical holdings.

i would stay well away from any etf trackers or leveraged etfs.  

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11 hours ago, Tdog said:

Do you see the share prices rising of the companies Labour want to takeover should they fail to get in office.

 

Dont care and dont know Tdog,dont care if they go up 20% or down 20%.I expect to return inflation+2% from them over the cycle.The price i care about on them is the price around 2027 and the divis between now and that date.I use ladders to buy the stocks i want,that way i ignore all noise.Always found it the best way over the longer term.

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18 hours ago, JMD said:

I would be interested in hearing views regarding what Rolls-Royce - and their mini-nuclear plants - might bring to the energy-mix solution, in terms of providing instantaneous on-demand energy supply (a factor lacking in renewables).

The problem with Nuclear is that it is not instantaneous on demand like Gas or Open Cycle Gas Turbines. Hence it is used as base load, however not without issues! Nukes are not 100% reliable as base load so equivalent on demand base load needs to cover them and be ready as a spinning reserve. Gas and renewable are the future of power generation.

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51 minutes ago, NogintheNog said:

The problem with Nuclear is that it is not instantaneous on demand like Gas or Open Cycle Gas Turbines. Hence it is used as base load, however not without issues! Nukes are not 100% reliable as base load so equivalent on demand base load needs to cover them and be ready as a spinning reserve. Gas and renewable are the future of power generation.

thanks NogintheNog for highlighting that crucial limitation of nuclear. I had wondered why nuclear hadn't made serious inroads over last 20 years. I know contaminated fuel, etc., is problem but thought the absolute demand for energy would rule. I recall a Scandinavian company (forget its name?) having similar mini-nuclear technology some 10 years ago and which apparently could be deployed 'very quickly', but that technology has seemed to fade away without trace.  

 

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15 hours ago, leonardratso said:

I think that fund is a good one for gold+silver miners, performance comparable to gdx, etc, but when I initially looked the 1% fee put me off. I was hoping that eventually slvp/sil funds would be available 'over here' by now but alas no. I therefore instead bought silver miner stocks.

For gold miner exposure I bought gdx. Although its a gold fund I did approximate/guess - for the purposes of getting my overall personal portfolio allocation right - that it held approx. 15% silver miners, but i'm now not so sure if it is that high a figure. Does anyone have a view on what % silver the gdx fund holds in terms of a gold/silver ratio? 

 

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