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

[Majorpain]

10 hours ago, sancho panza said:

Copper showing signs of life.Alongside the yellow stuff.Some real raliies off long time lows in FRES,HOC,FCX over lat 12 months to name a few.

Recent highs in PM miners of course,all occuring without a weak dollar.I dont know whetehr it's shrewd institutional money offloading AAPL and changing tack but something looks to be occuring.

I mena how else explain 2 year highs in XAU at the same time as S&P hitting new highs?

Markets are at a very dangerous level, nothing to stop a blow off top but the smart money will be rotating out to the bagholders for the crash.

[Barnsey]

14 hours ago, Loki said:

Deflation is over? 

I was expecting more than a 'blink and you'll miss it' event 

Bad inflation has arrived but only for next few months at most, classic mid point bump on the downward cycle like 2007-8, basically what kills off the cycle for good. Fed massively overestimating US GDP which probably hovered just above 0 for Q4. Still a believer in seeing deflation return in a big way this year despite all the efforts to postpone it. The minimum wage increase of 6.2% in April for UK workers is going to crucify business already teetering on the edge, watch unemployment rise ahead of it.

My card factory shares taking a real beating lately.

[DurhamBorn]

2 hours ago, Thorn said:

Definitely think we all sound a bit like Old Soldiers... but the collective Radar of all posting here is now teaching me a ton of stuff I would never have been able to find anywhere. I wouldn't ever have expected to know anything about why potash will matter or anything else. As somebody here said recently- SBGL. Thank you all again and keep it up.

And today's news on Yahoo finance saying BAT don't care about the US ban on flavoured vaping? Didn't DB predict this- that only the Big Boys would withstand the inevitable coming regulation?

Iv made a great profit on BAT before divis since i bought them back 11 months ago.Classic contrarian buy at the time.Outside the goldies my best performer over the last year,although SSE and DRAX have pushed it close.Who would expect them to be top performer's.Of course iv got quite a few reds in my portfolio  as contrarian investors always do including a very small red on Imperial,though up after divis on that.Down on things like RM and Centrica of course,but very happy with the gains over the portfolio last year,though a lot of moving parts,top slicing things when they bounce etc.

I still think we will see a lot of financial dislocation and probably deflation still.The Iran thing today though is a look at how the next cycle will play out.Massive tensions,super powers and their proxies vying for control of assets and power.Exactly as expected.It really is incredible how the macro situation drives the politics,and yet the politicians think they are driving things.

Oil and gas dead?,the next cycle will see demand explode,and i doubt there will be any aircraft carriers launching raids to protect a windmill or solar farm.

 

[DurhamBorn]

19 minutes ago, Barnsey said:

Bad inflation has arrived but only for next few months at most, classic mid point bump on the downward cycle like 2007-8, basically what kills off the cycle for good. Fed massively underestimating US GDP which probably hovered just above 0 for Q4. Still a believer in seeing deflation return in a big way this year despite all the efforts to postpone it. The minimum wage increase of 6.2% in April for UK workers is going to crucify business already teetering on the edge, watch unemployment rise ahead of it.

Agree on that Barnsey 100%.Lots of deflation arriving from Fed action 8 months ago after a bit of a bump in inflation.That minimum wage rise is nuts considering.Lots of lay offs in retail i expect etc.Lots more tech will be introduced as well.The government are desperate for inflation,and they will get it in buckets,but not yet.Im tracking Fed printing and US treasury issues like a hawk at the moment,its moved slightly to inflationary (6 month lag),but nothing to stop a right mess heading in.

[Barnsey]

6 minutes ago, DurhamBorn said:

Agree on that Barnsey 100%.Lots of deflation arriving from Fed action 8 months ago after a bit of a bump in inflation.That minimum wage rise is nuts considering.Lots of lay offs in retail i expect etc.Lots more tech will be introduced as well.The government are desperate for inflation,and they will get it in buckets,but not yet.Im tracking Fed printing and US treasury issues like a hawk at the moment,its moved slightly to inflationary (6 month lag),but nothing to stop a right mess heading in.

All you keep hearing about is our productivity crisis at full employment, so i'm in complete agreement, business will be very quick to introduce tech next cycle, and the government are going to have to work incredibly hard to retrain those made unemployed during the bust with a reduced number of alternative occupations, alongside further erosion of workers rights I fear, going to be a heck of a balancing act.

The Fed has some downward room on rates, so once those poor GDP numbers come through next month, I think we'll see rate cuts, and then this repo QE become full on QE which won't end for the foreseeable. I think extensive QE rather than a dive into negative rates seems to be the narrative ahead.

As for future proofing the home etc, we've been up in the Midlands for a month now, and have moved from a poorly sealed and very damp 1960's flat to a 5 year old one (still renting for now), and the difference in energy efficiency is mind blowing. Only really had the heating on to dry clothes in the time we've been here despite freezing temps overnight sometimes. It's pretty obvious these aren't as solid as they used to be, i'm definitely hearing everything the neighbours are up to all around us, but the appeal of a detached freehold newish build which has already had most snagging seen to (yet retains some structural warranty) has suddenly become more appealing than previously anticipated, especially with future energy costs in mind. Although I do find the issue of the roads not being council around here pretty dodgy, and the potential costs that might have to be shared by owners for repairs etc, another form of leasehold.

[Paulie]

12 hours ago, DurhamBorn said:

Id rather it stayed down a little longer),im still buying.

How are you buying this potash fund DB? On my UK (HL) platform SOIL is coming up as short oil.

Not likely especially given events in the Middle East.....!

[Loki]

@Barnsey and @DurhamBorn thanks for your views - valued and noted, as always

[Paulie]

37 minutes ago, Tdog said:

You cant buy that ETF .. Ive bought K+L and Mosaic ... will buy one more.

OK thanks for that info Tdog. Presume you mean K&S AG, Germany.

[Loki]

1 hour ago, DurhamBorn said:

It really is incredible how the macro situation drives the politics,and yet the politicians think they are driving things.

You could basically answer 90% of the topics on any forum with this 

[leonardratso]

barings global agricultar has some nutrien in it doesnt it?

https://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/b/barings-global-agriculture-class-i-gbp-accumulation/fund-analysis

[DurhamBorn]

57 minutes ago, Paulie said:

How are you buying this potash fund DB? On my UK (HL) platform SOIL is coming up as short oil.

Not likely especially given events in the Middle East.....!

Im not buying the fund im buying a few of the companies in it like Mosaic Ltd and K+S .Iv just sold some SSAB steel,was going to hold them a bit longer but took a quick 22% profit and im buying more potash today.Iv got a couple of ladders left below on the sector,but decided to use some quick profits elsewhere to increase slightly the allocation.Iv also started a small holding in OCI NV.They are a bit tricky as they gain when gas prices are low,but they are at a decent level on the cost curve,so should be able to inflate faster than gas prices once the cycle gets going.

 

[DurhamBorn]

21 minutes ago, Paulie said:

OK thanks for that info Tdog. Presume you mean K&S AG, Germany.

Yes thats the one.

 

[Loki]

26 minutes ago, Tdog said:

 

https://www.google.com/search?q=QUIMICA+Y-SP+ADR&oq=QUIMICA+Y-SP+ADR&aqs=chrome..69i57&sourceid=chrome&ie=UTF-8

According to the blurb on HL, they also have some involvement with lithium

E.V. batteries? 

[headrow]

Surely as demand for potash increases , which it surely will , then they will just dig more out of the ground.

 

I can't see there being more demand than supply at all in my lifetime.

[Loki]

Sirius are a steal at the moment 

[leonardratso]

not quite.

spy girl will be along any minute to explain why.

[DurhamBorn]

 

1 hour ago, headrow said:

Surely as demand for potash increases , which it surely will , then they will just dig more out of the ground.

 

I can't see there being more demand than supply at all in my lifetime.

https://www.bhp.com/our-businesses/minerals-americas/jansen/

They will dig more out of the ground,billions will be sunk into new mines as above,and they will keep chasing the demand higher and higher until a huge bust around 2028/9 probably,before that though some of the companies will see annual cash flow higher than what their market caps are now and we will probably 5 to 15x our capital in them.

I wouldnt buy Sirius though,it is likely equity will be diluted to nothing before its in production.Stick to the big producers who have survived cycles before.

 

[Loki]

Just be clear I wasn't serious about Sirius...some people had their life savings in that clunker 

[leonardratso]

ahem, cough cough, you cannot be sirrius.

the old ones are the best ones.

 

[Loki]

7 minutes ago, leonardratso said:

ahem, cough cough, you cannot be sirrius.

the old ones are the best ones.

 

Quote

The only profitable division of the company is its Complaints division, which takes up all of the major landmasses on the first three planets in the Sirius Tau system. The theme song for the Complaints division is Share and Enjoy, and has since become the theme apparent for the company as a whole. The main office building and headquarters for the company was originally built to represent this motto, but due to bad architecture it sank halfway into the ground, killing many talented young complaints executives. The downside to this is that the upper halves of the motto's words now read, in the local language, "Go Stick Your Head in a Pig."

 

[headrow]

2 hours ago, DurhamBorn said:

 

https://www.bhp.com/our-businesses/minerals-americas/jansen/

They will dig more out of the ground,billions will be sunk into new mines as above,and they will keep chasing the demand higher and higher until a huge bust around 2028/9 probably,before that though some of the companies will see annual cash flow higher than what their market caps are now and we will probably 5 to 15x our capital in them.

I wouldnt buy Sirius though,it is likely equity will be diluted to nothing before its in production.Stick to the big producers who have survived cycles before.

 

I looked at the German Company mentioned further up the thread , K&S AG , was looking at buying 100 shares at roughly 11 Euros each , by the time i factored in my dealing/selling fees and the exchange rate gouge from HL i decided it wasn't worth it , especially as the dividend yield is only something like 2.2%.

 

I'll keep any eye on it though and see what the price action is like when we get a market sell off , don't like buying unless there is a sea of red , i have zero agri stocks in my portfolio and am slightly tempted but i think that could be the fact i haven't made a trade for 4 months and my cash balance is shouting at me to get invested. I've learnt from many mistakes over the past 10 years investing but lack of patience is the thing that has cost me the most , jumping in too early many times and then watching the market continue to decline.

[MrXxxx]

Anyone have experience of a HSBC Invest Direct share trading account?...I don't plan on a lot of trading (more buy and hold), so a HL account with low trading fees is not necessary, and the yearly cost of the HSBC account is only £42, plus £10.50 per trade.

[DurhamBorn]

3 hours ago, Loki said:

Just be clear I wasn't serious about Sirius...some people had their life savings in that clunker 

I know Loki,but spy wasnt here to make sure any lurkers didnt go and buy them so thought i better make it clear 

[Bobthebuilder]

47 minutes ago, MrXxxx said:

Anyone have experience of a HSBC Invest Direct share trading account?...I don't plan on a lot of trading (more buy and hold), so a HL account with low trading fees is not necessary, and the yearly cost of the HSBC account is only £42, plus £10.50 per trade.

You could do cheaper with a simple monthly stock builder account, no yearly fees and £2 a monthly trade. Many here dont like these accounts but could work for some.

 

[DurhamBorn]

1 hour ago, headrow said:

I looked at the German Company mentioned further up the thread , K&S AG , was looking at buying 100 shares at roughly 11 Euros each , by the time i factored in my dealing/selling fees and the exchange rate gouge from HL i decided it wasn't worth it , especially as the dividend yield is only something like 2.2%.

 

I'll keep any eye on it though and see what the price action is like when we get a market sell off , don't like buying unless there is a sea of red , i have zero agri stocks in my portfolio and am slightly tempted but i think that could be the fact i haven't made a trade for 4 months and my cash balance is shouting at me to get invested. I've learnt from many mistakes over the past 10 years investing but lack of patience is the thing that has cost me the most , jumping in too early many times and then watching the market continue to decline.

K&S are also the biggest road salt company in the US i think,so a few hard winters might help them as well.I dont usually like companies that dont pay decent divis,but this sector is more about the cycle.It could become a bubble sector at some point once the narrative changes to inflation "everyone needs to eat,food running out" etc etc

51 minutes ago, MrXxxx said:

Anyone have experience of a HSBC Invest Direct share trading account?...I don't plan on a lot of trading (more buy and hold), so a HL account with low trading fees is not necessary, and the yearly cost of the HSBC account is only £42, plus £10.50 per trade.

I havent,but HL dont charge anything on a share account,costs are zero apart from trading fees and they dont charge anything for shares held in an ISA,only trading fees,they make their money with the fees on funds mostly.