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


spunko

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Heart's Ease

Can't remember if Baltic Dry used to be discussed as an indicator on this thread or elsewhere on TOS (Suntory thread?).  

More grist to the mill.

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10 hours ago, Harley said:

I've just done an awesome performance review of one of my income accounts for the year.  That is, my performance at buying at a rightish time (low price) using my preferred techniques.  Seeking such feedback really helps to validate approach and improve future performance.  A thoroughly recommended exercise.

The background story was that I needed to quite quickly ramp up this account to secure a future dividend stream to partially live off (to reduce work hours).  This started for this account in 2019, actually mostly the second half of that year.  So I was cutting a few corners and not religiously following my approach but initially buying as much when the share yields were good (over 5%) as when they were good and the price was at an intermediate low.  Several stocks therefore got cheaper!

I analysed my purchases (it's a buy and hold account) by:

. "Initial" purchases (I like the stock and the dividend so buy a small position regardless in order to get it on my radar)

. "Weekly" purchases using my approach and (aggressively for now) laddering in

. "TBD" purchases where I either used an old approach (looking at daily instead of weekly price data) or let emotion take over!

The results:

. Initial.  Represented 36% of purchases.  1% gain.  Happy with that.

. Weekly.  Represented 27% of purchases.  11% gain.  Happy with that.

. TBD.  Represented 37% of purchases.  2% gain.  Room to improve!

So for me, yes, I need to follow my approach, no exceptions.  Clearly, at 37% (TBD) there were loads of exceptions, but these were more at the start and the "Weekly" is now taking over.  This bodes well for the future.  The move from looking for weekly rather than daily buy signals for such a buy and hold account was a game changer.  Indeed, as the pressure to ramp up the portfolio lessens, I may move to monthly data for hopefully an even better performance.

Each to their own and nothing wrong with dollar cost averaging.  Indeed, that would be my personal next best preference.  But everyone needs to do what works.  the key is to review it to see how good and to look for possible improvements.  A bit like life generally!

PS:  All data excludes dividends.

What would be interesting is to `drill down` the weekly buy data by day/time and then compare likewise with the other two approaches...maybe its success was mostly by chance I.e more of those trade were done midweek and/or one our after/ before the markets opening/closing?

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21 hours ago, Yellow_Reduced_Sticker said:
@DurhamBorn GLAD ya doing well on the reductions at Tesco, are you getting any tescos "Finest Range" as that seemed to have been knocked on the head... I've only been to mine here a couple of times as its out the way and a 30 minute or so drive, besides i get most of me stuff at waitrose when i go out to the main town, yeah agree with ya in regards to ready-mades, total CRAP!
 
I don't bother buying ready-mades ... case in point i bought 1 packet of some fancy waitrose, Xmas pork/pastries £6.49 ...down to £1.69 AND what a load of sh*t NOT even worth 1p near on throw them out, BUT after spending money in addition to the gas cost i had to force 'em down me gullet!!!xD
 
Pooped in to waitrose the other day, and they had bugger all meat/fish/veg wise :Old: ...all they had was cakes so i bought the LOT...thats all i had in me basket, ya should of seen the look of the cashier HA-ha! 
 
image.thumb.jpeg.455d3f70f7acf46541363de595a4cc68.jpeg
 
Yep settling in OK, though had a depressing lonely xmas/new year cos of issues with a family member, so never posted around that time as i need to be in my chirpier mood like NOW! Hay-hoo life goes on...
 
@Harley The mention of Argos ...now most on here will know that i'm the TIGHTEST Wad on this board, i don't buy f***All NEW, everything 2nd-hand, even cloths, only thing bought new cloth wise is socks&boxer shorts and i bought enough when they were on sale to last me for the next 20 years!
 
Anyway...last 3 items i bought NEW in the last 2 years were: grass strimmer, heater & bedding sheets, ALL from Argos, mainly cos they had a deal going, also a piece of piss to order online and pick it up from the local Sainsburys store!
 
SO if a cheap-skate like me is buying his new items ONLY from Argos, then sainsburys shares may be worth looking into, however i don't like sainsburys supermarket because i can NEVER get any reductions there! so as ever...DYOR!
 
Logged into my HL acc, and its up 18% ! (not counting divis) Not bad as the portfolio is only around 18 mounts old, (Sibanye Gold UP a mental 233% :)) ...so a BIG thanks go out to YOU @DurhamBorn for sharing your knowledge ...
 
I wish YOU and ALL the Good FOLKS on this thread here:
 
GREAT Health & Prosperous New Year!
 
giphy.gif
 
 
 

Which part of the Cots did you move to? Lovely area.

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Those interested in turnings, roadmaps, timescales and preparation for turbulence may find a useful entry here. WTF: What the Fed.

It's the usual suspects of Chris Martenson (Crash Course), Grant Williams (Realvision), Mike Maloney, and similar.

They seem to have a consensus on timescale for the reset event. Maloney and Martenson are preppers to a degree with one going survivalist in Puerto Rico and the other purchasing a farm with the intention of paying someone to manage it for them.

As a learner on these topics, I'd be very interested to hear either debunking or approval. They do seem a bit open to the charge of vested interest one way or the other.

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9 minutes ago, Erewhon888 said:

Those interested in turnings, roadmaps, timescales and preparation for turbulence may find a useful entry here. WTF: What the Fed.

It's the usual suspects of Chris Martenson (Crash Course), Grant Williams (Realvision), Mike Maloney, and similar.

They seem to have a consensus on timescale for the reset event. Maloney and Martenson are preppers to a degree with one going survivalist in Puerto Rico and the other purchasing a farm with the intention of paying someone to manage it for them.

As a learner on these topics, I'd be very interested to hear either debunking or approval. They do seem a bit open to the charge of vested interest one way or the other.

I will try and remember to register and watch the full thing tomorrow

This comment caught my eye

Quote

Everything bubble is ramping, Mike. No deflation before inflation like we all thought.

 

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13 hours ago, DurhamBorn said:

Iv never married and never will.

Yes you could arb i expect.The knack is to look for the expensive stuff when new.Instead of a £70 rug for £20,the real bargains are the £800 rug for £100 etc.

Iv had amazing furniture on there.Last one was £1100 new bought for £60.Like you i hated paying VAT on stuff so its perfect.The beauty is you end up with really expensive stuff dirt cheap because a bored 60 something ex government worker on a big pension wants a colour change.

Christ, have you been buying stuff from my deranged spendthrift parents again? :S

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Finally getting my act together so that I can start trading/investing, and would value others thoughts on my approach. The plan is to have split my investment 10% cash, 10% Pm (Silver/Gold kept via Buiiion vault not in-hand, as a hedge against FIAT inflation), 40% individual equities (to learn), and 40% ETF index/trackers (single world or say several I.e FTSE 100/250 and S&P500, these as a long term hold/safety net against poor performers/mistakes made in other 40%).

Q1. Buy single equities now based on value potential/PEs, and reported performance/accounts...makes sense?

Q2. Wait on PMs until prices drop as a) currently poor value compared to six months ago, and b) pending deflation of economy and so sell off=lower prices...makes sense?

Q3. Wait on ETFs until pending recession hits as currently markets way beyond where they should be, and so offer poor value...makes sense?

Q4. Move cash into Gilts/Bonds in the future if they (ever?) offer value, but what to do with it now?...makes sense?

Q5. Income or accumulation shares?, and would choice differ if they were within tax-free wrapper?..dont need income right at moment and when I do couldn't I just sell accumulation variety and buy income variety?

Please note I take no comments as financial advice, and reserve the right to make my own mistakes! :-)

 

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21 minutes ago, MrXxxx said:

Finally getting my act together so that I can start trading/investing, and would value others thoughts on my approach. The plan is to have split my investment 10% cash, 10% Pm (Silver/Gold kept via Buiiion vault not in-hand, as a hedge against FIAT inflation), 40% individual equities (to learn), and 40% ETF index/trackers (single world or say several I.e FTSE 100/250 and S&P500, these as a long term hold/safety net against poor performers/mistakes made in other 40%).

Q1. Buy single equities now based on value potential/PEs, and reported performance/accounts...makes sense?

Q2. Wait on PMs until prices drop as a) currently poor value compared to six months ago, and b) pending deflation of economy and so sell off=lower prices...makes sense?

Q3. Wait on ETFs until pending recession hits as currently markets way beyond where they should be, and so offer poor value...makes sense?

Q4. Move cash into Gilts/Bonds in the future if they (ever?) offer value, but what to do with it now?...makes sense?

Q5. Income or accumulation shares?, and would choice differ if they were within tax-free wrapper?..dont need income right at moment and when I do couldn't I just sell accumulation variety and buy income variety?

Please note I take no comments as financial advice, and reserve the right to make my own mistakes! :-)

 

Rule #1: Dont trade on emotion, 75% it ends very badly for me. 

Rule #2:  Buy low, sell high.  Harder than it seems!

Ultimately its your own hard earned, only you know your risk tolerance, although i would suggest sticking to the bigger names with less risk rather than going for the little guys where your cash is seriously at risk if it goes wrong.

Id recommend anyone starting out to use a free training portfolio where you buy dummy shares in a safe environment, its important to find out what works for you rather than trying to copy someone else's strategy which doesn't!

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8 hours ago, Eventually Right said:

If the road map is still pointing to an extreme endgame, 3-4 years down the line, in around 2025, would you be tempted to buy a smallholding somewhere relatively remote, decking it out with solar panels/tinned food etc?

Slight digression into "prepper" themes, but if things do look likely to get that nasty, at least for a time, then I guess we'd want to be in real assets before things get to that point!

Its roughly 9 to 10 years away i expect and a lot can change.However if things do carry on then it really does look like a disaster ahead.To be honest i have no idea what to do.Lets just hope things dont come in as bad and we only see 10% inflation,not the 20%+ the road map is pointing to.Remember as well the road map that far ahead is based on the Fed printing £15 trillion and other countries similar percentages.It could come in at a third of that and still see a reflation.

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10 hours ago, Heart's Ease said:

Can't remember if Baltic Dry used to be discussed as an indicator on this thread or elsewhere on TOS (Suntory thread?).  

More grist to the mill.

It was actually down to 791 when he posted that, lots of recent noise about whether it truly reflects recent trade developments but no denying that’s a very clear trend.

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10 hours ago, MrXxxx said:

Q5. Income or accumulation shares?, and would choice differ if they were within tax-free wrapper?..dont need income right at moment and when I do couldn't I just sell accumulation variety and buy income variety?

I always take the income and use it to rebalance the portfolio as necessary. At the least it saves the question as to which investment to liquify if cash is needed.

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11 hours ago, MrXxxx said:

What would be interesting is to `drill down` the weekly buy data by day/time and then compare likewise with the other two approaches...maybe its success was mostly by chance I.e more of those trade were done midweek and/or one our after/ before the markets opening/closing?

Sorry, I don't think I understand.  The three buckets all cover stock purchases, they just vary depending on the reason for the purchase.  I bought the "Initial" stocks when I spotted a stock I wanted to add to my portfolio (an initial stake) regardless of any buy signal.  The "Weekly" stocks were bought as a result of a weekly buy signal (using my system).  And the "TBD" stocks were bought on the basis of my old system (daily buy signals) or on emotion, etc (maybe "Other" would be better!).  All these purchases were buy and hold (not trades) and were done in normal hours.  The point to me is that having a system works as it removes emotion, although emotion, even with the best will in the world, clearly still creeps in.  I even did it yesterday with Petrofac (not investment advice) - bought because it was at a low and could be turning but not on a buy signal so could go lower.  The system maybe could be anything sensible (e.g. dollar cost average) but I like mine as it, on average, ensures I buy at intermediate lows.  The issue for me has been the need to get invested so I have not been optimal in my timings and therefore paid a bit more for some shares to get that income stream sooner.  This should ease off now I am close to my investment goal.

 

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12 hours ago, MrXxxx said:

Finally getting my act together so that I can start trading/investing, and would value others thoughts on my approach. The plan is to have split my investment 10% cash, 10% Pm (Silver/Gold kept via Buiiion vault not in-hand, as a hedge against FIAT inflation), 40% individual equities (to learn), and 40% ETF index/trackers (single world or say several I.e FTSE 100/250 and S&P500, these as a long term hold/safety net against poor performers/mistakes made in other 40%).

Q1. Buy single equities now based on value potential/PEs, and reported performance/accounts...makes sense?

Q2. Wait on PMs until prices drop as a) currently poor value compared to six months ago, and b) pending deflation of economy and so sell off=lower prices...makes sense?

Q3. Wait on ETFs until pending recession hits as currently markets way beyond where they should be, and so offer poor value...makes sense?

Q4. Move cash into Gilts/Bonds in the future if they (ever?) offer value, but what to do with it now?...makes sense?

Q5. Income or accumulation shares?, and would choice differ if they were within tax-free wrapper?..dont need income right at moment and when I do couldn't I just sell accumulation variety and buy income variety?

Please note I take no comments as financial advice, and reserve the right to make my own mistakes! :-)

I cannot offer advice nor can anyone without knowing more about your situation, goals, risk attitude, etc, plus having to be a registered advisor.  People regularly get ripped off on pension and other advice (I recently heard £80k on average).  TBH, the sort of questions you ask are classic ones to ask a (good) registered financial advisor.  Deciding on an asset allocation first sounds good though but I make no comment on your chosen one other than you have initially excluded bonds, etc which some would argue against, others not.  Regarding the rest you have decided on, you may want to consider a sub-allocation of the equity holding by sectors and/or geographic regions as well as some rules to limit exposure to any individual holding.  Depends on your attitude to risk, etc.  Regarding when to buy (including timing versus say dollar cost averaging), that's purely your call and possibly whether you're trading versus investing.

"Income versus accumulation shares" is a bit of a mix up if taken literally.  There are so-called income and growth shares and there are distribution and accumulation funds, investment trusts, and ETFs.  An accumulation fund/trust/ETF could be growth focused or income focused and its holdings will reflect this objective.  Same for a distribution fund/trust/ETF.  Shares are just shares, but some (e.g. some utilities) are considered more suitable for income (dividends) while others more suitable for possible growth in their share price (with maybe little to none in the way of income).  I believe the the tax treatment outside of a tax wrapper is different for a distribution versus accumulation fund/trust/ETF (e.g. income tax versus capital gains tax).  There may be other differences.  Distribution funds/trust/ETFs may be of particular interest to those living off the income as they avoid having to sell shares (capital).  Indeed, some pay out monthly to provide such an income stream.  Furthermore I believe some specialist funds/trusts/ETFs (e.g. REITs and MLPs?) are required to pay out most of their income as part of their tax registered status.  But there are also other considerations.  For example, I personally prefer distribution funds/trusts/ETFs because I like to control where to allocate the income, rather than plough it back into the same.  Other people (especially those who don't want to be that involved) would see this as an advantage.      

The above are just some initial random thoughts and is not advice.  You would do best to read up to find the answers and/or short-cut this with a chat with a financial advisor (having chosen carefully) who should look at the bigger picture context in which the questions are being asked.  This is just a message board to hopefully educate (by sharing experiences) but above all to stimulate thought.  It carries a bloody big wealth warning! 

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18 hours ago, Eventually Right said:

Wouldn't urban areas get the rioting and high crime in such a scenario?

Possibly, but from an effort (e.g. food distribution, etc) POV, a lot more efficient with a bigger bang for the buck.  Just look at when we have bad weather, most country folk are on their own for quite a while (although fortunately most are farmer types who can more readily cope).  And my biggest fear if things kick off is marauding gangs in the countryside.  Theft (machines and livestock) is already a big problem the police currently can do little about given the resource levels and areas to be covered.  I think we can conclude we're all going to be effed one way or another!

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1 hour ago, Sideysid said:

Exactly like we said way back in the thread,a big miner like Anglo might buy it when equity was wiped out and thats exactly whats happened.The shareholders are actually really lucky to get anything as stand alone they could never really fund a project like that.Anglo has the capital and the ,massive experience.There could be a rival bid but for the area i hope Anglo get it.Of course the main thing is the huge message from Anglo here.Potash etc is at the bottom of the cycle,or at least close while they finish the mine.

Given Anglo have superb management they are seeing what we are seeing in the macro picture against the demand picture.

 Anglo American's portfolio trajectory towards later cycle products that support a fast-growing global population and a cleaner, greener, more sustainable world.”

 

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Just bought in on K&S AG at 10.80 , 200 shares. The share price has fallen every day for the last 5 days so perhaps i'm in a bit too soon , time will tell.

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18 minutes ago, headrow said:

Just bought in on K&S AG at 10.80 , 200 shares. The share price has fallen every day for the last 5 days so perhaps i'm in a bit too soon , time will tell.

Stick another ladder at 10.00,then 9.20 etc and then forget about if it goes down.Whats going on at Sirius is actually a really good lesson for new investors (like the retail all getting skinned in it).Companies who have survived many cycles end up buying up assets on the cheap.Froneman did the same at Sibanye.

Outside of the deal itself this sends a message exactly what this thread is about.The next cycle is industrial and investment,the north will gain over the south etc.Here we have one of the best miners in the world,real blue chip looking to own and operate a huge mine in North east England.Behind closed doors the government are swinging into reflation.They must of assured Anglo on a lot of things.The UK is very well placed for the cycle,if we play our cards right.

We have a cross market indicator on the currency road maps that takes into account inward investment liquidity flows.A lot of that data is hard to pick apart to the none financial inflows,but deals like this would flick that indicator to a positive.

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4 minutes ago, Craig said:

Anyone know where I can buy SOIL?

(and anyone who says the garden centre can f right off!)

You cant,the EU put regs in place so they need a special document to sell to EU investors.Just another insane EU directive i hope is dropped once we are out.

@sancho panza did his scores on the doors on the companies in SOIL i think if you check back through the thread,or he might drop them in a message again if he has them at hand then its a case of buying the companies themselves.

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2 minutes ago, DurhamBorn said:

You cant,the EU put regs in place so they need a special document to sell to EU investors.Just another insane EU directive i hope is dropped once we are out.

@sancho panza did his scores on the doors on the companies in SOIL i think if you check back through the thread,or he might drop them in a message again if he has them at hand then its a case of buying the companies themselves.

Cheers DB. Found them (with kudos to SP for the legwork):

"Coma scale scores on which I based our purchase from the SOIL ETF.dyor natch Tdog

Nutrien 18

yara 17

SQM 18

IPL 19

ICL 17

K+S 17"

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reformed nice guy
11 hours ago, Tdog said:

Debts still lower than much of the 20th Century. I was in Thailand not long after things went tits up there and things carried on as usual ... though no doubt the shopping trips of the previous years were curtailed.

https://www.ukpublicspending.co.uk/uk_national_debt_analysisimage.png.d8a6d9e61f9ca799c8f23ff6f8cfc2b8.png

The difference is that at the time, we were still one of the top 10 developed countries and places like Singapore, Korea, China etc were all agricultural societies. We have a lot more competition now so it is harder to compete

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leonardratso
36 minutes ago, Bricormortis said:

Is Sirius now a buy ?

well, it wont move from 5.5p unless the deal falls thru or a counter bidding war starts - still be 2 years until its strip mined.

Maybe buy in 2 years.

 

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Talking Monkey
On ‎07‎/‎01‎/‎2020 at 13:37, DurhamBorn said:

This is way way way out,but we do run a few really long term road maps,but the more out you go of course the more different things can be with lots of cross market events.However those road maps show complete collapse in Fiat systems around 2029.High inflation,governments unable to borrow etc.The problem is the road maps show everything goes to shit,no assets go up in price during it.There is nowhere to hide.Of course the hope is things dont get as extreme,that the macro situation gives us a few options,but i am very very worried about what it is showing then.The ending of this cycle doesnt concern me,the next one doesnt concern me,we are positioned for it,but how that ends does concern me greatly.There are policy options open still down the road,but if they dont take them its going to be terrible.

Worrying stuff DB for us that won't be able to access our SIPPs until well into the 2030s I wonder will they be confiscated by the government. From the ever increasing government debt load it does feel at some point it goes pop. The discussion on fiat collapse at the end of the next cycle sound very likely. On the policy options which might lead to a collapse being averted would you be able to elaborate on what they would be DB.

Even if collapse at the end of the next cycle is averted would that be only temporarily until the end of the cycle after that. ie 15 or so years from now

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