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

[BearyBear]

19 minutes ago, kibuc said:

WTF did just happen to the miners???

Cerveza Virus starts to bite..?  

[DurhamBorn]

26 minutes ago, Solzhenitsyn said:

Hi DB,

 

Presumably if we are at/around your bottom target in oil, then you must expect the bottom in stock markets is in or close? Surely the two would closely correspond to each other in time? No matter how much it goes down now, I can't see oil not going down in a major debt deflation event...

Also, the gold/silver peak for the cycle must be close before it all goes down together?

My oil work when it was $60 said $60,$43,$71,$18,$280

Oil goes below $18 in the above during the deflation ,the paper market that is,and very short term,maybe a day,maybe an hour,maybe a week.Gold i havent re-done but my roadmap is roughly $1700,$1050,$9700,Silver $22,$9,$270

There is a lot going on now on the macro side and a lot depends on how quickly the $ roadmap goes to 90,or 87,how oil responds,etc

Lots of leads and lags at play,remember oil smashed down supports other sectors like the transports,consumer etc.That might see one last jump in things before falls etc.So much at play at the moment im struggling to cross market everything so im doing most work on oil because thats where im putting capital to play at the moment.

I sold all my gold miners a while ago,way below where some ended up,if id kept hold it was a lot of extra profit,but i was very very pleased with what i got.It pretty much covers me for a 20% drawdown on my portfolio if it happens .

[DurhamBorn]

46 minutes ago, Barnsey said:

WTI $46 

I might frame that oil road map Barnsey. .Million $ question now though is am i right that the bottom is between here and $43? .Then back up to the $71 area .

Remember as well @Cattle Prod has provided fantastic info from the inside.That adds confidence that my road map is right.We will soon know.

[Solzhenitsyn]

7 minutes ago, DurhamBorn said:

My oil work when it was $60 said $60,$43,$71,$18,$280

Oil goes below $18 in the above during the deflation ,the paper market that is,and very short term,maybe a day,maybe an hour,maybe a week.Gold i havent re-done but my roadmap is roughly $1700,$1050,$9700,Silver $22,$9,$270

There is a lot going on now on the macro side and a lot depends on how quickly the $ roadmap goes to 90,or 87,how oil responds,etc

Lots of leads and lags at play,remember oil smashed down supports other sectors like the transports,consumer etc.That might see one last jump in things before falls etc.So much at play at the moment im struggling to cross market everything so im doing most work on oil because thats where im putting capital to play at the moment.

I sold all my gold miners a while ago,way below where some ended up,if id kept hold it was a lot of extra profit,but i was very very pleased with what i got.It pretty much covers me for a 20% drawdown on my portfolio if it happens .

Ok thanks for clarifying. So you are laddering into oil stocks now, in the belief that the big kahuna is still ahead, but you are happy to hold them through those (lower) lows, as you are focusing on the gains to be had at the other side. Makes sense. 

 

I've been laddering into oil over the past 12 months. Have a few more to get yet. I'm still in my gold miners at present but just trying to gauge if this is the big event coming, or if they have another leg up left. I also follow David Hunter who is convinced we have one more 'melt up' left.  

[Castlevania]

42 minutes ago, kibuc said:

The thing is, I can see a wall of red while gold is up strong and silver up marginally. I was thinking perhaps a "sell now, sell everything attitude" but that would include the underlying metals too?

Impact and Alexco started brightly only to find themselves at the wrong end of a 10% swing in a matter of half an hour, and they are not the only ones.

Isn’t that his what happened during the GFC? Gold went up but the miners went down.

Edit: Having just checked the rest of my holdings, I think the gold miners have gone down but by less than everything else.

[Solzhenitsyn]

SBGL (now SBSW) has taken a beating the past few days - all around the time this restructuring happened. Gone from $13+ to $9.4.......  

 

Any ideas why? Genuine fall in value have stock holders been done over by the re-structuring?

[BearyBear]

1 minute ago, Solzhenitsyn said:

SBGL (now SBSW) has taken a beating the past few days - all around the time this restructuring happened. Gone from $13+ to $9.4.......  

 

Any ideas why? Genuine fall in value have stock holders been done over by the re-structuring?

Well, after going 500% UP it is perfectly fine to go DOWN for no fundamental reason. I'm glad I've sold it for 370% profit, I wish more of my investments were so profitable.

[Castlevania]

16 minutes ago, reformed nice guy said:

I have had the jitters as well but I am planning on holding my shares long term (10+ years, probably longer). I have just been sticking to ladders, using 10+% drops for each rung and taking "the law of round numbers" into account when setting each step. 

I run this alongside another portfolio of cheap non-UK index trackers (Japan, Asia, USA, Europe, India, misc), topping up each month.

In case anyone is interested, here are my current next ladders. I dont have current positions in them all and some require big(ger) drops to get to them. Prices are in pence when no currency is stated

 

name	type	prices
######################	#########	######
Angloamerican	mining	1700
Basf SE	chem	€55
BHP group	mining	1300
BP	oil	385
British American Tobacco	tobacco	2500
CARGOTEC	transport	€25
Centrica	energy	67.5
Chevron	oil	$94
Drax	energy	215
Equinor	oil	135NOK
Evonik	chems	€22
EVRAZ PLC	steel	225
Exxon	oil	$50
Glencore	mining	180
Kaz	mining	300
K & S AG	chem	€6
Mosaic		$16
Nutrien	potash	$50
PJSC Gazprom	oil	$6
Repsol	oil	€10
Rio Tinto	mining	2750
RoyalMail	logistics	120
SSE	energy	1000
Shell	oil	1600
Siemens		€90
Solvay	chems	€85
StageCoach	transport	100
Telefonica	telecoms	€5
Telia	telecoms	35SEK
Vodafone	telecoms	110
Wood group	oil	295
Yara	chems	300nok

What’s the rationale behind Anglo? They’re a well run company but have a big exposure to coal, platinum group metals and diamonds. All three of which could in theory become obsolete.

[DurhamBorn]

5 minutes ago, Solzhenitsyn said:

Ok thanks for clarifying. So you are laddering into oil stocks now, in the belief that the big kahuna is still ahead, but you are happy to hold them through those (lower) lows, as you are focusing on the gains to be had at the other side. Makes sense. 

 

I've been laddering into oil over the past 12 months. Have a few more to get yet. I'm still in my gold miners at present but just trying to gauge if this is the big event coming, or if they have another leg up left. I also follow David Hunter who is convinced we have one more 'melt up' left.  

My oil target of $43 (or where we are now really) was in the numbers,$18 is forward projection of likely events etc.Im pretty certain the next cycle is a full on reflation and that the energy complex will  multiply that inflation for capital preservation.Road maps are not trading calls,.I will probably hold these now until 2027,though i might add later.

[Castlevania]

20 minutes ago, DurhamBorn said:

My oil work when it was $60 said $60,$43,$71,$18,$280

Oil goes below $18 in the above during the deflation ,the paper market that is,and very short term,maybe a day,maybe an hour,maybe a week.Gold i havent re-done but my roadmap is roughly $1700,$1050,$9700,Silver $22,$9,$270

There is a lot going on now on the macro side and a lot depends on how quickly the $ roadmap goes to 90,or 87,how oil responds,etc

Lots of leads and lags at play,remember oil smashed down supports other sectors like the transports,consumer etc.That might see one last jump in things before falls etc.So much at play at the moment im struggling to cross market everything so im doing most work on oil because thats where im putting capital to play at the moment.

I sold all my gold miners a while ago,way below where some ended up,if id kept hold it was a lot of extra profit,but i was very very pleased with what i got.It pretty much covers me for a 20% drawdown on my portfolio if it happens .

You’re using WTI as your benchmark?

[DurhamBorn]

1 minute ago, Castlevania said:

You’re using WTI as your benchmark?

Yes,iv always used that over Brent.

[Castlevania]

5 minutes ago, DurhamBorn said:

Yes,iv always used that over Brent.

Any reason why? It’s the most widely traded benchmark but most of that is paper, very little actual delivery takes place.

[reformed nice guy]

11 minutes ago, Castlevania said:

What’s the rationale behind Anglo? They’re a well run company but have a big exposure to coal, platinum group metals and diamonds. All three of which could in theory become obsolete.

My non-expert rationale is that they have a relatively low PE, own a lot of real assets, have been decreasing their long term debt and a lot of cash flow to throw about.

I dont think the big exposure to coal is as much of an issue because third world companies will buy it alongside all of the steel makers (especially those that will be making the the steel used in wind turbines subsidised by the 1st world!!)

[Harley]

47 minutes ago, Castlevania said:

Isn’t that his what happened during the GFC? Gold went up but the miners went down.

They are in two different asset classes.  I armchair hypothesise the first reallocation is within equities to miners but then the firm's senior management take over and move classes to PMs.  That's how many firms are presumably structured.  Each department optimises it's bit but then things get bad enough for a cross departmental asset class re-allocation. 

PMs haven't really done that much in the last few days all things considered, especially compared to the equity falls.  Margin calls may have been a drag.  For gold in GBP, there was a divergence between the price and MACD on the daily which resolved 13 Dec onwards to the upside.  There was then the start of a correction but the virus may have given things a fillip in the last few days.  Now having another go at resistance.  All a bit so-so.

Likewise Bitcoin only moving up today.  Things are not happening as expected, but they never do in these rigged markets.  Looks like a possible gold take down recently or just sales to meet margin calls (some trade data suggests a take down).  Maybe companies running share support operations, or the PPT, or well telegraphed FED intervention due shortly.

Barring regulation, IMO fundamentals of a damaged supply chain, etc will eventually assert themselves.  This maybe just a fillip to help get out of the exits, leaving retail once again holding the pig. 

FWIW, I'll start buying key equities when I have the time and I can't resist, which is probably tomorrow.  Partially for longer term gains/div's but also because my cash balances scare me.  I'm fully allocated PMs but will buy some physical silver (and bleach!).  Probably some bonds too but that's more on the risky side (madness)!

PS: Today has been particularly painful on my income portfolio.  I'm resilient but this does need a closer look tonight.  I might need to trade some FTSE shorts to make up which is very boring these days.

PPS: Friday, the weekend, and Monday could well be key for this virus and the markets.  IMO it looks like the pretence about the virus is over and the populace is being warmed up as part of an ongoing perception management game to get us where we need to be but without causing serious panic.  But then I thought more would have happened last night so who knows.

PPPS:. TBH, I'm more interested in solar arrays right now!

[Majorpain]

40 minutes ago, kibuc said:

The thing is, I can see a wall of red while gold is up strong and silver up marginally. I was thinking perhaps a "sell now, sell everything attitude" but that would include the underlying metals too?

Impact and Alexco started brightly only to find themselves at the wrong end of a 10% swing in a matter of half an hour, and they are not the only ones.

No, miners mine PM's but they still get swept up with stocks because that is what they are.  This is a phase where people are just bashing the sell button no matter the stock IMO, so im not worried yet.

Remember that the average person has been looking at the "you cant lose" main markets for the last 10 years, they will not be looking at the "loser" PM miners for a little while longer despite some doubling in value.

[DurhamBorn]

2 hours ago, Elbrus said:

is there a reason for no exxon? just wanted to check,  a complete amateur me....

No reason really,i just prefer some of the other big ones on value grounds.I would buy Exxon just below where it is now.I just think some others have better exposure to hydrogen in the future and i like that.

[Harley]

1 hour ago, reformed nice guy said:

In case anyone is interested, here are my current next ladders...

Many thanks for sharing.  I really ought to go the full bottom up route but right now, to get a foot forward, I might just run some TA on your list and go with it for an initial slice.  It has most of the aforementioned suspects.  

[JMD]

On 21/01/2020 at 14:45, JMD said:

MrX, surely your just being unfair - Halfords are a long respected publisher of mechanical publications and have not over recent years resorted to cheaponing their brand or dumbed down at all. 

https://www.ijustloveit.co.uk/product/haynes-pensioner-manual/?fo_c=95&fo_k=0c9293a37fbd7773af57d124b58136d6&fo_s=gplauk&gclid=EAIaIQobChMIz-2e9PWU5wIVTLTtCh30VQZqEAQYAyABEgIeZ_D_BwE

Not strictly for this thread I know, particularly in light of today's PM action, but some discussion was had recently about Haynes Publishers... Anyway their price jumped 75% couple weeks back (in fact share price is up 3x in 6 months). I believe that the company was sold recently so perhaps the new owners have some exciting plans for them. 

[reformed nice guy]

35 minutes ago, Harley said:

Many thanks for sharing.  I really ought to go the full bottom up route but right now, to get a foot forward, I might just run some TA on your list and go with it for an initial slice.  It has most of the aforementioned suspects.  

Hopefully it is a help to some people. When I first started to seriously investigate possible ladders I was unable to find any UK investor that had posted their buy in points, so I hope that this is useful to anyone that is doing their own research. I am no expert and I make absolutely no promises, but I have spent time using some of the methods mentioned in this thread (doing a simple Glasgow Coma Scale like system for example) and came out with the above. Hopefully it is my meagre contribution to an excellent ongoing discussion.

If anyone has any other comments, criticism or anything else then I would love to hear. Every day is a school day and it would be greatly appreciated.

[Solzhenitsyn]

3 hours ago, BearyBear said:

Well, after going 500% UP it is perfectly fine to go DOWN for no fundamental reason. I'm glad I've sold it for 370% profit, I wish more of my investments were so profitable.

Don’t get me wrong, I’m still 250% UP and no plans to sell it yet, it just seemed a very sharp drop around the time of the restructuring.

[Barnsey]

FTSE 100 pretty much flat for 20 years, astonishing!

[Wheeler]

11 minutes ago, Tdog said:

Whats going on with BP or is it a glitch with google.

I think it is a google glitch; I’m seeing a close price of 414.15p on yahoo and others.

Of course I’d like to buy some at 5p if anyone is selling?

 

[harp]

S&P closes down over 4%! I've been buying today even though I'm bleeding... Hopefully this is the crash we have been expecting. Time to focus the mind and be strong?

[Noallegiance]

4 minutes ago, harp said:

S&P closes down over 4%! I've been buying today even though I'm bleeding... Hopefully this is the crash we have been expecting. Time to focus the mind and be strong?

Global markets utterly butt-fucked. And gold drops.

Those negative-yielding bonds must be really attractive...

[Loki]

11 minutes ago, harp said:

S&P closes down over 4%! I've been buying today even though I'm bleeding... Hopefully this is the crash we have been expecting. Time to focus the mind and be strong?

"The time to buy is when blood is running in the streets"

~ Some rich possibly apocryphal guy