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


spunko

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3 minutes ago, Cattle Prod said:

Equinor ASA, price in NOK? Maybe I'm being thick! (Hargreaves)

CDI I think.  Crest Depositary Interest.  Gives you a legal right to the share.  Divs in GBP.  Thought they were priced in GBP too.  Close to a share but not 100%.  I assume Crest is the counterparty.

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10 minutes ago, Harley said:

CDI I think.  Crest Depositary Interest.  Gives you a legal right to the share.  Divs in GBP.  Thought they were priced in GBP too.  Close to a share but not 100%.  I assume Crest is the counterparty.

Iv got Telefonica as a CDI.Only one.Crest is the counterparty,although they could be in a nominee account.

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28 minutes ago, sancho panza said:

Lot of the euro oilies aremoving up.Hard to believe Total were E22 a week or two back.Repsol and ENI still looking good value

I'm taking the view now that whatever we can get RDSB below £15 and BP £4 is a bonus from ehre.Hope there might be a second run down but this market jsut doesn't have that sort of feel.

Having said that selling is heavier fri night as people don't want to be long over the weekend and I can see that trend conituing for some time.Monday mronings have been especailly weak.RDSB dropped down toe £11.87 Monday monring.Naturally I was busy dealing with the kids winding their Mum up so missed it.I keep telling them it's their Uni money but they don't listen.Ever.

On a that  matter my 3 year old today appeared at the kitchen window around the height of a 6 foot 6 inch bloke .I get out their and he's found one side of a cot(the bit with the railings in) and used it as a ladder to try and scale the drainpipe.......it's a kind of light relief to get back to the feeling of consistency I get from nursing my ever so red  position that cannnot be named @Democorruptcy

 

I also picked up some BHP just below £10,they have a decent oil exposure.I didnt go for many ENI i went more for Repsol.Noticed tonight Mosaic moved into a decent profit.Volatile of course,the internals are starting to show a move to reflation areas.Its below the radar,but ongoing.

During the sell off i also got my full holding in amount of shares back in BAT that i sold when they went over £50.Iv had them and Imperial all my investing life,and actually glad to have them back to full allocation again.Only 6th biggest holding now though where in the past it was always no1.

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5 hours ago, DurhamBorn said:

Iv got Telefonica as a CDI.Only one.Crest is the counterparty,although they could be in a nominee account.

I've assumed any LSE ticker starting with a "0" is a CDI.  Anyone know if this is correct?  I've also avoided them at some inconvenience and cost which may be an over-reaction to a slight perceived risk. 

Similar with ADRS, GDRS, etc (but they tend to have more normal tickers) listed on all exchanges.  They can appear worse and have conversion multiples to the underlying stocks (e.g. one ADR for 10 stock).  For the LSE, that precludes Gazprom, etc, again not ideal.

Ideally, I would have access to the correct exchanges (e.g Moscow) but that would need something like an IB account and not sure, even if IB and co supported them, whether those exchanges would be ISA or SIPP allowed.  Could also be costly to get the data accesses.

Also I don't know if the UK and foreign tax treatment for each of these things is better, worse, or neutral versus holding the actual shares.

Problem is I run from counterparties (at least avoidable ones), banks, opaqueness, and complexity, especially at times like this.  Maybe I just need a balanced risk approach.

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Castlevania
7 hours ago, Cattle Prod said:

Oxy has a great pedigree, but got tempted by shale. And then doubled down on it with Anadarko. I know what you mean when you say old fields run dry, but the trick is to remember that they never do: you don't keep the huge lumps of metal running them open to the last 1 barrel a day. They are always abandoned with x amount of oil remaining in them, only question is how much. The current situation has simply changed that number upwards. As you say, it almost guarantees a bubble, and it was ever thus in the oil game.

Thanks @Harley - I had no idea Dow chemical was paying a 10% divi. Scarcely believable.

The explanation I got on some TV science programme is that an oil well is like a very well shaken up bottle of fizzy pop. When you open the bottle/well it initially comes flying out and gradually slows until no more comes out. You still have over half the contents of the bottle in the bottle. Oil wells the same. 

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8 hours ago, Cattle Prod said:

you don't keep the huge lumps of metal running them open to the last 1 barrel a day. They are always abandoned with x amount of oil remaining in them, only question is how much

Once stopped at this stage of unprofitability is it possible to `mothball` them with a limited amount of maintenance so that if prices were to rise (& make it worthwhile) you can tap them more?

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8 hours ago, sancho panza said:

aving said that selling is heavier fri night as people don't want to be long over the weekend

Probably an obvious question but why is this, is it because if bad news broke they wouldn't be able to get out of their position quickly thus reducing their losses?

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8 hours ago, sancho panza said:

.Naturally I was busy dealing with the kids winding their Mum up so missed it.I keep telling them it's their Uni money but they don't listen.Ever.

Obvious solution...You need to get them all a share dealing account...I can just see it, Little SPs all with their mobile apps at the breakfast table shouting "Buy!, Buy!, Sell!, Sell!" inbetween mouthfuls of Coco Pops :-)...Just don't let Mrs SP go long on Mothercare!

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Democorruptcy

The Survivalist is one of those dystopian films about after the world population has been decimated. Interesting that the opening scene has oil production or lack of it in focus!

 

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What does the hive mind think about the share that cannot be named now? I only have a very small amount to invest. Missed the biggest dips in the big oilies since at the time wasn’t sure if still getting paid.FOMO is strong now. Not looking to trade but hold, I’m sure I should still be getting some shell/ bp while still relatively low. Also tempted by K + S a bit. After thoughts rather than advice obviously.

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TBH I think the recent bounce is a bit of a dead cat bounce.

Am saving any purchases for the FTSE 5,000 and 4,500 levels. I think sentiment will get worse with the US results and there will be a lower bottom than what we have seen already.

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15 minutes ago, Simon said:

What does the hive mind think about the share that cannot be named now? I only have a very small amount to invest. Missed the biggest dips in the big oilies since at the time wasn’t sure if still getting paid.FOMO is strong now. Not looking to trade but hold, I’m sure I should still be getting some shell/ bp while still relatively low. Also tempted by K + S a bit. After thoughts rather than advice obviously.

Which is the share that cannot be named? Obviously don't name it but linky linky may help?

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4 minutes ago, Paulie said:

Which is the share that cannot be named? Obviously don't name it but linky linky may help?

Gimme a C

Gimme an N

Gimme an A

Whatcha' got? Sweet FA!

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A tremendous # on the lung

Just had a communication asking us to check our bank systems could deal with zero or negative interest rates 

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Really basic question and I apologise, but if I were looking to buy Shell in a SS ISA with AJ, what code am I looking for is it RDSA?

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5 minutes ago, C-gull said:

Really basic question and I apologise, but if I were looking to buy Shell in a SS ISA with AJ, what code am I looking for is it RDSA?

RDSA is Dutch registered - you pay Dutch Witholding tax on dividends

RDSB is UK registered - you dont pay the withholding tax.

Have a guess which one you want and DYOR as i may be wrong!

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Castlevania
7 minutes ago, C-gull said:

Really basic question and I apologise, but if I were looking to buy Shell in a SS ISA with AJ, what code am I looking for is it RDSA?

B unless you want to pay Dutch withholding taxes

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43 minutes ago, Majorpain said:

RDSA is Dutch registered - you pay Dutch Witholding tax on dividends

RDSB is UK registered - you dont pay the withholding tax.

Have a guess which one you want and DYOR as i may be wrong!

Appreciated dude! And @Castlevania

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10 hours ago, DurhamBorn said:

During the sell off i also got my full holding in amount of shares back in BAT that i sold when they went over £50.Iv had them and Imperial all my investing life,and actually glad to have them back to full allocation again.Only 6th biggest holding now though where in the past it was always no1.

And now more reason ..... (surely they wouldn't April Fool this?)

April 1 - British American Tobacco BATS.L , the
maker of Dunhill and Lucky Strike cigarettes, said on Wednesday
its U.S. biotech unit was working on a potential vaccine for
COVID-19 using proteins extracted from tobacco leaves.
Kentucky BioProcessing (KBP), the unit developing the
vaccine, could produce between 1 million and 3 million doses per
week starting in June, the company said, with support from
government agencies and the right manufacturers.
British American Tobacco said KBP, a division of BAT's U.S.
unit Reynolds American Inc, would develop the vaccine on a
not-for-profit basis.
The vaccine, currently undergoing pre-clinical testing, uses
a cloned portion of COVID-19's genetic sequence to create an
antigen that is then inserted into tobacco plants for
reproduction.
Once harvested, the antigens - substances that induce an
immune response in the body - are extracted and purified and
inserted into the body to fight the virus, the company said,
adding that the formulation it is developing is stable at room
temperature, unlike conventional vaccines which often require
refrigeration.
KBP made headlines a few years back when it said https://www.reuters.com/article/health-ebola-tobacco-idINKBN0G608V20140806
it had created an effective treatment against Ebola called
ZMapp, in conjunction with California-based Mapp
Biopharmaceuticals. The drug is yet to get U.S. Food and Drug
Administration approval.
"We believe we have made a significant break-through with
our tobacco plant technology platform and stand ready to work
with governments and all stakeholders to help win the war
against COVID-19," David O'Reilly, director of Scientific
Research at BAT, said in a statement.
BAT said it was working with the U.S. Food and Drug
Administration on the next steps and was also engaged with U.K.
health authorities to bring its vaccine to clinical studies as
soon as possible.

(Reporting by Siddharth Cavale in Bengaluru; Editing by Bernard
Orr)
(([email protected]; within U.S.
+1-646-223-8780; outside U.S. +91 80 6749 1130; Reuters
Messaging: [email protected]))

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2 hours ago, MrXxxx said:

Probably an obvious question but why is this, is it because if bad news broke they wouldn't be able to get out of their position quickly thus reducing their losses?

Just in the mind.People mostly react far too much and often and have zero planning.They are worried on Saturday morning something else terrible happens.Of course all things being equal there is a 50% chance on normal times of something great happening as well.They should just walk away and do something else.

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1 hour ago, Simon said:

What does the hive mind think about the share that cannot be named now? I only have a very small amount to invest. Missed the biggest dips in the big oilies since at the time wasn’t sure if still getting paid.FOMO is strong now. Not looking to trade but hold, I’m sure I should still be getting some shell/ bp while still relatively low. Also tempted by K + S a bit. After thoughts rather than advice obviously.

If i only had a small amount and was prepared to hold and accept the risk,and hope for maybe a 4x + increase id probably buy Mosaic Company.Potash is very very cyclical,but its highly likely we are close to a turn in the cycle,given that inflation expectations should start to increase it might get a fundamental run,and then some speculative rocket fuel added.There is a chance it outruns the big oilies by a large margin and then could be sold and switched in oilies.I think oil will run up with small drops most of the cycle,but potash might see a big up,then down ,then up.

Not advice etc,just a thought.

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11 hours ago, sancho panza said:

Thanks for doing all the hard work Harley.Is there a US ETF that covers chemicals you know about?I'll ahev aflick through these wed/thu if the kids are in nursery and I have time.

Seeing as you're busy doing a proper job (at least the second one in your life!), I went through the US Basic Materials ETFs (top 10 holdings) from etf.com.  A mix of industries but here are the chemical companies:

Capture.JPG.996f923a4262202afbcef71a26a7c73c.JPG

PS: As an aside, a fascinating look at the coverage, etc of the ETFs.  Only MXI offers global coverage and the only share any offer I cannot buy direct is the Japanese Shin-Etsu Chemical Co Ltd.  The others were just too small a amrket cap to get on my top 15 list.  And they all crowd around the same stocks (fair enough) except for PSCM which is a real loner.  Also interesting which other sectors they hold.  Most hold about 4 non-chemical stocks so are about 60% by number into chemicals.  The only other non-chemical sector stock that I would think of as a possible chemical company is Corteva which is covered in Food Producers (an industry in my scope).

FYI:  The other holdings:

Capture.JPG.622bfb3e299a283e140703b705b72906.JPG

PPS: I could have just stood outside, alone, and clapped instead but thought this was a bit more appropriate!

 

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26 minutes ago, Loki said:

DXY creeping back up towards 100

Fed will pump again ;),almost 100% of the MSM think its going higher.It is going down 10% i expect around 91 or lower.Lets see.

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M S E Refugee
1 hour ago, Boon said:

TBH I think the recent bounce is a bit of a dead cat bounce.

Am saving any purchases for the FTSE 5,000 and 4,500 levels. I think sentiment will get worse with the US results and there will be a lower bottom than what we have seen already.

Sold all of my Precious Metals this morning for such an event.

No doubt it will now go stratospheric!

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