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

[S Brule]

59 minutes ago, sancho panza said:

 

Thanks Sancho. Always appreciate your insights and posts. Yeah, he became pretty worried towards the end of last year.

[sancho panza]

1 hour ago, Agent ZigZag said:

Sancho - Whats your current strategy. Are you looking to run with the mkt and skim a bit off your holdings here and there before a further sell off or just hold and ride it out. I aim to skim a bit off in order to have a cash position. I took a position in GDXJ and will run with this. There is enough commentators calling a run in gold to £2000 in gold and will form a bench mark for me to sell at that point. It is worth while remembering that many UK stocks have already seen a big sell off. Should we just stop stressing and let the game play out.?

 

We've ended up currently circa 45% big oil, 20% goldies,then 20% cash ,some potash,utilities,and some randoms eg cameco/vodafone/options.

I mention it beacuse it's not where I planned us to be 2 years ago.As I've said big oil was going to be 10%.Telecoms 25%(currently 0.5%iirc).

My plans have therefore changed going forward.We have pciked up some oil holdigns we will likely hold throughout what's coming so bottom ladders in XOM/BP/RDSB/EQNR/Total/Respol.Upper ladders will get sold during the relief rally that rises on a weakening dollar, that will take us up to the Big Kahuna. We'll then be selling our goldies plus everything else taking us back to 80% cash(mostly dollars).We may mvoe thsoe dollars into TLT/ZROZ but maybe jsut sit in cash.

Plan would then be to buy back goldies lower than we sold them,oilies/telecoms/potash/chemicals for the long term.Moving us back to 80% equities.

I think Big Kahuna will be next year or possibly late this year.We need to see rally fade.

I think gold to $2000 is a given in this phase pre Big Kahuna...............be very very surprised if we don't get a dollar high soon

 

Having said we'll trade what's coming,I think there's also a middle road case for buying and holding your goldies/oilies and jsut sit it through as you say Agent.

 

ref last bit in bold,important to remember that some stocks go up while the wider markets crashes.happens every time.We jsut got to pick em.

 

Edit to add-cheap leccy I use those moneysavign sites,but you have to do online,its way cheaper.

[sancho panza]

1 hour ago, TheCountOfNowhere said:

This is what I've been pondering.

Is it time to sell up now and wait for the market reality to hit ?

Depends where you are in life and if you're a gambler.

I most definitely am a gambler and wear my betfair ban with pride.I would avoid advice from people like me,as I'll take risks financially,that common sense says you shouldn't.

My Grandad always said to me ,leave the top 10% and the bottom 10% to the gamblers.We're playing around the market top here.Shirts will get lost over the next year or two imho.Mine might eb one of them.

[sancho panza]

16 hours ago, S Brule said:

Does anyone else follow that Raoul Pal fella of RealVision on Twitter? He's made some good calls in the past. He's posted a link where you can get his April report for free, here is the link to the pdf in googledrive that is in the email (in case you don't want give your email address to sign up).

TBH, I've not read it yet, it's 120 pages so I'll save it for the weekend. But skimming through it does mention debt deflation a few times so I thought I'd share it here (he does say share with friends and family haha).

Can't thank you enough for psoting that.What a thoroughly thought provoking piece of work.Great way to spend a couple of hours.Duly forwarded to some friends.

[Loki]

1 hour ago, sancho panza said:

He's very much along with the credit deflationists about the coming Big Kahuna.Page 34 he talks about debt deflationa and a velocity of money crisis.................wow.....calling all the students of behaviorual economics.

 

 

1 hour ago, Craig said:

I reckon the recipe is less important than the dough management side of things. Tend to find that the longer I leave the dough in the fridge, the better. Not only relaxes the gluten, but also aids flavour development. Three days is the longest I've tried, but have heard people doing the cold ferment for seven or eight days.

Can I just say the juxtaposition here cracked me up 

[TheCountOfNowhere]

5 minutes ago, Loki said:

 

Can I just say the juxtaposition here cracked me up 

It's all about the dough

[DoINeedOne]

10 minutes ago, sancho panza said:

 

We've ended up currently circa 45% big oil, 20% goldies,then 20% cash ,some potash,utilities,and some randoms eg cameco/vodafone/options.

I mention it beacuse it's not where I planned us to be 2 years ago.As I've said big oil was going to be 10%.Telecoms 25%(currently 0.5%iirc).

My plans have therefore changed going forward.We have pciked up some oil holdigns we will likely hold throughout what's coming so bottom ladders in XOM/BP/RDSB/EQNR/Total/Respol.Upper ladders will get sold during the relief rally that rises on a weakening dollar, that will take us up to the Big Kahuna. We'll then be selling our goldies plus everything else taking us back to 80% cash(mostly dollars).We may mvoe thsoe dollars into TLT/ZROZ but maybe jsut sit in cash.

Plan would then be to buy back goldies lower than we bought,oilies/telecoms/potash/chemicals for the long term.

I think Big Kahuna will be next year or possibly late this year.We need to see rally fade.

I think gold to $2000 is a given in this phase pre Big Kahuna...............be very very surprised if we don't get a dollar high soon

 

ref last bit in bold,important to remember that some stocks go up while the wider markets crashes.happens every time.We jsut got to pick em.

 

Edit to add-cheap leccy I use those moneysavign sites,but you have to do online,its way cheaper.

This is me as of today

 

Problem is them stocks broken down are 40% miners and 39% oil rest is Vodafone, Royalmail, SSE etc... Think i got a little bit over excited with oil, gold and silver (wish me luck)

[JMD]

14 minutes ago, Talking Monkey said:

They will lose control. What I don't understand is why this bullshit is being put out, its literally destroying the economy, will decimate the tax take for years to come, its suicidal for the government and also for the public sector. None of it stacks up at all. 

TalkingMonkey I know where you are coming from - but I think it is MORE CONTROL that governments seek, and I believe they will succeed in their desire. So more control over the economy, more control over social programs, etc. Ok track history is bad, but what is the alternative?  

And in terms of public acceptance over the new 'temporary' measures, the tiller the government appears to favour to 'steer' our citizenry will be instilled panic (bitter pill) over disease and then our sainted NHS (sweet pill) coming to the rescue. And why not? For many years the NHS has after all been called the UK's religion. Clapping hands today, genuflecting tomorrow.

I keep hearing the phrase 'the new normal'. Certainly Orwellian sounding. But where is the debate? Rhetorical question perhaps, as apparently we no longer need debates, because the government is at all times just following the 'science'. The science is 'settled' you see... ok, I accept government have not used that particular phrase (this time around).   

I'm not into conspiracies, but do enjoy science-fiction. So I wonder - if the daily government briefings (currently Corona themed) were to continue into the future, what's the betting the politician in the centre of our screens is one day flanked on the one side by a climate scientist, and by a psychologist on the other side... I leave it to you (and your nightmares) to imagine what the policies being explained are!! 

 

...hmm, I think I should now stop posting these type of fanciful(?) posts as I don't want to derail this excellent thread. After all, and can confirm, I am still very much into investing for the next cycle, but do admit that recent economic/political events have somewhat derailed my own thoughts and focus.

[Loki]

12 minutes ago, JMD said:

I am still very much into investing for the next cycle, but do admit that recent economic/political events have somewhat derailed my own thoughts and focus.

You aren't the only one.

[JMD]

49 minutes ago, sancho panza said:

We've ended up currently circa 45% big oil, 20% goldies,then 20% cash ,some potash,utilities,and some randoms eg cameco/vodafone/options.

I mention it beacuse it's not where I planned us to be 2 years ago.As I've said big oil was going to be 10%.Telecoms 25%(currently 0.5%iirc).

My plans have therefore changed going forward.We have pciked up some oil holdigns we will likely hold throughout what's coming so bottom ladders in XOM/BP/RDSB/EQNR/Total/Respol.Upper ladders will get sold during the relief rally that rises on a weakening dollar, that will take us up to the Big Kahuna. We'll then be selling our goldies plus everything else taking us back to 80% cash(mostly dollars).We may mvoe thsoe dollars into TLT/ZROZ but maybe jsut sit in cash.

Plan would then be to buy back goldies lower than we sold them,oilies/telecoms/potash/chemicals for the long term.Moving us back to 80% equities.

I think Big Kahuna will be next year or possibly late this year.We need to see rally fade.

I think gold to $2000 is a given in this phase pre Big Kahuna...............be very very surprised if we don't get a dollar high soon

Having said we'll trade what's coming,I think there's also a middle road case for buying and holding your goldies/oilies and jsut sit it through as you say Agent.

ref last bit in bold, important to remember that some stocks go up while the wider markets crashes. happens every time. We jsut got to pick em.

SP, I hope things play out as you describe. But if we do get a market high late this year/next year i wouldn't plan to sell everything and go to cash (i'm not that brave), but as i've mentioned before, I have made plenty of buying mistakes and therefore want an opportunity (2nd bite at cherry/moon on a stick) to adjust my portfolio for my preferred long term hold strategy (well to 2028)... And moreover being able to buy back into a future market - after it has crashed/big kahuna - would be the icing on the cake.... but do things like this really happen, surely that would be like winning the lottery?

[DoINeedOne]

On 05/04/2020 at 12:19, DoINeedOne said:

Also looking at getting back into a few old miners sold HMY at around $3.3

 

Currently $3.48 miners going crazy

[JMD]

55 minutes ago, Loki said:

 

Can I just say the juxtaposition here cracked me up 

yep, same here. I thought Craig was going to introduce a convoluted 'dough' and 'recipe' economic metaphor, not talk about making pizzas!

btw, nothing wrong with pizzas, but pretty much everything wrong with economic system.

[Harley]

@sancho panza sounds like your time might be even more profitably employed bagging those NHS discounts.  Just heard Brewdog offering NHS workers 50% off!

[Craig]

6 minutes ago, JMD said:

yep, same here. I thought Craig was going to introduce a convoluted 'dough' and 'recipe' economic metaphor, not talk about making pizzas!

btw, nothing wrong with pizzas, but pretty much everything wrong with economic system.

Sadly, advising folk to buy a Ferrari pizza oven has probably been my greatest contribution on here...

[Cosmic]

4 minutes ago, Harley said:

@sancho panza sounds like your time might be even more profitably employed bagging those NHS discounts.  Just heard Brewdog offering NHS workers 50% off!

Wow their stuff is expensive. May just be worth it with the GFs ID tho

[TheCountOfNowhere]

My share holdings has dipped below a 20% loss today, 18% down now, IIRC was about 40% at one point till I started laddering in.

The share than remains nameless apart from when I post has killed me, would be looking fairly  unscathed had it not been for them and a couple of other dogs like Stagecoach.

I caught schlumberger  at rock bottom ( for now )  and glencore is up about 10% from when I bought them, which have eased my pain.

Everything else is down about 5%ish but stable

The 2nd leg down will be here any minute I expect.

 

[Harley]

1 hour ago, Cosmic Apple said:

Wow their stuff is expensive. May just be worth it with the GFs ID tho

Did you know they call me Mr 10%?

[DurhamBorn]

Equinor have cut their first quarter dividend by 67% it will be interesting to see if Shell and BP follow.I think the fact the big oilies mostly pay every quarter means they can by quite flexible cutting one quarter,but quickly moving back as soon as price improves.I would be glad if they all cut and used the cash saved to buy up cheap assets while they can.Repsol have said they are holding theirs,but they might change their mind,though they are 60%+ gas upstream.

 

 

[Castlevania]

34 minutes ago, DurhamBorn said:

Equinor have cut their first quarter dividend by 67% it will be interesting to see if Shell and BP follow.I think the fact the big oilies mostly pay every quarter means they can by quite flexible cutting one quarter,but quickly moving back as soon as price improves.I would be glad if they all cut and used the cash saved to buy up cheap assets while they can.Repsol have said they are holding theirs,but they might change their mind,though they are 60%+ gas upstream.

 

 

BP have a new chief executive. I reckon he’ll set his mark and cut the dividend. Shell are in my opinion likely to maintain.

[CVG]

25 minutes ago, Vendetta said:

6.70% rise today. One of the top FTSE 100 performers. 
 

One for the portfolio? 

It's in my portfolio (down 50%+). If you enjoy wild swings up 6.7% and down 12% then it'll delight. The dividend policy also seems prety random. Don't bet on getting 20% +.

 

[DurhamBorn]

34 minutes ago, Cattle Prod said:

Maybe so.

But I recall the screaming from the middle class retirees of the UK when they cut it after Macondo, a surprising % of pension or retirement income in this country relies on BP divis. They were practically on the streets! 

Its interesting how things play out.Iv noticed a slow drift over 20 years of shareholders coming last in more and more companies.Iv got a share who has cancelled the divi,yet the execs have taken a 20% salary cut and given it to food banks.Why are they giving it to food banks before shareholders?.The problem is less and less ordinary people own shares.A new chief exec at the present time will be looking hard at all that cash they could spend instead of giving to shareholders.Imperial Brands have a new chief exec and he might cut,BT are almost certain to,Vod already cut but may cut again.

Its very telling of where we are in the cycle though.I can remember when divis went up every year 8%+ and wages went up RPI+1%

[Errol]

[MrXxxx]

6 hours ago, JMD said:

yep, same here. I thought Craig was going to introduce a convoluted 'dough' and 'recipe' economic metaphor, not talk about making pizzas!

btw, nothing wrong with pizzas, but pretty much everything wrong with economic system.

One is based on `sound` scientific principles, the other isn't...I will let you all decide which is which. 

[MrXxxx]

2 hours ago, DurhamBorn said:

got a share who has cancelled the divi,yet the execs have taken a 20% salary cut and given it to food banks.Why are they giving it to food banks before shareholders?.

Yes, I saw this the other day when researching buy options; can't remember which one it was, and It was my thought as well...though "Sod that if they think I am buying shares as a one man charity!", and they didn't get my investment.

[sancho panza]

8 hours ago, JMD said:

.. And moreover being able to buy back into a future market - after it has crashed/big kahuna - would be the icing on the cake.... but do things like this really happen, surely that would be like winning the lottery?

chances of a big lottery win are small,chances of lots of decent medium size wins are better.

if you're anxious about trading then don't do it.Like i said this stuff's specualtive.

4 hours ago, Cattle Prod said:

Heads up @sancho panza @MvR or anyone else who is interested, Saxo Bank has (I think) reasonably cheap call options on the XOP ETF which has a good spread of US oil and gas production companies, with some Appalaicha only gas players in there too which I really like. I bought Jun 21 calls, otm, just to have optionality on a supply squeeze in early 2021.

 

Do your own due dilligence please folks, just sharing a trade I think could work well!

defintely,cheers for the heads up CP,I had a look ,I didn't realsie you get options on etfs

4 hours ago, DurhamBorn said:

Its interesting how things play out.Iv noticed a slow drift over 20 years of shareholders coming last in more and more companies.Iv got a share who has cancelled the divi,yet the execs have taken a 20% salary cut and given it to food banks.Why are they giving it to food banks before shareholders?.The problem is less and less ordinary people own shares.A new chief exec at the present time will be looking hard at all that cash they could spend instead of giving to shareholders.Imperial Brands have a new chief exec and he might cut,BT are almost certain to,Vod already cut but may cut again.

Its very telling of where we are in the cycle though.I can remember when divis went up every year 8%+ and wages went up RPI+1%

this ahrks back to the discussion we had about teh loss of crest accounts and assets being held by nominees.not that there's much retial left in the UK to be fair.but those that there are can't vote at agms in the main.