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


spunko

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TheCountOfNowhere
2 hours ago, Vendetta said:

https://amp.theguardian.com/business/2020/may/07/rolls-royce-to-cut-thousands-of-jobs-say-sources


I know this has been mentioned before. 

10,000 + workers will probably be let go by end of month. Many of those local to Derby.

Has this been already reflected in their share price? Has share price of RR hit bottom? 

Catalyst for a big fall in Ftse? Back to 4800 and lower? 

Of course the trick is to pick up individual stocks at/near the bottom and hold for 5+ years. Just got to make sure they are not the ones that will totally collapse. 

Will Rolls Royce survive. Unthinkable for it not to. 

 

90BC62D3-71A8-42EA-92B9-D818DDAB3AAB.jpeg

CAE61E7E-96F0-4DD4-B4F5-BE17A958C0CD.jpeg

Someone posted earlier that RR supplies the military, so it's a buy for me.

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Any dip buyers today?

I know I said I'd buy BT at 99p but I'm having second thoughts now xD

14 minutes ago, TheCountOfNowhere said:

RR supplies the military, so it's a buy for me

so you think WW III incoming? O.o

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10 minutes ago, geordie_lurch said:

Potentially... :ph34r:

 

powell.png

came across a great graph recently

 

EUOhtYmXsAIKR1H.png

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geordie_lurch

I've taken a very small position in Shell at 1147.6p a share with an eye on the longer term as I was waiting for them to go back under 1150p :Geek:

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sancho panza
1 hour ago, geordie_lurch said:

Thanks for highlighting that @sancho panza - I take your point and your subsequent Big Kahuna comment. I'm not basing my decisions on anyone's specific advice here or elsewhere but simply a gut feeling I need to spread what little cash I have around to cover myself and already have outside of stocks and shares. All the best

No worries.I'm sjut saying spare a thought for DB.he gets a lot of people asking him what's going to happen next week and the simple reality is that no one knows.We can have a better guess at what the next decade will bring.

People come on here for education,information and fun.

58 minutes ago, Loki said:

I will definitely buy more reflation stocks but seeing as durhamborn himself said it's the most difficult market he's seen I'd just sleep easier with PMs. Personal preference and gut feel only and i am not an expert!

I'm like you loki,it's about sleep.We're in 4 trades-oil,gold,utilities and potash.All relatively decomplex.We're fully committed to oil now,I couldn't stick any more in but I'm sleeping soundly at night.Just chatting with my Mum about the possibility of price inflation accompanying the credit deflation and the fact that PM's look to be the go to trade here.

Trying to pick the winning complex trades here is insomnia inducing to me.

Must say a pary n spray  basket of defence stocks off the bottom would a decomplex trade of sorts ,personally I'm not rolls has bottomed yet.

They've got a big airlines business that's about tog et steam rollered.

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sancho panza
33 minutes ago, geordie_lurch said:

Potentially... :ph34r:

Our average buy price in RDSB is probably circa £15 if it makes you feel any better.BP around the £3.50/£4 mark 

If we weren't full up,I'd have a few.Not advice,DYOR>

 

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geordie_lurch
11 minutes ago, sancho panza said:

Our average buy price in RDSB is probably circa £15 if it makes you feel any better.BP around the £3.50/£4 mark 

If we weren't full up,I'd have a few.Not advice,DYOR>

 

Thanks for sharing that detail @sancho panza - long term I agree and don't worry I'm not taking your word as advice and always DMOR etc 

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Transistor Man
58 minutes ago, TheCountOfNowhere said:

Someone posted earlier that RR supplies the military, so it's a buy for me.

There are doing a lot for the Tempest programme — eventually the  Eurofighter replacement. 

And the submarine reactor/ propulsion. 

Relatively Small numbers in these, of course.

10 years ago they tried to get into new build civil nuclear, but I don’t think that really went anywhere. 

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DurhamBorn

Yes this thread is about road maps.I have no concerns over price today,none.My concerns now are about positioning.Im tracking the liquidity in the plumbing because i know the lags on that roughly.The more that builds the more certain sectors will gain.Of course everyone would love to pick the bottom,but iv never met anyone who can,and i never will.I have zero idea if oil stocks will be down 20% of up 20% in a month,or a year.I do have pretty high confidence oil will be over $100 by the end of the cycle,much more likely $200 and an outside chance of $300.

Telcos i feel are massively undervalued.I dont know if they go down a lot more or not.I do think inflation will help them.Vod for instance.I have zero idea about price this year.I do think they will be between £3 and £4 + divis by 2029.

This threads whole train of thought was that the consumer would be swept away and we are being proved 100% right on that.We didnt guess on what would cause it,but that is why now we need to change positioning in some areas.

Shell have said this below.Obvious big shareholders have let the board know they expect the divi to go back up as things improve and if not well new board members will be needed.The tone is different from the results,then it was the divi cut is permanent,now its not,

https://www.bnnbloomberg.ca/shell-gives-hope-for-dividend-boost-once-oil-market-rout-is-over-1.1435739

our outlook stabilizes and our balance sheet is in the right position, then we should be in a very strong position to increase shareholder distributions,” Chief Financial Officer Jessica Uhl said Wednesday on an investor call, citing the potential for both dividends and share buybacks.

 

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1 hour ago, Harley said:

Yes, yes, and maybe voluntary at first (patriotic, can banging, "War Bonds"), like say the current cv tracing app, but then......The past subtle financial repression may no longer be sufficient, indeed necessary atm.  Too good an opportunity to let go to waste?  Tbc, we were entering a storm before cv.  The recent media uptick in facilitatory (sic) "talk" on the financial implications of cv, as opposed to the medical ones, as mirrored here, should be a canary.  Are we being softened up, again?  Emergency budget?  I started a thread a while back on risk management where I tried to start a dialogue.  Was not too early, just we, including me, too late?  Here's one:

https://www.dosbods.co.uk/topic/6958-financial-risk-management-case-hardening/?do=findComment&comment=323143

PS:  The smart money has not been late, especially given the additional last few months.  They've since followed their money out of the country.  Easy for the rest to maintain their summer hols - easy to isolate in their own villa.  Thank you Mr & Mrs taxpayer.  If you don't know what this picture is all about, then the time is ripe and history knows it.....

000E371F00000258-3830558-image-a-25_1476111590412.jpg.a378a6a420d703740655656ecc62f9bb.jpg

 

Thanks Harley, I have posted several times about CV19 as the political manipulation and/or mismanagement has troubled me greatly. (i'll take your photo trigger/bait above - is corona the 'agent orange' of our times?, No!! - I don't think that, but thought you'd appreciate the joke).

In terms of being 'softened up', I think the government has run that experiment and the results came back positive - i.e. the public are extremely suggestible when it comes to health scares. In fact most seemed completely fixated with mental/physical health issues before CV struck, and now 'we' appear to be totally and hypochondriacally gripped, addicted even... But never mind, as we appear easily pacified with repeated instructs to Stay Safe, and as luck would have it, we also have a Big Brother to protect us!

I'm quiet prepared to accept that the above might say more about me than about the current reality of the situation. Actually I do hope so because to be clear, I'm not into conspiracies. I'm more in DB's camp, where he rejects the pointless tribal political bun-fight, and instead follows the economic fundamentals to discover answers.

 

Harley, you have created your own nearly self-sufficient homestead, sorry don't know how to properly describe it, as quiet jealous if truth be known. I think many here would also like to exit the financial system with its risk of financial repression (stealing), not that you yourself have exited I accept. However, the last few months have made me question what 'level' of my wealth (quarter/half/more..?) I want to commit to the market, given its so very difficult to predict in terms of massive downside risks - but staying in cash is not an option either. Its a dilemma. So perhaps the simplest ideas are the best, perhaps I should just buy and stack (bury!?) gold. Or should I shake myself out of this stupor and devout more time researching the 'de-complex trade' ideas?  

Oh, and thanks for the link, i'll def. have a read.     

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28 minutes ago, JMD said:

I want to commit to the market, given its so very difficult to predict in terms of massive downside risks - but staying in cash is not an option either. Its a dilemma. So perhaps the simplest ideas are the best, perhaps I should just buy and stack (bury!?) gold. Or should I shake myself out of this stupor and devout more time researching the 'de-complex trade' ideas?  

I am quite concerned at the moment of staying in cash. This is on both the personal and business side of things (with more cash 'exposed' with the latter). I accept it's a nice problem to have but it's a problem nonetheless. I sincerely believe that we are now at a point in history where anything can happen, socially, politically, financially. Despite the FSCS £85K scheme, I remain to be convinced that this is entirely watertight if more than one bank happens to go under. Our business cash is our pension but it not yet fully 'made up' in that we need 3 more years of earnings nor is the current balance ready to be deployed into the right areas (which might include property). I've moved a tranche into bullionvault but I'm not confident enough to chuck it all into PM. Bought some stocks as well but again it's too volatile at the moment. If there was a NS&I scheme for businesses I would probably move all surplus cash into there (but there isn't).

I was very interested to catch up with David Hunter's latest macro blog and his prediction of a final melt up to labor day and then the big slide downwards for stocks (and also temporarily for PM). However, even that brings problems if one was to temporarily cash out before going back in later. eg even more cash in the bank just when the wheels are falling off.

It's going to be a bumpy ride for the next 2 to 3 years. I think the path will be clearer by then (even if it's full of burning wreckage)

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Trump must be short the markets again....

TRUMP SAYS WE COULD CUT OFF WHOLE RELATIONSHIP WITH CHINA: FOX EXCLUSIVE

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7 minutes ago, Sasquatch said:

I am quite concerned at the moment of staying in cash

Au contraire.....I'm not worried about having cash at all, I think my buying power will increase exponentially over the next few years as ALL the economies implode and all the debt loving loonies get exposed.....

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4 hours ago, DurhamBorn said:

Huge stink isnt there.Companies raising quick money they say even though they have liquidity and shares issued to who knows who,but ordinary investors cant even take part.

In a way they are locking in losses for ordinary share holders.

The divi cuts are another huge problem.Companies slashing to nothing who dont need to etc.Another problem of passive investment.Legal and General,Standard Life etc would be pushing execs to get divis flowing,but passives wont.

Equity investment is one of the only ways an ordinary person can access an income with a few hundred investment the same as the rich. Are the elite trying to remove that route?

DB, sounds a very worrying 'trend', is it a trend? Do you think this could ultimately lead to a future where many companies are 'taken private'?

I cant remember where I read it, but was shocked to read that over last 20 years, fewer IPO's on yearly basis, have been bought to market. Public offerings are now I believe at record lows, with only 200 approx. happening last year. Whereas private equity capitalisation in total is growing at a faster rate year-on-year, compared to the total value of stock market (with the bull run we've had that is saying something). 

You have written previously about your concerns of shareholders becoming less and less valued by their companies, and by government. Now dividends are being cut, is this the new normal?  With Japan, and recently even the US, buying up shares/junk bonds, could this be the beginning of the small investor being 'locked out'. I note Harley posted recently his own concerns that even the big oilies might one day be taken into private hands.

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3 hours ago, sancho panza said:

@Harley it's as if the market gods were reading the thread last night.

image.png.3bc5c88ed66792966d6a7d09dbbd33a3.png

SP, did you see the recent BBC series DEVS? I thought it was great btw, but anyway if you did see it, then surely you realise already that everything is/has been written in our 'stars'  - or in our 'simulation'!... makes your head hurt if you dwell to long on this kind of stuff (if you didn't watch it, please excuse my strange interjection).

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@Cattle Prodi agree, globalisation and offshoring has fucked so much up......this is a scary chart......I'm a 'technology lover' but frankly these 5 corporates pedal 'shite'.....too many 'dislocations' out there.....

and lots of pain ahead methinks

 

 

EVzP_oBWoAEaGam.jpeg

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@JMD agree re DEVS, very entertaining and maybe an insight into the future xD For those who want more insight into what the one percenters get up to and pizzagate, watch 'Out of shadows' :S

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11 minutes ago, 5min OCD speculator said:

@Cattle Prodi agree, globalisation and offshoring has fucked so much up......this is a scary chart......I'm a 'technology lover' but frankly these 5 corporates pedal 'shite'.....too many 'dislocations' out there.....

and lots of pain ahead methinks

 

 

EVzP_oBWoAEaGam.jpeg

There's a great video of the largest US companies over time. Fascinating to see hiw we've shifted from oil, cars, chemicals, heavy industry etc to entertainment and technology. 

Found it - 

 

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3 hours ago, Harley said:

It was the run up to that photo that was the most prescient.  The fall of Saigon was proceeded by a "stay calm, all is OK" mentality within the city promoted by the media, etc.  A veneer of normality was created on the surface ("keep the City tidy"). Meanwhile, as the VC infiltrated and the frogs boiled, the smart folk moved out.  It is the human condition, hope to the very end. Never be on the last helo, possibly unless they are paying you mega bucks and you have at least one alternate bug out route.  

Harley, you are writing about the past as it relates to our present. I get that and do enjoy the helo ride! However, while reading your post I was struck by the phrase highlighted - i.e. in our strange times it sounded somehow eerily familiar to me. Anyway, I continued to read on, only to subconsciously(?) transpose those letters... I shan't get too freaked out, and won't labour the point if it is not obvious to others... but isn't this what they call synchronicity?!

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3 hours ago, 5min OCD speculator said:

Any dip buyers today?

I know I said I'd buy BT at 99p but I'm having second thoughts now xD

so you think WW III incoming? O.o

Not actual war. Hopefully not anyway. But heightened geopolitical tensions. Trade/sea route protections, etc.

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1 hour ago, JMD said:

...is corona the 'agent orange' of our times?

That'll be that other cancer inducing thing called debt!

1 hour ago, JMD said:

I'm quiet prepared to accept that the above might say more about me than about the current reality of the situation. Actually I do hope so because to be clear, I'm not into conspiracies. I'm more in DB's camp, where he rejects the pointless tribal political bun-fight, and instead follows the economic fundamentals to discover answers.

Sounds sane to me.  All this was never about tribal politics though, just the political economy, where politics is really just one mass.  It was very liberating when I realised my issue is with the complete political class, having stepped through the mirror of fake choice they had created.

1 hour ago, JMD said:

Harley, you have created your own nearly self-sufficient homestead,

I've been at it for many soul searching years and have a long way to go.  Hardly a homestead atm but that is now my clear dream, and my key search term on Youtube!  But independence (at least the liberating mental kind) can take many forms.

1 hour ago, JMD said:

....but staying in cash is not an option either. Its a dilemma.

That's the rub, the one that's killing me right now.  Still waiting for a messiah to pop up and put me out of my misery!

1 hour ago, JMD said:

Or should I shake myself out of this stupor and devout more time researching the 'de-complex trade' ideas?  

Maybe a little bit of everything?  What's for certain, after many profitable brainless years, now is the time to switch, and protect.

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1 hour ago, JMD said:

I note Harley posted recently his own concerns that even the big oilies might one day be taken into private hands.

I wasn't limiting myself to the oilies, by a long way.  I once had cause to trace an ownership chain as part of an acquisition and ended up with a secretive private equity company resident in the Caribbean.  All sorts could be going on, including secretive shares for favours.  Great if you are on the inside proper (i.e. not a patsy just thinking you are).  There's also a TED talk on the matter by a biologist(?) who leveraged their trace techniques to look into who owns what in the financial world.  Ultimately came down to a handful, like 60 or 600 odd people/organisations/families.  Max Keiser has been all over this subject.  

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2 hours ago, Transistor Man said:

There are doing a lot for the Tempest programme — eventually the  Eurofighter replacement. 

And the submarine reactor/ propulsion. 

Relatively Small numbers in these, of course.

10 years ago they tried to get into new build civil nuclear, but I don’t think that really went anywhere. 

Are Rolls-Royce jet engines part of Rolls-Royce cars, and all/both owned by BMW?

I'm thinking if Rolls-Royce jet engines are a separate company, and not foreign owned, then their 'mini off-the-shelf' nuclear technology might be of interest to British government.  

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