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


spunko

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5 minutes ago, M S E Refugee said:

I can't see that this was done out of the goodness of their hearts though - surely it was just that there's no opportunity cost in giving the stuff away for free when consumer demand has evaporated.

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https://www.zerohedge.com/personal-finance/where-you-can-buy-hertz-cars-huge-discounts

Hertz was a big player, half a million cars!

Creditors are playing the "he who panics first, panics best" game by getting shot ASAP and getting whatever cash they can.  Should be some good deals in the UK coming in the next 6 months. 

7 minutes ago, AWW said:

I can't see that this was done out of the goodness of their hearts though - surely it was just that there's no opportunity cost in giving the stuff away for free when consumer demand has evaporated.

Or they needed some refinery space freeing up, and this was one way of getting rid of something.

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leonardratso
46 minutes ago, Loki said:

Free publicity though, and petrol doesn't store well unless they load it up with an additive 

coke. Cheaper than vodka.

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23 hours ago, Harley said:

Some (most) ETF providers lend out their holdings for a bit more cash.  You can see the details for say iShares for each ETF detailed on their website.  This introduces a number of risks.

https://www.dosbods.co.uk/topic/6958-financial-risk-management-case-hardening/?do=findComment&comment=323114

Thanks Harley I had your 'risk' thread on my to-read list. I will now ensure I read it as I am sure it will help me -because I am always looking for ways to reduce my investment risk.

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47 minutes ago, JMD said:

Thanks Harley I had your 'risk' thread on my to-read list. I will now ensure I read it as I am sure it will help me -because I am always looking for ways to reduce my investment risk.

Justetf.com also details any securities lending for specific ETFs.

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I don't know how I ended up following this professor on Twitter.  He is meant to be a tax expert and is a campaigner for tax justice and against evasion etc which sounds good to me.  He is also very political in one of those nasty snarling ways.

I have learnt a lot reading here but tbh a lot still needs to be beaten into me 😅 and it's a very much a work in progress.  Especially the last couple of months I have read a lot (not neccassarily aprops to this thread but nevertheless similar to how I feel about reading the below) that just doesn't add up to me.  Except these are so called experts, have had long careers and sometimes even longer letters after their name.  So who am I to argue/question?

Richard Murphy came out with this a few days ago regarding the printing of money and how it is the panacea we need and not dangerous at all.  I think DB has said before that this is really the only option for govs/ Central Banks going forward - although I think they are completely different after that.  Here we talk of end of one macro cycle, end of money being pushed in a zero rate economy towards the consumer economy and likewise end of zombie companies who have survived thanks to these conditions.

Murphy seems to think government debt is a magic money tree that is there to be shaken to help the government and populace when needed.  And no inflationary risk involved!!  Am I missing something with the below?   Seems like big mental gymnastics going on or just no common sense.  If it was so easy to just keep printing why not take it to the extreme and just let everyone live in luxury.  

https://www.taxresearch.org.uk/Blog/2020/05/22/thank-goodness-for-the-governments-ability-to-create-money/

I have just put out the following Twitter thread to address some of the nonsense being said about inflation risk today, and other comments that show incomprehension about money. And yes, I know som MMT quibbles could be raised - but this is seeking to reach a wider audience with ideas they will bot be familiar with:

The usual ridiculous claims about inflation risk are whirling around the media because the government is borrowing more, and some of that is being paid for with quantitative easing (QE). So it’s time for an explanation 1/

First, gov’t debt in the UK right now is low: net of QE it may be just 57% of GDP right now, which is insignificant in the grand scheme of things. 2/

Second, despite £575bn of QE in the last decade the government and Bank of England has dismally failed to deliver inflation that we require. That suggests we might need more QE to create inflation and not less, and inflation is no bad thing. 3/

Third, government debt is made up of three things. They are notes and coins; National Savings including Premium Bonds, and gilts, which are, in effect, National Savings for banks, pension funds and companies. Can anyone give a good reason why we should get rid of all of them, including our money? 4/

Fourth, if big savers what to save with the government because they do not trust commercial banks (which is what is happening) should we force them to take the risk of losing their money in commercial banks? If so, why, especially when smaller savers are protected? 5/

Fifth, shouldn't we instead see this move to save with the government as a vote of confidence in the government's ability to provide economic security and instead worry about why commercial banks are not as safe, and do something about that? 6/

Sixth, government has never repaid the national debt, or ever really tried to do so since it began in 1694. Why should we plan to do so now? What's the reason for changing a policy now that's worked for more than 325 years? 7/

Seventh, if the national debt is going up it's because the private sector is failing, and not that the gov't is. If we demand that the debt be repaid who are we repaying it to? Wouldn't we just bailing out the private owners of wealth? Why should we do that? 8/

Eighth, if 'repaying the debt' would really be about giving private owners of wealth back the money they're lost in preference to providing jobs for people who'll need them and tackling the climate crisis which we should be doing, what's the justification? 9/

Ninth, weren't those in the private sector who've lost as a result of this crisis aware that they were taking risk when investing in private business? When was it that the state gave them an undertaking to underwrite their losses, which repaying the debt would represent? 10/

Tenth, anyone who claims we cannot repay ignores the fact that the government can buy back its own debt any time it likes: it has had the Bank of England create £575bn of new money via QE to do this over the last decade and none of that has to be repaid because the gov't owns the BoE 11/

Eleventh, it's vital the Bank of England does do this money creation. Right now, government loans apart there's almost no new money going into the economy and given that all the money we use is created by borrowing if the Bank of England was not creating new money right now no one would be 12/

Twelfth, in that case without the injection of new government-created money that is happening right now into the economy it would literally grind to a halt. Would anyone prefer that to this new money creation which will be used to clear a large part of this so-called debt? 13/

Thirteenth, or would people prefer that we kept as much as possible of the economy going right now, knowing that the only cost of doing so is the Bank of England technically eventually being owed quite a lot by the government, which it never need repay? 14/

Fourteenth, and if in doubt about this, think how hard you'd find it to repay your borrowings if you owed them to yourself, which is what will happen with much of the new so-called government debt that's going to be created by this recession, but which will be owned by the BoE 15/

Fifteenth, so let's not panic. The amazing thing about modern money is it can be made on demand by the Bank of England to keep our economy going, to clear government debt and to create the cash we need to keep finance going all at the same time 16/

Sixteenth, so there's nothing to worry about - because if the worst comes to the very worst all this debt will just be owed by the government to itself - and that's just fine because what's left over after that is something you really like - new money that makes your world possible 17/

And because that new money simply replaces that which would normally be created by commercial bank lending which isn't happening right now there is no chance it will deliver inflation. Instead it just keeps is going. Thank goodness for gov't and its ability to create new money in that case, I say End/

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22 hours ago, CVG said:

Have to be careful here because derisking as you approach retirement is sensible to ensure that your can crystalise the gains you have hopefully made with high risk equity investments throughout your work life. No one would have wanted to have their pension 100% FTSE 100 invested at the beginning of March with an April retirement due!

So cash is "safe" for a year or two as are short term bonds. Tapering is absolutely right. Just select the right assets!

Yes true, good point....its more important what you do with it once you have crystallized it.

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DurhamBorn

@Dogtania he is right in many ways but has no idea about leads and lags.Inflation cycles nearly always start with people who think "a bit of inflation is a good thing,we can control it later".The CBs are right to print,no question about that,because in our system they have to do that.However the idea he states that its free is ludicrous.Sterling has nearly been cut in half.Thats not free.He also seems to think the UK exists alone in the world and the outside doesnt affect us.The cycle coming will be industrial,it has to be,and its worldwide.There will be a dash for real assets when it gets underway.He seems to think all that QE will just sit forever in gilts.It wont.I think JP Morgan might have a better idea buying up all that silver.Noticed they bought a 5% stake in National Express as well.I sold them at £2.58,but think il buy them back again now around £2 and £200mill raised at £2.30.

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4 hours ago, Dogtania said:

Seventh, if the national debt is going up it's because the private sector is failing, and not that the gov't is.

How about we get rid of most of the government? Bet the private sector would do just fine.

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PatronizingGit
16 hours ago, ThoughtCriminal said:

I now know of 5 Businesses who have applied for and received 50k government backed loans, within 24 hours of applying no less. 

 

3 of them have no intention of paying it back and will just go bump. All of them lied about their turnover on the application as it said “if you don’t know your turnover just guess”. I shit you not. 
 

One of the others, the two lads that own it are using the 50k to buy range rovers. 

 

I predict this will be the next scandal down the line. 

Companies going to town with the govt subsidy. Lass I'm working with on her furlough said her employer (a well known online travel company) is giving all staff full bonus'es they usually have little hope of getting unless top performers because their basic is £20k and...well, govt 80% limit doesnt kick in till £30k or so. 

Another is getting paid for a summer job that she didnt even start (marking exam papers I think) purely because its being cancelled.

Same as the bank bail outs a decade ago...take the money, no strings attached...in fact, only string is be as irresponsible as you were before.

 

Of course, things like petrol duty suspension, council tax suspension, PAYE suspension would have been a lot less easy to abuse....

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PatronizingGit
14 hours ago, DurhamBorn said:

The UK has reached Clown World economics now where if you dont take from the state you get left behind.Furlough you could argue was a decent idea for couple of months seeing as the government decided to bankrupt a lot of the self employed,but the business loans idea and forcing the banks to push them through is nuts.Massive changes coming soon,there is hardly any private sector left compared to the size of the scrounging and feasting from the public and welfare sector.

The question about bank shares above is valid.Id nearly consider some good cycle buys if we knew they could get through whats ahead first,but it seems the government by pushing all this lending is making sure the next 5 years of bank profits,goes on covering bad debts so shareholders get zip.

Our chancellor even looks like a cartoon. Mr Jug ears himself. Not sure who he reminds me of more. Plug out of the Beano of David Schneider. And his nickname is 'dishy rishi' Maybe in Hartlepool or somewhere where more than half a set of teeth is considered exotic.

plug.jpg

david-schneider-s.jpg

74124946.jpg

 

 

 

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sancho panza
15 hours ago, DurhamBorn said:

The UK has reached Clown World economics now where if you dont take from the state you get left behind.Furlough you could argue was a decent idea for couple of months seeing as the government decided to bankrupt a lot of the self employed,but the business loans idea and forcing the banks to push them through is nuts.Massive changes coming soon,there is hardly any private sector left compared to the size of the scrounging and feasting from the public and welfare sector.

The question about bank shares above is valid.Id nearly consider some good cycle buys if we knew they could get through whats ahead first,but it seems the government by pushing all this lending is making sure the next 5 years of bank profits,goes on covering bad debts so shareholders get zip.

I think we'll be pciking up HSBC for the 50pence we paid mid 90's.Time will tell.

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sancho panza
13 hours ago, Castlevania said:

It’s a difficult one. I’m up YTD. I’m not invested in a balanced portfolio and yet when I break it down to the core sectors most are down. So for me in terms of performance:

Gambling: Rubbish

Agriculture/Potash: Rubbish

Telecoms: Rubbish

Energy: Rubbish

Oil & Gas: Rubbish

Emerging Markets: Rubbish

Financial services: Excellent

Precious Metal miners: Excellent

 

 

Interesting CV. Is uppose a lot depends on your average price.Problem you have twith things like S&P is that the big 5 or 6 tech firms can move the indices(and have done).So you can be sat there watching S&P rise as your holdings go red.

It's the idea I run with,pick the sectors that look good to run and hopefully one of them will.We're very nrrow at the minute but that's intentional.I think there's a big kahuna out there somewhere.

I'm comfortable with that risk though and the outlook for the sctors we're in.I'm getting anxious about sterling now must admit.I'd look at buying USD but am worried that could weaken and am averase to going 100% in stocks.Am tempted by physical silver/gold but am averse to having that much physical.Geuniely reflecting ehre whether we need to move that 20% cash into GLD or equivalent.................................................

 

edit to add:as per the above.What's the best alternative for GLD in the silver sphere?Sorry,I should have kept notes over the previosu 1000 pages but never thought I'd be considering this.

 

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Castlevania
11 minutes ago, sancho panza said:

Interesting CV. Is uppose a lot depends on your average price.Problem you have twith things like S&P is that the big 5 or 6 tech firms can move the indices(and have done).So you can be sat there watching S&P rise as your holdings go red.

It's the idea I run with,pick the sectors that look good to run and hopefully one of them will.We're very nrrow at the minute but that's intentional.I think there's a big kahuna out there somewhere.

I'm comfortable with that risk though and the outlook for the sctors we're in.I'm getting anxious about sterling now must admit.I'd look at buying USD but am worried that could weaken and am averase to going 100% in stocks.Am tempted by physical silver/gold but am averse to having that much physical.Geuniely reflecting ehre whether we need to move that 20% cash into GLD or equivalent.................................................

 

I’m quite happy with my exposure and mix at the moment - and have been buying quite heavily in Oil and gas and Agriculture and Potash companies since March as I think there’s good potential upside there. I suppose it does highlight where strong performance from only a couple sectors can make up for poor performance in several others.

Have you considered putting some of the money into long dated US Treasuries? I’m hoping for prices to fall back another 10% or so (I’d like to buy IBTL for sub £4.50) but that’s where most of my cash balance will most probably end up. It should provide some protection from a huge sell off in stocks.

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sancho panza

Here comes hte banking crisis.Not sub prime but uber prime.

 

More of the same coming in UK.I had a look at RM for my bit of Leicesterhsire.Still loads of dreamers trying to sell smallish 4 bed detached for £450k +.Good luck with that.UK could really struggle when hard working EU nationals start heading home.No job no point.

 

https://wolfstreet.com/2020/05/22/catastrophic-plunge-in-jobs-labor-force-in-los-angeles-san-francisco-silicon-valley-smacks-into-housing-bubbles/

Catastrophic Plunge in Jobs & Labor Force in Los Angeles, San Francisco/Silicon Valley Smacks into Housing Bubbles

by Wolf Richter • May 22, 2020 • 213 Comments

Holy cow, Los Angeles. The economy is gradually opening up. But the exodus has started hard and heavy. And the influx has stopped.

By Wolf Richter for WOLF STREET.

A little anecdotal thingy before we get into the horrifying data: I was on a call with a guy from Google – they want my WOLF STREET media mogul empire to spend money advertising on Google. He was working from home, and since he no longer has to go to Google’s office in Redwood City, he moved home to his parents in St. Louis, Missouri. One more soul gone from the Bay Area housing market, and he still has a job.

Coastal California is an expensive place, and if you lose your job, and you’re not rich, and maybe your stock options didn’t pan out, why stick it out? And if you can work from home, why spend a fortune on housing when you can spend a lot less elsewhere? These are the questions bedeviling millions of workers and former workers.

A housing market as inflated as California’s needs a constant influx of people to keep it going. And when people leave – either because their jobs have evaporated or because they can do their work-from-home somewhere else – well, then the housing markets, both renting and buying, head into trouble.

In Los Angeles County – with a population of 10 million – jobs fell off a cliff. This is where California’s largest and most intense outbreak of Covid-19 was threatening to spiral out of control, New-York-City-like. A lockdown and social distancing brought it under control and prevented a New-York-City-like tragedy. But the job market imploded.

The number of working people collapsed by 23%, or by 1.16 million people, counting from December last year, to just 3.79 million workers, the lowest number in the data series going back to 1990.

Until today, the lowest number of workers in the data series – released today by California’s Employment Development Department – was 3.83 million in January 1994, during Southern California’s Aerospace Crisis. Until today, the lowest this century was in January 2010, during the Financial Crisis, with 4.26 million workers. Back in December, there were still 4.95 million workers.

The labor force – and that’s particularly important for the housing market – plunged by 8.3%, or by nearly 400,000 people, to 4.76 million people, the lowest since 2003. The labor force plunged because people left the county, retired, or stopped looking for work. The unemployment rate shot up to 20%.

The chart shows the labor force (black line) and working people (red line). Note the Aerospace Crisis, the Dotcom Bust, and the Financial Crisis. In the prior downturns, the labor force only seriously shrank during the Aerospace Crisis, dropping by 480,000 people over a four-year period. During the Dotcom Bust and the Financial Crisis, there were some wobbles and dips, but no wholesale shrinkage in the labor force (the straight vertical red and black lines on the right are not the frame of the chart but the data lines):

US-California-laborforce-jobs-los-angele

Bay Area hit catastrophically, but less catastrophically than Los Angeles.

San Francisco, Silicon Valley (the counties of San Mateo and Santa Clara), and the East Bay (the counties of Alameda and Contra Costa) are the biggest drivers of employment in the Bay Area. Together, they’re somewhat smaller than Los Angeles County. They’re fused, with many people living in one county and working in another county.

The number of working people in those five counties combined (red line in the chart below) plunged by 13%, or by 545,000 people, to 2.93 million, taking it back to November 1999. It was the largest plunge in the data. The chart below shows the Dotcom Bubble and Bust, compared to which the Financial Crisis was puny. Then came the epic boom of the Everything Bubble, and now the most epic bust.

The labor force (black line) plunged by 192,000 people to 3.36 million, the lowest since August 2014. But labor force movements are slower than changes in jobs. During the Financial Crisis, the labor force barely dipped. During the Dotcom Bust, the labor force continued to drop for two more years after jobs had started to stabilize and tick up again:

US-California-laborforce-jobs-San-Franci

Clearly and hopefully, many of these people that have been laid off will get their jobs back. But many won’t. The uncertainty is huge. The entire startup field has been disrupted. That started early last year, and has continued to get worse, with numerous layoffs and shutdowns taking place throughout last year and into this year. Then came Covid. No one knows for sure what’s left over once the dust settles. Many of these jobs will be gone permanently.

In the Bay Area, Big Tech has largely switched to work from home, and their employees have jobs, but it doesn’t matter where they do those jobs, and the exodus, particularly among the younger workers – like my counterpart at Google – has begun there too.

Other people who have been laid off cannot afford to live in the Bay Area for long. For them, the state unemployment compensation and the federal Pandemic Unemployment Assistance help but are not enough to fund the high costs of living. If they haven’t already left, and if they don’t get jobs soon, they will leave. This is precisely what happened during the Dotcom Bust. But it wasn’t all at once. It took years to play out. The average rent dropped 25% during those four years.

Mortgage forbearance and the refusal to pay rent – with evictions on hold – will slow down the process. People can stick it out as long as they don’t have to pay for housing. But this is not a permanent feature. And then the floodgates open.

And there is another driver of the housing market that has evaporated: The influx of people from other countries – in the Bay Area, that’s largely educated people from Asia – has stopped cold.

No one knows how all this will shake out, how many companies will survive this, and how many people they will retain, and how many of those people they retain can work from anywhere, even from St. Louis, and they don’t have to rent or buy a home in the Bay Area.

This will take a long time to sort out and get through – countable in years. The startup shakeout was already underway for a year before Covid had arrived on the scene, but Covid compressed this dynamic into the shortest possible amount of time.

This labor force and jobs data is based on household surveys collected by the Census Bureau in the middle of April. The next set, collected in mid-May to be released a month from now, will likely be even worse. But hopefully, it will stop getting worse after that.

California’s economy is now gradually opening up – the businesses that are still around to open up. Big Tech has continued to work throughout, shifting work to home. What’s left of the startups remains a mystery. Uber, a large employer in the Bay Area, has gone through round after round of layoffs before Covid and doubled down after Covid. Macy’s shut down its tech center in San Francisco early this year before Covid became an issue, and laid off 1,000 people. Charles Schwab announced last November to move its headquarters from San Francisco to Texas. This has been a litany for a while. But the turmoil now is cleaning house.

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sancho panza
Just now, Castlevania said:

I’m quite happy with my exposure and mix at the moment - and have been buying quite heavily in Oil and gas and Agriculture and Potash companies since March as I think there’s good potential upside there. I suppose it does highlight where strong performance from only a couple sectors can make up for poor performance in several others.

Have you considered putting some of the money into long dated US Treasuries? I’m hoping for prices to fall back another 10% or so (I’d like to buy IBTL for sub £4.50) but that’s where most of my cash balance will most probably end up.

we're sat on losses in oil and ptoash but like you,feel very positive going forward.Like you say you only need one sector runnign and the rest can be held until they run.Thats the key good secotr selection imho.

Our Treausries trades are planned for later this year or 2021 depending on other factors.I'm risk averse in some ways and don't fancy UST's at these levels.If we get a weak dollar phase I'll regret it.

Plannign to sell oil/gold to buy UST's ahead of the big kahuna if I can get the June 08 moment right.

Much like you,we'll be moving most cash into UST's before redeploying back into oil/potash/PM's.March wasa  clear sign that when the sell off hits,the good value sectors get nailed as well.Only place to be is UST's.

 

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Castlevania
1 minute ago, sancho panza said:

we're sat on losses in oil and ptoash but like you,feel very positive going forward.Like you say you only need one sector runnign and the rest can be held until they run.Thats the key good secotr selection imho.

Our Treausries trades are planned for later this year or 2021 depending on other factors.I'm risk averse in some ways and don't fancy UST's at these levels.If we get a weak dollar phase I'll regret it.

Plannign to sell oil/gold to buy UST's ahead of the big kahuna if I can get the June 08 moment right.

Much like you,we'll be moving most cash into UST's before redeploying back into oil/potash/PM's.March wasa  clear sign that when the sell off hits,the good value sectors get nailed as well.Only place to be is UST's.

 

Sounds similar to my “cunning” plan. I failed miserably in March, here’s hoping for a second chance to get it right.

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DurhamBorn
3 minutes ago, Castlevania said:

I’m quite happy with my exposure and mix at the moment - and have been buying quite heavily in Oil and gas and Agriculture and Potash companies since March as I think there’s good potential upside there. I suppose it does highlight where strong performance from only a couple sectors can make up for poor performance in several others.

Have you considered putting some of the money into long dated US Treasuries? I’m hoping for prices to fall back another 10% or so (I’d like to buy IBTL for sub £4.50) but that’s where most of my cash balance will most probably end up.

Im pretty similar.Iv got some fat reds scattered about but those have been cut with ladders.The big jump we got in gold miners last year made me a big amount.For instance Harmony made 4x the loss on the share that shall not be named.Iv got a few Playtech at £4.40 in my ISA nearly cut in half,but i bought a very big holding between £1.68 and £1.78 in my SIPP during the sell off.Iv got some Go Ahead in my ISA i paid £15.40 for,but bought a big holding below £6 in my SIPP and then sold that above £12.50,though il likely buy a few back this week.Iv also got some scattered holdings in companies with a couple of K in each that are down 70%+.

Iv got some Vod at average roughly £1.73 in my ISA (about £1.47 if i take off divis),but i bought a really big amount in the sell off in my SIPP at an average of £1.09.BT similar,iv got some in my ISA at £1.90,but picked up a large amount at £1.05 and £1.11 in my SIPP.Telefonica and Telia i didnt own any and have bought a lot of both in the sell off,so both are slightly up and slightly down.Others i didnt own until the sell off.The oilies i only had a tiny holding until the collapse,so iv got Repsol,BP and Shell already in profit by quite a bit and i actually sold some Shell when they got near £15 simply as i had ended up with too many.My oil call protected me on those,and some was luck.I was moving an old pension and earmarked a lot of that for the sector.It arrived March 10th and so got invested in the oilies and potash during the lows over the following week or so.I also bought a big holding in BHP with some of that and they are up 52%.Crazy movements for a company the size of BHP.

Likes of tobacco im up 20% on BAT,down 16% on Imperial,but then cracking divis from them both.If they deliver a flat capital return between them over the next 8 years id be happy as long as divis hold steady from here.

Im very very happy with how things have gone.As always there are plenty of mistakes in my portfolio,at least timing mistakes and over paying mistakes,but il take them to be able to be buying the sectors i have and am for the prices.Potash for instance i had less than 5 figures in until the sell off,but thats expanded 5x since and now in front.

Iv a few companies as well that are in front bought during the sell off that im considering selling.Everything is fluid at the minute .My main focus now is directing divis coming in into silver,silver miners and more potash.My daughter said to me once,if you sell the ones in red on the screen,then they will all be blue,out of the mouths of babes.xD

 

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sancho panza
22 minutes ago, DurhamBorn said:

Im pretty similar.Iv got some fat reds scattered about but those have been cut with ladders.The big jump we got in gold miners last year made me a big amount.For instance Harmony made 4x the loss on the share that shall not be named.Iv got a few Playtech at £4.40 in my ISA nearly cut in half,but i bought a very big holding between £1.68 and £1.78 in my SIPP during the sell off.Iv got some Go Ahead in my ISA i paid £15.40 for,but bought a big holding below £6 in my SIPP and then sold that above £12.50,though il likely buy a few back this week.Iv also got some scattered holdings in companies with a couple of K in each that are down 70%+.

Iv got some Vod at average roughly £1.73 in my ISA (about £1.47 if i take off divis),but i bought a really big amount in the sell off in my SIPP at an average of £1.09.BT similar,iv got some in my ISA at £1.90,but picked up a large amount at £1.05 and £1.11 in my SIPP.Telefonica and Telia i didnt own any and have bought a lot of both in the sell off,so both are slightly up and slightly down.Others i didnt own until the sell off.The oilies i only had a tiny holding until the collapse,so iv got Repsol,BP and Shell already in profit by quite a bit and i actually sold some Shell when they got near £15 simply as i had ended up with too many.My oil call protected me on those,and some was luck.I was moving an old pension and earmarked a lot of that for the sector.It arrived March 10th and so got invested in the oilies and potash during the lows over the following week or so.I also bought a big holding in BHP with some of that and they are up 52%.Crazy movements for a company the size of BHP.

Likes of tobacco im up 20% on BAT,down 16% on Imperial,but then cracking divis from them both.If they deliver a flat capital return between them over the next 8 years id be happy as long as divis hold steady from here.

Im very very happy with how things have gone.As always there are plenty of mistakes in my portfolio,at least timing mistakes and over paying mistakes,but il take them to be able to be buying the sectors i have and am for the prices.Potash for instance i had less than 5 figures in until the sell off,but thats expanded 5x since and now in front.

Iv a few companies as well that are in front bought during the sell off that im considering selling.Everything is fluid at the minute .My main focus now is directing divis coming in into silver,silver miners and more potash.My daughter said to me once,if you sell the ones in red on the screen,then they will all be blue,out of the mouths of babes.xD

 

I think thersz a few salient points here. firstly for newbies the fact that even experienced traders like yourself and CV Harley cattle prod etc get timing wrong or make investments that go red. these things happen.recently a few new posters been worrying about catching the bottom entirely .

secondly that trades mature at different times. this is something Kaplan goes on about ie having enough sectors so that you've hopefully always got something in profit you can sell to raise funds. were spread across a narrow front bit that's for specific reasons as I've said. this is where the whole concept of laddering mechanically that you introduced me to helps no end.i used to average down when I felt like it. now I write a buying plan time/price based and generally stick to it

 

thirdly keeping in shares paying divis so you get some income. our oilies are giving around 8% at the moment.ill take my chances. pm miners not really paying big divi yet.

 

 

must admit next divi round due soon.and well be moving it into PMs .cant see anything else tbh here n now

 

 

 

on another matter db, if dollar weakens here, what currencies will strengthen? no pressure.im trying to work it out.is there a possibility that given the euro looks fubar, we could see thre mother of all PM squeezes??????

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DurhamBorn
7 minutes ago, sancho panza said:

I think thersz a few salient points here. firstly for newbies the fact that even experienced traders like yourself and CV Harley cattle prod etc get timing wrong or make investments that go red. these things happen.recently a few new posters been worrying about catching the bottom entirely .

secondly that trades mature at different times. this is something Kaplan goes on about ie having enough sectors so that you've hopefully always got something in profit you can sell to raise funds. were spread across a narrow front bit that's for specific reasons as I've said. this is where the whole concept of laddering mechanically that you introduced me to helps no end.i used to average down when I felt like it. now I write a buying plan time/price based and generally stick to it

 

thirdly keeping in shares paying divis so you get some income. our oilies are giving around 8% at the moment.ill take my chances. pm miners not really paying big divi yet.

 

 

must admit next divi round due soon.and well be moving it into PMs .cant see anything else tbh here n now

 

 

 

on another matter db, if dollar weakens here, what currencies will strengthen? no pressure.im trying to work it out.is there a possibility that given the euro looks fubar, we could see thre mother of all PM squeezes??????

It can sound hyperbole and probably is a bit,but yes i think we could see a dash for real assets.I noticed David Hunter was saying the PMs might do a .com and go hyperbole and i think there is a real chance they do.Once the cycle gets going i think the CAD will do well,but i think the main story is currencies being swapped for $s then swapped for assets.

Iv have some lag work on it,but need to really update things,but the numbers are so off the scale its almost a waste of time.However the road map is saying the liquidity flows into each currency through printing,then a lot is exchanged for dollars (what we have been seeing) and then those $s are exchanged for real assets.Potash is a prime example,i think people will be using their dollars to increase order size as the year unfolds.Again it probably leans to hyperbole,but there is a very good chance even the big players like Mosaic 5x or even 10x in price from here as they leverage the price increases.

Im not really doing much work on currency now,even though the calls have been fantastic over the tail end of the cycle because we are nearly ex-currency forward commods.

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geordie_lurch

Great posts as ever all :Passusabeer: 

I just wanted to post this quick link as a follow up about bank shares going forward but can't read the full article...

An investment tycoon has warned that Lloyds bank is facing an “existential crisis” and suggested it should wind itself up so it can return capital to shareholders.

https://www.thetimes.co.uk/article/tycoon-jeremy-hosking-warns-lloyds-bank-of-existential-threat-jw2gs9kv7

 

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9 minutes ago, geordie_lurch said:

Great posts as ever all :Passusabeer: 

I just wanted to post this quick link as a follow up about bank shares going forward but can't read the full article...

An investment tycoon has warned that Lloyds bank is facing an “existential crisis” and suggested it should wind itself up so it can return capital to shareholders.

https://www.thetimes.co.uk/article/tycoon-jeremy-hosking-warns-lloyds-bank-of-existential-threat-jw2gs9kv7

 

Not much extra in the full article:

An investment tycoon has warned that Lloyds bank is facing an “existential crisis” and suggested it should wind itself up so it can return capital to shareholders.

Jeremy Hosking, worth £385m according to The Sunday Times Rich List, asked whether Lloyds was “a for-profit private company or simply a publicly owned utility” after it joined other banks in cancelling dividend payments following pressure from the City regulator.

Hosking, 61, wrote to Lloyds before last week’s annual meeting, when more than a third of shareholders voted against a pay packet of up to £7m for boss Antonio Horta-Osorio. Hosking said there was “no point” in designing a new pay scheme until the bank had resolved “the dissonance between an (apparently) coherent strategy, and its complete failure from the point of view of shareholder returns”, even before Covid-19 hit.

He wrote: “Demonstrably we cannot make money in banking so the logical question . . . is: what is the point of Lloyds? Logically the most appropriate strategy . . . is that the bank should be . . . winding itself up.”

Hosking, who co-founded Marathon Asset Management and now runs a firm under his own name, has a £37.5m stake.

Lloyds’ first-quarter profits fell by 95% last month as it booked £1.4bn of charges to cover expected credit losses.

On Friday, Lloyds chairman Lord Blackwell wrote in The Times that banks should “be part of the solution” by paying, in effect, a “social dividend”.

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Eventually Right
28 minutes ago, DurhamBorn said:

It can sound hyperbole and probably is a bit,but yes i think we could see a dash for real assets.I noticed David Hunter was saying the PMs might do a .com and go hyperbole and i think there is a real chance they do.Once the cycle gets going i think the CAD will do well,but i think the main story is currencies being swapped for $s then swapped for assets.

Iv have some lag work on it,but need to really update things,but the numbers are so off the scale its almost a waste of time.However the road map is saying the liquidity flows into each currency through printing,then a lot is exchanged for dollars (what we have been seeing) and then those $s are exchanged for real assets.Potash is a prime example,i think people will be using their dollars to increase order size as the year unfolds.Again it probably leans to hyperbole,but there is a very good chance even the big players like Mosaic 5x or even 10x in price from here as they leverage the price increases.

Im not really doing much work on currency now,even though the calls have been fantastic over the tail end of the cycle because we are nearly ex-currency forward commods.

Hi DB, forgive the ignorance, but I’m seeing a lot of calls for the dollar to break a lot higher, whereas I think you’ve suggested your road map sees it lower.
 

If lots of the printed currencies will be used to buy dollars, does this not create upward pressure on DXY?

Cheers

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