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

[Tingles]

Jeff Bezos sold $3.1bn of Amazon shares yesterday, IIRC he sold a similar amount in February during the wealth transfer phase prior to the March crash.

[Jesus Wept]

17 minutes ago, Cattle Prod said:

It just occured to me that with everything overwhelming instant communication now, we need a shorshine boy scale. In 1929, such a tip would have been unusual and jarring, and a very clear contrarian signal. I'm waiting for Mrs to shout at me for selling her stocks (she wanted to sell them in March "in case they lost any more"). I want to see tinkers nicking lead off my roof, grannies melting down their rings, my ten year old asking me about aapl stock, and my dog getting barking when he sees a parabolic chart on my screen. Then the top is in.

I can tick a couple of those off.

My 11 year old boy told me to buy stocks in Tesla the other day....😳 I kid you not. 
 

The wife also criticised me for taking some profits in silver last week. (Mind she was right...🙄).
Back in March she was asking with exasperation why I started buying shares when the (ftse) market had just crashed 30% .... 

Compared to 2000 and 2007 when the last big crashes happened every man and his dog has an app on their phone to buy shares these days.

I think many are correct on here and this madness will continue down the mania phase for a good while yet. We saw that with bitcoin, tech stocks and tulips....

The eternal question is “how far will it go on before it comes crashing down and in what manner?”

November 4th and the US election is a critical point. I’m not sure how much upside there will be post the US election if the bull market was even to continue to that point. 

 

 

 

[M S E Refugee]

1 hour ago, MvR said:

Yup.. Something's coming..  The Robinhood thing is definitely our shoe-shine moment, but we could have a way to go yet.  IIRC Bitcoin tripled between me first being asked by a non trader if they should invest, and it peaking a month or so later.  I don't think all the retail money is in this move yet either.

Many Robinhooders seem to only buy the FAANGS, also they seem very partial to buying soon to be bankrupt Airlines and Cruise Ship companies and other assorted shit.

https://robinhood.com/collections/100-most-popular

[Jesus Wept]

5 hours ago, Hardhat said:

Personally I would not be surprised to see silver punch through $30 here, and then FOMO to follow.

90cents to go - at the current rate of increase that should take about 2.5 hours.

Never realised the silver and gold markets trade 23 hours a day - having sat & sun off:

Spot gold and silver trading is available 23 hours a day from 10pm GMT Sunday through 9pm GMT Friday. Trading is closed from 9pm to 10pm GMT daily. Spot gold and silver trading also follow CME holiday closures. Market hours and holidays are subject to change.

 

Throughout its history as a traded commodity, silver has seen many ups and downs, reflecting a variety of economic and political events. On January 18, 1980, this precious metal was at its premium, hitting $49.45 per ounce, the highest silver price to date.

[JMD]

4 hours ago, CVG said:

^

There are so many ways to validly avoid tax (including second hand purchases to avoid VAT) or earn tax free (such as 7200 rent a room*2), that I have little sympathy for those using the shady schemes to save more.

CVG, why is it '7200 rent room * 2'?  Can the £7200 tax free allowance be claimed twice?

[Loki]

46 minutes ago, Vendetta said:

My 11 year old boy told me to buy stocks in Tesla the other day....😳 I kid you not. 
 

You laugh but...there it is!  Whatever momentum it is that drives the latecomers will only go up from here

[CVG]

36 minutes ago, JMD said:

CVG, why is it '7200 rent room * 2'?  Can the £7200 tax free allowance be claimed twice?

My error. For some reason I thought it was 3600 per room pa to a a maximum of 2 rooms. Actually the cheme says

The Rent a Room Scheme

The Rent a Room Scheme lets you earn up to a threshold of £7,500 per year tax-free from letting out furnished accommodation in your home. This is halved if you share the income with your partner or someone else.

You can let out as much of your home as you want.

How it works

The tax exemption is automatic if you earn less than £7,500. This means you do not need to do anything.

If you earn more than this you must complete a tax return.

You can then opt into the scheme and claim your tax-free allowance. You do this on your tax return.

You can choose not to opt into the scheme and instead record your income and expenses on the property pages of your tax return.

[M S E Refugee]

I am going to sell the rest of my Fresnillo holdings this morning and buy Oil, the move in Silver must break down sooner or later.

Will look to get back into Fresnillo if it falls back.

[MrXxxx]

16 hours ago, kibuc said:

To emphasize my point that the miners are not buying this rally just yet, SILJ is ca 11% up this week with silver spot moving up 20%...

But is this not par for the course, as silver is a commodity and SMs are companies, and so behaves as such...whilst I would expect some correlation in movement, i wouldn't expect SMs to move at the same % rate.

[MrXxxx]

12 hours ago, Vendetta said:

Thanks for this @The_Doc
 

That is a good place to start. I have never really thought about my tax situation as I never had much disposable income, no investments in past, am PAYE and we both have inflation linked final salary pensions.

I did not even now what a SIPP was until recently 🙄 - or even knew much about S&S ISA allowances. Never too late to learn.

This was me about three years ago and just before I discovered this site...wish I had discovered it sooner, but better late than never! :-)

[MrXxxx]

11 hours ago, Vendetta said:

I don’t mind you asking. @Shamone

 “So how come I have not had much disposable income until recently?” 

I bought my final family home 11 years ago after STRing for 2 years at the trough in May 2009 having sold in July 2007. (I had discovered ToS in 2003!). 
 

As a result I had 60% deposit on the purchase and took out a 10 year fixed Mortgage for the remainder of the balance.
 

As DB would say - 1 economic cycle too early. Argh! I should have just got a variable discounted rate. Oh well.

Every penny we earned went into paying it off within 10years. Both of our salaries have gone up a fair bit in last 10 years too. I have also always driven a £3k 1.4litre 2nd hand car for 15 years. Hahaha!

 We are essentially Mortgage free now at 45 years old - so lots more disposable income. 

Also why we haven’t dabbled in shares in near on 20 years - as we have just paid down (mortgage) debt. 

My goal is to retire at 55 and live off pension, share dividend income and beekeeping and the odd bit of private work.

 

 

Well I wish you luck with your share dealing, as you won't make a fortune from beekeeping!....you will however get pleasure from it...oh, and a lot of `friends` wanting a pot of honey :-)

[MrXxxx]

11 hours ago, MvR said:

We just closed out the gold and silver physical ETFs in WvR2s ISA.. 10k worth to 18.5k since may 2019.  She's left with a tasty selection of oilys, potash, telcos, and other reflation stocks, all paid for with the profits from the PMs, with a little cash left over.  Turns out it's easier managing someone else's ISA than my own. She entered all the trade herself, with me viewing a screen share and checking she was buying the right stocks... an approach that minimises tinkering!

So in a little over a year, a 20k ISA turned into 21k cash plus over 7k of "free" stocks.

All credit has to go to @DurhamBorn for the education, timing and targets that made this possible. Thank you!

Can I have her next trading tip as she makes @DB sound like an amateur! :-)

[Democorruptcy]

11 hours ago, Tingles said:

Jeff Bezos sold $3.1bn of Amazon shares yesterday, IIRC he sold a similar amount in February during the wealth transfer phase prior to the March crash.

If I'd made $75bn this year I might cash in fraction of it for some pocket money:

Quote

 

There has been a surge in usage for technology companies such as Apple, Amazon, Google and Facebook as the public has turned online while under lockdown conditions during the coronavirus pandemic. Zuckerberg’s net worth has risen by about $22bn this year, while Bezos’s fortune has jumped by more than $75bn. Apple could hit a valuation of $2tn in trading on Friday, the first US company to reach such a milestone.

https://www.hl.co.uk/news/2020/8/7/facebook-boss-mark-zuckerberg-joins-centibillionaire-club?

 

 

 

[geordie_lurch]

I know it's Zerohedge but interesting for those interested in Hydrogen

A similar situation could enfold concerning emissions-free hydrogen production as China and the EU are getting ready to dominate the market.

https://www.zerohedge.com/energy/china-and-eu-vie-hydrogen-supremacy

[Sugarlips]

This guy is very good on bonds.. I'm a novice though so what do you guys think, how would you trade this?

 

[Jesus Wept]

2 hours ago, MrXxxx said:

Well I wish you luck with your share dealing, as you won't make a fortune from beekeeping!....you will however get pleasure from it...oh, and a lot of `friends` wanting a pot of honey :-)

I think there might be more money in bees than people imagine. 

Not a fortune as you say but enough to supplement a pension etc.... 

[AQUAMAN]

Weren’t miners shut down during corona

isnt that why all metals are mooning

[kibuc]

1 minute ago, AQUAMAN said:

Weren’t miners shut down during corona

isnt that why all metals are mooning

They aren't shut down now. Besides, a lot of miners (goldies in particular) were operating at near-full capacity for most of the Q2 anyway.
 

@MrXxxx I wouldn't expect the miners to simply follow the spot movements either, I'd expect them to multiply it. Free cashflow generated at current prices is leagues above what it was at $20, especially for marginal producers. If the spot averages even $24-$25/oz over Q3,  most of those companies will be swimming in money. At $28-$30 range it gets absurdly good. Instead, they are priced as if we were heading back to $20-$22 region and staying there, at best. Who knows, maybe we are.

I'm not saying markets are wrong, I'm saying the price action in miners implies total lack of belief that current silver prices are sustainable, even at 10% reduction.

[JMD]

22 hours ago, MvR said:

Any thoughts on the building materials sector?  Specifically brick makers like Forterra plc, Ibstock plc and Michelmerch Bricks, and a COVID recovery play?

Ibstock is on my technical buy screen today, and it's certainly taken a hit after reporting first half losses and redundancies. 

Maybe someone more knowledge than me on company accounts could take a quick glance at their financials?

https://www.expressandstar.com/news/business/2020/08/06/brick-sales-recovering-for-ibstock/

https://uk.finance.yahoo.com/quote/IBST.L/balance-sheet?p=IBST.L

 

MvR, I think that's an excellent question re. the building sector. And the mid-cap companies you mention are probably the best way - investment potential - to invest in the coming cycle infrastructure boom. Hoping others will comment as the building sector isn't mentioned as often as PM's, but it is an important reflation sector.

I am certainly no expert - contributors here such as Harley are much better placed to judge the financials i think? But i did have a quick look and all of those ones looked fairly similar, but Ibstock edged it for me on having a better debt profile. I would buy if it were cheaper - and if i knew it were a well managed company - and this is where crucial expert sector 'insider' knowledge comes in, because future contacts, etc, are important success factors.

MvR I cant recall if you work in the industry?, but if you do you probably already have a good overview of those 3 companies? Sorry i couldn't be more practical help, but if you had similar picks of other companies in the other building sub-sectors, i.e. plumbing, electrics, (what other ones are there?), i think it would make for a great discussion post.  

[AWW]

Relevant to this thread: https://edition.cnn.com/2020/08/07/tech/tencent-us-ban-wechat-hnk-intl/index.html

A phone without Tencent's WeChat has no chance of selling in China. It would be like trying to sell a phone without support for WhatsApp and PayPal in the west.

If AAPL shits itself when the market works out the significance of this, it could trigger the long-awaited NASDAQ collapse.

[MvR]

46 minutes ago, JMD said:

MvR, I think that's an excellent question re. the building sector. And the mid-cap companies you mention are probably the best way - investment potential - to invest in the coming cycle infrastructure boom. Hoping others will comment as the building sector isn't mentioned as often as PM's, but it is an important reflation sector.

I am certainly no expert - contributors here such as Harley are much better placed to judge the financials i think? But i did have a quick look and all of those ones looked fairly similar, but Ibstock edged it for me on having a better debt profile. I would buy if it were cheaper - and if i knew it were a well managed company - and this is where crucial expert sector 'insider' knowledge comes in, because future contacts, etc, are important success factors.

MvR I cant recall if you work in the industry?, but if you do you probably already have a good overview of those 3 companies? Sorry i couldn't be more practical help, but if you had similar picks of other companies in the other building sub-sectors, i.e. plumbing, electrics, (what other ones are there?), i think it would make for a great discussion post.  

Thanks  for that JMD.

No, I don't work in the industry. I wouldn't have heard of those companies if my brother hadn't done some IT consultancy for one of them the other year. One thing with bricks apparently is that given the weight, they're sourced locally where possible, so UK brick makers get to share the UK market without too much foreign competition. 

[janch]

1 hour ago, AWW said:

IfAAPL shits itself when the market works out the significance of this, it could trigger the long-awaited NASDAQ collapse.

I saw another article about this:

Apple, Trump and Tik Tok/Wechat

".....China is Apple's largest market........."

I'm thinking Trump knows what he's doing (maybe)..........He's ready for the industrial/infrastucture investment.

[leonardratso]

looks like gold+silver backing off now

might be friday profit takers

[AWW]

22 minutes ago, janch said:

I'm thinking Trump knows what he's doing (maybe)..........He's ready for the industrial/infrastucture investment.

Could just be his opening gambit, to be relaxed after negotiating something else.

[DurhamBorn]

6 hours ago, geordie_lurch said:

I know it's Zerohedge but interesting for those interested in Hydrogen

A similar situation could enfold concerning emissions-free hydrogen production as China and the EU are getting ready to dominate the market.

https://www.zerohedge.com/energy/china-and-eu-vie-hydrogen-supremacy

Keep buying Respol and other oil companies who will likely lead the hydrogen charge.DRAX is going up so much because the market sniffs it might be used for part of it here.The market is asleep and looking backwards as it always does at key inflection points.My VOD divi went into more Respol today.

https://www.petroleum-economist.com/articles/low-carbon-energy/energy-transition/2020/repsol-repositions-for-green-hydrogen

There is a big argument that hydrogen etc will never be as profitable as oil (and gas),but its to remember that big oil companies only supply a small part of the market now,where they might have a much bigger share later.People also forget that once big oil stops spending so much looking for more oil,and goes into draw down mode they might produce enough to buy back all their shares now x2 and build a large scale renewable energy business.