Jump to content
DOSBODS
  • Welcome to DOSBODS

     

    DOSBODS is free of any advertising.

    Ads are annoying, and - increasingly - advertising companies limit free speech online. DOSBODS Forums are completely free to use. Please create a free account to be able to access all the features of the DOSBODS community. It only takes 20 seconds!

     

IGNORED

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


spunko

Recommended Posts

RickyBacker
51 minutes ago, Shamone said:

No intention of selling, just wanted to check out local scammers. 74% of spot price, fucking joker.

Everywhere I look there's a significant premium over spot when buying physical...If they're selling at twenty I'd be tempted to my stack a bit higher.

Link to comment
Share on other sites

  • Replies 35.1k
  • Created
  • Last Reply
2 minutes ago, RickyBacker said:

Everywhere I look there's a significant premium over spot when buying physical...If they're selling at twenty I'd be tempted to my stack a bit higher.

Don’t think they would sell at 20. Just part of the bullshit they fed me.

Link to comment
Share on other sites

RickyBacker
Just now, Shamone said:

Don’t think they would sell at 20. Just part of the bullshit they fed me.

Aye, I guess many people are unaware of spot prices. If a Brittania says 2 quid on the back they maybe think they're getting a great deal?! I did an experiment with my family last year... Asked them which they would prefer... My one ounce gold brittania, or 100 pounds cash. Blew their minds to find out that the "100 pound face value" Brittania was worth multiples.

Link to comment
Share on other sites

1 hour ago, Castlevania said:

Companies with a lot of debt really aren’t very popular at the moment. Telefonica is now below it’s March pandemic low. Big Tobacco isn’t looking quite so big. What are your lot’s thoughts on tobacco stocks? I know DB’s a fan - they paid for his house. Imperial is down at £12.50 (they haven’t been this low since I was at university and I had to walk past Imperial’s massive bonded warehouses every day and inhale the sweet smell of dry tobacco); BAT below £25; Altria at $42; PMI at $77. All are paying quite chunky dividends. Are any likely to be forced to cut (I know Imperial already have)?

BAT are a money making machine.Iv been buying a few last week to top my holdings up.I know several people who contract to them fixing and putting in machines all around the world,ex Rothmans fitters.They make around 1/2 US cent profit per stick in a lot of countries so its easy for them to slowly increase prices faster than sales falls.They also have a fantastic next generation portfolio.The problem is debt of course,its too high,but they are slowly cutting it each year by around £1.5 billion.Imperial have the problem that they arent as exposed to developing markets and have made a disaster of next generation products.However their tobacco business can likely tread water and they should be able to de-leverage by £800mill a year and they could be a sitting duck for a joint takeover by BAT and Japan Tobacco.I hold Imperial,but wouldnt buy anymore while BAT is this cheap,if i wanted to own the sector id buy BAT.Something people forget is that they could always use their cashflow to buy other companies and expand into other areas.BAT is already involved in vaccines etc.I think Imperial might go down that road once the new guy is in charge.

I own them for historic reasons as well.I sold them all near the top a few years back,but was glad to buy them back.They made me bags of money in the past,and il admit a bit of nostalgia of course.For all the health risks etc i really really miss a cigarette having stopped 10 years ago.People have smoked something since we walked on two legs and discovered fire.Hopefully big tobacco can make heat not burn the next biggy in the sector.

Link to comment
Share on other sites

I should add on Telcos debt isnt a problem,the market thinks it is because they are projecting ahead 20 years what we have had for 20 years.Thats where they are wrong.Once fiber is ran out and 5G in place OPEX and CAPEX will fall heavily for telcos,just as governments have allowed them much better terms to build out.The costs of maintaining will fall fast.People forget that VOD for instance makes nearly $15 billion EBITDA.Lots gets swallowed by interest and depreciation,but they are currently re-financing at fantastic rates over the cycle and depreciation will fall as costs fall later in the cycle.

Telefonica isnt liked because it has slowly re-trenched over the years and has high debts,but they have been doing a good job of cutting them,down around $15 billion in a 4 years.They will also likely bump $8 billion of the debt into the O2/Virgin merger.Although thats more accounting,it still removes it from the parent.Iv been digging into their last accounts and i think their free cash will be higher than the market expects and easily more than double the dividend,so they should be able to keep de-leveraging by a few billion a year outside of asset sales.

I also think the space will consolidate over the cycle and that will mean cost cutting becomes another plank.How it plays out is tricky,as countries wont like seeing the main operator foreign owned,but we might see it through the back door where they merge parts of the business and remain shareholders,a bit like thr O2/Virgin deal.

In simple terms i dont give a toss if the market keeps their share prices down,or pushes them down more.Il keep steadily adding to my holdings as divis roll in and capital gets trimmed elsewhere.After all,i dont see a problem with the likes of Endeavour Silver nearly x3 your capital and splitting that among the big telcos.Its like getting VOD for 35p a share.

 

Link to comment
Share on other sites

29 minutes ago, DurhamBorn said:

Something people forget is that they could always use their cashflow to buy other companies and expand into other areas.BAT is already involved in vaccines etc

From a book i was reading the other week made me think of you and this thread

 

IMG_8293.thumb.jpg.eae5d73bde95c84692b6839cb8b7aa53.jpg

Link to comment
Share on other sites

M S E Refugee
3 hours ago, AWW said:

Sell them on eBay when they have a £1 final value fee offer on. That's how I've been selling tubes of Brits for a while and I've never had an issue with a scammer. I always put my direct contact details in the package and have then had people buy more off me outside eBay, saving the PayPal fee as well. I usually advertise at 3% below spot but accept offers down to about 5% below.

Be warned that eBay will rat you out to the HMRC if you sell a high amount.

Link to comment
Share on other sites

4 hours ago, Castlevania said:

Companies with a lot of debt really aren’t very popular at the moment. Telefonica is now below it’s March pandemic low. Big Tobacco isn’t looking quite so big. What are your lot’s thoughts on tobacco stocks? I know DB’s a fan - they paid for his house. Imperial is down at £12.50 (they haven’t been this low since I was at university and I had to walk past Imperial’s massive bonded warehouses every day and inhale the sweet smell of dry tobacco); BAT below £25; Altria at $42; PMI at $77. All are paying quite chunky dividends. Are any likely to be forced to cut (I know Imperial already have)?

For the next year I am ignoring divis, as Covid seems to be the universal excuse for cutting/suspending them.

Link to comment
Share on other sites

@Cattle Prod I think you were mentioning looking into buying woodland? I've also been looking at it recently.

There's a section on it on the woodlands.co.uk website about holding woodland in a SIPP.

https://www.woodlands.co.uk/buying-a-wood/finance/sipp/

Financial advisers can tell you if the regulations governing SIPPs, that any property you invest in has to be commercially managed, may also apply to buying a woodland. You will need to show it is a commercial woodland rather than an amenity woodland (one owned purely for recreation).

They may look at different ways of demonstrating the commercial usage such as Receiving an income from timber or other woodland products

  • Creating a management plan that emphasizes the generation of profit as an objective
  • Employing a professional forestry manager
  • Maintaining a separate bank account for the woodland and registering for VAT

Overall, the fact that the financial value of woodland usually appreciates over time, as well as the favourable tax status of investing through a SIPP, can make woodland an attractive addition to a SIPP portfolio. Please check your personal situation with your financial adviser.

Link to comment
Share on other sites

M S E Refugee
7 minutes ago, Loki said:

What for? They're CGT exempt

This is true but eBay will still turn over your details to the HMRC and you will have to explain yourself to them that your are not operating an online business.

Link to comment
Share on other sites

3 minutes ago, M S E Refugee said:

This is true but eBay will still turn over your details to the HMRC and you will have to explain yourself to them that your are not operating an online business.

Good point, I'm sure they make that as easy as possible too...

Link to comment
Share on other sites

45 minutes ago, M S E Refugee said:

This is true but eBay will still turn over your details to the HMRC and you will have to explain yourself to them that your are not operating an online business.

Has this actually ever happened in reality though? I don't see any operational difference between "running a business" and "buying things that you think will increase in value and then selling them".

Link to comment
Share on other sites

M S E Refugee
1 minute ago, AWW said:

Has this actually ever happened in reality though? I don't see any operational difference between "running a business" and "buying things that you think will increase in value and then selling them".

https://www.thisismoney.co.uk/money/news/article-4107122/How-taxman-spies-buy-sell-online-thanks-new-law-hardly-noticed.html

Link to comment
Share on other sites

14 minutes ago, AWW said:

Has this actually ever happened in reality though? I don't see any operational difference between "running a business" and "buying things that you think will increase in value and then selling them".

Probably similar to all those 'accidental' or otherwise landlords that some think will get their visit from HMRC... reality is they either don't have the time or resources to do so.

I've put a lot through ebay over 4-5 years and it could have definitely been seen as a part time business for a few years (may help that one account got banned so technically its my GF who does it now...) with the volume I was doing.

If I get the knock though I'll be sure you let you know :)

Link to comment
Share on other sites

sleepwello'nights
28 minutes ago, AWW said:

Has this actually ever happened in reality though? I don't see any operational difference between "running a business" and "buying things that you think will increase in value and then selling them".

It is the intent that is crucial. If you purchase something with the intention of selling it for a profit later then it is chargeable to Income Tax.

Classic case concerned a bulk purchase of toilet rolls. Who would ever have thought that it would return to be of topical interest earlier this year :D

https://www.taxationweb.co.uk/tax-articles/business-tax/the-badges-of-trade.html

Link to comment
Share on other sites

M S E Refugee
4 minutes ago, sleepwello'nights said:

It is the intent that is crucial. If you purchase something with the intention of selling it for a profit later then it is chargeable to Income Tax.

Classic case concerned a bulk purchase of toilet rolls. Who would ever have thought that it would return to be of topical interest earlier this year :D

The HMRC operate a guilty until you prove yourself innocent policy.

Link to comment
Share on other sites

2 hours ago, wherebee said:

We do know from history that governments often generate an external enemy in time of internal crisis.  If Trump loses the election, I would not be that surprised to see an invasion of Taiwan (as Biden and the Dem crime gang would do fuck all).

CCP is holding policy review in October which is interesting, although if i was Xi Jinping i would hold off rocking the boat till April if possible.  Problem i have with Taiwan is its too obvious and will backfire massively if (when) it fails.

Quite a lot hinges on whats really going on with the Chinese economy.  I suspect, like the Koreans are finding out, it doesn't matter if you dodge the virus when the market for your goods is locked down and buying less. That's before any economic scarring and re-shoring of production as well.

Link to comment
Share on other sites

sancho panza
14 hours ago, kibuc said:

Its worth keeping in mind that, while precious metals cannot go bust, miners can. I'd keep an eye on mid-tierers that mismanage the current bull and start splashing cash on marginal/borderline dirt projects, as they might find themselves in a very precarious situation should there be a strong reversal in a deflationary bust. Even if they don't go under, they might get taken over at fire sale prices. Also, cost creep needs to be watched for similar reasons. With metals, buy&hold requires a lot less maintenance. 

You're right K.I think there's an overriding imperative with this PM bull to stay spread across a range of stocks(if you can).Ive been burned already in 2018/2019 and have learned the hard way that it takes a lot of study and experience to avoid the obvious dogs.If it's hard to avoid the obvious dogs,then it's even harder to avoid the less obvious ones.There's a reason I spray n pray.History shows I'm a poor stock picker.

As you've said,some of these stocks are going to be throwing off FCF(especailly given how low detbs are across the sector) with $25 silver or $2000 gold.

 

Link to comment
Share on other sites

sancho panza
20 hours ago, wherebee said:

Why sadly?  Unless I am misunderstanding, like me you have rotated into oil and expect to do very nicely if the next decade plays out as it per TMs posts?

I jsut mean we cant really buy any more..............shame.looks an a great invesment here.

Link to comment
Share on other sites

sancho panza
12 hours ago, Majorpain said:

+ Geopolitical risk is going sky high right now, my Gut feel and research is pointing to China's economy and food supply being seriously strained from flooding and lack of western demand.  A cornered CCP tiger, running out of options and time, is highly likely to lash out and cause some serious damage with their new toys, although i've been pondering how big and where that's likely to occur (beside the obvious "renegade province" Taiwan) for a while now.  

I don't think they have actually gone up that much considering where PM prices are, IMO the miners are 25% past price which is going onto the balance sheet and 75% future price which will directly affect profitability in the weeks/months/years ahead.  The market doesn't seem to think that its going to remain at these elevated level for long, however it was wrong earlier in the year with Hoc/Fres that are now properly motoring, so it can and does happen.  I noticed this year the Canadian/US/UK miners don't always synchronise time wise which could make for some interesting trading opportunities if i wasn't so busy!

you're right on a few issues there MP.Jsut over a month back FRes were jsut over 800......even expereinced market players are calling this bull wrong.Remember IKN's silver going nowhere from his blog earlier in 2020 ...??

I think we're in a long bull to mid 20's.Having said that I think there's a trade on to seel your PM expsoure ahead of the BK and then buy it back for 30% of what you sold....jsut trying to time it wil be tough

11 hours ago, DurhamBorn said:

Interesting to see how things are developing.When profits are taken etc is a personal choice.Myself iv been taking silver profits because in cash terms they are a lot of money,about 4 years salary in a few months.I also think areas like potash will do maybe as well or even better than silver,or perhaps only half as well,but when the miners ran hard i ended up with 6x the amount in silver miners than potash.Thats now 2.5x and the same for telcos,i was 4.5x in silver thats now about 2x

 

was genuinely doing the maths on swapping out of PM's and buying oilies/income stocks ie Telecoms.The issue I'm mainly concerend with is swapping PM miners for yield-when/where/how to hedge.

9 hours ago, Castlevania said:

Companies with a lot of debt really aren’t very popular at the moment. Telefonica is now below it’s March pandemic low. Big Tobacco isn’t looking quite so big. What are your lot’s thoughts on tobacco stocks? I know DB’s a fan - they paid for his house. Imperial is down at £12.50 (they haven’t been this low since I was at university and I had to walk past Imperial’s massive bonded warehouses every day and inhale the sweet smell of dry tobacco); BAT below £25; Altria at $42; PMI at $77. All are paying quite chunky dividends. Are any likely to be forced to cut (I know Imperial already have)?

I'm a decent size fan CV but we don't own any yet.Have been watching Japan Tobacco particuarlyl.Imperial has too much debt for my liking here.Tobacco will be sized after oil,PM,potash,telecoms,miners,baccy.Intrigued they're below March lows.

Japan

image.png.f01649f3716d61eea24c5bccb6322313.png

image.png.f631b1819ad4a83f5c94406996d7267d.png

Imperial

Link to comment
Share on other sites

sancho panza
4 hours ago, Cosmic Apple said:

Probably similar to all those 'accidental' or otherwise landlords that some think will get their visit from HMRC... reality is they either don't have the time or resources to do so.

I've put a lot through ebay over 4-5 years and it could have definitely been seen as a part time business for a few years (may help that one account got banned so technically its my GF who does it now...) with the volume I was doing.

If I get the knock though I'll be sure you let you know :)

taxman will pursue you when it's worth their while.Seena  lot of self smployed people get the knock in their 50's after 25 years of buying bigger family homes/BTL's on £15k per annum.works until it doens't.

HMRC jsut isn't really that bothered aobut trying to collect £1000 of people who'll struggle to pay.They're very interested in people with £500k property assets and £300k declared income over the last 25 years.

Link to comment
Share on other sites

12 hours ago, Cattle Prod said:

Holy moly

I had no idea you could do this! Thanks, Hardhat

Sounds awesome owning a piece of woodland to me.  One that you can visit or camp overnight and watch nature develop would be amazing.

Only had a cursory glance but potentially looked like lots of benefits in owning woodland especially with inheritance tax.  Maybe if it's larger or used commercially for lumber not sure...I do wonder what percentage are owned by rich families trying to pass wealth most efficiently.

Link to comment
Share on other sites

goldbug9999
On 08/08/2020 at 19:47, M S E Refugee said:

The HMRC operate a guilty until you prove yourself innocent policy.

Tax tribunals operate on a balance of probability basis like a civil court, so while HMRC may act as if they can arbitrarily decide how much money you own them, thats not the actual legal reality.

Link to comment
Share on other sites

Archived

This topic is now archived and is closed to further replies.

  • Recently Browsing   0 members

    • No registered users viewing this page.

×
×
  • Create New...