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


spunko

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12 minutes ago, MvR said:

It's amazing how many other factors, besides stock picking and market expectations, affect our performance.

There are the exact entry and exit prices of course, which makes a small difference of course, but far more significantly there's position sizing, which may be driven by our biases for and against certain stocks.

There's also account size. Small accounts can't necessarily take advantage of laddered entries for example.

Then there's the emotional side. Fear of missing out or fear of losses. How meaningful are losses, and how long can we ride them? When do we feel the urge to lock in profits?

Many thanks for this.  Your explanation and experience shows why some of us are doing less well than others.  O.o

The small account size makes a big difference too mainly because of the disproportionate effect of fees as well as the laddering ability.

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I got this info today on GDGB and GJGB, (GBP denominated GDX / GDXJ), anyone know if this makes a difference to anything?

 

Vaneck Vectors UCITS ETFs PLC has announced some planned changes to the structure of the shares you hold.

Under the proposed terms, Vaneck Vectors UCITS ETFs PLC intends to convert its Irish Exchange-Traded Funds (ETFs) from being held in the UK CREST system into an International Central Securities Depository (ICSD) model.

Under the terms of the event, your existing ETFs will be replaced by new CREST Depository Interests (CDIs) on or around 12 October 2020.
 

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11 minutes ago, janch said:

 

I think we can all probably see in hindsight what we've done wrong!  Quite a few on here have only been in the stock market for a couple of years (or less) and it's a steep learning curve even when we have an experienced "guru" pointing the way.

My main reason for not doing better is selling the winners too early.  I had POG/SIB/AAU/SLP all of which did nothing for ages and then when they did rally I sold when I should have kept them.  (Let the winners run).  One of them SLP did well last year and I held on only to see a 100% gain dwindle to nothing so I didn't want that to happen again. Now of course it's doing well!

One reason I sold these miners was so I had a bit of profit to make up for the rest seemingly doing nothing. They are the reflation/income shares which are held for the long term.

I think it's good to keep saying like a mantra: (a)you want the price lower so you can buy more and also (b) reminding us it's total return ie including divis which counts.  It's taken me quite a long time to get that into my head.

One trick is to take out your stake at the doubling point and you're effectively 'in for free'.I did that with Harmony but then sold all our GFI a few weeks back as they were near enough to my price target at $13

For those who might be feeling some pain at the moment,I'm going to post a few charts from the Mar 2000-Oct 2002 bear when NDX dropped 70% S&P 50%

I can't tell anyone which thesis will be right but people can follow the logic and decide for tehmselves.Ref 20%/30% pull backs ,there were 3 in BLT before the end of the 2000 bear market.

My current working thesis like @DurhamBorn @Cattle Prod and a good few others is that the oilies are at a long term turning point

Decl-we've got a full tank.

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1 hour ago, Harley said:

Just listened to a George Gammon podcast (gotta love the guy!) where they discussed inflation and said how it has not really gone up overall just on things more noticeable like food.  Very much the Fed line with talk about cheaper and better TVs, etc thanks to offshoring.  Only stuff that can't be offshored may have gone up (e.g health).  Trouble is for frugal me, that's the sort of stuff which makes up the bulk of my expenditure.  So no, for me inflation is high and it's all BS.

One of the many big issues I have with the inflation data is that it's one size fits all ie lower income demogrpahics-bottom 20% are deemed to have the same cost base in the top 20% when quite patently,that is jsut not the case.

Lower income deciles spend a huge amount of their income on rent, food and fuel.Upper deciles don't.

And then you get the phrases like 'Core CPI' which excludes everything that is actually core to life ie food and fuel.

When you look at the societal inequity that will likely beget serious social upheavel,a lot of it is based on the price of food/fuel and the fact that the political class have glossed over the impact of thsoe price rises on lower income groups.

Rant over H.George gammon is great tho.

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4 minutes ago, sancho panza said:

One of the many big issues I have with the inflation data is that it's one size fits all ie lower income demogrpahics-bottom 20% are deemed to have the same cost base in the top 205 when quite patently,that is jsut not the case.

Lower income deciles spend a huge amount of their income on rent, food and fuel.Upper deciles don't.

And then you get the phrases like 'Core CPI' which excludes everything that is actually core to life ie food and fuel.

When you look at the societal inequity that will likely beget serious social upheavel,a lot of it is based on the price of food/fuel and the fact that the political class have glossed over the impact of thsoe price rises on lower income groups.

Rant over H.George gammon is great tho.

I worked out a guys money for him,(renting) and what he could save a year only came to 6 weeks wages.The odd lay off in between and he could never get anywhere.The entire system is stacked up for people on generous pensions and/or welfare.The state is crowding out everyone else.

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1 minute ago, TheNickos said:

I'm balls deep in oil in the hope something comes of it.

Life is about risk after all 🤣

Natural gas will likely be one of the three best performing assets over the cycle,the only one probably in front,silver.

Hedging inflation risk is very difficult and few areas will manage it.I think inflation loving areas will run and run,and people wont get on board expecting things to be only short term,expecting inflation to fall etc while it keeps increasing.Bonds are going to be destroyed in the cycle,as will highly valued growth.We just need to allow the cycle to play out over a decade.

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1 hour ago, Harley said:

Yep, top stuff.  I'm on doors today while working through podcasts and will defo do this one next (I'm subscribed).  The End Game series is excellent.  Sounds like I should brace myself, although I mentioned another one a while back that was also dark.  I'll see if I have a comment but suffice to say I hope we here appreciate such macro financial optimisation at such a turning is only part of the big picture.  The interference to date has been somewhat benign or indirect and this (with the Budget, etc) may be about to change.  We need to be careful any prudence, foresight, hard labour, success, etc is not stolen by others less deserving.  These are dangerous times, and not just in the macro sense.  A canary for me is the number of macro guys now sunning themselves physically outside the cage.

So just heard the podcast and the varnish is drying.  You're right about the last 30 minutes being the most interesting (bit slow to start with).  I'm very surprised Fleck said he never thought about the societal backdrop to all this macro stuff.  It's key and it's brewing everywhere.  Yes, like the very early 1930s, even with new young brownshirts, but without the hyperinflation.  That's why I thought the Deutsches Bank trends post earlier was important if however basic.  So far I've heard few people who can stand in the "to be" and call back to us.  No surprise as everyone is anchored on something, like the current financial system here.  Humans are hard wired not to make such leaps.  Something to do with survival, which works most of the time, except when it doesn't.  Like freezing in an ambush or car headlights.  So again, this thread is like a Russian doll, sitting within a larger doll.  Watch yer back!

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3 minutes ago, DurhamBorn said:

I worked out a guys money for him,(renting) and what he could save a year only came to 6 weeks wages.The odd lay off in between and he could never get anywhere.The entire system is stacked up for people on generous pensions and/or welfare.The state is crowding out everyone else.

Yeah absolutely,it's brutal for working people.

Which is one of the reasons why I've spent so much time on here over the years.The only way for working people to liberate themselves is to develop opportunities from their savings but getting some savings to begin with can be hard.All it takes is one car repair and a lot of people are screwed.Which is how the political class like it.

Take renting.We rent -out of choice- but we're lucky.I had a quick look at leicester yesterday for a rental for a lass my Mum knows expecting her first with hubby.She's competing at the bottom end of the market and it breaks me to see how little you get for £650pcm at the mo because she's competing with people with benefit cheques.I told my Mum she'd be better off not working.

When I was in my 20's you could buy a terrace for £35k in a liveable area and earn £13k in call centre.That call centre job is now about £18k but the hosue is £140k...............

Every day,I'm thankful for where we are in life me and Mrs P.

The old saying is we're 9 meals from chaos.I'd go with that.

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3 hours ago, Transistor Man said:

Cemaes? Nice today, I’m sure.

No third bridge either.

It will be interesting to see what happens. 

I read that the cost of Hinkley Point C would have been halved (or more) if the UKGOV had borrowed the money, instead of EDF.

Instead, HPC is going to end up being “the world’s most expensive power plant”.

My window isn't in Cemaes but funnily enough I was there today and it was nice. Wylfa from the coastal path between Cemaes and Llanbadrig:

 

 

Wylfa.jpg

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2 minutes ago, sancho panza said:

Yeah absolutely,it's brutal for working people.

Which is one of the reasons why I've spent so much time on here over the years.The only way for working people to liberate themselves is to develop opportunities from their savings but getting some savings to begin with can be hard.All it takes is one car repair and a lot of people are screwed.Which is how the political class like it.

Take renting.We rent -out of choice- but we're lucky.I had a quick look at leicester yesterday for a rental for a lass my Mum knows expecting her first with hubby.She's competing at the bottom end of the market and it breaks me to see how little you get for £650pcm at the mo because she's competing with people with benefit cheques.I told my Mum she'd be better off not working.

When I was in my 20's you could buy a terrace for £35k in a liveable area and earn £13k in call centre.That call centre job is now about £18k but the hosue is £140k...............

Every day,I'm thankful for where we are in life me and Mrs P.

The old saying is we're 9 meals from chaos.I'd go with that.

Yep,shocking £650 a month and getting nowhere.They need to split up,thats where we are.

Most people dont understand the system,they just live with how it impacts their life.

Most people could never understand how i could retire,but they dont understand income,spending and the affect of tax/NI etc.

Lets take an income of £12500 from an ISA or SIPP or mix

Thats tax free.

Home paid for,that couple needs £650 a month so £7800.However thats after tax,so about £11,700 on top of wage note.

Already they need £24,200 to be the same off as someone with owned house,£12500 income.

Lets add on £30 a week commute costs minimum,so another £1500 a year so another £2200 on top,we are up to £26,400

Reliable car to get to work?

Say £240 a month against say £80 a month for someone not working who can shrug shoulders if car doesnt start one morning.Another £2700 a year so now £29100.

 

So a young person needs £29100 a year wage just to equal someone with £12500 coming in who has a house paid off.

Thats before extra costs for lack of time to cook healthy so more takeaways,holidays to keep up with the friends,all the jobs you cant do yourself as no time etc etc.

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59 minutes ago, TheNickos said:

I'm balls deep in oil in the hope something comes of it.

Life is about risk after all 🤣

I used to go balls deep in the ex.....

then she fucked me over in a divorce I didn't see coming

Anyway I've just unearthed an extra £60k :P

@DurhamBornwhat you buying at the mo?

Good luck young man @TheNickos

EDIT: checking my charts......OIL IS ON A TEAR since yesterday, get the LAMBOS ordered........but watch out what Powell says later xD

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5 minutes ago, 5min OCD speculator said:

I used to go balls deep in the ex.....

then she fucked me over in a divorce I didn't see coming

Anyway I've just unearthed an extra £60k :P

@DurhamBornwhat you buying at the mo?

Good luck young man @TheNickos

BP at the moment as things trickle in.Iv been topping up BAT and a few Imperial as well.Also Repsol.Likely il top up Shell as well next month with a lot of divis coming in.Its outside my top 10 at the moment.

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36 minutes ago, DurhamBorn said:

Yep,shocking £650 a month and getting nowhere.They need to split up,thats where we are.

Most people dont understand the system,they just live with how it impacts their life.

Most people could never understand how i could retire,but they dont understand income,spending and the affect of tax/NI etc.

Lets take an income of £12500 from an ISA or SIPP or mix

Thats tax free.

Home paid for,that couple needs £650 a month so £7800.However thats after tax,so about £11,700 on top of wage note.

Already they need £24,200 to be the same off as someone with owned house,£12500 income.

Lets add on £30 a week commute costs minimum,so another £1500 a year so another £2200 on top,we are up to £26,400

Reliable car to get to work?

Say £240 a month against say £80 a month for someone not working who can shrug shoulders if car doesnt start one morning.Another £2700 a year so now £29100.

 

So a young person needs £29100 a year wage just to equal someone with £12500 coming in who has a house paid off.

Thats before extra costs for lack of time to cook healthy so more takeaways,holidays to keep up with the friends,all the jobs you cant do yourself as no time etc etc.

And that's why they'll take your assets and that £12,500 pa!  The youngsters will cheer as the manipulators send everyone to the bottom, only just like the original brownshirts and Pol Pot's early spawn (amongst others), the fools will be dispensed with once they have served their purpose.  Nothing new here, just forgotten.  Been listening to quite a few historians lately, both economic and general, and they provide the best contextual clarity atm.  That youngish Scottish lad (who did "Coast") was on the radio this morning.  Excellent.

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10 minutes ago, DurhamBorn said:

BP at the moment as things trickle in.Iv been topping up BAT and a few Imperial as well.Also Repsol.Likely il top up Shell as well next month with a lot of divis coming in.Its outside my top 10 at the moment.

I'm balls deep in oilies too....I dare not look see much BP I'm down :S but they're in a SIPP so I care little or try not to xD

OK I'll take some baccy.....

Gimme 3 more from different areas, what you buying in telecoms?

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1 hour ago, sancho panza said:

When you look at the societal inequity that will likely beget serious social upheavel,a lot of it is based on the price of food/fuel and the fact that the political class have glossed over the impact of thsoe price rises on lower income groups.

Historic, as in has happened throughout history!  First they will try and take all your money to shore up their world giving bread to the masses, and only then collapse.  Maximum pain all round.  Such is stupidity and the blindness afforded by troughing.  Ed touched on this in his interview with Grant (ref @JMD).  Talking about the Oxbridge elite, etc.  Wasn't expecting that from him and started to listen more closely!

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4 minutes ago, 5min OCD speculator said:

I'm balls deep in oilies too....I dare not look see much BP I'm down :S but they're in a SIPP so I care little or try not to xD

OK I'll take some baccy.....

Gimme 3 more from different areas, what you buying in telecoms?

Vodafone,Telefonica,BT and Telia,id buy more Telia but i hate the divi tax you have to pay :Old: i love Nutrien long term for the cycle,im already well up on it,but one i expect a lovely return over the cycle.

I actually got in front on Royal Mail today,wonders will never cease :D

 

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3 minutes ago, Harley said:

Historic, as in has happened throughout history!  First they will try and take all your money to shore up their world giving bread to the masses, and only then collapse.  Maximum pain all round.  Such is stupidity and the blindness afforded by troughing.

Yep,thats what keeps me awake Harley,the end of the next cycle.It wont happen now though,we are at the end of a huge dis-inflation so the CBs have unlimited printing power.Its inflation first,then at the end of that cycle a huge reset.I have no idea how to invest during that.Zero.Im hoping the fog will clear as the cycle gets halfway through etc.

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1 minute ago, DurhamBorn said:

actually got in front on Royal Mail today,wonders will never cease :D

good trading! I dumped them on the way down......thought about buying at £1.35 was it? I probably ate a banana instead hahahaha

Anyway cheers and good luck.....don't wanna turn your thread into 'short term nutter traders' so I'll STFU

Listen to what the FED says later....one for next week maybe? :D

https://www.hl.co.uk/shares/shares-search-results/w/wisdomtree-nasdaq-100-3x-daily-leveraged

 

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Imaz probably knows the EU will direct hydrogen spending south due to solar,and off the coast of the Netherlands for wind.

https://www.marketwatch.com/story/repsol-ceo-sees-green-targets-as-key-to-growth-2020-09-16-54852045

"Hydrogen is key to Repsol's decarbonization plan, Mr. Imaz said. This year, Repsol said it would initially invest EUR60 million in a synthetic fuel plant that uses hydrogen made from renewables in Spain's Basque Country, where Mr. Imaz was formerly the minister of trade and industry for the regional government.

The EU, where Mr. Imaz previously served as a member of the European Parliament, has proposed directing tens of billions of dollars into hydrogen made using sun and wind power over the coming decade. By 2024, the bloc aims to up hydrogen production sixfold."

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21 hours ago, Bus Stop Boxer said:

Im getting rinsed. Bought in early May. Went away. Was £2k up across the piece, briefly. No No this is long term i said...

Currently down.... actually i daren't look. Prob at least £2-3k on £10k in.

BP

Shell

Occidental

Pioneer

EOG

Wisdom Tree Crude

Amongst others....

Have to sit tight.

 

You're not getting rinsed until you actually sell at a loss...the reds are merely `ripples on the pond of investment`...

...just hope some fat fuc&er (Boris?) doesn't decide to do a belly flop there when you need to sell! :-)

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4 hours ago, sancho panza said:

Yeah absolutely,it's brutal for working people.

Which is one of the reasons why I've spent so much time on here over the years.The only way for working people to liberate themselves is to develop opportunities from their savings but getting some savings to begin with can be hard.All it takes is one car repair and a lot of people are screwed.Which is how the political class like it.

Take renting.We rent -out of choice- but we're lucky.I had a quick look at leicester yesterday for a rental for a lass my Mum knows expecting her first with hubby.She's competing at the bottom end of the market and it breaks me to see how little you get for £650pcm at the mo because she's competing with people with benefit cheques.I told my Mum she'd be better off not working.

When I was in my 20's you could buy a terrace for £35k in a liveable area and earn £13k in call centre.That call centre job is now about £18k but the hosue is £140k...............

Every day,I'm thankful for where we are in life me and Mrs P.

The old saying is we're 9 meals from chaos.I'd go with that.

Fucking A. Totally brutal. I have nothing but contempt for the entire system. Most people are still asleep to how screwed they are.

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4 hours ago, DurhamBorn said:

Yep,shocking £650 a month and getting nowhere.They need to split up,thats where we are.

Most people dont understand the system,they just live with how it impacts their life.

Most people could never understand how i could retire,but they dont understand income,spending and the affect of tax/NI etc.

Lets take an income of £12500 from an ISA or SIPP or mix

Thats tax free.

Home paid for,that couple needs £650 a month so £7800.However thats after tax,so about £11,700 on top of wage note.

Already they need £24,200 to be the same off as someone with owned house,£12500 income.

Lets add on £30 a week commute costs minimum,so another £1500 a year so another £2200 on top,we are up to £26,400

Reliable car to get to work?

Say £240 a month against say £80 a month for someone not working who can shrug shoulders if car doesnt start one morning.Another £2700 a year so now £29100.

 

So a young person needs £29100 a year wage just to equal someone with £12500 coming in who has a house paid off.

Thats before extra costs for lack of time to cook healthy so more takeaways,holidays to keep up with the friends,all the jobs you cant do yourself as no time etc etc.

Excellent post. 

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16 hours ago, DurhamBorn said:

I also cant understand how people can be down on portfolios here

Because i invested in BP (-30%) SSE (-12%-) CNA (-46%-) and RDSB. (-11%) xD

Only got so much money and i went for oilies. I'm not worried, or blaming, it's just the way it is for now.  I have absolutely no intentions of realising a loss by selling.

New gold seems to have finally turned a corner but i only put a pittance in anyway. Rockrose sale has been good to me.

Still grateful for all the advice and i would never moan on this thread for any reason other than banter. I'd have sold up and fucked off if i didn't think you were right

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Averaging down is my game, some losses, some +ves, but i just keep paying in, i dont even mind averaging up.

Have to admit when they hit a certain -ve %age(usually -40) then i stop buying and leave them to see if they recover some, ive got time, im in no rush, also i wont go massive on anything, just what i can afford to lose and not effect my standard of living or make me short of anything i need, to be honest i tend to just discount the money anyway like it never existed.

I still do mutual funds as well to a lesser extent just for spraying.

I did swap out one ftse fund in vanguard with not much in it, mainly because its never been in profit since i started it, i swapped it for the ultimate spray and pray fund VVAL with 1122 stocks or so in it because at least it doesnt just go down like the ftse one did month after month. Too many financials in it, but ill ride it for a while and pull the plug eventually like with the VUSA.

Edit to say : FUNDSMITH is still the star of the show at +43% (not a multi bagger but has more in it than some  (and some are shitty) aim multi baggers like HZM). I expect that to reverse at some point because of its heavy MSFT and tech weighting, but ill ride that too while i can.

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