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

[sancho panza]

On 07/10/2020 at 09:09, Harley said:

Yet another awful one.  A good poster child for our hopeless administration (including seemingly every public service and beyond) which has been stress tested and found to be beyond contempt.  Hidden until now during an apparent benign period of spin but now so exposed, taking to trying to hide behind printed money.

Windmills are the latest scam to transfer money from the poor to the already rich via energy costs, build costs, running (e.g. debt) costs, and subsidies.  I take that bit seriously.  But what does it mean, and how much, for the macro investing trends?  O&G not going away soon but maybe better to buy companies under less "woke" pressure?  Supply crunches as reality hits and just with any transition?  The growth of alternatives to the alternatives?!...........

I love some of your philosophy posts.The bit in bold and then the bit in bold.Couldn't agree more.Bozza's windmill dream will be exactly that,a transfer of wealth from poor to rich.

On 07/10/2020 at 11:15, Cattle Prod said:

Since Japan was mentioned a few pages back, it's probably a good one to look at for demand, as it has no production. Zero. Hence Pearl Harbour, but I digress... They seem to have largely dealt with the virus, or at least not had it affect the country too much. They seem to wear masks all the time anyway! Chart credits @monkey_charts

Refinery runs are higher than 2018 levels, and almost at 2019 levels, during a seasonal low. They were below 2019 levels in January. Says to me that demand in Japan is back to normal:

Exporting less distillate (diesel) than previous years, meaning they need more for themselves. I wonder what their heavy trucks and machinery orders are like...

And their inventory is up, with a large jump in the last week, meaning they are continung to buy it, even though they have more in stock than 2018 or 2019. Maybe...because it's cheap? Or maybe because they see geopolitical risk (again, running oil of oil stocks sent them to war before, so I'm sure they are sensitive about it).

Meanwhile, in China, it's Golden Week and 550m people are taking on holidays with tickets to the Great Wall sold out, hotels booked up etc etc

 

CP,Listening to a podscast last week-might have been Art Berman,he was saying China has been continuing to build inventory over the last few months.Can I ask if you've seen any evidence of that?

Because then we'd have US shale prod down,Eastern inventory build up,Western inventory down.

[sancho panza]

On 06/10/2020 at 22:47, 5min OCD speculator said:

Bears won the day....that's what happens when you get too carried away....market always there to teach you a lesson...

Amen and goodnight

 

 

Can I ask politely if you can quit with the porn please?I read this thread while I'm wortking in the hosue with the kids around,while I'm watching TV with the Mrs and sometimes at work when I have a quick flick though on my phone.

Also,we don't have a lot of female contributors and I think psoting porn-no matter how mild-makes them joining in the thread less likely rather than more likely.

 

[Ellandback]

Can anyone help please, over the next month or so I'd like to ladder into the below silver stocks but HL don't have them, I currently have a standard HL Fund & Share account and it's probably time I convert that to a S&S ISA to avoid any possible tax in the future, but before I commit to HL I wondered if I could get them with different brokers within a tax wrapper - anyone know? I've a hunch Interactive Brokers have them but they don't offer S&S ISAs.

Klondike Silver (CVE: KS)

CMC Metals (CVE: CMB)

Rio Silver Inc (CVE: RYO) 

Honey Badger Exploration Inc (CVE: TUF)

Monarca Minerals Inc (CVE: MMN)

Finlay Minerals Ltd (CVE: FYL)

 

[nirvana]

@sancho panzagood point and apologies....been a roller coaster ride trading for me this week.....

I have psycho issues deciding if I'm a trader or an investor 

will leave you in peace...

Good luck!!

[Castlevania]

1 hour ago, sancho panza said:

I've jsut run a quick coma scale on them.Chart 5 ,inc 2 BS 2(very nearly a 3),FCF 5 Sector 4=18.Their balance sheet has minor entries for goodwill.

Income statement can be heavily gamed but the free cash flow yield on last year was impressive.And the year before.We laready have a position but I'm tempted to add some more.

I bought a largish amount earlier this week. As far as I could see they haven’t been cheaper since 1996; I like their focus towards gas; and I needed to diversify away from buying more Shell; BP; Repsol; Exxon etc.

[Hardhat]

1 hour ago, Ellandback said:

Can anyone help please, over the next month or so I'd like to ladder into the below silver stocks but HL don't have them, I currently have a standard HL Fund & Share account and it's probably time I convert that to a S&S ISA to avoid any possible tax in the future, but before I commit to HL I wondered if I could get them with different brokers within a tax wrapper - anyone know? I've a hunch Interactive Brokers have them but they don't offer S&S ISAs.

Klondike Silver (CVE: KS)

CMC Metals (CVE: CMB)

Rio Silver Inc (CVE: RYO) 

Honey Badger Exploration Inc (CVE: TUF)

Monarca Minerals Inc (CVE: MMN)

Finlay Minerals Ltd (CVE: FYL)

 

None of them coming up on AJ Bell

[kibuc]

Great Panther reports 34koz gold and 375koz silver, reiterates annual guidance.

 

Yet another solid but not spectacular quarter from GPR, which is exactly what they need given their tumultuous 2019. Silver component is barely noticable, it's basically a 150koz/annum gold miner valued at... erm, $315mil. Make of that what you will, but it's my largest holding. Risks include continuous dillution (that sure is one helluva drug) and GPR being GPR, but their 2020 record so far has been very solid, only hitting the market once for $16mil and not having any production fuck-ups.

 

[Loki]

I'm not trying to turn this into a climate change thread, so treat this as a weather report and energy sector prediction by proxy

https://electroverse.net/why-is-north-america-immune-to-global-warming/

[Castlevania]

28 minutes ago, kibuc said:

Great Panther reports 34koz gold and 375koz silver, reiterates annual guidance.

 

Yet another solid but not spectacular quarter from GPR, which is exactly what they need given their tumultuous 2019. Silver component is barely noticable, it's basically a 150koz/annum gold miner valued at... erm, $315mil. Make of that what you will, but it's my largest holding. Risks include continuous dillution (that sure is one helluva drug) and GPR being GPR, but their 2020 record so far has been very solid, only hitting the market once for $16mil and not having any production fuck-ups.

 

You’re a far braver person than me.

[Harley]

3 hours ago, sancho panza said:

I love some of your philosophy posts.The bit in bold and then the bit in bold.Couldn't agree more.Bozza's windmill dream will be exactly that,a transfer of wealth from poor to rich.

CP,Listening to a podscast last week-might have been Art Berman,he was saying China has been continuing to build inventory over the last few months.Can I ask if you've seen any evidence of that?

Because then we'd have US shale prod down,Eastern inventory build up,Western inventory down.

Just putting the "P" back into "PPE" (but which "P"!).  Somebody mentioned the same thing on the radio - that maintenance costs are a big and profitable deal.  This to me is an example of the WEF "Reset" stuff being used as a front for more profiteering.

[Harley]

4 hours ago, sancho panza said:

I've jsut run a quick coma scale on them.Chart 5 ,inc 2 BS 2(very nearly a 3),FCF 5 Sector 4=18.Their balance sheet has minor entries for goodwill.

Income statement can be heavily gamed but the free cash flow yield on last year was impressive.And the year before.We laready have a position but I'm tempted to add some more.

Panic over!  I thought they scored well on my screens only to disappear.  But I found them lurking under "Natural Gas Utilities"!  Joint second in my pool only let down by a below average current ratio which is a bit silly really as it's 1.25 versus the 1.4 average.  DYOR though!

[Nippy]

On 02/10/2020 at 12:35, DurhamBorn said:

Oil use might fall by around 5% as part of the mix,but on a nearly doubling of demand.

Gas use part of the mix might nearly double and on top of demand doubling.Doubling market share on a market doubling.

These figures are based on emerging marker consumers going from using 1/3 the energy of a western consumer to using 1/2 the energy by 2050

Roger Mellie is claiming in The end game thread that we are about to hit peak oil demand, or we have already hit it. He has access to subscription journals that he can't share, but he stated that pretty much every analysis he has read indicates we are close to peak demand. He is a chemical engineer when he isn't on Dosbods.
https://www.dosbods.co.uk/topic/14568-the-end-game/?do=findComment&comment=902650
https://www.dosbods.co.uk/topic/14568-the-end-game/?do=findComment&comment=903296

 

[Loki]

@Roger_Mellie Get in here 

[DurhamBorn]

29 minutes ago, Nippy said:

Roger Mellie is claiming in The end game thread that we are about to hit peak oil demand, or we have already hit it. He has access to subscription journals that he can't share, but he stated that pretty much every analysis he has read indicates we are close to peak demand. He is a chemical engineer when he isn't on Dosbods.
https://www.dosbods.co.uk/topic/14568-the-end-game/?do=findComment&comment=902650
https://www.dosbods.co.uk/topic/14568-the-end-game/?do=findComment&comment=903296

 

The green investment means a big increase in oil demand,the horse goes before the cart.If oil/gas use falls now then there is no big renewable investment.Oil use will peak,no question about that,but massive profits to be made before the oil age ends.Oil will probably hit an all time high between 2027/30,around $200 minimum and maybe a late parablic run towards $300.

We are entering an industrial cycle,those use much more energy than consumer cycles and most people will be caught looking the wrong way.

[Roger_Mellie]

42 minutes ago, Nippy said:

Roger Mellie is claiming in The end game thread that we are about to hit peak oil demand, or we have already hit it. He has access to subscription journals that he can't share, but he stated that pretty much every analysis he has read indicates we are close to peak demand. He is a chemical engineer when he isn't on Dosbods.
https://www.dosbods.co.uk/topic/14568-the-end-game/?do=findComment&comment=902650
https://www.dosbods.co.uk/topic/14568-the-end-game/?do=findComment&comment=903296

 

DYOR.

That is all.

And Wikipedia doesn't count as the R.

Quote

Oil use will peak,no question about that, but massive profits to be made before the oil age ends.Oil will probably hit an all time high between 2027/30,around $200 minimum and maybe a late parablic run towards $300.

I'm not sure about that - oil price depends on so many factors outside demand. Agree on the profits though - peak demand does not mean no demand, nor is the peak going to be sharp. 

[JMD]

Not heard of this macro guy before - Louis-Vincent Gave.

He's an investment manager so has a vested interest in getting his topic right or risk losing his clients. Must say his writing style is refreshingly candid (perhaps because he is French?). Although written in summer 2019, he already had his own predictions on the type of trends discussed here. So i will def. look up his more rent stuff... i note that he writes positively about US shale (hopefully his recent writings have changed!), but i wonder what others thoughts are, has this guy anything extra in terms of insights to offer?

https://blog.evergreengavekal.com/an-investment-thesis-for-the-2020s/

https://blog.evergreengavekal.com/investing-for-a-new-cold-war/

 

[janch]

Time for more money printing?

[Bricormortis]

Email from Coininvest saying get your orders done before 31st December, as tax arrangements re vat may not be extended beyond then. 

[jamtomorrow]

40 minutes ago, Bricormortis said:

Email from Coininvest saying get your orders done before 31st December, as tax arrangements re vat may not be extended beyond then. 

Call me cynical, but what's the betting there's a miraculous repricing on 1 Jan that keeps them competitive at the cost of a bit less gouge?

[Harley]

48 minutes ago, Bricormortis said:

Email from Coininvest saying get your orders done before 31st December, as tax arrangements re vat may not be extended beyond then. 

#Metoo.  A bit odd that.  Not sure it's relevant.  VAT is an EU thing.  Maybe export/import duties.  Anyways no doubt to be covered in the deal.  I also noted the mail linked to a deal they had on silver Britannias!  Another thing that makes me think they've gone a bit "funny" of late, if you think their silver prices are funny!

[Harley]

A probably useless bit of info about buying overseas shares.  I spent part of the day on it so want to get my money's worth!  Some brokers will route your order to the relevant country exchange (e.g. Madrid) and you will presumably own the stock via your brokerage nominee account.  Other brokers will sell you a CDI instead which is actually an entry in the Crest system.  Crest will buy corresponding stock on the foreign exchange in their name and I understand hold it in some form of trust for you.

For example:

This what HL does: https://www.hl.co.uk/__data/assets/pdf_file/0005/9674978/important-info-overseas-shares.pdf.  That bit about withholding tax for SIPPs and ISAs is as clear as a brick!  I think AJ Bell also uses CDIs.

This is what II does: https://help.ii.co.uk/system/templates/selfservice/ii/help/customer/locale/en-GB/portal/402800000001013/content/Auth-5407/Investments-blocked-from-trading-online extract:

"International trades- If you are attempting to purchase an international line please ensure you have selected the international tab in the trading screen, otherwise you may be attempting to purchase a secondary listing which we do not trade in. You can recognise this as the tickers of a secondary listing on the LSE usually follow the format of – 0QZD for example".

and

"2. International Crest (CDI) Stocks - Other UK brokers tend to trade international stocks through the London market and hold these as CDIs. At Interactive Investor we trade and settle directly on local international markets and hold the local version of the stock for you. Where international stocks have been transferred in to us, rather than purchased directly through us, it may be that the stock is still held in CDI form. We will be unable to purchase any further holding of the CDI version, but you may buy the stock on its primary market by selecting the correct country on the 'trade now' page. Please call us if you wish to sell a CDI holding.

Investing.com shows you where a stock is traded and which is the primary market and which are secondary markets (the financial data appears to only be recorded against the security on the primary market).  Try looking at financial data for a CDI.

 

[Bricormortis]

43 minutes ago, jamtomorrow said:

Call me cynical, but what's the betting there's a miraculous repricing on 1 Jan that keeps them competitive at the cost of a bit less gouge?

Well punk ...are you feeling lucky ?

 

[sancho panza]

10 hours ago, Ellandback said:

Can anyone help please, over the next month or so I'd like to ladder into the below silver stocks but HL don't have them, I currently have a standard HL Fund & Share account and it's probably time I convert that to a S&S ISA to avoid any possible tax in the future, but before I commit to HL I wondered if I could get them with different brokers within a tax wrapper - anyone know? I've a hunch Interactive Brokers have them but they don't offer S&S ISAs.

Klondike Silver (CVE: KS)

CMC Metals (CVE: CMB)

Rio Silver Inc (CVE: RYO) 

Honey Badger Exploration Inc (CVE: TUF)

Monarca Minerals Inc (CVE: MMN)

Finlay Minerals Ltd (CVE: FYL)

 

I found the first two on Saxobank but I think CVE is the vancouver exhcange so probably an interactive brokers jobby

9 hours ago, Castlevania said:

I bought a largish amount earlier this week. As far as I could see they haven’t been cheaper since 1996; I like their focus towards gas; and I needed to diversify away from buying more Shell; BP; Repsol; Exxon etc.

you and me both CV but I will confess,I've been adding.

9 hours ago, Cattle Prod said:

I don't have a direct source, Sancho, everything there is opaque. But two things have been widely reported:

1. China has been increasing the size of its strategic petroleum reserve, and used the opportunity of the pandemic prices to buy cheap oil had over fist to fill it (insert conspiracy theory here). Chinese refiners also filled their boots, which is one reason why global inventories quickly turned down.

2. There was a wobble more recently where floating storage was backing up outside Chinese ports waiting to be sold, but I think that's been cleared now.

So it's correct that China has been building inventory over the last few months. But to me, this is not necessarily bearish in a huge consumer country, especially when they are stockpiling every other commodity at the same time. 

The two bits in bold could be more connected than we realise.My own proxy for industrial demand below,showing no sogns of letting up yet.Oil to follow imho.

AS I've said before,I think the Chinese/Japanese/AN Other have been taking advantage of the lows to inventory build.Makes perfect sense.

[Metalheadz]

10 hours ago, Ellandback said:

before I commit to HL I wondered if I could get them with different brokers within a tax wrapper - anyone know? I've a hunch Interactive Brokers have them but they don't offer S&S ISAs.

You should be able to get these with an Interactive Investors Stocks & Shares ISA

https://www.ii.co.uk/ii-accounts/isa

You have to pay a tenner a month but the trading fees / exchange rates are a lot better than HL (IMHO).

I have a trading account at Interactive Investors (good) and an ISA at HL (crap, selection kills me) so am planning to go all in on Interactive Investors.

I only have experience with the trading account which is good as I convert all my GBP in to AUD and CAD to eliminate conversion fees - but I have a feeling you can't do that in an ISA. YMMV.

[Talking Monkey]

6 hours ago, DurhamBorn said:

The green investment means a big increase in oil demand,the horse goes before the cart.If oil/gas use falls now then there is no big renewable investment.Oil use will peak,no question about that,but massive profits to be made before the oil age ends.Oil will probably hit an all time high between 2027/30,around $200 minimum and maybe a late parablic run towards $300.

We are entering an industrial cycle,those use much more energy than consumer cycles and most people will be caught looking the wrong way.

DB post 2030 would you expect there to still be a huge demand for oil, between then and now I'm sure a lot of renewable energy infrastructure will be stood up, however my understanding is it will take several decades for a majority of global energy needs to be met by renewables.