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

[MrXxxx]

3 hours ago, Democorruptcy said:

RR on a downer -64%!

https://www.hl.co.uk/shares/shares-search-results/r/rolls-royce-holdings-plc-ordinary-20p/share-news

Is it that rights 3 for 1 thing?

Shareholders agreed on rights issue yesterday 10 for every 3 held at 32p each.

[Harley]

Right time for techie look at the markets given I was too lazy Sunday night, having the usual consistency and follow through issues (which I may have mistakenly called "conviction" yesterday)!  All just for fun and DYOR or join me in the poorhouse.

FTSE weekly bearish MACD and Stochastic.  Also broken the 2016 low.  Tried to hold at the shoulders of the 2016 inverted H&S but failed.  2011 low about 11% away with a few minor lows before that.  2003 and 2009 lows about 38% away.  The daily technicals look more like a bad heart.  The monthly has heard the news and has already broken the 2020 low.  The monthly MACD continues to fall, as it has done ever since the 2020 low (hence a traders market).  The monthly stochastic peaked in July but has since followed the MACD down.  There is some good news somewhere but I can't find it.  That's usually in Cable but that's up only about 4% on the monthly although has started to show higher lows.

Monthly WTI looks like it wants to test previous lows with a series of lower lows and now a downturn in the Stochastics at their previous 2020 high.  Looks like April could indeed have been a fake buy signal but action is very similar to July 2016 where Stochastic reversed back up, peaking in June 2018 with an 88% odd gain.  Interestingly the Stochastic turned down in August 2020 at that July 2016 Stochastic level having twice failed like this already since the peak.  So the monthly could go either way.  The weekly everythings have stalled since the recovery from the 2020 low with a slight bias to the downside while similar for the dailies but with a slight bias to the upside.  Who knows!  But who buys WTI?  We buy the oillies and in an alignment of fear (or hope) they (a sample of RDSA and COP) are at lows for all my technicals across all time periods.  Could go lower but that is very low!

Gold wants to play something!  I focus on Gold in GBP, being a Brit and all.  The weekly shows price is at the end of a descending triangle and close to the pre Covid 2020 high.  A break is usually expected from here.  But a continuation or reversal?  Well MACD still going down but the Stochastic is oversold and that leads MACD.  The last time the Stochastic was this low was in December 2019, at the start of the big bull run!  Ooh!  The monthly is a bedwetter too with the Stochastic fluttering down off a high at a similar level to the August 2019 peak which was followed by a retrenchment and then a 35% run up.  Time for another moonshot or crash landing (e.g. H&S)?  The daily repeats the descending triangle beautifully and is that I buy signal I see before me or just a a trick of the light?  Silver is getting scolded for getting carried away but time to be kind as it is in a cup and handle chart pattern like gold was and not to pull back to these levels would be disrespectful!

VIX stays well elevated above the 2020 January lows having bottomed in August 2020 on the daily (which even then was 87% above the January lows).  The bullishesque view would be it hardly ever peaks higher than the initial crack up.  Oh but silly me, forgot to mention I got a possible buy on the monthly in October with only one signal letting me down (which is all it takes for a fake)!  As for the S&P itself, well any tracker, steamrollers and pennies.  Stock picking for me and that points to better value elsewhere, if anywhere.  DAX?  Double top on the monthly with a bearish turn on the technicals.  The weekly has broken down out of a rising channel with technicals to suit, and the daily is down, looking for support.  Nikkei?  It's having a nice time with the monthly having broken through the January 2018 resistance but with a challenging December 2019 top to beat else make a double top.  It's already on watch given previous price action and it technically it's still just about in Covid recovery territory.  Vanguard Emerging Markets ETF (VFEM) similar and at a well worn resistance zone.  One day son, one day.  Could that be "tomorrow"?

So what looks good out there?  Still looking.....!  Fancy a few US banks?  No, thought not.  No wonder things are a bit quiet here!

[Loki]

Good reply

Quote

I don't believe this correction is a melt down. Why? Of the major meltdowns I have observed since 1987's Black Monday, none of them came with as much fear as we have now. The meltdown happens when there has been euphoria. I plan to buy on this correction, and add to miners.

 

[JMD]

3 hours ago, Cattle Prod said:

Fully agree, when I was a kid we were told we'd have flying cars and a colony on the moon by now.

I think they were even more bullish than that... Moon Base Alpha!! - Space 1999?... Ok that was fiction.

But without a super-power space race (proxy war), or economic commercial reward, why does anything happen? When you think about it, its rather anomalous that medical progress has kinda stalled given the sheer number of people/countries involved and the money spent. Oh, and Intellectual advancement in our universities has gone into reverse. Peter Thiel (Paypal) believes many disciplines have gone down to many rabbit-holes, biology, physics, etc, and decades of time has been wasted.   

[Chewing Grass]

1 minute ago, JMD said:

I think they were even more bullish than that... Moon Base Alpha!! - Space 1999?... Ok that was fiction.

But without a super-power space race (proxy war), or economic commercial reward, why does anything happen? When you think about it, its rather anomalous that medical progress has kinda stalled given the sheer number of people/countries involved and the money spent. Oh, and Intellectual advancement in our universities has gone into reverse. Peter Thiel (Paypal) believes many disciplines have gone down to many rabbit-holes, biology, physics, etc, and decades of time has been wasted.   

Progress is only made when risk aversion and financial constraints are simultaneously thrown out of the window.

[Bricormortis]

Et tu.. vodaphone ? 

[JMD]

14 hours ago, sancho panza said:

I think Lockdown was jsut the Westminster bubbles way of warming us up for a decade of staying indoors under hosue arrest for the greater good aka saving the NHS aka saving the planet aka not killing Grandma aka not killing little Johnny's future.

You maybe right. Yesterday, (retired supreme court judge) Jonathan Sumption did an explanation of his 'government by decree' thesis. The fear, now we have set the precedent, is what happens next time? 

Interesting if you haven't heard him before. Its all very gently (genteel?) put. But the scary thing is that the topics he covers happened without any objection from political parties, or the media. Sumption does get airtime, but i think many more people who hold a similar viewpoint don't get heard. 

 

[Hardhat]

Turning the screens off is a good idea. There will always be some fear and noise on a day like today, but ultimately the macro thrust of this thread should keep us on the straight and narrow. I've been investing over the last two years for 2025-6 and maybe even later (27-28). The only reason I would withdraw money from my portfolios would be sustained income (job) loss or property purchase. As I don't want a huge mortgage, that means delaying a property purchase until my mid-30s. I'm hoping for a property price crash in the SE (where realistically I will want to live) at the same time as the reflation stocks start to motor. If it doesn't work out, I've still got more money than if I spent it all on booze and strippers, which I must admit, is a constant temptation 

[Loki]

@JMD watching that now

[Harley]

1 hour ago, Starsend said:

Hi all

I'm sure many of you have heard of Rick Rule/Sprott, bit of an investment legend, especially PMs. Lot of stuff from him on YouTube, I have a lot of respect for his opinions.

They do a portfolio review service where they grade your stocks (natural resources only) from 1 to 10 with 1 being the best and 10 I guess ultra shit. He does say ones are extremely rare. I'm not sure exactly what the exact parameters are, stability, future profitability etc but I thought it worth sharing as some of the comments are interesting and the things such as BP being ranked higher than Shell.

You can only enter a set number of stocks, some others on my watch list I would have liked an opinion on as well but perhaps other people can avail themselves of this free service.

BP p.l.c. (LSE:BP.)	5
Royal Dutch Shell plc (ENXTAM:RDSA)	6
Repsol, S.A. (BME:REP)	5
Schlumberger Limited (NYSE:SLB)		no opinion
Occidental Petroleum Corporation (NYSE:OXY)	6	new balance sheet issues
GasLog Partners LP (NYSE:GLOP)		no opinion
Fresnillo Plc (LSE:FRES)	5	very cheap, but opaque
VanEck Vectors ETF Trust - VanEck Vectors Junior Gold Miners ETF (ARCA:GDXJ)	5
GDX	5
MAG Silver Corp. (TSX:MAG)	4	superb deposit
Barrick Gold (NYSE:GOLD)	4	best of the biggies. First stop for generalist investors, in gold space
Agnico Eagle Mines Limited (NYSE:AEM)	4	superb, not cheap, rapid free cash growth, major capital spend passed
Pan American Silver Corp. (TSX:PAAS)	4	core silver name, big price run up, huge upside, big political risk
First Majestic Silver Corp. (TSX:FR)	5	not cheap, big recent price run up, great silver leverage, cult stock, marginal at these prices
Fortuna Silver Mines Inc. (TSX:FVI)	5	cheap, well run, cash short, Lindero implementation challenges
Hochschild Mining plc (LSE:HOC)	5
Endeavour Silver Corp. (TSX:EDR)	6	great silver leverage, unprofitable, small mines
Wesdome Gold Mines Ltd. (TSX:WDO)	5	well run, very fully priced
Harmony Gold Mining Company Limited (JSE:HAR)	5
Yamana Gold Inc. (TSX:YRI)	6	low inside ownership, high G&A
Franco-Nevada Corporation (TSX:FNV)	4	best of the best, growth built in, not cheap
Anglo American plc (LSE:AAL)		no opinion
Nutrien Ltd. (TSX:NTR)	4	world leading integrated plant nutrient business
Hecla Mining Company (NYSE:HL)	7	low inside ownership, high G&A
AngloGold Ashanti Limited (JSE:ANG)	5
Coeur Mining, Inc. (NYSE:CDE)	6	good following, low inside ownership, high G&A

Thanks for that.  By way of interest, here are the results of my screen of the Gold & Silver Industry (note some companies are not included in this sector).  For discussion only, DYOR, etc.  I just took the largest 15 by mkt cap in GBP.  Not that I would bother for the more passive side of my portfolio, there being GDX and GDXJ.  But I did it to compare against the EFT to explore any benefit in GDX over individual stocks and vv.

So he says (of those asked) MAG, GOLD, AEM, PAAS and FNV.

MAG and PAAS had too small a market cap (just).  Despite some impressive ratios, MAG has had negative operating cash flow for the last four years.  Why?  PAAS would have scored well.

AEM lost one score for not being in the top 4 by market cap (which is a bit hard but that's me chosen bias) and for having a slightly high (for the 15) LTDE (debt) ratio. 

FNV is categorised as being in the Miscellaneous Financial Services industry, as you do.  I'll deal with him later which I must as he would also have scored well.

But the best thing of all are those top-15 industry averages for debt, etc.  Makes such a welcome change from the many other industries I'm looking at.  Shooting fish in a barrel?  TBH, what they should all look like and did way back - debt less than 50% of equity, Current Ratio over 2, and covered dividends and positive operating cash flow histories.

Regarding using GDX, IMO I think I'll just do that.  Never say never!

[Harley]

16 minutes ago, Bricormortis said:

Et tu.. vodaphone ? 

What, my lovely 82% gain's been dented!

[Democorruptcy]

2 hours ago, geordie_lurch said:

I'm thinking about my Stocks & Shares ISA like the cat in the famous Schrödinger's cat idea... if I just don't log back into my account for a few months then the current carnage will have both happened and not happened but it's not until I log in it actually happens

When banks are in trouble they sweep the non performing assets under the carpet in a separate bad bank. I think such as HL should have 'naughty corner', where users can put non performing shares, so the individual red isn't smacking you in the face and doesn't show up in your portfolio total. Then one day it might be a nice surprise if you dare look in the naughty corner and a share has improved enough to be moved back into the portfolio.

[Barnsey]

53 minutes ago, Loki said:

Good reply

 

A reply shortly thereafter

I still think he's underpricing the risk here but perhaps his melt up will occur a little later than expected once again.

[Don Coglione]

5 minutes ago, Democorruptcy said:

When banks are in trouble they sweep the non performing assets under the carpet in a separate bad bank. I think such as HL should have 'naughty corner', where users can put non performing shares, so the individual red isn't smacking you in the face and doesn't show up in your portfolio total. Then one day it might be a nice surprise if you dare look in the naughty corner and a share has improved enough to be moved back into the portfolio.

I would have very little to look at if that were the case!

[Democorruptcy]

4 minutes ago, Barnsey said:

A reply shortly thereafter

I still think he's underpricing the risk here but perhaps his melt up will occur a little later than expected once again.

Must admit I've not paid much attention but I thought a bit back (even when we knew about covid), he was suggesting a summer melt up, followed by an Autumn crash. I had assumed that might be election related? A little late like the original S&P top figure? When the thread first started over on ToS I think that was 2,500 (or even 2,000?), then 3,000, then 3,500 now is it 4,000? The oil price top might be going to go the opposite way!

[Democorruptcy]

9 minutes ago, Knickerless Turgid said:

I would have very little to look at if that were the case!

I nearly said that's the idea because it saves you pain but I suppose it isn't really!

Maybe we can apply an old horse racing saying, form is temporary but class is permanent!

[reformed nice guy]

Got some of the ladders in: Gazprom, Conoco

Still a long way to fall for ladders that were set after purchases earlier in the year.

Does anyone every go back up a step of the ladder? I havent so far but I dont think Mosaic will be getting to $6 any time soon or TSMC to $40, so its looking like a very low rung!

My gut tells me to just leave the ladder where it is. Any thoughts?

[janch]

Just bought some more BP so now it's only down approx 30%

[JMD]

3 hours ago, sancho panza said:

Today I'm genuinely weighing up selling some two and three baggers to buy big oil. Can't help it.Dont want to drop our gold exposure but sometimes you look at the stats and think that your Barrick money from 2017 could today buy 5 times as many BP shares as you could  have when you bought the barrick...

SP, that's interesting as i think you have previously said you are already approx. 50% in oilies? I do think it will be one of the trades of the decade and personally i am also buying more. However, i am bit conflicted because i confess that i don't understand the potential divi return for the oilies. This is frustrating me because I have decided that i want to own more dividend paying (total return type) stocks, and oil and telecoms look the best sectors for maximising on doing this. 

If i recall correctly, DB has said the better performing oil sector stocks may have a total return of: 5x(depending on initial buy price of course) + divis. So, in my simple example, if a current BP £2 stock 4bagged to £8 by 2028, and also had a reinstated yield of say 6%(historic oil sector median), that would mean BP was paying 48p/share each year?  

SP, i believe you are buying to hold these oil stocks long term. Do you have any thoughts on what the yearly dividend return could be by 2028? I realise no one can tell the future, and it would depend on unknowns including inflation i guess. But It seems to me that having such a figure in mind, would help make the cheap prices we are currently seeing (at least hope they are cheap!) even more irresistable.  

 

[Green Devil]

11 minutes ago, janch said:

Just bought some more BP so now it's only down approx 30%

I have a buy in on BP at 150 😁😁

Exxon looks a buy at 25$ too 😁

[sancho panza]

tempting..............

Peak of £12 in 2013............and people are worried about a 50% drop in BP...

Looks like Google fiance has adjsuted for the rights issue the peak being £37...

 

[Green Devil]

1 minute ago, sancho panza said:

Whats going on with rolls? Are they bankrupt or something? They are behaving like a garbage stock. 

[Democorruptcy]

1 hour ago, Bricormortis said:

Et tu.. vodaphone ? 

VOD was the only one on my shopping list at 0.99 but weakened my resolve and just gone in at 1.01

I was disappointed it didn't drop more on Monday when the OFCOM ban on them selling locked phones was confirmed. I suppose because it was old news really.

[kibuc]

5 hours ago, sancho panza said:

Today I'm genuinely weighing up selling some two and three baggers to buy big oil.Can't help it.Dont want to drop our gold exposure but sometimes you look at the stats and think that your Barrick money from 2017 could today buy 5 times as many BP shares as you could  have when you bought the barrick..............................

Eldorado and Yamana are reporting earnings tomorrow. I think Sibanye as well. Also, Newmont.

Wesdome on the 3rd, Kinross and PAAS on the 4th, Barrick, Harmony, New Gold and First Majestic on the 5th.

 

[JMD]

3 hours ago, geordie_lurch said:

I'm thinking about my Stocks & Shares ISA like the cat in the famous Schrödinger's cat idea... if I just don't log back into my account for a few months then the current carnage will have both happened and not happened but it's not until I log in it actually happens

hmm, resisting logging-in?... The trouble is now it's all on your mobile phone, youv'e also got quantum entanglement/'spooky action' at a distance - to contend with!!

(ok, doesn't really work, but came into my head when i read your post, for context see below, its a weird world)

Albert Einstein colorfully dismissed quantum entanglement—the ability of separated objects to share a condition or state—as “spooky action at a distance.” Over the past few decades, however, physicists have demonstrated the reality of spooky action over ever greater distances—even from Earth to a satellite in space.