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


spunko

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28 minutes ago, Loki said:

"No money back, no guarantee"

That's the initial 'Dear John' letter...start making a few more noises about transferring your portfolio elsewhere and they may start to 'squeek'!

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3 minutes ago, MrXxxx said:

That's the initial 'Dear John' letter...start making a few more noises about transferring your portfolio elsewhere and they may start to 'squeek'!

We're not talking huge amounts here, they'd probably not even notice.  It would need a group effort with some big portfolios in there to make them sit up and notice

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41 minutes ago, DurhamBorn said:

Look at BT leading the FTSE :o Telcos,oilies and fags.Hopefully they all go back down so we can compound the divis in at lower prices,this sector rotation is happening far too quickly.Massive amounts of liquidity in the pipes though.Into the financial system first then into the real economy.It will be interesting to see if a bug kahuna takes everything back down in the short term or not.

Tell me about it @DurhamBorn.
 

I kept cost averaging down on RDSB and BP - down to £9.50 and £2.30 ish respectively and started getting uncomfortable with my holdings and high proportion in oils and then boom - they’ve exploded. I’m now wishing I’d bought more. 

Problem is when and what to buy now? I was hoping for a long slow contraction in stock prices until the start of the new financial year and then I was going to start using up both our next ISA allowances for 2020-21.

 

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3 hours ago, sancho panza said:

Obviosuyl coma scale scores come with a warning that they're best suited to spraying and praying, are historically based on the last full year and aren't deep dives into the accounts.

Nevertheless,I think you're buying a lot risk with IMB's balance sheet when others are similarly discounted to the wider market...

dyor natch

Company  Ch Inc BS CF Sect SCS
JAPAY 4 4 3 5 4 20
BATS 3 4 3 5 4 19
IMB 3 4 1 5 4 17
ALTRIA 2 2 1 4 4 13
PM 2 4 1 4 4 15
KT&G 2 4 5 4 4 19
ITC 2 3 5 3 4 17
Gudang Garam 2 5 4 4 4 19
           
             
             
             
             
             
             
             
             

So what your saying is SP: the 'health warning' on the packet applies to the company as well as their products? ...Next thing you'll be telling me is that my strategy of only buying companies 'too big to fail' is not failsafe!!!

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4 hours ago, JMD said:

Yes, all seems a little too neat and tidy doesn't it? An epidemiologist on the news last night said it was highly unusual to release any results during an ongoing trial of the type Pfizer are currently undertaking, because any news/discussions will affect the result (double-blinds, etc). But already we are being told that the potential new drug will need special -70c fridges for storage in the gp surgeries. And then i hear that the married couple who own BioNTech - they did the r&d for Pfizer - are now in top 100 richest Germans.

Is this story hype ...to help create the meltup? I notice the SP500 seems to be having trouble breaking out above the 3600 level (its 3rd attempt in 3-months), maybe this will just be another damp squib.  

 

 

57 minutes ago, DurhamBorn said:

Look at BT leading the FTSE :o Telcos,oilies and fags.Hopefully they all go back down so we can compound the divis in at lower prices,this sector rotation is happening far too quickly.Massive amounts of liquidity in the pipes though.Into the financial system first then into the real economy.It will be interesting to see if a bug kahuna takes everything back down in the short term or not.

 

Usually when theres a melt up, it means that everybody is out, and they want you to pay premium price to get back in, which usually means the long term low is in. Sorry, but if you boat isnt already loaded, youre screwed and will wait for the dip that never comes. Good call on all those that loaded the boat before the bullshit miracle vaccine was announced.

 

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34 minutes ago, UnconventionalWisdom said:

Are you confident we'll have the big kahuna? In the early days of the original thread you spoke about the possibility of having reflation take off without a big setback. 

I believe a sharp shock will happen but i am cautious to still invest in case they manage to quickly start the industrial cycle going. In that scenario, i would imagine a slow increase in reflation stocks and a slow decline in FAANGS, Tesla etc.

I think we might see a massive credit event,maybe derivative driven that smashes the market lower,but some of the prices UK and European shares went and still are lower than i thought they would be even after a massive crash.There isnt enough liquidity yet to ensure a full on reflation,but i expect lots more to come yet.It is possible we get a sector rotation,but there is still massive exposure to bad debts coming in the financial sector.

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2 hours ago, sancho panza said:

I havenm't been through them in a while.From memory AT&T was the only one to get 17+ on the SCS scores.I wouldn't buy it on the same basis as @Castlevania but also if I wanted dollar exposure we have a lot of oilies and goldies.

With telecoms,ideally I'd like to use it to hedge far eastern and emerging markets in case they outgrow the West-highly likely.

Ergo,we'll have a deep dive into the cross holdings wehn we start moving above 3% into telcoms.When I did have a look,I was very happy with BT's prospects at £1 and Vod too.Beyond them then staid old perfomers like Telstra and Singtel,.

The main European ones are deep in the hole in mature markets,so I think I'd have some small palys in the riskier end eg Tel italia(tit for short),and also some exposure to africa eg MTN/Airtel,far east eg KT,Nippon,TLK.

Sing tel and the jaoanese/SK ones may be the best way to gain exposure to EM countries like Vietnam etc.

Decl:long BT/Vod

Thanks very much SP for the information. I went through my telecoms the other day and realised that i didn't have enough exposure to the US, so i'll go back and have another look see.   

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6 minutes ago, Green Devil said:

 

 

Usually when theres a melt up, it means that everybody is out, and they want you to pay premium price to get back in, which usually means the long term low is in. Sorry, but if you boat isnt already loaded, youre screwed and will wait for the dip that never comes. Good call on all those that loaded the boat before the bullshit miracle vaccine was announced.

 

Not one vaccine,three i expect.My old job at Glaxosmithkline is being advertised right now,its to manufacture the adjuvant for the vaccines,they are entering full production right now.Its liquidity driving the market higher,people always look for a reason after the event and nail the tail on the donkey somewhere.

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5 hours ago, Hardhat said:

Within 2% of being in profit on BP. Was 25% down last week, average buy price of 255p

Steep rally! Let's see how the next five years go ;)

We would do well to remember David Hunter still reckons oil will revisit $10 a barrel after the melt up pops.

Another call of his which is worth bearing in mind is a strong dollar after the lows on DXY.

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Just for reference regarding HL accounts and RDSB tomorrow.

If you buy a stock one day before the ex-dividend, you will get the dividend. If you buy on the ex-dividend date or any day after, you won't get the dividend.

Conversely, if you want to sell a stock and still get a dividend that has been declared, you need to hang onto it until the ex-dividend day.

The ex-date is one business day before the date of record.

The date of record is the date in which the company identifies all of its current stockholders, and therefore everyone who is eligible to receive the dividend. If you're not on the list, you don't get the dividend.

In today's market, settlement of stocks is a T+2 process, which means that a transaction is entered into the company's record books two business days after the trade.

To ensure that you are in the record books, you need to buy the stock at least two business days before the date of record, or one day before the ex-dividend date.

 

Tomorrow for RDSB.

As you can see from the diagram below, if you buy on the ex-dividend date (Tuesday), only one day before the date of record, you will not get the dividend because your name will not appear in the company's record books until Thursday. If you want to buy the stock and receive the dividend, you need to buy it on Monday. When the stock is trading with the dividend, the term cum dividend is used.

If you want to sell the stock and still receive the dividend, you need to sell on or after Tuesday the 6th.

_20201110_175513.JPG

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51 minutes ago, AWW said:

Interesting chart ponced from Twitter 

535D549C-5467-40B3-8BF4-8D4991ED6966.jpeg

On that note, the always entertaining and eccentric son of a Glaswegian lorry driver chimes in with his predictions on negative rates in the States (meaty food for thought)

 

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1 hour ago, Bricormortis said:

We would do well to remember David Hunter still reckons oil will revisit $10 a barrel after the melt up pops.

Another call of his which is worth bearing in mind is a strong dollar after the lows on DXY.

Yes, he says the strong dollar will be the result of a flight to safety during the bust. Money will flow into dollars and treasuries. I guess, the UK equivalent of treasuries would be gilts.

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Democorruptcy
2 hours ago, Panda said:

Just for reference regarding HL accounts and RDSB tomorrow.

Another point regarding HL as people are talking about their portfolios, is that the P/L on your portfolio page may not be a true representation, if you have bought/sold the same share. Their "Cost" column may not represent how much that share has really cost you.

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37 minutes ago, Democorruptcy said:

Another point regarding HL as people are talking about their portfolios, is that the P/L on your portfolio page may not be a true representation, if you have bought/sold the same share. Their "Cost" column may not represent how much that share has really cost you.

Yes, it's a bit shit having to run your own spreadsheet to have a true representation of your current position (not that I bother, I just stick my fingers in my ears and let things ride).

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1 hour ago, Democorruptcy said:

Another point regarding HL as people are talking about their portfolios, is that the P/L on your portfolio page may not be a true representation, if you have bought/sold the same share. Their "Cost" column may not represent how much that share has really cost you.

At the risk of sounding like Mr Clarkson....how hard can it be?

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2 hours ago, Democorruptcy said:

Another point regarding HL as people are talking about their portfolios, is that the P/L on your portfolio page may not be a true representation, if you have bought/sold the same share. Their "Cost" column may not represent how much that share has really cost you.

It seems to be even more arbitrary/worse than that.

It's completely normal for me to see "Total Portfolio Value", "Total gain or loss" and "Daily gain or loss" figures moving around completely independent of each other. i.e. Daily gain can be more than a thousand pounds, but my total portfolio value will be a couple of thousand less than it was at the start of the day.

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7 hours ago, AWW said:

It seems to be even more arbitrary/worse than that.

It's completely normal for me to see "Total Portfolio Value", "Total gain or loss" and "Daily gain or loss" figures moving around completely independent of each other. i.e. Daily gain can be more than a thousand pounds, but my total portfolio value will be a couple of thousand less than it was at the start of the day.

My dad has a habit of logging on at 4.40pm then on the phone asking why his portfolio is up 10%,HLs price are all over between 4.30pm and 5.00pm.Luckily monday he actually was up 10% xD 

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Repsol come out with their strategic plan on the 26th Nov.I expect it will be similar to BP.Good chance they cut the divi as well.They want to stay very competitive on the divi front,so it may be a 33% cut,unless they do a BP and go for 50%.Hard to see them not cutting something while they have the cover of other European peers doing it,but they might hold out.Time will tell.I think all big oil companies are itching to be doing share buy backs at the moment,but locked themselves into debt reduction targets.Pay off 2% debt instead of cancelling 8% divi paying shares seems crazy.They should be paying debt down at the top of the cycle,not the bottom.

 

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Interesting article sort-of about a turn to defensives in the FT:  https://www.ft.com/content/57a37d6a-202d-4fde-b400-5247235595cd

Quote


    Don’t call it a comeback just yet, but something very weird has happened in markets over the past two trading sessions.

It seems, dare we suggest it, that the “value” factor — Ie companies which are cheap on a fundamental basis — is getting a serious, sustained bid after a near decade of getting crushed by the “growth” and “momentum” factors.
 

 

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11 hours ago, Loki said:
13 hours ago, Democorruptcy said:

Another point regarding HL as people are talking about their portfolios, is that the P/L on your portfolio page may not be a true representation, if you have bought/sold the same share. Their "Cost" column may not represent how much that share has really cost you.

At the risk of sounding like Mr Clarkson....how hard can it be?

Out of interest just checked this out in my AJ Bell SIPP. Looks like their systems are set up to know what your original investment has actually cost you with all fees included. I started this SIPP after a transfer back in March and have two tranches of GSK, all in costs were £2019.91 and £4015.53. As you can see this tallies up!

Screenshot from 2020-11-11 09-49-40.png

Not so impressed with having no access yesterday, but saying that my ships had already sailed:)

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Democorruptcy
4 hours ago, DurhamBorn said:

My dad has a habit of logging on at 4.40pm then on the phone asking why his portfolio is up 10%,HLs price are all over between 4.30pm and 5.00pm.Luckily monday he actually was up 10% xD 

Agree, it's a complete waste of time logging in at the time of day. The daily mega "trade" always goes in at 4:35pm.

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