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

[Errol]

I'm 231% up on my Freeport (FCX) position, purchased for $6.65.

Tempted to sell as the price is now ludicrous.

[planit]

33 minutes ago, AWW said:

Indeed. I've had several urges to sell out of at least half of my inflation equities during the current run up. Every time I sit tight and then breathe a sigh of relief that I didn't sell up as they head higher.

It's a very nervous market. Only natural that it's difficult to keep your foot in when March is fresh in the memory.

 

If they are an inflation play then we have only gone 1% into the cycle. Would be pretty early to cash out at 1%

Anyone wanting to play the volatility or reduce risk then selling is an option. The way DB was rebalancing his portfolio can be a good way of taking advantage of different shares making dashes forwards at different times without increasing overall risk at all (although there is a chance all the work produces no positive reward and could produce the opposite). 

 

I agree with the Vix being reactive, I always think of horses and stable doors after a big move down. It's more like a memory of bad events in the recent past and can seriously underestimate risk after a long run up in an index.

 

Edit to improve clarity

[AWW]

3 minutes ago, planit said:

If they are an inflation play then we have only gone 1% into the cycle. Would be pretty early to cash out at 1%

Yep, that's what I keep telling myself. First time I've really been properly balls deep in equities though, and the recent rise has been ferocious. Also  currently jobless.

[Loki]

I think everyone would do well to look at the price of TSLA now, and years ago, and remember what cycle we are starting 

Edit: I see @planit beat me to it 

[AWW]

9 minutes ago, Democorruptcy said:

What do they see causing it and are there any key dates? US election fraud or not, Brexit deal or not, etc.?

One on technicals, the other on interest rate expectations starting to shift.

[planit]

 

A word of warning for us all. We are not stock-picking geniuses because we made money in the last month *.

We are definitely NOT going to remortgage the house to buy shares because we have doubled our money on £1000 worth of shares bought in October.

 

 

*past performance is no predictor of returns in the future yadda, yadda, yadda

[Democorruptcy]

24 minutes ago, AWW said:

Yep, that's what I keep telling myself. First time I've really been properly balls deep in equities though, and the recent rise has been ferocious. Also  currently jobless.

When everything is blue (well apart from....) that's real money that could be cashed in. When it's red it doesn't matter, it's just figures on the screen to ignore for a while.

It's all about units? Will a sell and subsequent buy at a lower price realise more units or not? Each extra unit can make it's own trading profit and receive an income. I think that's what's lost with laddering. Looking at it as even if the price drops, the dividends offset part of the loss, by buying at too high a price, it reduces the units you could have had and so lowers profits/dividends. I suppose I'm just a gambler at heart, money is just a tool!

[DurhamBorn]

3 hours ago, 5min OCD speculator said:

Cable aka £ vs $ is at a crucial point 1.35......where it was 12 months ago.....

when it shat the bed in March it went down to 1.142

IF they get a good Brexit deal over the weekend it might 'break out' BUT that might already be priced in....

IF it decides to have another poo it'll probably drag the FTSE down with it.........

SO to take profit OR to sit tight? hmmmmmmm 

EDIT: 12 months ago the £ to € was 1.20, today it is 1.11 SO the $ rate is due to $ weakness NOT £ strength 

$1.40 for cable,luckily my CAD stocks will be ok as CAD will outperform both,

[geordie_lurch]

In my defence for top slicing some of mine... I didn't ever really like National Express as it had been in the red so long I'd almost given up hope it would ever come back so jumped at the chance to get a little back to put into others

[Castlevania]

On 02/12/2020 at 17:29, sancho panza said:

 

This is the whole thing with collateral though.Stating the obvious here, that's it's only as good as the assets within it.

Deutsche Bank is big in derivatives.Need I say more?

It's often claimed that all derivatives net off,which I understand the logic of, however,when the collapse came in 08,turns out the collateral wasn't as good as they thought because of either fraud,incomeptence by ratings agencies or collapsing liquidity in bond markets.

I'm not overly familair with these issues so happy to get some education.

 

It’s one of the areas which has come under a huge amount of regulatory focus, due to many of the issues seen in 2008. I just think the market and regulators are looking the wrong way. It’s the lending books that I’m concerned about.

[Castlevania]

I’ve not touched anything since the middle of October. There’s a lot less value out there whilst at the same time I don’t see many of my holdings as being particularly over valued. Asset allocation % looks ok. Time to sit patiently.

[Loki]

2 hours ago, planit said:

 

A word of warning for us all. We are not stock-picking geniuses because we made money in the last month *.

We are definitely NOT going to remortgage the house to buy shares because we have doubled our money on £1000 worth of shares bought in October.

 

 

*past performance is no predictor of returns in the future yadda, yadda, yadda

Go big or go home 

(This is not financial advice)

[UnconventionalWisdom]

Shiller CAPE ratio above great depression peak

[Erewhon888]

Fred Hickey informs Williams and Fleckenstein the details of his gold mining companies.

Starts at around the 56 minutes mark.

Which of these are also favourites of the Dosbods gold miner investors?

https://ttmygh.podbean.com/

[Harley]

9 hours ago, reformed nice guy said:

I did some digging, but probably not as deep as Harley.

My watchlist at current ladder prices:

Baidu - chintech - 85 usd

Fanuc - Jap robots - 16000 yen

Gazprom - russia gas - 3.5 gbp

JD.com - chintech/chinese amazon - 50 usd

NTT DOCOMO - jap mobiles - 35 usd

Nippon Telegraph - jap comms - 20 usd

Tencent - chintech - 50 usd

TSMC - taiwan chips - 60 usd

A lot of those are near their lowest price this year so you can probably ignore but hopefully it seeds some ideas

A few familiar names there but my bias is towards the source (materials, telco, etc) companies mostly due to the nature of my selection criteria, but TSMC did come up and is tempting, if China promises not to invade!

[Harley]

8 hours ago, sancho panza said:

I'd also add SingTel,Telstra and Japan Tobacco.

Japan Tobacco compares favourably on some key financial metrics (such as debt) to the usual suspects, not that I have a clue what they actually make or anything!

[Harley]

8 hours ago, sancho panza said:

I'd also add SingTel,Telstra and Japan Tobacco.

Singtel is a wicked temptress with her lovely industry and low debt ratio but has a somewhat lacking Current Ratio when you get to know her, and I am a Current Ratio kind of guy.

[Harley]

8 hours ago, sancho panza said:

I'd also add SingTel,Telstra and Japan Tobacco.

Telstra seems to like its debt as much as Billy likes his buns, and Australia has a hefty WHT on divs which eats into their yield, but such tech is undeniably sexy.

[Harley]

Sorry, not very macro, but we all end up having to put rubber to the road and the point stands though at the macro level - look far and wide as many macro commentators are saying (these companies stack up well against their western cohort) -  another dimension to the shifts that are underway?

[Harley]

1 hour ago, Erewhon888 said:

Fred Hickey informs Williams and Fleckenstein the details of his gold mining companies.

Starts at around the 56 minutes mark.

Which of these are also favourites of the Dosbods gold miner investors?

https://ttmygh.podbean.com/

It's a long time since I've been a fan of anything but defo a fan of W&F on the basis they would be good for a pint and a chat, with top delivery and humility, and regarding Fred, as I mentioned up-thread (), I really liked his macro stuff, approach (core versus trade), caveats about locationx3, etc too.  

[Harley]

6 hours ago, AWW said:

One on technicals, the other on interest rate expectations starting to shift.

With the post play MSM BS rationale to follow!

[Harley]

3 hours ago, UnconventionalWisdom said:

Shiller CAPE ratio above great depression peak

Interesting chart, although the rate of change is IMO key so all we need is a DH melt up and it's 2000 all over again (looking similar so far).

[sancho panza]

8 hours ago, Errol said:

I'm 231% up on my Freeport (FCX) position, purchased for $6.65.

Tempted to sell as the price is now ludicrous.

I abiled on my call options  from April a week or two back.They only had 6 weeks to run.Wish I'd bought the stock back,I wouldn't sell yet if I had some(but then I could have excercide the calls).

Nice profit though.Either way.

Noone ever goes bust taking profits.

[sancho panza]

7 hours ago, Castlevania said:

It’s one of the areas which has come under a huge amount of regulatory focus, due to many of the issues seen in 2008. I just think the market and regulators are looking the wrong way. It’s the lending books that I’m concerned about.

I know some of the CB's have been taking MBS's as collateral.It does beg the question doesn't it?Especially now.

[DurhamBorn]

Roll up roll up,another bullseye prediction from the thread hits home.When everyone predicted telcos would be in the clutch of regulators forever we said an inflation cycle would see regulators side stepped and back off.

Well seems OFCOM is happy to allow telcos to set fibre prices with no regulation for the WHOLE cycle,until "at least until 2031"

Nice as well  @sancho panza coma scores put BT top.Doing the road map work and knowing exactly where we were in the 40 year dis-inflation/inflation cycle meant we were filling our boots down to 95p while everyone and his dog was saying sell.

"We recognise there must be a compelling investment case. Shareholders and fund managers have plenty of choices over where to put their money,” she said. “We don’t expect to introduce cost-based prices for fibre services until at least 2031,” she said, adding that the regulator would not intervene in a way that would discourage investment."

“This is probably about as good as it can get . . . for BT.”

Tristia Harrison, chief executive of the company Talktalk, said that BT has been handed “almost total pricing freedom for a decade or more” at a time when affordable broadband access was more important than ever. “This is an unnecessary multibillion-pound giveaway to BT,” she said.

How many LOLs eh.

https://www.ft.com/content/0a9bb3c9-4923-4ef6-8b3b-63c8f2abc06b