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

[reformed nice guy]

https://www.bbc.co.uk/news/technology-56512430

Intel's new chief executive has told the BBC it is not "palatable" that so many computer chips are made in Asia

[DurhamBorn]

3 minutes ago, Harley said:

I'm trying and will update.  Suggestions please!  Bought some CEY today and will be looking for some more precious metal miners.  I own the likes of UU but may increase my allocations at the right time.  Im going to copy DB if he tells us, plus get a larger allocation to AsiaPac.  Ive been buying by still hold a small allocation.  China has pulled back so worth a look.  Sold Crest Nicholson today at break even.  Not a sector I want any more and I want divs.  A BK may be a concern but I'm far more concerned about having too much cash (inflation or bail ins).

Iv started buying VIV and TIMB both ADRs,first buys and 3 ladders set at 8% down points.

Iv also set ladders for CIG and ELP again 3 at 8% down.Thats the 4 for Brazil for now,but im still working through some.

Iv set a ladder,but not bought yet in REE (Red Electrica) want them cheaper or not at all.

On the far east iv started buying Henderson Far East Income HFEL .Iv not set ladders in those its ad hoc.

[DurhamBorn]

40 minutes ago, Vendetta said:

I have been looking at these too. Not dipped the toe yet. New Financial year coming up. Might go then....

 

@DurhamBorn think you timed it well.

VIV flew after you bought I recollect? Caught the bottom? 

 

 

They are down today,i think iv dead breakeven on them,but i hope they all sell off so ladders kick in.Telefonica Brazil is a different company to Telefonica,it trades as Vivo and is the largest telco in Brasil, Telefonica are the majority share holder though.TIM SA the other big telco im buying is similar in that the majority shareholder is the Italian telco Gruppo TIM.

 

[Castlevania]

47 minutes ago, Vendetta said:

I have been researching Kaplan and Brazil since you mentioned it. 

I am still struggling to get my head around the ‘different Telefonicas’

 

Telefonica grew through debt fuelled acquisition. To reduce their debt levels they’ve sold some of their stakes in different countries by listing them.

[Castlevania]

33 minutes ago, Harley said:

I'm trying and will update.  Suggestions please!  Bought some CEY today and will be looking for some more precious metal miners.  I

With regards to Centamin understand what you’re getting. They have one world class mine and some exploration property. They have a load of cash on their balance sheet and no net debt. They pay a dividend. It’s good stuff if analysing a normal company.

However, this is a gold miner and if you think gold is going to the moon you want the over leveraged operators with good assets. Centamin have a 50:50 profit share with the Egyptian government so a $100 on the gold price is only worth $50 to the bottom line. In addition they’ve had a lot of production issues over the past few years and struggle to maintain hitting half a million oz of production.

However, they do look good value and given the profit share and strong balance sheet should perform better than most of their peers in a down market, just understand that the upside relative to others won’t be as big.

If you’re willing to take more risk without going into the juniors have a look at Harmony, Yamana and Eldorado.

[sleepwello'nights]

I've noticed a few radio adverts for "sell your gold" recently. Are these making a comeback and is it a good portent for the price of gold ?

[JREWING]

1 hour ago, Castlevania said:

With regards to Centamin understand what you’re getting. They have one world class mine and some exploration property. They have a load of cash on their balance sheet and no net debt. They pay a dividend. It’s good stuff if analysing a normal company.

However, this is a gold miner and if you think gold is going to the moon you want the over leveraged operators with good assets. Centamin have a 50:50 profit share with the Egyptian government so a $100 on the gold price is only worth $50 to the bottom line. In addition they’ve had a lot of production issues over the past few years and struggle to maintain hitting half a million oz of production.

However, they do look good value and given the profit share and strong balance sheet should perform better than most of their peers in a down market, just understand that the upside relative to others won’t be as big.

If you’re willing to take more risk without going into the juniors have a look at Harmony, Yamana and Eldorado.

Fantastic post buddy.

Spot on. I'm holding an awful lot albeit at a 1.025 average.

Poly and Fres fell today. If they fall tomorrow. I'll add.

Poly at under 1440 and Fres under 9 will have my attention.

Bought some Hoc. Average bang on 2.

I'll average down if HOC falls. 1.91 for me is a no brainer. 

I think Gold and Silver is going up town. Heavily manipulated by the banks with their Fiat Gold backed paper nothing.

Funny though today CEY up,  Poly, Fres, Hoc down.

The MM's or Algo's never seem to get CEY under the pound support. Whenever it gets round 102~.7'ish. I pile in, hold my core holding and slice profits on the way up, once a weekly wage is achieved post tax. Beats working for a living.

 

[afly]

If there are any non FTB LISA holders here, it's cash out time if you want to take a 20% hit rather rather than the 25% normal rate. HL take 2 working days to settle and the deadline in Apr 5th.

I was over 120% up thanks to this thread so happy to take the lowered hit for access to the cash 

[Barnsey]

In other unsurprising news...

 

[23rdian]

3 hours ago, Vendetta said:

Anyone still buying stuff? Telecoms ? Utilities?

I have been looking at UU and some Telefonica. 
 

5 year view on UU....

or are you all holding on for the BK...? 

 

 

I bought some more BP this morning and from hearing about it on here IBTL. Was looking at UU too but didn't buy them on this occasion.

[Straingone]

14 hours ago, Lightscribe said:

I had delivery under €1000 for x2 10oz queens beasts via silver-to-go (sister company of coin invest) via UPS. No email or anything, but when I looked up the tracking after it had taken awhile, they required the VAT payment which I paid for online. No biggie as the Queens Beast series have a collector value also that sends them way above spot. In fact it’s seems the VAT is now reflected on the Ebay prices for them already. 
I’ve done most of my silver purchasing in the last few years anyway, it’ll only be Ebay for anything below spot other than any future Queens Beast series.

I think the Queens Beast series has finished, the last one was issued this year.

[Harley]

13 hours ago, ThoughtCriminal said:

That was my experience in Northern Sweden too. I wasn't as far up as the arctic, but my first thought whilst out walking at night well below freezing was "I've been far colder than this on a blustery rainy autumn night back in the northeast". 

 

 

Southern Germany too.  Continental as opposed to maritime.

[Harley]

11 hours ago, Castlevania said:

If you’re willing to take more risk without going into the juniors have a look at Harmony, Yamana and Eldorado.

Ta.  Sounds good.  I admit to just looking at charts and financials.  Think I'll work my way down the ETF holdings list, looking for value and cross check the list to ensure complete.  Correct sector/big stock selection provides me with enough alpha v risk than chasing the tail ends with juniors, etc.  Ideally looking for 5 to 10 holdings.

 

[Harley]

35 minutes ago, Cattle Prod said:

......

Exactly. Short term noise vs. long term baked in supply problems.

Another Rick Rule comment:  seasoned long term commodity traders look at supply more than demand. 

Which I take to mean demand is relatively fickle.  Takes a long time to change supply and he reckons we are still living off the production expansion in supply of commodities generally from the 1960s.

[sancho panza]

15 hours ago, DurhamBorn said:

Iv started buying VIV and TIMB both ADRs,first buys and 3 ladders set at 8% down points.

Iv also set ladders for CIG and ELP again 3 at 8% down.Thats the 4 for Brazil for now,but im still working through some.

Iv set a ladder,but not bought yet in REE (Red Electrica) want them cheaper or not at all.

On the far east iv started buying Henderson Far East Income HFEL .Iv not set ladders in those its ad hoc.

Is these the ones.SOme intersting one sthere.I've had a quick butcher's.I'm sorting out the coma scores for telecoms-awaiting Vod/BT have added these wherre relevant.Look good.At the bottom of the amrket these are the ones you want tyo be buying I suspect.

https://www.investing.com/equities/tim-participacoes

https://www.investing.com/equities/energetica-minas-gerais

https://www.investing.com/equities/red-electrica-corporacion-sa

https://www.investing.com/equities/telefonica-brasil-sa-adr

20 hours ago, DurhamBorn said:

The biggest risk i see is the fact the west is running a huge structural deficit.That is mainly welfare and over employing in the state sector.

If the economy and tax base doesnt grow much faster than it is and catch up then any increase i rates will cause lots of pain.

Looking at the size of the printing and spending it looks to me like they need to run rates about 2.85% below inflation for the cycle.This number moves slightly over time.Thats to get the public finances into range.

It also means public wages,welfare,pensions etc need to increase slower than inflation and/or private sector wages.

One of the quick gains on this is invest heavily in the north because of the lower costs.

Im really worried that we are going to do really well up here and suck in lots of outsiders and then see prices increase for my grandchildren.Id prefer we stayed a bit poor.Hopefully we have a few really bad winters in a row,that should send people back south.

 

 

Couldn't agree more.It's sjut a case of how long they can keep the plates spinning imho.But for each £1 increase in debt(both govt and private) we're getting increasingly less GDP growth.

Appreciate you putting your calcs out there.That 2.85% is going to hurt western standards of living if you're not proetcted.And that's before the govt's epic mismanagement of the scamdemic comes into play.

Next ten years are going to be brutal for people in the west used to an easy life.Going to be even worse for thsoe that are paying for it.

3 hours ago, Cattle Prod said:

Saw a great tweet this morning which reiterates my view on the physical oil market outlined here:

Exactly. Short term noise vs. long term baked in supply problems.

He was a double olympic champion back in 2012.What a talented so and so...........fair play.

[Barnsey]

This is interesting:

Everyone looking the other way.

[DurhamBorn]

 

@sancho panza they are the ones,Red Electrica you can buy direct to avoid ADR on that

https://www.hl.co.uk/shares/shares-search-results/r/red-electrica-corporacion-sa-eur0.50

Iv also set ladders in this,

https://www.hl.co.uk/shares/shares-search-results/c/cia-paranaense-de-energia-adr-rep-1-pref-b

Id rather that was a bit lower to start though.

Red Electrica have a lot of debt of course,and id like them a little lower as well.However they are a good play on the electrification of the economy.

ELP own a lot of Hydro production.

Of course electric production can suffer big political interference,but the state owns the largest share so its in their interests for the company to boost profits.

Kaplan made me look at them all.

[planit]

Suez Canal clearance could take ‘weeks’, says salvage company

Fears of a prolonged shutdown have started to push up rates in freight markets

https://www.ft.com/content/31dbe2b9-3ff2-4bcc-a3e3-813600caeb49

 

So supply chains and shipping rates are put under further stress.

 

 

Please could someone help me answer the following:

The prevailing belief is that oil is going to decline because we have magic green energy that will appear. 

As discussed on here this has lead to a decline in exploration which will likely result in an oil pinch a couple of years into the future.

The same must be true of oil tankers, will there be a shortage of tankers within 18 months? If so then how will this affect the market, it would mean there were two price levels, one for countries reliant on shipping and a lower one for countries that are self-sufficient or have piped oil.

Would this be good or bad for the oil companies, I assume bad as demand might fall and the shipping would take a bigger share of profits?

I guess it would also affect the backwardation/contango that would make hedging more difficult.

 

[sancho panza]

 

Jsut listended to a Lyn Alden Macrovoices podcast.Covers a lot of stuff @DurhamBorn has been covering re structural fiscal deficits ,fiscal stimulus,fiat issues.

Nice chart below from the chart deck

https://www.macrovoices.com/948-macrovoices-260-lyn-alden-shifting-from-monetary-to-fiscal-dominance

[Noallegiance]

I try not to be excessively cynical, but price of oil drops = Saudi bombing and handbrake turn container in canal.

Really? I mean, really?

[Barnsey]

15 minutes ago, sancho panza said:

 

Jsut listended to a Lyn Alden Macrovoices podcast.Covers a lot of stuff @DurhamBorn has been covering re structural fiscal deficits ,fiscal stimulus,fiat issues.

Nice chart below from the chart deck

https://www.macrovoices.com/948-macrovoices-260-lyn-alden-shifting-from-monetary-to-fiscal-dominance

 

[Noallegiance]

2 hours ago, Barnsey said:

 

Yes, round of applause to the current lot who have achieved the impressive task of pressing CTRL P harder.

Bravo.

[Bricormortis]

https://www.bing.com/search?q=iran+missile+hit+israeli+ship&form=ANNTH1&refig=5a52439e3cc04d76ab7ab1e4e3bbbed1&sp=-1&pq=iran+missile+hit+israeli+ship&sc=0-29&qs=n&sk=&cvid=5a52439e3cc04d76ab7ab1e4e3bbbed1

Iranian missile hits Israeli ship in the Arabian sea.  Very minor damage only, but still. On the heels of the Suez stunt too.

[Presuming Ed]

22 hours ago, DurhamBorn said:

On the far east iv started buying Henderson Far East Income HFEL .Iv not set ladders in those its ad hoc.

My biggest holding, funnily enough. I'm mostly in investment trusts these days as I move towards my eary retirement goal and increasingly looking for income rather than fireworks. Had enough of individual shares shitting the bed on a lousy RNS and giving up a year's worth of gains in the first hour of market opening. What I like about HFEL is the chunky 7% divi, obviously, but also how they managed to increase it last year while also adding to their reserves, while all the FTSE focused trusts were frantically dipping into theirs to cover up the divi cuts in their underlying holdings. Future is definitely east. 

[DurhamBorn]

44 minutes ago, Presuming Ed said:

My biggest holding, funnily enough. I'm mostly in investment trusts these days as I move towards my eary retirement goal and increasingly looking for income rather than fireworks. Had enough of individual shares shitting the bed on a lousy RNS and giving up a year's worth of gains in the first hour of market opening. What I like about HFEL is the chunky 7% divi, obviously, but also how they managed to increase it last year while also adding to their reserves, while all the FTSE focused trusts were frantically dipping into theirs to cover up the divi cuts in their underlying holdings. Future is definitely east. 

Yes its a very good trust and investment trusts are a good way to get some diversity,and of course no extra fees from the platform.