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

[geordie_lurch]

BP is still under 300p a share despite the news though

[Loki]

33 minutes ago, geordie_lurch said:

BP is still under 300p a share despite the news though

Just gone over

[Jesus Wept]

I am very pleased with my early purchases of BP and RDSB from April 2020 onwards (based on info gleaned from here). Laddered down and caught the bottom on both - to average out at about 250p and 961p respectively.

Long term holds for tax free dividends.

I have just picked up some HEFL and BAE (see ISA thread). Again just looking at dividend income. 
 

Anyway the question I have is that....

if I am buying GOLD, SILVER or COMMODITY ETFs or funds .....then am I right in thinking I should just buy outside my ISA - as these investments offer no yield - and the chances of generating capital gain profit in a single year and going above my/our annual CGT allowance is minimal?  Best to use ISA allowance for dividend generating stocks?
 

I still haven’t worked out how much I can put in my SIPP annually (as I have a final salary public sector pension and don’t want to go above thresholds). 

Currently will continue to use ISA allowances for me, wife and kids. 
 

Anyways here is BAE and HEFL

[DurhamBorn]

Should be remembered that BP expected debt to go up the first half as they paid for the Equinor joint venture in the US etc.

Obvious they are making like bandits as a blind man could of seen.The trading business will of been making hay on gas as well.

As a shareholder though id prefer the shares stayed down while they kicked in share buy backs,after all the cheaper they are the better.A big part of the bull case on BP is the share buy backs because in a higher price area that we expect they should be able to retire a lot of the equity.I expect Imperial Brands and BAT to do the same once they get their debts down.Industries nobody wants to invest in that will probably return 12% to 15% pa compounding over the cycle.

At $65 brent id expect around 21p a year in share buybacks.At $85 Brent id expect around 37p a year in buybacks,though i expect instead we would get around 25p and more debt repayments and higher renewable investment.

[nirvana]

1 hour ago, Harley said:

In euphoria!

the markets look like they want to take a shite again to me.......GBP euphoria didn't last too long yesterday, it's getting dumped again today 

so some guy tweeted this morning:

logically speaking, there really is no justification for the US stock indexes to ever have a PB, ever again...let alone a full blown correction (which would just be absurd)

So in the light of this BK, someone please remind me of the reasoning for it?

I keep going off on tangents...some other nerd mentioned 'mental models' too, apparently the great messiahs Musk and Bezos use these....

[DurhamBorn]

1 minute ago, nirvana said:

the markets look like they want to take a shite again to me.......GBP euphoria didn't last too long yesterday, it's getting dumped again today 

so some guy tweeted this morning:

logically speaking, there really is no justification for the US stock indexes to ever have a PB, ever again...let alone a full blown correction (which would just be absurd)

So in the light of this BK, someone please remind me of the reasoning for it?

I keep going off on tangents...some other nerd mentioned 'mental models' too, apparently the great messiahs Musk and Bezos use these....

Because liquidity isnt constant.Doesnt matter how high a new dam wall is to how high the water in it is.If the water drops more than 3 feet i cant dangle me feet in it anymore even though its the highest dam wall ever built.

Fed fills the capital markets as thats the conduit to get money into the real economy.We are entering a distribution cycle.

[nirvana]

2 minutes ago, DurhamBorn said:

Because liquidity isnt constant.Doesnt matter how high a new dam wall is to how high the water in it is.If the water drops more than 3 feet i cant dangle me feet in it anymore even though its the highest dam wall ever built.

Fed fills the capital markets as thats the conduit to get money into the real economy.We are entering a distribution cycle.

yeah ok BUT there is no evidence the FED will ever turn the taps off EVER again is there? So the markets will benefit and just keep rising......of course there are pullbacks on the way so you just keep buying the PBs.....like papa Buffet has been telling us.....I can go find the gif if you like? 

[DurhamBorn]

23 minutes ago, nirvana said:

yeah ok BUT there is no evidence the FED will ever turn the taps off EVER again is there? So the markets will benefit and just keep rising......of course there are pullbacks on the way so you just keep buying the PBs.....like papa Buffet has been telling us.....I can go find the gif if you like? 

Fed and BOE have already indicated to governments they have a window and that it needs to be a fiscal move.Fed couldnt give a toss if Tesla is knocked down 70% or any other stock.3% inflation and staying above it will be the signal.They want to keep inflation at 3% for as long as they can and rates around 0.5%.Inflation is not good for most of the bubble stocks.Once economy opens up Amazon for example will be facing inflation in every area ,falling margins and maybe flatlining sales at best in its retail business.

 

[nirvana]

13 minutes ago, DurhamBorn said:

They want to keep inflation at 3% for as long as they can and rates around 0.5%.Inflation is not good for most of the bubble stocks

this definition of inflation is a load o complete BS and it has been for decades......inflation is anything they want it to be..

Sure the FED don't care about 'Musk the Messiah' but he's outperformed the Oilies since April last year somewhat eh? And he's even done better than Royal Mail 

 

[Chewing Grass]

23 hours ago, Chewing Grass said:

So government debt to gdp has hit its highest peak since Britain was swinging in the early 1960s.

Then they nationalised everything, staggered trough the early 1970s, joined the EEC in 1975, everything went to shit Industrially between 1975 & 1981 followed by urban dereliction and riots as the debt pile dropped to an all time low of 20% about 1990.

Can't help but think history will repeat itself and the next 20 years are going to get grimmer & grimmer.

Can't help but think of this, starting with the COVID years, rinse and repeat.

The UK is king of the hill at this bar communism.

1939-45 During World War II, much of British industry was subjected to close regulation or control, although not nationalised as such.

1943 North of Scotland Hydro-Electricity Board

1945-51 The Labour Party comes to power in the Attlee ministry with a program for nationalising weak sectors of the economy.[51][52][53]

1946 Coal industry under the National Coal Board (later British Coal) with the Coal Industry Nationalisation Act 1946.[54]

1946 Bank of England - its private shareholders who were bought out by the state.[55]

1946 National Health Service created taking over hospitals and making medical services free by the National Health Service Act 1946.[56]

1947 Central Electricity Generating Board and area electricity boards. Privatized in the 1990s.[57]

1947 Cable & Wireless Ltd - the latter had had private shareholders who were bought out by the state.[58]

1948 National rail, inland (not marine) water transport, some road haulage, some road passenger transport and Thomas Cook & Son under the British Transport Commission. Separate elements operated as British Railways, British Road Services, and British Waterways.[59]

1949 Local authority gas supply undertakings in England, Scotland and Wales[57]

1951 Iron and Steel Industry under the Iron and Steel Corporation of Great Britain (denationalised by Conservative Government in 1955)[60][61]

1967 British Steel Corporation Re-nationalized (Reprivatized by the Conservative Government in September 1988)

1969 National Bus Company, combining former interests of the British Transport Commission with others acquired from the British Electric Traction group.

1969 Post Office Corporation created by the Post Office Act 1969.

1971 Rolls-Royce (1971) Ltd - The strategically important aero-engine part of the recently bankrupt Rolls-Royce Limited.

1973 Water Act 1973 nationalises local authority water supply undertakings in England and Wales

1973 British Gas Corporation created, replacing regional gas boards.

1974 British Petroleum - the combination of a 50% stake bought by Winston Churchill as First Lord of the Admiralty after World War I with around a 25% stake acquired by the Bank of England from Burmah Oil made the government directly or indirectly BP's majority shareholder, though commercial independence was maintained. The shares were all sold during the 1980s.

1975 National Enterprise Board - a State holding company for full or partial ownership of industrial undertakings

1976 British Leyland Motor Corporation - became British Leyland upon nationalization under the National Enterprise Board. Later became known simply as the holding company "BL Ltd", it was later reorganised into several standalone businesses - the best known being Austin Rover, Leyland Trucks, Freight Rover, Land Rover and Jaguar.

1977 British Aerospace - combining the major aircraft companies British Aircraft Corporation, Hawker Siddeley and others. British Shipbuilders - combining the major shipbuilding companies including Cammell Laird, Govan Shipbuilders, Swan Hunter, Yarrow Shipbuilders under the Aircraft and Shipbuilding Industries Act 1977.

https://en.wikipedia.org/wiki/List_of_nationalizations_by_country

[Yellow_Reduced_Sticker]

4 hours ago, nirvana said:

euphoria in what?

That will CALM ya down me 'ol mucker!

22 minutes ago, nirvana said:

...........And he's even done better than Royal Mail 

Do you mind ...I've been hiding under my bed over Easter in anxiety wondering if you are shorting Royal Mail OR if @DurhamBorn is trying to shake me out of my position! 

 

[Hancock]

59 minutes ago, Chewing Grass said:

Can't help but think of this, starting with the COVID years, rinse and repeat.

The UK is king of the hill at this bar communism.

1939-45 During World War II, much of British industry was subjected to close regulation or control, although not nationalised as such.

1943 North of Scotland Hydro-Electricity Board

1945-51 The Labour Party comes to power in the Attlee ministry with a program for nationalising weak sectors of the economy.[51][52][53]

1946 Coal industry under the National Coal Board (later British Coal) with the Coal Industry Nationalisation Act 1946.[54]

1946 Bank of England - its private shareholders who were bought out by the state.[55]

1946 National Health Service created taking over hospitals and making medical services free by the National Health Service Act 1946.[56]

1947 Central Electricity Generating Board and area electricity boards. Privatized in the 1990s.[57]

1947 Cable & Wireless Ltd - the latter had had private shareholders who were bought out by the state.[58]

1948 National rail, inland (not marine) water transport, some road haulage, some road passenger transport and Thomas Cook & Son under the British Transport Commission. Separate elements operated as British Railways, British Road Services, and British Waterways.[59]

1949 Local authority gas supply undertakings in England, Scotland and Wales[57]

1951 Iron and Steel Industry under the Iron and Steel Corporation of Great Britain (denationalised by Conservative Government in 1955)[60][61]

1967 British Steel Corporation Re-nationalized (Reprivatized by the Conservative Government in September 1988)

1969 National Bus Company, combining former interests of the British Transport Commission with others acquired from the British Electric Traction group.

1969 Post Office Corporation created by the Post Office Act 1969.

1971 Rolls-Royce (1971) Ltd - The strategically important aero-engine part of the recently bankrupt Rolls-Royce Limited.

1973 Water Act 1973 nationalises local authority water supply undertakings in England and Wales

1973 British Gas Corporation created, replacing regional gas boards.

1974 British Petroleum - the combination of a 50% stake bought by Winston Churchill as First Lord of the Admiralty after World War I with around a 25% stake acquired by the Bank of England from Burmah Oil made the government directly or indirectly BP's majority shareholder, though commercial independence was maintained. The shares were all sold during the 1980s.

1975 National Enterprise Board - a State holding company for full or partial ownership of industrial undertakings

1976 British Leyland Motor Corporation - became British Leyland upon nationalization under the National Enterprise Board. Later became known simply as the holding company "BL Ltd", it was later reorganised into several standalone businesses - the best known being Austin Rover, Leyland Trucks, Freight Rover, Land Rover and Jaguar.

1977 British Aerospace - combining the major aircraft companies British Aircraft Corporation, Hawker Siddeley and others. British Shipbuilders - combining the major shipbuilding companies including Cammell Laird, Govan Shipbuilders, Swan Hunter, Yarrow Shipbuilders under the Aircraft and Shipbuilding Industries Act 1977.

https://en.wikipedia.org/wiki/List_of_nationalizations_by_country

You missed off the govts have nationalised the housing market, people mortgages and the banks since circa 2003 ... Nationalised the losses that is.

[DurhamBorn]

1 hour ago, nirvana said:

this definition of inflation is a load o complete BS and it has been for decades......inflation is anything they want it to be..

Sure the FED don't care about 'Musk the Messiah' but he's outperformed the Oilies since April last year somewhat eh? And he's even done better than Royal Mail 

 

Inflation figures are ludicrous yes.I said Royal Mail would outperform Amazon over the cycle not Tesla  .Its incredible though how a bubble means companies like Tesla can simply sell $5 billion in shares into the market whenever it feels like it for some cash.Once that stops it will get interesting.Its actually a lesson in why the world needs to get off the dollar standard because it gives massive advantage to US companies.In affect the Fed is printing back all the dis-inflation Asian gave them and giving it to US companies.

[desertorchid]

11 minutes ago, DurhamBorn said:

Inflation figures are ludicrous yes.I said Royal Mail would outperform Amazon over the cycle not Tesla  .Its incredible though how a bubble means companies like Tesla can simply sell $5 billion in shares into the market whenever it feels like it for some cash.Once that stops it will get interesting.Its actually a lesson in why the world needs to get off the dollar standard because it gives massive advantage to US companies.In affect the Fed is printing back all the dis-inflation Asian gave them and giving it to US companies.

An astute observation yet rarely discussed. The fact the USD has so much value outside of its domestic economy allows the US to print to infinity, with huge leakage into companies which can take huge risks with very cheap funds. The US needs to lose this privilege ASAP as  financial crisis often stem from the US e.g Dotcom/ Great Recession.

[Barnsey]

UK for the win in 2022

[nirvana]

2 hours ago, DurhamBorn said:

I said Royal Mail would outperform Amazon over the cycle not Tesla  .Its incredible though how a bubble means companies like Tesla can simply sell $5 billion in shares into the market whenever it feels like it for some cash.Once that stops it will get interesting

I wasn't making a judgement on predictions, just making an observation on what has actually happened....

Maybe if the FED hadn't been printing trillions of dollars for the last x decades there wouldn't be this issue with dumping more shares on the market, dodgy buybacks, et al?

Soon there will no liberties left for the individual....large corporates will own everything and feed us with shite....through the mouth, through the eyes and through the ears.....in the meantime the Messiah is doing ok  Maybe I should have posted this on Sunday? Sweet Jesus NO!

edit 52 week low 89, high 900.....FECKIN 10 BAGGER! from TESLA, whod o thunk it eh???? in 12 months too eh?

[Noallegiance]

On 04/04/2021 at 23:54, DurhamBorn said:

I see dollar down sharp from here to 87 again,i know thats opposite to what almost everyone expects.It will send oil over $70 i think,roadmap cross market from the dollar is actually saying $73/74 Brent.It could be we get $70+ oil at the same time as 87 DXY bang on,if so its highly likely il sell a lot in that area.

Im trying to work out how to play this as running through my portfolio its reflation defensive and im not prepared to be out of equity BK or not,so im thinking maybe 40% cash and Treasuries if those dollar/oil targets hit.

One worry i have is derivative exposure from the debts of big blue chips.Massive interest rate and currency swings could hole a lot of balance sheets if counterparties fail.

Its the most difficult call i can remember on if its a BK or straight to inflation.Im trying to see through the fog.What if its both a BK and inflation etc.

DH has today updated a potential DXY drop to 82.

[nirvana]

kinnel Nasdaq has broken yesterday's high! Bloody runaway train, choo choo!

We need one of those heatmap thinga ma jigga doodas 

[Sasquatch]

Just called in to see my local friendly garden machinery dealer. He's now got all of the prices rises in for this year's stock (if he can get it). Going up between 5% and 20% 

[Don Coglione]

2 minutes ago, Sasquatch said:

Just called in to see my local friendly garden machinery dealer. He's now got all of the prices rises in for this year's stock (if he can get it). Going up between 5% and 20% 

I have just caved in (under much marital pressure) and bought some new garden furniture from the local, independent, centre. The price was at least double what I would have expected pre-Covid, maybe nearer triple. No negotiation on the price either, despite my best efforts - they have stock, bought and paid for, and will hold out for their desired margin against cheaper online outfits, who may or may not be able to supply sometime, maybe, never. I respect that. Cost of shipping from Vietnam was mentioned as a big driver of the price increases.

[nirvana]

BK has just been cancelled, seriously! 

edit: i think I predicted that, I said the FED would end up buying EVERYTHING! muhaha 

 

[Castlevania]

6 hours ago, nirvana said:

yeah ok BUT there is no evidence the FED will ever turn the taps off EVER again is there? So the markets will benefit and just keep rising......of course there are pullbacks on the way so you just keep buying the PBs.....like papa Buffet has been telling us.....I can go find the gif if you like? 

What’s a PB?

[Loki]

2 minutes ago, Castlevania said:

What’s a PB?

pull back

[Castlevania]

3 minutes ago, Loki said:

pull back

As in what I would call BTD (buy the dip)?

[nirvana]

8 minutes ago, Castlevania said:

As in what I would call BTD (buy the dip)?

BTFD is when something has really shit the bed, a pullback can be a lot smaller...ie a pullback to a breakout line

Like just now with Nasdaq, it broke yesterday's high, did a PB to it, now it's off again!

Fuck me I sound like I know what I'm on about and I'm fecking half stoned...