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

[VeryMeanReversion]

Sold the last of my FTSE100 trackers I had today as the index touches 7000.

My cash/PMs/oil/mining/utilities/tobacco is now at 67% of my SIPP which I consider to be the boring/safest part of my portfolio.   The rest is a mix of investment trusts, retail, finance, transport.

When the BK hits, I think it will hit the US first (extreme overvaluation) then the UK will be hit afterwards to a much smaller extent (more sensible PE's here).   Best guess is that a large financial institution will be the usual trigger then it all cascades from there.  If FTSE then drops by half then so be it, I have a good cash pile ready to buy in when the time is right.

I've been listening to an audio book about the 1929 crash ("The Day the Bubble Burst") which has been the final push I needed to get prepared.  The similarities are very interesting regarding use of leverage and overoptimistic speculation.  The dominoes are all in place for a repeat.

Maybe there is more to run on this mini-boom but I've decided to reduce my risk, move to real(er) assets and wait.

The central banks seem to have forgotten that their job should be "reserve providers". Instead, they seem to want a planned economy.

 

 

[Harley]

In other news, something that made me smile.....

Colin versus Cuthbert as M&S declares caterpillar cake war on Aldi

£1.12 versus 80p per 100g

If I could, I'd love to do a taste test!

[jamtomorrow]

11 minutes ago, VeryMeanReversion said:

The central banks seem to have forgotten that their job should be "reserve providers". Instead, they seem to want a planned economy.

The fun really starts when populist politicians realize the opportunity for self-advancement inherent in demonizing/blaming unelected Central Bankers - I'm fully expecting we'll see a populist abolitionist movement.

[Harley]

16 minutes ago, VeryMeanReversion said:

Sold the last of my FTSE100 trackers I had today as the index touches 7000.

My cash/PMs/oil/mining/utilities/tobacco is now at 67% of my SIPP which I consider to be the boring/safest part of my portfolio.   The rest is a mix of investment trusts, retail, finance, transport.

When the BK hits, I think it will hit the US first (extreme overvaluation) then the UK will be hit afterwards to a much smaller extent (more sensible PE's here).   Best guess is that a large financial institution will be the usual trigger then it all cascades from there.  If FTSE then drops by half then so be it, I have a good cash pile ready now ready to buy in when the time is right.

I've been listening to an audio book about the 1929 crash ("The Day the Bubble Burst") which has been the final push I needed to get prepared.  The similarities are very interesting regarding use of leverage and overoptimistic speculation.  The dominoes are all in place for a repeat.

Maybe there is more to run on this mini-boom but I've decided to reduce my risk, move to real(er) assets and wait.

The central banks seem to have forgotten that their job should be "reserve providers". Instead, they seem to want a planned economy.

Right about the FTSE versus virtually anyone.  FTSE is more a value play but patchy when you get down to the individual companies.  I'm wondering if a BK could separate the East and West some more.  How are you holding the cash?

[Loki]

Thanks for those graphs @Cattle Prod, very interesting

[VeryMeanReversion]

3 minutes ago, Harley said:

Right about the FTSE versus virtually anyone.  FTSE is more a value play but patchy when you get down to the individual companies.  I'm wondering if a BK could separate the East and West some more.  How are you holding the cash?

Cash is split between Hargreaves Lansdown SIPP and Royal London deposit.

The BK will ruin those with the most leverage.  I guess that is the West but I don't know.

 

[DurhamBorn]

17 minutes ago, Harley said:

In other news, something that made me smile.....

Colin versus Cuthbert as M&S declares caterpillar cake war on Aldi

£1.12 versus 80p per 100g

If I could, I'd love to do a taste test!

Il stick to my homemade orange and lemon cake,costs around 80p and im getting damned good at it.

On GSK.Its had shit management since the Beechams merger,and i mean shit.However there is a great company underneath with lots of fat to cut.Elliot know this.Firstly they will want to stop Walmsley running the pharma side after the split,she has no experience and should run the consumer side.Next they will fancy both sides getting taken out in takeovers.The other option is load the debt onto the consumer part and then the pharma side will be easy to take over,probably for the present market cap on its own.

Id rather not see them taken over ,the company means a lot to me in many ways.Then again i think the split up then takeover value is £18+ a share,maybe £20+ ,government wont like it though.

[Harley]

On 12/04/2021 at 16:34, Harley said:

I've subbed to a few things in the past but nothing had much value for me except the more macro stuff and the sharing of thoughts and ideas.  DOSBODS is cheap. 

Well, you lot may be cheap but I decided to put down a wodge for a year of reading someone I have long, long liked.  You've gotta be flexible!  Always meant to do it but never got round to it.  Nice mix of macro and specifics (but more for examples and to help me keep an open mind).  I just have to be careful and respect the IP.  One of the last few of the old guard which is sad to see but then we have the likes of Lynn stepping up which is nice to see. 

[Harley]

24 minutes ago, DurhamBorn said:

Il stick to my homemade orange and lemon cake,costs around 80p and im getting damned good at it.

On GSK.Its had shit management since the Beechams merger,and i mean shit.However there is a great company underneath with lots of fat to cut.Elliot know this.Firstly they will want to stop Walmsley running the pharma side after the split,she has no experience and should run the consumer side.Next they will fancy both sides getting taken out in takeovers.The other option is load the debt onto the consumer part and then the pharma side will be easy to take over,probably for the present market cap on its own.

Id rather not see them taken over ,the company means a lot to me in many ways.Then again i think the split up then takeover value is £18+ a share,maybe £20+ ,government wont like it though.

Apricot cake today from the bead maker.  Very nice!  How I like it, no sugar and more olive oil than butter!  I did some work for GSK on the retail stuff.  Liked the people, not the management stuff, and it felt a bit like my dad used to talk about Marconi.  Some real value there though.  Just may be better plays out there in the bigger world.  People really need to be thinking about looking wide and far these days.

PS: Recipe please?!

[Harley]

11 minutes ago, Cattle Prod said:

So gold finally is up decently today

Is it?  Only 1.8% in GBP?  Looks overbought on the daily but starting to turn on the weekly and monthlies but I recently got a likely fake buy signal on the monthly.  I'm wondering if for a good run we first need a sucker punch to shake out the final weak hands.  Select miners looking more interesting atm.

[Harley]

18 minutes ago, Cattle Prod said:

There may be another washout, f u oil 

I hope so.  The companies feel like they're stalling a bit, kind of stuck in the mud.  Need a bit of action to break them free and stop the prevailing narrative about them being an undervalued value play.  I'm looking to add but prices are a bit meew atm.

[Harley]

5 minutes ago, Cattle Prod said:

Yeah stocks are not following the underlying recently, not quite believing it after recent consolidation.

I think it was in the last podcast I posted but I liked the contextual bit about oil becoming like the tobacco stocks.  Suits me.  Maybe not going anywhere but still a good hold for the income.  And as someone pointed out, there may well be a backlash against the woke narrative as people wake up to things like California couldn't hope to charge all those cars.  People still smoke, and for me, I like my BTUs as does me Harley!

[kibuc]

A rather unexpected impact of covid on the mining industry... or, at least, on one specific company.

"Towards the end of Q1 2021, Tucano experienced disruption in its purchased oxygen supply with scheduled deliveries shipped to Brazil’s hospitals to meet increased demand as a result of COVID-19. Shortages in purchased oxygen supply are expected to decrease recovery rates over the next few months. With the exception of oxygen supply chain issues, mining activities at Tucano continue uninterrupted due to COVID-19."

Now, it's worth remembering we're talking about the Greatest and Pantherest miner in existence, so it might very well be a case of finding a new low in an attempt to explain one's own incompetence. Nevertheless, I found it interesting.

[planit]

42 minutes ago, Cattle Prod said:

I'm tempted to say gold is good for a run here, but I won't . Actually I've noticed a really good sentiment indicator in myself. When something I'm invested leveraged in has completed a long consolidation, I'm apathetic about it, exhausted of it, all sentiment washed out, and had to force myself to hold on. I wish I could be as Zen as DB, Kibuc and others here, but I'm just not made that way.

So gold finally is up decently today, whatever. Wake me up at new ATHs . 

Oil is irritating me too, which could be a good sign. China upping it's buying from Iran has upset the physical market a bit, so my supply calcs are be pushed out a few weeks. There may be another washout, f u oil  but market likes inventory drawdowns. Let's see what next week's inventory says.

 

Regarding Gold I was feeling quite confident a couple of weeks ago as the double bottom looked pretty solid and all commentators were talking about another leg down and they wouldn't pile in until there was an uptrend formed.

Now there has been a breakout I am hoping these momentum investors will have a sign to pile in.

(I was lucky with the TSG buyout and recycled into CEY and POLY)

 

Regarding oil I was feeling the same as you so yesterday I spent a few hours going through BP which I believe is really undervalued only to find this article which came to exactly the same conclusions

BP's Financial Strength Is Being Underappreciated

Basically reaching the debt target 3 quarters early looks really positive 

On top of that when you look at the BP presentation you come up with a share buyback figure between $5bn and $7bn if oil prices stay at this level for the year (which is 7-10% of shares in issue).

Perhaps it won't work out like that but this is what BP themselves said before the debt update and I assume they were being slightly cautious. There is also the chance they will continue to outperform and oil prices get pushed higher.

I am completely over-invested here so I hope I am right.

 

The drag I put down to the fast rise in Covid cases in certain countries like India. I am waiting for world cases to stop rising (See graph https://www.worldometers.info/coronavirus/) as that could be the trigger for confidence to return.

[NogintheNog]

1 hour ago, DurhamBorn said:

Id rather not see them taken over ,the company means a lot to me in many ways.Then again i think the split up then takeover value is £18+ a share,maybe £20+ ,government wont like it though.

I worked for Beechams back in the early 80's, and the management were bloody awful! So maybe they all got to keep the management jobs in the merger!

I'd be very happy with £18 a share value, I have a fairly large chunk of my ISA portfolio in both GSK and AZN, plus PFE just for good measure.

55 minutes ago, Cattle Prod said:

Yeah stocks are not following the underlying recently, not quite believing it after recent consolidation.

I agree, I did sell a chunk of RDSB a few weeks back (which is unlike me) and caught the mini top @£15.15. It was only a small chunk at £3400 up from £2000, and tempted to buy back but I have plenty more of it bought at higher prices... Doh!

I do wonder with the oil stocks if the market senses to much being spent on the new 'green' initiatives by the likes of BP and Shell???

[Hardhat]

14 minutes ago, NogintheNog said:

I do wonder with the oil stocks if the market senses to much being spent on the new 'green' initiatives by the likes of BP and Shell???

I just think people still remember the huge plunge from a year ago and are wary. Added to that, most newer investors are likely to buy Tesla or Apple rather than an oil major. Sentiment.

[NogintheNog]

All my metals looking good today. I think America looks weak though with the current round of news. Pulling out of Afghanistan after 20 years of toil and American lives sacrificed. Not sure what they've achieved other than leaving a dangerously unstable country, like the one they entered 20 years ago!

Meanwhile Russia builds up its forces in the Crimea, and China ignores the rest of the World with regards to Hong Kong and the Uyghurs.

Was globalisation a good idea???

[MrXxxx]

1 hour ago, Harley said:

Apricot cake today from the bead maker.  Very nice!  How I like it, no sugar and more olive oil than butter!  I did some work for GSK on the retail stuff.  Liked the people, not the management stuff, and it felt a bit like my dad used to talk about Marconi.  Some real value there though.  Just may be better plays out there in the bigger world.  People really need to be thinking about looking wide and far these days.

PS: Recipe please?!

Very skilful there @Harley, talking appliances/recipes whilst keeping it on topic with stocks...very impressed! :-) :-) :-)

[Harley]

20 minutes ago, NogintheNog said:

Pulling out of Afghanistan.....

Just like the Russians and the Brits before them! 

[Harley]

Having japped on about value, etc and the general state of things monetary, I've been switched on to some emerging internet stuff about how to survive the Great Reset.  In Elizabeth Kuber Ross terms, maybe I've moved on to the Bargaining phase.  It's all pioneering stuff with scare porn and paid for newsletters but worth a crawl through the internet to get envisioning.  One thing I liked was the idea of a bifurcated setup where the Central Bank crypto coins are transactional but absolutely not a store of value while those who managed to hold onto their wealth reverted to other crypto, PMs, property, shares in the picks and shovels (Coinbase?!), etc.  Good time to map out the "to be" setup and a transition plan.  Clock's ticking!

[Lightscribe]

1 hour ago, kibuc said:

A rather unexpected impact of covid on the mining industry... or, at least, on one specific company.

"Towards the end of Q1 2021, Tucano experienced disruption in its purchased oxygen supply with scheduled deliveries shipped to Brazil’s hospitals to meet increased demand as a result of COVID-19. Shortages in purchased oxygen supply are expected to decrease recovery rates over the next few months. With the exception of oxygen supply chain issues, mining activities at Tucano continue uninterrupted due to COVID-19."

Now, it's worth remembering we're talking about the Greatest and Pantherest miner in existence, so it might very well be a case of finding a new low in an attempt to explain one's own incompetence. Nevertheless, I found it interesting.

I still have an allocation . The Panther may be a little worse for wear and oxygen starved from contracting Covid, but it will pounce back, mark my words! ⚡️ 🐆 💰 

[Bobthebuilder]

3 hours ago, leonardratso said:

but it definately came in on lloyds isa (rebadged halifax).

Hi Leo. How do you find that Haliwide platform? I have one that was originally a TD Waterhouse , terrible platform IMO. Limited funds, ETFs, very bad real time data ADR's don't seem to ever move.

I have all my dogs in mine, Scottish play etc. Alas, dear Panther the great I knew him well. Just the fact its free is why I'm still there, but £46 a year plus £9 trades from next April. I will be moving the pets to a new dog house.

[Castlevania]

44 minutes ago, Harley said:

Just like the Russians and the Brits before them! 

I flew over parts of Afghanistan on a flight. I sat and stared at the mountain ranges. You don’t win wars in such a place.

[Cosmic]

3 hours ago, Harley said:

In other news, something that made me smile.....

Colin versus Cuthbert as M&S declares caterpillar cake war on Aldi

£1.12 versus 80p per 100g

If I could, I'd love to do a taste test!

What about ASDAs Clyde the Caterpillar? ASDA too much for M&S to take on?

[Harley]

2 minutes ago, Cosmic Apple said:

What about ASDAs Clyde the Caterpillar? ASDA too much for M&S to take on?

I'm sorely tempted to travel far and wide to do a taste test and report back!  Sorry, this has nothing to do with investing.....no wait.....I see M&S still not paying a div.  No wonder if eveyone's taking the Colin!  They've been rumbled?