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

[Harley]

REITS.  Assuming it's good to have property in your portfolio given inflation, etc what's the best?  That is, the devil is in the detail as offices per se may be a bit iffy (if WFH, etc sticks).  So any good areas and companies to look at?  I ask as I've started looking at data centres and an asian one just popped up on my radar.  Any other areas, companies, funds, etc?  

PS:  Oh look...QTS to be acquired by Blackstone!

[Starsend]

5 hours ago, spygirl said:

 

They do. And theyll check.

Theres very very few banks wholl provide a FHL mortgage.

 

How do you know this?

[janch]

@Harley

Here are a couple which have been mentioned recently elsewhere  (can't remember where):

LON:WHR   Warehouse REIT PLC

LON:CTH   CareTech Holdings plc   (residential care)  I held this one for a while and sold just before it did its latest upward lurch

 

This link to a 2018 article gives a lot of info re investing in GP surgeries/residential homes etc:

https://www.sharesmagazine.co.uk/article/why-investing-in-healthcare-via-investment-trusts-could-be-lucrative

 

I don't have any exposure to any of these.  DYOR etc

[Harley]

11 minutes ago, janch said:

@Harley

Here are a couple which have been mentioned recently elsewhere  (can't remember where):

LON:WHR   Warehouse REIT PLC

LON:CTH   CareTech Holdings plc   (residential care)  I held this one for a while and sold just before it did its latest upward lurch

 

This link to a 2018 article gives a lot of info re investing in GP surgeries/residential homes etc:

https://www.sharesmagazine.co.uk/article/why-investing-in-healthcare-via-investment-trusts-could-be-lucrative

 

I don't have any exposure to any of these.  DYOR etc

Cheers, yes health related sound interesting.  CTH is why I just sell down positions I like rather than exit.  I would have done the same.  I notice several have issued a lot of shares recently.

[ThoughtCriminal]

Duplicate. Deleted. 

[DurhamBorn]

Interesting on the job front.Iv had three job offers today.One was decent money,but annualised hours.I told that one i wanted 30 holidays + bank holidays and to choose when to take them,not annualised hours,of course no chance of them agreeing to that so told them i wasnt interested as no work life balance.What im seeing is the skilled jobs cant be filled because the only people with the skills are retiring early,or taking easier lower paid jobs with better work/life balance.

The lower paid end cant get reliable people because there are that many jobs available in that range and people dont care,and the wages arent high enough to care.

Im finding it fascinating when these employers ring,because they simply dont yet understand the macro situation has changed and isnt going back.They need to get ahead of the curve quickly,but they are so used to holding the power over workers they simply can adjust to the new reality.They need to push through price increases and up wages quickly.Employers with big workforces on low wages must be really feeling it now,and thats before Dumbo Boris's NI increases.

[ThoughtCriminal]

Fucked. Absolute solar panel, wind turbine, up the shitter, fucked. 

[Ghostly]

3 minutes ago, ThoughtCriminal said:

Fucked. Absolute solar panel, wind turbine, up the shitter, fucked. 

Was just watching a video on YouTube about Shetland (IIRC) where they’ve got so much excess electricity from wind farms that they can’t use it all. They’re refusing planning applications for any more wind farms. Then other issue is they haven’t got a sufficient ‘interconnect’ (cable basically) to send power back to the mainland.

[Noallegiance]

10 minutes ago, ThoughtCriminal said:

Fucked. Absolute solar panel, wind turbine, up the shitter, fucked. 

Shame we don't own the energy sector....

[DurhamBorn]

5 minutes ago, ThoughtCriminal said:

Fucked. Absolute solar panel, wind turbine, up the shitter, fucked. 

DRAX gave us a lovely treble didnt it.This is also going to destroy all the competition to Centrica.I noticed the two that went under the other day the regulator gave Centrica the customers.They are waking up now to their folly.All those small players thought they could win by using the spot market,same as many in Europe on gas,but now they are being slaughtered.Russia will honour contracts but keep spot market tight.Centrica might just reward us yet.

 

[Harley]

Nothing much new for us here (except Jim has just got over Covid!) but from 51:20 he lists the inflation drivers, and talks about stagflation and which assets to hold.  He does a great job.  Spot on with my hypotheses.  Like he visits here!  Another example of it all going mainstream (even the timings).

https://www.financialsense.com/podcast/20056/weekend-edition-inflationary-decade

PS:  Congrats Jim, and I look forward to your podcast on Monday about your personal covid journey.  Jim's produced some great podcasts on Covid.  He's been with me all my investing life!

PPS:  What after a devalued USD?  CBDCs, a new paradigm.

[DurhamBorn]

8 minutes ago, Ghostly said:

Was just watching a video on YouTube about Shetland (IIRC) where they’ve got so much excess electricity from wind farms that they can’t use it all. They’re refusing planning applications for any more wind farms. Then other issue is they haven’t got a sufficient ‘interconnect’ (cable basically) to send power back to the mainland.

Those cables were the main reason i bought SSE when it was smacked down.Crucial,and they own the main ones.They are going to need to convert wind power to hydrogen when there is too much and then burn it later.Without that they wont get the returns etc because  the returns come when the wind isnt blowing,not when it is.

[DurhamBorn]

1 minute ago, Harley said:

Nothing much new for us here (except Jim has just got over Covid!) but from 51:20 he talks about inflation drivers, stagflation, and which assets to hold.  Another example of it all going mainstream.

https://www.financialsense.com/podcast/20056/weekend-edition-inflationary-decade

PS:  Congrats JIim, and I look forward to your podcast on Monday about your personal covid journey.  Jim's produced some great podcasts on Covid.

Inflation is locked in now Harley,its just a question of how high.I expect we might get a sharp quick deflation event though to shake people out.Trillions sat in dis-inflation assets are going to get mullered.Its a beautiful example though of how wealth is moved from one are to another without the people understanding whats going on.

[Noallegiance]

3 minutes ago, DurhamBorn said:

Inflation is locked in now Harley,its just a question of how high.I expect we might get a sharp quick deflation event though to shake people out.Trillions sat in dis-inflation assets are going to get mullered.Its a beautiful example though of how wealth is moved from one are to another without the people understanding whats going on.

So do you see a 'David Hunter thing' less likely to impact our investment areas as heavily as those positioned for the last cycle?

[DurhamBorn]

3 minutes ago, Noallegiance said:

So do you see a 'David Hunter thing' less likely to impact our investment areas as heavily as those positioned for the last cycle?

We might still get a sharp hit in some areas,telcos might get a sharp 25% off in a 60% drop,but pull half back in a crack.Iv got cash ready to deploy if needed and all the divis flowing in are building up nicely,apart from a few i take out to live on.

Iv missed a few areas,mainly uranium,and mainly through being unable to buy the ETFs etc,but im very happy with positioning here.Everything i own gains from inflation,some a little bit,some a lot,none lose from it.They could get cheaper or more expensive i dont know,but i see my job as positioning so they arent fighting the cycle and they arent.They will go where they are going in their own times now.

[Harley]

20 minutes ago, DurhamBorn said:

DRAX gave us a lovely treble didnt it.This is also going to destroy all the competition to Centrica.I noticed the two that went under the other day the regulator gave Centrica the customers.They are waking up now to their folly.All those small players thought they could win by using the spot market,same as many in Europe on gas,but now they are being slaughtered.Russia will honour contracts but keep spot market tight.Centrica might just reward us yet.

I eased my position but am still in.  It's overbought on the monthly but I could see it going higher (has done this before).  The weekly momentum just turned up but this could be a fake this time.  Even so, maybe part of some base building at what was prior (2015) resistance?

PS: CNA has been creeping up (more sustained than in the past prior to the falls!) but still no div?  A take over bid would also do!

[ThoughtCriminal]

Ofgen cap going up 13%.

 

Just got to look through inflation though, piece of piss. 

 

Feels like that scene in The Big Short where they realise what's coming and that the masses havent got a fucking clue. 

 

 

[DurhamBorn]

12 minutes ago, Harley said:

I eased my position but am still in.  It's overbought on the monthly but I could see it going higher (has done this before).  The weekly momentum just turned up but this could be a fake this time.  Even so, maybe part of some base building at what was prior (2015) resistance?

PS: CNA has been creeping up (more sustained than in the past prior to the falls!) but still no div?  A take over bid would also do!

Im expecting div to be announced at the capital markets day in November.I think 2p a share is likely the starting point,maybe slightly higher.Then the questions are around Nuclear,Rough and Spirit.I think they will invest the Spirit proceeds once they sell in Rough for Hydrogen IF the government give them a lock in price.Nuclear im not sure how they will play it.They cant really sell now,but they cant really afford to invest in new plants.BP should buy them now i think.Owning gasmnuclear ,wind, hydrogen production and Rough to store it in would be a fantastic mix.

[Don Coglione]

4 hours ago, Starsend said:

How do you know this?

I agree with @spygirl on this; if my conversation last week is anything to go by, I suspect any funds agreed will be held until you have reached at least the contractual part of your "second home" purchase - which, to be fair, you would expect. No way are they going to say "OK, Starsend, here's £150k, crack on and good luck in your second home." 

Seriously, the depth of questioning even at pre-formal application stage was extensive, almost intrusive. Hence my previous post that the banks are happy to lend against property in some form (here I disagree with Spy), but you have no chance of smuggling their free cash out of the property market; this is merely another prop, albeit seemingly funded via the private sector (if you can call RBS et al private sector...).

[Harley]

Select company technicals are getting exciting here.  I'm not quite ready to pull the trigger but I'm beginning to think we might still get that blow off (Hunter admits he's no timer).  Many stocks are overbought and at resistance on the monthlies so they either turn down from here (more normal) or stay overbought and blow off to the upside.  Several stocks have other supporting technicals.  Sentiment wise, the unfolding narrative may panic people to rush in to the inflationary "safe" havens.

BHP is a classic example.  Currently c.23% away from it's all time top.  Overbought on the monthly (but oversold on the weekly and daily) so could head down but maybe only to prior resistance (11 Dec21) for the third time to make or break.  If it makes, then it could yo-yo around the oversold level, as it has done in the past (e.g. Feb17 to Jul19 for a 40% gain).  Some of the best runs are in the oversold zone!  If they stick, they often run!  It's also got a 01Sep21 gap down to retrace to fill!

DYOR, could go either way from here, but defo a time to prepare for any upside.  Then it will be the old "transitory or not" BS where we crack on while they talk!

[Loki]

I keep seeing about the gas shortage, how long and how much would it take to re-fill supplies to a level where there are no concerns?

[Harley]

15 minutes ago, Cattle Prod said:

I've had them as a SIPP staple since I saw how it behaved during the 2020 crash. Not adding now.

Yep, it's eventually got a gap to fill below, but thanks to the maths, that's a lower % fall!  Actually, the recent price action is what could happen in regard to my last post!

[DurhamBorn]

11 minutes ago, Cattle Prod said:

Yes, and it'll blow out the grid if they don't get rid of it: 'stable baseload'. Pumped storage should have been mandated as a condition of wind farm development.

Yep,those idiots will be paying DRAX to run their turbines to use up the energy not produce it.Pumped storage was a no brainer for wind like you say,but they all fell for the we can use batteries as backup lunacy.

Whats really really pleasing is though is that whats going on shows that the long dis-inflation cycle has meant nobody uses macro anymore.Thats great news for us all on here.

Government is in serious trouble now,and i mean serious.Inflation is going to hit hard in all the basics,the UK is now the NHS with a government attached,they cant sustain the state without massive tax increases or massive inflation.The beauty now is these value sucking area like the NHS and welfare will devour each other.Want more NHS,cut welfare,etc.

BOE is running out of road to monetise.Maybe £90billion more max without a BK.

[DurhamBorn]

6 minutes ago, Loki said:

I keep seeing about the gas shortage, how long and how much would it take to re-fill supplies to a level where there are no concerns?

Nowhere to store it,they are closing the fantastic areas in the North Sea at pace.

[Yadda yadda yadda]

1 hour ago, DurhamBorn said:

Interesting on the job front.Iv had three job offers today.One was decent money,but annualised hours.I told that one i wanted 30 holidays + bank holidays and to choose when to take them,not annualised hours,of course no chance of them agreeing to that so told them i wasnt interested as no work life balance.What im seeing is the skilled jobs cant be filled because the only people with the skills are retiring early,or taking easier lower paid jobs with better work/life balance.

The lower paid end cant get reliable people because there are that many jobs available in that range and people dont care,and the wages arent high enough to care.

Im finding it fascinating when these employers ring,because they simply dont yet understand the macro situation has changed and isnt going back.They need to get ahead of the curve quickly,but they are so used to holding the power over workers they simply can adjust to the new reality.They need to push through price increases and up wages quickly.Employers with big workforces on low wages must be really feeling it now,and thats before Dumbo Boris's NI increases.

I hear tales from people of the 70s and they'd quit somewhere on a Friday and find somewhere down the street the next Monday.