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

[BoSon]

1 hour ago, TheCountOfNowhere said:

I still dont get why no ones waited for the crash. 😭😭😭😭

I have, in that I need to set up a new s&s ISA before April but not rushing to buy yet. There could be a long way to go if the USA gets hammered and China is sluggish to recover. Global recession seems inevitable.

While sat on my hands I'm wondering whether to go for cheap index trackers when many of the weaker companies in the index may fall out through bankruptcy or severe losses, so I suppose spreading the risk across trackers and more solid companies/sectors that will recover in the medium term is the safe approach to drip invest when the bottom looks near.

Been taking notes from this thread over the months/years it's been running so will use the wisdom of the crowd to decide which companies and sectors may be worth investing in. 

[Alifelessbinary]

I’ve wanted this to happen since 2016 and have watch in amazement as shares defied reality.

I’m with Cattleprod on this one, I’ll be steadily laddering into quality stocks as I’m working on a 20 year + investment horizon. Yes this is going to bad in the short - medium term, but it’s not as bad as WW3! 

I’ve had £20k in a cash ISA rotting for the last 6 years this is now being transfer to my S+S ISA. I’m also going to put £40k into a SIPP, as I don’t plan on being a high rate tax payer forever and I imagine tax relief will be changed shortly. 

The insurance firms are delighted that the WHO have finally called this a Pandemic, as many of the larger institutions have Pandemic exclusion clauses. 

[nirvana]

might buy some BT at 99p .......crazy times, had them in a SIPP few months ago when they were 225p.....sold before they went negative...

[Alifelessbinary]

Getting back to the longer term nature of this thread.

Ive just finished reading The Moral Case for Fossil Fuels - Alex Epstein. While I’m still fact checking some of the content is an interesting counter argument to a lot of media content on the subject. 

It certainly worth a read and does make the point that the current energy system is tied into fossil fuels for the foreseeable future. He also argues after you’ve spent all of the carbon getting to the resources it doesn’t make sense not to extract them and then utilise these resources to invest in complementary renewable.

[Harley]

A couple of trends/dynamics I'm looking for:

. Relative underperformance of the US market versus the FTSE given the divergence of the last few "forevers"

. PMs and BTC really take the bid once assumed selling to meet margin calls is completed

. Others?

 

[DurhamBorn]

Fantastic that things are now playing out as hoped for/expected.Today at last a lot of companies iv been waiting for fell to first ladder points,lots of German ones actually and i was able to start buying them.There is zero confidence in the markets.It has been a long wait,but we can at last start to buy reflation stocks across the board.Iv invested around 11% of my portfolio this morning  and will be fully allocated if we see 25% falls from here.

CB action had been a none event so far and of course Trump simply does anything to pass the blame.Printing should start very soon and id expect the first to stop their falls and turn will be the energy complex at the quality end.

The knack in investing is to have a plan,do the work and be ready.Having a list of nearly 100 companies ready and with a huge amount of prior work done meant its just a case of buying.

The markets are rightly very worried a lot of companies will go down due to not being able to pay their debts.Likely we will all end up with a few of them in our portfolios,but hopefully not too many.

 

 

4 minutes ago, Harley said:

A couple of trends/dynamics I'm looking for:

. Relative underperformance of the US market versus the FTSE given the divergence of the last few "forevers"

. PMs and BTC really take the bid once assumed selling to meet margin calls is completed

. Others?

 

Watch for quality energy stocks to turn first or fall less.They will lead the dollars falls and indicate CB liquidity is ramping up.

[TheCountOfNowhere]

1 minute ago, Cattle Prod said:

Just looking at Shell and BP long term on the monthlies, they are much the same price now as the 2016 low or the 2009 low, BP even passed the Macondo low, it's totally insane! Before that, July 1996. It just screams to me that this sector is having it's bear market now, for whatever reason. Obviously I don't know if this is the bottom or not, but it must be close. Conditions today are no worse than 2009 or 1998, and not much worse than 2016. Decl - I bought alot of them today, more BP than Shell. BP was priced for bankruptcy after Macondo, to exceed that low now is just stupid. 

I'm beyond fully allocated, so I'm not going to talk about these shares any more. I hate sounding like I'm talking my book. I'll stick to macro stuff.

What does this tell you about the bigger picture? 

[nirvana]

15 minutes ago, Alifelessbinary said:

Alex Epstein

looks like he was a Ayn Rand follower along with Greenspan.....I always meant to read Atlas Shrugged but I think I'll pass now....

PS I do agree the current situation looks better for fossil fuels going forward.....who in their right mind is going to be buying an electric car in this environment?? the rioters will be mugging you at the charging points!!! 

[M S E Refugee]

1 hour ago, Solzhenitsyn said:

Currently at 14.3, lowest I can see was 2011 at about 5.7.......... assuming you dont expect it to actually get anywhere near 1:1

Ask me in a months time.

[Democorruptcy]

I just phoned The Treasury, no seriously!

Suggested as an emergency measure for this and next tax year, they up the ISA limit from £20k to £200k or £250k

Helps both the stock markets and savers moaning about low interest rates.

Of course there will be winners and losers playing stocks and shares ISA but I'd take my chances.

 

[DurhamBorn]

4 minutes ago, TheCountOfNowhere said:

What does this tell you about the bigger picture? 

That we are at the end of a dis-inflation cycle that started in 1982 and the end will be a violent affair with massive financial dislocation,as theis thread said on page one.Its where we are going that matters,and where the work goes.Oil will be over $200 in 2028,maybe over $300.The liquidity about to come from the CBs will be shocking in its size.They will start small,fail,increase,fail,increase etc.When people wake up to the money supply doubling there will be a dash to assets.BP is £3.00ish,i suspect at some point in the next cycle it will go up £3.00 over a 3 month window and end the cycle up around 500% from here.

[nirvana]

14 minutes ago, Cattle Prod said:

so I'm not going to talk about these shares any more

There's nothing worse than an echo chamber....chat away if you ask me and it's always interesting hearing folks 'real life experiences'......markets are like the path of life, it's never a straight line.....

The count is frustrated cos his wife thinks he's a loon 

[onlyme]

3 minutes ago, DurhamBorn said:

That we are at the end of a dis-inflation cycle that started in 1982 and the end will be a violent affair with massive financial dislocation,as theis thread said on page one.Its where we are going that matters,and where the work goes.Oil will be over $200 in 2028,maybe over $300.The liquidity about to come from the CBs will be shocking in its size.They will start small,fail,increase,fail,increase etc.When people wake up to the money supply doubling there will be a dash to assets.BP is £3.00ish,i suspect at some point in the next cycle it will go up £3.00 over a 3 month window and end the cycle up around 500% from here.

Problem is it is going to all the wrong places, the debt load just keeps increasing and regardless of the interest rate even a marginal one many are underwater on their lifelong capital repayment alone, high inflation will destroy their free income.

How about a global currency split to wash away the debt burden?

[DurhamBorn]

1 minute ago, confused said:

There's nothing worse than an echo chamber....chat away if you ask me and it's always interesting hearing folks 'real life experiences'......markets are like the path of life, it's never a straight line.....

The count is frustrated cos his wife thinks he's a loon 

Yes its important for people to remember markets arent linear.

[reformed nice guy]

2 hours ago, Alex said:

If Yahoo!'s graphing tool is correct, the FTSE100 is now at the same level it was in Oct/Nov 1998.

How are those all-index trackers looking now, kiddies?

I said earlier in this thread (or the older one) that I invest in some broad, low cost trackers every month but outside of the UK. Each month I buy a different area - America, Japan, Asia, West Europe, East Europe, India etc.

My logic is that this reduces my UK exposure for international diversification since my home and job are UK. I do not have the time and skill to understand other markets like India, but a tracker will give me exposure.

This recent episode is making me waver however, but since I am investing for the longer term (I am early 30s) then I am thinking about 20+ years. 

By then I will be thanking my Chinese overlords for allowing me my 1000 calorie rice portion for the day.

[TheCountOfNowhere]

7 minutes ago, DurhamBorn said:

That we are at the end of a dis-inflation cycle that started in 1982 and the end will be a violent affair with massive financial dislocation,as theis thread said on page one.Its where we are going that matters,and where the work goes.Oil will be over $200 in 2028,maybe over $300.The liquidity about to come from the CBs will be shocking in its size.They will start small,fail,increase,fail,increase etc.When people wake up to the money supply doubling there will be a dash to assets.BP is £3.00ish,i suspect at some point in the next cycle it will go up £3.00 over a 3 month window and end the cycle up around 500% from here.

I was just going to say everythings ####ed 😁

What to do about the housing bubble? The tories showed their hand yesterday, full on support for the landed gentry 

 

 

 

[DurhamBorn]

Just now, onlyme said:

Problem is it is going to all the wrong places, the debt load just keeps increasing and regardless of the interest rate even a marginal one many are underwater on their lifelong capital repayment alone, high inflation will destroy their free income.

How about a global currency split to wash away the debt burden?

Doesnt matter,the next cycle isnt about the consumer its industrial.The CBs will inject probably $30 trillion into the world economy,at least.The west will rebuild itself,and the east will try to extend its reach.In simple terms Australia will need less gadgets from China,but more warships to protect itself from China.

 

[nirvana]

2 minutes ago, TheCountOfNowhere said:

What to do about the housing bubble? The tories showed their hand yesterday, full on support for the landed gentry 

it's been this way since 1066 when Billy the turkish/greek mercenary and his mates stole all the land from the plebs....

Why don't you lobby your local MP to return the tax system to one of 'land tax' rather than the current system that the aforementioned robber apparently changed as well??

[TheCountOfNowhere]

Just now, confused said:

it's been this way since 1066 when Billy the turkish/greek mercenary and his mates stole all the land from the plebs....

Why don't you lobby your local MP to return the tax system to one of 'land tax' rather than the current system that the aforementioned robber apparently changed as well??

Lobby my tory mp..... 

 

 

[Majorpain]

16 minutes ago, Cattle Prod said:

Just looking at Shell and BP long term on the monthlies, they are much the same price now as the 2016 low or the 2009 low, BP even passed the Macondo low, it's totally insane! Before that, July 1996. It just screams to me that this sector is having it's bear market now, for whatever reason. Obviously I don't know if this is the bottom or not, but it must be close. Conditions today are no worse than 2009 or 1998, and not much worse than 2016. Decl - I bought alot of them today, more BP than Shell. BP was priced for bankruptcy after Macondo, to exceed that low now is just stupid. 

I'm beyond fully allocated, so I'm not going to talk about these shares any more. I hate sounding like I'm talking my book. I'll stick to macro stuff.

Its a combination of demand shock, Russia/Saudi supply spat and the oil having no future narrative IMO, mixed together its a potent combination for some damage.

Im thinking that PM's will turn before oil for that reason as QE ramps up, although its an emotional market atm so who knows what the herd will be doing next week, never mind next month!

[nirvana]

26 minutes ago, TheCountOfNowhere said:

Lobby my tory mp..... 

 

 

Maybe not.....

[kibuc]

Alexco reported earnings (or lack thereof) yesterday. Numbers are as expected - after all, explorecos are not in the business of making money - but the key information for me is this:

 

"(Alexco) expects the granting of WUL renewal late in the first quarter of 2020"

 

It's no secret that the water licence is the final missing piece to the Keno Hill puzzle. Now that their coffers are full, what with having sold their environmental arm, Alexco seems ready to go and it looks like the key piece of news will be delivered in the enxt couple of weeks.

[BearyBear]

7 minutes ago, TheCountOfNowhere said:

What to do about the housing bubble? The tories showed their hand yesterday, full on support for the landed gentry 

Sellers in Edinburgh are panicking a bit, never seen so many recently advertised flats (<2weeks) with closing dates announced... in red colour! 

Normally they are just waiting for the highest bidder... and there was abundance of them in the last 2-3 years outbidding each other...

[TheCountOfNowhere]

1 minute ago, BearyBear said:

Sellers in Edinburgh are panicking a bit, never seen so many recently advertised flats (<2weeks) with closing dates announced... in red colour! 

Normally they are just waiting for the highest bidder... and there was abundance of them in the last 2-3 years outbidding each other...

Maybe more btl tax related than the Wuhan plague 

[BearyBear]

2 minutes ago, TheCountOfNowhere said:

Maybe more btl tax related than the Wuhan plague 

Maybe... but the supply is still at record lows.