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

[Talking Monkey]

2 hours ago, confused said:

got quoted 1174p with 12.51% divi!!!.......might wait till they go sub £10 

One of the things I was thinking was what would stop Shell going a fair bit lower if we get a bust and oil hits sub 20, if the DOW loses 50% from the highs so is around 15,000  in that scenario I would expect shell to be sub £10

[Solzhenitsyn]

20 minutes ago, Loki said:

It's all good in theory!

I'm oot. Fair play to anyone buying.  Wouldn't saying I'm nursing wounds as i was always buying for the next cycle.  Would never have bought a share in my life if not for that.

But i have lost my bottle!

I'm about 20%in cash. Not in a rush to pull the trigger either. I probably started getting into some of my equity positions a little early (hindsight is great), so making sure I spend my final 20% as late as possible. Lots of rooms for the likes of GDXJ / Big Oil / Potash etc to get much lower once this virus really gets to grips in the west.

 

Not trying to be doom and gloom. It will pass. Once the Central banks magic money kicks in we'll get a bucket load of inflation. But don't see the sense in buying before peak infection rates hit the US.

[kibuc]

I cannot hold a candle to our resident macroanalysts here, but I see a rationale for a swift upturn. It's not a debt crisis, it's a pandemic sell-off. Which might mean that

a) While a lot of money will be thrown at the problem, it won't make it go away as it's not money-related.

b) As it is with every disease, it will get bad, peak, and then peter out much more quickly than a financial crisis would.

c) As soon as we start seeing good news (lower infection numbers, new treatments reducing lethality, vaccines) the panic will go away but the money created will linger in the market for much longer

Having said that, I'm balls deep and I need a rally in the miners to save me so confirmation bias must be strong

[Harley]

15 minutes ago, sancho panza said:

I felt there was a capitulation feel to the markets monday,then again yesterday.The majority of the weak hands wil be gone after yesterday I suspect.

I was feeling a bit of that too.  I'm not looking to time the bottom but to buy very specific stocks at a bit of a general plateau, with a lower risk of a another significant leg down.  I'm watching my back, which is a banking crisis, bail ins, and a big hit to my portfolio.  Plus inflation.  There comes a time to "de-risk" from cash, and in the round (front and back) that may be before the stock down is conclusively down.  This thing is going to cost any which way, but some avenues may be costlier than others.  I can't stress enough the importance of thinking through all possibilities, doing an unconstrained (by our natural grounding prejudices)  what-if.  It's not the governments who will particularly bail out the banks in the last resort this time.  They have been implementing the legislation for some time now to ensure we all take a direct hit.  But not just banks, there are plenty of other counter-parties around.        

[sancho panza]

14 hours ago, Cattle Prod said:

The number 1 thing happening for me at the moment is the capex cuts in US shale. Apache announced today it is going to spend zero on the Permian. People do not understand how much you have to drill just to keep production flat. If this continues it will fall like a stone, and probably cause a price spike later this year. I must sound insane, but it could easily happen, as it did in 2007. I'll try and quantify this a bit later more later.

Something you said the other day that has been runnign through my head since and that's

'the cure for cheap oil prices is cheap oil prices'..............

So simple but makes complete and utter sense.I've jsut brought our average repsol price to a 10 handle and I'd have taken that a year back.Looking at FCG at 4.24 and thinking well yeah some will go bust but those that survive will get higher prices.Same with XES at $2.3 they were $49 five years back.We know(well I do from my coma scaling them last year that some are headed for bankruptcy) but those that are left will prosper.

'Last thing genius learns is simplicity'-Gordon ramsey.

When AMZN/FB etc have these soprt of losses off peak,then we're likely near the bear market low.But these ETF's I track cover the necessities of life for billions of people.

[Harley]

15 minutes ago, kibuc said:

I cannot hold a candle to our resident macroanalysts here, but I see a rationale for a swift upturn. It's not a debt crisis, it's a pandemic sell-off. Which might mean that

a) While a lot of money will be thrown at the problem, it won't make it go away as it's not money-related.

b) As it is with every disease, it will get bad, peak, and then peter out much more quickly than a financial crisis would.

c) As soon as we start seeing good news (lower infection numbers, new treatments reducing lethality, vaccines) the panic will go away but the money created will linger in the market for much longer

Having said that, I'm balls deep and I need a rally in the miners to save me so confirmation bias must be strong

Makes a lot of sense, especially as a straw-man.  Totally agree with "a" (the financial folk in charge are so myopic), with "b" it may just linger for some time with the markets treading water, plus we have a few months at least before peak CV distress, and then the possibility of re-runs of unknown relative sensitivity, and totally agree with "c".  So just the stuff "b" in the middle then!  

[DoINeedOne]

Bought some Minera Alamos and some more Mako mining yesterday

[sancho panza]

14 hours ago, DurhamBorn said:

On potash i have mainly got Mosaic,and a very small amount of K+S.Its funny today,but id been wanting to buy National Express for a long time,multi years and then today there it was down another 20% at £2.60.I was glad to get it.I was going to get Total,but iv concentrated on Shell,BP and Repsol,and some BHP today when it hit £9.50.

There will be a lot of companies go under during this debt deflation due to cash flow issues,but the big caps are more likely to survive.It was brutal today as it always is when buying straight into falling positions.

I have no idea how much red il have before things turn,and the FTSE is still around 600 point above where my road map expected it to end up,but most of my targets have hit the prices i hoped for.Lucky in some ways the falls were so fast because in most cases i actually missed ladders out and bought the one below.I knew the falls were severe when i was checking the likes of BHP wondering if it was below £13 yet and it was below £10 

The way iv lost the most money in the past has been selling massive winners far too early,im not bothered about how much lower things go,im more worried about bailing too early in the next cycle 

above biyts in bold.

Made the decision a few weeks back to sell off all the smallies we had except for PM miners.In retrospect,a good call.I fear there will be some dislocations in this bond market now particualrly junk/just above junk.Inevitable.However,I believe the big debt deflation is 12-24 months away as there's no inflationary pressures to prevent CB's printing cash.Wehn we get those pressures,I think itll be game over.

We're 20-30% in the red on a lot of things but that includes some chunky holdings of XOM/RDSB etcOut highest small order for RDSB was at £23 some time in Dec 19.Currently down 50% on that lol.But like a few on here I've been here before.When I was yonuger as as the shares had recovered their lossses I'd sometimes sell them.It was only as I aged that I learned about backing myself and my value investing insticnts.

These oilies could reverse the losses in two weeks.I suspect it will take 6 months.By which time we'll be fully allocated/invested and sat on big oilies at50% porfolio value.Or more.

 

My plan was always to sell the oilies/PM's when the dollar bottoms in a year or so,but genuinely,some of these bottom £11/£12 ladders in RDSB are going to be with us for a long time.I think it yields a $1.88 at these levels.....................

[PaulParanoia]

21 minutes ago, Solzhenitsyn said:

Potash

Excuse my ignorance, but what is 'Potash'?

[sancho panza]

7 minutes ago, DoINeedOne said:

Bought some Minera Alamos and some more Mako mining yesterday

good trade on MAI they're a real prospect(we hold).

 

We'll be buying a big chunk for us of NCM this afternoon but looking at the tier 2/3 as well.

[sancho panza]

12 hours ago, Simon said:

How is FCG so low? Surely the world needs gas?

@Cattle Prod has said that with gas it depends where it is and if it can get to market.so problems in the permian realte to the fact that it's not viable to ship to europe for instance.

Russian gas has a ready marekt in western weurope however much Putin intereferes in US elections.

[sancho panza]

26 minutes ago, Harley said:

I was feeling a bit of that too.  I'm not looking to time the bottom but to buy very specific stocks at a bit of a general plateau, with a lower risk of a another significant leg down.  I'm watching my back, which is a banking crisis, bail ins, and a big hit to my portfolio.  Plus inflation.  There comes a time to "de-risk" from cash, and in the round (front and back) that may be before the stock down is conclusively down.  This thing is going to cost any which way, but some avenues may be costlier than others.  I can't stress enough the importance of thinking through all possibilities, doing an unconstrained (by our natural grounding prejudices)  what-if.  It's not the governments who will particularly bail out the banks in the last resort this time.  They have been implementing the legislation for some time now to ensure we all take a direct hit.  But not just banks, there are plenty of other counter-parties around.        

Us too.I could enver have predicted 25 year lows in ENI/Total.......

Correspondingly,we hold a fair bit of our cash at NS&! and obviously rate cuts inbound.Cash is going to get destroyed here.

 

your second bity in bold is good advice.I'm having to adapt our plan to suit possible new outcomes.Thats one of the benefits on here ie getting your confirmation bias tested,we're all on a similar page but lots of divergent views.

[sancho panza]

38 minutes ago, kibuc said:

I cannot hold a candle to our resident macroanalysts here, but I see a rationale for a swift upturn. It's not a debt crisis, it's a pandemic sell-off. Which might mean that

a) While a lot of money will be thrown at the problem, it won't make it go away as it's not money-related.

b) As it is with every disease, it will get bad, peak, and then peter out much more quickly than a financial crisis would.

c) As soon as we start seeing good news (lower infection numbers, new treatments reducing lethality, vaccines) the panic will go away but the money created will linger in the market for much longer

Having said that, I'm balls deep and I need a rally in the miners to save me so confirmation bias must be strong

I'd go with b and c.Defo overhyped for me(and I work in the trade and it's not an uncommon view amongst A&E staff).

We're buying some NCM/poss NGD this afternoon.

[Bricormortis]

 

 

[Yellow_Reduced_Sticker]

AT LAST...

"European stocks Rise after US Fed vows to pump Trillions into markets"

 

https://uk.finance.yahoo.com/news/european-stocks-rise-after-us-fed-vows-to-pump-trillions-into-markets-085917198.html

BLIMEY Even CNA up 13%  to 49p ...who got there order on @ 42p?

seriously was about to add more CNA this morning when buying BP...

BUT i thought CNA would go down MORE!

EXHILARATING TIMES Folks!

[Bricormortis]

22 minutes ago, PaulParanoia said:

Excuse my ignorance, but what is 'Potash'?

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

Helps crops grow, potassium based, populations are increasing and so I read on here.... soil is depleting.

[TheCountOfNowhere]

Markets rigged. 

Somone ought to tell the poor 

[BearyBear]

Wow, Fear & Greed Index at 2 and the market is reversing  

https://money.cnn.com/data/fear-and-greed/

[Harley]

GDX:LSE yesterday breaking $26 support on the 30m......

 

[kibuc]

5 minutes ago, sancho panza said:

I'd go with b and c.Defo overhyped for me(and I work in the trade and it's not an uncommon view amongst A&E staff).

We're buying some NCM/poss NGD this afternoon.

I was thinking more in line of all three happening in succession  In fact, the "a" has already started.

NGD, HMY, Eldorado, they all got smacked hard, disproportionally to the movement in gold price. Sibanye too, although their leverage to platinum group metals probably outweighs leverage to gold.

NGD is probably the one that best meets my criteria of a small-cap on a rebound, but as you know I'm not a fan  Corvus is too far away from production. I guess it's going to be HMY, for now at least.

[Yellow_Reduced_Sticker]

7 minutes ago, BearyBear said:

Wow, Fear & Greed Index at 2 and the market is reversing  

https://money.cnn.com/data/fear-and-greed/

THATS IT ...the Fear BELL has RUNG!

Buffet must be BUYING, Time to be BRAVE.... SO I'm FILLING ME BOOTS with my last few shekels ...well maybe!

[JMD]

23 hours ago, Tdog said:

Ive a fucken fortune sat in the bank, almost enough to buy a shite 3 bed terrace in southern England ... but dont really fancy putting any of it into this stock market.

 

Are/were those savings always intended for house purchase, or is the plan to deploy into stocks when market finally flat-lines (i.e. current market action may be just market arrythmia?) later in year?  

[sancho panza]

23 minutes ago, kibuc said:

I was thinking more in line of all three happening in succession  In fact, the "a" has already started.

NGD, HMY, Eldorado, they all got smacked hard, disproportionally to the movement in gold price. Sibanye too, although their leverage to platinum group metals probably outweighs leverage to gold.

NGD is probably the one that best meets my criteria of a small-cap on a rebound, but as you know I'm not a fan  Corvus is too far away from production. I guess it's going to be HMY, for now at least.

Jsut looking at the goldies now

 

Think we're gonna be topping up a few here.Cant believe how much some have dropped since march 5

New positions-

AUY/FCX-both repurcahses

Adds-

AGI/NCM/GFI/SIB/BVN/NGD/HMY

[Majorpain]

Is that the sound of Printing presses being fired up i hear?

[Bricks & Mortar]

I bought back in to gdxj.  5% position.  It's about 20% lower than where I got stopped out.

Thought this tweet interesting, although I don't understand it fully.