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

[Harley]

53 minutes ago, DurhamBorn said:

Yes its been brutal,iv even bought a few shares i wasnt considering like ITV and WPP simply on valuation grounds,small amounts,but werent on my radar.

I have both!  Plus CCL, CARD, WHL, etc!  OK, CARD was naughty but the cash flow and low debt was impressive, WHL was a kind of sin stock to weather a recession and had IMO the best financials of the FTSE sector players, CCL was playing to a trend of boomers and terrorism, etc.  I also had sensible ones such as Oil and Gas, plus a load of various types of insurer who (and I noted your earlier comment about the Life ones) can usually wiggle their way out of such issues as paying claims (plus L&G were doing clever stuff with company pensions and may have hit gold here!).  So all thought through with good themes and financials and most had a place in the macro roadmap.  But the current crisis is from left field.  Can't do anything about that other than mitigate risk or don't play (which has it's own risks!).  Hopefully such themes (at least some of them) will materialise down the line.  These are income stocks, not my essential bread and butter pension money so something I could take more risk over (i.e. floor versus upside and all that).  Essentially, I would have sold them because the price has now gone down not because of any other fundamental reasons.  And this fund is like an annuity, fire and forget.  My only concern is big cuts to divs, otherwise I'm less concerned about capital values as it's the income stream I want first and foremost, not capital gains.  I have other finds targeting that objective (which mercifully are in cash atm!).  So all this stuff stresses the importance of having a broad plan and knowing what bit is for what.  I spent a lot of upfront time two years ago researching all this and currently feel quite resilient as a result which is good.  I could still lose it all but then I could also get run down at a set of green traffic lights!

[BearyBear]

15 minutes ago, JMD said:

BearyBear, great call on today's silver price. Do you see a similar 'setup' (or lack thereof) driving silver again below £10 in the short term? (sorry, but cant recall the exact technicals you laid out in your post a few days back that predicted this).

btw did you trade this and make some money today (hope you did!) or are you waiting for something bigger? 

That setup was once-in-10years kind of... I was watching silver closely for a long time, it only became apparent to me last Friday that a downside breakout is almost certain and it will be sooner than later. The chart was screaming at me! 

From this point it's hard for me to tell what the price will do next... going further down seems to be more likely but I wouldn't trade it as I can't see an entry point on my chart.

And yes, I did put money on it and made almost 20% on my account (the trade is now closed).

[Harley]

1 hour ago, Majorpain said:

Supply has dried up by the sound of it, it happened in 2008 as people are not daft and buy physical for protection at a premium to spot.  I think your right and they see an opportunity to stock up cheap and sell at a higher price in a few months after QE, but they need a decent stock of coins first!

Had some chats, seems a supply shortage of unknown duration.  I'm moving to plan B, crossbow!

[PaulParanoia]

1 hour ago, DurhamBorn said:

Yes its been brutal,iv even bought a few shares i wasnt considering like ITV and WPP simply on valuation grounds,small amounts,but werent on my radar.

Hi DB, I understand you had a plan which you have executed.  However, are you not at all worried that you fired all your ammunition too early?

[Harley]

1 hour ago, Festival said:

I think debt levels are the single most important issue due to the market shorting companies with high debt and the unsustainability of cashflows.

I mostly bough on that basis and still got creamed.  As I said earlier though, too soon to count the bodies.  Plenty of time for these to come through.  I reckon we'll start seeing asset write downs too as they've gone silly too.

[Harley]

6 minutes ago, BearyBear said:

That setup was once-in-10years kind of... I was watching silver closely for a long time, it only became apparent to me last Friday that a downside breakout is almost certain and it will be sooner than later. The chart was screaming at me! 

From this point it's hard for me to tell what the price will do next... going further down seems to be more likely but I wouldn't trade it as I can't see an entry point on my chart.

And yes, I did put money on it and made almost 20% on my account (the trade is now closed).

I hear you.  My technical work was pointing to a PM dip but I could not square that with what I could see out the window.  It seemed crazy.  I'm learning to be a bit more balanced and trusting more of the technical work I do.  Some I win and some I lose.  I've held some PMs for over a decade and they have weathered all sorts and are one of my most profitable and least risky plays.  Nothing like serving the time!

[TheCountOfNowhere]

15 minutes ago, PaulParanoia said:

Hi DB, I understand you had a plan which you have executed.  However, are you not at all worried that you fired all your ammunition too early?

Depends if his plan was to get us idiots to buy shares that he then profited from.

It's a cynical world. 

[Loki]

9 minutes ago, TheCountOfNowhere said:

Depends if his plan was to get us idiots to buy shares that he then profited from.

It's a cynical world. 

It would be nice to think we had that much control over share prices 

[Agent ZigZag]

18 minutes ago, TheCountOfNowhere said:

Depends if his plan was to get us idiots to buy shares that he then profited from.

It's a cynical world. 

How would he do that please explain

[Loki]

@DurhamBorn Don't be a stranger, and thank you for sharing your time and unique insights with us.  

[Harley]

Well I've looked back at some of my trades into some buy and hold income accounts and I'm the one at fault.  I've mainly made the big losseses where I failed to adhere to my system.  I was just too keen to invest and ignored the system I have to ladder in.  Take BWY for example.  I was buying after 8 Jul 19 while it was on it's rise from its last buy signal then.  I had no business doing that regardless of my eagerness or the attractiveness of the div after a bit of a pull back.  I should have known far better, no ifs, not buts.  The fact was I had missed the boat not buying back on 8 Jul 19.  I should have sat on my hands or moved on.  If I had bought then and not later I would now be an understandable 13% down rather than the far higher figure I am.  I'm going to wallow in this failure until it hurts so much I (hopefully) never do it again.  There will be other new lessons to relearn but hopefully not this one.  That's how to play this game: no BS, just give yourself up, take the beasting, learn, and move on.

[kibuc]

6 hours ago, Ponty Mython said:

My wife just told me that, against my advice, she had cheekily switched her pension into 100% cash last Monday.

From now on, she holds the purse-strings...

My former portfolio is 35% up since I sold it today at the open. As I said, someone has to sell at the bottom. Alexco @1.02, Fortuna @2.05 etc., you get the picture.

There's a good chance the next thing she says will be along the lines "oh, it's going up now, we should buy back" and then I might say some words or do some things.

I know it's our money and we should have equal say in what we do with it, but maybe it'd be reasonable to appreciate that one of us has been following the markets for 16 years, whereas the other one... has not.

Anyway, rant over. At least I didn't listen to her 100% and sold our SIPP with a few hours' delay.

[Loki]

4 hours ago, Harley said:

Is CoinInvest now charging VAT on silver coins?

Looks like it.  And they have 74 Britannia left (Split over 2 different types)

[CVG]

From Bullionvault:

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[StrugglingMillennial]

To be honest i can see that getting worse, once non essential businesses shut shop.

[DurhamBorn]

1 hour ago, PaulParanoia said:

Hi DB, I understand you had a plan which you have executed.  However, are you not at all worried that you fired all your ammunition too early?

No,i have plenty of cash,but iv bought everything that hit ladders and only a few remain to be bought mostly German chemical companies,odd ladders in a few Telcos like Telia,not interested now in prices ,il likely not even log in much apart from to re-invest and withdraw dividends.Everything i own i think will be much higher by 2027 including a few ten baggers,apart from odd ones that might go under.Can turn now,or go down another 30%.Iv been here many times in the past its part of investing.Brutal for sure,and a very different one this time due to governments going crazy trying to shut everything.FTSE could go to 4000 of course,and its up to an individual what they can tolerate.

I think im about 14% down on a portfolio where the companies are down between 50% and 90% from highs.Thats all my work can do,it cant say if everything goes to zero,i also sold my whole portfolio in 17 with the full intention to re-invest in the chosen areas as the market collapsed.Thats exactly what has happened,and exactly what i wanted to happen.

[Festival]

2 hours ago, Democorruptcy said:

I think of those as Beta shares and agree they gain more on the bounce than what say utilities might.

I've gone too early partly because I think the UK was nowhere near as overvalued as the US. I think Brexit held us back. Our QE and Cape was fair value at 7,400 while the US was way way overvalued. Although calculating value against future earnings can't be easy now!

If we did start getting nearer to 4,000 my NS&I money is coming over and I'm going all in all in, instead of just all in already on the ISA and SIPP. My issue is I don't work so don't pay tax and gains outside tax wrappers will mean getting back in the tax loop. Unless you think this is end of days, surely a temporary virus is a buying opportunity? Looking ahead I don't want too much cash after the way they will fight this one.

Good luck!

Agree the U.K. feels way less overvalued than the US or even the Dax on a cyclical P/E basis. 4000 approx  in the FTSE has held through the last two crises. The key question now is this just a 3 month disruption to cash flows or a full on debt deflation that central banks and govts can’t turn around. If the former the indices will rise again as the recession is relatively short. If it’s the latter then buying in ladders maybe I’m even down to 80 percent down in the indices might make sense. I can’t call this so I’m hedging between the two outcomes. 

[DoINeedOne]

 

lol

[sleepwello'nights]

4 hours ago, Castlevania said:

Goldcore just sent me an email. They’ll buy silver coins at 10% over spot and 100 oz bars at 7% over spot. Downside is that they have to be in their vaults to begin with. However, something doesn’t seem right.

I opened a Bullion Vault account yesterday. The silver price on Kitco is showing about £12. Bullion Vault fell to £358 kilo this morning, its now back up to £37-380 ish whilst Kitco is still showing £12 ish. 

Its also reported that coin dealers have no stock. 

Anyone explain?

[Harley]

Here's one for the collective.

This is a full list of industries from Investing.com.  What are your top 10 sectors for the deflation/inflation ahead (life after CV) and why?  What should the selection criteria be?  I'm thinking those with pricing power, with historical low valuations (e.g. PE ratios), those near the source (i.e. not consumer), those that meet needs not wants, and those who would benefit from infrastructure and other government (capital?) expenditure.  This would help prioritise the search for the best companies in the best industries, something I'm already well into.

[Yellow_Reduced_Sticker]

F*****g HELL ...BLOOD on the streets!

DOW Jones is DOWN 3,000 Points!

[TheCountOfNowhere]

5 minutes ago, Yellow_Reduced_Sticker said:

F*****g HELL ...BLOOD on the streets!

DOW Jones is DOWN 3,000 Points!

It's a biggy.

 

20,188.52 −2,997.10 (12.93%)

 

It's gonna keep going 

It wasn't different this time after all.

[M S E Refugee]

4 minutes ago, TheCountOfNowhere said:

It's a biggy.

 

20,188.52 −2,997.10 (12.93%)

 

It's gonna keep going 

It wasn't different this time after all.

How far?

The DOW was between 7000 and 8000 points in 2009 and the FTSE  traded from around 3800 to 5400 in the same year.

[Harley]

15 minutes ago, Yellow_Reduced_Sticker said:

F*****g HELL ...BLOOD on the streets!

DOW Jones is DOWN 3,000 Points!

S&P hourly.

Thud, fill the gap, bye bye....

[MrXxxx]

5 hours ago, JMD said:

MrXxxx, my thoughts on Q1 are that most would believe diversification to be single biggest crucial factor, fees can mostly be ignored if holding for long term. But i'm the least qualified here and still learning myself, so can't really give advice. I can say however, that I personally hold both spgp and gdx, and the interesting thing is spgp outperforms gdx (fees same for each), plus spgp is denominated in pounds so there is no currency risk. In terms of funds for me that's a big win-win.

The individual miners part is far more complicated (for me). Perhaps Kibuc, Majorpain, SP can help you in regards to 'good' silver/gold miner holds for the long term? 

Thanks for your thoughts JMD, and it doesn't matter as to the level of experience; diversity of opinion/experience makes the best `sounding board`, and I like to `kick around` ideas on here to help develop my own understanding.