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spunko

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

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3 hours ago, billfunk said:

There are three I am currently most interested in:

RRE - recent upgrade and has appeared to form a base (Bull Flag pattern) around at 1650-1850. P/E currently 2.1 with exceptional sales and profit growth anticipated (100% pa). Cannot see too much downside from here. Slow and steady growth.

https://rockroseenergy.com/

Would welcome people's thoughts on any of these companies. I am a new investor looking to learn.

Does it know how to do slow and steady, looking at the chart 50 to 1670 in just over 3 years! 

By the way great call on HZM. I hovered over the buy button but didn't press. 

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Posted (edited)
11 minutes ago, Tdog said:

But up to this point there hasn't been a tightening of credit causing bankruptcies, job losses, and a "house price crash" which is the obvious sign to the man in the street of a debt deflation.

Ive been saying for a while that ive noticed credit starting to dry up. Many small builders i know are losing work because customers cant get thier hands on as much equity release as they first thought, also a few longish 0% balance transfer credit card deals are out there, but also starting to dry up.

Edited by Bobthebuilder
also

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19 minutes ago, Democorruptcy said:

Does it know how to do slow and steady, looking at the chart 50 to 1670 in just over 3 years! 

 

I was confused by the long diagonal, was trading suspended or something as HL full chart shows no data between high and low points 

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14 minutes ago, Loki said:

I was confused by the long diagonal, was trading suspended or something as HL full chart shows no data between high and low points 

Switch to 3Y and you'll see it was suspended 3 times... weird.

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30 minutes ago, Bobthebuilder said:

Ive been saying for a while that ive noticed credit starting to dry up. Many small builders i know are losing work because customers cant get thier hands on as much equity release as they first thought, also a few longish 0% balance transfer credit card deals are out there, but also starting to dry up.

Sure i read within the last 2 weeks that mortgage lending is up.

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Posted (edited)
9 minutes ago, sleepwello'nights said:

https://www.telegraph.co.uk/business/2019/08/30/mortgage-lending-jumps-pre-crisis-levels-july/

Was yesterday i read it.

And is anyone on here going to own up to being Keith Calder who comments in the DT? I know he's a HPCer as he's posted links to it.

I like the cut of his jib.

Edited by Tdog

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1 hour ago, Loki said:

Thank you, I have no thoughts to add - how did you discover these companies?  If I know your procedure I may be able to suggest some.  Of course I understand if you don't wish to disclose trade secrets!

My sources are:

Stockopedia - good for running screens and checking fundamentals. I am looking mainly for resource stocks currently, but after the crash I will adopt a Minervini type Quality+Momentum approach to pick the early leaders. Stocko is great for that kind of thing.

Vox Markets, Proactive Investers, Seeking Alpha 

Twitter - Great for quick sales pitches. Some really good people on there. Also lots of pumps and dumps and people selling spikes. Beware. I have 3 spikes in my arse from the early days. Yes, I am that stupid. Never again! I also like joining Twitter groups once I am in a stock as it helps my psychology to be around "friends". Yes, I am that soft.

Justin Waite (a Vox employee) on youtube showcases interesting companies. Argo was from him. He covers lots of companies though and the accusation is that he is a paid shill. People have to do their own due diligence!

I look for disruptive tech companies with large runways and irresistible growth prospects as well as resource companies. The only trade secret I can find is risk management. Mine has been appalling and explains my poor performance of 6% since March. As far I can perceive the game is 5% stock picking and timing, 95% risk management. Any mug can pick a stock - it's fun, like a hobby for me, but I would have to be in cloudcuckooland to believe it was the essence of investing.

 

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28 minutes ago, sleepwello'nights said:

I read it (just) and all lending compared to the same month in 2018 was down in percentage terms a few points.

The only increase was 16880 remortgages where more capital was taken out +8.3% with the average additional amount borrowed (in June) being £56,100.

So I can't see how this breaks records unless these mortgages overall are whoppers or high LTV.

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Posted (edited)
1 hour ago, Tdog said:

But up to this point there hasn't been a tightening of credit causing bankruptcies, job losses, and a "house price crash" which is the obvious sign to the man in the street of a debt deflation.

Credit has been tightening for two years.The Fed has been doing it.House prices where i live are at 2003 prices.South is falling now and will fall for 8 years in real terms.There are bankruptcies ,but not the big ones that hit the news yet.Sterling falling 30% has helped shield the UK for now.Not much longer though as sterling starts to rise.

Global liquidity supply is the big one,flat to falling while demands on it (debt) increased.

https://www.yardeni.com/pub/frodorcb.pdf

Edited by DurhamBorn

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Posted (edited)

Lots of Nickel miners not available on HL. Horizonte is the one it seems.

Came across 3NIL in there though- says it’s an ETFS and it’s 3xdaily long nickel. Bloomberg says it’s an ETC. 

Ok so sorry all if this is a bit of a basic question... but say if you were get x of this in your HL SIPP... and it goes up, that’s good. But if it goes down... do you just lose what you bought? 

Edited by Thorn

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37 minutes ago, Thorn said:

Ok so sorry all if this is a bit of a basic question... but say if you were get x of this in your HL SIPP... and it goes up, that’s good. But if it goes down... do you just lose what you bought? 

Well, the price goes down -- you've got the same number of 'certificates' but each is worth less (they can't be worth a 'negative amount', if you're concerned about losing more than your stake).  The amount of 'less' depends on the performance over the holding period (duh), BUT

I'd warn about leveraged ETFs -- they don't really work the way you think they might.  So, if you buy at £1 when nickel is £1 (for example), and nickel goes up to £2 after 6 months, you'd think the 3xdailynickel would give 3x the gain, so could sell for £4.  But it doesn't work that way -- in particular, day-to-day volatility and fees (taken 'off the price') kills their performance.  In that example the price might have only gone up to £2 (but it would almost certainly have gone up, at least).

The 'normal' result of holding is that the price doesn't do much (perhaps moves +/- a few %) but your holding goes down in value anyway.  Losses are, of course, magnified.

Anyway, I'd suggest that if you have to ask then you shouldn't invest in that sort of thing.  But, if you do, the advice is to consider it to be a trade measured in days, not weeks.

Now, this is a shame as it would be nice if they were the sort of thing that could be held for longer term gains, but they're pretty-much not.

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48 minutes ago, dgul said:

Well, the price goes down -- you've got the same number of 'certificates' but each is worth less (they can't be worth a 'negative amount', if you're concerned about losing more than your stake).  The amount of 'less' depends on the performance over the holding period (duh), BUT

I'd warn about leveraged ETFs -- they don't really work the way you think they might.  So, if you buy at £1 when nickel is £1 (for example), and nickel goes up to £2 after 6 months, you'd think the 3xdailynickel would give 3x the gain, so could sell for £4.  But it doesn't work that way -- in particular, day-to-day volatility and fees (taken 'off the price') kills their performance.  In that example the price might have only gone up to £2 (but it would almost certainly have gone up, at least).

The 'normal' result of holding is that the price doesn't do much (perhaps moves +/- a few %) but your holding goes down in value anyway.  Losses are, of course, magnified.

Anyway, I'd suggest that if you have to ask then you shouldn't invest in that sort of thing.  But, if you do, the advice is to consider it to be a trade measured in days, not weeks.

Now, this is a shame as it would be nice if they were the sort of thing that could be held for longer term gains, but they're pretty-much not.

Thanks dgul- suspected as much.

... and seriously, many thanks for the info. Tricky bloody bastards out there... thank God for everybody on this thread. 

Does anybody else feel like we are in Kelly’s Heroes and it’s the bit where they lads have to pick their way through a minefield..? 

(Searching for gold, in fairness!)

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Nice little Sunday morning chart recap to go with your morning coffee. Covers equity indexes, commodities etc. One always has to be wary of confirmation bias with these videos if they're predicting something you're hoping for, but he seems fairly balanced.

Overall thesis is there are some bullish setups appearing in various markets as tests and breakdowns through support have failed to trigger sell-offs.

 

Edited by MvR

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13 hours ago, DurhamBorn said:

What the bond market is doing is acting as somewhere to park money.

There was a interesting analogy to gold and cars in Moneyweek on Friday. It is similar to owning Gold, which generates no yield, and paying Bullionvault or the bank to store it for you. Likewise, owning a car and paying someone to store it in their garage.  

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12 hours ago, DurhamBorn said:

Credit has been tightening for two years.The Fed has been doing it.House prices where i live are at 2003 prices.South is falling now and will fall for 8 years in real terms.There are bankruptcies ,but not the big ones that hit the news yet.Sterling falling 30% has helped shield the UK for now.Not much longer though as sterling starts to rise.

Global liquidity supply is the big one,flat to falling while demands on it (debt) increased.

https://www.yardeni.com/pub/frodorcb.pdf

I own shares in Begbies Traynor, who are insolvency practitioners for the SME market. They’ve been doing well the past few years. There’s a lot of companies going bust out there.

Edited by Castlevania

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8 hours ago, Thorn said:

Lots of Nickel miners not available on HL. Horizonte is the one it seems.

Came across 3NIL in there though- says it’s an ETFS and it’s 3xdaily long nickel. Bloomberg says it’s an ETC. 

Ok so sorry all if this is a bit of a basic question... but say if you were get x of this in your HL SIPP... and it goes up, that’s good. But if it goes down... do you just lose what you bought? 

Horizonte is available on hl or am I missing something?

https://www.hl.co.uk/shares/shares-search-results/h/horizonte-minerals-ord-gbp0.01/buy-and-sell-shares

It isnt available on the regular saver is that what you mean?

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Iv been going through the US steel stocks and wow they have been really smashed down.AKS Steel ,US Steel etc.They usually run hard (200%+) just before a crash as CBs go loose.Im really tempted to take a small contrarian punt on a couple,even though the timescale may be tight.

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Was talking to a young lad who has just started at PWC in Canada and they are preparing for a huge shares rout.

Thought it would be a bit off quizing him so left it at that.

If that is the impression a newby has at his employer then it was good enough for me.

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42 minutes ago, spunko said:

Imagine the glee on the faces of the housebuilders when they worked out they could sell the same plot of land to two different parties. Hopefully they get their comeuppance one way or another. 

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6 minutes ago, Thorn said:

Yes you can get Horizonte alright there in a HL SIPP

Sorry misread your post HZM is the only one. Just wanted to make sure I had the right one on my watchlist.

I have KDNC as well and they have dealings with other lithium miners.

https://www.hl.co.uk/shares/shares-search-results/c/cadence-minerals-plc-ord-0.01p

Not advice, dyor ect.

Edited by stockton
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