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

[janch]

21 hours ago, DurhamBorn said:

Fed is near the curve now,problem is the ECB isnt.The EU is proving a disaster.Once they start to rightsize the $ should fall.Over 100 and i think there are still systemic risks somewhere and the Fed will need to keep pumping.Once things settle and the world wakes up to the fact the super powers are going to face off for a cycle there will be a dash for real assets.

Many thanks DB.  That makes perfect sense.

[TheCountOfNowhere]

Any thoughts on:

 

Tata Motors Limited Fully Paid Ord. Shrs

[Loki]

3 hours ago, TheCountOfNowhere said:

Silver

Isn't silver at a ridiculously low spot price and silver/gold ratio?

Physical and paper prices are worth bearing in mind

Just checked out of curiosity and silver Brits back below £20.  Bought more.

[PaulParanoia]

34 minutes ago, Loki said:

Isn't silver at a ridiculously low spot price and silver/gold ratio?

Silver lagging Gold

[Loki]

1 minute ago, PaulParanoia said:

Silver lagging Gold

I saw that price of £19.94 and couldn't resist.  This is what following this type of info has done to me 

 

My name is Loki, and I'm a silverholic.

[TheCountOfNowhere]

46 minutes ago, Loki said:

Isn't silver at a ridiculously low spot price and silver/gold ratio?

Physical and paper prices are worth bearing in mind

Just checked out of curiosity and silver Brits back below £20.  Bought more.

U tried buying any ?

[Loki]

4 minutes ago, TheCountOfNowhere said:

U tried buying any ?

Have, and did 

 

As an aside, I really don't like the way they can't get a handle on the DXY...back over 100.  (I'm not basing that on any sort of in-depth knowledge by the way, it just seems odd)

 

[Moominpapa]

For those of you buying shell what do you think of them obtaining credit to maintain their dividend, if you're going to be a long term share holder? If you're looking for decent management when stock picking how does this sit with you?

[PaulParanoia]

Just now, Moominpapa said:

For those of you buying shell what do you think of them obtaining credit to maintain their dividend, if you're going to be a long term share holder? If you're looking for decent management when stock picking how does this sit with you?

Where did you read that they are using the new credit facility to maintain the dividend?  I though they secured it as a precaution but didn't need to draw on it at this time.  They might have to cut the divi before drawing the loan down.  We don't know what the terms are.

[JMD]

3 hours ago, TheCountOfNowhere said:

Do I mean that....that is a good question.

Yes, I think I do.

Show me an asset class that doesn't look inflated due to the events of 2007 onwards, cars, houses, US stock market, even Gold, Bit coin, Silver look historically high, relative to UK wages ( that's the important bit ).  In the great depression the US ( land of the free ) tried to confiscate gold.

I think the best you can hope for it to maintain your position but I dont think there is any simple answers on how to do that other than to try and time your jump into various asset classes.

For that though we sure as hell better hope we are about to see some sort of asset deflation event.

Count, I was just wondering what your strategy was. You have on several occasions recently mentioned your own stock purchases, yet regularly state everything's in a massive bubble. (perhaps so where even cosmologists tell us we live in an inflationary universe, where stars are flying apart at 1000mph, so maybe absolutely everything exists within a bubble)   

Ok, only fair to at least briefly mention my own strategy. I do expect a crash later this/next year, so am waiting for that and hope to benefit from it. I have bought into the 'market bubble' in recent years because I wanted to begin positioning for the next cycle. Much of this 'investment game' is new to me and I have certainly made some mistakes, but knew in order to learn I had to start buying and reviewing my decisions. Hopefully I wont get punished further in the next big market correction, if/when it comes.    

[Loki]

1 minute ago, JMD said:

I have bought into the 'market bubble' in recent years because I wanted to begin positioning for the next cycle. Much of this 'investment game' is new to me and I have certainly made some mistakes, but knew in order to learn I had to start buying and reviewing my decisions. Hopefully I wont get punished further in the next big market correction, if/when it comes.

You are me AICMFP

[Bricks & Mortar]

1 hour ago, Loki said:

As an aside, I really don't like the way they can't get a handle on the DXY...back over 100.  (I'm not basing that on any sort of in-depth knowledge by the way, it just seems odd)

This chap (stumbled on this on Twitter - don't know the guy), reckons extra liquidity usually shows up in the DXY after 2-3 months.  So, maybe we're just waiting for it?
 

I'm interested in leads and lags, but don't know it well enough to comment on this.

[Loki]

@Bricks & Mortar superb post for a novice like me, thanks

[TheCountOfNowhere]

1 hour ago, JMD said:

Count, I was just wondering what your strategy was. You have on several occasions recently mentioned your own stock purchases, yet regularly state everything's in a massive bubble. (perhaps so where even cosmologists tell us we live in an inflationary universe, where stars are flying apart at 1000mph, so maybe absolutely everything exists within a bubble)   

Ok, only fair to at least briefly mention my own strategy. I do expect a crash later this/next year, so am waiting for that and hope to benefit from it. I have bought into the 'market bubble' in recent years because I wanted to begin positioning for the next cycle. Much of this 'investment game' is new to me and I have certainly made some mistakes, but knew in order to learn I had to start buying and reviewing my decisions. Hopefully I wont get punished further in the next big market correction, if/when it comes.    

My strategy is based on better 30% of something than 100% of nothing.

Most of the stocks I've bought were/are down 50% from a peak, some like Centrica have gone about 50%+ past that, but at least 50% off already mitigates the losses.  I dont think it matters much what you buy now, so long as the company is solvent and has an actually place in a real economy.I got caught with the oil falling knife too but not far off even on those.

When we are coming out of lock down I'll pile a lot more into oil etc with a view to selling it when/if the 2nd wave starts hitting.  Stuff that should get back to normal quickly should be a good bet for a quick profit, EasyJet, Rolls Royce, Cineworld, Wetherspoons, but I'd buy and sell shortly after.

I expect losses for sure.  I should see any shares go into profit if DB's reflation takes off or I live long enough, or the economy doesn't imploded, so buying now is one of the few best options I see. 

I've not utilized a SIPP yet, as I did not want my money tied up in a stock market/pension that was going to fall at some point.  I'll move my £40K allocation in this year which will give me a healthy tax handout to mitigate my losses, I should use my wive's too when i think about it

I've got a lot of cash that's been coming out of 5 year fixed rated savings bonds for the last 2 years and I emptied peer 2 peer money in the nick of time.  Those rates were all very good and beat or kept up more or less with inflation ( that's the name of the game for me ).

For sure though, this cash is now earning below inflation rates but is easily accessible but it is beating housing for sure, probably up 10% on housing in 2 years ( down south ) with zero effort or risk, I'll plough a lot/most of that into land/housing here and abroad it collapses further, if not then I am left with a quandary of how best to try and protect it.  If house prices drop substantially I will take out a massive mortgage backed by my savings on the longest fixed I can get and pray that DB is right.  The savings would then go back into short term bonds, with get out clauses, maybe even some corporate bonds.  

I'm happy to buy into DBs long term view so will do what most on here are doing for now.  I've got some physical gold and silver, enough to live on for a year or two if need be.  I'm lucky to hold loads of index linked savings certs but even those are being hammered now as they are moving from RPI to CPI so will keep an eye on that.  

It's all about the timing now, when to get out of cash safe and with as few a losses as possible.

This is why I always go on about timing.

How does that sound ?

 

[Democorruptcy]

Greatest return on investment I've ever seen. A bloke on the news has made plenty.

I'm going to buy two

 

[Barnsey]

8 hours ago, DurhamBorn said:

If the US sees 20% unemployment we can expect massive fiscal injections as the Fed keeps expanding its balance sheet.

Markets arent linear and cycles take time to play out.If the CBs stopped printing now you would see the biggest financial and social disaster in history.A dislocation so large almost every company would go under.

U.S. unemployment already at 13.3% going by today’s figures, and that’s taken just 4 weeks to reach! All the jobs created in the last decade since the recession erased in a month.

[Harley]

4 hours ago, Loki said:

Have, and did 

 

As an aside, I really don't like the way they can't get a handle on the DXY...back over 100.  (I'm not basing that on any sort of in-depth knowledge by the way, it just seems odd)

 

Back on the "margin scheme" so no VAT charged?

[Loki]

9 minutes ago, Harley said:

Back on the "margin scheme" so no VAT charged?

Looks like it mate.  Too late now if they change their minds anyway   I think there might have been a site glitch too, for a while silver Leaf coins were VAT free but not Brits

[spygirl]

3 hours ago, Bricks & Mortar said:

This chap (stumbled on this on Twitter - don't know the guy), reckons extra liquidity usually shows up in the DXY after 2-3 months.  So, maybe we're just waiting for it?
 

I'm interested in leads and lags, but don't know it well enough to comment on this.

They are extending credit to jaPs, Canada, Mexico, UK n Europe, to support liquidty.

This is trade finance, basically.

It's not debt to plebs, so far.

[Iamcynical]

20 minutes ago, Loki said:

Looks like it mate.  Too late now if they change their minds anyway   I think there might have been a site glitch too, for a while silver Leaf coins were VAT free but not Brits

Where are these from please ?

[Loki]

3 minutes ago, Iamcynical said:

Where are these from please ?

coininvest.com

[Iamcynical]

Just now, Loki said:

coininvest.com

Thank you

[Moominpapa]

4 hours ago, PaulParanoia said:

Where did you read that they are using the new credit facility to maintain the dividend?  I though they secured it as a precaution but didn't need to draw on it at this time.  They might have to cut the divi before drawing the loan down.  We don't know what the terms are.

 

Well the ft seems to think otherwise

 

https://www.ft.com/content/ee832198-024b-4a0f-a61d-de767a1e6d6c

 

Basically if there are tough market conditions over the next 9 months they will  be incapable of maintaining their dividend. If the price of oil falls further that time frame.will be speeded up.

[PaulParanoia]

20 minutes ago, Moominpapa said:

 

Well the ft seems to think otherwise

 

https://www.ft.com/content/ee832198-024b-4a0f-a61d-de767a1e6d6c

 

Basically if there are tough market conditions over the next 9 months they will  be incapable of maintaining their dividend. If the price of oil falls further that time frame.will be speeded up.

Well I'm sure the FT are better informed than me. I'm holding this share for the long term gains in the much discussed coming reflation cycle. Dividends on top would be great but I wouldn't be surprised if they were reduced this year.

[Talking Monkey]

10 hours ago, Cattle Prod said:

I saw that, I think averaged its 9.something a day. OPEC has agreed to cut in excess of that, I was shocked they agreed substantial cuts to 2021.Organic cuts this year will be well in excess of that. So carnage for the next month or two as stocks fill, then stocks will rapidly draw if their projection is right. Will be an interesting end to the year ...

The scaling back of capex etc all just adds to the supply constraints that will inevitably appear. I also wonder the twattery Saudi did of pumping more did they damage their fields, theres probably some measure of damage thats been done