• Welcome to DOSBODS

     

    DOSBODS is free of any advertising.

    Ads are annoying, and - increasingly - advertising companies limit free speech online. DOSBODS Forums are completely free to use. Please create a free account to be able to access all the features of the DOSBODS community. It only takes 20 seconds!

     

spunko

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

Recommended Posts

4 hours ago, spunko said:

Its vile that they've done this, but unless the contract did not say "leasehold" i fail to see how it was mis-sold. I bought a leasehold flat 22 years ago, surely i was mis-sold this if they were.

These people are just outright stupid.

Edited by Tdog

Share this post


Link to post
Share on other sites
38 minutes ago, Tdog said:

Its vile that they've done this, but unless the contract did not say "leasehold" i fail to see how it was mis-sold. I bought a leasehold flat 22 years ago, surely i was mis-sold this if they were.

These people are just outright stupid.

I bought a leasehold house and then bought the freehold after two years.I waited until the day before we completed,other people had bought a new house and it was a builder part ex.I said oh its leasehold im dropping out unless you cut the price,think i said £10k or something (i knew i could buy the freehold for £4k in 24 months) so they did and then i bought the lease and was £6k better off.

Its a vile practice selling houses leasehold mostly,but the people who bought them knew they were leasehold and likely got them cheaper because of that.The real story is that people dont budget to buy the freehold,dont bother for decades and then it goes into marriage value and the cost shoots up.

I reckon if the government do anything they will make it so you cant sell a freehold on without first offering it to the leaseholder at a set price.Also probably stop ground rents increasing more than inflation.

This county is now full of people who have zero understanding of money,or investments or markets.They are like infants happy to take the gains,but cry on the falls.Just wait until HTB blows up.

 

Share this post


Link to post
Share on other sites

Here's one for you @durhamborn - Do you think there is any chance, no matter how slight, that things could just carry on the way they are, and the money carnival carries on until most of us are dead? (After which, it won't matter to us any way).

 

Share this post


Link to post
Share on other sites
3 minutes ago, DurhamBorn said:

I bought a leasehold house and then bought the freehold after two years.I waited until the day before we completed,other people had bought a new house and it was a builder part ex.I said oh its leasehold im dropping out unless you cut the price,think i said £10k or something (i knew i could buy the freehold for £4k in 24 months) so they did and then i bought the lease and was £6k better off.

Its a vile practice selling houses leasehold mostly,but the people who bought them knew they were leasehold and likely got them cheaper because of that.The real story is that people dont budget to buy the freehold,dont bother for decades and then it goes into marriage value and the cost shoots up.

I reckon if the government do anything they will make it so you cant sell a freehold on without first offering it to the leaseholder at a set price.Also probably stop ground rents increasing more than inflation.

This county is now full of people who have zero understanding of money,or investments or markets.They are like infants happy to take the gains,but cry on the falls.Just wait until HTB blows up.

 

I bought in a hurry and didnt quite understand to the extent the leaseholder had me by the balls, and i didnt quite understand what i was paying hundreds of pounds a year for other than them cutting the grass which as there were circa 100 flats in 5 blocks was a profitable deal for someone. I will never buy such a place again.

Ironically i wanted to rent the place out whilst i travelled the world but was not allowed (if i could have i'd not have been a HPCer), i went to the office and it was some guy renting expensive office space doing fuck all, all paid for by mug leaseholders.

Quite simply leasehold is a scam that needs ending, but these people have not been mis-sold anything.

Share this post


Link to post
Share on other sites
4 minutes ago, Loki said:

Here's one for you @durhamborn - Do you think there is any chance, no matter how slight, that things could just carry on the way they are, and the money carnival carries on until most of us are dead? (After which, it won't matter to us any way).

 

No,there are too many tensions now.We could go straight to a reflation,with the debt deflation limited,but we are getting a debt deflation and we are getting inflation,the only question is time and length.The Fed are way too tight and have been for two years.They are too far behind the curve.Look at some of the falls in UK stocks and even in US cyclicals.Many stocks are down more than any time in history.My road map said PEs down to 6 to 8 and many stocks are at that now.

Share this post


Link to post
Share on other sites

Mines on a 999 year lease at a princely sum of £10 per year, I always pay by cheque so it costs the cunt money to process it and ask for a receipt all of which takes the twat time.

The lease has been with the family of the original builder on the female side I believe and he used an agent to collect the monies, originally estate agents but as they went bust (3 of them) it then went to a specialist in Swansea who just collects lease money.

He has now stopped collecting the money i.e. the agent is not collecting it and split the leases into three batches, sold two of them and the other is unsold and mine is one of them.

So no money has been collected for 3 years now as I imagine it would cost more to actually collect annually i.e. he would loose money.

I watch and wait.

Share this post


Link to post
Share on other sites
1 hour ago, Chewing Grass said:

Mines on a 999 year lease at a princely sum of £10 per year, I always pay by cheque so it costs the cunt money to process it and ask for a receipt all of which takes the twat time.

The lease has been with the family of the original builder on the female side I believe and he used an agent to collect the monies, originally estate agents but as they went bust (3 of them) it then went to a specialist in Swansea who just collects lease money.

He has now stopped collecting the money i.e. the agent is not collecting it and split the leases into three batches, sold two of them and the other is unsold and mine is one of them.

So no money has been collected for 3 years now as I imagine it would cost more to actually collect annually i.e. he would loose money.

I watch and wait.

true,a lot in the north west and Sheffield are on 999 year leases.They were often built with church money etc and the lease will contain things like must not be used as a brothel,no goats kept in garden etc.The ones on more modern houses are usually 100 or 120 years.Mine was the same.Ground rent £25 a year no increase.However at 75 years marriage value kicks in and the cost to buy shoots up.Its that 75 year mark that causes most of the problems,or if the lease terms double every ten years etc.A lot of my neighbours were offered to buy the freeholds for £500 about a few years before i bought my house,around half turned it down,crazy.Looking at land registry data etc it looks like one in three on my estate are still leasehold,and thats 69 years left now so price will be shooting up each year to buy the freehold.

Share this post


Link to post
Share on other sites
3 hours ago, DurhamBorn said:

No,there are too many tensions now.We could go straight to a reflation,with the debt deflation limited,but we are getting a debt deflation and we are getting inflation,the only question is time and length.The Fed are way too tight and have been for two years.They are too far behind the curve.Look at some of the falls in UK stocks and even in US cyclicals.Many stocks are down more than any time in history.My road map said PEs down to 6 to 8 and many stocks are at that now.

Thanks mate

Share this post


Link to post
Share on other sites
22 hours 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 

I wondered about the straightness of that long diagonal and thought it couldn't be true. If only all share buying was that easy.

Share this post


Link to post
Share on other sites
1 hour ago, Democorruptcy said:

I wondered about the straightness of that long diagonal and thought it couldn't be true. If only all share buying was that easy.

was it diluted or consolidated along the way? rights issues/buybacks etc or consolidation tends to bugger up graphs when the NAV cant be traced back properly because it has fundamentally changed, eg 1 share is now 100 old shares etc. Maybe they just cant draw the graph and have limited data so just joined the limited data with a straight line?

Share this post


Link to post
Share on other sites
6 hours ago, DurhamBorn said:

reckon if the government do anything they will make it so you cant sell a freehold on without first offering it to the leaseholder at a set price.Also probably stop ground rents increasing more than inflation.

I thought that this was the case, or is it just for flats where all the residents can form an association to buy it?

Share this post


Link to post
Share on other sites
24 minutes ago, MrXxxx said:

I thought that this was the case, or is it just for flats where all the residents can form an association to buy it?

Flats,thats more to do with service charges rather than ground rents.

Share this post


Link to post
Share on other sites
8 hours ago, Loki said:

Here's one for you @durhamborn - Do you think there is any chance, no matter how slight, that things could just carry on the way they are, and the money carnival carries on until most of us are dead? (After which, it won't matter to us any way).

 

Debt is lent for specific periods - 10y era commercial, 25 consumer mortgages.

Got to refinance after that period ends.

As far as UK housing goes, less n less epople are taking on debt. Its truely remarkable, and not wholly explained by demographics.

*if* it carries on then people - and banks - have to a serious look at whether the house the debt is secured on is really sellable at anywhere near the price on the books.

UK housing is just too expensive for UK incomes. Theyll fall.

 

 

 

 

 

Share this post


Link to post
Share on other sites
7 minutes ago, spygirl said:

Debt is lent for specific periods - 10y era commercial, 25 consumer mortgages.

Got to refinance after that period ends.

As far as UK housing goes, less n less epople are taking on debt. Its truely remarkable, and not wholly explained by demographics.

*if* it carries on then people - and banks - have to a serious look at whether the house the debt is secured on is really sellable at anywhere near the price on the books.

UK housing is just too expensive for UK incomes. Theyll fall.

 

 

 

 

 

Sure will Spy.70% inflation adjusted probably in the south,north much less,but still falls inflation adjusted.Highly likely housing will take most of the pain in the UK as that is where most over investment went.Many new build HTB estates will see massive falls,ones near me only finished a couple of years are falling apart already and look terrible.

Share this post


Link to post
Share on other sites

Love the UK. And Love Ireland. But it’s getting ridiculous. Border Customs posts here have now got fencing up again like there are plans for the diggers and builders to move in. Cannot contain myself with anger at the notion.

Brexit is a 100% disaster for Ireland and might restart the religious Civil War here that the So-Called BBC called The Troubles.

I hope it does not.

...meanwhile we have to listen to people like this tell us it’s good for us. 

https://www.politicshome.com/news/uk/political-parties/labour-party/john-mcdonnell/news/105738/john-mcdonnell-brands-sajid-javid

 

Share this post


Link to post
Share on other sites
2 minutes ago, Thorn said:

Love the UK. And Love Ireland. But it’s getting ridiculous. Border Customs posts here have now got fencing up again like there are plans for the diggers and builders to move in. Cannot contain myself with anger at the notion.

Brexit is a 100% disaster for Ireland and might restart the religious Civil War here that the So-Called BBC called The Troubles.

I hope it does not.

...meanwhile we have to listen to people like this tell us it’s good for us. 

https://www.politicshome.com/news/uk/political-parties/labour-party/john-mcdonnell/news/105738/john-mcdonnell-brands-sajid-javid

 

Sorry DB and sorry not meaning to derail thread at all. I know Brexit makes sense for some - it seems less EU taxes will benefit many- but from here it is going to be a complete disaster. The Peace here is so fragile. 

Share this post


Link to post
Share on other sites

Just replying to a couple of things off previous thread

@JMD

'Sancho your scs scores are excellent, I find them very helpful, but I don't think they include for factors like long-term-low-interest-debt 'protection' or 'valuable' fixed assets do they? ...how granular to go I guess might be your answer? ...but the reason I ask is because identifying companies with these positive factors (along with good cashflow which I know you do account for) would help find financially sound companies, ones that are better positioned to survive next 10 years.    '

 

No they don't JMD,their purpose is to support spray n pray operations in a sector.So a companies debt profile in terms of duration is ignored but it's total debt isn't.There's an element of 'ceteris paribus' here in that investing across a basket of stocks ,we'll hopefully pick up a nice cross section of corporate detbs across a sector in terms of both duration and debt to equity.

The key aim is to be able to pluck out the clear 'no go's' and focus on the ones that offer the more reliable win.After the inital sift,we might then include other factors such as those you mention as we weight the purchases.

It would also,by implication,allow you to find the companies that are the most leveraged play in the sector by going for the ones with the lowest scores.

 

@Harley 

@sancho panza did you publish the methodology behind these scores?

 

You have to understand that I've developed this system to help with spray n pray operations in various sectors not to assess single companies on their individual merits. Worth noting from the start that all the scores have to be adjusted for the average for the sector.Comparing Telco's with oil services isn't what it's intended for.It serves to pick out the least leveraged,most profitable companies in one sector by comparing companies in one sector with each other.It's based loosely on the Glasgow Coma Scale which is used as an aid in assessing the conciousness of patients.The aim of the Scale is to monitor any change in the neurological state of a patient

 

Glasgow Coma scale scored out of 15(4/5/6)

Eyes:
Open spontaneously 4, open to voice 3, open to pain 2, don't open 1.

Verbal:

Orientated 5, Confused 4, Inappropriate words 3, Inappropriate sounds 2, no response 1.

Motor:

Obey commands 6, Localizes to pain 5, Normal flexion 4, Abnormal flexion 3,  Extension 2, No response 1.

With GCS you get a score between 3 and 15

 

Scores for the Sancho Coma Scale for stocks are worked out a below

            Chart                  Profitability                            Balance sheet                    free cash flow                      Sector

5= very low in chart    Well above average               Very solid                             excellent for the sector     Very good value compared to other sectors

4= below average         Above average                      Above average                    above average                     Good value

3=average                      average                                    average                              average                                   average

2= above average..........and so on.

Lowest score you can get is 5,highest 25.Obviously,subjective,eg having the whole PM mining sector graded as a 5 increases the chances of a score of 17(17 is,aside from company specific issues,my buying point).In a way though,that's it's purpose.It's hopefully gets you running with the bull, as a key feature of stock picking is picking the right sector that has upside potential

Chart score:I have a long term chart set up I like and use as Harley and other chartist will admit,there's a good degree of latitude in reading charts.My score is my view of how much upside there is.5 means lots of upside potential,1 means it's historically high

Obviously,there's a degree of subjectivity in the comparisons of balance sheet,FCF,profitability as for instance, there are some sectors where intangibles will include assets such as intellectual property that likely have a value whereas one might not feel an estate agent would not.

It is what it is but it's a plank of how we're investing at the minute

 

 

To give a flavour of what I do here is my assessment of OIH ETF -oil services

SLB 43334=17

HAL 44134=16

FTI 31414=13

MOR 41124=12

BHGE 42434=17

TS 45434=20

NOV 41434=16

CLB 44144=17

ESV 51324=15

PTEN 41444=17

RIG 51234=15

OII 42345=16

APY 33334=16

HP 34544=20

DRQ 32524=16

NBR 51114=12

RPC 43554=21

DO 52324=16

CJ 42434=17

NE 51224=14

OIS 42434=17

SPN 51114=

Edited by sancho panza

Share this post


Link to post
Share on other sites
On 30/08/2019 at 16:53, DurhamBorn said:

An apt time to continue part 2.

Might be worth @sancho panza adding on his scores on the doors from different sectors on the first few pages of the thread.They are an excellent way to look at the sectors most of interest going forward.Reference of course not investment advice.

When I have some time,I'll stick up the sectors I've been through.Got my Dad over at the mo and so my evenings and days are going to be busy.Only four side of psots to catch up on.

If I can we'll be doing first ladders in oil services/potash/Nat Gas and XOP, this week.

@spunko I donate to a few sites I frequent regularly eg Wolf Ricther and would be grateful to have the chance to offer some support given how frequently I dwell in the basement and how much I appreciate the discussion.Thanks as ever for your efforts and time.

Edited by sancho panza

Share this post


Link to post
Share on other sites
9 hours ago, DurhamBorn said:

No,there are too many tensions now.We could go straight to a reflation,with the debt deflation limited,but we are getting a debt deflation and we are getting inflation,the only question is time and length.The Fed are way too tight and have been for two years.They are too far behind the curve.Look at some of the falls in UK stocks and even in US cyclicals.Many stocks are down more than any time in history.My road map said PEs down to 6 to 8 and many stocks are at that now.

Hey DB, seen many U.K. stocks have been hammered, yet the index is still relatively close to all time highs. Which sectors are keeping it afloat?

Share this post


Link to post
Share on other sites
5 hours ago, leonardratso said:

was it diluted or consolidated along the way? rights issues/buybacks etc or consolidation tends to bugger up graphs when the NAV cant be traced back properly because it has fundamentally changed, eg 1 share is now 100 old shares etc. Maybe they just cant draw the graph and have limited data so just joined the limited data with a straight line?

Does anybody know if (and if so, where) you can find graphs of market cap over time? The number of shares in issue of many companies are constantly changing and I feel that simply looking at the share price doesn't always give a true reflection of value. Would also be nice to then plot the debt of the company in a bar chart behind the market cap line.

Share this post


Link to post
Share on other sites
3 hours ago, sancho panza said:

@JMD

'Sancho your scs scores are excellent, I find them very helpful, but I don't think they include for factors like long-term-low-interest-debt 'protection' or 'valuable' fixed assets do they? ...how granular to go I guess might be your answer? ...but the reason I ask is because identifying companies with these positive factors (along with good cashflow which I know you do account for) would help find financially sound companies, ones that are better positioned to survive next 10 years.    '

No they don't JMD,their purpose is to support spray n pray operations in a sector.So a companies debt profile in terms of duration is ignored but it's total debt isn't.There's an element of 'ceteris paribus' here in that investing across a basket of stocks ,we'll hopefully pick up a nice cross section of corporate detbs across a sector in terms of both duration and debt to equity.

The key aim is to be able to pluck out the clear 'no go's' and focus on the ones that offer the more reliable win.After the inital sift,we might then include other factors such as those you mention as we weight the purchases.

It would also,by implication,allow you to find the companies that are the most leveraged play in the sector by going for the ones with the lowest scores.

SP, to be fair to you, I think that you previously described your scs system perfectly well, when you introduced it some weeks back. But I guess its important to remind us of the rationale for using the scs scores, i.e. that you can use this method to help identify a selection of good/potential stocks within specific (reflation) sectors.

Further validation checks, including for example company debt profile, (ceo psychopathy!), etc., is entirely driven by the level of scrutiny/risk of individual before deciding to buy or not.  

         

Edited by JMD

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.