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

[DoINeedOne]

13 hours ago, Castlevania said:

Do you have a screenshot of the listed investments in agriculture?

[Nicolas Turgeon]

Latest contrarian blog post by Steven Jon Kaplan is now up. Interesting that he's "currently sporting my heaviest net short percentage since August 2008"

https://truecontrarian-sjk.blogspot.com/2020/08/the-trick-of-successful-investors-is-to.html

[wherebee]

2 minutes ago, Nicolas Turgeon said:

Latest contrarian blog post by Steven Jon Kaplan is now up. Interesting that he's "currently sporting my heaviest net short percentage since August 2008"

https://truecontrarian-sjk.blogspot.com/2020/08/the-trick-of-successful-investors-is-to.html

More and more voices are saying expect the crash.  Does that mean that we are now mainstream and not contrarian?  And doesn't that mean we should reconsider (seeing as the masses always get this stuff wrong!)

[AWW]

Nothing is certain... there are more than a few on this thread who don't think there will be a crash at all and, the more I hear that there's one dead ahead, the less I think it'll come to pass.

[Green Devil]

12 minutes ago, Nicolas Turgeon said:

Latest contrarian blog post by Steven Jon Kaplan is now up. Interesting that he's "currently sporting my heaviest net short percentage since August 2008"

https://truecontrarian-sjk.blogspot.com/2020/08/the-trick-of-successful-investors-is-to.html

The problem with shorting is you're only right for one week every 10 years. The rest of the time youre wrong. It's better to buy as inflation is always on your side. 

[Bear Hug]

12 minutes ago, Nicolas Turgeon said:

Latest contrarian blog post by Steven Jon Kaplan is now up. Interesting that he's "currently sporting my heaviest net short percentage since August 2008"

https://truecontrarian-sjk.blogspot.com/2020/08/the-trick-of-successful-investors-is-to.html

I saw that too. It's hard to reconcile this with the views of another contrarian (David Hunter) who is expecting a rally first. 

https://mobile.twitter.com/DaveHcontrarian/with_replies?lang=en

 

[ThoughtCriminal]

I think an issue we face now is that it isnt easy to dismiss the voices saying “It’s different this time” because we’ve never faced conditions like these before. 
 

Maybe it really is different this time.

[Loki]

The last 5 posts just make me think "When the last bear turns bull"

Have we forgotten that TSLA is now over $2000 and Apple 'worth' 2 trillion?! Those aren't crashtastic numbers at all....

Your average investor clearly isn't expecting anything except more gainz - it is still contrarian to expect a crash IMO

[ThoughtCriminal]

6 minutes ago, Loki said:

The last 5 posts just make me think "When the last bear turns bull"

Have we forgotten that TSLA is now over $2000 and Apple 'worth' 2 trillion?! Those aren't crashtastic numbers at all....

Your average investor clearly isn't expecting anything except more gainz - it is still contrarian to expect a crash IMO

Agreed.

 

I still think there’ll be a spectacular crash, I just wonder if it’s going to be almost impossible to detect the catalyst this time.

[Loki]

1 minute ago, ThoughtCriminal said:

Agreed.

 

I still think there’ll be a spectacular crash, I just wonder if it’s going to be almost impossible to detect the catalyst this time.

It will be artificially triggered by a media-manufactured second wave of the the Deadly Killer Virus of DOOM (Survival rate >99%) IMO.

"They" control the economy entirely, it seems reasonable to assume that includes when it 'crashes' too.

[DurhamBorn]

Id rate Steve Kaplan as one of the best contrarian investors in the world,but he isnt a macro strategist.He spots value very well,not timing.People should always read him though as he is superb for highlighting under valued sectors/countries and has a long history.He is also a superb person.

David Hunter is one of the best macro strategists on the planet.His job isnt to allocate capital,its to position a road map for others.I can say though (as i have some of his tools) that he will be watching Fed liquidity closely because everything going down isnt a given due to the structure of the crash.We might see a huge sector rotation and a slow grind down in bonds etc.

[Jesus Wept]

1 hour ago, Loki said:

The last 5 posts just make me think "When the last bear turns bull"

Have we forgotten that TSLA is now over $2000 and Apple 'worth' 2 trillion?! Those aren't crashtastic numbers at all....

Your average investor clearly isn't expecting anything except more gainz - it is still contrarian to expect a crash IMO

This @Loki so true.... 

So many of the old cliches being rolled out.

“New paradigm”

“Its different this time” 

Once sentiment turns the rush for the exit will be comical.

1 hour ago, ThoughtCriminal said:

Agreed.

 

I still think there’ll be a spectacular crash, I just wonder if it’s going to be almost impossible to detect the catalyst this time.

I agree with @ThoughtCriminal it will be a spectacular crash. 
 

The only question is WHEN?
 

All the fundamentals say ‘any day now’ - I based my recent financial decision of closing 70% of my portfolio as the crash being sometime in September  - (glad I left in ‘that Hedge 30% mind’ - nice paper profits today 😂 on those long term holds) however as a ‘contrarian’  I could see this market continuing to melt-up (a la Hunter) until November and onwards into 2021. Just far too risky for me to leave a significant cash pile in. Sleeping much better now. 😁
 

To be honest the longer the market continues without a crash the better for me. More time to get positioned and build liquidity. Also I’d take the profits on the stocks I still hold if they do 20% +

Ideally a continued inflation of the bubble building and consuming into P, O, and T ‘s..... followed by a massive drop in March 2021 followed by a ‘prolonged’ 18month bear market into 2022 would be perfect....before the 2022-30 massive re-inflation of the sectors: POTISM.....is that too much to ask?  😂 

We shall see....

 

[AWW]

21 minutes ago, Vendetta said:

POTISM

O P T I Mi S M

Oil, Potash, Telecoms, Industrials, Miners, Silver, Materials

[DoINeedOne]

https://telecoms.com/506163/private-equity-firms-reportedly-mull-15bn-bt-bid/

BT’s share price has jumped on a rumour that it is preparing to defend itself from a potential £15 billion takeover bid.

This is according to Sky News, which reports that several large private equity firms are exploring the possibility of launching a joint offer for the whole company. In response, BT is said to have asked bankers at Goldman Sachs to update its bid defence strategy. Presumably this is a fancy way of saying it is going to beg large shareholders – which includes Deutsche Telekom – to ignore any offers. The report also claimed that BT might hire boutique investment bank Robey Warshaw as an advisor.

Unsurprisingly, a BT spokesman declined to comment on the report.

Before the news broke, BT’s market capitalisation stood just north of £10 billion, making it cheaper than the sum of its parts. Indeed, when rumours circulated that BT was mulling whether to offer a stake in networks business Openreach to its pension scheme in a bid to plug its multi-billion-pound deficit, the unit was valued at around £20 billion.

There are several reasons why, for a company of its size, BT Group’s shares are going for bargain-basement prices – the aforementioned pension scheme being one of them.

There is also the non-trivial matter of Openreach’s plan to roll out full fibre to millions of premises – which includes 3.2 million rural residences – by the middle of the decade. The high cost of such a project led BT to axe its annual dividend for the first time since privatisation.

In addition, Covid-19 and the resulting postponement of several major sporting events, also hit its TV business.

BT is also in the middle of a major restructuring that includes 13,000 redundancies and shuttering 90 percent of its offices in an effort to shed £1.5 billion of costs over five years. It also struggling to steady the ship at Global Services. Its enterprise unit has been hit by reduced business activity caused by the pandemic. Global Services is also still trying to bounce back from 2017’s accounting scandal in Italy – the catalyst for the slump in BT’s shares and which ultimately led to the departure of former CEO Gavin Patterson.

Sources cited by Sky claim his successor, Philip Jansen, would be able to complete the restructuring more quickly if BT were to go private. Despite all these and other challenges facing BT, the share price is said to have reached such a nadir that it is proving hard for potential suitors to resist.

[Jesus Wept]

53 minutes ago, AWW said:

O P T I Mi S M

Oil, Potash, Telecoms, Industrials, Miners, Silver, Materials

I bloody love that! 
 

OPTIMiSM 

I am going to steal...patent and brand this share buying tag line! “OPTIMiSM”

Will be useful when inflating the bubble.... (mind @DurhamBorn will probably want his rights!)....

[leonardratso]

not seeing much jumping go on in BT, went up fell back a bit +5% now, looks disinterested.

 

[Jesus Wept]

2 minutes ago, leonardratso said:

not seeing much jumping go on in BT, went up fell back a bit +5% now, looks disinterested.

 

Might build slowly on firmer news....

[JMD]

23 hours ago, Clueless Imbecile said:

DurhamBorn, just wondering if you ever looked at....
https://www.hl.co.uk/shares/shares-search-results/h/hsbc-etfs-plc-msci-russia-capped-ucits-etf

https://www.hl.co.uk/shares/shares-search-results/i/ishares-vii-plc-msci-russia-adrgdr-ucits

Last time l looked, they seemed to have a lot of oil & gas companies (Gazprom, Lukoil, Novatek, Tatneft, Rosneft) and also some metal mining/production (MMC Norilsk Nickel PJSC, Polyus PJSC).

Both funds appear the same to me, same performance, and also appear to track the same index, or at least both funds hold ostensibly the same stocks (cant go strictly by the 'top 10 stocks', because each fund updates their data different times). The HSBC fund is slightly cheaper, so probably that is the one to use.

The strange/interesting thing is that i had the following Russian fund on my radar (more expensive, but that's JPM for you!), but which again seems to hold the same stocks , with similar looking charts. However the below IT's performance is lot better over 5/10 years. I wonder if its because this is an investment trust? It is twice as expensive as the above funds, but its performance is >30% better over 5 years (so which is best to hold)? 

https://www.hl.co.uk/shares/shares-search-results/j/jpmorgan-russian-securities-ordinary-1p

I wonder - Is this just an example of the type of anomalous performance reporting to be expected when comparing funds and trusts? Maybe its down the IT is leveraging/borrowing to buy more stocks and therefore receiving correspondingly larger gains? 

 

Is someone more knowledgable about funds, etc, able to explain the performance difference between the fund and the investment trust...

Harley - if you have a few minutes free from building that (border!) wall - be great if you could maybe comment?

[MrXxxx]

6 hours ago, wherebee said:

More and more voices are saying expect the crash.  Does that mean that we are now mainstream and not contrarian?  And doesn't that mean we should reconsider (seeing as the masses always get this stuff wrong!)

Yep, I always make sure I do completely the opposite to @YRS !...where is he buy the way, we haven't heard anything from him recently?...perhaps he is reading `Rich dad, poor dad` to hone his share buying prowess?! :-) :-) :-)

[Bobthebuilder]

1 hour ago, MrXxxx said:

Yep, I always make sure I do completely the opposite to @YRS !...where is he buy the way, we haven't heard anything from him recently?...perhaps he is reading `Rich dad, poor dad` to hone his share buying prowess?! :-) :-) :-)

I do hope he is ok, have not seen a post in quite some time.

I have not seen anyone mention Standard Life Aberdeen on here for quite a while either. They held up really well through the last year, a good share i think to have in the pension.

[DurhamBorn]

2 hours ago, Bobthebuilder said:

I do hope he is ok, have not seen a post in quite some time.

I have not seen anyone mention Standard Life Aberdeen on here for quite a while either. They held up really well through the last year, a good share i think to have in the pension.

I added some more in March when they went under £2.Id happily buy them at this price and probably will add a few more from divis,or in my SIPP.They might have to trim the divi at some point but not certain.They should do well as their funds lean more to value and reflation areas.

[MvR]

 

Uncannily accurate..

 

[Loki]

His gold analogy is Warren Buffet's

[sancho panza]

14 hours ago, Cattle Prod said:

Great chart here from Art showing that 83% of global supply growith has been from tight oil 2009-2019. This is why I go on about it. Another 10% from deep water and oil sand are not receiving any investment either. Current tight oil decline is running at ~250k per month, though the rig count has started to pick up a little. 

 

Any chance we can get a laymans explanation of what tight oil refers to CP?

That cahrt is striking.

 

12 hours ago, AWW said:

Nothing is certain... there are more than a few on this thread who don't think there will be a crash at all and, the more I hear that there's one dead ahead, the less I think it'll come to pass.

Kaplan has a great record,but I'm wary of crash calls by anyone no matter how good their record.

Obviously, dyodd, but there's a few things missing I'd be expecting to see or have seen recently not least among them a rising USD which has been a frequnet occurence over the years.I suspect Trump and the Fed will run a weak dollar into Nov 2020.WE hevn't really had much of a weak dollar phase.

This is a tricky time.I could well be wrong,I'm debating raising some cash or buying some hedges but not willing to sell any oilies/potash/PM's as yet.

[sancho panza]

12 hours ago, Bear Hug said:

I saw that too. It's hard to reconcile this with the views of another contrarian (David Hunter) who is expecting a rally first. 

https://mobile.twitter.com/DaveHcontrarian/with_replies?lang=en

 

History is more on his side given the US establishments lack ofwilling to let markets drop into a US Presidential run off.COuld always be different this time though..