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

[Loki]

8 minutes ago, Bear Hug said:

For all of them?  I set 1-2% below current price limit orders in a few oil companies and most executed

No idea mate sorry, just throwing ideas around

[leonardratso]

hmm just been looking at QQQS - looks like its never spiked or gone up in its life

its a doozy;

[Bear Hug]

9 minutes ago, Loki said:

No idea mate sorry, just throwing ideas around

Same here. Buying a bit more just in case anyway

[Jesus Wept]

1 hour ago, leonardratso said:

hmm just been looking at QQQS - looks like its never spiked or gone up in its life

its a doozy;

I year profile allows you to see the spike from 19/02/20 to 13/03/20 when it moved from 60cents to 111cents so 85% return.

That is assuming you hold it for 2 weeks. The ETF also ’degrades’ due to high charge cost - so recommend 1 day hold only. However in a protracted 2 week crash it would be fine to hold it.

 

 

Now if only ‘one’ had gone long on QQQ3 After the March crash $751 (23.03.20 low) which now is $3311....

An amazing return of 440%.

It say hold for a day maximum - however would have done no harm to hold it for the 5 months..... 

[Jesus Wept]

Hurricane Laura about to slam into US oil region.
 

What effect will Hurricane Laura have on Oil market and prices? You’d think prices of Crude Oil would increase yes? 

However this is not the case.....

4 out of 5 of the largest oil refineries in the US are directly in the path of Laura. 

84% of oil output in Gulf of Mexico shut.

3mn barrels of oil refinery production is shut off right now. 

1.5m off shore barrels

There is a pipeline that carries another 3m barrels which may be disrupted.

$25bn potential damage to property and economy. 

However we know there is a glut of oil in  the current market at present - 80mn excess crude oil barrels in storage compared to this time last year. 507mn barrels in store. (All time record is 540mn barrels in storage). 

If the refineries shut more crude oil will end up in storage. 3million bpd as it cannot be ‘refined’.

The bottom line is this storm will depress crude oil price. 

Refineries are vulnerable to flooding.

Production platforms are much more resilient and won’t be affected as much - so oil will be produced at a faster rate than it can be refined. So barrels of oil will build up in storage.

However Gasoline prices will go up as the refined product market much tighter. 

[Option5]

7 minutes ago, Vendetta said:

Production platforms are much more resilient and won’t be affected as much - so oil will be produced at a faster rate than it can be refined. So barrels of oil will build up in storage.

A large number will be shut down and crews evacuated.

You can't really operate a platform in a hurricane as you can't go outside the accomodation to do things, so it will be shut down anyway, may as well evacuate the crew as well just in case.

[Jesus Wept]

2 minutes ago, Option5 said:

A large number will be shut down and crews evacuated.

You can't really operate a platform in a hurricane as you can't go outside the accomodation to do things, so it will be shut down anyway, may as well evacuate the crew as well just in case.

True - but what I mean is they will be back up and running in a few hours compared to refineries that could get offlined for a few days. .... flooding, personnel issues etc....

[Option5]

Just now, Vendetta said:

True - but what I mean is they will be back up and running in a few hours compared to refineries that could get offlined for a few days. 

Actually, getting the crews back out takes the time, availability of vessels and helicopters. Standby vessels will have run for port and you can't re-man until they get back. Helicopter seats are limited, as are pilot's hours.

Restarting time when started depends on the shutdown preparation (planned or not planned) and the pipeline pressures.

[Jesus Wept]

3 minutes ago, Option5 said:

Actually, getting the crews back out takes the time, availability of vessels and helicopters. Standby vessels will have run for port and you can't re-man until they get back. Helicopter seats are limited, as are pilot's hours.

Restarting time when started depends on the shutdown preparation (planned or not planned) and the pipeline pressures.

Up a $

[Option5]

2 minutes ago, Vendetta said:

Up a $

It's a blip, the oil price isn't based on supply and demand, it's overpaid "experts" betting against each other.

Just like the stock exchange it's just a stupid game of bluff and double bluff played out by people with big ego's and smaller brains.

[sancho panza]

Done with a view for spray n pray, not buying individual stocks.Intersting to see some changes since I last ran the Potash/Fertilizer co.s.SQM SCS score has come down but then it's price has come up.SDF looks even better(although it's balance sheet is on the edge of getting a 2).

Obviously there are reasons some co.s FCF has dropped eg capex so I know it has it's weaknesses.

Perhaps the most contrarian indicator I could find for any sector is below the scores on the doors.Time to back the truck up imho.

Decl:we hold most of them from.

Company	Chart	Income	Balance Sheet	Cash flow	Sector	SCS
CMP	2	3	1	3	4	13
YARIY $USD	3	4	3	4	4	18
NTR	3	4	3	4	4	18
SQM	3	3	3	2	4	15
ICL	5	4	3	4	4	20
IPL	4	3	3	2	4	16
MOS	5	1	3	1	4	14
K+S	5	4	3	5	4	21
IPI	5	4	4	1	4	18

 

https://www.etf.com/SOIL

 

 

[DurhamBorn]

8 hours ago, Loki said:

@DurhamBorn Do you have any thoughts on the upcoming Jackson Hole announcement from Powell?

No,Fed want rates below inflation for the rest of the cycle,they will do whats needed to get it.

[Loki]

4 minutes ago, DurhamBorn said:

No,Fed want rates below inflation for the rest of the cycle,they will do whats needed to get it.

I was hoping you'd say something like that - business as usual for us. 

Not wanting to put words in your mouth  - it sounds like you think it won't be anything to dramatic - nothing worth taking a cheeky punt on?  It's been so hyped up, maybe that's part of the plan.

[DurhamBorn]

54 minutes ago, sancho panza said:

Done with a view for spray n pray, not buying individual stocks.Intersting to see some changes since I last ran the Potash/Fertilizer co.s.SQM SCS score has come down but then it's price has come up.SDF looks even better(although it's balance sheet is on the edge of getting a 2).

Obviously there are reasons some co.s FCF has dropped eg capex so I know it has it's weaknesses.

Perhaps the most contrarian indicator I could find for any sector is below the scores on the doors.Time to back the truck up imho.

Decl:we hold most of them from.

Company	Chart	Income	Balance Sheet	Cash flow	Sector	SCS
CMP	2	3	1	3	4	13
YARIY $USD	3	4	3	4	4	18
NTR	3	4	3	4	4	18
SQM	3	3	3	2	4	15
ICL	5	4	3	4	4	20
IPL	4	3	3	2	4	16
MOS	5	1	3	1	4	14
K+S	5	4	3	5	4	21
IPI	5	4	4	1	4	18

 

https://www.etf.com/SOIL

 

 

Its fantastic that the ETF has shut isnt it,what a contrarian indicator.Just as we are about to enter a full on reflation.Belarus also has a few problems at the moment.

https://www.fitchratings.com/research/corporate-finance/global-potash-producers-may-benefit-from-lower-belarus-exports-25-08-2020

 

[mcdongle]

https://www.youtube.com/watch?time_continue=4&v=fyKSkj-2uN0&feature=emb_logo

 

Just watched this about oil prices..backs up this thread

[sancho panza]

On 25/08/2020 at 11:39, Cattle Prod said:

The other thing about Hunter is I think he takes a longer, more cyclic view than Kaplan. Kaplan is a details guy, and has dissected bull and bears going back a long way, but is to me, perhaps a little zoomed in. Hunter is zoomed out, and is looking at a 40 year rather than 10 year cycle. They will both be right, of course, but neither can time it IMO. I try to take the bits of both that resonate, and like @Harley try to listen to more than two people who resonate to try and pick up common threads, including the folks here of course.

I'm weighing lots of opinions here,incl those onthread.I think you're right on kapaln,he's an amazing historian but is currently going against what he's posted before about sector rotations before big downturns eg oil hasn't run up for one.

I jsut can't see the dollar strenghtening in the near term with the US pressie elections in Nov.

 

18 hours ago, DurhamBorn said:

About to turn up?,Im up 100% on Mosaic and many others are well up from their lows.Its a very good point though,lack of investor interest is fantastic.Its actually incredible how the market is structured at the minute.Is it 25% of the S+P now in a few techs?

Must say,we're on the verge of selling Goldfields/Anglogold and Fresnillo taking profits(GFI has four bagged from $3 in 2017...).Was going to plough it all back into PM's but instead going to use a chunk of it to add more Potash/but Telecoms.Looking at the balance sheets yesterday,you realsie how realtively solid the sector is(bit like the PM miners,jsut not leveraged much at all).We already have some but got some options I might excercise on MOS/NTR,generally add more SDF etal.

Yesterday,went through the sector as per psot and things look very solid indeed.WOuldn't tkae much of an upturn in prices for these companies to start throwing off the FCF.

I've been working through telecoms as well and BT looks incredible at these levels for long term buyers.I'll post when I've finished later

Ref that final stat,it's absolutely incredible that the Fang stocks are at that level.ANd it could get even worse before it resets,that's the crazy thing.XOM getting kicked out of teh DOw is a sign.

18 hours ago, Hardhat said:

I wish I'd bought MOS instead of the dog K+S. Still time to add Potash? MOS and Nutrien are favourites of this thread, any others? Or an ETF?

Oilies going lower, I don't think I'm brave enough to add more here as I'm already looking well allocated. But extension of furlough / WFH is worrying. Might be underwater for a while here, so keeping the faith as a LTH.

The tech bubble in US stocks is crazy. Many investors "Looking the wrong way" ?

K+S jsut hasn't run up yet.Looking across the PM sector there are some companies which have specific issues eg IAMgold,there are others that jsut haven't enjoyed much of the love more generally eg Oceana.

We're same as you ref oilies,jsut can't add more,no matter how compelling the case.

[Jesus Wept]

https://www.bbc.co.uk/news/business-53929215
 

More deflation.... £5.6bn loss in 6 months...

 

Down 7% in early trading around 235p. Low in March was 221p

[Democorruptcy]

Carney's new job:

Quote

 

Mark Carney is joining asset manager Brookfield to launch an “impact investing” fund focused on social and environmental benefits as well as financial returns, in his first big business role since his near seven-year term as Bank of England governor ended in March. 

Mr Carney has long been an advocate of more activist policies on climate change. While governor of the BoE, he launched the bank’s first climate-related stress tests and he has warned about the risks of coal, oil and gas investments in a world that is trying to limit greenhouse gas emissions. 

Accepting the Brookfield position, he said that investment that focuses on outcomes beyond financial returns was “one of the greatest commercial opportunities of our time,” and that he was “looking forward to building on Brookfield’s leading positions in renewable energy and sustainability”.

He will combine the role with a position as United Nations special envoy for climate action and finance, an unpaid, advisory position that centres on preparations for next year’s COP26 climate change conference in Glasgow.

Towards the end of his tenure as BoE governor, Mr Carney made a pitch to become the next head of the IMF, but failed to win backing from EU governments, which did not see him as sufficiently European despite his holding Irish and UK citizenship.

In an interview with the Financial Times this year, he highlighted what he saw as the limits of the private sector in tackling global warming. “I don’t think the financial sector should be or will be a substitute for climate policy,” he said.

The former British central banker is one of a long line of high-profile figures recruited to steer Brookfield, a $550bn business with investments ranging from Australian railways to French mobile phone masts and skyscrapers in London and New York.

Billionaire investor Howard Marks took a board seat this year after selling a majority stake in his Oaktree Capital to Brookfield in a $4.7bn deal. 

Brookfield also recruited Ron Bloom, an adviser to the Obama administration who helped to restructure Chrysler and General Motors, and Gus O’Donnell, the former head of the UK civil service.

The group’s embrace of impact investing follows similar moves by industry leaders including Bain Capital, TPG and KKR.

Such funds have sometimes provided a berth for former public officials who still harbour political ambitions. Deval Patrick, the former governor of Massachusetts, spent four years at Bain spearheading investments in “sustainable” enterprises ranging from sushi restaurants to composting companies, before quitting in 2019 to run for president.

https://wealthcreationinvesting.com/2020/08/26/mark-carney-joins-brookfield-to-launch-impact-investing-fund/

 

 

[Jesus Wept]

4 minutes ago, Democorruptcy said:

Carney's new job:

 

This is another article reinforcing the message:

”Investment moving away from big oil companies”.

The big oils will become the ‘tobacco industries’ of the 90/00’s - and look what happened to their share prices.....

e.g. BAT

330p to 5800p...... and big dividends all the way up too....

[wherebee]

45 minutes ago, Democorruptcy said:

Carney's new job:

 

jesus christ.

If I had any money in that investment fund I'd be getting it out.  That arsehole does not see the world through an honest lens (I think to be a senior official in the past 25 years you have to have drunk the kool aid), and his advice will be fucking terrible as a result.  He'll open some doors due to contacts, but in terms of investment strategy...

[DoINeedOne]

7 hours ago, mcdongle said:

Just watched this about oil prices..backs up this thread

Don't think you can embed videos as you only have a few posts so i will 

 

 

[DurhamBorn]

1 hour ago, Vendetta said:

This is another article reinforcing the message:

”Investment moving away from big oil companies”.

The big oils will become the ‘tobacco industries’ of the 90/00’s - and look what happened to their share prices.....

e.g. BAT

330p to 5800p...... and big dividends all the way up too....

The best investments iv ever had were ones like tobacco who could stop investing capital because nobody was entering the market. @Cattle Prod will know best but if big oil can slowly run off capital projects and tighten OPEX their free cash will explode in a rising oil price cycle.People dont understand returns.Iv worked out on BP for instance at my oil cycle average target (around $95) and their pulling back on oil/gas capital means they should be able to pay 6% divis +15% buy backs + $5 billion a year in green projects.So by the end of the cycle you might have a company with $5 billion profits outside of oil and gas that has delivered 200% return to shareholders.Thats minimum.

So my inflation target is roughly 65% compounded over the cycle (could be higher,road map is showing top line 98%) yet BP should return 200% + whatever oil and gas is left + a green business that has had around $60 billion invested.

Of course nothing is certain and we could be way wrong,but i trust my macro work more than i trust hyperbole.

 

[Lightscribe]

Fed announcement at 2pm BST today before the US markets open. Widely expected the unshackling from the 2% target inflation.

Which by coincidence another BTC fund aimed at the wealthy is launched.

https://www.bloomberg.com/news/articles/2020-08-26/fidelity-launches-inaugural-bitcoin-fund-for-wealthy-investors
 

[sancho panza]

1 hour ago, wherebee said:

jesus christ.

If I had any money in that investment fund I'd be getting it out.  That arsehole does not see the world through an honest lens (I think to be a senior official in the past 25 years you have to have drunk the kool aid), and his advice will be fucking terrible as a result.  He'll open some doors due to contacts, but in terms of investment strategy...

Me too.

I suepct he'll be charging a lot for his advice.Amazing how much inflation proof pension he accumulated at the BoE telling us inflation wasn't an issue.....

[sancho panza]

Been through the telecoms sector.Intersting to see how different the balance sheets in this sector are compared to commodity sectors(where they've struggled to borrow over the last decade eg PM miners).Lot more 1s and 2s but the rates they've borrowed at will be decent.Let's remember that Vodafone floated off 40 year bonds at 1% last year.Obviously dyodd as ever but there are some compelling bargains in these names imho and we'll be adding to our Vod.

Having sifted all these names,I think I might adapt the scoring system a little bit and measure out of 50 to try and reflect a little more accurately-eg Vod and Koninklijke get the same Balance sheet score but equity/assets ratio is at either end of my banding for a 2 score.

It is what it is.But this is roughly what we'll be spraying and praying off.As before,anything over 17 for me gets seriously looked at.

Decl-own Vod.Also beware the Veon score,there are some anomalies worht a closer look

If tehre's any names people could suggest for any of my lsits I'd much appreciate a heads up.

 

 

   

Company	Chart	Income	Balance Sheet	Cash flow	Sector	SCS
America Movil	1	4	1	4	4	14
AT&T	4	4	2	5	4	19
BCE	1	3	2	5	4	15
Bharti Airtel	1	1	2	1	4	9
BT	5	5	2	4	4	20
Century Link	5	1	1	5	4	16
Deutsche Tel	2	4	1	5	4	16
KDDI	1	4	3	4	4	16
Koninklijke NV	4	4	2	4	4	18
KT Corp (Korea tel)	5	4	3	1	4	17
MTN (Africa)	4	4	2	4	4	18
Nippon Telegraph	3	4	3	4	4	18
Orange (France Tel)	5	5	2	3	4	19
Proximus (Belgium)	5	4	2	5	4	20
TLK (Indonesia)	2	4	3	3	4	16
Singapore Tel	4	3	3	4	4	18
SK Telecom	2	3	3	2	4	14
Softbank	1	2	1	1	4	9
Swisscom	2	4	2	3	4	15
T-Mobile US	1	3	3	1	4	12
Telecom Italia	5	2	2	5	4	18
Telefonica	5	4	1	5	4	19
Telia	4	4	2	4	4	18
Telstra	5	4	2	3	4	18
Telus	1	4	2	1	4	12
United Internet AG	2	3	3	4	4	16
VEON	4	5	1	5	4	19
Verizon	1	4	2	3	4	14
Vodafone	4	3	2	5	4	18