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

[Popuplights]

35 minutes ago, Green Devil said:

I have a buy in on BP at 150 😁😁

Exxon looks a buy at 25$ too 😁

Stop twisting the knife you sadist

[sancho panza]

17 minutes ago, kibuc said:

Eldorado and Yamana are reporting earnings tomorrow. I think Sibanye as well. Also, Newmont.

Wesdome on the 3rd, Kinross and PAAS on the 4th, Barrick, Harmony, New Gold and First Majestic on the 5th.

 

be interesting to hear your take if you have time K.

I'm genuinely on the verge of selling our Barrick/Newcrest holdings to buy some more big oil/some RR/some BT+Vod

[sancho panza]

49 minutes ago, JMD said:

SP, that's interesting as i think you have previously said you are already approx. 50% in oilies? I do think it will be one of the trades of the decade and personally i am also buying more. However, i am bit conflicted because i confess that i don't understand the potential divi return for the oilies. This is frustrating me because I have decided that i want to own more dividend paying (total return type) stocks, and oil and telecoms look the best sectors for maximising on doing this. 

If i recall correctly, DB has said the better performing oil sector stocks may have a total return of: 5x(depending on initial buy price of course) + divis. So, in my simple example, if a current BP £2 stock 4bagged to £8 by 2028, and also had a reinstated yield of say 6%(historic oil sector median), that would mean BP was paying 48p/share each year?  

SP, i believe you are buying to hold these oil stocks long term. Do you have any thoughts on what the yearly dividend return could be by 2028? I realise no one can tell the future, and it would depend on unknowns including inflation i guess. But It seems to me that having such a figure in mind, would help make the cheap prices we are currently seeing (at least hope they are cheap!) even more irresistable.  

 

I jsut do the calcs on the divi these companies were comfortably paying with $60 oil.If we get anywhere near there then all of a sudden,my eyes will start watering.I've no idea on the 2028 divi you need a proper road mapper like @DurhamBorn for a decent guesstimate.

Shell was paying $1.88 USD last year.Share price currently roughly $11.05 USD.At this price that's 17% gross yield.Now I don't think they'll reinstate it jsut like that,but rather they'll tease it back up,but when you're kicking off that sort of FCF with oil at $60+ then you have to do something with it.

In short,I'll take my chances looking at the evidence we've seen of late particularly the flashback inducing chart from @DoINeedOne and @Cattle Prod China import chart.I am a gambler though,and sometimes you have to back yourself and take a risk.Will teh 2.8bn people in India and China push up their demand for oil over the next two years by more than 50% of the decline in US shale ie circa 1.5 to 3 million bpd? I'd say it's a near certainty.The demand/supply equilibrium is delicate from what we've seen of the data and we know US supply will only go down by more as theshale wells drilled in Q4 2019 and Q1 2020 start drying up.

Originally we were buying these to sell ahead of the BK,but at these prices they could well go up during the bear market jsut like Billiton/Vodafone/BATs et al did during other bear markets.At these prices-and given the demand outlook- we'll be keeping them I think.(although I may sell some of teh top ladders from 2019 if I get the chance.

[Bricormortis]

31 minutes ago, Democorruptcy said:

VOD was the only one on my shopping list at 0.99 but weakened my resolve and just gone in at 1.01

I was disappointed it didn't drop more on Monday when the OFCOM ban on them selling locked phones was confirmed. I suppose because it was old news really.

Yeah I am going to be tempted back in for a second ladder if its below 0.98...was telling myself to stay out of everything atm except cash, but for long term divi paying holds there are some compelling buys around. 

[JMD]

2 hours ago, Chewing Grass said:

Progress is only made when risk aversion and financial constraints are simultaneously thrown out of the window.

Yes i agree, high stakes and winner take all, was the space race/war analogy i was mentioning.

But in say medical therapies, what gives there? China for example should have come up with something/anything! - if only for world prestige by now, especially with all their millions of university students.  

[kibuc]

25 minutes ago, sancho panza said:

be interesting to hear your take if you have time K.

I'm genuinely on the verge of selling our Barrick/Newcrest holdings to buy some more big oil/some RR/some BT+Vod

I hope you don't expect me to make sense of a nonsensical market

Earnings are starting to roll in and all the big boys are expected to post big numbers. Like, really big. Normally I'd say wait for the earnings and sell on the uptick, but it might be that we're way past any connection between financials and share price. Also, if you believe shit is hitting the fan right now then what difference do earnings make.

I felt bad when I didn't but RDSB in March and then it went up by 35%. Not feeling the same temptation now. 

[DurhamBorn]

4 minutes ago, sancho panza said:

I jsut do the calcs on the divi these companies were comfortably paying with $60 oil.If we get anywhere near there then all of a sudden,my eyes will start watering.I've no idea on the 2028 divi you need a proper road mapper like @DurhamBorn for a decent guesstimate.

Shell was paying $1.88 USD last year.Share price currently roughly $11.05 USD.At this price that's 17% gross yield.Now I don't think they'll reinstate it jsut like that,but rather they'll tease it back up,but when you're kicking off that sort of FCF with oil at $60+ then you have to do something with it.

In short,I'll take my chances looking at the evidence we've seen of late particularly the flashback inducing chart from @DoINeedOne and @Cattle Prod China import chart.I am a gambler though,and sometimes you have to back yourself and take a risk.Will teh 2.8bn people in India and China push up their demand for oil over the next two years by more than 50% of the decline in US shale ie circa 1.5 to 3 million bpd? I'd say it's a near certainty.The demand/supply equilibrium is delicate from what we've seen of the data and we know US supply will only go down by more as theshale wells drilled in Q4 2019 and Q1 2020 start drying up.

Originally we were buying these to sell ahead of the BK,but at these prices they could well go up during the bear market jsut like Billiton/Vodafone/BATs et al did during other bear markets.At these prices-and given the demand outlook- we'll be keeping them I think.(although I may sell some of teh top ladders from 2019 if I get the chance.

By 2027/28 i expect BP to be paying at least 60p a share in divis and buybacks.I think it might be 80p.Shell i expect will be paying around £3.20 a share in divis and buybacks.Thats before the final parabolic rise in oil before the end of the cycle.This cycle will catch people because oil and other commods will simply build and build,with sharp,but short lived pull backs.Im nearly fully invested now,around 17% in cash,really enjoying the violent ending of this cycle.Sentiment is on the floor.CBs will start to panic again and add more liquidity.

Once people are released from covid hell and the liquidity flows out of the pipes we will start to hear the term "the roaring 20s"

 

[JMD]

2 hours ago, Harley said:

Thanks for that.  By way of interest, here are the results of my screen of the Gold & Silver Industry (note some companies are not included in this sector).  For discussion only, DYOR, etc.  I just took the largest 15 by mkt cap in GBP.  Not that I would bother for the more passive side of my portfolio, there being GDX and GDXJ.  But I did it to compare against the EFT to explore any benefit in GDX over individual stocks and vv.

So he says (of those asked) MAG, GOLD, AEM, PAAS and FNV.

MAG and PAAS had too small a market cap (just).  Despite some impressive ratios, MAG has had negative operating cash flow for the last four years.  Why?  PAAS would have scored well.

AEM lost one score for not being in the top 4 by market cap (which is a bit hard but that's me chosen bias) and for having a slightly high (for the 15) LTDE (debt) ratio. 

FNV is categorised as being in the Miscellaneous Financial Services industry, as you do.  I'll deal with him later which I must as he would also have scored well.

But the best thing of all are those top-15 industry averages for debt, etc.  Makes such a welcome change from the many other industries I'm looking at.  Shooting fish in a barrel?  TBH, what they should all look like and did way back - debt less than 50% of equity, Current Ratio over 2, and covered dividends and positive operating cash flow histories.

Regarding using GDX, IMO I think I'll just do that.  Never say never!

Thanks Harley, I do like a hard-data filled table to peruse. Btw did you see my post few days back where i posted about a stock screener, was it any good?

Tbh, I find it difficult to beat the gdx/gdxj, but i do keep trying! So I hold the etf and also individual gold mining stocks.

However, the real kicker for me is that i do worse - performance wise -  when picking silver miners - and yet there is no silver etf available in UK - so i am forced to take the silver miner stock risk 100% - i find that 'financially offensive'!!

[BurntBread]

8 minutes ago, JMD said:

Yes i agree, high stakes and winner take all, was the space race/war analogy i was mentioning.

But in say medical therapies, what gives there? China for example should have come up with something/anything! - if only for world prestige by now, especially with all their millions of university students.  

I used to work (remotely) with a fair few industrial scientists about 5 to 10 years ago at my previous employer. We would be in projects together, but each working in our own countries. Not high end stuff; physical chemistry mostly.

Things may well have changed now, since I know that 5 to 10 years before that, the big Chinese universities (e.g. CAS) were desperate to have any interaction with Western companies doing research, but by the time I had any interaction (2010-2015), CAS couldn't give a shit, because they were getting loads of money from the CCP and could work, at will, with the big American universities. So, attitudes and training are in pretty rapid flux over there.

Anyway, that older history is a bit by-the-by compared to the main point I want to make, which is that when I was working with those industrial scientists, the only good ones were the few who had done post-docs in America. That's not to say that the others didn't have the relevant knowledge; it was just that they would not or could not question results or propose ways to confirm or refute the understanding we thought we had at that stage. Neither could they come up with alternative explanations as foils, unless it was text-book stuff. I other words, they were technicians, not scientists. I think for the others, it was partly the inhibition from thinking they might look a fool (so would never ask a question to check their own understanding), and partly the fact that the current understanding of each problem was somehow seen as the authority on the matter, and so shouldn't be questioned. It needed people to spend a couple of years in a foreign, sceptical and open culture for them to shed their inhibitions. It's also the case that it takes a long time and much practice to get good at asking research questions, and they obviously didn't get that practice as scientists working in China.

Having said that, Japanese laboratories are also very top-down, and "Professor is always right", but have produced some great work, so it doesn't completely halt progress. Nevertheless, I think China has under-performed in breakthrough research because of those cultural handicaps. The subsequent years might have changed that, as more people will have studied abroad - but even though I have had no contact with the Chinese research scene since about 2015, I expect culture to change slowly, and what you would find is a few American-trained super-stars getting enormous government funding, while a large majority don't get the chance to develop as independent thinkers, so miss the chance to make those big advances. I would also be shocked if there isn't a lot of bureaucratic empire-building and corruption at Chinese universities, which diverts money and effort from real work.

[Green Devil]

43 minutes ago, DurhamBorn said:

By 2027/28 i expect BP to be paying at least 60p a share in divis and buybacks.I think it might be 80p.Shell i expect will be paying around £3.20 a share in divis and buybacks.Thats before the final parabolic rise in oil before the end of the cycle.This cycle will catch people because oil and other commods will simply build and build,with sharp,but short lived pull backs.Im nearly fully invested now,around 17% in cash,really enjoying the violent ending of this cycle.Sentiment is on the floor.CBs will start to panic again and add more liquidity.

Once people are released from covid hell and the liquidity flows out of the pipes we will start to hear the term "the roaring 20s"

 

Agree. It can't get much worse than covid hell. But winter isn't over yet. Stocks are to still too overbought. No where near enough pain yet. Look out for the big one, second wave covid crash, save your cash for that, coming soon to a country near you. 

[Erewhon888]

DrBubb formerly of "the other place" continues his analysis at DrBubb's gold and mining shares analysis

Maybe he could be brought in from the cold to expand his thoughts to a larger audience?

 

[Tingles]

7 hours ago, sancho panza said:

fair play to you.You have the sort of patinece I wasn't blessed with.

Patience, caution and a personal philosophy of always having enough ammunition for both active engagement and held in reserve.

[Democorruptcy]

2 hours ago, Bricormortis said:

Yeah I am going to be tempted back in for a second ladder if its below 0.98...was telling myself to stay out of everything atm except cash, but for long term divi paying holds there are some compelling buys around. 

I had my finger poised waiting for less than a £1 fairly recently but it bounced and then I was annoyed I'd not gone in. Today I decided it was noise arguing about 1p+. Not to say it cannot go lower, it was 92p earlier this year!

[Democorruptcy]

1 hour ago, Green Devil said:

Agree. It can't get much worse than covid hell. But winter isn't over yet. Stocks are to still too overbought. No where near enough pain yet. Look out for the big one, second wave covid crash, save your cash for that, coming soon to a country near you. 

Are you betting the house on it, if you sell in time?

[JREWING]

Possible fund buy in today...

10 million BP shares..

Found a spare 19 mill down the back of the settee..

Onwards and upwards. Never let the devil take another day!

[harp]

3 hours ago, DurhamBorn said:

This cycle will catch people because oil and other commods will simply build and build,with sharp,but short lived pull backs.Im nearly fully invested now,around 17% in cash,really enjoying the violent ending of this cycle.Sentiment is on the floor.CBs will start to panic again and add more liquidity.

Once people are released from covid hell and the liquidity flows out of the pipes we will start to hear the term "the roaring 20s"

 

Sounds like you shot your load too early DB! Classic newbie investment mistake, especially as the cycle turns. Can you get any overtime in your new job?
If you need any advice....

[Green Devil]

1 hour ago, Democorruptcy said:

Are you betting the house on it, if you sell in time?

I doubt it. I might get to sell it by end 2021 at this rate! 

[Harley]

8 hours ago, geordie_lurch said:

I'm thinking about my Stocks & Shares ISA like the cat in the famous Schrödinger's cat idea... if I just don't log back into my account for a few months then the current carnage will have both happened and not happened but it's not until I log in it actually happens

When my partner begins to think we're nutters on here, I show her posts like this!

PS:  I mean that in a good, refuting sort of way!  Let's keep the nuttery our little secret!

[Harley]

4 hours ago, JMD said:

Thanks Harley, I do like a hard-data filled table to peruse. Btw did you see my post few days back where i posted about a stock screener, was it any good?

Tbh, I find it difficult to beat the gdx/gdxj, but i do keep trying! So I hold the etf and also individual gold mining stocks.

However, the real kicker for me is that i do worse - performance wise -  when picking silver miners - and yet there is no silver etf available in UK - so i am forced to take the silver miner stock risk 100% - i find that 'financially offensive'!!

No time yet I'm afraid.  Not even enough for my own screener with lots left to do.  Still trying to get some financial logistics sorted and an insulation job done ('orrible job even with board).  Just get classed as a professional investor(!!!!!) and buy all the SIL you want, but it'll still be a wild ride. Remember the adage:  "Gold for safety, and a bit of silver for some excitement"! 

[Metalheadz]

9 hours ago, geordie_lurch said:

I'm thinking about my Stocks & Shares ISA like the cat in the famous Schrödinger's cat idea... if I just don't log back into my account for a few months then the current carnage will have both happened and not happened but it's not until I log in it actually happens

I've decided now is the ideal time to transfer my S&S ISA. Mentally it's OFFLINE for me for the next few weeks 

[Harley]

5 minutes ago, Metalheadz said:

I've decided now is the ideal time to transfer my S&S ISA. Mentally it's OFFLINE for me for the next few weeks 

I was thinking similar.  I was tempted with Saxo Bank given their international market access, Chinese owners aside.  What do you think of them Sancho?

[Yellow_Reduced_Sticker]

22 hours ago, MrXxxx said:

Can't disagree with that...assuming of course you're not @YRS (where are you fella?, your tips/humour are missed!) and your 'second bite of the cherry' is 'sweet and not sour [again]' :-)

 

 

I'm BACK!

 

Good evening boys & girls!

 

Must say it's an absolute honour to be missed by ONLY 1 or 2 guys here!

 

Well...been very BUSY doing work on my house, AND with this depressing BS covid crap i've had lots of the BEST 90's trance music recorded onto my mp3 and have had it BLASTING out from my house CONSTANTLY while painting/working ect, near on every day, i tell the residents that pass by...this is how life should be AND NOT to listen to this GOV depressing BS messages about covid sh*t !!!

 

Check this CLASSIC out from the legendary Paul Van Dyk (For An Angel) that dude with dark glasses & hat at 0:30 was me strutting my stuff in the day, however @MrXxxx will think the guy at 0:11 getting painted on his chest is me today!

 

 

Onwards...

 

gotta tell I've got the BEST neighbours on one side you could ever meet, WHY...they are TIGHTER than me!

 

FFS, they collect ALL rain water,even flushing their toilet with buckets of rain water to SAVE on their metered water bill..!

 

Anyway...most of the summer i've been scavenging in skips with my tight-wad neighbour, we have literally CLEANED up!

 

Right on to some of my share buys...

 

Last week added more BP at £2.16 ... today £1.94 WELL what do ya expect!!!

 

AND guess WHAT I bought today?

 

YES ... Rolls-Royce!

 

They were showing a price of: 84p this morning...yet HL charged me 92p something about volatility ...what bollox, still got them cheaper than the 170p per share i paid back at launch in 1986...blimey waited years to sell & made a SMALL profit, HOPEFULLY this time will be DIFFERENT?!

 

WARNING -> IF I'VE BOUGHT YOU ALL KNOW WHAT THAT MEANS?!!!

 

I reckon they could get to a LOW of: 50p / 60p ?

 

Actually my portfolio not to bad, I NEVER check it regular, logged in today it was ONLY down -3.5% ...mainly gains to my gold/silver stocks, so a BIG THANK YOU to @DurhamBorn

 

I've skimmed through the thread and how come NO-ONE has mentioned NEW-GOLD?

 

Blimey I'm UP 100% on these, @sancho panza must be doing even BETTER?

 

I can remember MANY posts MOANING about NEW-GOLD's dire price, ALWAYS pays to average down/ladder in...knowing my *luck* now I've raved about NEW-GOLD...the price will bloody well COLLAPSE!

 

P.S. Yet again I was WRONG! ...on What?

 

When i said that I'd bought my house last October, it was the TOP for property prices, well bugger me you would NOT believe what's going on in this area, EVERY house that comes on to the market is SOLD within a couple of weeks, FFS, I've been told folks are even knocking on doors and asking if you want to sell!

 

I paid 250K last year - if i sold today it would fetch £300K ...and yet i was pricing in a fall of -30 to -40% over the next decade here in the Cotswolds, story is a lot of folks who work at home now from London want to move here...

 

No doubt this info in the last paragraph will cheer up @TheCountOfNowhere

 

 

 

 

[Lightscribe]

59 minutes ago, harp said:

Sounds like you shot your load too early DB! Classic newbie investment mistake, especially as the cycle turns. Can you get any overtime in your new job?
If you need any advice....

I have been investing monthly from the beginning. To me averaging down (as I have been in oil) in this current cycle/time period is the best strategy as the last ‘shabang’ is still to come. 

It’s all tech at the moment and it will take a while for the masses of QE to change direction and a little while longer for the out of favour stocks to rebound in current COVID circumstances (Bit like PMs when we were investing here for the last few years)

It’s all al la dot com until it isn’t. Let’s see post US election and into 2021 where all this shit is going. I’ll be investing monthly still and keeping powder dry until then.

I‘ve stopped trading in crypto now I’m all in BTC in a hardware wallet, the wider circumstances could mean it could rocket (if allowed).

 

[Loki]

@Yellow_Reduced_Sticker! Welcome back.  Cracking choon.  90's/00's trance does make everything better.  There's a thread in the Music section if you want to post up there too

[DurhamBorn]

@Yellow_Reduced_Sticker good to see you back,those were the days werent they.Iv just been watching some Sleeper performances from the mid 90s Louise Wener still gives me a reflation ever time.

Down 3.5% after the carnage of the markets is a great position,thats the beauty of having some areas that double,treble and more like the goldies,silvers,bookies,potash from March and several others.Oilies have taken a pounding and 20% down from the March entry points and the telcos keep hitting a brick wall every time they try to rally.Like the PMs though their time will come.Did you keep Sibanye Harmony and Eldorado?