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

[JMD]

Weekly newsletter from investment house EverGreen. I find their commentary style refreshing, and their thinking chimes with this forum - Ok perhaps this means more 'confirmation bias'(?). However this edition, although about the recent CB crypto moves, shows that they are not bitcoin bulls (some on here might be relieved to hear that!).

I find the subject of what CB's will become, and therefore what role will be left for retail banking fascinating (will retail banks even exist in future?). 

https://blog.evergreengavekal.com/a-digital-shock-to-the-system/

Note, this edition is from their tech editor, so is not as financially insightful as usual. But well worth subscribing to (its free) - plus it comes with a weekly 'crib sheet' insight into what this particular money management firm is doing for their own wealthy clients...

https://blog.evergreengavekal.com/likes-dislikes-october-23-2020/

[JMD]

43 minutes ago, TheNickos said:

tempted to pick up some GSK now they are sub 13, nice 5% divi.

Very very tempting. Its at 6% now on HL.

Btw does anyone know why a quick Google search shows GSK having a divi yield of 0.077? What metric are they using, or is it just that they are wrong?

[leonardratso]

thats the thing about crypto, it goes on a run and the 'expoirts' all come out in droves going on about its virtues and how its going to the moon, then 3 months later its back in the doldrums and theyve all fucked off back under their stone.

Time and again we see the cycles play out and die out, the current run looks strong, but looking back they all looked strong, however as per usual it could turn on a dime and head back to where it came from.

[leonardratso]

im not really disparaging it, but the end game is always what its worth in a fiat currency, if it was priced in pebbles nobody would be interested, unless pebbles were worth a pretty penny. Its the rate of fiat it can gain over inflation that attracts the momentum, ive just been watching an andrei jikh video with him going on about BTC and his predictions - not saying it wont happen like he said, but theres a million pundits pushing - and like i said if BTC tanks back to 7-8K then they will all disappear just as fast as they appeared.

Until the next run..........

[JMD]

1 hour ago, leonardratso said:

im not really disparaging it, but the end game is always what its worth in a fiat currency, if it was priced in pebbles nobody would be interested, unless pebbles were worth a pretty penny. Its the rate of fiat it can gain over inflation that attracts the momentum, ive just been watching an andrei jikh video with him going on about BTC and his predictions - not saying it wont happen like he said, but theres a million pundits pushing - and like i said if BTC tanks back to 7-8K then they will all disappear just as fast as they appeared.

Until the next run..........

Leonardratso, investment gurus - like that Jikh chap you mention - are mainly noise. I prefer to listen to people like the Velez guy below (he's a former nuclear engineer; unfortunately, its still a Raul Pal video!!). The video is interesting - even just for the crypto-tech knowledge roundup imparted by Valez.

I'm convinced crypto is the start of something big, and not only in the money realm, but also in how the world will interact commercially, politically, etc. BTC might become the corner-stone of that transformative crypto world about to descend on us all (could even become its fabled digital 'store of value'), along with the other supporting infrastructure, stable-coins, CBDC's, etherium apps... or BTC itself might wither away, who can know? 

But whatever does unfold, this video is worth watching to begin to understand the social/governing apparatus that lies ahead. (then again, 'back in the real world' we, including Germany, can't even get a contact tracing app to work, so what do i know!!)

 

[janch]

Until they make BTC easy for the average idiot ie me to buy and use day to day I don't think it'll properly take off. 

I can see the appeal with regard to "store of value" and because there's a finite number of coins it is inflation-proof but I need to be able to pop to Tescos and buy a loaf of bread with it before it's much use to me.

Is it anywhere near this point yet?

[Barnsey]

Food for thought...(cc: @DurhamBorn)

 

[Harley]

Just spent a chunk of the day looking at (comparing) monthly (performance) charts going back to the late 1980's.  All part of some financial planning.  We talk specifics but sometimes you need to take a step back and look at the big picture.  We really are at the end of a cycle, actually several.  You can even see the impact of all that 2008+ money printing and how even that, in it's then form, is fading.  How many crossing currents there are now out there.  TBH, things look pretty bad to me and I'm even more convinced of the need to balance things between inside and outside the existing financial (and regulatory) systems.  A lot of the financial stuff seems to be about doing less bad than actually making headway.  The game to be played is far bigger than stock A versus stock B.  This may be obvious to some but we all tend to forget and need an occasional "come to Jesus" moment to re-invigorate and re-ground ourselves.  I hope all here do OK, and that requires us to all get the exam questions right before running for the answers.

PS:  Looking at the charts "Covid" is just the name of what was already baked in to happen.  Financially, the virus is a nothing.  It would have been called something else if the virus hadn't happened because it still would have happened.  Better in a way it happened like this than a death by a thousand cuts which would have been the same or greater loss but with more pain.  But there's more to come, this is a turning well beyond the toys within the finance playpen.

 

[Craig]

4 hours ago, janch said:

Until they make BTC easy for the average idiot ie me to buy and use day to day I don't think it'll properly take off. 

I can see the appeal with regard to "store of value" and because there's a finite number of coins it is inflation-proof but I need to be able to pop to Tescos and buy a loaf of bread with it before it's much use to me.

Is it anywhere near this point yet?

It's easy enough to buy, just get a Coinbase or Uphold account. As for payments, the BTC network tends to get very slow or expensive at busy times. Fortunately there are many other coins out there which have built on the technology and provide transfer speeds more suited to widespread usage. 

Though which one will prevail is the subject of a million arguments online. Not going to get into that debate here, tends to get a bit tribal, to say the least... 

[Harley]

Even the DAX gasps its last few breaths:

[Errol]

Haha!

 

US ELECTION DECISION TREE

[Harley]

1 hour ago, Craig said:

It's easy enough to buy, just get a Coinbase or Uphold account. As for payments, the BTC network tends to get very slow or expensive at busy times. Fortunately there are many other coins out there which have built on the technology and provide transfer speeds more suited to widespread usage. 

Though which one will prevail is the subject of a million arguments online. Not going to get into that debate here, tends to get a bit tribal, to say the least... 

Coinbase was a dud for me.  Would not read an uploaded document and no way to deal with it (contact, etc).  Judging by the emails, they think I'm still working on my application!  All very clever, in a stupid sort of way! 

[DurhamBorn]

Just going through Shells results and it looks like their debt is the lowest its been for a year.They have lowered debt through this crisis.Their CFO mentioned several times "at the bottom of the cycle".They know whats coming.

[Harley]

Recently took an insolvency practitioners eye to my portfolio today and froze a number of holdings (into a "bad bank"), reducing my target number of holdings and thereby upping the target allocation to each of the remaining.  Used that extra to top up RDSB and BP on the basis any cheaper and I could buy a refinery at the next car boot sale!  A bit early as no technical buy signal but hopefully in the zone.  If they fall much from here then the whole world is in trouble (er, which it is!).  Now focussed on laddering into other O&G sector plays in Operations, Integrated, Services and Gas.  Also opened new positions on the sterling versions of GDX and GDXJ.  No need for me to take on additional risk for more alpha with individual stocks.  Trading volumes (liquidity) on these two ETFs not great though, especially compared to the USD versions.

[Loki]

5 minutes ago, DurhamBorn said:

Just going through Shells results and it looks like their debt is the lowest its been for a year.They have lowered debt through this crisis.Their CFO mentioned several times "at the bottom of the cycle".They know whats coming.

That is brilliant info, thanks mate

[Harley]

2 minutes ago, Loki said:

That is brilliant info, thanks mate

Indeed.  BP hasn't got the mail though, nor a few others!

[leonardratso]

whenever i transferred between exchanges, i always found LTC to be the cheapest and fastest to get the coinage across, i even used to convert out to LTC from xxx and transfer then convert back to xxx if i wanted xxx, usually it was to get to an exchange with a UK bank account tied to it - coinbase pro use clearing bank, think its a euro bank and basically its a 10-15 minute to my bank extract, says 3 working days, never seen it take longer than 15 minutes though.

[Loki]

1 minute ago, Harley said:

Indeed.  BP hasn't got the mail though, nor a few others!

Hopefully they do a silver - run last, run hard!

[DurhamBorn]

3 minutes ago, Harley said:

Indeed.  BP hasn't got the mail though, nor a few others!

Bp might be playing to the gallery a bit.Looking at the small print their 10 year 40% reduction in oil doesnt include Rosneft.

Could Shell do $100 billion operational cash flow one year during the cycle?.Maybe.

[Harley]

14 minutes ago, Loki said:

Hopefully they do a silver - run last, run hard!

I hold them but would not from here given the debt, etc.  They're playing to the woke crowd though so a nice variation and a rising tide should lift all boats.  But time for some nasty Asian players who are unmoved by such things!

PS:. And Russian!  We surely can't go to war with both of them!

[Loki]

1 minute ago, Harley said:

I hold them but would not from here given the debt, etc.  They're playing to the woke crowd though so a nice variation and a rising tide should lift all boats.  But time for some nasty Asian players who are unmoved by such things!

I can certainly understand wanting to invest in countries that still seem to have some grasp of reality and fact.

[Harley]

27 minutes ago, DurhamBorn said:

Could Shell do $100 billion operational cash flow one year during the cycle?.Maybe.

Cash flow is king.  I haven't bothered looking at a story of a P&L for ages.  The O&G sector is a classic.  They all had to take write downs through the P&L due to the oil price drop but the operating cash flow told the true story.  Not free cash flow mind.  That seems a somewhat silly metric to me (presumably promoted because it's open to abuse and too aggregrated).

[Sugarlips]

4 hours ago, Harley said:

Indeed.  BP hasn't got the mail though, nor a few others!

BP are at least facing up to some tough decisions, 600 jobs going at The Kwinana refinery here in Perth just announced:

https://www.perthnow.com.au/business/oil-gas/hundreds-of-wa-jobs-to-go-as-bp-shuts-kwinana-refinery-ng-b881708425z

[Barnsey]

The drum getting louder...

 

[Craig]

10 hours ago, Harley said:

Coinbase was a dud for me.  Would not read an uploaded document and no way to deal with it (contact, etc).  Judging by the emails, they think I'm still working on my application!  All very clever, in a stupid sort of way! 

Binance now have faster payments enabled, which means no fees. Slightly clunky KYC like Coinbase though, have heard of people having issues.