Credit deflation and the reflation cycle to come (part 3)

[JimmyTheBruce]

17 minutes ago, arrow said:

Almost 40 per cent of its debt is with European banks and if it is forced to refinance that debt domestically or with Chinese banks it is likely to face higher rate of interest, he said.

What's that saying about banks and debtors and the relative balance of power?

[CVG]

3 hours ago, WICAO said:

From memory the Permanent Portfolio calls for 25% in PM's (might actually be 25% in gold).

I follow the Golden Butterfly portfolio (outline), so 20% for me including Gold, Silver, Physical, vaulted, Miners, ETF's.

[CannonFodder]

I.m learning a lot this week, its great, though education is expensive.

really seeing the strengths of more diversification moving forwards. PMs, cash and wider geographical splits. 

Good to get this knowledge sooner in life

[sancho panza]

On 26/02/2022 at 19:51, Hancock said:

Sorry for late reply, but thought not worth it as you seemingly have a very high opinion of yourself for making a bit of money on the stock market. 

I rarely drink, not looking for sympathy, i'm more than aware my decision are my own fault, but i had to laugh at your claim this is a "traders forum".

I'm most certainly not a trader and i don't have a trigger finger .... though i made a bit of money in my SIPP by buying in the 2020 crash, hardly the work of genius, more a case of going out to work and earning money ... and then not pulling my non existent trigger finger in the months prior on the presumption something wasn't quite right. 

But lets be fair to buy 70 grands worth of shares in one company or about 1/3rd of ones house deposit is gambling.

Originally this topic was started so people didn't lose money due to inflation, but its now seemingly morphed into a "trading forum for rank amateurs" with one guy sadly down a hell of a lot of money, due to owning shares in Russian based companies. I do hope he isn't suffering, as it reminds me of the guy on HPC who went balls deep buying gold shares with his house deposit prior to them crashing about a decade ago..

Can't but help think this topic has morphed into something it shouldn't have, and people have been suckered into thinking they're far more financially savvy than they actually are with people very possibly losing 1000s of pounds they can ill afford on what is looking like a disaster in Russia. 

As for Sunak if anyone thinks he created the SDLT holiday to get liquidity into the economy, as opposed to blatantly inflate houses prices, then i suggest they listen to what he said at the time!

As ever,like the typical playground bully you are,you don't face up to the issue I criticized you for,which was taking majorpain's nuanced reading of the Fed's position,and then twisting it so you could attack him personally,for no real reason that I could see other than your own bitterness at your position in life which appears mainly to be down to your own ineptitude.

I'm here to learn like 99% of other people but you have set yourself up as the 'c*** caller' in chief and don't seem to like it much when someone calls out your behaviour.

What generally differentiates the discussion here is that we have vibrant discourse based upon a healthy exchange of different ideas and theses within a framework that endorses a mutual respect for contrary opinions.

Below is another instance where you tooka great discussion and turned your ire onto one of the participants for what seems the simple reason from what I can see ,that she's more switched on than you.

I've never set myself up a paragon of trading success,and have widely owned my losses on the Scottish play and in Northern Rock.We are the sum of our experiences,but there's no need for you to be as vile and petty as you can be at times.

[mcdongle]

20 hours ago, wherebee said:

Jesus.  both the speaker and the audience in NZ are complete fuckwits.

If you were to listen to talkback radio here you would realize a lot of kiwis have no idea what is going on in the world

[Hunty]

11 hours ago, Cattle Prod said:

God that 25% divi on Poly is an evil temptress. Don't forget that bit @Hunty if you're feeling down, there has been no divi cut, no reason to cut it, and although the water is murky right now, you haven't been told you're not going to be paid it out.

Great SP buy price today bud, I do not think they will cut the div. From what I can gather the money is sitting in USD in their Cyprus bank accounts. (75c) my guess on the financials. Could get a nice bump Wednesday am.

My 18 month trading/div profit was £180k. At 800p that profit was gone and my original £720k pot was going to be sniffed at. So I went all out Friday pm taking no hit on my original pot. It's been a fun 18 months but at my age why risk a pot of 720k cash in drawdown.

I nearly went in today, but I may be tempted Sub 300p. If it goes tomorrow.

Great reading this thread today, DB is right, Poly is the threads opium at the moment.

Good luck all, it's a journey. Great thread.

[MrXxxx]

5 hours ago, Pinkpanther said:

Anyway I decided last thursday to take the risk and bought 70 shares at £7.10 ( I ment to get it at sub £6 but I clicked accept instead of decline) only to watch it tank to £5.05 then go back up.

Not sure what broker you are using, but buying in such low value means that a £20 trading fee [£10 in, £10 out] means that on this trade [~£500] you need to make a 4% return on your shares to 'break even', and that's before even considering the spread. If you have small sums such as £500 personally I think you are better 'saving' them up and then buying your ladder.

Note, just my opinion, DYOR etc.

[MrXxxx]

5 hours ago, WICAO said:

Maybe all of us with some shiny could sit around (not sure what we'd sit around as a fire might attract attention) and look at our precious.  

On a more serious note what % of your wealth do you aim to hold in PM's?  I've decided on 5% as it doesn't have a yield and I want as many £'s as possible to earn their keep.

....but PM miners do! ....well some, until their assets are commandeered by some crazy guy ;-)

[Loki]

1 minute ago, MrXxxx said:

Not sure what broker you are using, but buying in such low value means that a £20 trading fee [£10 in, £10 out] means that on this trade [~£500] you need to make a 4% return on your shares to 'break even', and that's before even considering the spread. If you have small sums such as £500 personally I think you are better 'saving' them up and then buying your ladder.

Note, just my opinion, DYOR etc.

Divis help to some extent there too

[MrXxxx]

1 minute ago, Loki said:

Divis help to some extent there too

Agree, but a) you are assuming divis are guaranteed; we saw recently that even with Blue chips this can no longer be assumed, and b) the divi [average ~ 3-4%] is all 'well and good' but if the stock price stagnated [as we have also seen recently with mature Blue chips] or doesn't rise at the rate of inflation you are still losing money [and any compound effect].

[mcdongle]

8 hours ago, Loki said:

Possibility of a sudden stratospheric warming event leading to cold snaps - gas, Russia, etc

https://electroverse.net/ssw-underway-christchurch-cold-and-wet-feb-midwest-and-ne-winter-to-extend-into-march/

Its been a crap summer here in Christchurch. First time ive seen people light fires in summer, We have had the heat pump running in the evenings

[mcdongle]

14 minutes ago, mcdongle said:

Its been a crap summer here in Christchurch. First time ive seen people light fires in summer, We have had the heat pump running in the evenings

Im wondering if this grand maunder minimum is actually happening?

[wherebee]

54 minutes ago, MrXxxx said:

....but PM miners do! ....well some, until their assets are commandeered by some crazy guy ;-)

Back to the macro discussions:

 

GDXJ and PSLV both risen steadily all week.  PSLV looking the strongest for some time (I have it in my metals section as a long term hold; been in the red for a while).

Hard to say whether it's the war or the rotation into PMs, I suspect both.  I wish I had picked up more GDXJ (I sold a bunch at 46, picked up some again at 38).

[Loki]

37 minutes ago, mcdongle said:

Im wondering if this grand maunder minimum is actually happening?

AFAIK it's forecast for the next solar cycle, around 2030. So another few years of global warming hysteria to go

[Pinkpanther]

24 minutes ago, MrXxxx said:

Not sure what broker you are using, but buying in such low value means that a £20 trading fee [£10 in, £10 out] means that on this trade [~£500] you need to make a 4% return on your shares to 'break even', and that's before even considering the spread. If you have small sums such as £500 personally I think you are better 'saving' them up and then buying your ladder.

Note, just my opinion, DYOR etc.

You are totaly right, and i appreciate your opinion.

I'm using HL - But I'm still what I would regard as quite new to this and this is my first what i would regard as a risky buy, looking at a share bounce back to make capital gains. (and I could be waiting a long time)

I still have 25 years until i retire and Im not dependant on this as my pension, or day to day living.

If I get the May dividend - I should/could get £88 but hopefully enough to cover any trading fees. I kinda look at its the cost of learning. I aim to hold them for the next 3 years, Or sell them sooner if they go up significantly.

I also have another half who views the stock market as gambling/black magic/dosent get it and thus i have to demonstrate to her (and myself) that my theory/strategy is "soundish" (making more that i would get in the bank) before i will invest larger amounts in "risky" investments.

Cheers

 

[MrXxxx]

4 hours ago, HousePriceMania said:

Shocker, the poly dividend is only 20% now, was 25% at quarter past 4.

 

If I'd bought 20k worth rather than £200 id be feeling like Billy big baws

 

Assuming it will be paid?!.....plenty of 'excuses' to withhold it on a 'temporary' basis at the moment.

[wherebee]

1 hour ago, MrXxxx said:

Not sure what broker you are using, but buying in such low value means that a £20 trading fee [£10 in, £10 out] means that on this trade [~£500] you need to make a 4% return on your shares to 'break even', and that's before even considering the spread. If you have small sums such as £500 personally I think you are better 'saving' them up and then buying your ladder.

Note, just my opinion, DYOR etc.

Another thing to watch in relation to trading fees is that some countries have tax rules which disallow deduction of trading fees against income if certain criteria are not met (such as holding for a certain amount of time, some asset types, etc).  

Not being able to deduct the cost of trading from your income will be an even harder hit if you are doing small trades.  Always worth being informed on the tax shenanigans.

[MrXxxx]

3 hours ago, arrow said:

Analysts expect Polymetal, whose £1.6bn value is down from £7bn a year ago, to declare a final dividend of 75 cents a share when it reports results on Wednesday. Analysts reckon the money needed to cover the dividend has already been sent to Polymetal’s bank account in Cyprus but the company could decide not to make the payment and preserve cash in light of heightened market volatility.

“Obviously that’s a big concern for Polymetal shareholders because a lot of them hold it for the dividend as much as the gold exposure,” said Guy.

...and what is that going to do to the price on Wednesday if it happens?...mmmmm...

[MrXxxx]

3 hours ago, arrow said:

Polymetal was not the only Russian gold miner hit hard on Monday, with Petropavlovsk falling 15 per cent to a three-year low of 8p. The gold producer needs to refinance a bond in November in which roughly $300mn of principal is outstanding. Peter Malin-Jones, analyst at Peel Hunt, said that while the company would be able to refinance the loan with Russian banks it was not clear how it would repay bondholders.

“The challenge is not refinancing the facility but actually repaying it,” he said. Polymetal ended 2021 with net debt of $1.65bn, according to Guy. Almost 40 per cent of its debt is with European banks and if it is forced to refinance that debt domestically or with Chinese banks it is likely to face higher rate of interest, he said.

I can see a 'fire sale' of assets held outside of Russia being necessary to cover their Current liability borrowings...anyone know if they have mining operations outside of Russia i.e. in the 'Stans'?

[AWW]

Does anyone have any insight as to what divestment of Russian assets actually looks like for the big oil integrateds? I have been thinking about this. It might actually be positive. Bear with me...

They can't actually sell the Russian assets, because there's no buyer (well, except Russia). So the asset is marked as "to be sold" on the books and its value appropriately marked down. That results in a loss which can be used to reduce the tax bill.

Meanwhile, the assets are still generating cashflow. The oil company can use that cashflow to fund share buybacks while the share price is now 10% less than it otherwise would be, due to the "bad" news.

Seems too good to be true, but I can't see why it doesn't work. Am I missing something?

[DurhamBorn]

8 minutes ago, AWW said:

Does anyone have any insight as to what divestment of Russian assets actually looks like for the big oil integrateds? I have been thinking about this. It might actually be positive. Bear with me...

They can't actually sell the Russian assets, because there's no buyer (well, except Russia). So the asset is marked as "to be sold" on the books and its value appropriately marked down. That results in a loss which can be used to reduce the tax bill.

Meanwhile, the assets are still generating cashflow. The oil company can use that cashflow to fund share buybacks while the share price is now 10% less than it otherwise would be, due to the "bad" news.

Seems too good to be true, but I can't see why it doesn't work. Am I missing something?

They arent getting cashflow though,BP has declined the dividend,so wont be getting it.

[CannonFodder]

5 minutes ago, DurhamBorn said:

They arent getting cashflow though,BP has declined the dividend,so wont be getting it.

The world has truely gone mad.

They leaving him with his money? Surely the idea is to deprive him of funds.

[DurhamBorn]

I know most on this thread now prefer to put everything on red or black,but for those who are trying to build a diverse portfolio im going to start buying this Investment Trust.

JP Morgan Japan Small Cap Growth and Income Trust (JSGI) .

I really like Japan this cycle,and i havent really got around to investing in it.Iv decided this is a good place to start as it offers the quarterly divis.They pay 4% of assets pa and its trading at a 9% discount so roughly a 4.4% yield here.

Japan has had to become very very efficient due to a long deflation and China,but some inflation should help them.The downside is they have few natural resources so will be hit with commod/energy inflation,but should manage it better than most.

These investment trusts are becoming a bigger part of my portfolio,but still small.I intend to grow them.Im prepared to give up some returns to have more diverse regions in holdings.Il be looking for exposure to bigger Jap companies as well.

[DurhamBorn]

4 minutes ago, CannonFodder said:

The world has truely gone mad.

They leaving him with his money? Surely the idea is to deprive him of funds.

Exactly ,utter madness.Our polos are beyond useless.I think the next few years will focus their tiny minds.There could be a huge scramble for energy next winter.

I think Rosneft were upset to lose BP,genuine upset because they had a good working relationship.The government of course is just miffed dirty ex factory workers didnt fall into line and made big money buying BP when NEST was selling.

[23rdian]

5 hours ago, Sidd said:

I am confused. Google is showing a closing price of 476 vs HL and Yahoo showing circa 350. Is this the after market price?

I have seen this sort of thing before. I thought it was due to the 15 minute delay. I think that is the close price?