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

[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?

[Castlevania]

6 hours ago, DurhamBorn said:

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

Looney by name, Looney by nature.

[sleepwello'nights]

6 hours ago, 23rdian said:

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?

its similar to what we accountants can do with numbers. Some years ago I viewed a site that listed the transactions of shares. It showed buy and sell volume with the price of each transaction. A large order could have a higher or lower number than preceeding or following transactions. It reflects the fundamental nature of supply and demand. 

Its a bit like the story of a shop customer complaining about the price of the product he wants to buy telling the shop keeper his competitor sells them at a lower price. The shopkeeper replies yes we list them at that lower price when we haven't got any. 

When a site shows a price does it take the latest transaction or an average of the latest. How is the average calculated. I'm sure there are rules, I'm no expert so can't say what they are, but as we know rules can be skewed. 

Finally the price shown is, as far as I know, the mid-price. An average of the latest? bid offer price. As an example Evraz, when I looked at the site I use recently after close, was showing a a buy price of £2.00 and a sell price of £3.00. with a mid price used for valuing them of £2.50

 

[Majorpain]

7 hours ago, CannonFodder said:

The world has truely gone mad.

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

Which is a good point, the dividend must be in Dollars, so by refusing the dividend BP is making Rosneft/Russian Govt's life a lot easier by not draining some of its much more limited Dollar reserves!

[sleepwello'nights]

8 hours ago, Pinkpanther said:

 

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.

 

 

I started to buy shares towards the end of last year to use this years ISA allowance. The dividends so far are far, far more than the miniscule interest that cash would have earned on deposit at 0.30%or the typical 0.01%. 

There was also a 10% capital gain in a few months. Well there was until I got tempted by the dividend yield on EVR and POLY. 

[Barnsey]

7 hours ago, DurhamBorn said:

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.

Thanks for the recommendation, my work AVC scheme is being butchered in the name of social responsibility so I've finally plucked up the courage to transfer it out into a SIPP with my S&S ISA provider ii. Starting off with this one along with Henderson Far East, Murray Intl and Blackrock Latin America, along with a few chunks of hefty dividend shares. 

[BadAlchemy]

Luke Gromen - "US can't sanction Russian energy without risking systemic collapse"

Time Stamp References:
0:00 – Introduction
1:31 – Russia’s Options
7:55 – Forced Solutions
10:14 – China & Europe
16:06 – Russia’s Gold
20:37 – Bond Market Risks
24:57 – LBMA & Comex Risk
27:29 – Scenarios
35:38 – Weaponizing Bitcoin
38:26 – Fed & EuroDollar
43:30 – Taper/Tighten?
47:20 – Gold in 2019
49:58 – Trudeau & Miners
53:53 – Crypto & Fiat Risk
58:05 – Hedging Options
1:01:55- Wrap Up

[Heart's Ease]

 

 

 

[Pinkpanther]

39 minutes ago, Cawn said:

Polymetal have just released an RNS.

Blackrock have increased their stake from 5% to 10% at double yesterday's SP close. Also a positive RNS about exploration.

Blackrock did buy a chunk of Eurasia Mining plc at 40p so maybe not a buy signal.

I had a hunch that they would be investing in Polymetal. - Bit like buying Oil producers when they were down.

[geordie_lurch]

1 hour ago, Cawn said:

Polymetal have just released an RNS.

Blackrock have increased their stake from 5% to 10% at double yesterday's SP close. Also a positive RNS about exploration.

Blackrock did buy a chunk of Eurasia Mining plc at 40p so maybe not a buy signal.

Where is the news that Blackrock bought Polymetal as I can't seem to find any reference to it online?

Found it https://markets.businessinsider.com/news/stocks/polymetal-tr-1-notification-blackrock-1031241471?op=1

EDIT - Maybe Blackrock follow this thread for ideas