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

[Harley]

11 hours ago, Wheeler said:

What’s with all the crypto talk on the thread? I thought we preferred not to discuss it here.

Need to reaffirm approach?  Personally, I don't get the negativity.  It is what it is, as is everything else.  Everything has its place.  IMO, that's the real discussion to be had by some.

[planit]

10 hours ago, BadAlchemy said:

Thungela share holders will be very pleased this evening. 15% up following strong coal demand and upbeat end of year results.

https://www.miningreview.com/coal/thungela-posts-solid-results-despite-several-challenges-to-operations/

"Demand for energy, including thermal coal, has continued to improve as global economic activity recovers from the COVID-19 pandemic.

International coal supply from the major supply basins was disrupted by logistical constraints in China, Russia and Indonesia, community unrest in Colombia, and on-going geopolitical tensions between China and Australia.

Demand for high-quality South African coal has remained firm."

I am kicking myself so hard for not jumping in a few weeks ago.

IMO it is still really cheap, cash generation has been much better than I expected. I have been trading in and out, I got lucky here as I hadn't sold (mainly because it looked strong banging into the 350 resistance) but I completely missed there was an update coming.

Results in March, from that point other investors will have access to financial figures which are missing currently and I am hoping for a re-rate. Divi should be between 70p and £1 on a £4 share (I must have made a mistake??).

 

On the downside this is extremely volatile (its my only share needing 100% margin), the railway to get the coal to the coast is being impacted by organised armed gangs and there are all the other environmental ESG risks.

I think of it as a wild west version of DB's tobacco stocks in the 90's, the divis could be spectacular.

I am currently looking to sell down (trying to time guess size of this move up) but intend to be a nice big holder in March.

 

dyor as usual, this is high risk.

[Harley]

11 hours ago, Majorpain said:

I'm not sure this is going to be to anyone's benefit, total crypto market cap is around $2.8 Trillion, or just under UK GDP.  Something that size going bang is going to ripple through all asset classes doing damage. 

It is about time that reality started to reassert itself, which would be good for things like commodities who actually have a product to sell and not hype like a worryingly high percentage of the financial world these days.

This, especially NFTs, seems to me (based in the past as I am) to be a repeated general bubble characteristic, a bit like the tulip mania et al.  But I must accept I could be wrong, as I try to do in everything, and position accordingly.  

But that talk is boring and not the real interesting stuff to me.  I find if you push on past the shuttered "it's crap" mindset and accept it for what it is, then the "so what" becomes interesting.  IMO it will have an impact on the next significant correction.  For example, look at the type of person owning it?  Are they really mostly broadly based asset owners, etc.  Will it act as a firebreak for some assets such as gold, etc?  And so on.

That's the real discussion to be had.

[DurhamBorn]

2 hours ago, Barnsey said:

Cc: @DurhamBorn

 

Good my roadmap work isnt it,,were we first to say it on here,i think so.

BAT the machine carries on as usual today.Notice they mention debt will hit 3x at year end,then free to do what they want with £3billion spare after the divi,i expect the lot to go into share buybacks until the shares are over £33.Usually id prefer they kept paying down debt,but i think buybacks are right at these levels for them given it saves 8% divis rather than 2.5% coupons.

 

[DurhamBorn]

40 minutes ago, MrXxxx said:

This is the crux...getting out whilst winning...unfortunately most get greedy and end up with nothing.

Worse they keep adding from earnings so lose the massive profits and what they kept adding.The interesting thing will be to see if its a slow death or happens over a few days/weeks.They depend on sucking more and more in assuming there will be more and more to pay higher for nothing in return.It could be the greatest delusion bubble of all time.Most bubbles have tiny investments at the bottom,but crypto has nothing.Of course the early buyers etc made a fortune.Interesting to see it play out.

[Democorruptcy]

28 minutes ago, DurhamBorn said:

Good my roadmap work isnt it,,were we first to say it on here,i think so.

BAT the machine carries on as usual today.Notice they mention debt will hit 3x at year end,then free to do what they want with £3billion spare after the divi,i expect the lot to go into share buybacks until the shares are over £33.Usually id prefer they kept paying down debt,but i think buybacks are right at these levels for them given it saves 8% divis rather than 2.5% coupons.

 

It's one I'd never been able to buy but last week I put a hundred large in. I feel like a bad person buying fags with so many deaths caused by it in our family. Watching a TV program last night someone lit up and that's always annoyed me but this time I thought "That might have tempted a few viewers to open their packets of fags" . TPTB might limit nicotine, ban vaping etc and hand me the punishment I deserve.

[Bricormortis]

1 hour ago, leonardratso said:

age old problem everyone suffers from

Deleted post

[planit]

25 minutes ago, Democorruptcy said:

 I put a hundred large in

Is that you Yolo'ing in or the first ladder?

[Harley]

I try to screen a universe of some 85k stocks each week.  My screens have a mix of nine fundamental and technical parameters with a value focus.  Most funds and ETFs fail these tests so I run a different screen for them.  I screen on monthly chart data but also look at the weekly and daily data of those passing the screens for buying signals.  I also look at other asset classes but that's a separate analysis.

Anyway enough of that.  What am I (personally, IMO) seeing? 

. Not much caught in either screen.  Even less so than usual.  And then many fail further technical and fundamental checks as is normal.

. Of those passing the screen but mostly failing later:

  . The exchange composition has changed?  It was pretty exclusively Asia before but now includes more US and, interestingly, less Russian.  Little in Europe as usual (say 1% or less of the total per country).

  . The industry composition is diverse as usual but has a noticeable number of stocks in electrical utility, real estate, construction materials, and engineering and construction.

. Many looked ready to give a possible buy signal on their weekly charts in early November, or indeed did, but then failed which I found slightly odd but then I'm still learning.  Their MACDs (price momentum) however often still remain positive so this could just be a pullback or could signal further falls is that changes?

. Another noticeable tendency is how attractive many stocks are on their monthly charts as they have often pulled back to what could be longer term support and maybe their negative price and volume momentum could turn positive over the next few months (tbd)?

. The daily charts are often fairly volatile so maybe the bull case would be a wall of worry?  Or do we break down from here for a few bad months into 2022 as predicted by several commentators, in which case this could be quite violent break?

. Despite the above comments, are several monthly charts beginning to show potential bearish patterns (depending on interpretation) such as head and shoulders and bearish triangles?  That is, at tempting support levels but could break which could be painful?

. There has been a positive move in select bond ETFs, some of which actually have quite promising technicals.  This defies mainstream "logic" but.....!

Take a look at Unilever.  A volatile daily chart, quite bullish weekly and monthly charts which could be advancing on a wall of worry (recent higher lows) or is that just part of a dominant head and shoulders topping chart pattern in the monthly?

Just how I'm personally seeing things based on my chosen parameters (many others available), many alternative views, certainly not investment advice, do not rely on the data (it will contain errors), for macro discussion purposes only, DYOR, etc. 

[Axeman123]

4 hours ago, Barnsey said:

Cc: @DurhamBorn

Tick another waypoint off on the clipboard!

[harp]

1 hour ago, Democorruptcy said:

It's one I'd never been able to buy but last week I put a hundred large in. I feel like a bad person buying fags with so many deaths caused by it in our family. Watching a TV program last night someone lit up and that's always annoyed me but this time I thought "That might have tempted a few viewers to open their packets of fags" . TPTB might limit nicotine, ban vaping etc and hand me the punishment I deserve.

Most my family smoke. I’ve never smoked and they know I hate it. All now have smoking related illnesses. I used to tell them to give up. I stopped telling them a couple of years back when I bought BAT and IMB. Fuck em. No sympathy if they die from it. 

[Harley]

2 minutes ago, harp said:

Most my family smoke. I’ve never smoked and they know I hate it. All now have smoking related illnesses. I used to tell them to give up. I stopped telling them a couple of years back when I bought BAT and IMB. Fuck em. No sympathy if they die from it. 

Right now I wonder if some media companies are more unethical than big tobacco!

[DurhamBorn]

1 hour ago, Democorruptcy said:

It's one I'd never been able to buy but last week I put a hundred large in. I feel like a bad person buying fags with so many deaths caused by it in our family. Watching a TV program last night someone lit up and that's always annoyed me but this time I thought "That might have tempted a few viewers to open their packets of fags" . TPTB might limit nicotine, ban vaping etc and hand me the punishment I deserve.

Id say shit food will kill more people so the money they spend on fags means less Mcdonalds,your doing them a favour.Next generation is doing very well now,still loss making,but falling losses now and doing very well from their own website so cutting out retailers margin.Noticed fag volume was flat around the world,not down,Indonesia seeing the growth and Pakistan etc.

 

[ThoughtCriminal]

2 hours ago, Harley said:

This, especially NFTs, seems to me (based in the past as I am) to be a repeated general bubble characteristic, a bit like the tulip mania et al.  But I must accept I could be wrong, as I try to do in everything, and position accordingly.  

But that talk is boring and not the real interesting stuff to me.  I find if you push on past the shuttered "it's crap" mindset and accept it for what it is, then the "so what" becomes interesting.  IMO it will have an impact on the next significant correction.  For example, look at the type of person owning it?  Are they really mostly broadly based asset owners, etc.  Will it act as a firebreak for some assets such as gold, etc?  And so on.

That's the real discussion to be had.

That's what my initial post that started the conversation was asking.

 

It was long pushed as being the new gold, an inflation hedge etc. We now have enough data to know that isn't true.

 

So it becomes interesting to ask "What is it? What isn't it?".

 

To whomever mentioned that we don't usually mention crypto:  that's because in the past it's descended into "This shit coin is going to the moon, you're all idiots if you can't see that! Blah, blah, blah". 

 

I personally think it's worth re-examining our assumptions about things every now and then in an intelligent way.

 

But if the consensus was that this should be a permanently crypto free thread then that's ok. 

 

 

[JMD]

3 hours ago, planit said:

IMO it is still really cheap, cash generation has been much better than I expected. I have been trading in and out, I got lucky here as I hadn't sold (mainly because it looked strong banging into the 350 resistance) but I completely missed there was an update coming.

Results in March, from that point other investors will have access to financial figures which are missing currently and I am hoping for a re-rate. Divi should be between 70p and £1 on a £4 share (I must have made a mistake??).

 

On the downside this is extremely volatile (its my only share needing 100% margin), the railway to get the coal to the coast is being impacted by organised armed gangs and there are all the other environmental ESG risks.

I think of it as a wild west version of DB's tobacco stocks in the 90's, the divis could be spectacular.

I am currently looking to sell down (trying to time guess size of this move up) but intend to be a nice big holder in March.

 

dyor as usual, this is high risk.

Plus the 'moral case' against coal is running out of steam(!?) - i note that Japan is building coal fired power stations, so giving China and India a easy excuse to continue on their coal path. Interestingly Japan still says it will be carbon neutral by 2050 because of increased use of CCS, sequestration tech, hydrogen, LNG, etc. I think most of their coal and hydrogen might well end up being imported from Australia, so Australian coal companies might be a particularly good bet (especially with Australia no longer looking 'fully engaged' with the green agenda!!), however lots of coal sector divestment happening at the moment so it is far from clear which ones might be best, and Australia has many coalies - Is anyone here buying or looking to buy after say a BK correction?, or maybe just stick with the big boys, eg BHP?                                                                                                                                                                ...As an aside, apparently Toyota will only do hydrogen engines in future, ie no battery tech, so maybe a good hydrogen play (and one in the eye for that Twitter weirdo Musk!)

[Yellow_Reduced_Sticker]

2 hours ago, Democorruptcy said:

It's one I'd never been able to buy but last week I put a hundred large in. I feel like a bad person buying fags with so many deaths caused by it in our family. Watching a TV program last night someone lit up and that's always annoyed me but this time I thought "That might have tempted a few viewers to open their packets of fags" . TPTB might limit nicotine, ban vaping etc and hand me the punishment I deserve.

 

NOT a chance!

 

WHY...Cos some of TPTB fookers are holders British American Tobacco shares.

Back in in 1998, Ken Clarke has grossed an estimated £1m since joining the board of the multinational tobacco firm BAT.

Even i'm thinking of buying BAT ...BUT only with the yellow sticker price of: £23.99

 

pls stop buying cos the price is ROCKETING ...UP 56p today!

[JMD]

53 minutes ago, Harley said:

Right now I wonder if some media companies are more unethical than big tobacco!

Definitely unethical. To think that certain cinema advertising - eg fast intercuts that didn't register on the conscious mind of the viewer - was actually banned in the 50's because it was deemed psychologically manipulative... But today whole media organisations are permitted to do far far more manipulation, causing imho very measurable social divisions and individual mental illness. Yet very little attention from our politicians or from the media is discussed. 

[Democorruptcy]

2 hours ago, planit said:

Is that you Yolo'ing in or the first ladder?

I didn't know what Yolo'ing meant , I've not gone all in. I don't really do ladders intentionally but I suppose a first purchase becomes one, if I make another!

[Harley]

59 minutes ago, DurhamBorn said:

Noticed fag volume was flat around the world,not down,Indonesia seeing the growth and Pakistan etc.

That Indonesian one has recently popped up on my radar but alas, like some other prospects in other markets like Malaysia and Thailand, no market access.

[Wheeler]

25 minutes ago, ThoughtCriminal said:

That's what my initial post that started the conversation was asking.

 

It was long pushed as being the new gold, an inflation hedge etc. We now have enough data to know that isn't true.

 

So it becomes interesting to ask "What is it? What isn't it?".

 

To whomever mentioned that we don't usually mention crypto:  that's because in the past it's descended into "This shit coin is going to the moon, you're all idiots if you can't see that! Blah, blah, blah". 

 

I personally think it's worth re-examining our assumptions about things every now and then in an intelligent way.

 

But if the consensus was that this should be a permanently crypto free thread then that's ok. 

 

 

TC, I completely agree with the highlighted parts. I do think crypto will play a big part over the next decade but the problem is defining what crypto is.

My take is that it is a very broad range of different ideas with the actual cryptographic technology only playing a small part. A bit like comparing TCP/IP to the internet. I see it as a broad range from simple scams to replacement financial systems. My general categories are:

1. Scams - a token or coin just created to try and scam money from people. One example being the Squid Game one. Usual exposed when the creators run off with the money.
2. Tulips - a bit like the scams but tend to have more of a life of their own and the project continues for a while even if the original creators/investors leave.
3. NFTs - a digital version of collectables. I don't see the attraction but some people have always collected things, e.g. stamps, baseball cards, barbie dolls, watches or paintings. There is a lot of potential around digital rights for songs, movies and games, and if you look at how much money is spent on entertainment there is a lot of potential here.
4. Decentralised finance (DeFi) - there is a lot of money made in the financial system. If anything could replace the banks and take some of their commissions/fees then there would be a lot of value directed towards the DeFi tokens.
5. Central Bank Digital Currencies (CBDCs) - not sure how to invest in this and don't think I'd want to as I hope they fail!
6. Store of value - for me only Bitcoin has that. 

 

[Harley]

15 minutes ago, Wheeler said:

TC, I completely agree with the highlighted parts. I do think crypto will play a big part over the next decade but the problem is defining what crypto is.

My take is that it is a very broad range of different ideas with the actual cryptographic technology only playing a small part. A bit like comparing TCP/IP to the internet. I see it as a broad range from simple scams to replacement financial systems. My general categories are:

1. Scams - a token or coin just created to try and scam money from people. One example being the Squid Game one. Usual exposed when the creators run off with the money.
2. Tulips - a bit like the scams but tend to have more of a life of their own and the project continues for a while even if the original creators/investors leave.
3. NFTs - a digital version of collectables. I don't see the attraction but some people have always collected things, e.g. stamps, baseball cards, barbie dolls, watches or paintings. There is a lot of potential around digital rights for songs, movies and games, and if you look at how much money is spent on entertainment there is a lot of potential here.
4. Decentralised finance (DeFi) - there is a lot of money made in the financial system. If anything could replace the banks and take some of their commissions/fees then there would be a lot of value directed towards the DeFi tokens.
5. Central Bank Digital Currencies (CBDCs) - not sure how to invest in this and don't think I'd want to as I hope they fail!
6. Store of value - for me only Bitcoin has that. 

 

And how does it score against the principles of money (acceptability, divisibility, store of value, etc)?  Almost comical given our current version of money is in the departure lounge on the basis of these principles!  And that is increasingly looking deliberate, so it's all bets off.

But again, the key is what does it mean (implications) rather than just whether it has inherent merit.  Could be negligent to ignore it entirely or write off its implications too dismissively.  IMO, it has/will have an effect.  Just exactly what?  My starter is as a useful pressure valve, especially with what might be coming.

I own some.  Of course.  But overall I feel like those buying Walmart and Coca Cola towards the end of the dot com boom!  I missed that last time but less likely this time.  If my crypto crashes but in some small way that softens the blow on my other assets then job done.

[DoINeedOne]

14 hours ago, mcdongle said:

Anyone fancy moving to Canada

 

https://www.realtor.ca/real-estate/23846012/1060-danforth-ave-toronto-danforth

Please Note Property Is Less Than 1' Wide(1 Foot Wide). Own A Piece Of The Danforth! A Residential Address In The City! Ever Thought Of Being A Landowner But Couldn't Afford It? Now You Can Own A Piece Of Toronto And Wait For Developers To Knock At Your Door! 

$49,999

And we think Crypto is fucking mental

4 hours ago, Harley said:

This, especially NFTs, seems to me (based in the past as I am) to be a repeated general bubble characteristic, a bit like the tulip mania et al.  But I must accept I could be wrong, as I try to do in everything, and position accordingly.  

But that talk is boring and not the real interesting stuff to me.  I find if you push on past the shuttered "it's crap" mindset and accept it for what it is, then the "so what" becomes interesting.  IMO it will have an impact on the next significant correction.  For example, look at the type of person owning it?  Are they really mostly broadly based asset owners, etc.  Will it act as a firebreak for some assets such as gold, etc?  And so on.

That's the real discussion to be had.

I won't go on about Crypto i don't like 99% of it but as others have said there's some interesting projects, i do play around with it only to test and learn i see it as a education so not to much money

NFT's are interesting if you get past the why are people buying a stupid image which most are, its what can be coded into the contract, royalties, easy transfer etc...

There's one company trying too whilst not an NFT but via smart contracts working on home sales so image you buy house payment is transferred, instantly deeds and any other titles or what not are transferred too you in seconds

A interesting way NFT's can be used is memberships, now image you have a membership to XYZ Golf Resort in your wallet

This golf resort has a 5 year waiting list and is in demand you being lazy don't use it much 

Rather than waiting around 5 years for a membership you can receive offers and sell it on an open market from those willing to pay a premium 

You sell your membership at a premium, the code also sends for example 2.5% royalties for any sales to the golf resorts wallet

Golf resort wins (royalty), you win (Sold Membership) the new member is winning (No need to wait)

Rough example but its interesting 

Have a certain NFT gain early access to ???

I still think we're years aways from most this stuff becoming normal but as i said its quite interesting

 

[janch]

3 hours ago, harp said:

Most my family smoke. I’ve never smoked and they know I hate it. All now have smoking related illnesses. I used to tell them to give up. I stopped telling them a couple of years back when I bought BAT and IMB. Fuck em. No sympathy if they die from it. 

My father who smoked like a chimney and left his lighted fags on tables so they all got singed, dropped dead of a heart attack at 49.  I have bought some BATS and IMB and the way I sold it to myself was it's revenge.  I can get some of his wasted money back with their divis.

[Axeman123]

1 hour ago, DoINeedOne said:

NFT's are interesting if you get past the why are people buying a stupid image which most are, its what can be coded into the contract, royalties, easy transfer etc...

There's one company trying too whilst not an NFT but via smart contracts working on home sales so image you buy house payment is transferred, instantly deeds and any other titles or what not are transferred too you in seconds

A interesting way NFT's can be used is memberships, now image you have a membership to XYZ Golf Resort in your wallet

This golf resort has a 5 year waiting list and is in demand you being lazy don't use it much 

Rather than waiting around 5 years for a membership you can receive offers and sell it on an open market from those willing to pay a premium 

You sell your membership at a premium, the code also sends for example 2.5% royalties for any sales to the golf resorts wallet

Golf resort wins (royalty), you win (Sold Membership) the new member is winning (No need to wait)

Rough example but its interesting 

Have a certain NFT gain early access to ???

I still think we're years aways from most this stuff becoming normal but as i said its quite interesting

Those use cases sound fantastic. Interestingly though none of them would require anything from the current crypto eco-system, except ideas and skills. It might be a good career area for a young person, so long as they get onto good projects and not generic scams, but it doesn't seem investable yet.

[Craig]

2 hours ago, Wheeler said:

TC, I completely agree with the highlighted parts. I do think crypto will play a big part over the next decade but the problem is defining what crypto is.

My take is that it is a very broad range of different ideas with the actual cryptographic technology only playing a small part. A bit like comparing TCP/IP to the internet. I see it as a broad range from simple scams to replacement financial systems. My general categories are:

1. Scams - a token or coin just created to try and scam money from people. One example being the Squid Game one. Usual exposed when the creators run off with the money.
2. Tulips - a bit like the scams but tend to have more of a life of their own and the project continues for a while even if the original creators/investors leave.
3. NFTs - a digital version of collectables. I don't see the attraction but some people have always collected things, e.g. stamps, baseball cards, barbie dolls, watches or paintings. There is a lot of potential around digital rights for songs, movies and games, and if you look at how much money is spent on entertainment there is a lot of potential here.
4. Decentralised finance (DeFi) - there is a lot of money made in the financial system. If anything could replace the banks and take some of their commissions/fees then there would be a lot of value directed towards the DeFi tokens.
5. Central Bank Digital Currencies (CBDCs) - not sure how to invest in this and don't think I'd want to as I hope they fail!
6. Store of value - for me only Bitcoin has that. 

 

Plenty of other use cases showing potential, such as supply chain/logistics, medical records, cross-border payments, gaming/gambling, even the dreaded social credits.