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

[Royston]

7 minutes ago, DurhamBorn said:

The consumer staples they own wont be able to pass on the inflation,the tech will be lower in 10 years nominal,never mind inflation adjusted,healthcare should do ok,but governments might press down on prices and they own very little in comms.I think they will likely underperform inflation this cycle and that will be a disaster for the many who use the fund for their pension drawdown.Iv read many times people retired saying they drawdown from Fundsmith 5% a year and its easy etc.

Thank you for the reply, I do have a chunk in FS and although I'm not drawing down on it right now I was hoping it could make a relatively steady and modest (by it's previous performance) 5-10% a year for the next 10 years but it looks like I might have to look at other options!

[leonardratso]

8 minutes ago, Royston said:

Thank you for the reply, I do have a chunk in FS and although I'm not drawing down on it right now I was hoping it could make a relatively steady and modest (by it's previous performance) 5-10% a year for the next 10 years but it looks like I might have to look at other options!

ive got a small amount in there, just a gia, they dont like me much cos i kept skimming the top off it for a while and they told me to go and get a trading account so i left it a while, think i might skim the profits off soon and leave the small amount there for the meltup if it happens.

[Royston]

2 minutes ago, leonardratso said:

ive got a small amount in there, just a gia, they dont like me much cos i kept skimming the top off it for a while and they told me to go and get a trading account so i left it a while, think i might skim the profits off soon and leave the small amount there for the meltup if it happens.

My plan was to keep skimming off it every time it made 10% of my initial investment, but all the conventional wisdom was there's no point if you don't need the cash and it's better to leave it to compound. 

[leonardratso]

11 minutes ago, Royston said:

My plan was to keep skimming off it every time it made 10% of my initial investment, but all the conventional wisdom was there's no point if you don't need the cash and it's better to leave it to compound. 

which would have been the case over the last 5-10 years, i cant complain, its done well, i should have hit it earlier and with more but nothing lasts forever and at some point, even if its not the optimal point, you have to cash something out either via divis or sales, the whole point is not to end up with large numbers of shares or huge numbers of units on the day you drop dead, unless the plan is to efficiently shift them to the family in some way, but to earn passive income on your way there i suppose. I dont have any sentimental attachment to any of them really, they are merely a vehicle to achieve an end.

[Libspero]

Hi guys..  I’ve been put off joining in on this thread,  simply because it’s so long.

Is anyone able to provide a brief overview of the state of the nation?

As far as I can tell the general theme is inflation protection and avoiding tech and momentum stocks..  the rotation as it seems to be called.

Schiff is talking about oilies..  BP, Total, Shell,  then Vodaphone, Singapore Telecom, BASF, Danone, Sodexo (France), Telefonica (Spain) and British American Tobacco. And of course,  being Peter.. gold.

Are these the same kinds of picks you guys are looking at and talking about?

Can anyone help get me up to speed? 

[CannonFodder]

5 minutes ago, Libspero said:

Hi guys..  I’ve been put off joining in on this thread,  simply because it’s so long.

Is anyone able to provide a brief overview of the state of the nation?

As far as I can tell the general theme is inflation protection and avoiding tech and momentum stocks..  the rotation as it seems to be called.

Schiff is talking about oilies..  BP, Total, Shell,  then Vodaphone, Singapore Telecom, BASF, Danone, Sodexo (France), Telefonica (Spain) and British American Tobacco. And of course,  being Peter.. gold.

Are these the same kinds of picks you guys are looking at and talking about?

Can anyone help get me up to speed? 

Yes apart from sodexo and danone, we dont rate them

We are into tinfoil and pizza ovens as opposed to danone

[Yellow_Reduced_Sticker]

well ...well...looks like Mr crystal ball Dave's final melt-UP prediction is here!

 

Had to log into my HL acc to read a secure message, AND blimey portfolio is at the highest it's ever been ...a nats cock shy of 50% UP!

 

@DurhamBorn CHEERS and  to the rest of the contributors on this board!

 

 

[Libspero]

7 minutes ago, CannonFodder said:

Yes apart from sodexo and danone, we dont rate them

We are into tinfoil and pizza ovens as opposed to danone

What’s the verdict on miners?  they seem to have great PEs,  but I’m not sure exactly what the future is for metal prices or how much debt they hold? 

[Bobthebuilder]

39 minutes ago, Libspero said:

Can anyone help get me up to speed? 

I think, you already know.

[Wheeler]

52 minutes ago, Libspero said:

Hi guys..  I’ve been put off joining in on this thread,  simply because it’s so long.

Is anyone able to provide a brief overview of the state of the nation?

As far as I can tell the general theme is inflation protection and avoiding tech and momentum stocks..  the rotation as it seems to be called.

Schiff is talking about oilies..  BP, Total, Shell,  then Vodaphone, Singapore Telecom, BASF, Danone, Sodexo (France), Telefonica (Spain) and British American Tobacco. And of course,  being Peter.. gold.

Are these the same kinds of picks you guys are looking at and talking about?

Can anyone help get me up to speed? 

@BurntBread did an excellent summary of this thread (from both here and ToS). The focus was on the macro early on but so far everything has played out pretty much as predicted by @DurhamBorn so discussions have ranged a bit further.

 

[CannonFodder]

52 minutes ago, Libspero said:

What’s the verdict on miners?  they seem to have great PEs,  but I’m not sure exactly what the future is for metal prices or how much debt they hold? 

Tin miners that mine tinfoil, yes certainly.

I.m also long shotguns and baked beanz; gas is going up.

Views on miners here vary

We think miners that wont survive will underperform the market

Miners that are cat like and experienced like a silver haired panther could surprise.

overall those that survive will offset those that dont probably.

[DurhamBorn]

51 minutes ago, Yellow_Reduced_Sticker said:

well ...well...looks like Mr crystal ball Dave's final melt-UP prediction is here!

 

Had to log into my HL acc to read a secure message, AND blimey portfolio is at the highest it's ever been ...a nats cock shy of 50% UP!

 

@DurhamBorn CHEERS and  to the rest of the contributors on this board!

 

 

Bet you enjoyed your 27p a share divi from Royal Mail as well.Iv been naughty lately,iv been spending,ok its all 2nd hand but still....iv even started taking my other half out,luckily she drinks pints and its £2.30 a pint where we go,bit of entertainment as well,though old fella sat next to me introduced me to his wife,it was a Jack Russell,he said the week before he had caught her getting humped in the park  ,

 

[Bobthebuilder]

1 hour ago, Yellow_Reduced_Sticker said:

well ...well...looks like Mr crystal ball Dave's final melt-UP prediction is here!

 

Had to log into my HL acc to read a secure message, AND blimey portfolio is at the highest it's ever been ...a nats cock shy of 50% UP!

 

@DurhamBorn CHEERS and  to the rest of the contributors on this board!

 

 

That's a terrible waste of damn fine good cooking lager, I think I know her.

[CannonFodder]

North of a fiver here for a pint. I can get four bottles of nice real ale for same amount. Supermarkets bottles generally taste better too and I dont have to queue to my kitchen.

Am quite boring, no longer go out. IT sadly doesn't seem worth it any longer.

Used to love it, 2 kebahs on way home, one for dinners and one for breakfeast, great for the hangovers.

[leonardratso]

14 minutes ago, CannonFodder said:

North of a fiver here for a pint. I can get four bottles of nice real ale for same amount. Supermarkets bottles generally taste better too and I dont have to queue to my kitchen.

Am quite boring, no longer go out. IT sadly doesn't seem worth it any longer.

Used to love it, 2 kebahs on way home, one for dinners and one for breakfeast, great for the hangovers.

i once bought a kebab and was eating it on the street in the middle of the day, i was well hungover, this was in sunderland town center in 1989 when i was a student, quite a nice local sounding bird walked by and said 'eee a kebab in the middle of the day of the day ya dorty bastard' then she asked me for a bit of it. (and some kebab).

[Hancock]

8 minutes ago, leonardratso said:

i once bought a kebab and was eating it on the street in the middle of the day, i was well hungover, this was in sunderland town center in 1989 when i was a student, quite a nice local sounding bird walked by and said 'eee a kebab in the middle of the day of the day ya dorty bastard' then she asked me for a bit of it. (and some kebab).

Going back 28 years .. I was in Bournemouth town centre with my mates at 5pm on a sunny summer evening .... anyone one of my mates was eating a kebab and we got talking to these girls ... she then asked for a bit of his kebab .... at which point our other mate said "if you want some real meat have a go on this". We all looked down and he had a semi hardon bouncing away in his hand.

The girls ran off laughing and screaming ... got up the top off the street and then flashed her tits for us.

The good old days!

[leonardratso]

im glad it was back then, might be rose tinted glasses an all that shit but im so glad im not going through that stage of my life right now, it really doesnt look as good to me as it was back then.

[CannonFodder]

Just now, leonardratso said:

im glad it was back then, might be rose tinted glasses an all that shit but im so glad im not going through that stage of my life right now, it really doesnt look as good to me as it was back then.

Everything videoed on phones now and uploaded to social media, puking in a hedge not what it used to be in being a harmless memory of last night. Now that stuff can follow you and haunt you on the web.

 

[23rdian]

11 hours ago, Harley said:

ULVR gaps down while GSK gaps up! 

I sold my GSK for profit and put half into ULVR today. I hear what you are saying about inflation but people still love brands and have gone cold on Pharma.

[23rdian]

2 hours ago, Libspero said:

What’s the verdict on miners?  they seem to have great PEs,  but I’m not sure exactly what the future is for metal prices or how much debt they hold? 

Particularly interested in Polymetal at the moment as it's well down for me but I still fancy buying some more at these prices? Sensible?

[JMD]

6 hours ago, CannonFodder said:

Wrong is a strong word, perhaps not universally accurate in all situations

I.M tending to agree that Capital markets are malfunctioning however as the cost of capital goes down and anybody can get capital from a oversaturated market I m not sure that this means that corporates will disappear

Victor looks at it through the banking lens as corporates losing their advantage of cheaper capital ( why bother setting up a corporate if money costs the same or is free for a one man band) however I think they have other advantages such as organisational resilience and operational excellance 

1 miner can borrow the capital to buy his mine for free in Viktor.s world

100 miners can spread the cost of a mechanic or geologist over a 100 people or take it in turns to work mine while one miner is sleeping or asleep.

A company with 10 mines can have a shut down at one, still pay all its workforce 

Should capex advantages disappear; many industries still have opex related advantages related to size.

There is more to running a corporate than getting cheaper Capital from the bank

What I can see is that as the cost of capital reduces and amount becomes Infinite from borrowing then why bother to be listed as as there is no need to attract capital from placements therefore companies start to leave the listed exchanges and go private.

What exactly is victors definition of corporate here - listed or big?

 

Those are all good questions for our current system but Shvets is predicting radical change. Excuse my below meandering reply, but for some odd reason I do find Shvets thesis intriguing.                                                                                                 Unfortunately I am no expert in these financial subjects, let alone the intracaties of Shvets theory. But he says central banks will create future money and control the rates, and in effect there will be no free market as we understand it today. It might sound like he is giving himself a free pass to say anything, however strange sounding (clown world part deux?). But having listened to all/most of his interviews I do think he has done a deep dive and is merely describing what he believes the authorities will be forced to implement, however awful those policies sound, and certainly not ones he favors.                                                                                                                Incidentally Shvets doesn't think the new model will work longterm, but hopes it will at least allow several decades or more for a new stable economic settlement to be agreed. He sees the impending social transition, whatever shape it ultimately takes, as being part of the historical continuum, from tribal/feudal/capitalist markets/industrial/big state corporatist/digital... the determining 'moral metric' at each juncture being how highly people are valued (ie living standards/freedoms) within each of these prevailing economic systems... All this might sound a bit to philosophical, but for me personally I find it useful by providing perspective (albeit an alarming one?). But in terms of the practical scope of this thread i think it helps crystallise the imperative of building wealth this decade, and also for accumulating assets - financial or otherwise - that will be of value or utility in the 2030s.

[Libspero]

3 hours ago, 23rdian said:

Particularly interested in Polymetal at the moment as it's well down for me but I still fancy buying some more at these prices? Sensible?

I can’t tell..  PE of 7,  dividend of 8%, 60% gross margins makes it a no brainier on paper as a “value stock”to me.  But the same is true of many of the miners..  what’s the catch? 

[Castlevania]

2 hours ago, Libspero said:

I can’t tell..  PE of 7,  dividend of 8%, 60% gross margins makes it a no brainier on paper as a “value stock”to me.  But the same is true of many of the miners..  what’s the catch? 

Financial statements are backward looking. Revenue is tied to the selling price of a commodity over which you have no control and costs will be higher this year due to the price of oil.

Having said that I think the short term price pressure is due to sabre rattling over Russia where most of their mines are based.

[Lightscribe]

Over Xmas I attended a couple of work and retirement dos, London pints are well north of £6 going onto £7 and beyond now. Basically £15 for two pints and a packet of crisps.

What also grinds my gears, are these hipster Brew Dog places that try and give you a small bottle of some hoppy IPA and call it wanky name for the same price as a pint. What’s with the coke can sizes of beer nowadays? Have we really descended that far into a nation of tossers not to be able to drink a pint? 

Pubs/bars (especially in cities) will now hasten their own demise. They haven’t got the footfall they once had, will have to compete to pay more for staff and supplies and will try to lump on the costs onto the punter (faced with their own rising cost of living) who will just increasingly take the cheaper option of drinking at home instead.

I measure by my own gauge of being a pub goer from at least once a week, to once every few months now.

Final nail in the coffin is that younger generation don’t drink on any scale of previous generations either, it’s too expensive and they’d rather go out for a coffee: Times are a changing and the city economy as we once knew it is fucked.

P.S a large kebab is around £10 now too, so you’ll need a small fortune nowadays to get pissed and manage to find your way home (trains still running reduced services)

[CannonFodder]

3 hours ago, Libspero said:

I can’t tell..  PE of 7,  dividend of 8%, 60% gross margins makes it a no brainier on paper as a “value stock”to me.  But the same is true of many of the miners..  what’s the catch? 

Fear of US sanctions if ukraine gets hot. Gazprom also dropping.

I.ve backed up the truck and ordered a portrait of Putin for my wall.