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


spunko
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2 hours ago, planit said:

Funny that we have lead a very similar path.

I feel we have been seeing a rotation into value due to tech being seen as more risky, some of the oil shares including BP are a no-brainer at current valuations. BP averaged 520p in 2019 when oil was $55.

I will continue to trade my shares but don't see myself selling out of BP for a very long time, we are just at the beginning of the cycle.

Today I see a breakout to the upside for BP (trend from Nov 2020), I am hoping for good results to push the share over 400p.

image.thumb.png.0f9b506ada459e764e30fc2c0a7b79cf.png

 

I missed out buying the BP @320.1 by 0.1p per share which was pretty stupid, I just left the order to be filled and it never was.

However, I did buy BP ADR Jan 23 Call options on a day when the ADR was at a discount to the UK share, I paid about 355 per share when the shares were 360 (excluding the extrinsic option value). In this way I did manage to load up on BP albeit at a price 30p more expensive.

I did hold onto my PFC shares and doubled down at 111p so I am happy in Jan :)

TGA - @M S E Refugee - I have been backing up the truck, it has been good to me trading it and I can't wait for the results in March. I will be disappointed with a dividend announcement less than 70p but we will see how it goes.

 

I am now trading options the 'TastyTrade' way, (hat tip to @MvR) using about 15% of my portfolio (not including the long BP ADRs) and trying to learn fast so I don't have to get a job.

 

 

 

Yep, received a buy signal last week but am fully allocated, plus the monthly is getting overbought toppy.  Nov20 was like a tripple witching time wise and the monthly has had a one way clear run from then to now.  Overbought stocks can still get more overbought so could defo go higher (especially given the MACD) but IMO these are more risky levels at which to lay trades.  The action is perfectly reasonable given the state of the general energy markets. 

PS: Similar with RDSB and co.

PPS:  You're probably right about the rotation as the trend was down and then turned early Jan22.  It'll be interesting to see if resistances get breached and become support.  Probably not if it's retail money driving it up atm! :)

Edited by Harley
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DurhamBorn
2 hours ago, ThoughtCriminal said:

This'll end well. 🤦

Interesting to see what ETFs are seeing the inflows.Iv been buying lots of UK small asset managers,started on Jupiter today as well.Contrarian macro play that cycle suits the none 60/40 types.Iv been buying Blackrocks Latin America Investment trust,tiny compared to its growth ETFs.

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DurhamBorn
2 hours ago, No One said:

@DurhamBorn I have a question for you in regards to pensions.

I have a pension with Standard Life with my new job, I asked HR if they can contribute directly to a SIPP and they said no, I called SL to ask about partial transfers and they also said no.

 

If I request a transfer to my AJ&B SIPP from my SL what happens to my SL account? Does it get closed, does it go to 0 but contributions still come in?

You cant transfer while your working there,the day you leave you can transfer into a SIPP.Iv left jobs in the past so i could transfer the pension out.I left GSK,they said they would put up deferred pensions by RPI,i knew that would out run pay increases.When i moved it into my SIPP it was worth 30% more for those years than someone who stayed working there,i got a bigger pension for not working there than someone who kept working ,clown world,but i saw it coming.

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Transistor Man
2 hours ago, sancho panza said:

TC I'm looking to buy some nuclear leccy stocks ,I thought the French were good at that? @Transistor Man,EDF are going to run a couple in the UK iirc.

Have you got a laymens expalantion for the pummelling?

I read that the french state are basically going to expropriate some GWh, and force the sale of electricity at a loss. The state still owns a good chunk of EDF. 

Ageing fleet now too. And they aren’t into the swing of building new ones. 

Edited by Transistor Man
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3 hours ago, No One said:

I have a pension with Standard Life with my new job, I asked HR if they can contribute directly to a SIPP and they said no, I called SL to ask about partial transfers and they also said no.

 

If I request a transfer to my AJ&B SIPP from my SL what happens to my SL account? Does it get closed, does it go to 0 but contributions still come in?

I also had the same issue but rules may be different for my scheme.

I have a Defined Contribution SL pension that my company contribute to. Mostly terrible funds and even with discounted yearly costs, still seemed expensive to me. Although you could change between funds 10 times a year without charge.

The SL GSIPP is stupidly expensive so I didn't enquire about moving in to that, but if it's possible it might be worth looking at if desperate (you can hold pretty much anything in it even gold)

Not sure if this made the difference this time but I didn't ask about direct contributions or partial transfer, I asked if I could move the total of the funds in my works SL pension into my existing HL SIPP (I have previously been told that wasn't possible but if i don't get the answer I want I usually just keep asking, or find someone else to ask) and the answer to my surprise was yes this could be done at no cost but only 1 time a year. Then a new SL company pension is set up for me and contributions continue.

So if your company has the same arrangement the process is as follows -

  1. You have an existing SIPP set up
  2. You authorise your SIPP provider to request the transfer from SL (there may be a form to fill in)
  3. SIPP provider contacts SL to request funds
  4. SL contact your company to confirm happy for you to opt out but then to immediately rejoin to get your future contributions. This all happens betewen SL and your company
  5. SL send funds to SIPP and set up a new SL plan for you
  6. SL confirm to your company it has been done and your company can tidy up their end

None of the above is advice, I am not a pension adviser, do not start this process as it may not even be in place for you.

I just wanted to share that there is no legal reason why this can't be done and that I got a negative response to my request to do this several times.

Edit to note I transferred out 6 months ago and contributions have continued to new SL company pension as before.

edit to clarify that mine is a DC pension not a DB pension which I think DB was talking about. 

Edited by Ma2
Clarification
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36 minutes ago, DurhamBorn said:

You cant transfer while your working there,the day you leave you can transfer into a SIPP.Iv left jobs in the past so i could transfer the pension out.I left GSK,they said they would put up deferred pensions by RPI,i knew that would out run pay increases.When i moved it into my SIPP it was worth 30% more for those years than someone who stayed working there,i got a bigger pension for not working there than someone who kept working ,clown world,but i saw it coming.

I wish I had a quarter of your economic savvy...but having been here for 2-3 years and 'inheriting' 1/100 it is still of benefit! :-)

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HousePriceMania
3 hours ago, No One said:

@DurhamBorn I have a question for you in regards to pensions.

I have a pension with Standard Life with my new job, I asked HR if they can contribute directly to a SIPP and they said no, I called SL to ask about partial transfers and they also said no.

 

If I request a transfer to my AJ&B SIPP from my SL what happens to my SL account? Does it get closed, does it go to 0 but contributions still come in?

Here's DB at home....

 

In the Shawshank Redemption, wouldn't the guards and whomever else let Andy  to do their annual taxes have had to worry about changes in tax laws that  Andy wouldn't be up on,

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Democorruptcy

Permabear Hussman's latest downdate. Though looking back he now suggests he wasn't as bearish and the risk free buffet is still open:

Quote

 

My error in this cycle was to believe that speculation still had well-defined limits. In late-2017, I abandoned that view, and became content to gauge speculation versus risk-aversion based on the condition of market internals. Since then, we’ve refrained from adopting or amplifying a bearish outlook when our measures of internals are constructive, regardless of how extreme valuations might be.

Over four decades of work in the financial markets, I’ve regularly been defensive at bull market peaks, shifting to a constructive, unhedged, or leveraged outlook after valuations plunged toward their historical norms, as they did in the 2000-2002 and 2007-2009 collapses. That flexibility produced beautiful results in previous, complete market cycles. Yet I’ve never seen such conviction among speculators that the good times will never end, or such faith that the Federal Reserve can make it so. I’m quite certain that this is a delusion, but I am less certain about how long that delusion can persist.

https://www.hussmanfunds.com/comment/mc220114/

 

 

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5 hours ago, No One said:

@DurhamBorn I have a question for you in regards to pensions.

I have a pension with Standard Life with my new job, I asked HR if they can contribute directly to a SIPP and they said no, I called SL to ask about partial transfers and they also said no.

 

If I request a transfer to my AJ&B SIPP from my SL what happens to my SL account? Does it get closed, does it go to 0 but contributions still come in?

I've been wondering exactly this. Mine at work is so poor and no choice. Do I have to leave £1.00 in it to keep it open? Want to take it into a SIPP but also want to keep company contributions flowing in.

EDIT
I see @Ma2 has just explained above. My company did not argue when I asked if I could do it, just said yes, but I could not understand how it could work.

Edited by Funn3r
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CannonFodder

For pension transfer, reccomend talk to HL, they will have dealt with SL before and will know what is possible or not and are motivated to get your money across to get fees from it. Different plans have different rules.

For my SL company pension where I am, i selected SL Blackrock Gold and General where my company pension monies resides. I.m happy with the make up. Screenshot below

The SL version has lower fees than the one I could buy as a retail investor in my own SIPP

Screenshot_20220114-192843_Chrome.thumb.jpg.0203de93abf4953889364468c109a25b.jpg

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4 hours ago, DurhamBorn said:

You cant transfer while your working there,the day you leave you can transfer into a SIPP.Iv left jobs in the past so i could transfer the pension out.I left GSK,they said they would put up deferred pensions by RPI,i knew that would out run pay increases.When i moved it into my SIPP it was worth 30% more for those years than someone who stayed working there,i got a bigger pension for not working there than someone who kept working ,clown world,but i saw it coming.

I thought this might have been the case. 

I don't think I will stay where I am for the long term, 2-3 years or maybe more if I can secure promotions and pay rises. Currently working on asking for 7k after a stellar review. But I may need to push them by getting a second offer in hand just to get the ball rolling.

3 hours ago, Ma2 said:

I also had the same issue but rules may be different for my scheme.

I have a Defined Contribution SL pension that my company contribute to. Mostly terrible funds and even with discounted yearly costs, still seemed expensive to me. Although you could change between funds 10 times a year without charge.

The SL GSIPP is stupidly expensive so I didn't enquire about moving in to that, but if it's possible it might be worth looking at if desperate (you can hold pretty much anything in it even gold)

Not sure if this made the difference this time but I didn't ask about direct contributions or partial transfer, I asked if I could move the total of the funds in my works SL pension into my existing HL SIPP (I have previously been told that wasn't possible but if i don't get the answer I want I usually just keep asking, or find someone else to ask) and the answer to my surprise was yes this could be done at no cost but only 1 time a year. Then a new SL company pension is set up for me and contributions continue.

So if your company has the same arrangement the process is as follows -

  1. You have an existing SIPP set up
  2. You authorise your SIPP provider to request the transfer from SL (there may be a form to fill in)
  3. SIPP provider contacts SL to request funds
  4. SL contact your company to confirm happy for you to opt out but then to immediately rejoin to get your future contributions. This all happens betewen SL and your company
  5. SL send funds to SIPP and set up a new SL plan for you
  6. SL confirm to your company it has been done and your company can tidy up their end

None of the above is advice, I am not a pension adviser, do not start this process as it may not even be in place for you.

I just wanted to share that there is no legal reason why this can't be done and that I got a negative response to my request to do this several times.

Edit to note I transferred out 6 months ago and contributions have continued to new SL company pension as before.

edit to clarify that mine is a DC pension not a DB pension which I think DB was talking about. 

I have a Defined Contribution SL pension that my company contribute to too. The fund I am in is the "Standard Life Active Plus III Pension Fund" (what a name hey?), in the 4 months contributions have gone in (£1587, should go up by 416 soon so in reality it only has 3 months contributions) the amount has only increased by £10, by comparison my SIPP which has 5 different stocks for a total cost of £8k over 8 months have returned £1k in profit.

The % change over the 8 months is 12.% gain.
The % change over 3 months is 0.006%, if we divide by 3 and times by 8 we get 1.16% (crude calculation to compare performance)

So what is inside  the "Standard Life Active Plus III Pension Fund"?

image.png.a94e7afc2ae140e30cc880a96504938e.png

1 hour ago, Funn3r said:

I've been wondering exactly this. Mine at work is so poor and no choice. Do I have to leave £1.00 in it to keep it open? Want to take it into a SIPP but also want to keep company contributions flowing in.

EDIT
I see @Ma2 has just explained above. My company did not argue when I asked if I could do it, just said yes, but I could not understand how it could work.

I may try this out when my pot gets a little bit bigger. Just read that SL is going the eco-wanker route of moving to green energy, likely diversifying from Oil and Gas which would explain why their performance is shit vs my SIPP.

https://www.ftadviser.com/pensions/2019/08/20/best-and-worst-pension-default-funds-named/ from 2019

 

image.png.9beb5e532b28990dea06745b57315cea.png

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Chewing Grass
5 minutes ago, No One said:

I thought this might have been the case. 

I don't think I will stay where I am for the long term, 2-3 years or maybe more if I can secure promotions and pay rises. Currently working on asking for 7k after a stellar review. But I may need to push them by getting a second offer in hand just to get the ball rolling.

I have a Defined Contribution SL pension that my company contribute to too. The fund I am in is the "Standard Life Active Plus III Pension Fund" (what a name hey?), in the 4 months contributions have gone in (£1587, should go up by 416 soon so in reality it only has 3 months contributions) the amount has only increased by £10, by comparison my SIPP which has 5 different stocks for a total cost of £8k over 8 months have returned £1k in profit.

The % change over the 8 months is 12.% gain.
The % change over 3 months is 0.006%, if we divide by 3 and times by 8 we get 1.16% (crude calculation to compare performance)

So what is inside  the "Standard Life Active Plus III Pension Fund"?

image.png.a94e7afc2ae140e30cc880a96504938e.png

I may try this out when my pot gets a little bit bigger. Just read that SL is going the eco-wanker route of moving to green energy, likely diversifying from Oil and Gas which would explain why their performance is shit vs my SIPP.

https://www.ftadviser.com/pensions/2019/08/20/best-and-worst-pension-default-funds-named/ from 2019

 

image.png.9beb5e532b28990dea06745b57315cea.png

At lot of staff DC pension schemes are poor performers and this is no exception and especially so with poor compounding over the long term and you should remind them how bad it is and tell all your colleagues. I had a SL pension 20 years ago, it was the worst one I've ever had in 40 years by a country mile other than the latest one I'm in now Aegon. I posted earlier in the week how my previous pension a Aegon SIPP (now just sat there) has returned 11.96% over the last 12 months compared to 2.87% for the company one with the same provider.

I also noticed they are being hoodwinked into pumping money into 'sustainable' gimmicks which are ripe pickings for scams and subsidised follies. The number one thing a Pension scheme should be doing is making money for you not 'virtue signalling'.

https://markets.ft.com/data/funds/tearsheet/performance?s=GB00B735BP26:GBP

 

 

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7 hours ago, M S E Refugee said:

I wish had the nerve to trade TGA but I am just going to keep accumulating. 

The Coal price has crept above $200 again so they should be making money hand over fist.

I use this link I got from LSE which is where they load from in SA.

Feb Coal Futures Richard Bay

I found the link for Feb futures by using the search bar so you can keep moving it forwards (Jan is currently $166, Feb $156).

 

I start trading by 'accidentally' buying too many shares when they seem cheap. I then sell when I can. 

It's laddering in both directions but keeping a core holding. I don't hold shares in companies I don't believe in. TGA has been pretty good for trading as there is loads of volatility. Managed to hit a buy order at 406 and a sell order at 426 today.

I am at a crossroads where my brain tells me you can't make a living trading but I can't get a job as I might lose more money than I gained by working O.o

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CannonFodder
38 minutes ago, planit said:

 

The interesting thing I have noticed is that different investors have very different views of the market this month. MeetKevin, CathyWood and @nirvana see the market is falling and in a stressed state but my portfolio is having a great month. I don't own EZJ but they are up 30% since Dec 20th.

 

I agree s&p 500 within half a percent of all time high, ftse 100 at cycle high.

Some tech indices falling but I view it as sector rotation. Out of growth and into value.

Posted a bit back that due to perception of negative real yields, investors could sell bonds and buy value stocks pushing market higher.

Why sell bonds and keep money in cash, be inflated away....

Why keep bonds with negative yield....

The answer to bond holders worried about inflation is sell bonds and immediately buy something else, the smarter ones will avoid growth stocks.

need to think about how bond holders will view the world once transitory leaves the mind

A rush out of bonds could push equities higher in my simple mind. People were buying negative yield when price going up so they offload to greater fool before maturity, what will happen when price moves other way

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6 hours ago, Democorruptcy said:

Permabear Hussman's latest downdate. Though looking back he now suggests he wasn't as bearish and the risk free buffet is still open:

 

image.png.61a141321173ad931ae01a25f5566013.png

Says it all and it sums up the BK theory, of course there will be a crash, but is it in 2022 or 2023, the latter is a long time to sit and wait watching savings being inflated away.  .... however I'll sit and wait as apart from telcos and silver it all looks a bit over priced, and the shares ive been buying in recent months are all down!

If only i had pressed the buy button when BP was 290p, as it'd have been 20k profit already!

 

 

 

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11 hours ago, CannonFodder said:

need to think about how bond holders will view the world once transitory leaves the mind

Thats not a certainty.

image.png.5b3398a1a326c2f6a5e6c9276ea9a9bd.png

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10 hours ago, Hancock said:

image.png.61a141321173ad931ae01a25f5566013.png

Says it all and it sums up the BK theory, of course there will be a crash, but is it in 2022 or 2023, the latter is a long time to sit and wait watching savings being inflated away.  .... however I'll sit and wait as apart from telcos and silver it all looks a bit over priced, and the shares ive been buying in recent months are all down!

If only i had pressed the buy button when BP was 290p, as it'd have been 20k profit already!

 

 

 

My approach is not to be stymied by some talk about a BK or whatever.  I've seen the disconnect between talk and price too many times.  I put the time in to look for opportunities and manage them.  I get better each week.  There aren't too many opportunities atm so that tells me I'm not looking at the right thing (i.e. I should be looking at a robust asset allocation, asset protection, etc atm).

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19 hours ago, DurhamBorn said:

Iv been buying Blackrocks Latin America Investment trust,tiny compared to its growth ETFs.

I haven't yet compared the price performances of the trust versus the ETF but the trust I saw had a lower yield than the LTAM ETF.  I may (like I just have for Asia) hold a trust and ETF to see if the trust delivers alpha, as well as to diversify holdings. 

This is for a "fund" only account.  It holds regional and (sad face: where possible) global sector ETFs and trusts.  Some regional ones seem to be on the move so I like to tilt the sails towards them. 

There was a great Palisades interview a while ago about doing this and it was something I used to do a while back when we had access to the US ETFs.  But back then I used a blunt and not very effective macro only approach.  I now have a more technical approach to support these rotations but lack the access to those better US ETFs!

Regardless, it seemed a good way for me to run a SIPP without too much attention or churn (when I lacked the time).  That maybe is not so much of an issue now but maybe it could diversify my risk from holding a pure individual stock based portfolio.

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31 minutes ago, Harley said:

My approach is not to be stymied by some talk about a BK or whatever.  I've seen the disconnect between talk and price too many times.  I put the time in to look for opportunities and manage them.  I get better each week.  There aren't too many opportunities atm so that tells me I'm not looking at the right thing (i.e. I should be looking at a robust asset allocation, asset protection, etc atm).

You clearly put a lot of research into your approach, at this moment in time i lack the inclination to start doing what you do, though in the future it'd be of interest. 

I'm still of the opinion the FED will raise rates significantly + QT this year, which will cause a taper tantrum, and they won't capitulate like last time, causing markets to fall further. Though I don't believe its going to be the 1929 esq Armageddon that mad Davey Hunter is claiming.

Recently been trickling in circa 1% of my cash at a time into several shares, etfs ... think i may buy a touch more GJGB and some Telcos with the house money, so its 90% cash 10% stocks ... but apart from that its a case of sit and wait for me ... as i'm thinking unless there is a crash of sorts then maybe its a case of watching interest rates rise throughout the year and see what it does to house prices, and just buy one of them to avoid seeing more money being inflated away.

 

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Story from Reuters from bbc. If it's true about loans wonder how much the interest rate will be. Centrica should benefit and how will they define gas companies. Producers too, like BP? Will they really cut taxes as reuters suggests? Unlikely. Government needs the money

Another part of the article is Inflation 6% in spring, Boe agrees with this. Increasing taxes and higher energy costs when the energy cap is raised. Major decrease in disposable income for many people.

 

LONDON (Reuters) - Britain's government is considering plans to smooth a sharp rise in energy costs which is due to hit households in April, the BBC said.

Under a cost deferral mechanism, big banks would lend billions of pounds to energy companies, allowing them to spread the increase in gas bills over five or 10 years, the broadcaster reported.

Britain's finance ministry could play a role by guaranteeing the loans to the energy firms.

Government officials were also considering using the Bank of England, which provided emergency loans to businesses during the coronavirus pandemic, to provide upfront funding, the BBC said late on Friday, without citing its sources.

Other options for the government to reduce the impact of the tariff hike - which could see bills rise by 50% after a surge in international energy prices - include an expansion of a discount scheme for low-income households or cuts to taxes on energy.

Prime Minister Boris Johnson is under pressure to act before an expected rise in the fuel price cap which is set to take Britain's inflation rate to 6% or higher in April, when tax payments are also due to go up for workers and employers.

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1 hour ago, Harley said:

My approach is not to be stymied by some talk about a BK or whatever.  I've seen the disconnect between talk and price too many times.  I put the time in to look for opportunities and manage them.  I get better each week.  There aren't too many opportunities atm so that tells me I'm not looking at the right thing (i.e. I should be looking at a robust asset allocation, asset protection, etc atm).

Agree about a bk. The person quoted the most about a bk is david hunter. I have a lot of respect for David Hunter's knowledge and experience. He has been right about a fair few things, but he has also been calling for a melt-up and bk since 2014.

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Axeman123
34 minutes ago, arrow said:

LONDON (Reuters) - Britain's government is considering plans to smooth a sharp rise in energy costs which is due to hit households in April, the BBC said.

That kind of article is generally just speculation.

Hopefully they just suspend green taxes, which then becomes permanent.

Knowing our government, more wild spending and taxe rises to pay for it.

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