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

[AWW]

6 hours ago, jamtomorrow said:

Good point. Makes me wonder how long before they take a serious crack at automating shelf stacking

I find the idea of browsing shelves of stock really rather quaint. We do our shopping online and have done for years. Clicking around an app for thirty minutes is a lot less hassle than driving to a supermarket, walking around it with a  trolley, searching around for the stuff you don't buy very often, then running it past a cashier, packing up the car and bringing it all home.

I just don't see the point of supermarkets anymore. But then my first job as a teenager was in the retail visionary, Argos!

[JMD]

6 hours ago, Innkeeper said:

I’ve come to the view that supermarkets seem disinterested in shoplifting (and theft via self service tills) and must view it as a price of doing business.   Receipts for your purchases are now only given on request so how the security guy is meant to know whether you’ve paid, I don’t know.  

Retailers have always accepted this phenomena, they call it 'shrinkage' (of stock).

[DoINeedOne]

6 hours ago, Lightscribe said:

Again solved with Digital ID. You’re walking out with the goods without any interaction anyway.

 

was in a Uniqlo store a few months back where they had these checkouts seriously impressed me whilst nothing like above i normally avoid self checkouts as something doesn't scan right then you stand there like a twat waiting for a member of staff

 

Not my video but this is them

 

[JMD]

6 hours ago, BurntBread said:

If you are a big FMCG manufacturer, supplying supermarkets, then I believe you pay a number of things:

There is a charge for putting your products on the shelf. If you want them put on a wide aisle, or put at eye-level, rather than near the ground, there is an extra charge. If you want an end-of-aisle display, then you not only have to set it up and clear it away at the end of the promotion, but you have to pay an extra fee for the position, even though the supermarket gets more sales because of your advertising efforts.

If one of your products is defective (e.g. broken top to an aerosol), you will be charged a fine by the supermarket. I think it was something like £5 per item 20 years ago. If a product is returned to the supermarket, and you want to see it, to figure out what was wrong, there will be another charge (I can't remember the amount, but maybe £50 per item).

Theft of items from the shelves is called "product shrinkage" in the business, and the supermarket charges the FMCG manufacturer for it (maybe not the whole cost, but there is a charge). Supermarkets like there to be a certain amount of product shrinkage, because it shows which lines are attractive to consumers.

As @Innkeeper says, I'm sure it will be a completely commercial decision whether the losses from theft outweigh the savings on wages. I also like @CannonFodder's point that these calculations are likely to be done with some assumptions about levels of theft, which could be wildly inaccurate if the economy tanks. Supermarkets are not omniscient, and can make mistakes. I remember talking to an Australian guy about 25 years ago, who was recounting how a Japanese retailer had set up in Sidney, and didn't last very long, because they assumed (as would be correct in Japan) that people would not steal unattended things.

I was aware of some, but not all of those charges. Makes the supermarkets sound like the industrial mill owners of old, paying their staff in tokens which they would then redeem for food in the company owned food shop! Not as bad of course... but is this capitalism (life) 'Jim' as we know it?!

[JMD]

5 hours ago, Axeman123 said:

That is really interesting.

Surely though that will only affect jobs which can be fully substituted by robotics, ie the absolute bottom rung. Even staff stacking shelves in a supermarket while it is open can show a customer where the coffee is, or get something down from a high shelf etc. People at the bottom are going to have to add value beyond surly jobsworthism, even if it is just a smile. No one should be doing a job that could be done by a robot anyway, it would be a terrible way to live.

AI is already 'automating' the legal profession, and not just in conveyancing either.

[Majorpain]

4 hours ago, working woman said:

New technology to combat Shoplifting and help Stockcontrol - two new changes coming up. We usually put a security tag on the clothes when they come into the store. From this year, clothes will have a security device installed at the factory, I think it is a micro chip. The price tag is also changing to allow tracking of items. We will no longer have to manually count for stock take, staff will walk around each section, eg jeans, and wave a machine and it reads all the chips. Each item of clothing, via it's chip, will be able to show it's journey from factory, to warehouse, to store and if  who/how it was paid for. I wonder if they will be able to see where stolen goods are. Interesting.

New Rules for motorists:

My husband has been looking at the new rules - coming in soon Where drivers have to give way to pedestrians at junctions, who look like they are about to cross - where is the big publicity campaign on this???? Lots of confusion and accidents inbound. 

The new highway priorities are moronic, golden rule for pedestrians is use your eyes when you cross the road and treat all car drivers like they are morons.  Now little Jimmy is going to think he doesn't need to wait for that car as it will stop for him, until it doesn't and he gets a face full of bonnet.  Not much use being in the right if your also crippled for life or worse.

RFID tags on everything is actually quite a clever idea, its got some interesting implications for the likes of motoring if all parts are tagged, would make life more difficult for chop shops if they have to not just remove the components but also start taking them to bits to get at the RFID tags.

[Axeman123]

2 minutes ago, Cawn said:

So you hold nothing but cash and Junior miners? No Oil, no telecoms and no tobacco?

Correct. I am considering a small short-term punt on the S&P500 (via ETF), although this would be a deviation from my original plan.

2 minutes ago, Cawn said:

So I am thinking you are expecting the house of cards to fall this year?

Also correct, I broadly agree with Dave Hunter's thesis of a final melt up and then (what we on here have been calling) the big kahuna. 

6 minutes ago, Cawn said:

You have missed out on some huge gains to be had in Oil and Tobacco recently.

I never claimed to be smart!

My long term plan was that the biggest percentage gain would be in junior gold miners, and I wanted to focus 100% of my attention on capturing that gain. I can hit all my personal financial goals by doing so.

Clearly diversification and rolling gains into laggards etc could have had me much further forward by now, but I had a plan and put it into action. Too many variables could have put me into analysis paralysis.

A lot of lessons have been learned along the way, which can only be done by getting stuck in.

Longer term I see the post BK cycle as the place where real fortunes will be (hopefully) made, obviously gains made before then are a bonus and will compound, but we are just waiting for the big bottom to buy. Not losing capital while learning plus developing a stomach for buying when there is blood in the streets are the real goals in the interim.

[JMD]

4 hours ago, Volcanic said:

I used to read the MSE site but got fed up with people saying they are struggling to feed kids but have numerous pets or have just started a sky/phone subscription.

The same applies to all these benefits programmes.The tattoos are mind boggling.

There is a psych theory that correlates tattoos with having low time preference, just saying!

[Democorruptcy]

2 hours ago, Cawn said:

I’d like to ask the forum a generic question, not specific to me or anyone; just some variables which could act as pointers.
You wake up Monday morning with the clothes on your back, a laptop, a phone and one million pounds in your bank account. You are 50 years of age, no partner, no ex, no kids.
You must live in the UK, you could buy a house, you can invest in shares on any exchange which your platform allows. You can remain in cash by any amount up to 50% of the pile. There is no hurry is buying the shares, but you must allocate at least 50% of the cash to shares/assets by the end of 2022.
What and when would you buy?
 

Man or a woman? Working or living off the income?

[JMD]

2 hours ago, arrow said:

Inheritance tax was created, supposedly, to tax the rich. But, it hasn't done that. It's taxed the middle classes as the rich have mostly avoided it. It's also double taxation for paye. You get taxed on your income then taxed again after death when your post tax income is used to grow assets. As, Durhamborn has said the fiscal drag will catch out a lot of people through these taxes as they find they're caught in ukgov's net.

The labour politician jenkins said that inheritance tax was for people who trusted their kids less than the taxman. But that's a lie. The rich don't trust their kids any more than anyone else, but they've got "wealth advisors" who make sure their money and land gets passed down through generations.

Yes, IHT, off shore tax havens, ltd companies and so called 'corporate person-hood', such schemes, plus so many other accounting (mal)practices are nothing more than legal fictions that require massive overhaul... I dought change will happen this side of 2030, but beyond then I believe that all bets are off.

[Majorpain]

3 hours ago, Cawn said:

I’d like to ask the forum a generic question, not specific to me or anyone; just some variables which could act as pointers.
You wake up Monday morning with the clothes on your back, a laptop, a phone and one million pounds in your bank account. You are 50 years of age, no partner, no ex, no kids.
You must live in the UK, you could buy a house, you can invest in shares on any exchange which your platform allows. You can remain in cash by any amount up to 50% of the pile. There is no hurry is buying the shares, but you must allocate at least 50% of the cash to shares/assets by the end of 2022.
What and when would you buy?
 

If it were me:

Cash buy house first, worst comes to worst you can comfortably live off dividends from £100k of stocks easily. (300k)

£100k each in Oil, Telco, Generic Natural resources (Anglo, Rio BHP etc), Senior PM's and tobacco. (500k)

For that level of money prob £20k physical Gold/silver slush fund.  Easy to pass onto children/relatives if it doesn't get spent.

When is dependent on what actually happens, problem with time limits is if you limit yourself to buying when the market decides the price and not when you decide the price.  One thing I've learnt is don't rush into buying, there is always another opportunity down the road.

[Axeman123]

7 minutes ago, JMD said:

Yes, IHT, off shore tax havens, ltd companies and so called 'corporate person-hood', such schemes, plus so many other accounting (mal)practices are nothing more than legal fictions that require massive overhaul... I dought change will happen this side of 2030, but beyond then I believe that all bets are off.

I would say the opposite. The direction of travel is clear, internationally mobile capital is indulged and courted. Citizenship by investment schemes are multiplying for example, including EU member states. Non domiciled status is a UK scheme to let the global wealthy live here, and not be taxed on offshore income. Frank Zacharias Robin Goldsmith (Baron Goldsmith of Richmond Park)  Minister of State for Pacific and the Environment was even able to go abroad and come back as a non-dom for a few years, in spite of being born in Chelsea! 

Very large transnational companies are able to negotiate with HMRC how much tax they are willing to pay in the UK, under the implicit threat of routing all the income to an offshore subsidiary instead.

The counter trend movement running in paralell is to raise the bar for accessing the benefits of all this, to restrict the masses of tax cattle getting on a good thing. The old "6 months rule" enabled many Brits with money to just split their time between homes (with at least one of them overseas) and pay no UK tax on worldwide income. Convoluted new rules make that a lot more difficult, unless someone is willing to cut nearly all ties to the UK and pay for specialist advice. Keeping a house here and wintering in Spain no longer cuts it for example.

[CVG]

Drip-feeding continuously into your chosen assets nearly always beats buying the dip. If you BTD then you'll miss on all the potential gains of a rising market and you'll also likely find you buy the dip too early and lose even more as the crash continues.

If I woke up to a massive fortune then I'd max out Premium Bonds (50K each) for all the people I cared about, followed by maxing out their ISA's and SIPP's and paying off their debts, 20% to precious metals and the remainder to 12/16 dividend paying stocks to fund future ISA contributions. Any left over then I might check out some VCT's (but I'm never anywhere close enough to being interested in these!).

[Bobthebuilder]

21 minutes ago, CVG said:

Drip-feeding continuously into your chosen assets nearly always beats buying the dip.

That's how I used to think before spending way too much time on this thread. I prefer to ladder into stocks nowadays, the big boys on the thread got that one right.

To give an example, I bought a load of Lloyds in 2008 at around 25p. I set up a monthly drip feed and sort of forgot about it, bought every month all the way up to 90p. They have never been that price since.

I am happy to wait for the market to come to me, bought a lot of ladders over the past two years, really happy with those, so much, so I don't want to buy anything at these prices at the moment.

[Spiney Norman]

22 minutes ago, Bobthebuilder said:

I prefer to ladder into stocks nowadays, the big boys on the thread got that one right.

Could someone explain this please?

[Bobthebuilder]

6 minutes ago, Spiney Norman said:

Could someone explain this please?

Simply. If you want to invest say £3000 in any one investment, then set three entry price points on the way down to limit potential larger losses.

Also works selling on the way up, but I have rarely ever done this.

[BurntBread]

4 minutes ago, Spiney Norman said:

Could someone explain this please?

It's where you think a security is going to do well in the long- or medium-term, but you think it's going through a hard time (ideally just because of sentiment, like tobacco, but perhaps because you see a change in the macro climate in future, for example negative real yields over the cycle being good for gold).

You then choose an entry price, but you don't buy it all at that point: you split your money up into (say) 3 "ladders". One at the current price (your entry point), one at 8% lower, and one at 8% below that (details vary). You then buy the tranches if and when the price reaches your "ladder points".

The idea is that if you are right about the sentiment or macro or whatever, that may well continue (timing is difficult), so you avoid too much staring at a big hole by buying in gradually, and you get ore gains if you are right. Of course, your ladders might not all be hit, and then you have to look elsewhere for value.

It's a very sophisticated technique, as you need to have an independent idea of the value of the security, which is different to the market, and some idea that the mis-pricing is going to continue for a while.

It has psychological advantages in taking emotion out of the process: "plan the trade, trade the plan". It also leads you to buy when prices are going down, and avoid when they are going up, which is opposite to many poor market-timing strategies that are driven by our natural instincts. Those natural instincts of fear and greed serve people poorly in financial markets.

My own approach, for the very little that it's worth, is that I have been deciding how much I want to invest in a sector, taking a very basic look at the company financials (debt, assets, P/E, dividends) for stocks that are discussed here, and deciding whether I like the company on that basis. I then buy a bit (but not my whole allocation), and get used to seeing red numbers. After a while, if they are very red, I'll have another look, and if it still looks good, then I think "well, it was good value before, so it's very good value now", and buy some more. I don't have a long investing history to recommend the method, though!

[Ash4781b]

6 hours ago, DurhamBorn said:

I think we will see it in oil for a while for certain,more buybacks,pay down debt ,slow divi increases.Telcos have the advantage of being a small bill at the start.£20 to £30 a month wont register,£110 to £200 will for energy etc.Telcos have a good whip as well,investment.I think the sectors should avoid special divis though,it wont look good as they do a news article with fat Sharon who reckons she cant afford to use her phone for her Mcdonalds Uber eats.

Yeah there is the absolute value of the bills. Unlucky for the Councils maybe they take the brunt? Also I think they can for those that can switch telco provide ‘help’ but I don’t know how it all works over there on MSE commercially.

[working woman]

6 hours ago, Volcanic said:

I wonder if a new rota system would outrage the bleeding heart ❤️ single mums re childcare.It’s business innit. How do they get employed?Savvy employers would find a way without the faffing involved.

It must be expensive employing such people and those that reek entitlement.

 

No single mums where I work, rarely apply for jobs here, all  staff are women 50+ helping to care for grandkids and elderly parents. Their daughters have F/T good jobs. Being able to swap shifts to look after sick grandkids & parents is important to them.

The above YouTube clip of self-service in Uniqlo is interesting - all making sense for where I am working now, I guess that is why the clothes are starting to be chipped.

[Hancock]

3 hours ago, CVG said:

Drip-feeding continuously into your chosen assets nearly always beats buying the dip. If you BTD then you'll miss on all the potential gains of a rising market and you'll also likely find you buy the dip too early and lose even more as the crash continues.

If I woke up to a massive fortune then I'd max out Premium Bonds (50K each) for all the people I cared about, followed by maxing out their ISA's and SIPP's and paying off their debts, 20% to precious metals and the remainder to 12/16 dividend paying stocks to fund future ISA contributions. Any left over then I might check out some VCT's (but I'm never anywhere close enough to being interested in these!).

Depends if your buying and holding or trading.

I've done rather well out of being in cash for the last crash and holding, believe someone named this strategy as "crocodile investing"!

If you set 3 ladders at 30p, 20p and 10p ... then you might as well just go all in at 20p on the basis it might not hit 10p ... though of course it may not hit 20p so you miss out.

 

[working woman]

7 hours ago, Cawn said:

I’d like to ask the forum a generic question, not specific to me or anyone; just some variables which could act as pointers.
You wake up Monday morning with the clothes on your back, a laptop, a phone and one million pounds in your bank account. You are 50 years of age, no partner, no ex, no kids.
You must live in the UK, you could buy a house, you can invest in shares on any exchange which your platform allows. You can remain in cash by any amount up to 50% of the pile. There is no hurry is buying the shares, but you must allocate at least 50% of the cash to shares/assets by the end of 2022.
What and when would you buy?
 

Firstly, I would love the initial sense of freedom, being unemcumbered, no job, no home etc. The world is my oyster etc. I would book into a hotel , have a well earned rest after working non-stop for decades, and then take some time to review my options. Longer term, I would want to buy/rent in a retirement complex with a warden, someone to keep an eye on you. In the meantime, I would buy a camper and explore our beautiful country. Keep enough cash back to buy a retirement flat, and  invest the rest for both income and inflation beating growth.  From some of the income, send annonymous gifts to people who have been kind to me throughout my life.

 

 

[leonardratso]

I would blow the lot on hookers and coke.....to the end.....

[Hancock]

Oil/steel prices rising means windmills cost a lot more to build

Siemens Gamesa and Siemens Energy share prices take a big hit

https://uk.news.yahoo.com/siemens-gamesa-shares-slide-latest-091100419.html

Boris and Gretas plan for wind energy seems to get worse by the day.

[DurhamBorn]

46 minutes ago, Hancock said:

Oil/steel prices rising means windmills cost a lot more to build

Siemens Gamesa and Siemens Energy share prices take a big hit

https://uk.news.yahoo.com/siemens-gamesa-shares-slide-latest-091100419.html

Boris and Gretas plan for wind energy seems to get worse by the day.

We told them here what would happen didnt we.Sometimes things are so obvious almost everyone misses it.Where they have contracts to supply x amount of turbines at a certain price,big oil supplied at a floating price after hedges.

This is amazing to see as well,youngsters having to be taught what inflation is,

https://www.bbc.co.uk/news/av/newsbeat-60085274

Of course being the BBC it has to mention Brexit,and of course no mention of the fact one of the big drivers of the inflation is the BOE printing money to fund the working age welfare budget so when the woke young cheer those dover boats and welfare increases they are inviting government into their pockets,but at least its a start.

I should add,the Siemens story is why i banged on and on about it being crucial to own companies with very high fixed assets even if they were funded with a lot of debt to equity as long as coupons were fixed etc and depreciating at a set rate because people adding assets now will have to pay much more for the assets themselves and the debt to fund them.Bullseye.

 

[Hancock]

1 minute ago, DurhamBorn said:

We told them here what would happen didnt we.Sometimes things are so obvious almost everyone misses it.Where they have contracts to supply x amount of turbines at a certain price,big oil supplied at a floating price after hedges.

This is amazing to see as well,youngsters having to be taught what inflation is,

https://www.bbc.co.uk/news/av/newsbeat-60085274

Of course being the BBC it has to mention Brexit,and of course no mention of the fact one of the big drivers of the inflation is the BOE printing money to fund the working age welfare budget so when the woke young cheer those dover boats and welfare increses they are inviting government into their pockets,but at least its a start.

 

 

Wonder why the BBC didn't use house prices to explain what inflation is.

Its great news that the licence fee is about to be finished, just a pity that its a couple of decades too late.